G500 Aviation Week

Nordam Files Chapter 11 Due to PW800 Contract Dispute

Nordam spent more than $200 million on the PW800 nacelle system program over the past eight years.

The Nordam Group and its U.S. affiliates filed for Chapter 11 protection on July 22 based on a contract dispute with Pratt & Whitney Canada over the PW800 nacelle system. Nordam designed, engineered and manufactured the PW800 inlet, nacelle, thrust reverser and related components used on Gulfstream G500 and G600 until it ceased producing them on July 5, based on the dispute that has been going on since last year.

Pratt & Whitney says it “has worked diligently for many months” with Nordam and its lenders to address the challenges, including offering “significant financial and other support that, in our view, could have kept Nordam out of bankruptcy. We continued to offer this support despite Nordam making a decision to breach its contract by suspending work on the PW800 nacelle program.” The company adds: “Nevertheless, Nordam chose to pursue bankruptcy over other business continuity options which P&W had strongly requested” in an effort to support Gulfstream’s G500 and G600 aircraft programs, which are scheduled to received FAA and EASA certification and enter service this year. The G500 received FAA type certification on July 20.  

Pratt & Whitney says it will hold Nordam accountable for its actions.

Nordam says the court filing does not affect the repair division or other programs—or its international businesses in Europe and Asia-Pacific.

“Outside of the contract situation with Pratt & Whitney Canada, our company programs and product lines are performing well, and we are pursuing several new business opportunities,” said company CEO Meredith Madden in a statement.

While the company would not disclose any details of how it intends to reorganize or the timeframe for doing so, it appears the Chapter 11 filing had become the best way to resolve the PW800 dispute while allowing the rest of the company to operate without more strain.

Nordam and Pratt & Whitney Canada signed the nacelle contract in 2010.

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