A Lawrence aviation company has lost the rights to manufacture kits that allow people to build replicas of a famous World War II airplane.

GUT Works President Ron Renz confirmed the company had pulled out of a deal with a Colorado Springs, Colo., company that would have given the Lawrence firm the rights to manufacture kits allowing people to build their own 3/4-scale replica of a World War II P-51D Mustang.

Doug DuBois, chief technician at GUT Works and Kevin Shaffer, assistant aircraft technician., work Tuesday morning on one of the replica Thunder Mustang airplanes the company is building at the Lawrence Airport. The Lawrence company has been forced to rethink its business strategy as a result of the downturn in the aviation economy since Sept. 11.

Renz said GUT Works and the Colorado company agreed to dissolve the contract after realizing a downturn in the economy would make it impossible for the Lawrence company to meet the financial terms of the deal.

But Renz said the loss of the contract didn’t mean GUT Works, which is based out of a city-owned hangar at the Lawrence Municipal Airport, is going out of business.

“We’re still here, and we’re still viable,” Renz said. “We’re still employing people, and we still have work to keep us busy.”

Renz said he is currently trying to negotiate a new deal with the Colorado company that would allow GUT Works to re-acquire the rights to manufacture kits for the Mustangs.

Renz said GUT Works was forced to pull out of the original deal because it was negotiated before the 9-11 terrorists attacks. The economic fallout in the attacks’ aftermath has made it harder to find people interested in buying the $300,000 airplane.

“It basically comes down to the fact the aviation industry has changed significantly since Sept. 11, and the nation’s economy has changed significantly,” Renz said. “Part of what happened is we had a couple of sales vanish because of Sept. 11, and generating new sales has become much more difficult.”

The company currently has five employees, and Renz said it was looking to add one more. He said the company would continue operating because it is still able to help aircraft owners put together previously manufactured Thunder Mustang kits.

Renz said the company had contracts to put together two of the airplanes, which should keep the firm busy for the next 12 to 18 months.

Loss of the deal has caused the company to cut its growth projections in half. When GUT Works moved into the 12,000-square-foot hangar last March, Renz was projecting it would employ 12 people by the end of the year. Today Renz said the company had no current plans to employ more than six people, but he said that could change depending on whether it re-acquires the rights to build the kit.

John McCartney, a managing partner with Thunder Builders Group, said the company had no firm timeline for choosing a new manufacturer for the kits. He also said the company wasn’t opposed to working with GUT Works on the project, but wasn’t optimistic the company would be able to come up with the necessary financing.

“If they come back to us with a revised business plan and money, we’re certainly willing to do business with them,” McCartney said. “But whether that happens or not, I don’t know.”

McCartney said the group had received inquires from “a couple of other parties” interested in building the airplanes. He said the assets, which included all the molds and intellectual property associated with the airplane, had a value of about $4 million.

Details of the previous deal between GUT Works and the Thunder Builders Mustang Group were not released.