Diamond Aircraft lays off most of staff
Slow sales of piston-engine aircraft cited
Diamond Aircraft on Feb. 25 announced that it had laid off most of its staff, saying it needs several weeks to restructure. Work on the company’s costly prize project, the D-Jet, has been suspended. Remaining is a support staff needed to fulfill sales of spare parts, provide technical information to owners, and provide airworthiness support.
Diamond President and CEO Peter Maurer said he hopes to rehire the employees as quickly as possible. “We want to hire back as many employees as possible, as quickly as possible, but the exact number and timing will be determined as we develop our restructuring plans in the coming weeks,” Maurer said. “Regrettably, we need to suspend activity on the D-Jet Program, pending the securing of additional funding.”
Two years ago the London, Ontario, company acquired extra funding with a promise to finish the D-Jet development program when the Medrar Financial Group in Dubai, United Arab Emirates, bought the company. Unannounced to the public, the promised investment never came: “We and Medrar announced in November 2011 (Dubai Airshow) that we had reached agreement for their acquisition of majority interest in D-JET and our Canadian operations. The funds we were to receive never came and despite a protracted effort to conclude the transaction it didn’t,” Maurer said in an email released earlier this week. “We made efforts to secure other investors and in the interim, funding was provided by the shareholders.”
Prior to the purchase, Diamond in 2011 had laid off half of its 400 workers at its plant in Ontario. The “London Free Press” said the firm still had 240 workers prior to the most recent layoffs. However, a newsletter from Great Lakes Diamond Aircraft Sales said Feb. 28 that they were briefed by the factory, and 161 of 212 employees were laid off. The remaining 51 will also do production of new aircraft in addition to support of the existing fleet of 2,000 aircraft. A call to aircraft support staff was answered two days after the layoffs took effect. Operations at Diamond Aircraft Industries in Austria, still independently owned and operated, are not involved in the layoffs in Canada.
The company will now be restructured. It was hit hard by a downturn in piston-engine sales particularly in North America, the company said in a late-evening announcement. The announcement called development costs of the D-Jet a “significant burden.”
The Diamond D-Jet is to be powered by Williams FJ33-5A engines and fly at a maximum cruise speed of 315 knots true airspeed. It is to have a useful load of 2,240 pounds and carry a maximum fuel load of 1,740 pounds. The company promises a 1,350-nautical mile range. It was priced at $1.89 million in March 2009 U.S. dollars.
February 26, 2013