Adam Aircraft laid off 300 people in January in what is described by company officials as a “strategic adjustment.”
The company, based in Englewood, Colo., manufactures the A500, its distinctive centerline piston twin, and is in the process of certifying its VLJ, the A700.
A few days after the layoffs, Adam Aircraft President Duncan Koerbel sent a letter to the company’s shareholders, telling them Adam needs to raise $25 million by the end of the month. If that doesn’t happen, it may be forced to liquidate some assets to meet financial obligations. As this issue was going to press, that goal had not been reached.
“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,” Koerbel said. “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.”
Koerbel described the workforce reduction, which targeted employees in the production departments, as a “strategic move to enable the company to obtain the Type Certificate for the A700 jet design and complete our MPF (Make Production Fly) Initiative.”
That initiative is designed to streamline production and reduce man-hours required to produce the all-composite A-500 and A700.
Operations at the company’s Ogden, Utah, facilitate will be closed down through summer. Layup and bonding operations for the empennage will be moved from a facility in Pueblo, Colo., to Englewood although machine shop operations in Pueblo will stay there.
“We regret that these actions will result in a layoff for many of our employees, but it is in the best interest for the long-term success of Adam Aircraft,” said Koerbel.