Ford buys a Chrysler in Pontiac

 - May 22, 2008, 7:18 AM

DaimlerChrysler Aviation, which had been on the block for several months, has been acquired from the German-based automaker by Ford Motor Company board member Edsel Ford II. As a result of the sale, the facility has been given back its former name–Pentastar Aviation.

The Pontiac, Mich.-based company was well known as Chrysler Pentastar, a subsidiary of Chrysler Corp., before the automaker was bought by Germany’s Daimler-Benz three years ago and Pentastar’s name was changed. This past February, DaimlerChrysler placed the aviation unit on the block as the result of across-the-board adjustments in response to the company’s deteriorating financial situation. The sale of the U.S.-based aviation unit to Ford is no surprise. AIN this past August revealed that Ford was negotiating for the unit.

The 52-year old Ford will buy the company’s 212,000-sq-ft complex, which includes FBO facilities, flight and aircraft management operations, repair station and avionics installation shops, at Oakland County (Mich.)  Airport, but not its airplanes. The company’s two Gulfstream IVs and Hawker 800 were sold separately. Three other DaimlerChrysler Aviation airplanes–two GVs and a GIII–are being retained by DaimlerChrysler and will be managed by Pentastar. The majority of the approximately 300 employees have been asked to stay with the new company, one of the first aviation service facilities to receive ISO 9002 quality certification in 1998.

Ford is described by colleagues as an “aviation enthusiast” and the Pentastar acquisition is his first business venture into an aviation services company. He said he was “excited to announce a new owner, a new name and a broadened mission.” By broadened mission, a spokesperson said that Ford wants to “expand the business that exists.” The spokesman said a lot of things “came to a halt” while the sale was being transacted. “Now we’re ready to get back to what we do well and to do more of it. There is no grand plan.”

Thomas Seeber, formerly with PricewaterhouseCoopers, was named Pentastar Aviation president and CEO. Seeber, a private pilot, replaces Tom Davis, who left the company this past summer to become COO of Avolar, UAL’s new fractional and charter subsidiary. Another PricewaterhouseCoopers financial veteran, Brady Bailiff, was named CFO. Kris Mayle, a 20-year Pentastar employee and most recently director of operations, was named v-p of operations. Steve Taylor, another Pentastar alumnus, has been promoted from director of sales and marketing to v-p of sales, marketing and customer relations. All other management positions were promotions from within the existing staff.

Also part of the sale is Automotive Air Charter, a joint venture originally established in late 1999 between DaimlerChrysler Aviation–now Pentastar Aviation–and the General Motors flight department to use their respective aircraft in air-transport services beyond company travel. Approximately 20 airplanes, including Gulfstream Vs and Citation Xs from GM and Pentastar, are available to meet outside demand for the charter service. Both GM, Pentastar and DaimlerChrysler continue to operate independent flight departments. GM is the majority owner of the venture.

An Airbus Corporate Jetliner shuttle operation between Oakland, Michigan and Stuttgart, Germany, was not part of DaimlerChrysler Aviation, but belongs instead to the DaimlerChrysler corporate flight department based in Germany; it is therefore not part of the sale.

Pentastar’s roots go back more than 50 years, beginning when Detroit-based automaker Chrysler established a flight department based at Willow Run Airport. As part of a government-funded bailout, in 1979 Chrysler agreed to disband its in-house flight operation. But by establishing a corporate aircraft charter subsidiary soon after, Chrysler Pentastar Aviation, the automaker found a way to keep using corporate aviation without running afoul of the agreement. In the early 1980s the subsidiary began offering its services to the public.

Corporate and business flying is a high growth industry,” Ford said. “Pentastar Aviation is ideally positioned, and now clearly poised, to fully leverage growing air transportation needs by providing safe, secure, convenient and highly personalized air service.”