Why Mooney Shut Down The Factory - Opinion

[Mooney217RN]

I've been reading through all the comments online including the future speculation of the product line.

Earlier this year I posted online about my experience flying with a friend & neighbor of mine who bought a brand new Cirrus SR-22 GTS.  We flew to dinner one night in that beautiful plane of hers.

Some of the comments in response to my observations were critical of my comparison between the two product lines, Mooney & Cirrus.  But one of the the things I said is at the core of Mooney's demise.

Years ago, Mooney built a line of aircraft that included a variety of models.  There was the C, D, E & F.  There was a G model for a while.  In the late 1970's through the 1980's, there was the J, K & L bodies, the K having two variations.  Later, the long body models were born from the PFM (L).  We had the Bravo, Ovation and later the Acclaim.  The 252 became the Encore, arguably one of the best of breed.  All the while, there was a common thread - the J Model (201) was available and sought after.  But the profit margins were better on the long body Mooneys.

So like many manufacturers, Mooney went where the money was and after a change of ownership, the J model and the Encore were shelved.  The factory was left with the Bravo, Ovation and later the Acclaim to replace the Bravo.

Seemed like a good business decision, right?  Not so quick.  One of the things I mentioned in my post about the Cirrus is that you can easily transition into an SR-22 from a C172 or C182 or similar trainer.  Take my aircraft ownership as a case in point.  I went from about 300-350 hours in a C172 with some C182 time into an E Model.  Really nice transition.  It didn't hurt that our local flight school had an E Model (which is still at our airport but owned by a good friend now).  The E Model was a perfect transition for a low time pilot into a complex platform.  Later in life (last year), after a couple thousand hours of time in the E model, I traded up to a near new Ovation 3.  I wanted more aircraft, faster speeds to bridge the gaps of distance, and I wanted more capability.  Thanks to Don Kaye and Will Wobbe, I received good transition training.  I found that moving into the Ovation 3 was a handful coming out of the E Model.  I couldn't imagine going into an Ovation Ultra coming out of a C172, let alone transitioning into an Acclaim as a low time pilot.

When Mooney decided to pare down the product line to two models, they determined their fate in my opinion.  Very few people (if any) are going to move into an Acclaim or Ovation with only a few hundred hours of flight time.  The 201 was such a success because you could move into a 201 easily from only a few hundred hours of flight time.  It was a logical move.  Then you're into a 201, and after a few years, you want more.  You step up to the Ovation or the 252 Encore (when it was in production).  Nobody today is going to really know what an Ovation or Acclaim is, because they never flew the lower end of the product line.  All that was left were the two top ends of historical production.  There was no entry level Mooney to introduce pilots to the product line.

I liken this to BMW.  Years ago my first new car was a BMW 320i.  It was a wonderful car, powered by a 1.8 liter inline 4 cylinder motor.  It had a 5 speed manual gearbox, roll down windows, a crank operated sunroof, manual seats, two doors, dual mirrors.  It was so much fun to drive.  BMW sold a lot of 320i cars.  I put 375,000 miles on mine before I sold it.  And a few years after that, I bought an E46 323i.  I also have an M8 and an X3.  BMW has continued to build 4 basic models - a sports sedan (3 Series), a sedan (5 series) a coupe (6 or 8 series) and a luxury sedan (7 series).  They also have a successful line of SAV's, the X series.  But look at that car of mine from 37 years ago - it set me on a path to own BMW's.  It was the entry level BMW, affordable, sporty, efficient, and a true pleasure to drive.  A drivers car.  

Mooney neglected the entry level, and in my opinion, that has led to the demise of the brand.  Only those of us who have flown Mooney aircraft will know how good they are.  People coming out of training aircraft won't get into a new Mooney, because there was no entry level model to get into.  That my friends is the root of WHY the factory is shut down, and likely will not re-open.  If Mooney were to ever emerge from this shutdown (and I have seen a few as an owner), the only way they rise from the ashes is to bring back the 201.  Short of that, we won't see the factory re-open, sadly.

[RobertE]

You know, that’s an interesting and very thoughtful analysis.  But (hey, you knew the “but” was coming!) it presumes a manufacturer needs a product line that allows people to transition from one model to the other.  Yet the used market does that really well.  The fact is, though, that manufacturers address just a small sliver of the market.  They live or die on the 350 people (in Cirrus’ case) or 12 people (in Mooney’s or Beachcraft’s case) who decide each year they need a new vs used aircraft.  And those manufacturers have learned that someone who is prepared to pay hundreds of thousands more for a new vs 95% as good used aircraft are most likely interested in the higher end of the line.  The manufacturing cost doesn’t vary all that much for a bigger engine, turbocharging,....  So it’s really tough for manufacturers to build a business on anything but the top of the line.  In my opinion, of course.

[cbarry]

The cool factor of sucking up the gear after a positive rate has been replaced by saying “CAPS available.”  It doesn’t take a whole lot to start the shift to what is believed (rightfully or wrongfully) to be a more modern model of aircraft—it just takes starting a trend then the herd follows.

[PT20J]

The business term for deciding to serve only the high margin, high priced segment of a market is "skimming the cream." Usually works for a while and then ultimately fails for a variety of reasons. The real problem has been that established manufacturers with legacy designs made the mistake of viewing Cirrus as just another competitor rather than a market disruptor.

[CaptainAB]

Cirrus is unique designing their planes to enhance the passengers experience, knowing that many of us wanted to fly with our friends and family. Mooney’s were designed to focus on the pilot experience, a much more competitive field and one that doesn’t seem to have as much of a premium on “new”.

[GLJA]

Thoughtful insight. But, there are car companies that do well, and don’t have an entry model:

Bentley, Ferrari, Lamborghini, Porsche, Aston Martin
they have their market, and go after them. 
 

 

[carusoam]

I’m with you GL, up to the Porsche part.... 924, 944... and any VW in the same stable...

if they can’t keep the factory open selling the high end Porsches... they have an entire family of VWs to pay the bills...

Or the Ferrari part.... where it was owned by a few companies prior to being spun off and going public...

Or the Lambo part... currently owned by.... VW!

Or the Bentley part... currently owned by.... VW!

 

Keep in mind my research only went as far as saying hey alexa... who owns...

 

Guess there is a natural divide between the airplane world and the automotive world...

Or... we could have VW buy up the Mooney company.... hmmmmmm.....

Does anyone buy a Ferrari to learn how to drive?  Similar to buying a new LB Mooney to learn how to fly...?

Does anyone take a high end Ferrari to the race track and not get transition training to go with that...?

Best regards,

-a-

[gsxrpilot]

This whole speculation is based on the premise that the Meijing Group expects or needs Mooney to be a profitable business or even just self supporting. I'll be that when this "trade war" with China is over, they'll be back in business.

[Schllc]

Full disclosure, I am a Mooney fan at heart, am completely biased and in no way impartial....
 

The premise is logical,  however in the grand scheme of things I don’t believe it’s a big enough factor. 
The phrase “best plane for your mission” resonated when I took my instructor and a friend in a 172 to fly to look at a commander that was a three hour drive away. 
Well, with a 45knt headwind in the Cessna, full tanks and two passengers it took us right at two hours to get there!  
I knew that day it had to be a Mooney. 
My first plane was an ovation 3.  I got it with barely 40 hours total under my belt, when I didn’t even have my ppl. I finished my ppl with 62 hours in the 172 and 6 in the Ovation. 
I went straight into training for my IFR in the g1000 ovation. 
The speed of things, and the avionics took me longer to get a grip on than the characteristics of the plane. The Mooney really is a pilots plane, it flies much nicer than the G5 SR22, or the 172.
I quickly discovered that roughly 95% of the negative things people said about mooneys were incorrect, and from people who were just repeating things they heard, not from personal experience. 

I read somewhere recently that what cirrus did is take an entire class of people who would otherwise not even aspire to be pilots, and convert them to owners, simply by convincing them the platform was simpler and safer.
Kudos for their market insight and successful campaign, but I feel sorry for pilots whose “go to” is a parachute before skill and good decisions.  
Don’t get me wrong, I’m not knocking Cirrus or the parachute, or even Cirrus pilots, I’m sure most of them are fine pilots. I just think that a parachute can lure people into making decisions that they would otherwise not make.

When I took the cirrus transition course I was really taken aback by the focus of the training. 
All through the course the instructor scolded me for not engaging the autopilot sooner after takeoff, or during an approach.
I realize my autopilot is a critical piece of equipment, but when you are on an approach and don’t understand what the AP is doing, should you spend time figuring out the avionics or fly the plane?   I feel like teaching the autopilot vs the plane may make a lot of people comfortable, but feels like it may not be equipping them completely. 
 

The first barrier to entry is price, second is complexity, third is safety. 
Cirrus made it “feel” simple, and makes it “feel” safer, price didn’t seem to affect them. 

[INA201]

2 hours ago, gsxrpilot said:

This whole speculation is based on the premise that the Meijing Group expects or needs Mooney to be a profitable business or even just self supporting. I'll be that when this "trade war" with China is over, they'll be back in business.

Hmmm, Defintely merit to this.  China functions differently than we do for sure. 

[steingar]

It might be a direct response to the trade wars. China will want them to hurt, and I bet the guys who own Mooney are beholden to the Chinese government on some level.

That's the optimistic view.  I suspect more likely that the Chinese who own Mooney got tired of loosing so much money.

[GLJA]

1 hour ago, steingar said:

It might be a direct response to the trade wars. China will want them to hurt, and I bet the guys who own Mooney are beholden to the Chinese government on some level.

That's the optimistic view.  I suspect more likely that the Chinese who own Mooney got tired of loosing so much money.

This was my initial response. But, being in Canada, and having my head in the sand when it comes to Trump's government (My Mother is so Dem, I had to block her posts on Facebook, because she's reverted to complaining about the government full time in her retirement years), I wasn't too sure if this was even an issue any more. 

I will say this: Our Labor up here per US dollar is about 30% cheaper on exchange right now. Just a thought.

[Nick Pilotte]

11 hours ago, GLJA said:

Thoughtful insight. But, there are car companies that do well, and don’t have an entry model:

Bentley, Ferrari, Lamborghini, Porsche, Aston Martin
they have their market, and go after them. 
 

 

I tend to agree with Tony (Carusoam) on this.   In fact, for many years, my industry was the Euro exotic car market.  All of those have an “entry model” and all launched them at a time when their brands were dying.  They may not be entry level to average consumer Joe but that applies to all luxuries like aircraft.  Bentley was in financial distress and sold to VW, who launched the Continental GT for $140k Opposed to $300+ for the Arnage.  Lambo did the Gallardo, Porsche launched the Boxster and Cayenne much to the dismay of purists and it saved them. Aston relaunched the Vantage in 06ish for about $140k too.  Ferrari California was a V8 powered convertible for half the cost or so of their 360/430 model.  

Mooney has had no entry level model anymore.  This could be where a properly executed trainer or even a step up from training model that would be similar to an io-360 powered M20 that could help promote easily manageable transition to complex aircraft.  
 

I do agree that there is no way you could keep a company afloat with selling 10 aircraft under $1mil each when you factor costs of employees, materials, overhead on property, and compliance.  
 

That is my thought as a new pilot and I am not a marketing expert either.  

[Bravoman]

6 hours ago, gsxrpilot said:

This whole speculation is based on the premise that the Meijing Group expects or needs Mooney to be a profitable business or even just self supporting. I'll be that when this "trade war" with China is over, they'll be back in business.

Unless I am misunderstanding you, your argument does not make sense from the standpoint that the trade war should not impair Mooney  since manufacturing and parts and labor all occur in the United States. Whether the so-called communist regime in China is putting pressure on such companies, who knows. I very much doubt that is a factor. In any event, something had to be done about China, and Trump is finally doing it.

Edited November 26, 2019 by Bravoman

[Guest]

1 hour ago, Bravoman said:

Unless I am misunderstanding you, your argument does not make sense from the standpoint that the trade war should not impair Mooney  since manufacturing and parts and labor all occur in the United States. Whether the so-called communist regime in China is putting pressure on such companies, who knows. I very much doubt that is a factor. In any event, something had to be done about China, and Trump is finally doing it.

Instead of a “Trade War it may have been more beneficial to force China’s currency to a floating rate against other world currencies as opposed to fixed.  Seven years ago I bought my Comanche when the Canadian dollar was on par with the US dollar, now it’s at a 35% penalty, and yet both of our economies are doing well.

Everything we buy from the USA hurts a lot, everything we sell to the USA is discounted for you.

Clarence