Cirrus May Expand into Aircraft Maintenance Base

Nov. 22, 2021

Nov. 20—Cirrus Aircraft, Duluth's largest manufacturer, continues to grow, and it's running out of room.

But the mostly-vacant former Northwest Airlines maintenance base in Duluth could provide the airplane maker with some temporary breathing room as it looks for a longer-term solution. In recent years, the facility had been used by AAR Corp. to service commercial aircraft, but that business closed up shop in May 2020 as the pandemic threw airlines around the world into a tailspin.

Cirrus is in immediate need of both more space and more workers, said Ben Kowalski, vice president of marketing.

"We are looking at several different options to expand our capacity to produce aircraft," he said, acknowledging that the maintenance base is under consideration by company management.

Their interest in the base appears to be more than passing, according to Chris Fleege, director of Duluth's division of planning and economic development, who said company staff and engineers have spent a more than a few weeks scoping out the facility and developing prospective layout plans.

Fleege informed members of the Duluth Economic Development Authority of the ongoing talks with Cirrus on Wednesday.

"They're taking a good thoughtful approach, and I expect we'll know more in the next couple of weeks," Fleege later told the News Tribune.

Kowalski said Cirrus is currently looking to fill about 200 positions, including more than 130 in Duluth. The company also has pre-assembly production in Grand Forks, North Dakota, as well as research, training and delivery facilities around the nation.

Earlier this year, Cirrus reported it employed about 1,900 people company-wide, with most of its workforce (1,300 employees) based in Duluth, where its headquarters remain. The company is owned by a subsidiary of China-based AVIC.

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DEDA owns the cavernous former Northwest/AAR maintenance base, and continues to lose money every day the facility sits empty, due to its sizable overhead costs. Fleege earlier estimated that carrying costs for the largely vacant building range between $50,000 and $60,000 per month.

If Cirrus indeed decides to lease space inside the base, Fleege doesn't expect the company to fully cover those carrying costs, but he said, "It would reduce the bleed."

Fleege said the company is considering up to a two- to three-year lease and told DEDA commissioners the arrangement could soften the authority's losses at the base while simultaneously providing support for a growing local business.

"It would be a win-win for both of us," he told the News Tribune.

Cirrus faces a welcome challenge, according to Kowalski.

"The demand for our products over the past 12-15 months has grown and has continued to remain strong, and so we're looking for options to grow our workforce and our facilities base," he said.

Through the first nine months of this year, Cirrus reported more than $360 million in sales. That's up 70% from the same period last year and nearly 6% from pre-pandemic levels in 2019, according to statistics from the General Aviation Manufacturers Association.

"Both Grand Forks and Duluth continue and will continue to be our main production facilities. We'll continue to build airplanes in Grand Forks and Duluth and expand in those facilities, as able, and to that end, the AAR building is one of the potential options," Kowalski said.

Fleege said DEDA would welcome Cirrus as a tenant, but probably not on a permanent basis. He said city staff will continue its effort to recruit another aircraft maintenance repair and overhaul (MRO) operation to occupy the building. The base, with its high ceilings and equipment, was specifically designed to accommodate large commercial aircraft.

SEE ALSO: Soaring together: Local 'aviation cluster' grows up around Cirrus

"It's a unique building designed with one purpose in mind. But this arrangement with Cirrus could be a nice intermediate use," said Fleege, noting that if the efforts to bring another MRO to Duluth eventually prove successful, at least six months of lead time would likely be involved.

Should Cirrus land in the facility, it won't be the first time the airplane manufacturer has set up shop there. The fast-growing company briefly made use of space in the maintenance base until 2009, when a recession temporarily forced the company to dramatically downsize.

While the ongoing pandemic has created other challenges for Cirrus, including supply chain and workforce difficulties, Kowalski said demand for its products has held up and even strengthened.

"A lot of people have been introduced to personal aviation over the past 15 months. When the world changed a little bit and commercial air travel greatly contracted, there were still a lot of people who wanted to move around for business or personal reasons. And personal aviation is the market that we're in," he said, noting that Cirrus' aircraft provide a popular user-friendly entry point for many new pilots.


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