Cessna profits plunge......OT (or is it?)

C J Campbell wrote:
In every sector of aviation there appears to be bunch
of losers that are barely able to tie their own shoes, and a
couple of performers that seem to make money despite
all the excuses the losers have.

And why is this so? Because aviation businesses are almost all terribly
difficult to be successful in: only those who have love and devotion to
invest will be true winners, ala the Klapmeiers. Note I do not equate
mere survival (Mooney, Piper, Lycoming, Continental, etc.) with success.

The Textron/Cessna situation reminds me of the AMF/Harley-Davidson
situation of a few years back: a multi-group corporation owning a
business it didn't understand or really care about. AMF damned near ran
it into the ground, and a guy who loved Harleys saved it. Imagine the
hero (and cash) it would take to do that for Cessna's piston aircraft
business!

...run things like a business instead of a
social welfare agency for executive loons.

What?! That's un-American!
--
Dan
C172RG at BFM
(remove pants to reply by email)

"Dan Luke wrote:

And why is this so? Because aviation businesses are almost all
terribly
difficult to be successful in: only those who have love and devotion
to
invest will be true winners, ala the Klapmeiers. Note I do not
equate
mere survival (Mooney, Piper, Lycoming, Continental, etc.) with
success.

I'm reading Donald Pattillo's book, "A History in the Making: 80
Turbulent Years in the American General Aviation Industry." Compared
to the past going back to 1920, the GA insdustry has been relatively
stable in recent years. In fact, it was so bad in the early days, that
one would have difficulty looking at only the GA industry to determine
when the Great Depression occurred. Remarkable also is how very old
the problems are where demand for small planes is very price
sensitive, new designs are often a unit sales success but financial
loss, and the availability of much cheaper, good used planes depresses
demand.

Fred F.

"Dan Luke" wrote in message
...
| C J Campbell wrote:
| In every sector of aviation there appears to be bunch
| of losers that are barely able to tie their own shoes, and a
| couple of performers that seem to make money despite
| all the excuses the losers have.
|
| And why is this so? Because aviation businesses are almost all terribly
| difficult to be successful in:

Every field of business is terribly difficult. No excuse. If you can't stand
the heat, get out of the kitchen. What I said about aviation can be applied
to almost every other field of business. There may be exceptions, but I
can't think of any right now.

I have had just about enough of the idea that aviation is somehow different
than other businesses, that ordinary business principles don't apply to
aviation, that the only reason to get into aviation is that you love it,
etc. Well, here's a news flash: people succeed because they work hard, use
their imaginations, keep costs to a minimum, and charge enough for their
labor and capital to get a reasonable return. They try to sell a product
that people actually want. Loving your work makes all that a lot easier, but
it is not totally necessary. Nevertheless, I'll bet that Bill Gates loves
his job.

Now, there is no question that people want to fly. Look at what they put up
with in order to do it. The customer in this industry is generally treated
like crap. The whole message from the time he walks in the door is, "We
don't value our jobs very highly, and we think even less of you. At best,
you are an inconvenience. At worst, a dangerous criminal."

"C J Campbell" wrote:

I have had just about enough of the idea that aviation is somehow
different
than other businesses, that ordinary business principles don't apply
to
aviation, that the only reason to get into aviation is that you love
it,
etc.

But that's why Pattillo's book is so fascinating. Those are the
people who have formed the GA companies from day one, and when they
brought in talented nonflyer execs to try to turn things around, it
generally failed. Business principles do apply, namely a low
unit-demand, handmade product in a fickle market, where customer
demand can't be predicted until you've spent enormous money to show
them what it will be like is a big gamble. The fact that there's a
historical shortage of less romantic investors who may otherwise
determine that toilet plungers will be more profitable tells me there
have been many such people reaching an objective conclusion for a long
time now. To argue otherwise means GA is uniquely a profit
opportunity going unnoticed by nonflying investors and executives who
do know what they're doing.

Fred F.

"C J Campbell" wrote:
Every field of business is terribly difficult. No excuse. If you can't
stand
the heat, get out of the kitchen. What I said about aviation can be
applied
to almost every other field of business. There may be exceptions, but
I
can't think of any right now.

Then why is it that there is currently only one innovative, successful
American company building piston GA airplanes? Lancair may make it two,
but they're not there yet. How far is the market from the end of pent up
demand?

If it's no worse than any other businesses, building light aircraft must
be a deep secret from entrepreneurs. IMO only lovesick dreamers would
ignore other opportunities and invest the money necessary to turn
Cessna's piston business into a real winner. Such people may exist, but
putting them together with a talented, similarly driven CEO who could
pull it off would be little short of a miracle.
--
Dan
C172RG at BFM
(remove pants to reply by email)

It seems to me that there must be a lot of risk in the small piston plane
market.

This means that a company without a high degree of ability to accept risk
will eventually fail a critical gut check. The question is - Can a public
company stand the risks it takes to be number one?

I believe Cessna simply will not do what it takes to win in this business
because it has become too risk averse. It may survive, but I don't see it
thriving. Strangely, its the same attitudes that kept them in business all
this time, that may now be their downfall. Until the recent entries of new
players, Cessna was king.

Cirrus has done well, and much of it is due to the passion of the founders.
I may be mistaken, but I believe that the investors are likewise passionate.
They are not presently trading the stock on an exchange, are they? If not,
then the company is still reasonably closely held.

What about the rest?

Also, someone mentioned American companies. I understand that the Canadians
are all about tax incentives to attract manufacturing companies, and they
have grabbed a few that way.




"C J Campbell" wrote in message
...

"Dan Luke" wrote in message
...
| C J Campbell wrote:
| In every sector of aviation there appears to be bunch
| of losers that are barely able to tie their own shoes, and a
| couple of performers that seem to make money despite
| all the excuses the losers have.
|
| And why is this so? Because aviation businesses are almost all terribly
| difficult to be successful in:

Every field of business is terribly difficult. No excuse. If you can't
stand
the heat, get out of the kitchen. What I said about aviation can be
applied
to almost every other field of business. There may be exceptions, but I
can't think of any right now.

I have had just about enough of the idea that aviation is somehow
different
than other businesses, that ordinary business principles don't apply to
aviation, that the only reason to get into aviation is that you love it,
etc. Well, here's a news flash: people succeed because they work hard, use
their imaginations, keep costs to a minimum, and charge enough for their
labor and capital to get a reasonable return. They try to sell a product
that people actually want. Loving your work makes all that a lot easier,
but
it is not totally necessary. Nevertheless, I'll bet that Bill Gates loves
his job.

Now, there is no question that people want to fly. Look at what they put
up
with in order to do it. The customer in this industry is generally treated
like crap. The whole message from the time he walks in the door is, "We
don't value our jobs very highly, and we think even less of you. At best,
you are an inconvenience. At worst, a dangerous criminal."

On Mon, 02 Feb 2004 07:21:54 GMT, "Dude" wrote:


Cirrus has done well, and much of it is due to the passion of the founders.
I may be mistaken, but I believe that the investors are likewise passionate.
They are not presently trading the stock on an exchange, are they? If not,
then the company is still reasonably closely held.

Cirrus has done well by taking risks with the customers. The basic
design is great but the devil is in the details. They lack good detail
design, testing, and quality control. While the COPA web site
indicates the quality control is improving, the early users are
swinging in the breeze with high maintenance and planes that lost 50%
of their value in 2 years.

The stock is publicly traded, it is not on the NYSE because the
company cannot meed the financial requirements for being listed.

ArtP wrote:

On Mon, 02 Feb 2004 07:21:54 GMT, "Dude" wrote:



Cirrus has done well, and much of it is due to the passion of the founders.
I may be mistaken, but I believe that the investors are likewise passionate.
They are not presently trading the stock on an exchange, are they? If not,
then the company is still reasonably closely held.


Cirrus has done well by taking risks with the customers. The basic
design is great but the devil is in the details. They lack good detail
design, testing, and quality control. While the COPA web site
indicates the quality control is improving, the early users are
swinging in the breeze with high maintenance and planes that lost 50%
of their value in 2 years.

My club has a few dreamers that keep suggesting we should look into
getting some Cirruses (our current high-end planes are Mooneys).

I sure hope our board doesn't fall for that mistake.

On Tue, 03 Feb 2004 17:04:41 -0500, TTA Cherokee Driver
wrote:


My club has a few dreamers that keep suggesting we should look into
getting some Cirruses (our current high-end planes are Mooneys).

I sure hope our board doesn't fall for that mistake.

The plane is now 2 years and 1 month old. I just got 3 "mandatory"
SB's (2 for the parachute and one for the starter). The estimated cost
is over $1,000. This is just after the 2nd annual ($2,000 and 6
weeks).

While new Mooneys are expensive, they sure are nice. I sat in one at an
open house they other day. Sweet!


"TTA Cherokee Driver" wrote in message
...
ArtP wrote:

On Mon, 02 Feb 2004 07:21:54 GMT, "Dude" wrote:



Cirrus has done well, and much of it is due to the passion of the
founders.
I may be mistaken, but I believe that the investors are likewise
passionate.
They are not presently trading the stock on an exchange, are they? If
not,
then the company is still reasonably closely held.


Cirrus has done well by taking risks with the customers. The basic
design is great but the devil is in the details. They lack good detail
design, testing, and quality control. While the COPA web site
indicates the quality control is improving, the early users are
swinging in the breeze with high maintenance and planes that lost 50%
of their value in 2 years.

My club has a few dreamers that keep suggesting we should look into
getting some Cirruses (our current high-end planes are Mooneys).

I sure hope our board doesn't fall for that mistake.