* El Salvador operations unhurt by Aveos shutdown in Canada
* Aveos's parent invests millions in Salvadoran expansion
* Salvadoran operation hires more workers
By Nelson Renteria and Euan Rocha
SAN SALVADOR/TORONTO, March 23 The parent
of an aircraft maintenance company spun off by Air Canada
is expanding in El Salvador even as its Canadian arm
liquidates its assets after terminating more than 2,600
Aveos, which shut its doors in Canada earlier this week, has
corporate ties with El Salvador's Aeroman, with Aero Technical
Support & Services Holdings, a closely held company domiciled in
Luxembourg, owning both of them.
While Aveos may count the Salvadoran unit as part of its
network, the two operations are independent of each other, said
Ernesto Ruiz, chief executive of Aeroman.
"Our board of directors made the decision to continue the
expansion in El Salvador," Ruiz said in an interview with
Reuters. "At this time we are about to complete construction on
hangar No. 4, which will have capacity for three airplanes and
which should be operational by early April."
In a letter to its roughly 1,800 workers in the tiny Central
American country, Aeroman said Aveos' financial plight in Canada
would have no effect on their jobs in El Salvador.
Aveos filed for creditor protection in Canada on Monday, but
neither Aveos nor its lawyers in Canada have so far said what
impact, if any, this would have on the El Salvador operations.
Both Air Canada and Aveos, once the airline's own in-house
maintenance unit, have faced harsh criticism after mass layoffs
in Montreal, Vancouver, Winnipeg and other Canadian cities.
Aveos blames Air Canada for its financial failure, claiming
that the country's largest carrier breached its contracts by
deferring or reducing maintenance work it normally performs. Air
Canada has denied that, saying it has met all of its contractual
and financial obligations to Aveos.
The terminations are the latest blow to the Canadian
organized labor movement, which is the throes of a sharp decline
in membership. In some cases, unionized workers have accepted
deep contract concessions, with their employers facing new
competitive pressures. Costs have risen partly because of the
strength of the Canadian dollar against the greenback and other
Caterpillar earlier this year closed a locomotive
plant in London, Ontario, and terminated 450 workers. Blaming
high costs in Canada, the heavy-equipment maker moved much of
its work to sites in the United States.
Aeroman's Ruiz said there is no talk of moving Air Canada
maintenance work to El Salvador even though Aveos's parent is
pouring millions into expanding operations there. He said
Aeroman aims to attract more work from the United States, Latin
America and the Caribbean.
Air Canada said it has identified "qualified and government
approved" facilities in Canada and the United States to replace
Aveos, which has performed much of its heavy maintenance work.
Representatives of Aveos and its parent could not be reached
to comment about the expansion in El Salvador.
Aeroman, acquired by Aveos's parent in 2007, will have
nearly tripled its operational capacity by the time the current
expansion is complete next month, going from four aircraft
maintenance lines to 11.
While Aeroman has grown, Aveos has scrambled to restructure,
reduce costs and increase revenues. In a statement issued six
months ago, the chief executive of Aveos said the Salvadoran
expansion has been driven by increased customer demand for "high
quality, on-time, cost-efficient product."
Aeroman and its parent have invested $16 million in the new
hangar alone, said Ruiz, adding that about $60 million in all
has been poured into infrastructure at the site.
"Obviously we are going to hire more personnel," said Ruiz,
noting that the three new maintenance lines at the new hangar
would require more trained aircraft maintenance crews.
Aeroman services and overhauls the air frames of narrow-body
aircraft such as the Airbus A318, A319, A320 and Boeing's 737
and 757 series. Its clients include JetBlue, US Airways and
"We have some 1,800 employees either working on the aircraft
or in support functions," Ruiz said. "We have more than 200
technicians in training for these new lines of production, which
will bring Aeroman to more than 2,000 employees once they are in