MONTREAL – A Canadian subsidiary of U.S. defence giant Lockheed Martin Corp. expects to hire up to 100 former Aveos Fleet Performance employees after purchasing a number of the Montreal-areas assets of the insolvent company.
The first of the employees are expected to be on the job when Lockheed Martin Canada reopens the shuttered engine maintenance, repair and overhaul operation in April. The rest of the hiring is expected to be completed by the end of the year.
Lockheed Martin Canada purchased tools and equipment at auction for two lines of aircraft engines, along with the Aveos building near Trudeau International Airport.
The CF34 and CFM56 engines will join the eight other engines that are repaired by business unit Kelly Aviation Center based in San Antonio, Tex.
“We’re very excited about the venture, we’re looking forward to working with the Canadian expertise and bringing our experience to bear,” Kelly Aviation vice-president Amy Gowder said in a telephone interview.
The sale of the business still requires approval from the Quebec Superior Court, but the monitor for Aveos is recommending approval.
Gowder said Lockheed only learned of the opportunity in September but is eager to begin hiring managers to plan for the phased start to the business.
“We expect to be making offers literally within the next couple of days,” she said.
About 100 workers should be hired by the end of the year. Former Aveos employees won’t be automatically hired but have a good chance because of their skills.
Their union was also optimistic about their chances.
“This means that some of our people who lost their jobs when Aveos closed will get their jobs back,” said Fred Hospes, president and general chairman of District Lodge 140, International Association of Machinists and Aerospace Workers.
“This is great news for our members, the province of Quebec and the aviation industry in Canada because we retain this vital component in Canada and the jobs that go with it,” Hospes said.
Gowder said the company, which has been negotiating a new collective agreement with the union, said workers would not receive lower wages or benefits than they did at Aveos and will gain the security of having one of the world’s largest aerospace companies as an employer.
“Lockheed brings a lot to bear. We have a lot of experience and have very good union partnerships and we know how to have a collaborative relationship that we intend to bring that to the table.”
Terms of the purchase agreement were not disclosed but Lockheed Martin said they are “not material” to the defence company.
“This acquisition is consistent with our strategy of acquiring capabilities that enhance our ability to expand into attractive adjacent market opportunities,” added Lockheed Martin CEO Marillyn Hewson.
Lockheed (NYSE:LMT) said it will use the acquired assets to work on CF34 and CFM56 engines that power Embraer and Bombardier (TSX:BBD.B) regional jets, along with the Airbus A320 family of planes.
The new facility will be named the Kelly Aviation Center Montreal and be affiliated with the aviation centre based at the former Kelly Air Force Base in San Antonio, Tex.
A Kelly spokeswoman, Cheryl Kahn, said the company didn’t receive any government financial support to stay in Montreal.
“We wanted to stay in Montreal, if at all possible, and with the co-operation of the officials there, Transport Canada and the union, they all made it possible for us to be able to do it,” Kahn said.
Lockheed Martin Canada has more than 700 employees at facilities in Ottawa, Montreal, Dartmouth and Calgary, as well as Department of National Defence sites across the country.
This transaction is the latest effort by Aveos’ creditors to sell off the failed aircraft business, which closed last March, terminating about 2,600 jobs across the country, including some 1,800 in Montreal.
Earlier, the court approved the sale of an unrelated part of Aveos’ engine repair business to Lufthansa Technik over the objections of rival bidder MTU Aero Engines.
Technik tripled its original bid for the Aveos engine repair business during negotiations.
The move enabled the German company to best MTU Aero Engines with an offer that was more than twice what the Vancouver-based company offered to pay.
The value of the winning bid wasn’t been disclosed but MTU offered $5.2 million including $4 million plus specialized tools.
MTU valued the tools at $1.2 million, but the chief restructuring officer testified the amount was less than the liquidation price.
The company had been Air Canada’s main provider of aircraft overhauls and heavy maintenance.
The court also approved the sale of the component repair business to British-based firm A J Walter Aviation for an undisclosed sum. The company plans to create about 200 jobs.
Earlier, its airframe business and other assets were sold for $10.8 million to three Canadian firms, two U.S.-based companies and one liquidator.
The buyers of the airframe business include Avianor Inc. based in Mirabel, Que., Avmax Aviation Services Inc. of Calgary and Discovery Air Technical, a subsidiary of Yellowknife-based Discovery Air (TSX:DA.A).
Premier Aviation Overhaul Center of New York, which has an operation in Trois-Rivieres, Que., and Illinois-based Aircraft Services Inc. also acquired parts of the business.
Liquidator Maynards Industries Ltd. also bought several lots of equipment that are being sold at auction.