Gulfstream expects NORDAM nacelles dispute with Pratt & Whitney Canada to impact G500 deliveries

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Phebe Novakovic, chairman and CEO of Gulfstream’s parent company General Dynamics, says that the dispute between Pratt & Whitney Canada and NORDAM regarding the supply of engine nacelles will have an impact on deliveries of the new G500 business jet.

Answering a question during General Dynamics’s second-quarter investor-relations call, Ms Novakovic said “…the current issue will have some impact on our deliveries to some extent this year, but it is solvable. Let’s remember that the (34:30) as manufactured and designed was approved through the FAA certification process. We are confident in that the parties will expeditiously resolve their dispute.”

Ms. Novakovic would not elaborate on the exact impact but did later say that Gulfstream’s margins will go up and its earnings will be flat in 2018.

NORDAM and Pratt & Whitney are locked into a dispute regarding an issue in the contract NORDAM has to supply engine nacelles to Pratt & Whitney Canada.

Both companies say they have been trying to resolve the issue, however in early July NORDAM stopped production of the nacelles. It then filed for Chapter 11 bankruptcy protection on July 23, saying that the voluntary filing was supported by its bank lenders who will continue to support the company’s day-to-day operations.

Gulfstream received both the type and production certificates for the G500 on July 20, paving the way for the first delivery, as well as serialised production of the aircraft.

The company says it will deliver the first G500 by the end of this year ’s third quarter.