Aviation analyst skeptical of aerospace plan for tribe

loading...

BANGOR – A national aviation industry analyst is questioning a plan by a Florida company to partner with the Passamaquoddy Tribe to build a $20 million aerospace maintenance and manufacturing company on tribal land in Washington County.

On Thursday, Passamaquoddy Gov. Melvin Francis and John Shaffer, chief executive officer of Aviation and Aerospace Management Inc. of Orlando, Fla., rolled out the plan at a press conference. They said the 200,000-square-foot facility could be running by summer and eventually could employ up to 2,000 people earning between $18 and $24 per hour.

Before that happens, the tribe will have to come up with its share of the costs to create a business plan – $213,000 of the $413,000 that Shaffer said is needed to cover the time and expense of writing a plan. Shaffer said he is paying the other $200,000, but both the tribe and he will be paid back by an investor that has not yet been secured.

He said the facility would fix aircraft components, such as all or parts of wings, rudders or landing gear, and not work on the actual frames, while capturing a small percentage of the $30 billion-a-year aircraft maintenance marketplace.

But the analyst, who advises Bangor International Airport, major airlines and other aerospace businesses as well as offers insights to major television news programs and newspapers, said Friday that there already are more than enough companies doing the work. Most of them are well-established firms that have been operating for decades.

Michael Boyd, president of The Boyd Group: Aviation Consulting and Forecasting, based in Evergreen, Colo., said he questions the validity of Shaffer’s idea – calling it “fruity” – since Shaffer does not have a business plan, investors or clients yet.

“I wouldn’t open my wallet for this one,” Boyd said. “There’s plenty of manufacturers out there to make components. There are plenty of companies out there to fix components. And there’s plenty of space [buildings] out there to make components in.”

Plus, Boyd said he disagrees with an assertion that Shaffer made Thursday that the major carriers such as United Airlines and Delta Air Lines will shed their maintenance shops in the near future in favor of outside contractors, and possibly break into smaller carriers.

“We’re a premier firm in forecasting airline trends and we don’t see any of that happening,” Boyd said during a telephone interview Friday.

Boyd said there are a number of vacant buildings – some owned and emptied by major airlines – in easily reachable locations such as Indianapolis that would be suitable for independent aircraft maintenance operations if a company were looking to break into the business.

Shaffer, however, disagrees with Boyd’s take on the accessibility of those facilities. He said that most of those buildings are in cities with a strong union presence, and if a large operation were to set up in any of those locales, the unions would want a presence also.

Union workers cost companies more money than nonunion employees, Shaffer said.

“Nobody’s going into it [the Indianapolis plant] because it’s a huge white elephant,” he said. “It’s huge.”

Shaffer also disagreed with Boyd’s assessment that there already are a lot of established aircraft component repair businesses filling the needs of the major airlines.

“If you’re going to be successful at all, you have to offer a quality product with a quick turnaround,” Shaffer said. “Major carriers for some reason don’t want to go to them because of a quality problem, a safety problem.”

Shaffer, a 48-year veteran of the aviation industry, said he has been successful in the past in aircraft components repair. He said he once was a senior executive for United Airlines and was the president and chief executive officer of 12 corporations worldwide.

From 1985 to 1999, Shaffer said he and other former airline executives along with two investment firms operated Aviation Management Systems of Orlando. Shaffer was president and chief executive officer during those 14 years.

In 1999, Aviation Management Systems purchased a commercial maintenance operation at Sky Harbor International and Goodyear airports in Phoenix, Ariz., according to The Arizona Republic newspaper reports.

Shaffer said it was investment firm UBS Capital, one of Aviation Management Systems’ original partners, that purchased the maintenance operation. He said UBS Capital asked him to oversee the operation for the first year, and during that time the company grew to 1,500 employees and $120 million in sales.

“I came in to turn it around after UBS bought it,” he said.

Shaffer said he left after one year.

Aviation Management Systems filed for Chapter 7 bankruptcy, or liquidation, on Sept. 18, 2002, but Shaffer said he was not affiliated with AMS when it went bankrupt.

Terry Dake, a Phoenix lawyer who represented the bankruptcy trustee, said Friday that he does not recall Shaffer’s name as being part of Aviation Management Systems when it went bankrupt.

Shaffer said he plans to grow an aerospace maintenance operation with the Passamaquoddys just like he did in Phoenix.

But first Shaffer and the Passamaquoddys need to complete the business plan.

On Thursday, Francis said he did not expect much help from Gov. John Baldacci, forming a “zero” with thumb and index finger.

Francis could not be reached for comment Friday.

Jack Cashman, commissioner of the Department of Economic and Community Development, said Friday that his department was asked for information on how to get money to get the business plan started.

He said the tribe and others were asked to fill out an application for a federal economic development grant from the Department of Housing and Urban Development. Cashman said the Passamaquoddys were advised to form an agreement with the town of Eastport and that the town would secure the grant for the tribe.

After the application was received, the tribal project would be put out to bid and Shaffer could be a bidder if he chose to, Cashman said.

“When they were told that, they never applied,” he said. “We just don’t write checks for $400,000 and hand them out. We don’t have that kind of money.”