Kestrel Aircraft Decision Brings 600 Jobs North
Superior has landed a general aviation manufacturing plant and hundreds of new jobs.
Kestrel Aircraft Corp. formally announced Monday it will operate two manufacturing/assembly plants in Superior, confirming a story that had been circulating since late in December.
“We’re talking 600 new jobs,” Wisconsin Gov. Scott Walker said at the morning announcement at Richard I. Bong Municipal Airport. That’s the most associated with any new development since World War II, according to Superior Area Chamber of Commerce President Dave Miner.
“Six-hundred is a reasonable number and we hope to eventually have even more,” said Kestrel chairman and CEO Alan Klapmeier, who also co-founded Duluth-based Cirrus Aircraft.
The effort to recruit Kestrel, which will manufacture a corporate-size turbo jet airplane, began in July, said Superior Mayor Bruce Hagen.
“Superior and Douglas County have a can-do mentality,” he said, also crediting Walker and Wisconsin economic development agencies.
A package of incentives helped lure Kestrel, including:
• $30 million in new market tax credits through the Wisconsin Housing and Economic Development Authority (WHEDA).
• $60 million in future new market tax credit allocations through WHEDA.
• A $2 million loan through the U.S. Treasury Department’s State Small Business Credit Initiative Program.
• $18 million in Enterprise Zone Tax Credits through the Wisconsin Economic Development Corp. (WEDC)
• A $2 million economic development loan, also through WEDC.
Construction will begin on Kestrel’s Winter Street composite plant this spring and in 2013 on the Bong Airport assembly plant.
Kestrel was launched in July 2010 in a merger with United Kingdom-based Farnborough Aircraft Corporation Ltd., which had already developed a prototype. Its headquarters is in Brunswick, Me., where it has a 10-year lease on 93,000-square-feet of hanger space at the former Naval Air Station. It’s unclear what aspect of manufacturing would occur in Maine versus Superior. In an Oct. 20 story, however, The Reader Weekly reported the Maine facility might be used for a separate Kestrel division that will refurbish aircraft made by other firms.
Farnborough was founded in 1998 to develop a six-seat air taxi, said Adrian Norris, who was director of business development at Farnborough Aircraft and now sits on the Kestrel board. The Kestrel JP-10, he explaines in an Aero-TV video, evolved from the amateur-built Epic LT. It can fly at about 25,000 feet. About $20 million was invested in developing the aircraft, with total costs expected to reach about $100 million, according to the aviation magazine “Flying.” The aircraft is expected to fly at 300 knots and sell for about $2.8 million.
The product Kestrel will manufacture, called the K-350, is somewhat larger than current models offered by Cirrus but similar in size to the Duluth company’s proposed SJ-50 lightweight personal jet, which Alan Klapmeier was in the midst of developing when he departed Cirrus in 2009. He and Ed Underwood sought unsuccessfully to obtain development rights to that design. Underwood, a retired executive director of Arcapita, the Bahrain-based firm that had invested in Cirrus before its sale to the China-based CAIGA, now is on Alan Klapmeier’s management team at Kestrel.
The carbon-fiber Kestrel seats five passengers plus the pilot. Kestrel says it will have the lowest seat miles per gallon cost of any aircraft in its class while having journey times on par with light jets.
“Our community is excited and ready. Today, we’re at the top of the roller coaster and the best part of the ride is yet to come,” said Douglas County Board Chairman Doug Finn.
This article first appeared on BusinessNorth.com.