Dream of high-paying jobs in Northland crashes and burns

The vision of high-paying jobs building airplanes was too tantalizing for public officials and now they’re paying the price.

Alan Klapmeier started Kestrel Aircraft after a split with his brother and his former company, Cirrus.

Wisconsin gave his company $4 million on the promise he’d build an aircraft factory in Superior, Wis., employing over 600 people. Wisconsin “won” Klapmeier’s competition with Maine in bidding with public financing for his business.

In 11 months, Klapmeier hasn’t paid anything on the loan and there’s no indication the factory will ever happen so now Wisconsin is taking legal action, the Duluth News Tribune reports.

These days, aircraft manufacturing is a bad investment, despite the success of Cirrus over the years.

People aren’t learning to fly much anymore, the economy isn’t what it once was and there’s too much competition in business aircraft sector for a new company to make it.

The News Tribune also reports a subsidiary of ONE Aviation — Klapmeier’s Kestrel is now part of the corporation — hasn’t used a $1.5 million loan from the IRRRB and a hangar hasn’t been used that the Grand Rapids Economic Development Authority bought for $293,000 with the notion that it would be used to build parts for a jet, employing 20 people.

How many jobs have been created with the all of the financing? None.

“We’re being cautious. But we’re still hopeful,” IRRRB Commissioner Mark Phillips told the News Tribune. “The latest we’ve heard is that they’re still trying to get their financing organized. We aren’t out anything to let them have more time.”

Neither were authorities in Maine, who gave Kestrel more time to come up with rent money for its hangar workship in Brunswick after the company didn’t pay its $15,000-a-month rent for a year.

Kestrel had promised there’d be hundreds of jobs there. It employed about a dozen.

Last week, Kestrel was evicted.

Archive: Iron Range board ready to bet on another airplane company (NewsCut)

  • MrE85

    I wonder how much Wisconsin would pay a traveling music professor who promises them a boys band?

    • $3B for Foxconn.

      • jon

        I figured it at closer to $4 billion…

        Either way they could afford to pay those workers ~$20k a year for the same 15 years the foxconn money is distributed over for doing nothing.

        • Rob

          Or a better wage for 8 or 9 years; still would be a nice length of time.

          • Jack Ungerleider

            Playing with numbers is something I do, so lets break this down a little bit.
            $3B over 20 years is:
            $150M per year
            Spread over 10,000 people is $15,000 per person per year
            Coupled with a $10 minimum wage that provides: $20,000/person/year

            Total income: $35,000 = $17.50/hr equivilant

            There’s your $15/hr wage and then some.
            As of 2016 Wisconsin’s population was about 5 million people. Cost per person (understanding that not everyone is a tax payer) is $30/year or between $1.15 and $1.25 per paycheck. If you make the assumption that only 50% of the population is paying income tax that still comes out to $60 per taxpayer per year and that’s $5 a month. Seems like a good way to spread the “livable wage” concept across the whole of society.

          • Rob

            Cool stats!

          • Jack Ungerleider

            The amazing thing is that most people will look at that and their eyes will glaze over, they’ll nod off and probably fall out of their chair. There’s not much beyond middle school math in those calculations. Many people are Math phobic and don’t want be presented with this kind of analysis. So I’m going to extend the previous comment. 8^)

            Since Wisconsin’s current minimum wage is $7.25 a grant of $15,000/year would be more than a full time minimum wage job ($14,500 at 2000 hrs/yr). So if you have a household with two workers doing full time at minimum wage a grant of $15,000 would be the equivalent of a third full time income, or in a situation where children are involved allow one parent to stay home and care for the children while the other worked. Other scenarios involving multiple part time jobs can be worked through, but as my old textbooks used to say, “that is left as an exercise for the reader.” 8^)

        • First thing I thought…then the local economy would at least get THAT $$

    • Mike
    • wjc

      You gotta know the territory.

  • Zachary

    Speaking of building airplanes – any further word about that crash over at Flying Cloud last week? I have not read anything following up on it – cause, etc.

    • The preliminary report from the NTSB came out yesterday. It’s mostly just a recitation of facts already known. But the most interesting thing — to me — is there was NO mention of anyone reporting a fire aboard the plane as some officials had previously said. The witnesses description of the plane’s behavior described what is a classic stall-spin to the ground on the turnback to the airport. They had also reported the plane appeared unstable when taking off.

  • Rob

    Some irony in the fact that kestrels are a type of falcon; I guess the only difference here is the nature of the prey.