Centennial Airport-based Adam Aircraft said it laid off about 300 employees — more than a third of its workforce — as it seeks more funding.
The aircraft developer is laying off around 170 employees at Centennial Airport, about 80 in Pueblo and about 50 in Ogden, Utah, said Adam Aircraft spokeswoman Shelly Simi. Before the layoffs, the company had about 800 employees total. About 500 Adam Aircraft employees remain at Centennial Airport.
In Pueblo, about 10 to 12 employees remain, working in the company’s machine shop. Adam Aircraft is transferring all other work in Pueblo to its Centennial Airport facilities and plans to maintain a smaller presence in Pueblo in the foreseeable future.
The company is suspending operations in Ogden through early summer, Simi said.
The moves come as Adam works toward getting its A700 very light jet federally certified this year, while trying to revamp and speed up production of its A500 propeller plane.
But the company is trying to conserve cash while it works with Citibank to seek $75 million to $150 million in additional funding. Adam raised $93 million in funding in 2006 and $105 million last year, but “the health of the economy and the financial markets are a little bit different today,” said president Duncan Koerbel.
The cutbacks come after promises to create hundreds of jobs in Ogden and Pueblo. Those communities had offered millions of dollars in incentives for the company to locate operations there. Koerbel said the company still hopes to produce 1,000 planes in the next 10 years.
At one point, Adam was offered about $3 million in state and local incentives for the Pueblo facility.
Jeffrey Shaw, chairman of the Pueblo Economic Development Corp., said his group, the city and Adam “are going to have to sit down … and identify what the long-term implications are going to be.”
The city of Ogden offered Adam about $1.2 million in property-tax rebates. The state of Utah in December offered two $2 million grants, though the company did not countersign the commitment within the required time, according to Utah officials.
Adam’s layoffs come after Aviation Technology Group, also based at Centennial Airport, in December suspended work on its Javelin jet and let go almost all of its employees as it seeks more funding.
“There’s a lot of turbulence in the (very light jet) market right now,” said Tom Cappelletti, president of Broomfield- based Professional Jet Aviation Consultants. “What you’re seeing is a shakeout in the VLJ market” because large, established aircraft manufacturers, including Cessna and Embraer, are introducing very light jets that compete with those developed by startup companies.
“People like ATG and Adam probably will suffer,” Cappalletti said.
Kelly Yamanouchi: 303-954-1488 or kyamanouchi@denverpost.com
Adam Aircraft layoffs
170 Centennial Airport
80 Pueblo
50 Ogden, Utah
This article has been corrected in this online archive. Originally, due to a reporter’s error, Tom Cappelletti’s name was misspelled.
