WASHINGTON -- Robert Hastings, executive vice president and chief of staff at Bell Helicopter, in an interview with Defense News, talks about how the Pentagon's priority to be innovative mirrors the company's own business strategy: to stay ahead of the curve as it looks to improve helicopters in the US military's inventory and design a future vertical lift aircraft expected to come online in the 2030s.

Here are some edited excerpts.

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How do you see the defense market evolving and how is that influencing Bell's business strategy?

I would probably give you the same descriptor of the defense industry that you are hearing from everybody else right now. It's challenging. Our customers are dealing with limited funding, and I say limited relative to what funding was years ago. There is still a very robust defense budget with money out there, but there's increased competition for that limited funding and the way it gets spent so we are seeing that among our customers and we are seeing the defense department having to prioritize what they can and can't do.

Talk about your biggest customer and biggest efforts going on at Bell right now.

Our biggest customer is the Marine Corps, but we are also doing a lot of work with the Army and Air Force right now and the Navy as well… but we are seeing them very focused on increased collaboration looking for more innovation and that is good for us because Bell right now has a very strategic focus on innovation in fact we are using the term here "jumping the curve," kind of meaning how do we get ahead of what our customers will need and make sure we have those solutions ready for them when they need them, so it's kind of "jumping the curve," getting ahead of the requirements.

It's been a good year for Bell, a good year in a challenging environment. The business has been steady, we are still able to deliver favorable returns for our shareholders, our products are performing very, very well. We are getting excellent feedback from our customers and our customers are very engaged.

Our biggest program is the V-22 [Osprey]. … The program of record is 360 V-22s for the Marine Corps and 52 for the Air Force and currently there are about 305 V-22s in service already around the world. 257 of those are with the Marine Corps and 48 with the Air Force. The V-22 has transformed the US Marine Corps. That's not my or Bell's estimate, those are the words we are hearing back from the Marine Corps all the time.

Building on that success, the Navy has now selected the V-22 for the Carrier Onboard Delivery (COD) program. There are 44 is what the number of V-22s for the Navy will be. They will become the base for multi-year three [contract]. They made that announcement this year that we were selected and we are now in negotiations on multi-year three. It will take probably another year before it's on contract.

In the last couple of weeks, the Navy has had Marine V-22s on the carriers doing operational assessments and the feedback is they all performed extremely well out there.

A couple of other things we have been doing with the V-22 to help improve its operational efficiency, so you probably saw the tests late last year where we fired rockets, several different rockets, off the V-22. That was at request of the Air Force for us to look at arming it so we have now demonstrated that for the Air Force.

We demonstrated air-to-air refueling off the back of a V-22, that was done at the request of the Navy. It was part of their decision-making process in selecting it for the COD mission.

One of the challenges the V-22 had going into places like Afghanistan is adjusting to that kind of talcum powder dust so we have developed for them a new inlet barrier filter which will overcome that problem.

And the last thing we did, kind of developing the V-22, is we demonstrated the ability to put the F-35 engine inside of it and that was, I think, probably the most important thing the Navy was looking for as they begin to field the F-35, how would they get a replacement engine out to a carrier and the V-22 demonstrated the ability to do that.

Are you expecting more V-22 sales soon internationally?

We've had our very first completed foreign military sale to Japan. There are a number of other countries that are in the FMS process and you know with FMS process we can't talk about who's talking to who.

Japan is out there in Asia and they aren't the only ones in Asia interested and there's significant European and Middle Eastern interest.

How is your Future Vertical Lift effort going?

The thing we are really excited about here is we are working Future Vertical Lift. We have a contract, there are two companies engaged in the technology demonstration program. A Boeing-Sikorsky team and then a Bell team with Lockheed, is our principal partner. Our entry into the technology demonstration is the tiltrotor that we call the V-280 Valor. It is a purpose-built, clean-sheet design, we call it a third-generation tiltrotor. It is smaller than the V-22. It's designed for the Army as the lead customer so you will see it's sort of Black-Hawkish in size, designed for 11 troops in the back, two pilots and two crew members. And the name 280 comes from the fact that it will cruise at 280 knots. The big advantage of tiltrotor is speed and range…  For example, in Afghanistan today, if you look at the [medical evacuation] basing plan, the Army has about nine Black Hawk bases to cover the entire country for Afghanistan. The Marines do it with two V-22 bases. … It will also self-deploy up to 2100 nautical miles and the advantage of that is with 2100 nautical miles you can fly anywhere in the world.

We are going to fly the V-280 next summer. Our contract is to fly it by September. It's about 65 percent done.

The Army's plan is to have that ready for production by 2029, Bell has presented a plan to the Army to accelerate that to 2024.

What's happening at Bell beside the V-22 and FVL?

The second major product line still open and running for the military is the UH-1 and we have built two versions of that, the UH-1 Yankee and the AH-1 Zulu. They are not upgraded versions of the previous aircraft, they are new powerful, well-designed aircraft. The Marines love them. They are both in production. So far we have delivered … 137 Yankees and we have delivered 53 Zulus. So the Yankee, we got those off the line a couple years ahead of the Zulus so they managed to get into Iraq and Afghanistan and that extra power the Yankees have, the Marines absolutely love it, they fly into combat with full fuel, full of weapons, and a squad inside and so it gives the Marine commanders a lot of ability to just do a lot of stuff when that aircraft is on site.

The Zulu is the most advanced attack helicopter in the world today. It's a generation newer than Apache with the systems that are on it and the Marines… we can't deliver them fast enough.

The Zulu in particular, there is a lot of foreign military sale interest so you have probably seen that we have sold to Pakistan, Pakistan is under contract. They are the first ones and you've seen publicly…  [interest from] Poland, Romania, Czech Republic and a bunch of other countries beyond that, there is just a significant interest in that aircraft internationally and the reason is it's the value. … Look at the price of a Zulu against the price of an Apache and the cost of the flying hours and the cost of maintenance, you will see that the Zulu in particular is a real value. And, of course, if you buy both, like the Marine Corps has, the Yankee and Zulu are 80 percent common, the parts are 80 percent identical footprint.

What trends are we seeing in the DoD that are driving your business decisions?

Innovation, they are looking for innovation. They are looking for providers like us who can provide them solutions to their problems faster, in advance of when they might think they need it, so being able to forecast where those are going, and they are also looking for real value for the money.

The V-280 Valor is the perfect example. The real opportunity is something that is new and clean sheet and so what we find particularly refreshing working with the Army and the technology demonstration program is the collaboration, rapid exchange of ideas, rapid feedback. … The [Marine Corps'] V-22 was designed on big blue drawings. The V-280 is completely in a digital environment.

Army has a track record of not doing well with helicopter procurement in recent years. What has changed in the Army in how they are doing things that gives you more hope that a helicopter will be bought and flying after all of this?

What we are seeing is collaboration and engagement, so the customers and our own engineers and our leaders, there is an active engaged commitment to work together to bring this program to life. I think beyond that the Army really wants to have a successful acquisition program and, I don't know I would say that is an objective of the program, but what we are seeing is they are doing all the right things.

What are the right things?

There is money in the budget first of all. So we can see that as the Army is going through its budget exercises. ... The science and technology budget line is funded. … They have talented people assigned to the program, so another thing we look at a lot of times is are the program offices manned? So the Future Vertical Lift, the [Joint Multi-Role Technology Demonstration] program is staffed, is manned, they have the appropriate skilled people there and the third thing is their engagement. They are here, they are actively engaged in this program and committed to getting the right thing to the warfighters.

The Army made a big decision with its aviation restructure initiative that drastically affected Bell's role in the service. Bell-made Kiowa Warriors are retiring and the Army is replacing Bell's TH-67 trainer with Airbus-made LUH-72A Lakotas. Any hope there'll be a reversal on the trainer decision? Is Bell setting trainer role sites on other services now?

The Army is on its plan, it's committed, they are fielding Lakotas and we were on the record last year that we thought that was a mistake, but that is the Army's decision, so we decided not to challenge that.

The Navy has an active request for information on replacing their aircraft and so we are participating in that.

And there are, on the commercial side, a lot of countries around the world procuring a commercial aircraft for their trainer. We have the new 505, which should be certified by the end of this year, there are a lot of countries that are looking at the 505 as a base military trainer for their fleets.

What is influencing opportunities around the world for Bell? Are you seeing a shift in international opportunities from domestic ones at Bell and why?

We are seeing much more international opportunities than we have had in a long time and the reason that is available to us is we are just now [last year] cleared to sell these products – the V-22 and the UH-1 – internationally.

I won't name countries but there is a lot of stress in Eastern Europe these days around their security. Eastern European militaries, a lot of them still are flying Soviet equipment and … they are trying to move away from that Russian supply chain.

Then you go to the other end of the world, Asia. South Korea and Japan are very nervous with their neighbors these days and so they are looking for the same opportunities.

Bell has a relatively new CEO Mitch Snyder, how have things changed?

I think if there's a headline at Bell Helicopter these days it's innovation . We have a new CEO that has been at the desk for about eight or nine months now, and what he has brought back to the company is a real focus on returning Bell to be the company that has, over the last 80 years, sort of been the leading rotorcraft company in the world.

We are investing a lot in innovation and technology these days and things take time but you are going to see the result of that pretty soon.

Jen Judson is the land warfare reporter for Defense News. She has covered defense in the Washington area for 10 years. She was previously a reporter at Politico and Inside Defense. She won the National Press Club's best analytical reporting award in 2014 and was named the Defense Media Awards' best young defense journalist in 2018.