Bell to close Lafayette Assembly Center after LED cancels contract

Avatar for Oliver JohnsonBy Oliver Johnson | August 22, 2018

Estimated reading time 3 minutes, 39 seconds.

Bell is closing its Lafayette Assembly Center after Louisiana Economic Development (LED) announced it was cancelling its contract with the manufacturer to support the project, with the state accusing Bell of failing to meet its obligations.

Bell's Lafayette Assembly Center was originally slated to hold the final assembly line for the new 505 Jet Ranger X helicopter. Leslie Westbrook Photo
Bell’s Lafayette Assembly Center was originally slated to hold the final assembly line for the new 505 Jet Ranger X helicopter. Leslie Westbrook Photo

“Effective Monday, Aug. 20, Bell began taking steps to close its Lafayette Assembly Center and has begun transitioning 525 cabin subassembly work to [Bell’s facility in] Amarillo, [Texas],” said Robert Hastings, EVP, chief of communications at Bell, in a statement provided to Vertical. “Without economic incentives, Bell cannot continue operations at the [Lafayette] facility.”

The $26.3-million facility was funded by State of Louisiana, with Bell committing to creating 115 new jobs as it broke ground at the center — originally slated to hold the final assembly line for the new 505 Jet Ranger X — in August 2014.

Bell and state, regional, and local officials celebrated the grand opening of the 82,000-square-foot center 12 months later, but with the helicopter market in a downturn, in 2017 the manufacturer negotiated a change to the Cooperative Endeavor Agreement (CEA) it had signed with LED. Assembly of the 505 was moved to Bell’s facility in Mirabel, Quebec, while the Lafayette Assembly Center was to be used for cabin subassembly of the 525 Relentless. The amended CEA also reduced Bell’s job commitment to creating 95 jobs and extended the term of the agreement from 2029 to 2031.

In a statement issued Aug. 21, LED secretary Don Pierson said that just 22 people were employed at the site.

“Following four years of underperformance by the company and a failure to produce either of the agreed-upon operations, LED has elected to terminate its Cooperative Endeavor Agreement with Bell Helicopter,” Pierson said. “From the beginning of this project in 2013, LED valued Bell Helicopter as a world-class manufacturer with world-class aerospace products. We regret that our experience with Bell Helicopter has left the State of Louisiana with no other choice but to terminate the CEA for a once-promising project.”

Employees in Lafayette were notified of the facility’s closure Monday, said Hastings. “Bell is actively working with each of them to either find positions within the company appropriate to their skills and interests or help in finding working in the local community,” he added.

The manufacturer has filed an action seeking the Louisiana State Court’s help to determine the rights and responsibilities of the parties to the CEA, while LED has called on Bell to settle “its financial obligations to the State of Louisiana.”

“Despite LED’s efforts to accommodate Bell Helicopter, the company never identified a path forward for meeting its obligations to the State of Louisiana,” said Pierson. “The State of Louisiana has met its obligations for the project; Bell Helicopter has not.

“We regret that we must terminate the CEA and close out the project, but the company has defaulted on numerous occasions, leaving us no other course. We must protect the interests of the State of Louisiana and its taxpayers.”

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4 Comments

  1. It is LED’s responsibility to the tax payers of Louisiana to collect the $26.3 million spent to establish Bell in Lafayette. I totally understand Bell’s position with the downturn of the economy, but the economy has turned around and Bell needs to meet its contractual obligations or reimburse the state for our expenditures.

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