Loss is Tupelo's gain: Company's move surprises Ark. airport

By Dennis Seid/NEMS Daily Journal

Saturday afternoon, a Boeing 747 will land at Tupelo Regional Airport, the first of what officials hope are many more so-called wide-bodied jets.
But the 747 won’t be bringing a cabin full of passengers or cargo. Instead, the aircraft will be taken apart, its components sold to airlines and other companies.
The company doing that will be Memphis-based Universal Asset Management, which was formed in 1993.
UAM announced last week that it was transferring its warehousing facilities in Pocahontas and Walnut Ridge, Ark., to Tupelo Regional Airport, where it will use the soon-to-be vacated Army Air National Guard facility.
Dan Coker, chairman of the Walnut Ridge Airport Commission, said he was surprised to hear about the news when it was announced last week.
“You know as much as we do,” Coker said Monday.
A news conference is scheduled Saturday at Tupelo Regional, and local and state officials have said they can’t provide details about the project until then. Some jobs are expected to be created, but the exact number – and when operations officially begin – aren’t known at this time.
UAM has disassembled more than 140 aircraft in Walnut Ridge and employs about 50 people between its headquarters in Memphis, its acquisitions office in Atlanta, its sales office in Denver and its facilities in Walnut Ridge and Pocahontas.
Coker said the company has “13 or 14” employees in Walnut Ridge but wasn’t sure how many were employed in nearby Pocahontas by UAM.
“They pay their bills, they’ve hired a few people, and they’re a good revenue producer,” he said.
UAM pays a fee for each aircraft as well as leasing buildings from the airport.
Asked what incentives were used to attract UAM, Coker said none.
“We told them we had an airport and had some new buildings and they came,” he said.
Coker said Walnut Ridge Airport has seven 747s on the ground, along with several other smaller aircraft being disassembled.
“We are out of room; we can’t grow more concrete,” he said. The 747s “take up a lot of room.”
According to UAM, its disassembly and warehouse operations will move to Tupelo, although it will maintain some presence in Arkansas.
UAM, with $32 million in sales in 2008 – the most recent figures available – also leases aircraft but got into the aircraft reclamation business in 2003, starting in Walnut Ridge.
The company says the move to Tupelo was made in part because of a recent vote of the Walnut Ridge Airport Commission to prohibit any new wide-body aircraft arrivals to the airport.
“So there really isn’t any other option but to take the wide-bodies elsewhere,” UAM Chief Operating Officer Keri Wright told Jonesboro, Ark., station KAIT-TV.
Coker said that wasn’t exactly what happened.
“Our airport engineer had concerns about the pavement, not about the runway,” he said. “He was concerned about shortening the life of the concrete on the apron and taxiway. After that, I met with Keri. She read the report and said ‘OK, we won’t bring anymore 747s in.'”
Coker said the meeting occurred about two weeks ago.
“I never heard anything else,” he said, until the news broke last week about UAM’s plans to move to Tupelo.
Wright was traveling and unable to provide additional information, the company said Monday.
Just four months ago, UAM CEO Steve Manley told the Lawrence County (Ark.) Chamber of Commerce that he was looking forward to an expansion of the Walnut Ridge facilities and adding new jobs.
According to the Walnut Ridge Times-Dispatch, Manley said his company was in the process of taking over vacated space at the airport and planned to use 17 acres of farmland.
“We need 50 more people in the near future,” Manley said.
Manley, according to the Times-Dispatch, credited the work ethic of local employees in expanding the Walnut Ridge operations
“You have incredible people in this area,” he said. “That’s why we are here and why we want to add 50 more jobs. I can’t tell you how proud we are to be here.”
But where those plans stand now isn’t clear for the airport.
Walnut Ridge Airport Manager Mitch Whitmire did not return calls for comment.
Walnut Ridge Mayor Don House was out sick, according to a person answering the phone at City Hall.
Coker, however, said he’s not sure what will happen next. The hope is that UAM will keep its narrow-body airplane disassembly and warehouse operations there. But the earlier plan for UAM to take the vacated space – which belonged to a metal storage building manufacturer – fell through.
Wright, the COO of UAM, said the wide-body warehousing facilities in Walnut Ridge and Pocahontas would be transferred to a 453,600-square-foot warehouse in Tupelo.
According to the company, UAM’s business is expected to increase by 20 percent during the next 12-18 months and will include a “significant number” of wide-body aircraft.
It also will use a 16,000-square-foot hangar and 39 acres of ramp and apron space.
In a Memphis Business Journal article last summer, Wright said the company buys planes for as little as $75,000 or as much as $20 million.
She told the MBJ that Universal Asset Management expected to increase sales in 2010 by $10 million and said parts sales have grown during the past two years because airlines are repairing more planes than replacing them, a far cheaper option than buying new multimillion-dollar aircraft.
And according to the Aircraft Fleet Recycling Association, more than 12,000 aircraft will be disassembled in the next 20 years, or about 400 to 450 each year.
Walnut Ridge was once a World War II flight-training facility. It has a 6,000-foot runway and two 5,000-foot runways.
Coker said the airport is home to some 30 aircraft, ranging from 737s to 747s.
Told that Tupelo Regional Airport has a 6,500-foot runway – with plans to add another 650 feet – Coker said it wouldn’t be a problem for the 747s to land here.
As for appearances of UAM’s operations, he said,”We have fuselages on the ground and fuselages on cross-ties and planes in various forms of disassembly.”
He admitted that the airport could appear “junky” but added that the airport is located in a rural area. And Walnut Ridge is a town of only 4,000 people.
At the Greenwood-LeFlore Airport, a similar aircraft disassembly operation takes place
The airport – which has no commercial air service – has a 6,500-foot runway used by 747s and other aircraft that are later taken apart by GE Capital Aviation Services. GECAS dismantles aircraft in Greenwood and warhouses the parts in Memphis.
When asked about the appearance of the disassembled aircraft on airport property, Airport Manager Bardin Redditt said GECAS “has been a good tenant. We’ve had a good, long relationship.”
The company brings in aircraft of all sizes, from regional jets to 747s, he said.
What Universal Asset Management’s operations will look like in Tupelo isn’t known, but sources say that will be discussed at Saturday’s news conference.
Contact Dennis Seid at (662) 678-1578 or dennis.seid@journalinc.com.

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