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Poised for takeoff: BAe news is good medicine for state's aviation industry.

THE RECENT ANnouncement by British Aerospace Inc. that it will headquarter BAe Corporate Jets Inc. at the Arkansas Aerospace Inc. facility in Little Rock should bolster the state's growing reputation as an aerospace center.

It also comes as good news during troubled times for the aerospace industry.

According to the Arkansas Industrial Development Commission, 60 aerospace-related companies now call the state home. Those companies employ about 8,000 people at salaries generally higher than that of the average Arkansan.

Dave Harrington, AIDC executive director, calls the choice of Little Rock as the company's worldwide headquarters a "wonderful idea."

"It tells me that our state's reputation in the global marketplace is maturing," Harrington says.

The British Aerospace announcement was welcome news at Arkansas Aerospace, where 32 employees lost their jobs last year because of belt-tightening in the recession-plagued industry. A wholly owned subsidiary of British Aerospace, the company now has 390 employees.

Dewi Rowlands, a former British Aerospace executive who assumed the leadership of Arkansas Aerospace from Dennis Davis last September, says the move also helps bring the Little Rock-based company further into the BAe fold.

Before, he says, a sort of "us" and "them" mentality existed. Now, the separate entities are thinking in terms of "we."

In a recent interview, Rowlands and Bill Boisture, president and chief executive officer of BAe Corporate Jets, alluded to an eventual name change to signal Arkansas Aerospace's strengthened alliance with its parent company.

Before, corporate jet operations in North America were based at Dulles Airport in Washington, D.C.

The move to consolidate the marketing, management and customer-support operations of BAe Corporate Jets in Little Rock is considered a shot in the arm at Arkansas Aerospace, but not necessarily a sign the troubled industry is over hard times.

In 1988, BAe bought Arkansas Aerospace, previously known as Arkansas Modification Center. Arkansas Aerospace's core business is the completion of corporate jets, but the company also services commercial and corporate aircraft.

Completion Work in Little Rock

Boisture says the company's Little Rock headquarters will oversee worldwide operations pertaining to the company's popular 125 series aircraft, sales of which hit a three-year high of 32 last year.

Development, engineering and manufacturing activities for the aircraft family, which includes the 800 model and long-range 1000, will continue at two BAe plants in the United Kingdom.

Last year, a majority of the 125 series corporate jets were completed at BAe's plant in Chester in the United Kingdom, but that is expected to change.

"We'll shift a majority of our |completion~ work during the course of '93 to Little Rock," Boisture says.

He cites a variety of reasons for BAe Corporate Jets locating its headquarters in Little Rock.

Among them are Arkansas' central U.S. location and its proximity to the increasingly important Latin American markets.

Arkansas Aerospace also has a reputation for quality workmanship and its new $20 million, 295,000-SF facility at Little Rock Regional Airport, Adams Field, is well-equipped to handle an expanded corporate jet focus, Boisture says.

The first employment phase of BAe Corporate Jets is expected to include about 25 people, but Boisture says more job growth is likely as completions and service operations are stepped up in Little Rock.

Details as to where the company's initial employees will come from are not yet finalized, but at least 10 jobs will probably be filled locally, a British Aerospace spokesman says.

The company declines to discuss the salary level of incoming employees but has indicated most positions are professional-level jobs, though clerical and other support personnel will be in the mix.

Other aerospace companies in the state say it may be a bit early to forecast what spillover effect the headquarters will have on the industry's outlook in Arkansas.

A spokesman for AlliedSignal Aviation Services, the new name for Little Rock's Garrett Aviation, says the company views the move positively since it located its engine shop at Adams Field to support operations at both Arkansas Aerospace and Falcon Jet Corp. AlliedSignal's Garrett engines are used on BAe's 800 model aircraft and on earlier models of the 125.

"British Aerospace's decision to relocate their corporate jet operation to Adams Field will strengthen Little Rock's presence in the aerospace industry as a major aviation center," says Bill Whittaker, a spokesman for AlliedSignal.

Rohr Inc., which has aircraft-component manufacturing plants at Sheridan and Heber Springs and is building one near Arkadelphia, makes a thrust reverser for BAe's 1000 model. But that component is not produced in Arkansas and a company spokesman says he's not sure how the company might benefit from the corporate jet headquarters.

"We don't have a good feel for that yet -- what that would mean in terms of potential increased business in the Arkansas plants," says Mark Bergherr, a Rohr spokesman at its Chula Vista, Calif., headquarters.

Bergherr says the Arkadelphia plant's start-up date is tentative because of management changes at Rohr, which is searching for a CEO and chairman to replace Bob Goldsmith, who took early retirement.

"We were planning on beginning operations in November of 1993," Bergherr says. "However, the company is slowing down the rate of spending on major capital projects pending the review of the new leadership ... so I don't know if that November date is still realistic."

Initial employment projections were that the plant would employ 50 people at the outset and 150 within three years.

Though it may be a while before the effects of BAe's Little Rock headquarters can be measured, Dick Holbert, president of Little Rock's Central Flying Service, says the end result will be mutually beneficial.

"There will be some benefits to Central," says Holbert. "In general, any time aviation activity increases at the airport, there are fallout benefits to all the operators."
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Title Annotation:location of BAe Corporate Jets Inc.'s headquarters in Little Rock, Arkansas
Author:Walters, Dixie
Publication:Arkansas Business
Date:Feb 15, 1993
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