Saturday, January 19, 2008
Adam Aircraft Industries has laid off 300 members of its 800-strong workforce and suspended operations at their plant in Ogden, Utah. The moves come as the result of unexpected financial difficulties.
In addition, Adam is transferring much of its work at Pueblo, Colorado to its headquarters at Centennial. The only operations that are to continue in Pueblo is machine shop work. In addition to these three locations, Adam had previously been considering the possibility of a plant at New Mexico.
Fifty employees were laid off at the Ogden facility, 170 in Pueblo and 80 in Centennial. Ogdon is planned to remain inoperational for six months. Laid off workers may be able to obtain new positions within the company when production resumes.
Adam Aircraft are producing two carbon composite aircraft: the Adam A500 twin-engine piston aircraft, which is certified and due to enter full production soon, and the Adam A700 very light jet, which is undergoing US federal certification processes.
Adam Aircraft spokesperson Shelly Simi said that the company is looking for between US$75 million and $100 million, and that they are in talks with Citibank to secure these funds.
Adam secured $93 million in August 2006, and $105 million in June 2007. The A500 is valued at $1.2 million and the A700 at $2.5 million. Seventeen A500s have been manufactured, of which seven have been delivered to customers. The backlog of orders totals around $1 billion.
Adam Aircraft President Duncan Koerbel released a statement that said To provide for our future growth, we must be strategic in our focus by managing current cash expenditures to ensure adequate time to secure financing for the long term. We’re off to a good start in this effort with assistance from our partner, Citibank, but we need to be able to provide them with sufficient time working with potential investors to secure long term financing.”