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 operation.

"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 Georgia.

FMI: www.navajo.org, www.utilicraft.com