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At least according to the Charleston Daily Mail that is the case
http://www.dailymail.com/news/News/2006042026/
http://www.dailymail.com/news/News/2006042026/
Aircraft maker hits turbulence
George Hohmann
Daily Mail business editor
[SIZE=-1]Thursday April 20, 2006[/SIZE]
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Seven years ago, the state Economic Development Authority issued $3.8 million in bonds to help finance a Martinsburg company that makes Tiger Airplanes.
Sen. Jay Rockefeller was instrumental in luring the company to Martinsburg and went out on a limb for it. He said on a 1999 trade mission to Asia that some new partners had been brought in, and "It makes for a very sound financial situation. So it's very good."
Now Tiger Aircraft Limited Liability has stopped making airplanes, is in technical default of its bonds and has a main goal of hanging onto the federal certificate allowing the company to manufacture airplanes.
Gene Criss, president of Tiger Aircraft, said the company ran into a cash crunch last year. "In fact there are only about 20 people left in the company right now," he said Wednesday.
He said the company is working through its problems.
"We're looking for funding to buy parts to build airplanes," Criss said. "We're working through that. We'll hopefully have this resolved in the next 30 days.
"We're hunkered down, taking care of customers who have Tigers with parts and warranty support," Criss said. "No production is going on right now."
He added, "We are building subassemblies and things we do have the material for, so we will have a leg up. We're still looking to start her back up. Let's hope that happens here soon."
Rockefeller's press secretary, Stuart Chapman, said the senator still hopes the company can succeed.
"Senator Rockefeller has always believed that with economic development, you must be willing to take risks," Chapman said. "That's why he is always working to bring new industries to West Virginia, even when naysayers tell him it is impossible.
"Sen. Rockefeller is concerned about the future of Tiger Aircraft, as the company has endured its share of ups and downs. But Sen. Rockefeller remains hopeful that Tiger will emerge stronger than ever and play an important role in the state's growing aviation industry."
The bad news broke on Jan. 31 when bond trustee WesBanco notified bondholders that the company fell behind on its required monthly lease payments to the trustee.
But the company did make the $54,000 semi-annual payment that was due to bondholders on Feb. 1, said Janet Shelburne, a senior trust officer at WesBanco. That means the company is still current on its debt service.
She said the company is still "a little bit behind" on its monthly payments to the trustee, so the "Event of Default" will continue until the company catches up on the monthly payments. There are four aircraft bond issues; each has a different maturity date and interest rate. The issue that matures in 2019 carries a 7.5 percent interest rate. These bonds have traded this year in a range from a high of 79.75 cents on the dollar on Jan. 30 to a low of 68.125 cents on the dollar on April 13.
The Tiger is a four-seat aircraft first manufactured in 1975 by Grumman Aircraft.
In 1978 Grumman sold its small aircraft division to Gulfstream Aerospace, which continued production of the Tiger.
American General Aircraft Corp. bought the Tiger design from Gulfstream in 1989. American General ceased making Tigers in 1993.
Tong Lung Metal Industries Co. Ltd. of Taiwan formed a company, TLM Aircraft Limited Liability Co., in the late 1990s. TLM Aircraft acquired the rights to the Tiger and constructed the Martinsburg plant.
Tong Lung Metal, was best known as one of the largest lock set manufacturers in the world, had no previous experience in the aircraft industry. Tong Lung ran into financial difficulties during the Asian financial crisis and in 1999 ownership of the aircraft company changed from TLM Aircraft to Tiger Aircraft.
Criss said four companies now own Tiger Aircraft. "They're doing a cash infusion," he said. "Some are investors overseas. It is difficult to get them to move sometimes." He said that some of the owners are Taiwanese.
Chapman said Rockefeller wrote the Taiwanese Ministry of Economic Affairs in November about the need for continued investment in Tiger.
The company has a backlog of orders for its single-engine airplane, Criss said. With proper financing, "we would need up to 40 more people to ramp up" and the company has enough orders to build planes for the rest of the year, he said.
The base price for a Tiger is $239,500, according to the company's Web site, www.tigeraircraft.com.
When the Martinsburg project started seven years ago, the hope was to employ 58 people and produce 65 aircraft during the first year of operations. The company's best year was 2004, when it employed 64 people and was making about two airplanes a month, Criss said.
Tiger built 14 airplanes at Martinsburg last year, he said.
The Martinsburg plant's production capacity is one airplane a day -- about 240 units a year, Criss said. However, "I've never forecast any kind of numbers like that."
The talk in Martinsburg is not about finances but rather about maintaining the company's production certificate, Criss said. The Federal Aviation Administration, the industry's regulator, issues the certificate. Holders of a certificate are allowed to build and certify their own airplanes, Criss said.
Keeping a certificate requires quality control systems, planning, tooling and skilled people, he said.
John Witcher is a former president of TLM Aircraft. He said he parted ways with the company in 2001. He is now an industry consultant. The Tiger aircraft "is well positioned to do much better than it is doing," Witcher said Tuesday. "The owners of the company are excellent business people."
Witcher said he believes the owners are not as interested in building aircraft in Martinsburg as they are interested in manufacturing aircraft in China. "I am convinced they're losing a relatively small amount of money every year and haven't had time to take on that task," he said.
He noted that China-Taiwan-United States relations are complex.
"I hope things go well with West Virginia," Witcher said. "We have a tremendous opportunity if companies will only invest in doing it right."
Criss called Witcher's comments "pure theory and speculation with very little fact involved."
The owners don't have another plant somewhere else, he said. "Why build and go into a bond issue if you're planning to leave it?" he asked. "It makes no sense."
A total of about 3,000 Tigers have been made over the years. About 2,000 people belong to the American Yankee Association, a fan club for owners of Tigers and other light aircraft once made by Grumman. The club's Web site is at www.aya.org. Contact writer George Hohmann at 348-4836