Region’s Know-How Pilots New Plane

Southern California long ago lost its claim as the world capital of aircraft production, but a fledgling airplane company in Long Beach is about to start building a new commercial plane and possibly prove that the region still has world-class technical know-how.

Advanced Aerodynamics & Structures Inc., just a block from the troubled Boeing Co. aircraft complex in Long Beach, passed a critical development milestone earlier this month and is close to winning key federal licenses for a new corporate turboprop plane, one of the first new commercial aircraft designed and built in Southern California for decades.

Run by Carl Chen, a former Hughes Aircraft satellite engineer, and a cadre of workers from Northrop Grumman Corp., Lockheed Martin Corp., Boeing and other major aerospace companies, Advanced Aerodynamics plans to double employment to 200 in the next two months as it gears up production of its six-seat Jetcruzer 500--a plane for which it already has a backlog of orders worth $226 million. A test craft has logged 200 hours of flight.

Five years from now, Advanced Aerodynamics hopes to have a larger 12-seat business jet in production and 1,000 workers on the floor of its new 200,000-square-foot factory on 10 acres next to the runway at Long Beach Airport. The company even has a sketch of a 60-to-80-seat passenger jet that Chen says it might attempt if Jetcruzer sales make Advanced Aerodynamics the first commercially viable new builder of private aircraft domestically in nearly four decades.

Founded 10 years ago near what was then Lockheed’s secretive “Skunk Works” aircraft plant in Burbank, Advanced Aerodynamics is an example of how Southern California retains a strong base of aerospace expertise after a decade of cutbacks and consolidations.

Los Angeles County has 58,000 aircraft parts makers, assemblers and designers, after shedding 67,000 jobs since the industry’s peak in 1986. Chen said he’s sitting on top of a database of 2,000 resumes to tap when he starts hiring.

“Aerospace employment is still shrinking, but that doesn’t mean the knowledge is leaving the region,” said Lisa M. Grobar, director of the Cal State Long Beach Economic Forecasting Project.

Indeed, Century City-based Northrop Grumman has launched a program to capture aerospace expertise developed over decades through programs such as the Palmdale-built B-2 stealth bomber.

“We realize that as the industry gets smaller and as people age and go out the door it gets critical to know what knowledge you have and then be able to retrieve it,” said Jeff Wessels, who directs the company’s “knowledge management” program.

Northrop has created an elaborate documenting system that relies on retiree and employee interviews, video, questionnaires and various forms of software to collect and catalog the information about who worked on what product down to the part number.

Yet, as Advanced Aerodynamics discovered, knowledge alone doesn’t guarantee success.

The company burned up its first $20 million of capital from Taiwanese industrialist Song Gen Yeh, whose family controls 30% of the venture. The initial funding went to build two flying prototypes and gain Federal Aviation Administration certification for its Jetcruzer 450, a smaller, slower and lower-flying version of the 500. After deciding it would never be a moneymaker, the company cut the aircraft in half.

Advanced Aerodynamics then spent $35 million more from a stock offering building its Long Beach factory and developing the second Jetcruzer. It has an additional $10 million in private money to get through certification and initial aircraft order construction and delivery. It has yet to earn a dime.

“We won’t start to make a profit until after 20 to 25 deliveries,” Chen said. “If we deliver 100 to 150 we will start to make decent money.”

VisionAire Corp., a struggling small aircraft builder in St. Louis, also an aerospace center and the headquarters of the former McDonnell Douglas Corp., is attempting to leverage the expertise in its region to launch a small business jet.

But VisionAire’s Vantage jet, which like the Jetcruzer, heavily relies on composites and targets the corporate market, has been unable to turn regional aerospace expertise into financial success.

The Vantage is at least two years and $100 million away from FAA certification, according to VisionAire’s founder and chief executive, James O. Rice Jr.

Aerodynamic’s timing might be better. Market conditions for its new aircraft, which, barring a surprise, is nearing the end of the certification process, are helped by soaring general aviation aircraft sales.

Shipments of small planes rose 11% to 2,504 last year, and that’s on top of a 45% increase in 1998, according to the General Aviation Manufacturers Assn. The industry’s billings soared 24% last year and 26% in the previous year.

A 1994 change in aviation product liability laws and a strong economy that has funded the flying habits of private pilots, especially the owners of small and medium-size companies, brought new life to an industry that lawsuits and a recession almost killed a decade ago.

“We are in the right place in the right time,” said Chen, whose previous business ventures include Union China Investment & Development Group Inc., a Monterey Park commercial real estate company that filed for Chapter 11 bankruptcy reorganization in August 1995.

Advanced Aerodynamics is pitching the $1.5-million Jetcruzer 500 as a high-performance general aviation airplane and entry-level business craft.

It has an arresting appearance, unlike most aircraft on the market. The Jetcruzer has what’s called a canard design, with a little wing in the front and a large one aft. The Pratt & Whitney turboprop engine--a jet with a propeller--is mounted in the rear in a configuration that pushes, rather than pulls, the plane.

The design bears some resemblance to the discontinued Raytheon-Beechcraft Starship, a business plane that sold for $4 million to $5 million each but was canceled after only 53 were built because of slow sales.

Plans call for the pressurized aircraft to seat six, including the pilot. It will fly at speeds up to 345 mph, and will have a cruise altitude of up to 30,000 feet. The Jetcruzer will have a range of about 1,400 miles, but a four- to five-hour flight might get uncomfortable. The standard aircraft doesn’t come with a restroom.

“If it meets all of its performance targets, the airplane should have a nice little market,” said William Leeds, who ran the certification program for the Jetcruzer 450 but left the company to take on another aircraft development project with Aerostar Aircraft Corp. in Hayden Lake, Idaho.

The Jetcruzer’s fuselage is made of an advanced graphite composite, not unlike the B-2 bomber, though it will have conventional aluminum wings. Advanced Aerodynamics plans to build most of the Jetcruzer’s components at the Long Beach factory. It will vacuum-pack the graphite composite sheeting in molds for each side of the hull and then bake the molds in a 30-foot-long nitrogen-pressurized autoclave.

Chen said the company will be able to control manufacturing costs by producing its own tooling, jigs, dies and molds.

Moreover, use of the graphite composite material, Chen said, is simpler than metal construction because it eliminates most riveting, which is labor-intensive.

Work is nearing completion on a second prototype aircraft--one for FAA certification flights. Chen said he plans to rev up production of delivery aircraft starting in late summer in anticipation of FAA certification by December.

At full speed, Chen believes, the factory can turn out about eight Jetcruzers a month with one shift.

Chen said the company’s backlog represent 188 orders. Advanced Aerodynamics has nonrefundable $10,000 deposits for 156 of the orders and can start collecting partial payments as production of individual aircraft hit certain contractual milestones.

Earlier this month, Advanced Aerodynamics invited FAA inspectors to the factory. Engineers pumped a sealed test fuselage with enough compressed air to create pressure of 12.2 pounds per square inch and then held their collective breath to see if their design would spring a leak or burst. Nothing happened and the FAA gave the company its approval to pressurize the aircraft to fly at an altitude of 30,000 feet, a critical landmark for the Jetcruzer.

News of the test also helped elevate Advanced Aerodynamics’ stock, which has risen 23% this year, closing Friday at $3.88, down 9 cents, on Nasdaq.

Aviation experts liken the establishment of a successful new aircraft builder almost as remote as a new company breaking into automobile production.

“Yes, its very difficult to start a new aircraft company,” Chen said. “But the tools to do this are much better than even just 20 years ago. There are better computers, better materials, better avionics. Everything is smaller, lighter and cheaper.”

Still, there’s a chance Chen could wind up with planes on the factory floor and lack FAA permission to sell them. “You can’t use the word ‘complete’ until you are actually building and delivering the aircraft,” said Andrew Claverie, vice president of customer service with Socata, the general aviation plane division of Paris-based Aerospatiale Matra.

“You can get near the end of certification and wind up with just two prototypes sitting in hangers,” Claverie said.