Adam Aircraft sees bright future in Ogden

0 Comments | Deseret News (Salt Lake City), Mar 17, 2005 | by Brice Wallace Deseret Morning News

OGDEN -- In as little as two months from now, Adam Aircraft Industries will have employees hard at work building aircraft at a facility at the south end of Ogden-Hinckley Airport.

How quickly the staff grows after that depends on demand for the company's planes, designed for business people and air taxi use.

The Colorado-based company on Wednesday announced it will produce both its A500 twin-propeller and A700 AdamJet twin-jet aircraft at the new Kemp Ogden Airport Gateway Center.

"We're doing something relatively new, so it's a little hard to forecast the demand for our products," chief executive officer Rick Adam said during a news conference at the center. "We currently have several hundred airplanes on order. We have an order backlog that's in the several hundreds of millions.

"If that sort of stays that way, we think the employment will be probably around 200 to 300 folks. There is some possibility demand will be bigger than we thought, in which case kind of the sky's the limit. But we tend to plan these things pretty conservatively."

The company has already made job offers for some of its management in Ogden.

"We are starting right away. We intend to be in some kind of operation in the month of May," Adam said.

Adam Aircraft is leasing 22,000 square feet at the Kemp Jet Services terminal at the 47-acre business park owned by Kemp Development Co. Adam said the company could do final assembly on 40 to 50 aircraft per year but has room for operations to increase.

Five customer-ordered aircraft are being built now in Colorado -- the company has more than 80,000 square feet of office and manufacturing space at its Englewood headquarters and 22,000 square feet of manufacturing and testing space in Pueblo, Colo. -- but that work will be shifted to Ogden.

The A700 AdamJet, meanwhile, expects to have customer deliveries next year. Each will cost about $2 million, or about twice as much as the twin-prop A500.

Several speakers Wednesday noted the synergies rampant in the Ogden area that made it attractive to Adam Aircraft. They include a strong labor force, proximity to Hill Air Force Base and Williams International -- the maker of the AdamJet's engines -- being located across the airport from Adam Aircraft.

"We have great materials. We have great engines. We have great computer-aided technology. But at the end of the day, the only thing that matters is if you have good people," Adam said. "We compete because we have better people than the other companies we're competing against. We've come to Utah for only one reason, which is to get access to the terrific human resources, the labor pool that exists here."

Utah Gov. Jon Huntsman Jr. said Ogden was a "perfect match" for the company.

"I've said for some time that there are some things in this state that we can do better than anyone else," Huntsman said with an A500 behind him and the roar of flying aircraft audible inside the hangar. "In today's world, you have to be very careful in defining what you're competitive advantage really is, vis-a-vis your neighbors, and I happen to think one of ours is aerospace design and engineering. . . . Adam Aircraft will be an anchor tenant in this move toward a center of excellence that will include aerospace design, engineering and manufacturing."

The company will have job fairs soon and expects to pay, on average, about $20 per hour. "These are going to be the kinds of jobs we want and need here in the Ogden area," Huntsman said.

In addition to manufacturing and assembly, Adam Aircraft expects jets to be serviced in Ogden.

Adam noted that the Department of Labor estimates that for every aerospace manufacturing job created, three supporting jobs also are created. He expects feeder jobs in Ogden to include those outsourced to metal parts and upholstery companies.

Several speakers lauded Adam for his pioneering work in the design and manufacture of small aircraft. The A500 can hold six people, while the jet will accommodate six to eight. Huntsman described him as a "visionary."

"We live in a very, very lucky time," Adam said. "We're in a renaissance in aviation. We've had breakthroughs in composite materials, breakthroughs in engines, breakthroughs in computer- aided technology."

And while aviation marked its 100th anniversary last year, the last 50 years have not featured much change, he said. "We're now in a time period," he said, "where we can do that."

Utah's other competition to land the facility came from Kentucky and Texas.

Last spring, the Utah Board of Business and Economic Development approved financial incentives to lure Adam Aircraft to put a plant in Ogden. It calls for the company to get a rebate of a percentage of tax revenue generated by the company over 15 years, to a maximum of 30 percent over the life of the project. To get the rebate the company would have to keep operations in Utah at least 15 years. At the time, state officials estimated the rebate could be $10 million net in present value, but that the plant's gross benefits to state coffers could be about $100 million.