Adam Aircraft closes up shop
At a time when business jet deliveries are setting record highs (see page 3), Adam Aircraft, an Englewood, Colo. piston twin and very light jet developer, has ceased operations. Adam Aircraft is the second of the modern crop of very light jet manufacturers to shut down (Aviation Technology Group was the first), hobbled by a lack of funding at a critical time in development of the all-composite A700 twinjet.
In a brief statement issued on February 11, Adam Aircraft wrote, “In a difficult but necessary move, Adam Aircraft Industries suspended operations today at its facilities in Colorado. This measure was required due to the inability of the company to come to terms with its lender for funding necessary to maintain business operations. The company is currently exploring all of its alternatives and will provide further guidance when decisions are made, which is expected to be later this week.”
When it suspended operations, Adam Aircraft laid off all of its 500 employees. This followed an earlier cutback, announced on January 17, in which the company laid off 300 employees, suspended operations at its Ogden, Utah satellite facility and curtailed composite lay-up and bonding activities at its Pueblo, Colo. facility. At that time, Adam Aircraft president Duncan Koerbel said that the move was intended to help the company conserve cash flow to allow for time to secure additional funding.
Adam Aircraft was planning to gain FAA certification of the A700 in the fourth quarter this year, and the January 17 cutbacks were intended to allow the company to focus on achieving certification and finalizing the “make production fly” manufacturing efficiency improvement program. The company said it had enough money to certify the A700, and plans called for volume production of the A500 piston twin to start in the middle of this year.
Yet a week after the January “strategic adjustment” announcement, AIN learned that there was more to Adam Aircraft’s financial issues than the company revealed. John Wolf, Adam Aircraft’s CEO, sent a letter to shareholders on January 15 warning that the company needed to raise $30.5 million by the end of January, to allow it to continue operating until it could raise another $100 million by May 31.
The Adam Aircraft backlog was last revealed in detail in 2006 as totaling $855 million, which included 70 A500s and 341 A700s. This didn’t include a May 2007 order for 50 A700s from Hainan Zhong Hang Tai General Aviation Airlines, a Hainan, China-based operating entity of Ameritech Aerospace.
Another earlier large order was from startup air-taxi company MagnumJet, recently renamed Jetsuite, which placed firm orders for 50 A700s and had options for another 51. Jetsuite CEO Alex Wilcox told AIN, “We want to see the airplane produced more than anything else. We are aware of a couple of efforts to resuscitate the company and will remain interested in those efforts and hope a deal comes through sooner rather than later.” Jetsuite also has 100 Embraer Phenom 100s (50 firm, 50 options) on order; first delivery of the Brazilian airplanes is planned for April next year.
Adam Aircraft was founded in 1998 by Rick Adam, who left the company last August without discussing his reasons for leaving. Adam still held positions on the board of directors and retained ownership of A500 S/N 4. Recently, he launched a new venture called AdamWorks, which develops and manufactures composite parts for a variety of industries. Joe Walker, president of Adam Aircraft since 2003, left the company in February 2007, and he was succeeded by Koerbel.
Adam Aircraft holds five U.S. patents, two for “hybrid composite-metal energy absorbing seats,” two for the twin-boom design of the A500/A700 and one for a “modular spar tunnel.” In August 2006, Groen Brothers Aviation announced that Adam Aircraft was a member of a team that won an initial DARPA contract for a proof-of-concept high-speed, long-range vertical takeoff and landing aircraft.