Kestrel still flies despite media reportsKestrel Aircraft Co. is back in the black as far as the state is concerned. The Superior-based aviation company missed July and September payments on two loans administered by the Wisconsin Economic Development Corporation, they caught up this month, according to WEDC spokesman Mark Maley.
By: Maria Lockwood, Superior Telegram
Kestrel Aircraft Co. is back in the black as far as the state is concerned.
The Superior-based aviation company missed July and September payments on two loans administered by the Wisconsin Economic Development Corporation, they caught up this month, according to WEDC spokesman Mark Maley. Reached Friday, he said the business was current on its loans
Mike Ivey with the Capital Times reported on Oct. 11 that Kestrel was behind on the loans — a $2 million state loan and a $2 million federal State Small Business Credit Initiative Loan. A follow-up story Oct. 15 indicated the business had caught up on its loan payments.
“At WEDC, we focus a lot on start-up companies,” Maley said. “It is not uncommon for them to have cash flow problems when getting started.”
Businesses must set up the materials and equipment to produce their product, but often have no orders coming in, he said. WEDC, a public-private corporation that replaced the Wisconsin Department of Commerce in 2011, provides financial resources for companies that may have difficulties getting financing elsewhere, Maley said. The businesses are often technology firms or manufacturers that WEDC officials feel could be successful. Aviation start-ups in particular can be tricky, Maley said, but the state is backing Kestrel.
“If this works out right, it could bring hundreds of jobs to your neck of the woods,” Maley said.
Kate Dougherty, spokeswoman for Kestrel, said the failure to pay the loans on time was an oversight, not a problem with cash flow.
“Everybody forgets Apple started in a garage and not everything was paradise,” she said. “People think because of Alan’s success we’re not going to have any hiccups. We’re not G.E.”
Kestrel landed in Superior in 2012 with plans to invest about $120 million in Superior and create 600 jobs building its single-engine turboprop, carbon composite airplane.
In July, Kestrel Aircraft chief operation officer Steve Serfling told the Superior City Council the company has grown from 50 to 110 employees since 2012, about 60 of them in Superior and the rest in Brunswick, Maine. While progress had been made on the design, the company wasn’t fully funded.
Dougherty said it will take a collaboration of public and private funding to reach Kestrel’s goal.
In addition to the late loan payments, Kestrel had reportedly been missing payroll and cutting health benefits for its workers, according to the Capital Times story. Dougherty said that was a non-story.
“Everybody has their benefits,” she said, although there was a small blip.