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Bucharest, Aug 3 /Agerpres/ - In Romania, the conditions for success exist and, in case the agreement with Bell will be accepted by the Romanian and US governments, our country will be the only place outside the United States where the AH-1Z and the UH-1Y aircraft will be produced, said, in an interview granted to AGERPRES, Joel Best, director for Global Business Development Europe with Bell Helicopter.
"There are some other production facilities for commercial aircraft, we do some partnering in other places. Those are pre-existing, not new, and even in the Czech Republic - they're not actually building aircraft, they're doing kind of a final assembly on green aircraft that are coming in from Canada, and they do the customization and painting, but that's commercial, so for the military platforms, especially for the Marine Corps, the AH-1Z and UH-1Y, Romania is going to be it, the only place outside of Amarillo, Texas to do this," said Best.
He stated that, currently, in Romania, "the conditions for success are here".
"Otherwise we'd be looking somewhere else. We found again the military leaders to be very diligent, we found a very engaging political environment, where despite all the change, and some of the turmoil and controversy there's a level of permanent technocrats that operate in the system," he noted.
AGERPRES: Recently, actually two days ago, the Romanian Ambassador in the United States, said in an interview for Politico that there are advanced discussions between the Romanian Government and Bell Helicopter, regarding the acquisition of helicopters. Can you tell me how advanced the discussions are and can you give us any details about this?
Joel Best: It's important to outline exactly how the process works, and in this discussion, Bell Helicopter is a primary provider, the customer, in this case, is the United States Marine Corps, and the United States Marine Corps and the US Government would then be the partner for Romanian Government. So, the United States military is our partner and the United States Government is Romania's partner. It's important to understand that in the foreign military sales process we've completed the LoR (e.n. - Letter of Request ) for price and availability, and the way that works is, basically, what would the price be for and when can I get it, and that's usually a very rough order of magnitude number, it's not well refined. The next step and the next process that will happen is that the Ministry of Defence and all the people in the acquisition process will move into the LoR for LoA phase. The LOA is a Letter of Offer and Acceptance. In that process, really what it does, if you think of a funnel, it starts very big at the top, and ends up very skinny at the bottom, so once an LoA is submitted, that funnel gets a little narrower, and the price gets a little bit tighter and we start to figure out exactly what they need and the United States Government leads that with Bell as its industry partner, and in the case of Romania, where they're interested in both the attack and the multi-combat multi-role, the big advantage we have is that those aircraft share 85 percent commonality. Because they're common, you get 100 percent of the battlefield mission sets, and all of the capability from a domestic operations side, fire buckets, moving VIPs, fighting fires, those kind of things come with the "Yankee" as well (e.n. - UH-1Y) but you also have the advantage of a directive attack helicopter AH-1Z, which is designed to obviously destroy large armor formations, of any kind of hostile formation, so if you look at the AH-1Z and the UH-1Y as the premiere aircraft team on the planet, both of which were designed and brought to life in the 21st century, they're unique in the way they're built, the level of commonality is unmatched, and so this is the discussion, this is why Romania is so interested, because you get all of the advantages of a directive attack and a multi-role, 100 percent of the battlefield mission sets and two aircraft that share 85 percent commonality. That's pilots, maintainers, all of the support equipment, much more efficient than if you buy two different platforms from two different providers.
AGERPRES: In March, this year, representatives of Ministry of Defence visited the headquarters of the helicopters, and at the time the Minister of Defence communicated that they were talking about 45 helicopters and 24 of them were attack helicopters, and they were talking about producing them in Romania. Are those things still correct?
Joel Best: It is true. It's a very interesting term, production, so in the process of what we are looking at doing with the Romanian military and industry, and we call it "cradle-to-grave", meaning from when the aircraft are born, and they're in a cradle, or a bassinet is a better way of saying it, all the way until Romania decides that they're now ready to retire them, so we're looking at level of final assembly and checkout, that's in-country delivery and a development along with the teaming we do on the aircraft, so there will be Romanian people assembling these aircraft in Brasov
AGERPRES: In Ghimbav, yes.
Joel Best: Absolutely, and so that's the level of detail, that's the level of technology transfer, that's just the beginning, because as they learned how to assemble the aircraft for the final assembly, they're actually going to do acceptance on the airplanes, do the flight checks, all of this requires a tremendous amount of technology transfer that comes with it then, as their capabilities grow, more capabilities get rolled in. It's like going from kindergarten to college, you don't start with graduate level work, you start easy, so this plan that we've done, over the last 6-8 months, the transition study, we've looked at where the capability is, where their strengths lie, how to build on the strengths to support some of the areas where we need to work on for the facilities and those kind of things, and the things the people at IAR Brasov are doing are tremendous, the government leaders that are helping us in this process, they've been very open and transparent for us, doing a great job, making sure that the Romanians get the chance at this technology. But more importantly, in addition to the teaming and the level of assembly that go on in Brasov, you're looking at 30-40 or 50 years of maintenance, repairs, and overhaul, that means upgrades, new technology that comes in, so being partnered with the USMC, as the Marines decide a new capability is available for the aircraft, that capability can be shared with the NATO partners, so it keeps Romania on a very capable growth path and there are other opportunities that can spring forth from that, future technologies that we want, collectively, that the United States and Romania could partner on, so again, the final assembly and checkout, that level of teaming and dare I say the word "production", in Brasov, is the central element of the beginning, and then obviously on the long term sustainment, support, all that, that's why you have years and years, 30-40-50 years of opportunity for people who are there in that valley.
AGERPRES: The point in March this year is that the Romanian authorities were talking about a 5 year time until the first Bell helicopter will be produced / assembled in Romania. Is this a realistic term?
Joel Best: It's realistic. Actually, it depends again on when they physically sign, so when the Government of Romania signs an LoA, not when they submit it, because we do all the work, it takes 4-6 months from submitting, there's a lot of work that gets done. There's American military members here, Government officials from here going to the US, it takes a lot of work to make sure we get all the requirements exact, and we don't spend any more money than we have to for things they maybe don't need. So once that's all done and they physically say "We're buying it, we're signing the LoA", from that time, the normal production time for the first aircraft to be done is 3 years. We expect to build the first four aircraft or so, in the United States, fully, with people from IAR Brasov, coming to learn there on our production line, and from then on our plan is to bring in aircraft 5 and on back here, where they'll be doing the level of work that they were working on in Texas with our team, and they'll bring those elements back here for the final assembly and checkup, so it's kind of a crawl, lock, run. They're not just going to come back here on their own, we're going to send people back there to make sure that they help with them with any problems that pop up, so we've planned this out quite well and I think that the work we've done with our transition study is money well spent, and again, that money was originally designed for a country, who was too slow to act, who kept delaying the process and the program.
AGERPRES: Could you name the country?
Joel Best: Probably not a good idea for the interview.
AGERPRES: But it's a country in the region?
Joel Best: Yes.
AGERPRES: Does it have to do with the political background of the country? Because I was planning to ask you.
Joel Best: It's just the bureaucracy, it's the way they go about interacting with not only other governments, but the way they interact with industry, so the one thing that I will say about Romania, we've had a number of business councils here, we have a great opportunity, we're working with the US Government, the embassy team, and actually autonomously, of sitting down and meeting with key leaders in the military, and on the political side as well who ask questions, very penetrative questions. They want to know if they're getting good value for what they're going to be spending their taxpayers' dollars on, they want to know they have a capability in the military's hands that is going to allow them to be as effective and efficient to defend the nation as they possibly can, which again, is why they're looking at the AH-1Z and UH-1Y, because it's 21st century technology, with unmatched capabilities, the commonality I mentioned, all of these things produce less waste. Fewer people have to go through training, and once they get it they'll be like you getting a car that's very similar to your friend's car. You can get in, you know where all the knobs are at, you know how to work 'em.
AGERPRES: Because you were talking about the challenges in the region, what made Bell Helicopter consider Romania a country that will not face the same challenges - that it's a predictable country for investing in?
Joel Best: I will tell you this. I read a news article that came out today, that kind of questions that. We haven't seen any of those issues. I'm just speaking from our engagements of the last 4 years. We realize that every government has challenges, I mentioned to you earlier that another country that I was working in, we were very near in completing a deal, they had elections and the entire deal has to be restarted, it's part of the democratic process, and so every country has its challenges, and I can tell you that Romania has a common vision, and everybody that we've spoken to... I think I started coming here under Prime Minister Ponta, so one of the days that I was here was the day he resigned (...).
AGERPRES: The investment that Bell is making is ground-breaking for Romania because since the defence budget was 2 percent of the GDP, Romania was very active in terms of acquisitions, especially from the United States, but always the question of empowering its military industry came up, and Bell is doing the first step. What convinced Bell to actually come?
Joel Best: That's a brilliant question. So, in our analysis of a country, when you look at all the bright, young people, and the craftsmen, the existing journeymen, they have a wealth of experience in working on aircraft equipment at Brasov, and other places in Romania. You've got the perfect balance of bright, talented, young people, coming out of very highly effective universities and institutions, you have a willingness of not only the military, because they really want to buy the right equipment, that not only is going to defend Romania today, but in the future, and once that's going to bring in that level of technology - remember that in the late 90's we were very close to building the AH-1W here, but for one signature we would've gotten that done. So Bell is interested in Romania for a couple of decades, and we don't have a lot of times the opportunity to come and advance the casethat we would like to make until there's actually a need, and in this case some of the geopolitical issues that have happened in the last 4-5 years, as you know from the neighbors around you, and what's happened is it created a very realistic and a very true threat in the region, and so I think, again, knowing that you need to have the ability to defend and deter your own territory and assist in a article 5 of NATO, as needed, your neighbors have a high level of commonality, we at Bell would like to see our platforms from East to West, from North to South, across Europe, because nobody could produce a better commonality than the AH-1Z and the UH-1Y, security of supply across Europe could be done by major institutions such as Brasov and other industries in other countries that have interests, so no matter where you have to go to war, outside of your own borders, you've got aircraft that are built for deployability, they're expeditionary by mindset, the way we build them for the United States Marine Corps, they're operated effectively at sea, in littorals and for land combat. Nobody does it better than the USMC. Going back to my comment, when you look at fighting a direct attack helicopter, an AH-1Z, just designed to kill the enemy armor formations, that's it's sole purpose in life. It's not designed to deliver medical supplies, but the UH-1Y does all those battlefield mission sets as a partner, so the AH-1Y and UH-1Z fly most of their missions together, because they complement each other, no single multi-role helicopter can do that, so the US Army flies an attack and a multi-role, the USMC fly a direct attack and a multi-role, and most of the modern militaries of Europe in fact fly a directed attack and a combat multi-role, so it sounds good on paper to say that we can use one aircraft to do all of the mission sets, but it can't, because no matter how you do it multi-role, it's only set up in that role for how you configure it for that day or that mission. So if you find yourself in an attack role, where you need to do casualty evacuation, now you can't, so with the AH-1Z and the UH-1Y flying together, they battle their way in the fight, so if somebody gets hurt, the Yankee, in this case the UH-1Y can extract those people and deliver medical supplies, ammunition, food, all because it's an actual combat multi-role, it's not a Medevac aircraft, it's restricted to what it can actually do, but that's why the Marines are so effective in what they do. They really are the best air-ground team in probably all the militaries. It's tough for an old Army guy to say, but it's true, so when they operate, they do it usually by themselves, so think of Romania, it's a large country, if you have to deploy your aircraft from one side to the other, very easily done. If you have to support another NATO country, it's very easily done, but they're a very small package, because again, the aircraft are 85 percent common, so if you bought in one aircraft from a different European OEM (e.n. - Original equipment manufacturer), and another from an American OEM, they're going to share no commonality. They're going to have very limited inter-operability, but with our aircraft you get all those battlefield mission sets, and two helicopters that are 85 percent common, and that's why the Romanian military and the Government is trying to support the funding. They're so smart and so forward in thinking.
AGERPRES: You were talking about the geopolitical situation, which is most likely not going to change, and I'm talking about Russia and the fact that Russia always sees American military involvment, including investment in the military industry, is a threat, so how do you see this?
Joel Best: American military involvement is a threat to the Russians?
AGERPRES: For them.
Joel Best: Well, really, I look at it more as a capability for Romania. Several of the leaders of this country have stated that they know that America is a reliable and dependable partner, would you agree? My son is also in the military, I spent 33 years in the United States military, my son is a 4th generation helicopter pilot, so this is our family business, and America goes anywhere it is required to defend our allies, as a fellow NATO member, and so I think it was abundantly clear in the last NATO Summit that we will continue to support NATO nations that are contributing, supporting, and paying their fair share and right now your Government is leading the charge, so your purchase of PAC 3, HIMARS, Romania is doing all the right things to take care of their citizens and modernize their military, it's impressive, and I'm sure that a lot of people can find other reasons to spend money on what they would do, but people must remember that there's no security at home without security.
AGERPRES: How would you approach if Russia had the same discourse about your investment in Romania, or eventual investment in Romania, as it does somehow about Aegis Ashore, or about the anti-missile defence. "This is a threat to us."
Joel Best: Oh, because they're considering it an offensive weapon. What we built is obviously to deter Russia. Can it be used in an offensive manner? If needed, but clearly these weapons systems are designed to protect, defend and deter Romania from hostile aggressor nations, so what does that mean? I liken it to your house having a security system. If your house is secure, and you have an alarm and it goes right to the police, and it's got cameras and it's well lit at night, is the burglar coming there? Can you go someplace else? So Romania is putting up a big sign that said "we're here to take care of ourselves, we're going to be well defended" and the weapons system are very wise and the choices that they made, and they're doing an outstanding job of operating inside the business cycle, even though they're buying things incrementally, they're getting them in a level of capacity that they need for collective defence of the Romanian people. I really appreciate it, as a guy whose son would be put on call, in fact my nephew is part of the multinational brigade, he's stationed in Germany, he's a Stryker driver, and he's been on a multinational brigade, stationed in Poland. So these are the things that America does.
AGERPRES: How much does the business deal for Bell rely on the very tight relation between Romania and the US, in terms of military cooperation, and now I'm talking about the fact that Romanian Defence officials, Ministry of Defence officials, have talked a lot of times about the fact that they want a permanent American military presence. How is this context?
Joel Best: I will tell you this as an American taxpayer, not as a Bell employee, because I can answer that question as an American taxpayer. I find value in supporting our NATO allies that want to support themselves, and I see value in NATO and Romania as a leading member of NATO, especially due to the geopolitical position of the country. When you look at the borders, the Black Sea, what's taking place around it, Crimea, Moldova, Georgia, there's a lot of activity and a lot of reason to actually have a good partner and have a NATO ally that's well equipped. So, I would leave the decisions of where Americans are going to base, but I'm going to tell you that I find value in seeing a larger USMC footprint, simply because of the Black Sea. The Marines are masters of their craft, they can arrive and conduct operations in littorals, fight over water, they're experts in land warfare, all which is done in an expeditionary mindset, which is also another value of these aircraft, because they don't need a lot of support and sustainment, they don't need large hangars, they can be operated in small clusters, that are well dispersed, making it difficult for the enemy to launch an attack and destroy all of the aircraft, because any place where you have to put large formations of aircraft, big hangars and lots of bright lights, it's an easy target, so we're going to give that capability to make it hard for these aircraft to be found and destroyed in clusters, should something catastrophic like that happen - two nations go to war. But there is an increasing engagement, that there are discussions and dialogue - from open source materials, I don't have any direct insight - that America is very interested in and looking at that opportunity here, and it's nice to be welcome. Not all countries welcome to have that kind of permanent footprint.
AGERPRES: Because Bell has the perspective of a foreign investor, when it came to foreign investors in Romania, there was also always the question of the Romanian infrastructure, which is not perfect, to say it lightly, how does this affect your perception of your investment in Romania?
Joel Best: Part of the transition study takes that into account. Getting from Bucharest to Brasov is not the easiest trip, if you've ever done it, but we've analyzed that, that's going to be part of the process, there are our plans for improving the infrastructure, for us right now it's enough. We can do the job as is now, with the infrastructure as it is now. Anything they do to improve it is only going to get better.
AGERPRES: Do you have a long term plan, that if the infrastructure would not improve, then ...
Joel Best: No. We know we can do it right now, so if it doesn't get any better than it is right now, it's not going to be a problem for us. Could it better? Sure.
AGERPRES: Could you give us some numbers, at this point in time, about the estimate investment that Bell is going to make in Romania and the number of people that are going to have jobs in Romania?
Joel Best: It's a very tricky question to answer, and we have to be very careful to answer that question, because even though the level of work we're going to be doing here will increase jobs in Romania, it won't necessary eliminate any jobs in the US, because we're going to be giving work share to the Romanian people, as agreed to in this transition study. I can tell you right now that we've invested a significant amount of money of our own Bell funding, there's no Government matching funds, that's just Bell, going out on a risk to do this transition study, to make sure that we understand the infrastructure question. Are there adequate people to actually do the jobs, are the universities keeping up? These are all answers that I gave early on in this interview, and the reason that we're so confident that we can actually do this is because we brought in teams of experts three or four separate times, we brought in large teams, and we're talking about engineering for building design, security of supply. The actual engineers that are going to be lining out the way the aircraft are assembled, painting, water intrusion, all of the sub-elements that have to go with it, to make sure that they're going to have the right facilities and infrastructure, and so we think that's money well spent, we're now just waiting for the next step, so that we can actually do even more, so our level of the direct investment really depends on the Government of Romania signing an LoA and the number of jobs that come with that, as I mentioned, is what they decide for final numbers. Do they stick with 24 and 21 for a total of 45? Or do they want to buy more, and then the number of jobs and the amount of other investments that have to be made will be decided somewhere in that LoA.
AGERPRES: Could you tell me how many capable Romanian people you found during your searches?
Joel Best: Let's just say enough. Our industrial cooperation and partnering team that we have, industrial cooperation in offset, Romania doesn't do traditional offset, based on the law, but industrial cooperation is a big deal, and so when we went out and looked at the factories, the regions, the institutions, we found that there are highly capable number of people available of accomplishing the task we're looking at doing, so I don't have an exact number, just like I don't have an exact number of jobs, but it will improve the position of Brasov as a whole airspace industry and I think it will be reasonably robust.
AGERPRES: You were talking about the fact that Bell wanted to build helicopters in the 90's in Romania. What did Bell learn from that experience? Because you said it depended on one signature.
Joel Best: I think it makes us realists. I would say we are optimistic realists, but we understand that the Government plays a role, the requirements of the military play a roll. So right now I will tell you this: Unlike some of the other people who are involved in the industry that threaten to leave if they don't get their way, we're here forever. We really want to do this process in Romania, it's important to know that we haven't done the level of work, this level of detail anywhere. Romania will be the first country and most probably the only country that we actually do this in, based upon our estimates of work share.
AGERPRES: In the region?
Joel Best: Globally. So there are some other production facilities for commercial aircraft, we do some partnering in other places. Those are pre-existing, not new, and even in the Czech Republic - they're not actually building aircraft, they're doing kind of a final assembly on green aircraft that are coming in from Canada, and they do the customization and painting, but that's commercial, so for the military platforms, especially for the Marine Corps, the AH-1Z and UH-1Y, Romania is going to be it, the only place outside of Amarillo, Texas to do this.
AGERPRES: Could you tell me what do you think changed, business-wise, from the Romania of the 90's?
Joel Best: I wasn't here in the 90's, so I can't really give you a good answer, but I can tell you that the conditions for success today are there, otherwise we'd be looking somewhere else. We found again the military leaders to be very diligent, we found a very engaging political environment, where despite all the change, and some of the turmoil and controversy there's a level of permanent technocrats, that operate in the system, so that level of continuity has existed, and they've done a good job of keeping the material and holding it, so even though new leaders come in, they're able to quickly share that information, when a new leader gets it quickly, we come back and we really haven't felt any resistance, any undue pressure, it's an environment for us that's been very welcoming and accommodating, free of threat, totally transparent, we really like being here and working in Romania.
AGERPRES: The Romanian ambassador in the US said that in September this year the Romanian Defence Minister will go meet Secretary of Defence Jim Mattis. Will the Bell negotiation be on the agenda, as far as you know, or are there are chances?
Joel Best: I hope so. I hope it's on the agenda, it's not something that the Minister shared with us ... , Remember Secretary Mattis used to be a Marine, so he knows this aircraft. Another country in the region, he actually flew with their Minister of Defence in a UH-1Y, when he went to the United States. Secretary Mattis is an amazing man, and I'm sure he's going to get all the talking points that he needs and that Minister Fifor and whoever travels with him, from his team, hopefully it will be more than just the Minister Fifor, so they can talk to state and defence, and all the other people, as a collective package, but I think that Minister Fifor and Secretary Mattis are going to get on very well, so I hope that answers your question.
AGERPRES: What is the one thing you can point out, in terms of business, that made Romania have the quality of a viable partner for Bell?
Joel Best: For us it's the ability to interact with leaders, it's the ability to know what the requirements are, and understanding the operating environment. We ask questions, we get answers. We don't have a lot of predictability in other countries we work in, they're still going through developing new processes, they've changed old structures for new structures, but they haven't shared what those structures are. Here, we know what our requirements will be, and we know, based on our industrial cooperation plan and the fact that when they decide, they being the Government and the Military, to decide their total numbers to shape their requirement, we will know how to meet that requirement. That's very comforting. And again, just the people in the business environment. We have such great universities and bright young students, and yet you have a wealth of existing talent that have been working on aircraft in Brasov, for 30-40-50 years, and I'm talking about individuals, not just collective firm, so it's a great place, a neat place. AGERPRES (RO - author: Oana Ghita, editor: Mirela Barbulescu; EN - author: Oana Ghita, Catalin Cristian Trandafir; editor: Razvan-Adrian Pandea)
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