Mon, Mar 28, 2011
Layoffs Pending Federal Government Decision On External
Financing
Diamond Aircraft announced the
temporary lay-off of 213 employees at its London, Ontario facility
Monday. The job cuts affect mostly D-JET program employees,
temporarily suspending D-JET program work pending the arrangement
of external financing. There is no direct impact on other Diamond
operations.
"We are disappointed and frustrated in the extreme to have to
take this action. We had deferred these cost cutting measures as
long as possible, while awaiting a positive response to our request
for a federal government loan. At this time we are still awaiting a
formal response," said Peter Maurer, President of Diamond Aircraft
Industries Inc. "We are hopeful that the government will give this
matter urgent attention and provide the requested assistance,
following which we would immediately recall our furloughed
employees and get our program back on track. We will be contacting
our D-JET customers individually to further detail the impact of
these actions and our plans for the way forward."
Diamond D-Jet
The D-JET program is over 60% complete but increased program
costs and delays, coupled with the overall depressed current state
of the general aviation industry, have required Diamond to seek
external funding to complete the program. Diamond has arranged for
all but $ 35 M to complete the program and has turned to the
Canadian federal government to support the company with a fully
repayable loan. The federal government loan is key, because it not
only completes the required funding, but also triggers the other
arranged financing commitments.
Diamond has invested very heavily to create the infrastructure
and technology that enable D-JET. Diamond intends to leverage the
technology developed for the D-JET to develop an entire family of
future aircraft, much as the original HK 36 motorglider spawned the
company's successful line of piston engine airplanes.
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