PLANE BUILDER'S CLOSURE HINDERS U.S. DRUG PLANS

WASHINGTON -- The State Department will delay plans to expand its fleet of
drug spraying planes in Colombia after the planes' bankrupt manufacturer
shut down its assembly lines this month.

Ayres Corp. of Albany, Ga., had won the contract without having to compete
for it, despite a rival's claim that Ayres' shaky finances made it
undependable.

The delay is a setback to the $1.3 billion, U.S.-funded plan to step up
drug eradication in Colombia. Since the mid-1990s, State Department
contractors have worked with Colombian police in fumigating coca and opium
crops, the raw materials for cocaine and heroin.

Ayres halted production Aug. 3, five days before it was to deliver the
first of nine single-engine, propeller-driven T-65 planes.

Those planes, along with three twin-engine OV-10 planes that the State
Department is refurbishing, would have increased the 11-plane fleet to 23
planes by February.

The additional planes are "extremely important because we're trying to go
after an exploding amount of coca production and opium production," said
Barry McCaffrey, the former White House drug policy director.

"You want to have a mass of spray aircraft that you can move around the
country and attack these criminal operations all in one fell swoop and then
move somewhere else," he said.

The State Department declined to provide specifics on the shutdown's effect.

Congress provided $20 million for the Ayres planes and the refurbished
OV-10s. Fred Ayres, the president of the plane company, said Ayres' share
of that was about $15 million.

Ayres' main creditor, GATX Capital Corp. of San Francisco, has taken over
the company's assets and hopes to find a buyer soon, GATX spokesman Glenn
L. Hickerson said. If it does, the first planes could be completed by
year's end, he said.

It was not clear whether the State Department would wait for the sale.

An Ayres rival, Air Tractor Inc. of Olney, Texas, planned to demonstrate a
spray plane to State Department officials this week, Leland Snow, the
company's president, said.

In January, Air Tractor cited Ayres' finances when it challenged the State
Department's decision to award the contract without allowing competitors to
bid.

Air Tractor also claimed it could build a better plane for drug spraying
missions and that the contract should have been open to competitive bidding