Premier Aviation Freebie Extended To Fourth Year

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Premier Aviation Freebie Extended To Fourth Year

It’s hard to believe, but my approximate eight-year odyssey to extract critical information from the City of Windsor on its chattels at Windsor International Airport, has reached a conclusion.

My requests to the province’s Information and Privacy Commission (IPC) started in 2012 when Premier Aviation began operation of an airframe Maintenance, Repair and Overhaul (MRO) facility.

The $23 million, 144,000 square foot space was funded and constructed by the city and federal government with the promise by former Mayor Eddie Francis and others that it would be a major employer, and possibly an engine for a new aerospace industry on the city’s airport lands.

In fact, predictions that the MRO would employ well over 300 workers continue to fall well short, despite herculean assistance from governments.

My first successful Freedom of Information (FOI) request to the IPC revealed, by way of a June, 2014 order, that Premier was allowed to lease the monstrous hangar for the first three years of a 20 year contract at $1 a year. As an adjunct, the facility doesn’t pay property taxes.

Six years later, my latest FOI resulted in a startling March 11, 2020 order from IPC Adjudicator Jenny Ryu. It revealed that Windsor and its wholly-owned subsidiary YQG, agreed in June of 2015 to waive the contract fee for year four of the lease, which ran from April 23, 2015 to April 22, 2016.

That gesture saved the company $120,000, effectively extending the taxpayer supported freebie.

A year and a half later, in September of 2017, the unlamented Canadian owned Premier Aviation sold the company to AAR Aircraft Services, a respected MRO provider headquartered in Illinois.

By then, my second FOI request had unearthed covenants in Premier’s contract with YQG that obligated the service provider to hire 100 full-time employees within the first year, 175 employees by the end of the second year and 325 by the end of the seventh year.

My third request unearthed the information that Premier would be on the hook for stiff penalties $5,000 times the difference between the number of employees guaranteed in the contract and the actual number delivered.

I subsequently asked YQG to provide the number of employees hired in year one and two and the number employed as the seventh year approached in mid 2019, and how much the company paid in penalties if those job guarantees were not achieved.

A battery of lawyers toiling on behalf of the city, YQG, Premier and AAR moved heaven and earth to keep those numbers hidden during the glacial-speed FOI process. I’m tempted to file an FOI to find out the amount of legal fees expended by the city on this file.

Suffice to say the fees are a few bucks (LOL) more than I paid to pursue my objectives. It cost me $5 to file each request to the city, and $25 per appeal to the IPC when the city denied me access to the information.

Ironically, YQG and the city decided to disclose the information in my most recent appeal, and it was AAR that fought to submerge it.

AAR is a publicly traded company and that explains it. The adjudicator noted there are four affected parties representing AAR, and there were claims that certain disclosures would interfere with its contractual and labour negotiations, resulting in financial loss to the American owned company. Ryu rejected those arguments.

Her order to release YQG documents that are responsive to my requests lacks explicit details. For instance, we still do not know exactly how many full-time jobs were created at the end of years one, two and seven of the service agreement.

We do know that the targets fell short and certain penalties were waived. YQG admitted as much to an IPC mediator, identified on page three of Ryu’s order.

We also know, through a recent interview with David Robertson, AAR Vice President of Windsor Operations, that the company has never approached a workforce of 300, although not from a lack of trying.

“We have 150 to 160 workers, including technicians and administrative staff, when we are working full out,” he indicated.

Business was good earlier this year, before the pandemic hit and decimated the aviation industry world wide. AAR workers were laid off and receiving government assistance.

In early July, 60 percent of the workforce was called back to work on two Embraer planes in the hangar that can handle six aircraft at a time.

Robertson has stated he would like to see 300 staff within a couple of years, but a big drag on that objective is a lack of skilled labour.

“Kids today don’t want to get into the technical trades, they want to start at the top,” he says, noting that his recruiting efforts to lure technicians to Windsor to earn $80,000 to $90,000 a year have been frustrated by other MRO outfits, many of them AAR owned.

“We’re all competing in the same talent pool,” he concludes.

Let me return to Premier Aviation and the question of whether Premier paid all its rent and subsequent penalties to the city prior to AAR’s purchase of Premier on September 8 of 2017.

On that point, YQG released a statement, dated August 22, 2017, that showed Premier was past due in the amount of $169,500, plus interest, reflecting five monthly payments of the contract fee covering the fifth year of its agreement with the city, which had escalated to $240,000.

Premier committed to paying the arrears and meeting all other obligations to the city as a condition of the sale.

Premier also agreed in that statement to pay $360,000, in monthly instalments, on a contract fee payable in each of years six to 10 of the terms of agreement.

Of course, by year six the MRO company had been turned over to AAR and I don’t know what that agreement with the city is. We can be assured that job guarantees are not part of it.

I could carry on with a request to IPC for more details, but I have decided against it. I believe there’s enough information out there now for taxpayers to make a judgement on whether they got a proper bang for their buck.

Don’t ask me. After eight years of this, my brain needs a rest.

Here’ my previous columns related to Premier Aviation:

The views and opinions expressed by Alan Halberstadt do not necessarily reflect those of Biz X magazine or its advertisers.

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Alan Halberstadt
Opinion Editorial. Alan Halberstadt is a career journalist who served on Windsor City Council for 17 years before deciding not to run for re-election in 2014. Alan Halberstadt believes all businesses share a common interest in how governments spend tax dollars. The emphasis of his columns is to expose and comment on the political gymnastics and taxation excesses of bureaucracies. As a former Windsor City Councillor he has a particular insight on how local municipal governments function or not. Opinions expressed by Alan Halberstadt are not necessarily those of Biz X magazine or its advertisers.