Story ID: 104RobertsEricksonHAI16Final.doc
Erickson Offering “Full Bandwidth” Solutions
By: Mark Huber
Caption: Erickson’s new leader, Jeff Roberts, has consolidated the fleet and business elements to make the company leaner and more efficient.
Word Count: 976
Erickson’s new CEO Jeff Roberts said his experience at the helm of the company has been an “eye-opening 10-month tenure.” Roberts had only been on the job a few months when the company posted a surprise quarterly loss of $75 million, $49.8 million of it related to an impairment-of-goodwill accounting charge and much of the remainder attributable to Erickson’s acquisition of Evergreen’s rotorcraft assets.

Roberts said he has spent a good part of the last year streamlining and strengthening Erickson so it is positioned for future growth and profitability. “Our transformation is 80 percent of the way there. Now we are trying to aggressively win new business. We are optimistic that this is a year we get things headed our way. We have positioned the business to stop the decline and start the growth pattern.”

The company had three maintenance organizations when he took over, but those have been consolidated into one. Multiple safety management systems are also down to one. “We had multiple facilities supporting operational tempo and content,” he said, “now we have consolidated all our stuff into Oregon at one location. We had four business units, now we’re down to three. We had some operations that were not profitable, so we’ve drawn down those and exited a couple of markets. Within the markets that we are going to continue to participate in, we find those areas that we are going to pursue. For example in oil-and-gas; the company made a big play to get into the [offshore] oil-and-gas space. There wasn't a whole lot of differentiation or value that we could bring there, so we stepped back and said the offshore oil-and-gas play is not for us. There’s nothing we can do there. However, for land-based remote-location exploration and production, where heavy lift and precision placement-support transportation services are required, that could be a nice play for us. So we still are going to participate in oil-and-gas, but just in that very specific opportunity.”

Rationalizing the fleet was a principal focus. “Now we have a strategic fleet plan,” he explained. “When I got here we had 85 aircraft and 12 different types and 25 to 30 different models. It was all over the map. We are in the process of focusing on three or four types and as few models as we can. We’ll dispose of aircraft selectively.”

One Stop for Service

Roberts said that Erickson plans to stress its ability to provide customers with what he called the “full bandwidth” of services, including MRO, manufacturing and operations–all vertically integrated, which can be invaluable when operating in austere environments. “We operate 70 to 80 aircraft, both rotorcraft and fixed-wing. We operate them all over the world. We have our own maintenance repair and overhaul capability. And we have a type certificate for both an airframe and an engine. So that manufacturing capability coupled with the MRO capability coupled with the operational capability by itself makes us unique. Then if you think about the legacy business that we have been in for the last 40 or 50 years, that has forced us to operate in very remote, very austere, difficult non-infrastructure-rich environments.

“A remote environment where a number of utility aircraft platforms are required, where a combination of transportation services, lift and precision placement are of value and where you can leverage your vertical integration, MRO and manufacturing and operations to give you best-in-class dispatch reliability” is where Erickson can provide unmatched service, Roberts said. And he sees plenty of growth in those areas.

“We believe based on the research that we have done, across defense and security, commercial and manufacturing and MRO markets, that there is probably a $3 to $4 billion market for those specialized services. And were at $300 to $400 million [in revenues now] so there’s a lot of upside,” he said.

Roberts described the markets and Erickson’s role in them. “In commercial markets we are in firefighting and timber harvesting, on land oil-and-gas and construction. We lead in two and are material participants in two, so we think there are opportunities for us. Because of the portfolio that was Evergreen, we now have a demonstrated [capability] in defense and security support around the world, and we believe there are opportunities for us to participate there, offering the operations piece and leveraging the MRO piece in that space. The final piece is doing MRO work for legacy assets as well as providing job shop, non-high-volume, technically difficult and complex manufacturing.”

Internally, Roberts has been fine-tuning Erickson. “You look at the front of the business. How good are we at identifying and uncovering opportunities and putting our value proposition forward? In the middle of the business how we are doing from an execution standpoint: are we meeting or exceeding customer expectations? What can we do to improve ourselves? And then a third area is the cross-functional and support areas on the back end of the business: are we as efficient as we should be?”

The company focused on all three areas during the past year. “I think we accomplished a number of things,” Roberts said, “in terms of efficiencies and driving effectiveness on the back of the business. We’ve consolidated some things and eliminated some non-winning propositions. We have introduced more accountability and rigor into the execution into how we do things and why we do them and what works and what doesn't, and to make sure the customer feels that improvement. And on the front end it has been a build scenario. We didn't have a lot of vigor or robustness from a marketing, sales and business development standpoint, so we brought in sales and business development leaders and marketing expertise, to go in the marketplace and uncover and capture additional work.”