Trouble at Alpha

[beagle]

Just down the road from you dave, heard any more

35 jobs go as plane maker shuts
By ROELAND van den BERGH - The Dominion Post | Wednesday, 23 January 2008

Alpha Aviation has closed its factory at Hamilton Airport with the loss of about 35 jobs, not long after being sold to a listed Australian company, Inventis.


Inventis appointed a liquidator yesterday, after costs spiralled out of control and a three-month search failed to find a new buyer for Alpha.

Alpha Aviation was set up in 2004 when it acquired the world rights to the French-designed Robin R2160 and R2120 light aircraft, renamed the Alpha 2000 series.

Inventis, then Gregory Australia, bought Alpha in August 2006 for A$11 million.

Alpha was targeting the aging global fleet of 25,000 two-seater training aircraft market, worth US$5 billion.

The sale to Inventis was to have given Alpha access to capital to rapidly expand production to 100 aircraft a year.

About 20 aircraft had been delivered in New Zealand and Australia, including some to flying schools.

Inventis chairman Ian Winlaw said Alpha aircraft had been selling well, with significant orders. "But there were internal cost problems that were unable to be controlled."

The liquidator was likely to try to sell the business as a going concern to another aircraft manufacturer, and to reopen the factory.

There were about four aircraft on the production line and some staff might be kept on to complete those.

"We cannot have our profitable divisions to continue to support Alpha's development," Mr Winlaw said.

Alpha had been forecast to lose money in 2008 while production was increased. But it was not as advanced in its development as previously thought.

More details about the company's financial position would be made available tomorrow.

New Zealand publisher Barry Coleman was appointed to the Inventis board yesterday.

[corsair67]

This is very sad, and I can't help wondering if Inventis isn't throwing in the towel a little too easily?

Sounds like they were almost expecting to make millions out of the place in the first year, which isn't really very realistic.

[Dave Homewood]

That's very sad to read. I had heard that their production line had stopped but I assumed it was for the Christmas break. That may explain why we were not allowed a look through their factory on the 12th of January. And Noel Cruze, their test pilot, was saying just what great aircraft they were too, so it's a shame for all the potential customers here as it was slowly beginning to catch on.

[flyjoe180]

I went to the opening of the factory and visited again in late 2006 and they were very enthusiastic about the future with more orders than they could handle. So what happened?! And is Pacific Aerospace still going healthily? Last I heard it was they who were in trouble.

[corsair67]

PAC always seem to be in trouble! ;D

Where's the NZ Govt in all this: isn't it their duty to help foster businesses like this? I can see someone else will buy the company, pack it all up and send it overseas - and then make a motza out of it!

[Dave Homewood]

Wasn't Alpha building a contract of 100 aircraft with a company in Canada who were working in parallel? Or was that another Rukuhia based outfit?

As for PAC I believe it's doing a lot beter with the new owners in charge and I heard recently they're now taking on actual aircraft engineers to build their aircraft rather than the unskilled labour of the past there. Just rumours, but hopefully the company will continue to grow and flourish.

[flyjoe180]

The local government was spouting about how successful the whole operation was, and that they had invested millions in establishing Hamilton as an aeronatutical manufacturing centre for NZ. Must be rather disappointing for them to see this news.

[Dave Homewood]

I guess it is very hard to compete with the likes of Cessna and Piper, even if your product might be better, simply as they have the brandname, like Coke or Toyota. Everyone knows it.

[flyjoe180]

Piper and Cessna have not been making two seaters for years, only now is Cessna reentering the market, and even then with a powerplant hailing from the C150 days. The Alpha R2160 is one of few certified GA two seat trainers that I can think of about in production that has aerobatic capability. The problems have to extend from economical issues inside the company, not due to fierce competition from outside.

[Bruce]

Alpha was having problems with spooling up the quantity of production. They have plenty of orders but due to delays with the subcontractors there were instances of staff waiting around doing very little (and having to be paid), waiting for the bits to come in. this is for things such as the CNC machined lower fuselage skins etc. With a bit more investment that sort of thing could have been done in house if required. The issues arent insurmountable, it just may take an investment of time and money to do it properly. The production techniques Alpha use are a big step forward from the way Robin built the same aircraft, so I dont think they are doing anything wrong, its just its taking a lot longer than expected to get a positive cashflow. Surely there will be a sensible buyer out there somewhere?

[Peter Lewis]

It always takes some years to get a start-up business to actually generate cash profits. In the meantime, the interest on the capital involved is steadily chewing you up.

A sad outcome, at this time. Maybe Mr Izard will re-enter the scene?

[stu]

Damn shame, here's hoping that a buyer is found.

The Robin/Alpha 120 is my regular mount at the moment and, although not the fastest and most powerful around, is a really nice and responsive aircraft to fly.

[flyjoe180]

Hamilton's Alpha Aviation put into liquidation
4:35PM Wednesday January 23, 2008

Hamilton firm Alpha Aviation has gone into liquidation leaving a good proportion of its 70 staff out of work and owed a week's wages.

The company called a meeting of staff yesterday to tell them the grim news.

Australian listed parent company, Inventis, called for a suspension of trading in its shares as it made the announcement.

Avionics technician Geoff Sanderson told the Waikato Times the company informed them it was going into liquidation and couldn't pay staff. He was due to be paid yesterday but had not received any money.

Workers were told to collect their tools and go home.

Mr Sanderson moved from Air New Zealand to Alpha in November and his son Tim, 18, had also been working for a short time as a trainee process worker.

He said the company had been still hiring until recently, with one moving from the UK to take up work only two weeks ago.

He had seen no sign the company was in trouble. "It was unexpected. The work, if anything, was ramping up."

Just 18 months ago, then chairman Graeme Edwards said Alpha was "exceeding our wildest expectations" with regards to orders for its two-seater aircraft.

It was expected Alpha would pump $75 million into the local economy over 10 years, excluding aircraft revenue.

Alpha is a key part of a cluster of aviation companies in Hamilton which also includes Pacific Aerospace and CTC.

Inventis appointed a liquidator after costs spiralled out of control, and a three-month search had failed to find a buyer of the business.

Alpha was set up in 2004 when it acquired the world rights to the French-designed Robin R2160 and R2120 light aircraft, renamed the Alpha 2000 series.

Inventis, then Gregory Australia, bought Alpha in August 2006 for A$11 million ($12.63 million) .

Alpha was aiming to sell into the $5 billion market of training aircraft. The sale to Inventis was to have given Alpha access to capital to rapidly expand production to 100 aircraft a year.

About 20 planes had been delivered to New Zealand and Australian customers, mostly flying schools.

The Times reported that the liquidator was likely to try and sell the business as a going concern to another aircraft manufacturer and reopen the factory. Four aircraft were on the production line and some staff might be kept on to complete those.


Inventis said it was not prepared for its profitable divisions to support Alpha, whose internal costs had spiralled up.

Inventis said more details about the company's financial position would be made available tomorrow.

Investors in Alpha included Tony Noun, a director of both companies, Richard Izard, Mr Edwards, Barry Colman, and John Birch.

- NZPA

www.nzherald.co.nz/section/1/story.cfm?c_id=1&objectid=10488333

[vgp]

www.stuff.co.nz/waikatotimes/4373374a6004.html

Job hope for Alpha workers
By WAYNE TIMMO - Waikato | Friday, 25 January 2008

Some of the workers made redundant by the collapse of Alpha Aviation could find work with another Hamilton plane-maker looking to expand.


Alpha's Australian parent company, Inventis, sent the close-to-70 workers home and called in receivers on Tuesday in a move that surprised other industry players.

The company was hailed as a key player in Waikato aviation, and its collapse is a major blow for the local industry which had recovered after Pacific Aerospace laid off 45 workers in 2005 in the wake of a failed US deal.

Pacific Aerospace Ltd commercial manager Todd Stephenson said the company had increased staff from 107 to 150 last year and expected to add about another 20 by the end of this year as it raised production of its flagship 750XL aircraft from 11 to 16 a year.

"A lot of the staff from Alpha are ex-Pacific Aerospace people and there's a possibility there (we could hire some) but we need to make sure we get the right people," Mr Stephenson said.

Receiver Colin McCloy, of accountants PricewaterhouseCoopers, said it was too early to say how many Alpha workers would lose their jobs. "We are still investigating the position of the company."

An Alpha worker yesterday told the Times staff were owed a week's wages. Mr McCloy was unable to confirm this or say when workers would be paid but said the receivers would notify staff soon as Alpha's position became clearer.

CTC Aviation chief executive John Jones was surprised by the closure, saying Alpha had a great product.

The airport-based CTC flight school trains 180 commercial pilots a year and operated 11 Alpha 160A trainers, one of which had arrived earlier this week.

"We made a conscious decision to go with Alpha, they are an excellent aircraft and our flight instructors prefer them to anything else," Mr Johns said. CTC had placed orders for "a few more" aircraft but he was unsure whether they would be delivered.

Mr Jones did not think the closure signalled a downturn in the aviation cluster. "It's just one part of the cluster and things will continue."

Hamilton International Airport chief executive Chris Doak said the receivership was disappointing and he hoped Alpha could trade its way out of difficulties.

Hamilton's aviation industry was well established and he did not expect Alpha's fate to have a wider impact.

Alpha leases land from the airport but owns its premises. Mr Doak said there was no outstanding rent. He hoped to see the business stay but finding a new tenant would not be a concern.

Recruitment company New Life New Zealand places skilled UK workers in the aviation sector. Although it had not dealt with Alpha, business development manager Paul Goddard said the closure could make it harder to attract workers.

Aviation Industry Association chief executive Irene King wondered whether Inventis, which bought Alpha in 2006, pulled out too soon. Plane-makers often took early losses and operators had to expect a wait until returns came in. "It's not a typical business and even some of the big players overseas like Airbus have had losses."

[vgp]

Buyout may help firm to fly
Waikato Times | Saturday, 23 February 2008

-Hamilton based Alpha Aviation may be down but it's not out. Chris Gardner and Wayne Timmo look at new options so the firm can fly again.


The management team who ran failed Hamilton training aircraft manufacturer Alpha Aviation Ltd are considering a buyout.

The business, which is based at Hamilton Airport, went into liquidation and receivership on January 22 after costs spiralled out of control and a three-month search by Australian owner Inventis failed to find a buyer.

Inventis chairman Ian Winlaw told the Waikato Times a buyout by management, including general manager Gretchen Jahn, was one of many offers on the table.

Yesterday Ms Jahn confirmed a management buyout was one of the options in the offing, but would not say more. Mr Winlaw said he did not know when a deal might be closed.

"Five per cent get to the starting line, and one per cent to the finishing line," he said from Sydney. "Different parties want to do slightly different things."

But receiver Anthony Boswell, of PriceWaterhouse Coopers, expected movement on a deal in two to three weeks.

In a statement posted on the Australian Securities Exchange website, Mr Winlaw said Alpha failed after it couldn't meet the projected output of its French designed Alpha 160 aircraft.

It had produced and sold 20 aircraft, confirmed orders for a further 16 and options for another 14, when it hit trouble with sister companies Alpha Aviation Manufacturing Ltd and Alpha Aviation Marketing Ltd.

"Production has been the greatest challenge and the objective has always been to change the production methods from a one-off hand-crafted aircraft into a production line aircraft that could be made in quantity, quickly and the same way every time," Mr Winlaw said.

"The manufacturing model originally adopted assumed only painting and assembly would be carried out in-house and all component manufacturing would be done by contract component manufacturers.

"This approach proved to be a significant issue with speed of delivery, quality and cost of manufacture of the component parts and the aircraft becoming major issues."

Mr Winlaw told the Times Inventis had spent $22 million bailing Alpha out since July. He said Alpha lost out on a $3 million New Zealand Trade and Enterprise grant, which would have been put towards a further production facility in Hamilton, and a capital raising bid to raise $11.25 million in Australia resulted in a $5 million shortfall. A legal stoush with the original French owners of the Alpha 160 aircraft design also took its toll. Alpha alleged critical drawings and tools were not supplied, resulting in production delays and costs but this was settled in early November.

Alpha was hailed as a key player in the Waikato's growing aviation cluster, which had largely recovered from the turbulence struck when fellow Hamilton Airport-based manufacturer Pacific Aerospace laid off 45 workers in 2005 in the wake of a failed US deal. Pacific Aerospace had increased staff from 107 to 150 last year and expects to add up to another 20 by the end of this year as it raises production of its flagship 750XL aircraft from 11 to 16 a year, despite a buffeting from the high Kiwi dollar.

Mr Boswell said he had re-hired a dozen or so of Alpha Aviation's 70 staff in a bid to keep parts of the operation afloat. Mr Boswell said there 370 aircraft built along Alpha Aviation's design worldwide which required parts.

But how many skilled workers are still waiting to pick up tools a month after being laid off should a buyout take place remains uncertain.

One former Alpha employee, who asked not to be named, welcomed the prospect of the plane maker flying again.

The man had since found work with another Hamilton aviation company, virtually on the same day as he had been made redundant from Alpha.

The worker was still owed a week's pay and contractual obligations for the lack of notice period and holiday pay.

He had received mixed messages from Alpha on whether he would be paid.

He was unlikely to return to Alpha due to loyalties with his new employer and questioned how many former workers were still available to restart the business.

"We have all gone our separate ways and they would find it quite hard the more time that passes. I think if it does come back it will be as a very different company."

Alpha had not been given enough support, both from the Government and its Australian parent company, he said.

``It would be cool to see this sort of thing go ahead.

``It's the sort of industry that once you took the lid off would just go well. The Government should have been in there from the word go.''

The worker said any firm investing in the aviation industry had to expect a long wait before it started turning a profit.

Aviation Industry Association chief executive Irene King also wondered whether Inventis, which bought Alpha in 2006, pulled out too soon.

Plane-makers often took early losses and operators had to expect to wait until returns came in.

``It's not a typical business and even some of the big players overseas like Airbus have had losses.''

Ms King said a management buyout could well be a solution for Alpha's problems.

``It certainly would remove any shareholder misgivings or instability and when we have a management buyout they are very influenced by the profitability of the business.''

But other parties were also looking at Alpha, with Ms King saying European aviation companies interested in buying the stricken firm had been in touch with her.

The interested buyers are understood to be involved with supplying the New Zealand Air Force.

Buying Alpha would be a cheap, low-risk way into the trainer aircraft market with an established model and factory.

``There's still certainly some interested parties from time-to-time,'' said Ms King.

Ms King said Alpha had happeared to have captured a potentially lucrative niche of the aviation market prior to its collapse.

``They produced a product that was globally in demand. It's not an issue of order books.''

The demand for training aircraft was driven by a need for commercial pilots to meet rapid growth in airline schedules.

``When you look at what's happening globally in aviation manufacturing, servicing and a number of other sectors are on a very very strong growth path it's four to eight per cent over the next five years.''

CTC Aviation chief executive John Jones said any moves that would revive Alpha were good for his aviation school and the Waikato aero industry.

The airport-based CTC flight school trains 180 commercial pilots a year and operated Alpha 160A trainers.

It would continue buying aircraft from Alpha if the company could deliver.

``Our pilots are sitting in the seat of jet aircraft (when they graduate).

``The reason they get good jobs is down to the quality of their training and the aircraft they fly,'' he said.

``The Alpha aircraft are ideal for us.''
www.stuff.co.nz/waikatotimes/4411601a6415.html

[vgp]

Alpha buyout a possibility
Waikato Times | Saturday, 23 February 2008


Grounded Hamilton plane-maker Alpha Aviation looks likely to fly again as groups, including its former bosses, line up to buy the company.


The business, which makes training aircraft, went into liquidation and receivership on January 22, leaving most of its almost 70 staff redundant.

Australian owner Inventis called in liquidators after spending $22 million bailing Alpha out since July and a three-month search for a buyer failed to attract any bids.

Inventis chairman Ian Winlaw said a management buyout, by a syndicate including Alpha general manager Gretchen Jahn, was one of many offers on the table.

Ms Jahn confirmed a management buyout was one of the options. Receiver Anthony Boswell expected a result within weeks, though Aviation Industry Association chief executive Irene King said approaches had also been made by European aircraft companies looking to enter the trainer market.

See Buyout may help firm fly, above
www.stuff.co.nz/waikatotimes/4411692a6004.html

[corsair67]

I really hope this succeeds, as I think this business has a lot of potential.

Obviously, as others have pointed out on here, it takes a fair bit of money to get a venture like this established, but I'm sure once production is up to full speed, thinks would look a lot better.

I'm surprised in some way that PAC hasn't gotten a finger in this pie.

[philip]

Jan 23, 2008 15:28:12 GMT 12 Peter Lewis said:

Maybe Mr Izard will re-enter the scene?

Didn't take long. I wonder if all the burnt alpha workers and contractors will line up to help. Then again it's going to be assembled in asia (ala cessna skycatcher)

i'd be interested in seeing their business plan, if they have one

from scoop

Hamilton aviation designer to launch NZ plane
Wednesday, 23 July 2008, 10:12 am
Press Release: Word of Mouth Media


Hamilton aviation designer seeks to launch NZ plane on to domestic and world market

A Hamilton aviation designer is seeking equity partners to launch his new Omega light aircraft on to the domestic market.

Omega will be one of the first companies to apply new generation manufacturing and research based computer tools. The aircraft was designed by Bill Izard and Peter Bull with some Auckland University input.

`We will make the parts here in Hamilton or Te Awamutu and have the final assembly done in Asia, then have them shipped back to New Zealand,’’ Izard said today.

`` We could produce up to six a month after the prototype has been completed and we could also sell the Omega in kitset form.’’

Izard said the market suited aero clubs, microlight and leisure pilots and as a trainer plane for pilots seeking a commercial licence.

``It has a distinct advantage and edge over other designs. It is easy to make and to produce parts. An easing of aviation manufacturing restrictions provides an opening in aviation industry which wasn’t previously there. ‘’

In just two years, the sport pilot/light-sport aircraft community has grown to be a significant and promising part of the general aviation picture.

Izard, who owns the brand and the design, said the Omega Aircraft company wishes to be part of the growing aviation market.

The Omega will cost $100,000 plus GST, ready to fly compared with other makes up to $300,000.

We are now seeking investors or partners to turn this aircraft into reality and back the Omega company,’’ he said.

The Omega is a low wing aluminium plane with a proven diesel Gemini engine producing 100 horse power. They sit two people side by side. The visibility over the nose is excellent due to the relative upright seat position.

interesting about the diesel engine. their webpages says its the UL260 which isn't.

www.omega-aircraft.co.nz/

pass

[Bruce]

Different Izard to the one that started Alpha - Bill is his Son.

[shane]

Alpha put a new build 2160 on the civil register last month and has been exported so i think they are finishing the planes that were started and still on the line. they are also building parts i believe. the omega was advertised on trade me a while ago im not sure what progress they have made.