The news just began to spread around the Internets today that one of my favorite airframe makers looks like they are throwing in the towel, according to this press release on their web site:
In a difficult but necessary move, Adam Aircraft Industries suspended operations today at its facilities in Colorado. This measure was required due to the inability of the company to come to terms with their lender for funding necessary to maintain business operations. The company is currently exploring all of its alternatives and will provide further guidance when decisions are made, which is expected to be later this week.According to this story in Aviation Week, the company is going to give their position holders more information very soon:
"The Englewood, Colo.-based aircraft manufacturer is looking at alternatives and expects to provide further guidance by Feb. 15. The manufacturer had obtained the type certificate for its A500 twin-piston aircraft and had hoped to start production this summer."There is not much out there that I can find today that explains what happened to Adam, but as of last summer, it appeared they were on track, according to the Fran Fiorino article in Aviation Week:
"In June 2007, Adam finalized a $105-million round of financing. In January this year, however, Adam Aircraft announced a "strategic adjustment" in operations--aiming to streamline production processes and manage cash expenditures to allow time to secure long-term financing. The company outlined two main goals: Obtain the type certificate on the A700 twin-engine jet design and complete the Make Production Fly (MPF) program, which was designed to reach high-rate production. The strategic adjustment, however, also meant cost-cutting and a reduction in labor--and, now, a suspension of operations."I have always loved the Adam design, and hoped they would do great things. But I must say that the day I heard they were so aggressively chasing the jet dream by introducing the A700 without fully launching their piston A500, I immediately thought they were moving way to fast.
Which makes me think about any position holders who have money down on an A500 or A700. What happens to them – that is always the question in these kinds of situations. I can only hope that this new "further guidance" the company will be releasing this week addresses that issue.
The general aviation business community needs to make sure this kind of thing does not become standard operating procedure with new GA airframe makers. I guess it is the same old rule we must always follow...let the buyer beware. If you write a check on the hopes that a new maker with an exciting but untested new design will stay afloat long enough to receive their type certificate and deliver your bird, you had better know that it is always a crap shoot.
Me, I would never gamble on a new company until their design receives the TC and the fleet has amassed serious flight hours and a good safety record. For instance, would I have bought into the Eclipse excitement two years ago...never. But now that their planes are starting to find their way to ramps across America and build some tach time, sure, I would consider one if the right six Powerball numbers are ever chosen.