NORDAM will resume G500 and G600 engine nacelle production

NORDAM has come to an agreement with Gulfstream Aerospace to resume building engine nacelles for the Savannah-based aircraft manufacturer’s new G500 and G600 private jets.

In July 2018 NORDAM entered into Chapter 11 administration, following a protracted contract dispute with Pratt & Whitney Canada, which makes the engines that power the new Gulfstream aircraft.

NORDAM supplies the engines nacelles to Pratt & Whitney Canada. Nacelles are the engines casings.

Under the terms of the agreement, Gulfstream will pay NORDAM $18 million that will allow it to begin manufacturing the nacelles again.

NORDAM stopped production of the nacelles in early July.

“After months of unsuccessful attempts to resolve a contract dispute with Pratt & Whitney Canada, we have suspended production on the Gulfstream G500/G600 aircraft program where NORDAM has developed and is producing the aircraft’s nacelle system components,” said Meredith Madden, CEO of NORDAM, in a statement issued to Corporate Jet Investor at the time.

In court documents filed on September 4, NORDAM says that it met with Gulfstream on August 22.

During the meeting it was agreed that Gulfstream would assume $18 million in outstanding payments and costs in connection with the nacelle program, and, in return, NORDAM will grant it a fully paid royalty from intellectual property licences for the nacelle program.

“Suspending a customer’s program and impacting them, their customers, our stakeholders and supplier/partners is not something that should ever happen. My family and I, as well as the entire NORDAM family, are forever grateful to Gulfstream for stepping into the situation and leading us to a successful settlement.” Said Ms. Madden in a statement issued to Corporate Jet Investor on September 5.

NORDAM will now resume begin the manufacturing process for the nacelles again.

“This solution, that we were able to quickly reach with Gulfstream, will reduce the impact of the temporary suspension and allow all program activities to resume. I am also deeply grateful for the support of our stakeholders, our supplier/partners and our banks. I know the reorganization process has created significant worry and anxiety for everyone concerned. This settlement agreement is the best outcome for everyone involved. Gulfstream gets to build its business jets; it allows NORDAM to continue under our family’s ownership and leadership; it secures our stakeholders and company’s future and allows us to pay all of our suppliers, continuing our strong relationships with them. “ said Ms. Madden.