Aviation firm's crew keeps plugging while end approaches
RUFFIN PREVOST Billings Gazette | Posted: Monday, February 6, 2006 12:00 am
GREYBULL - At the headquarters of former aerial firefighting firm Hawkins & Powers Aviation, two dozen people are completing what is likely to be the company's last job.
Four days a week, the crew works 10 hours a day refurbishing a C-130 cargo plane owned by the U.S. Air Force, a job that takes about 40,000 hours of labor. Fewer than 3,000 hours of work remain.
"We're working ourselves out of a job," said Mike Sims, a maintenance supervisor who has worked for H&P for eight years. "It's really something."
After the H&P board of directors decided last summer to phase out operations, there was talk around Greybull about a successor company coming in to pick up the profitable refurbishing business.
But that hasn't happened, and time is running out for the employees who are expected to finish their last scheduled job around the middle of February.
Refurbishing is meticulous, exacting and often monotonous work that involves chores such as replacing thousands of metal rivets, or removing, testing and reinstalling hydraulic and electrical lines.
It's a far cry from the romantic and dangerous aerial firefighting work for which H&P became famous.
The company's planes played starring roles in Steven Spielberg's "Always," a 1989 movie about a daredevil aerial firefighting pilot, and the recent Dennis Quaid film, "The Flight of the Phoenix."
Large tankers grounded
In summer 2002, two crashes involving H&P planes were followed by new aviation standards that eventually resulted in the grounding of heavy air tankers throughout the industry.
The accidents were probably the result of nearly undetectable metal fatigue, and H&P was cleared of any wrongdoing or negligence after an extensive, multi-agency federal investigation. But the result was a company deeply in debt and unable to make money from its key assets.
The company ceased its firefighting operations and sold its fleet of helicopters, leaving only its manufacturing division producing steady revenue, mainly by refurbishing and repairing planes.
"H&P has continued operationally over last two years relying on the manufacturing division," said Duane Powers, a former executive with the company who was instrumental in establishing the refurbishing business.
Powers is the son of Gene Powers, who ran the company with partner Dan Hawkins for more than 35 years. Gene Powers and Dan Hawkins still own the company, but are ready to retire, according to Duane Powers.
Duane Powers said he has resigned from the company and, along with a group of local investors, he has started his own business called Aerospace Fabrication, or AeroFab.
Powers said he hopes to see AeroFab become a successor to H&P.
"Over the next five years, this new company would be moving forward with its own new customers and its own new direction in the aircraft maintenance, modification and repair industry," he said.
Powers said he has been working with Big Horn County officials to secure funding for improvements to the airport, including an advanced fire suppression system and a larger hangar.
Currently, only the tail section of the C-130 will fit inside the H&P hangar; work on the rest of the aircraft takes place outside, exposed to the elements.
Ready for a buyer
Some employees are weary of talk about new hangars and improved infrastructure, and wonder why the business hasn't attracted investors on its own merits.
"We've proven we can be profitable doing this with what we have here right now," said John Olin, a mechanic with H&P who has also worked as an inspector and supervisor.
"Going into real debt with a multimillion-dollar hangar wouldn't make good business sense," he said.
"In the last year, when we let a lot of our mechanics go, we lost a lot of good people," Olin said. "I know of a couple guys working in mines right now, and some have gone into construction, and some have gone to work in the bentonite plants in Greybull.
"Others have gone to other towns or areas, trying to stay in aviation," he said.
At one time H&P employed around 200 people, but it now has about two dozen employees, some of whom are part-time.
Mechanics at H&P earn between $15 and $20 an hour, according to Sims, with the cleaners who do sanding and basic labor earning around $10 an hour.
Those wages would make any H&P successor company a premier employer in Big Horn County.
It's apparent by the way they work that the remaining H&P employees appreciate their jobs. They have been working for months without direct management, essentially supervising themselves.
"We don't need supervisors," Sims said. "We just come up with a plan and make it happen."
Working as a subcontractor for Lear Siegler Services, a major defense contractor, H&P employees received the only perfect score ever issued by the Department of Defense for a C-130 refurbishing job, said Jim Taggart.
Taggart is a turnaround specialist brought in by H&P last summer to restructure the company and manage its dissolution.
"Everybody should know how extraordinary those guys are," Taggart said of the refurbishing crew. "They've done phenomenal work while knowing there may not be jobs for them in the future."
Complicated interests
Coming up with a workable plan for a successor company is complicated, Taggart said, thanks to the number of players at the table and a tangled web of legal and financial interests.
To pay off more than $14 million owed to creditors, H&P sold its fixed assets to Great American, a liquidator that brokered a deal to buy all the planes, parts and even tools owned by the company.
"We're keenly interested in seeing those employees stay," said Ron Leesy, a senior vice president with Great American. "They are an exceptionally good work force."
Because many of the aircraft that Great American bought from H&P are not fully airworthy, Leesy hopes to repair them, then sell them for more than he could if they didn't fly. For that, he'll need the H&P employees.
But because Great American hopes to repair and sell by September nearly 50 planes acquired from H&P, it won't be a long-term presence at the airport.
Only two takers
Although six groups looked into taking over after H&P, there now appear to be only two serious parties expressing interest: AeroFab and B&G Industries of Thermopolis.
B&G is a precision manufacturer of custom fabricated machine parts, according to co-owner Paul Galovich. It has customers nationwide and has worked on projects with H&P.
"We have kind of a history of taking on distressed companies like that and building and developing them," said Paul Galovich, co-owner of B&G. "We think we can make that happen here, too.
"Some people think it's crazy trying to take over a company that has no work," he said.
Galovich said he's been impressed by the H&P employees he has worked with, and is pleased with how they've performed since the shake-up in the company's business.
"The company looks like it's doomed to fail," he said. "And yet they still keep coming to work and performing with such discipline. It speaks a lot of their integrity."
Lucrative contracts
It also speaks of the sheer number of hours required to overhaul a C-130, and the potential profits to be made by whoever can successfully take on contracts like those performed by H&P for Lear Siegler.
The latest C-130 contracts have typically generated profits of around $400,000 for H&P, Sims said.
Despite efforts by both Taggart and Powers to bring in more such lucrative deals, the work is not likely to come from Lear Siegler or elsewhere until a stable successor company is in place, Sims said.
Taggart said he is frustrated by the inability of the board to move forward with plans to sell H&P's remaining assets to a successor company.
Differences in opinion between the two ownership families have been part of the problem, he said.
He also cited long-standing confusion over the status of Duane Powers, who Taggart said must either act as a member of the board or an independent party - but can't be both without creating conflicts of interest.
Duane Powers has said he has severed ties with H&P, and that AeroFab is a separate and independent company.
Taggart said he has asked that future contact talks between Powers and H&P management be conducted through attorneys, but declined to elaborate on what led to that request.
Sims said he has had the occasional disagreement with Powers as well, but hopes either AeroFab or B&G steps in quickly.
"These mechanics are established in Greybull," Sims said. "People here want to stay and continue to work for this company. People here care about their jobs.
"If this all goes away and everybody goes to work at the bentonite plants or the railroad, that would be really sad."
Timeline:
* 1946: Mel Christler and Bud Watson form Big Horn Flying Service in Greybull, offering flight instruction and general aviation services.
* 1950: Morris Avery joins Mel Christler in forming Christler-Avery Aviation, specializing in aerial spraying services for U.S. Forest Service and agriculture interests.
* 1958: Christler-Avery purchases surplus PB4Y-2 airplanes for use in spraying and later for aerial firefighting.
* 1961: Mel Christler moves to Thermopolis and sells interest in company to Avery, who renames company Avery Aviation.
* 1969: Morris Avery dies, and widow sells company to Avery Aviation pilots Dan Hawkins and Gene Powers.
* 1970s: Pioneers use of helicopters in firefighting operations, develops use of C-119 aircraft, phases out B-18s and B-25s. Flies many oil exploration missions.
* 1980s: Creates largest air tanker, based on C-97; begins using C-130 aircraft and phases out C-119s.
* 1990s: Focuses on upgrading avionics systems, develops computer-controlled fire retardant delivery systems.
* 2002: Two accidents with H&P aircraft, a PB4Y-2 and C-130A, result in grounding of all heavy air tankers throughout aerial firefighting industry.
* 2003: Government agencies cancel contracts for use of heavy air tankers, develop continuing air worthiness standards calling for smaller, newer planes.
* 2004: Unable to secure contracts for most of its heavy air tankers, H&P phases out aerial firefighting; closes out helicopter operations; focuses on repair, maintenance operations.
* 2005: Company changes management structure, liquidates assets to satisfy around $15 million owed to creditors; seeks successor company for refurbishing operation.
* 2006: Last refurbishing contract scheduled for completion in mid-February.