Tuesday, February 16, 2010

Flying car maker Terrafugia weighs Ohio move

By Brendan Lynch

Woburn-based Terrafugia Inc. will decide in the next six to eight weeks whether to accept an offer of $4.4 million to move into a facility in Dayton, Ohio, according to its CEO, Carl Dietrich.

A potential move, first reported earlier today by the Boston Globe, would mean Massachusetts would miss out on “hundreds of jobs” that Dietrich said the company plans to add as it ramps up production of its flying car, the Transition.

“The deal is hot, and if it’s on the table, we can’t just leave it there,” Dietrich said.

The investment is being led by private investors, but also includes Ohio state agencies. Terrafugia would move into a manufacturing facility in Dayton, Ohio, and receive a $4.4 million investment. A General Motors plant recently closed in Dayton, which means there are plenty of manufacturing employees available for Terrafugia’s production plans.

“Everybody’s hurting for jobs,” he said.

Dietrich, who said he was frustrated by the lack of interest from local investors, had lunch this afternoon with a group of investors willing to provide the startup with a larger headquarters “up the street” from its current home in Woburn, he said.

Dietrich also met with staffers from U.S. Sen. John Kerry’s office this morning to invite Kerry to visit the company’s Woburn headquarters.

Dietrich blamed the lack of local investment interest on skepticism over the prospects of a company making a flying car, despite what he sees as a number of opportunities the company could offer investors. More than 70 people have paid $10,000 just to reserve a Transition when they do go into production. Dietrich said the company has more than $14 million in back orders for the Transition. Dietrich said the company has also recently talked to Boeing Co. and Lockheed Martin about partnering with them on the Defense Advanced Research Project Agency’s $60 million request for proposals on a military version of a flying car. That project is already funded but would likely be a few years down the line, Dietrich said.

“We’re the only company that has experience with a flying car,” he said.

Terrafugia would only need about $3.5 million from Massachusetts investors to stay, after subtracting moving costs, and Dietrich said he doesn’t care whether it comes from private investors or public agencies.

“We’ve been here for years and it took a proposal from another state to generate interest here,” he said.

Despite his frustration, Dietrich said there are benefits to staying. If the company moves, there’s no guarantee the team that developed the Transition would all move with it.

“That has a huge downside for us,” he said.

Dietrich co-founded Terrafugia with fellow MIT alum, his wife and chief operating officer Anna Mracek Dietrich and vice president of engineering Samuel Schweighart. Anna Mracek Dietrich was named a Mass High Tech Woman to Watch in 2009.