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SSAC's first light aircraft almost ready for delivery

Sino Swearingen Aircraft Corp (SSAC) said it has completed all flight tests and all the paperwork for delivering the company's first light business jet SJ30, chairman Kuo Ching-chiang (郭清江) wrote in an e-mail to the Taipei Times yesterday.

"The airplane will be handed to FAA [Federal Aviation Administration] [yesterday] for on-ground checking and flight spot checks. When FAA finds everything satisfactory, a Certificate of Airworthiness will be issued to SSAC for delivering the airplane," Kuo said.

Kuo said the flight tests were glitch free, an exciting outcome as people normally expect a lot of glitches with a completely new airplane design, especially one from a new company like SSAC.

Confident

While Kuo said he was confident in delivering the airplane to its first customer by the end of the month, a lawmaker in Taiwan questioned the firm's credibility, citing its continuous delays in mass production.

On Monday, the Chinese Nationalist Party's (KMT) Lai Shyi-bao (賴士葆) questioned Kuo's ability, citing a loss of US$200 million the company has incurred since he took over some 20 months ago. Lai said he doubted if the company could deliver the plane by the end of the year and asked the Ministry of Economic Affairs (MOEA) to determine whether anyone at SSAC should take responsibility for the company's financial woes.

In response, Kuo said it would be inappropriate for him to respond to Lai's comment because he didn't have a full picture of the lawmaker's criticism. But he admitted that negative comments and untrue rumors from Taiwan have hurt the company's image.

"Our customers, suppliers read these comments and start to have doubts about the company," Kuo said.

The SJ30 jet flies slightly faster than a Boeing 737 and much faster than other light business jets in its class. The FAA issued the SJ30 jet a type certificate (TC) on Oct. 27 last year, which authorized SSAC to conduct in-house flight training for customers seeking SJ30 type ratings.

Kuo said the company expects to produce 100 jets a year by 2010, if SSAC receives the finance it needs in full and in a timely manner. The airplane sells for about US$6.2 million and the company has 302 orders on the books, he added.

Kuo -- former vice chairman of the Public Construction Commission and the holder of a doctorate in aerospace engineering from the Massachusetts Institute of Technology -- has been under pressure recently for failing to help turn around the ailing company, in which the government holds over a 90 percent stake.

Pouring in cash

The government has been pouring tens of billions of dollars in SSAC since its establishment in 1999 by combining Swearingen Aircraft Corp and Sino Aerospace Investment Corp (華揚航太投資).

With mass production delayed year after year, the local press have speculated that the government may ask the state-run Aerospace Industrial Development Corp (AIDC, 漢翔) to take over the company, or sell it to foreign investors for US$100 million, or simply shut SSAC down as the company could be a bottomless money pit.

In August, the company laid off about 100 people in San Antonio, Texas, and 50 in Martinsburg, West Virginia.

Layoffs

"We made the layoffs because we encountered some manufacturing problems and had to slow down the production of the airplanes," Kuo said. "Now the root causes of the problems have been identified and the solutions are being implemented, we expect production to pick up, and some of the people we let go will be recalled based on our needs."

The layoffs caused some disturbance to SSAC's original expansion plan but Kuo said he expected no impact on its long term goals.

Even so, earlier this month, Vice Minister of Economic Affairs Shih Yen-hsiang (施顏祥) led a delegation in a visit to SSAC headquarters in San Antonio for the first time, aiming to obtain first-hand information about the company following a delay in its efforts to mass produce the SJ30 jet, mainly because of incorrectly-installed wings.

"Shih visited us last Monday and Tuesday [Oct. 9 and 10] ... The visit was mutually beneficial to both sides. He got a chance to see the company for the first time and we got an opportunity to present him with the whole picture," Kuo said, hoping that Shih's visit would help the economics ministry make recommendations to the Executive Yuan.

Whereas SSAC is currently in the process of fund raising, the MOEA will make a final review of the company's operations and seek to solve its management problems by the end of next month, Minister of Economic Affairs Steve Chen (陳瑞隆) said on Monday.
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