Diamond Appeals For Loan Support

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The president of Diamond Aircraft has issued a public appeal (PDF) for support for his company's bid for a $35 million loan from the government of Canada. In an Op/Ed piece in the London (Ontario) Free Press, Peter Maurer says the company's survival may depend on the politically mired loan request. "The protracted federal government decision process puts the entire London operation at risk," Maurer said in a lengthy explanation of the company's apparently precarious situation. Maurer said the company asked for the loan (he stresses that it is fully repayable) as a last resort when private funding fell through due to the recession. He also stressed that $35 million in private funding has already been committed as has a $20 million loan from the provincial government of Ontario but both are contingent on the federal government contribution. The loan application was made last fall but no decision has been made and a federal election being held Monday has complicated the public debate on the issue. Federal officials have said a decision will be made on the request sometime after the election but won't set a time. Finances aside, the delay is having a potentially far more devastating effect on the company.

As we reported earlier this month, when Diamond laid off 213 staff in response to the funding shortfall, other companies, including Piper and Bombardier, began recruiting engineers for their jet programs. Maurer says in the Op/Ed piece that losing key personnel could not only sink the D-Jet, it might spell the end of the Canadian operation, which also builds piston singles and the DA42 twin. "With the loss of this team, the building of a replacement team would add cost and time that the program and company may not survive," Maurer wrote. Maurer has held meetings with key members of the current government, but the Canadian political landscape is expected to change dramatically on Monday with a last-minute surge by the left-of-center New Democratic Party challenging the current right-of-center Conservative government.