Will they be around to benefit from the Fedex Loadmaster order

Published: 4/6/2000

LET Kunovice, 93% owned by US producer Ayres Corporation, has had delays in paying its employees their wages for January, after a similar delay in December and there has been considerable speculation about the company"s financial health. A promised press release clarifying the situation failed to appear in early March. It also appears that wages for February, payable on the 25th March, were not paid as of 4th April, although the company has said that the money should be in accounts by the 7th of April. The plant"s unions have already threatened strike action over non-payment. In the last reported figures for 1998, LET was reported to have lost 500 m crowns on turnover of 696m crowns and according to the CEO of the company, Turner Bostwick, had lost money for the ten previous years. In the meantime however, rumours have begun to emerge that BAe Systems had expressed interest in the Czech producer and were in discussions regarding possible acquisition. According to a BAe spokesman, that although talks were taking place between Steve Mead, the BAe regional director and the company, they were only concerned with the possibility of offsets on the production of the JAS-39 Gripen in the event of it winning the Czech fighter contract. The rumours in the local press state that one of the company"s largest creditors Konsolicacni Banka is putting considerable pressure on the Georgia based company to withdraw and allow BAe Systems to move in. From press comments made by Bostwick, it seems likely that a potential partner could emerge, rather than a complete withdrawal by Ayres The plant, which produces the L-410/420 and L-610 twin turboprops, employs 1480 people in Kunowice. It is also responsible for manufacturing the wings and wheels for the Ayres turboprop transport, the Loadmaster in conjunction with the company"s plant in Alabama. A recent order for five L-420 from Seattle based carrier Pan Pacific has led to a great deal of acrimony after a visit my the airline"s management to the Kunowice plant in January. According to the airline, they found the aircraft no more than rough airframes and are now suing for the return of their $450,000 production deposit. Ayres have countered that the commuter carrier was incapable of raising the financing for the order, in explanation for dragging their heels on the contract"s fulfilment. These disputes have occurred against a background of increasing concern for the plant"s future as a producer for the Ayres Loadmaster programme, which has a lead order of 50 aircraft from Fedex and options for a further 350. The Czech plant will be responsible for the production and delivery of components for the programme as well as completed aircraft for Fedex in Europe under the contract. There is however, a real worry among a number of parties, including the plant"s current management, that they will be around long enough to become involved in the order, which was to have quadrupled the plant"s technical staff. This situation is not helped by rumours that the Fedex order"s timing may not be as immediate as expected. Associated articles: www.concise.org 25th June 1999: First US sales for Let L-420

Article ID: 1618