Land Of Enchantment High On Aviation -- But Warns Indian Tribe
Of Problems In Proposed Deal
Slow down and think it over. That's
reportedly the warning from the State of New Mexico to the Navajo
nation, as the Native Americans consider investing $34 million in a
Georgia-based aviation operation.
The Albuquerque Journal reports the state's Finance Authority,
which has joined in a major effort to attract aerospace companies
like Eclipse to the Land of Enchantment, issued the unusual
cautionary note because of the company's past bankruptcies,
"questionable" customers and a suspiciously large severance package
paid to the company's former CEO.
The warning from New Mexico state officials concerns American
Utilicraft and its privately-owned spinoff, Utilicraft Aerospace.
According to the Navajo Nation and American Utilicraft, Utilicraft
Aerospace would perform final assembly work on the Utilicraft
FF-1080 freighter. The aircraft is still in the design stage. While
state economic development officials introduced the Navajos to
Utilicraft last year, Secretary Rick Homans now says he never
vouched for the Georgia company. In a letter to the Navajo Nation,
state officials pointed out that, even with a $34 million
investment in Utilicraft -- reportedly worth no more than $10
million -- the tribe would only get a 25-percent stake in the
"I feel very good, very confident about this," Navajo President
Joe Shirley, Jr. (above, right, with Utilicraft Aerospace President
John Dupont) said of the agreement. "This is an awesome opportunity
and industry to bring to the Navajo Nation."
That feel-good feeling is anything but universal. Some industry
experts say Utilicraft has less than a 25-percent chance of
success. In any event, Homans is quoted by the Journal as having
told tribal development officials the deal is "very risky."
Homans wouldn't comment on the story. Neither would tribal
officials. But the state review of the proposed deal found that, if
problems developed for Utilicraft, CEO John Dupont would walk away
with a severance package of up to $100 million. In fact, according
to the state report, Dupont can fire himself and collect that big
severance package if his duties change, if his paycheck is
shortened or, as may be the case with the Navajo deal, if the
company moves more than 20 miles from its current location in