Attack Grounds Deliveries from Duluth, Minn., Airplane Manufacturer
KRTBN Knight-Ridder Tribune Business News: Duluth News-Tribune - Minnesota
Copyright © 2001 KRTBN Knight Ridder Tribune Business News; Source: World Reporter ™
Cirrus Design Corp. delivered four airplanes Friday – the first since Sept. 11 when terrorists attacked the World Trade Center and Pentagon with hijacked jetliners.
In the days that followed, workers at the Duluth airplane manufacturer worried about the victims, but they also had reason to be concerned for their company.
Cirrus continued to produce airplanes but could not deliver them because of flying restrictions – that Cirrus fully supports – imposed by the Federal Aviation Administration. The company’s income stream ran dry.
“We had $4.5 million in inventory just sitting there,” said Cirrus Vice President Bill King, after tallying the value of 15 airplanes that were waiting for delivery Friday morning. “That’s $4.5 million we would have had for operations.”
Cirrus was in good company, said Shelly Snyder Simi, a spokeswoman for the General Aviation Manufacturers Association in Washington, D.C.
“The flight restrictions created a tremendous hardship for manufacturers and many others in general aviation,” she said. “When we’re grounded, we hurt.”
Many companies are still reeling from last week’s events. As evidence of the damage done, Simi pointed to an announcement made Friday by New Piper Aircraft Inc. in Vero Beach, Fla. It will shut down airplane-making operations for two weeks.
King said Cirrus might have found itself forced to take similar action were it not for a recent infusion of cash. On Aug. 21, Crescent Capital, the U.S. arm of the First Islamic Investment Bank of Bahrain, became the majority owner of Cirrus by making a $100.3 million investment in it.
Even with its capital reserves replenished, King said the past few weeks hardly have been a cakewalk for Cirrus. “We encountered some of the most difficult management issues we’ve ever faced here.”
Cirrus had to find room to store unshipped airplanes without disrupting production. It had continued expenses to meet. The business also had to deal with pilots eagerly waiting for airplanes.
Kate Andrews, part of the sales and support staff at Cirrus, remembers one would-be airplane owner in particular: a German man who arrived in Duluth with his son-in-law Sept. 10, expecting to take delivery of a Cirrus airplane.
But the terrorist attacks put the delivery on hold. Cirrus requires each of its customers to go through an orientation and training session before taking possession of an airplane. Those exercises were impossible with FAA restrictions in effect.
For more than a week the waiting Germans came to Cirrus to look at their plane, sit in it and one day – still not permitted to fly – they took it for a spin.
“We watched them driving up and down the taxiway,” Andrews said. “They must have been out there for an hour. I guess it was the next best thing to flying.”
The amusing sight apparently did Cirrus workers some good.
“It was the first time any of us had chuckled all week,” Andrews said.