Mesa helicopter company lands $1.4B deal with Army

“I for 20 years have been saving jobs in America and not sending my manufacturing overseas when others thought it was ridiculous.” LYNN TILTON MD HELICOPTERS CEO

Mesa-based MD Helicopters is adding 150 jobs to the area after scoring a contract with the U.S. Army worth nearly $1.4 billion.

The contract is a victory for the company and its fiery CEO, Lynn Tilton, who is feuding in court with Mesa neighbor Boeing. She also battled the Securities and Exchange Commission and on Wednesday beat fraud charges the nation’s investments regulator had brought against her.

The Army contracted with MD Helicopters to supply approximately 150 helicopters over the next five years. Initially, 30 aircraft will go to the Afghan Air Force. The company has already hired 100 people because of the contract and is looking for another 50 to hire.

At the helm of it all is Tilton in her lavender-hued Mesa office. The CEO said she works 18 to 20 hours a day, seven days a week in Mesa and at her other holdings.

Tilton said she started buying manufacturing companies to “give people the dignity of work,” and MD is her thesis statement. It’s a platform she said she evangelized long before President Donald Trump did.

“You have to take care of your own before you can take care of anyone else, and the reason we have violence in the streets of America, the reason we have so much vitriol, is because we left too many people behind after the financial crisis,” she said.

“Every time we’re creating a manufacturing job — a high-paying manufacturing job in Mesa — it has a much broad-

er effect on the community,” she added.

A company spokesman said 436 people in total work at the Mesa headquarters. When Tilton bought the company in 2005, 151 employees worked there.

The company counts the Mesa Police Department as a client, along with other law-enforcement agencies across the U.S. It’s delivered helicopters to Malaysia, El Salvador and Costa Rica.

One bid was solicited and received for the Army contract, according to the Department of Defense. Tilton said she expects to deliver the first aircraft to Afghanistan in March; 12 helicopters are already in production at the Mesa facility, which borders Falcon Field Airport.

“That’s a big contract over five years,” said Sally Harrison, president of the Mesa Chamber of Commerce. “That’s a substantial economic boost.”

Tilton is known for buying distressed companies. She bought MD, she said, when it was “days away from liquidation.” The company traces its history back to film producer and aviator Howard Hughes, whose business eventually sold the helicopter division to McDonnell Douglas in 1984. With this and other government contracts, Tilton said, the business is now on track financially.

“I think it’s just a tribute to this company and how they’ve journeyed to make this company great again,” she said.

It hasn’t come without its battles, including with Boeing, which operates right next door.

Boeing’s Mesa facility sits right across the street from MD. With 3,700 employees, it is one of the largest employers in Mesa, according to the city’s Office of Economic Development. Both companies have representatives on the Mesa Chamber of Commerce’s Industry and Defense Council, Harrison said. The council works to address federal issues.

The two companies’ histories are tightly intertwined. Boeing merged with McDonnell Douglas in 1997, then sold the spun-off helicopter business in 1999. Six years later, it was Tilton’s.

The CEO now characterizes MD’s relationship with Boeing as “strained.”

MD is suing Boeing in federal court for damages of $3.8 million, claiming breach of contract, records show. The lawsuit was filed in August and accuses Boeing of failing to pay invoices for 24 delivered helicopter airframes.

In 2012, Boeing and MD entered into arbitration over both companies pursuing defense contracts. Boeing claimed agreements made with MD in 2005 barred the helicopter company from offering its MD540F helicopter for U.S. military sales.

The arbitration panel ruled in MD’s favor, allowing it to move forward in pursuing military contracts.

Boeing has not responded to MD’s most recent complaint over breach of contact. In a statement, a company spokeswoman wrote, “Boeing does not comment on active litigation issues.” Tilton remains poised to fight. “We have a lot of large competitors sort of rooting for our demise,” she said. “People didn’t want MD in the game. And I think the one thing everyone has to acknowledge today is, we’re here to stay.”

The SEC dismissed fraud charges against Tilton on Wednesday after an administrative-law judge ruled the allegations were “unproven.”

Tilton and her company, Patriarch Partners, were accused of defrauding investors, misleading them over the performance of loan assets. Patriarch’s portfolio contains MD Helicopters. The funds tangled up in the SEC charges also are suing Tilton and Patriarch.

“I have never been one to accept injustice or cower in the face of challenging obstacles, and I knew the truth would ultimately prevail,” Tilton said in a formal statement. “I can only hope that this vindication will deter the future abuse of power that comes with government overreach.”

Earlier this year, she attempted to take her fight to the U.S. Supreme Court, calling the SEC’s use of in-house judges “unconstitutional.” The Supreme Court declined to hear the case.

Though Tilton owns at least a dozen companies — Stila Cosmetics and Rand McNally, to name two — she has been spending a lot of time in her office in Mesa, at MD Helicopters.

The company’s growth, Tilton said, is emblematic of her decades-long mission to save jobs in America. She doesn’t agree with Trump’s manufacturing platform, she said. It’s the other way around.

“I for 20 years have been saving jobs in America and not sending my manufacturing overseas when others thought it was ridiculous . ... I’m glad Trump is agreeing with my platform,” she said.

MD Helicopters has a wholly owned manufacturing plant in Monterrey, Mexico. A website that appears to represent that plant states, “Our plant assembles 62 percent of MD Helicopters brand aircraft.”

But anything for the military is built in Mesa, Tilton said. About 92 people work at the facility in Mexico, where piece parts are manufactured for MD’s single-engine aircraft, a company spokesman said.

In 2007, Tilton told Bloomberg News of the decision to manufacture out of Monterrey: “Over time there will be great savings . ... It makes a tremendous amount of sense, and that’s why I’m there.”

Tilton said she wants more female engineers and women who code in the office, and that she wants to solidify the company’s place in the community.

“I want this to be a place where those who grew up in Mesa want to come to work,” she said.