Vision jet project will have economic impact in the Northland
April 19, 2012
Duluth News Tribune
A nearly $100 million investment from Cirrus Aircraft’s new owner has put the Duluth-based airplane maker’s languishing jet program back on track and heading for a 2015 production date.
“This is big, big news for Cirrus,” company spokesman Todd Simmons said. “And it’s a great day for Duluth.”
That’s because the new Vision SF-50 light jet largely will be built in Duluth, creating more than 100 jobs, Cirrus officials say.
“We can see from 100 to 125 jobs,” said Simmons, Cirrus’s vice president of marketing. “They’re valuable jobs needed to ramp up a program of this magnitude.”
Up to 60 of those jobs will be engineers, the remainder technicians. Some engineers already have been hired, and some positions are posted on Cirrus’ website, but most will come as the program moves forward.
The impact of the Vision Jet moving into production in Duluth could be far-reaching, providing a boost to Cirrus’ local suppliers and the local economy.
Among those suppliers is Northstar Aerospace, which builds and assembles seats for Cirrus planes, as well as other precision machine parts used. It supplied materials for the first prototype Vision jet. And if Northstar is chosen as a supplier for the jet, that will mean greater company revenue and more good-paying jobs at Northstar, namely machinists, welders, painters and assemblers.
“It benefits the entire community,” said Kevin Snyder, Northstar’s vice president. “It’s such wonderful news for Cirrus. But we know the benefits that their success has on the community and the region, including jobs we can create because of their success.”
Cirrus’ announcement came just one day after news that AAR Aircraft Services would be setting up an aircraft maintenance base at the former Northwest Airlines base in Duluth, creating 225 to 250 jobs.
It’s another sign that the local economy is turning around, says Brian Hanson, executive director of the Duluth Economic Development Authority.
The milestone for Cirrus was long-awaited.
“We needed significant capital investment to move the program out of the lower level and up to a specific timeline. And that is what this is all about today,” said Simmons, who made the announcement Wednesday at the Aero Friedrichshafen aviation expo in Germany, one hour before it was officially released in the United States.
He said the Friedrichshafen expo is the most significant general aviation trade shows in Europe and important worldwide. And with 40 percent of Cirrus’ business outside the United States and growing, making the announcement there allowed Cirrus to reach a global audience.
The single-engine Vision Jet will fill a gap in the light jet market, between high-performing propeller planes and light business jets. It will seat five adults and two children and have luxury features and technology similar to Cirrus’ single engine piston planes.
The jet’s development, which began about five years ago, had slowed when funds needed to keep the program moving forward dried up under previous owner Arcapita Inc. The slowdown came as Cirrus and the general aviation industry were hit hard by the recession.
“It’s been a difficult time for Cirrus,” Simmons said. “There’s been changes in employee base, ownership and leadership. And here we see something that changes the course of this company. We charted a new course and gave ourselves a new product.”
And that, he said, is in sharp contrast to the rest of the industry that has contracted 50 to 60 percent and is remaining there.
The nearly $100 million investment by new owners, China Aviation Industry General Aircraft Co., is doing what the China-based company said it would do when it bought Cirrus last year from financially ailing Arcapita, including not only keeping but creating jobs in Duluth.
Before that, about $45 million of the needed $150 million for the jet program had been invested, which went into the design of the flying prototype and its testing, Simmons said.
“Our new owners have stepped up to what is required and committed the resources to get the program finished, the plane certified and into production,” Simmons said.
A Minnesota Public Radio report Wednesday questioning the feasibility of a 2015 delivery date for the jet and the safety of its 300-knot speed left Simmons a bit bewildered.
“Three-and-a-half years away is ample time,” he said of the targeted production start. “The timeline isn’t anything but exactly what we planned. The speed of the airplane is ill-informed. There are a multitude of turboprop or light jets that go beyond 300 knots. The speed is ideal for the pilots we talk about.”
Moreover, he said Cirrus has training programs for pilots of their planes.
“This is first time during the entire program that we’ve heard this criticism,” he said. “It almost doesn’t make sense.”
Cirrus has about 515 orders for the $1.72 million Vision SF-50. But the price tag goes up to $1.96 million on July 1.
“The cost to produce the jet has gone up,” Simmons said. “We are three years later than we would have liked to have been. As time goes by, costs have gone up. It’s one of the reasons we’ve been so anxious to move forward.”
But, he said, that at under $2 million, the jet will still be priced below its closest competitors, the single engine Diamond D-Jet also in development and the Eclipse 550 twin engine light jet.
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