Signs of life begin to emerge at moribund Dornier factory

 - October 8, 2007, 11:12 AM

The empty hangars at Oberpfaffenhofen airfield outside Munich reflect a stark impression of the decline Germany’s aerospace industry has experienced over the past decade. But if one were to look hard enough, signs of renewal have begun to emerge at this extensive industrial site, where Dornier GmbH built scores of aircraft for more than 60 years.

Granted, the signs remain subtle. Few workers are busy in the hangars where Fairchild Dornier produced the 32-seat 328JET until last year. Five aircraft in various stages of completion lay in rigs, with large components such as wings and control surfaces still detached from their fuselages. Their condition remains unchanged since April 2002, when the manufacturer filed for insolvency.

U.S.-based AvCraft Aviation, now responsible for the 328 program in Germany, employs some 220 people at Oberpfaffenhofen, mostly office personnel and engineers active in product support, engineering, sales, supplier negotiations and preparations for production re-launch next year. Although the factory still sits idle, Wolfgang Walter, CEO of AvCraft’s German subsidiary, sounded optimistic during a recent interview with AIN.

“There is a lot of interest in the 328JET by the market,” he said. “Once confidence in the manufacturing and support organization is fully restored, we should be able to achieve a sales breakthrough, and we hope that will happen soon.” Along with the five incomplete airplanes, AvCraft also acquired 18 completed 328JETs, five of which are now under contract.

Finance has become a subject of singular preoccupation, as one might expect from a company with more than 200 people on its payroll and relatively little income from sales and support. As announced earlier, AvCraft still plans to complete its five unfinished airplanes by year-end, and produce 18 new 328JETs next year.

Supplier Talks
Since the Oberpfaffenhofen facility served primarily as an assembly plant, AvCraft continues to talk with potential subcontractors over the supply of major components and subassemblies, including the wing. “We are in talks with many possible suppliers,” said Walter. “M7 Aerospace, successor of the Fairchild Dornier division that produced the wings in the past, is among them, but we have a wide choice, from the U.S. to Eastern Europe, and as far as China.” Most recent reports suggest a possible link with Canadian interests.

According to Walter, the company’s development program is progressing as scheduled. “A recent milestone is that we have obtained all necessary JAA authorizations as an aircraft manufacturer and support facility,” he said. “These authorizations are not transferrable when a company is sold, so we had to prove our capabilities to the German civil aviation authority with our present personnel and facilities.”

Search for 728 Partners
Meanwhile, Fairchild Dornier’s 70-seat regional jet, the 728, remains in Oberpfaffenhofen as well. Since the acquisition of the program by China’s D’Long Group, a dozen executives and clerical staff, mostly hired from Fairchild Dornier, keep an eye on the prototypes and tooling, pay rent for the hangars and try to find a way to complete development of the airliner.

“Our primary goal was to prevent the 728 hardware from going to the wrecking yard and the documentation from being dispersed,” one D’Long executive told AIN at Oberpfaffenhofen. “The next step will be to find partners and financing to re-launch development and manufacturing.”

Ruag Aerospace of Switzerland doesn’t have to contend with such worries, having had the good luck–or business acumen–to acquire the most profitable divisions of Fairchild Dornier: Airbus component manufacturing and third-party maintenance. Both divisions had continued to function while a court-appointed insolvency administrator managed Fairchild Dornier. Some 300 people work in the Airbus components division, and maintenance employs a staff of about 400.

While the main activities of Ruag’s 5,000 employees center around defense manufacturing and maintenance, the company aims to compensate for a declining military business with a stronger engagement in the civil sector, mainly corporate aviation. In Oberpfaffenhofen, it performs maintenance on the entire Challenger and Citation lines except the Citation X. It also holds maintenance certificates for the Dornier 328 turboprop, 328JET and Envoy 3 business jets, and type certificates for the Do-27, Do-28, Do-128 and 19-seat Do-228 turboprop.