An opposition lawmaker yesterday demanded that the government sell its majority stake in a US aircraft company that has failed to attract new investment and produced just one business jet in 11 years.
Chinese Nationalist Party (KMT) Legislator Lin Yu-fang (林郁方) said the Sino Swearingen Aircraft Corp (SSAC) would need an estimated NT$13 billion (US$340 million) and another 18 months before it could begin mass production, citing a recent official study.
SSAC is a joint venture between Taiwan's Sino Aerospace Investment Corp (華揚航太投資) -- under the Ministry of Economic Affair's trust -- and Swearingen Aircraft Corp of San Antonio, Texas.
"Investing in the company was a big mistake," Lin said. "The company has failed to raise new funds, and the [Taiwan] legislature is unlikely to approve any further funding."
The ministry announced on Thursday that it has decided not to inject any further funds into the troubled SSAC.
The ministry is looking for strategic investors and candidates that would transfer part of the design and manufacturing work back to Taiwan would be considered first, the ministry said in a statement on Thursday.
State-funded Aerospace Industrial Development Corp (AIDC, 漢翔航空) is studying whether it would want to invest in the company, Minister of Economic Affairs Steve Chen (陳瑞隆) said on Friday.
AIDC sent a team to SSAC's headquarters in San Antonio last month for a final evaluation.
But Lin questioned how the AIDC could bail out SSAC, saying that the Taiwanese firm had a poor track record and survived mainly on government subsidies.
The likelihood of finding private investors for the firm also appears extremely slim, given the large amount of funds needed, Lin said.
Since its establishment in 1996, Taiwan has invested between US$500 million and US$600 million in SSAC, but the company only won regulatory approval to build its business jet in late 2005 and has delivered only one plane.
The manufacturer delivered its first seven-seat, twin-engine SJ30-2 jet to San Antonio businessman Douglas Jaffe last October. It has more than 290 orders for SJ30s on its books, with a price tag of approximately US$6.2 million a jet, former SSAC chairman and chief executive Kuo Ching-chiang (郭清江) told the Taipei Times on July 8.
But the number of orders for the SJ30-2 jet has dropped to 276, the ministry said in the statement last week, citing poor business operations at the jet maker.