Rumour of bankruptcy nonsense — Aerospace

Press, 2 May 1981, Page 19

Rumour of bankruptcy nonsense — Aerospace

PA Hamilton I Persistent rumours that < Aerospace Industries, of Hamilton, were facing finan- i cial collapse were dismissed as “nonsense” by the company's deputy chairman Mr Ossie James, yesterday. The company was having a difficult period because industry was not buying air- . craft, but said recent Cabinet meetings which discussed Aerospace were unconnected with its financial position, he said. The meetings were about changes to Air New Zealand’s policy towards investment in outside companies, including Aerospace. Air New Zealand has a 50 per cent shareholding in the company. The aviation industry was in “deep trouble” because of the lack of work, he said. Aerospace had planned to provide one aircraft a month but because of the downturn in the industry had not been able to sell them, and had a lot of aircraft in stock at the moment. The company's liquidity

was “much the same” as every other operator, and it did not have anything like the amount of work it would .usually have at this time of year, Mr James said. The company could “live through” its present problems, and there were no plans to lay off more staff. Some staff were laid off at .Christmas when Aerospace planned its production for the coming year. It had had financial difficulties before in its nine-year history. In 1974, the company had problems mainly because of the slow payments by a customer, and work in progress was held up because of the difficulty in obtaining sophisticated key components. The following year the Government agreed to finance the production of the company's agricultural aircraft if it was forced to stockpile planes because of a collapse in orders. In an unusual move the Government underwrote essential equipment orders so the company could continue to

build planes in the hope of an eventual improvement in demand.! In August, 1980. the company offered topdressing companies increased investment to finance development of its turbine version of the Fletcher topdresser. The move was to give the company more capital at a

time when aircraft sales were slow and development of the Cresco aircraft was well behind schedule. The chairman of Aerospace, Mr Skip Watson, said recent profits by the company had been “far from impressive,” but stressed that it was in no immediate financial danger.