Gulfstream maker General Dynamics (GD) said Oct. 1 it acquired the Nordam Group’s nacelle manufacturing line for the Gulfstream G500 and Gulfstream G600, ending a drama that saw the latter file for bankruptcy and throw uncertainty into one of industry’s high-profile business jets.
GD said it will continue to operate the line at Nordam’s Tulsa, Oklahoma, facility. A federal bankruptcy judge approved the transfer Sept. 26, clearing the way for the acquisition. Terms will not be disclosed, the company added.
According to GD, a deal for the line was filed in court in September. What is more, GD had been operating the line “since early September” under a sublease as parties worked to address Nordam’s bankruptcy, filed July 22.
“Gulfstream has a 60-year history of manufacturing and product excellence that will serve our customers well as we assume responsibility for nacelle production,” said Gulfstream President Mark Burns. “The manufacturing of this component is firmly in our wheelhouse, especially since we also manufacture the wings and empennages for these aircraft.”
Family owned Nordam filed for bankruptcy protection after a protracted contract dispute with Pratt & Whitney Canada over the PW800 nacelle system used in G500s and G600s. The company said the bankruptcy was due to this dispute only and other programs were not affected.
Gulfstream delivered the first G500 on Sept. 27. The G600 “is progressing toward certification this year and customer deliveries in 2019,” according to GD.
Jefferies analysts expect five deliveries of G500s this year, growing to 32 next year. According to a Sept. 27 note to investor clients, the analysts estimate G500 aircraft sales of about $1.4 billion in 2019, 15% of total Gulfstream revenues. “We forecast about $230MM of revenues associated with the program this year, but recognize there was likely some slippage given Nordam stopped production for two months,” they said.
Until the dispute, the G500 seemed to be going swimmingly, the analysts noted. Total time to market was about 47 months, “significantly shorter” than some other clean-sheet models such as the Embraer Legacy 500, more than 80 months, and Bombardier Global 7500 at more than 84 months. The Textron Cessna Latitude entered the market in 45 months with the Longitude's timeline at 34 months.