Duluth misses out on defense contract, up to 100 jobs

DULUTH – Plans to bring Air Force maintenance work to a Duluth hangar — and with it up to 100 jobs — have been derailed after the federal contract was awarded to a rival company last week.

Utah-based Borsight Inc. planned to expand into a 189,000-square-foot hangar at the Duluth International Airport that was vacated by AAR Corp. this summer. But on Friday the Air Force announced it was awarding the F-16 maintenance contract, worth up to $900 million, to Lockheed Martin. Four different companies bid on the work.

"You don't always win, but hopefully something else will [come through] up there," said Chris Fleege, director of planning and development for the city of Duluth. "We've had some other interest, but it's tough times for the airline industry."

AAR, which had performed routine maintenance for commercial airlines in Duluth since 2012, shut down this summer and ended a recently signed 20-year lease at the hangar after work disappeared due to the pandemic's affect on air travel. About 275 jobs were lost.

The Duluth Economic Development Authority approved a lease in September to help Borsight win the grant. The company would have committed to a year in the facility, with the hope work would continue well beyond that.

Cirrus Aircraft is leasing part of the hangar until the end of the year, and Lake Superior Helicopters is using some of the space as well.

The hangar was originally built for Northwest Airlines. Fleege said the goal is to attract an employer that would use the space for large aircraft maintenance.

"We're still optimistic that's going to happen, and we're going to put more efforts into marketing especially as we come into 2021," he said, given the possibility air travel picks up quickly once a COVID-19 vaccine is widely administered. "We hope we get some of the larger aircraft, and that brings more of the jobs we're talking about — hundreds, not just 100."

Brooks Johnson • 218-491-6496