Al Marsh

Nordam sues Cessna over contract loss

May 6, 2011 by Alton K. Marsh, Senior Editor, AOPA Pilot

A judge has denied an injunction sought by Nordam Group to prevent Cessna Aircraft Company from awarding the contract for cabinetry used in the Citation CJ4 to a lower-priced competitor. Ken Lackey, chairman of Nordam, told AOPA Pilot that he felt he had won the contract for the life of the CJ4 program, and is suing Cessna for breach of contract. There is also a claim for loss of intellectual property is designing the cabinets to meet the contours of the CJ4 interior. Cessna has not commented on it because it is pending litigation. Cessna work, including thrust reversers, liners, and metal work, amounts to only 10 percent of Nordam’s $500 million-plus in annual revenues, Lackey said. “It’s the principle of the thing,” he added in a telephone interview. He said he wants to help Cessna keep its costs low, and recognized that everyone in the industry is under competitive pressure. He said his company rarely files such a suit. The CJ4 received special mention in the last Textron quarterly report as suffering from high supplier costs, even though it has proved popular with customers. Textron chief Scott Donnelly called Cessna’s performance “disappointing” only days before the sudden retirement of Chairman, CEO and President Jack Pelton. The retirement is not effective until June 1, but Donnelly immediately took over as interim CEO.  An analyst has expressed concern that the issue was possibly a disagreement over expenditure of research and development funds for new products.

2 Responses to “Nordam sues Cessna over contract loss”

  1. Tim Valentine Says:

    It amazes us that our country has departed from its roots of competitive self reliance to a socialistic thinking society. This is still America. We are still a market economy. Compete or get left behind. And stop whining and running to a judge when you loose fair and square.

  2. John McGowan Says:

    Tim and others… Before going all Tea Party and anti-Socialist, hold off making judgments until you’ve read the contract that was negotiated and signed by both sides in a market-based competition wnen first awarded.. Just possibly, Cessna promised a lifetime run as part of getting Nordam to absorb development costs.. If a business partner willingly makes a long term commitment and then decides to change their mind, walks away and costs you a lot of money, that’s why we have courts and judges and laws of contracting.. The alternative (no contract is worth the paper it’s printed on..) is actually and in fact the true socialist model in places like Asia and the Third World….

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