Diamond ups the ante in bid to secure D-Jet funding

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Diamond Aircraft has raised the stakes in its fight to secure a $35 million Canadian government loan that would allow it to restart the D-Jet programme. It promises to develop unmanned and special mission aircraft for the North American market at its London, Ontario factory if the D-Jet is saved.

The Austrian-owned company hopes the commitment will convince politicians contesting a 2 May federal election to back the loan, warning that the longer the delay, the harder it will be to re-hire 213 workers - more than half its workforce - who were furloughed when Diamond suspended production of the single-engine jet on 28 March.

Diamond needs $90 million to bring the personal jet - first flown as a prototype in 2006 - to certification, something president Peter Maurer estimates will take 22 months. The company, which also has a factory near Vienna, has built three of the jets, two of which were involved in a flight test programme.

 © Diamond

The family of owner Christian Dries, who founded Diamond in the early 1990s, has committed a further $20 million on top of $120 million already spent since the D-Jet was announced in 2003. The Ontario provincial administration has promised $35 million, but only if the national government matches that figure.

The funding has become a campaign issue, given the importance of Diamond to the local economy. The outgoing minority Conservative administration had failed to agree the loan before prime minister Stephen Harper resigned, prompting the election. However, opposition Liberal leader Michael Ignatieff has committed his party to the investment and Maurer is confident the Conservatives will follow suit, despite his irritation at having to halt the programme and lay off staff.

"We are frustrated the federal government has taken so long to take a decision," says Maurer. "The province has done a full financial and technical due diligence and seen the value of making their loan offer. This is a very good investment for the Canadian government, not just in jobs, but the future technical developments that we have started here."

Maurer's case also rests on claims that Diamond employees in London have paid tax on $250 million of wages over the past 18 years, that Diamond is an export-led and high-technology company, and that any loans will be repaid with interest. "So far, we have been an entirely self-funded company and we will be investing more here in future," he says.

Although Maurer believes most of the furloughed workers will return, he says engineers, specialist composite technicians and flight test pilots, in particular, are in high demand in the industry and any lengthy delay will persuade many of them to seek jobs away from London.

Diamond has had a factory in London since 1993. As well as sole responsibility for the D-Jet, for which it has 225 orders, it builds versions of the two-seat DA20 and four-seat DA40 piston singles, and assembles twin-engine DA42s produced at its sister plant in Wiener Neustadt, near Vienna. Launched amid the early-2000s hype for very light jets, the D-Jet is one of three single-engine jets under development, the others being the Cirrus Vision and Piper's PiperJet.

In recent years, Diamond in Austria has branched into the military and special mission market, developing the sensor-equipped DA42 MPP and an unmanned version of the aircraft with Israeli manufacturer Aeronautics. Although the MPP is built exclusively in Austria, moving some of the production to Canada would allow Diamond to market versions of the aircraft to US government, state and local agencies. Maurer says further unmanned aircraft programmes could also be based there.