Diamond Aircraft announced March 28 that it is temporarily laying off 213 employees at its facility in London, Ontario, because of a lack of funding for its single-engine jet project. The company had expected a loan from the Canadian government early this month— a loan the company said was critical because it is a condition for similar funding already promised by the Ontario provincial government and private funding sources.
Diamond said that it is temporarily suspending work on the D-Jet program, pending the arrangement of external financing; the job cuts primarily affect employees assigned to the D-Jet. There is no direct impact on other Diamond operations, the company said.
“We are disappointed and frustrated in the extreme to have to take this action,” said Peter Maurer, president of Diamond Aircraft Industries Inc. “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.”
Maurer said Diamond is “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.” The company said it would contact D-Jet customers individually to explain the impact of its actions and discuss its plans for moving forward.
While the D-Jet program is more than 60 percent complete, increased program costs and delays—combined with the current overall depressed state of the general aviation industry—have required Diamond to seek external funding to complete the program, the company said.
Diamond said it had arranged for all but $35 million in funds needed to complete the D-Jet program when it turned to the Canadian federal government and asked for 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, the company said.