I’d like to add some opinions on diesels in aviation, two-stroke in particular, but hadn’t we better discuss that in a new thread?
One more split-off, messrs. mods?
I can’t split threads, on current software. All I can do is move whole threads from one forum section to another. I am kicking off one new thread, on turboprop engines here.
I am not sure about diesels (already covered here in multiple Diamond threads) but am willing to be convinced, and are there any 2-strokes (outside the halls at EDNY looking for investors)? Same goes for Wankel engines e.g. the Mistral.
C’mon, thats really rhetorics. If ANY money had been made, they would not have shut down. Period.
Rethorics? No, that is the facts. At the time, Mooney had several completed but unsold aircraft so they decided to stop production until those were sold off. At the same time, they wanted to make sure that they would exactly NOT go bancrupt because they knew the consequences, such as orphaned C of A, a fleet without support e.t.c. Ask any Eclipse owner how they felt while that company was gone.
How many companies have done the same in recent years? Stop producing in crisis and then restart when times get better? Piper, Cessna, most of them went through such phases. Also Socata stopped making the TB series but still do the parts and support. Not such an abnormal thing in this industry.
No comparison between Piper, Cessna – and Mooney. Not productwise, not marketwise. Even when it was bad Flight Safety had 100 Warriors and Lufthansa ordered Senecas …Cessna sold MANY new 172s. Also, Cessna has a strong backbone with their Bizjets and many other sources of revenue.
Yes, maybe “technically” they were not bancrupt. Practically they were exactly that.
I think it has to do with certification. It seems impossible to certify pretty much any new power plant unless it’s so basic it’s already ancient.
I have 4 turbos on my Aerostar. Two recently didn’t pass inspection and I had to source overhaulable ones. They weren’t cheap at about $2500/piece. These are aviation grade, certified RayJay’s that are expected to run for at least a 1000hrs in the harshest conditions. When you take it apart, it’s obvious that its centrifugal compressor is about the same size as a turboprops, maybe slightly smaller. My question is – a turbine is essentially just the same as this turbo, but with a turbine assembly after the combustion chamber that converts the energy to shaft power. How come my aviation grade turbo, that runs even hotter than a compressor in a turbine (since the air coming into it is already hot) can be had for $2500, but the turbine costs $500K? The figures don’t add up. These turbos are basically 1/3 of the mechanical parts of a turbine. Someone, somewhere is pocketing the difference.
Alexis,
I really don’t know what you want to achieve with this biased statements. If you are interested, this is how the events are documented in Wikipedia:
- in 2008, Mooney reduced production quota gradually until in November they decided to halt production in order to sell off 25 production aircraft they had in stock.
- The aircraft in stock got gradually sold until 2010, the revenue of which plus the revenue from parts sales making it possible to maintain parts supply operation until 2013, that is for almost 5 years. In 2010, the staff level was reduced to less than 10 people in order to maintain the supply and airworthiness currency.
- In October 2013, the deal with “Soaring America” was finalized and currently staff levels are increased gradually, at the same time, external production of parts have been restarted or transferred to Mooney’s own premises in Kerrville.
At no time during this periode was Mooney in uncontrolled debt, in receivership or in bancruptcy.
By contrast, in 2008 and 9, Cirrus reduced their own production massively and also laid of a lot of staff. In 2010, they were sued by LG for 18 Million of unpaid bills for avionics, at the same time, it emerged that the City of Duluth had not received rent for 16 months. In 2011, Cirrus was sold to China for $20 Million. In 2013, they received a new grant by Duluth of almost 1 million for a new autoclave.
Columbia Aircraft went into Chapter 11 bancruptcy in 2007 before they got bought by Textron /Cessna for 26 Million. 2 years later, the original plant was closed and all employees either transferred to Kansas or laid off. Cessna in turn laid off more than 5000 workers during 2008 and 9 and stopped single engine production totally between 2008 and 10, when it restarted the 172 and later 182 lines.
Diamond almost went bancrupt in Canada in 2010, their over all production broke down 75% from 500 to 150 airplanes p.a. by 2009.
Piper in 2008/9 laid off most of it’s workforce in order to sell of unsold inventory. They were in hefty receivership with the state of Florida and others, before being taken over by the government of Brunai.
Eclipse Aviation went Chapter 7 bancruptcy and liquidation in 2008, leaving 279 airplanes orphaned and the owners in dire straits. In an unprecedented effort, the owners organisation managed to keep their fleet flying until the assets of Eclipse was taken over by Eclipse Aerospace in 2009.
So let’s see. Just about all airplane companies went through either bancruptcy or massive layoffs in 2008-2010, basically all of them changed hands into new ownership in the same periode. Mooney never got any subsidies (unlike most others) nor did they file for Chapter 11 or any other form of bancruptcy in this period, but kept it’s legal obligations as well as parts supply going to the day they finally were sold to Soaring America. Without foreign investment, most of the above companies would not have survived 2008/9, including Cirrus.
So what is this unilateral banter against Mooney? Other than Cirrus and others they overcame this crisis without help until the buyout. Not to produce airplanes was a very reasonable decision and, due to the fact that it was taken in a timely manner, avoided the necessity of bancruptcy, supply interruption or “bail out” loans by the taxpayer or emergency sell offs like Columbia or the orphan scenario experienced by Eclipse owners. IMHO, if you call Mooney bancrupt during this time, which is simply wrong, you’d have to call just about all of them bancrupt. Most of them were much closer calls.
And anyway, what is the point? Fact of the matter is that most companies have survived one way or the other and that is why we still have a GA production scene at all. There was a massive danger in 2008/10 that most GA companies would fail and we’d be left with a massive problem and no production at all. It did not happen and any company who survived this is good news.
Good summary on the recent history thanks for posting. Makes Tecnam an interesting case study.
A couple of humorous quotes, I hope, on our industry:
If the Wright brother were alive today Wilbur would have to fire Orville to reduce costs.
— Herb Kelleher, Southwest Airlines, USA Today, 8 June 1994.
The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines. Here a durable competitive advantage has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.
W Buffett 2008
Adam,
I think it has to do with certification. It seems impossible to certify pretty much any new power plant unless it’s so basic it’s already ancient.
The main problem that our industry has is the massive cost and hurdles of certification. That is why we still have no choice but to work with the material we do have, some of which is ages old. Add to that product liability and the associated cost and you get the totally overpriced situation we have today.
The overregulation and the fact that most companies simply do not have the means to see a whole development through to the end before running out of cash due to that said overregulation and processes which, had they been in place in the 1950ties and 60ties would have most probably resulted in us not having a GA even now, are the biggest hurdle for new developments.
The situation we see today is that almost in all cases, the orginal companies who start up with new, innovative designs will once certification is achieved, or in many cases somewhere on the way there, fail and either be bought up or re-emerge from bancruptcy in one way or the other before they can establish themselves on the market place.
Notable exceptions are Rotax, Technam and some companies having concentrated on microlight/vla technologies.
Today’s up to date airframe makers have all gone to near death or death / resurrections or have simply failed.
The really innovative designs today are almost all non-certified planes, either experimentals or ULs.
Or see avionics: we see development of products these days taking up to a DECADE until a new product can be launched. Not many companies have the financial possibilities to survive that.
In order to change that, we would have to radically change the certification processes into something a normal company can finance. We have to stop demanding ultimate safety and go back to a certification environment which concentrates on ESSENTIAL issues. We have to get away from airline standards for GA planes, from overregulation and crazy product liability court decisions to be able to significantly lower hurdles and pricing of the products we need to sustain GA. I was told by one manufacturer that in the US, between 50 and 70% of the price of a new airplane are costs for certification and product liability. That is simply crazy. As long as this continues, we will only see very sparse and very slow development if any.
Robert,
thanks.
If the Wright brother were alive today Wilbur would have to fire Orville to reduce costs.
It sometimes takes a bit of reflection on that. Actually, while that statement is humorous, it is probably beside the point. The point being, that under the rules we have in place today, the Wright Flyer could never have taken flight in the first place.
Neither could Lindbergh have crossed the Atlantic on a plane without forward visibility and hopelessly overloaded.
Lots of classic planes would not be certifyable today, amongst them the DC3 and Antonov 2, two of the most produced planes in the world. Yet, many of those planes have served us very well in the 1st century of flight.
In the current climate, can anyone envisage the phantastic developments we had in the 1960ties to 70ties including spaceflight and the moon landing? Look at where we are today, where the only manned spacecraft in serial production is a Sojuz?
So why have we reached this decline? Primarily because today’s politics violate the primary rule about safety and security set forth by Benjamin Franklin nearly 300 years ago:
“Whoever is willing to sacrifice freedom for a bit of temporary security and safety deserves neither.”
Our demands on safety and security (not only in aviation) have reached a point where it is slowly strangling any development. People have been conditioned in believing anything is too dangerous to contemplate and that ultimate protection of the citizen from the dangers of life should be the standard dogma of todays lawmakers. The result is far more scary than flying was in the 50ties. And the results do impact much more than just aviation, they actually move towards a change in society at a rather startling rate.
We have to accept that risk is part of life and that by trying to eliminate risks altogether we will stifle society and any notion of freedom we hold dear. Ultimate safety will lead to a stand still, to people who are sufficiently scared not to do anything anymore.
In more than one way, this leads to depression, not only with the individual who sees his freedoms go down the drain, but in society in a whole. We have been in this depression since the early 2000s and it continues to develop in a very unhealthy way. And somehow I can’t see it changing unless some rather dramatic developments might change the ballpark profoundly.
I was told by one manufacturer that in the US, between 50 and 70% of the price of a new airplane are costs for certification and product liability
It is indeed the line always given in the business but I absolutely do not believe that.
If you look at what goes into a GA plane, look at the list prices of the main bought-in bits (engine, avionics), have a stab at the OEM prices for those (say list minus 30%), look at the man-hours used up in metal bashing in the typical GA operation, multiply by the hourly cost of employing people in the Prosperous West (and multiply that by 1.5x for France 
), you get a gross profit of roughly 50% of the dealer price of the finished plane (which is roughly list minus 20%).
50% is in line with most high price tag industrial products. In my business we also make 50% gross on products which are sold via resellers.
In the past, various people tried to find these supposed massive costs (cert and PL insurance) in the various published company accounts, but nobody could find them. They obviously don’t exist.
My guess is that a GA manufacturer spends around 1-2% of the trade price on insurance, which will be the total package i.e. product liability, public liability and employee liability. I sell to the USA and while not in aviation I pay 0.4% of turnover for the whole package.
Certification of a completely new major item (e.g. an engine or airframe) is a major cost but it will get funded if there is a market for it. The problem, I am sure, is that when somebody takes a long hard look at most propositions in this game they conclude there isn’t really a market, so they instruct the PR Department to issue a press release that Project X cannot be commenced due to impossible certification costs, and that looks a lot better to the investors than the real story.
It would be easy enough to challenge me on this, using the published company accounts. I recall asking for that on some US forum and not one person was able to.
MooneyDriver,
“Unilateral banter against Mooney”, “biased statements”? Don’t you think this is silly? Haven’t we all expressed our love for the birds with strange tail?
Whatever you call it. Mooney went out of the business making airplanes because they could not sell enough of them for many years. (Since I am no banker, and don’t plan to become, i call that “bancrupt”) And I predict that if they build the same, old, airplane again, even with new fuel caps, for +600.000 dollars, it will happen again.
Yes, other airplane makers have had fiancial problems too (although the cases can hardly be compared)
Is this the politically correct statement ?
PS.
Other than Cirrus and others they overcame this crisis without help until the buyout. ….
Now that is really a new definition of “overcoming a crisis”
