Future of Mooney

[Pete M]

11 minutes ago, mike20papa said:

The true spill over from the cloth era is the FAA's certification process.  I once read what it took to certify the composite structure of the Columbia (I think that's the name) It was loaded into a custom fabricated jig and "manipulated" to simulate loading for hours on end.  It was all so expensive - the FAA making sure they would never be asked to work that problem again. 

By the way what happens if a Tesla hits a Sherman tank head on?  

Everyone in the tank is electrocuted and bursts into flame?

[M20F]

9 minutes ago, aviatoreb said:

Talking about hours to build - How many hours does it take to build a Honda Accord?

does that question even make sense re all the robots involved?

It isn’t so much about the labor hours in the assembly it is the labor hours in the entire supply chain.  The complexity of getting a part from point A to B and the engineering put into that is massive.  Each and every part has a plan from manufacture to the line with many of the parts coming as kitted sub assemblies.  Scale is what drops production cost the most, not automation.  This is why it is so important for Tesla to get their volume up.  

Apologies for not the best explanation but hope it makes some sense.  

[aviatoreb]

52 minutes ago, M20F said:

It isn’t so much about the labor hours in the assembly it is the labor hours in the entire supply chain.  The complexity of getting a part from point A to B and the engineering put into that is massive.  Each and every part has a plan from manufacture to the line with many of the parts coming as kitted sub assemblies.  Scale is what drops production cost the most, not automation.  This is why it is so important for Tesla to get their volume up.  

Apologies for not the best explanation but hope it makes some sense.  

Right - supply chain management is a field that certain people I know here in the Business School specialize in - but just because people I know do know this topic well, doesn't mean that I know a thing about it other than to name it and recognize the field if I see it.

[M20F]

6 minutes ago, aviatoreb said:

Right - supply chain management is a field that certain people I know here in the Business School specialize in - but just because people I know do know this topic well, doesn't mean that I know a thing about it other than to name it and recognize the field if I see it.

30yrs of doing it and still amazed and interesting stuff people do that is wrong and right.  The math intensity is fairly high both on the engineering and financial side with a lot of elaborate modeling.  My heart wants Mooney to be financially successful but my brain knows that isn’t possible without substantially cheaper engines and avionics, neither of which Mooney can impact. 

What I do fail to get and I am guessing it is modeled off liability is why Lycoming/Continental don’t produce more engines.  You should be able to make an IO-360 for about nothing.  For whatever reason they limit demand through price. 

[aviatoreb]

8 minutes ago, M20F said:

30yrs of doing it and still amazed and interesting stuff people do that is wrong and right.  The math intensity is fairly high both on the engineering and financial side with a lot of elaborate modeling.  My heart wants Mooney to be financially successful but my brain knows that isn’t possible without substantially cheaper engines and avionics, neither of which Mooney can impact. 

What I do fail to get and I am guessing it is modeled off liability is why Lycoming/Continental don’t produce more engines.  You should be able to make an IO-360 for about nothing.  For whatever reason they limit demand through price. 

I don't understand why an IO360 is so expensive - I mean I would think the volume would be there to justify more modern methods and all the rest.  I know not a lot of airplanes are sold by anyone company but those two engine companies pretty much monopolize the entire fleet of pistons.

[M016576]

20 minutes ago, aviatoreb said:

but those two engine companies pretty much monopolize the entire fleet of pistons.

That’s the answer.  Monopoly.

if I had to wager... and I have no objective proof of this... both companies are not really competing with one another- or anyone else (due to airframe certifications w/ each certain type of motor).  As a result- their business practices are probably not as aggressive as they could be to get A) new engines out in the field (rather than practically endorsing field overhauls by their high pricing) and B ) the company many be carrying “extra weight” in their admin, operations and engineering departments... because they can.

I don’t think anybody wins long term in a situation like this (total monopoly).  

[jaylw314]

32 minutes ago, aviatoreb said:

I don't understand why an IO360 is so expensive - I mean I would think the volume would be there to justify more modern methods and all the rest.  I know not a lot of airplanes are sold by anyone company but those two engine companies pretty much monopolize the entire fleet of pistons.

The IO-360 at least is significantly more in demand than others given that the most popular kit planes (most of the RV's being built) use them

[M20F]

6 minutes ago, M016576 said:

That’s the answer.  Monopoly. 

I don’t really think so because they could make 10x’s more with a product 5x’s less expensive.  This obliviously doesn’t apply to all engines or new engines but for me the math looks a lot better at pushing a couple thousand IO-360’s out per year.  There definitely is a market for them and they lose tremendously in the sense that almost everyone is going to overhaul (and generally not with manufacturers) versus buying a new motor.  

I am sure there is a reason for it but monopoly I don’t think is the driver. 

[aviatoreb]

28 minutes ago, M20F said:

I don’t really think so because they could make 10x’s more with a product 5x’s less expensive.  This obliviously doesn’t apply to all engines or new engines but for me the math looks a lot better at pushing a couple thousand IO-360’s out per year.  There definitely is a market for them and they lose tremendously in the sense that almost everyone is going to overhaul (and generally not with manufacturers) versus buying a new motor.  

I am sure there is a reason for it but monopoly I don’t think is the driver. 

Could it still be a matter of monopoly and price collusion on the following grounds.  You are speaking as if there is a competitive market and each company would grow if they could, and since they are not growing it must therefore be that they cannot. That is the increased profit motive to grow.  But companies also "enjoy" a fear of irrelevance and eventual demise if they do not grow.  Move forward or you move backward concept.  So if Lycoming and Continental are fat and happy, each with their established shares of a seemingly fixed market, and they see themselves as stable, and growing would require more equipment, more factory space and workers, maybe they are satisfied to stand still and not fearing that another competitor would swoop in and kill them like would happen in a normal market?

[M016576]

1 hour ago, aviatoreb said:

Could it still be a matter of monopoly and price collusion on the following grounds.  You are speaking as if there is a competitive market and each company would grow if they could, and since they are not growing it must therefore be that they cannot. That is the increased profit motive to grow.  But companies also "enjoy" a fear of irrelevance and eventual demise if they do not grow.  Move forward or you move backward concept.  So if Lycoming and Continental are fat and happy, each with their established shares of a seemingly fixed market, and they see themselves as stable, and growing would require more equipment, more factory space and workers, maybe they are satisfied to stand still and not fearing that another competitor would swoop in and kill them like would happen in a normal market?

That’s exactly what I was getting at above.

and more to the point of free market and competition... Lycoming and Continental both have a serious moat in the form of certification requirements.  I can’t imagine it would be easy to steal market share from either company.... first a new comer would have to build the engine.  Then they’d have to find an airframe that could use it.  Then they’d have to certify it for that airframe... and then they’d have to do that same process over and over again- for each application on a certified airframe.  It would probably take a decade just to get the foot in the door.  And by that time conti/lyc could price them out.  That’s a HUGE amount of risk, for a potentially limited reward (market).

the experimental market is a different animal- probably why we see “other” motors there- rotax , etc.

yes... the end state of a monopoly- ever rising prices and reduction to production.  Why build more for less when you can build less and charge more.

Edited February 23, 2019 by M016576

[Davidv]

5 hours ago, LANCECASPER said:

Back in the 60's, 70's and 80's Mooney was the lost cost airplane.

 

 

 

 

Yes Lance, great ads! I just meant that they aren’t thought of that way any more (right or wrong)  so they would have to pick one message going forward.

 

I remember looking at historical new prices of the Js and there was a time in the early 80s as you know where in a matter of 2 years the price almost doubled.  I realize there were a few different reasons for this but it was pretty striking.

[LANCECASPER]

1 hour ago, Davidv said:

Yes Lance, great ads! I just meant that they aren’t thought of that way any more (right or wrong)  so they would have to pick one message going forward.

 

I remember looking at historical new prices of the Js and there was a time in the early 80s as you know where in a matter of 2 years the price almost doubled.  I realize there were a few different reasons for this but it was pretty striking.

The price of a J more than doubled from 1982-1985. The French owners brought in cost accountants who showed that they were losing money on each one being built. The only thing keeping the factory going was some of the contract work they were doing for other manufacturers. 

It's a great example of the elasticity of pricing. In 1982 they sold 113 J's and in 1985 they sold 51. The price doubled again from 1985 to 1998 and they only sold 19 in 1998.

[aviatoreb]

1 hour ago, LANCECASPER said:

The French owners brought in cost accountants who showed that they were losing money on each one being built.

 

But they made it up on volume?

It's a great example of the elasticity of pricing. In 1982 they sold 113 J's and in 1985 they sold 51. The price doubled again from 1985 to 1998 and they only sold 19 in 1998.

What were the other manufacturers, say Cessna, doing price wise during that early 80's period?  Weren't there other factors also at play, like the liability topic?

[LANCECASPER]

For sure all those things were factors. In ‘86 Cessna made a choice to stop production of single engine airplanes since their parent company Textron was a huge target.


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[jetdriven]

1 hour ago, LANCECASPER said:

 

For sure all those things were factors. In ‘86 Cessna made a choice to stop production of single engine airplanes since their parent company Textron was a huge target.


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?? https://www.nytimes.com/1992/03/02/business/textron-buys-cessna.html

[LANCECASPER]

?? https://www.nytimes.com/1992/03/02/business/textron-buys-cessna.html

Excuse me - General Dynamics was a big target


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[DaveAnderson]

My dad, in 1984 bought a brand new 231.  I remember flying around in it as a kid.  Fast forward about 30 years or so...last July he got re-certified and started flying with me in my 231 that i had purchased in 2014.  We both have a huge affinity towards Mooney.  Not too long after, he asked if I wanted to fly from San Diego to Florida with him on a cross country so that he could borrow the plane and buzz around Florida where he lives.

After a few months, he knew it was time to buy a new plane and that he'd love to buy a new Mooney.  We went to an air show with myself, him and my step mom.  We both sat in the new Acclaim, a G36 and a Cirrus.  There was no way he was getting the Mooney after we sat in the Cirrus...and my step mom...yeah, all you had to say was "parachute".   

I'm not sure if Mooney will ever be able to compete, but it won't happen unless a major shift in design and thought.  We picked up the new Cirrus G6 last month and it dawned on me that they were a Sales & Marketing company that sells planes.  As a business owner, i know how hard it is to change and i can't imagine trying to do it while dealing with the FAA.  I still have and love my Mooney, and although my heart is with them, i'd rather buy a used G3 Cirrus then a used Ovation or Acclaim.

[Pete M]

Couple of thoughts. If lyc sold new motors for 20k a copy they'd sell many more engines. Who's get an oh at that point but then they'd increase their liability costs tremendously. Conti is buying up the pma parts makers in search of monopoly...see mike busches article...tactonic shifts. 

Why would you rather have a cirrus over an acclaim?

[M016576]

If the business could be streamlined, and maybe shave 100-200K off the sticker price of an M20U/V.... maybe... maybe... mooney would sell more.  

But the plane lacks a modern look/feel (carbon fiber, switchblade doors, etc).  I can see why consumers are turned off of mooney and turned on by cirrus.

to put it another way- a (very rich) student goes through flight training in a 14 year old Cessna 172.  That trainer, while sporting nice paint and a garmin panel, still feels... well... like a trainer 172.  

Now it’s time to go shopping.  You’ve got this sleek composite plane on the ramp with these cool doors and seats that look like they came out of a Ferrari.  It’s got a side stick.  Tons of room.  A higher useful load and seating for 5.  It feels like it was designed in the last 30 years.

in the mooney, the doors open.. normally.  You see rivets in the wings, on the tail section... it doesn’t “look” as modern.  The avionics are practically the same, but it has a yoke, like your trainer (albeit covered in supple leather).  The interior is OK... but the seats just aren’t as nice... and the finishing feels a little underdone (compared to the cirrus).  The plane carries four people and you kind of have to be small people to all fit (due to useful load being lower).  Not to mention you don’t sit “normally” in a mooney- you’re lower- with your legs stretched out in the front. Finally- there is no BRS.

I would personally pick the mooney- assuming the new one’s useful load isn’t totally anemic.  But I can see why cirrus gets a huge chunk of the new plane market.  While I don’t think it’s justified from a performance standpoint- at the price point both these aircraft are at I totally think the market has this one “right.”  If Mooney can drop their prices, they *will* sell more airplanes.  The question is- can/will they do it... and can they remain solvent if they do.

[Cruiser]

Cirrus sells their planes at nearly the same price as Mooney. I don't see the price as an issue.

[M016576]

4 minutes ago, Cruiser said:

Cirrus sells their planes at nearly the same price as Mooney. I don't see the price as an issue.

That’s my point.  The two sell for the same price- but potential buyers see “more” in a cirrus.  It looks like a better deal to them. (And that’s not subjective- the numbers speak for themselves there)

mooney needs to sell at a discount to the cirrus if they want to sell more planes.

Edited February 24, 2019 by M016576

[glbtrottr]

Others brought it up again. I deal with well to do students and pilots frequently...why not? No parachute (it isn’t just the wife), the need for retractable gear, not sexy, harder to get into, not as “glassy”.

Shaving $100k will not appreciably make a dent. You need fk be able to tap I to someone’s disposable income to the tune of between $1k and $2k a month...if you want volume.


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[M016576]

8 minutes ago, glbtrottr said:

Others brought it up again. I deal with well to do students and pilots frequently...why not? No parachute (it isn’t just the wife), the need for retractable gear, not sexy, harder to get into, not as “glassy”.

Shaving $100k will not appreciably make a dent. You need fk be able to tap I to someone’s disposable income to the tune of between $1k and $2k a month...if you want volume.


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I don’t know- that 100K equates to between 5-7 years of ownership cost if you do the numbers.  Set aside the initial purchase price of a cirrus, then buy a new mooney and fly it “free” for 5 years?  Sign me up.

Edited February 24, 2019 by M016576

[LANCECASPER]

On 2/23/2019 at 8:52 AM, Pete M said:

Everyone in the tank is electrocuted and bursts into flame?

If the Tesla owners are electrocuted and burn also, that's a very lenient sentence for buying anything from Elon Musk . . lol

[bonal]

I think another consideration potential buyers would have is what is the health of the company that makes the product. And sadly Mooney is not perceived to be very healthy for the long run. If someone is about to invest near a million dollars I'm sure this would play a big part of their thinking.  From an esthetic point of view the Mooney ultra is way more beautiful to look at than the Cirrus but that is purely subjective. Modern doesn't always look better in fact in most cases IMHO vintage looks much more appealing.

This thread is depressing