An update from Mooney....sort of

[bcg]

I'm based at ERV and this was in the monthly airport newsletter -

 

Mooney International Corporation Update
Mr. Jonny Pollack, CEO of Mooney International Corporation, presented an update on the company’s current operations and strategic objectives to the Joint Airport Board on April 26, 2023. Mr. Pollack reported the company is currently focusing on aviation parts as a “stepping stone” to a return to full sized aircraft manufacturing. “In the short term,” Mr. Pollack explained, “we plan to become a self-sustaining aviation parts company. In the long term, we’re manufacturing airplanes again, but with a more solid foundation that can weather economic uncertainties.“ Since Mooney International has a sizeable footprint on the airfield, and an economic impact on Kerrville-Kerr County development, meeting attendees asked if there was potential to lease portions of the facility to third parties. Mr. Pollack stated the property’s value was in the company’s manufacturing certificate.

The company recently passed the FAA Part 145 Service Center audit and has plans to secure contracts for manufacturing specialized defense avionics and related components. Mr. Ed Marin, Chief Operational Office, pointed out that potential growth of the company is tied to sustainable and long-term development within the aviation industry, including the potential for defense contracts.

[EricJ]

6 minutes ago, bcg said:

The company recently passed the FAA Part 145 Service Center audit and has plans to secure contracts for manufacturing specialized defense avionics and related components. Mr. Ed Marin, Chief Operational Office, pointed out that potential growth of the company is tied to sustainable and long-term development within the aviation industry, including the potential for defense contracts.

I take that to mean that making traditional Mooney airplanes is a ways down the priority list, if they can get to them after they figure out how to actually make some money.

[KSMooniac]

I've been wondering why they haven't pursued aerospace/defense sub-contracting for a while now...the market is red-hot, and Mooney is (or was/should be) well-positioned to take on a lot of manufacturing and sub-assembly work for any number of bigger companies.  Anything to keep the lights on and a work force stabilized would be highly beneficial to us and help secure a future for Mooney.

[ArtVandelay]

I saw a piece on TBM years ago, they do the same thing.

[Pinecone]

I met a guy a few years ago that had a factory that made parts for telephones.  He was almost 100% defense work then.

It was at a track event where he and his wife were driving his and her Ferraris

 

[jetdriven]

That's what happened to Sonex, they started building defense parts, and now all of their JSX-2 is on hold. Their rate is  progress is probably going to be permanent vaporware..  .So it'll be good for the company if making money is what the company wants but it won't necessarily translate to more and better parts availability for Mooney airplanes. I've got 4000 bucks worth of fiberglass window frame pieces on hold for my plane, and they said they had to wait till the fall to make them because the air conditioner in the Layup Room is broken. 

[A64Pilot]

I wish them luck honestly, Fred Ayers especially went down the contract work hole, even built MD 600 helicopter fuselages and lots of Boeing work, hush kits and cargo doors for 727’s back in the day etc.

It’s really easy to lose money in contract work so you have to be careful, Boeing in particular is very sneaky, not the word I was looking for, but Boeing will come in with a very lucrative contract, so you hire people and maybe buy new machines etc to fulfill the contract, everything is going great, then Boeing comes in contract renewal time and tells you they will only pay a lot less, you having hired people you don’t want to lay off and have payments to make on those machines, agree because you have no choice, but you scratch to break even.

You can make money doing contract work, but it’s tough, really tough and you have to be careful, lots of competition it seems.

The money we made was actually not in one big killer contract, but in many nickel and dime ones, making parts for Twin Otters, a guy that had an STC to replace magnesium skins on some kind of Beech, not the V tail, we pressed the skins etc. Made parts for lots of people.

All of the throttle lever quadrants for the Reaper drone we built. Think about that for a minute, why does a drone need a throttle quadrant? I don’t have an answer for that, the control stations of course, but the drone?

[Schllc]

2 hours ago, KSMooniac said:

I've been wondering why they haven't pursued aerospace/defense sub-contracting for a while now...the market is red-hot, and Mooney is (or was/should be) well-positioned to take on a lot of manufacturing and sub-assembly work for any number of bigger companies.  Anything to keep the lights on and a work force stabilized would be highly beneficial to us and help secure a future for Mooney.

I think that given the entanglement with the Chinese ownership, they haven’t been eligible to work on defense projects. 

[N201MKTurbo]

5 minutes ago, A64Pilot said:

I wish them luck honestly, Fred Ayers especially went down the contract work hole, even built MD 600 helicopter fuselages and lots of Boeing work, hush kits and cargo doors for 727’s back in the day etc.

It’s really easy to lose money in contract work so you have to be careful, Boeing in particular is very sneaky, not the word I was looking for, but Boeing will come in with a very lucrative contract, so you hire people and maybe buy new machines etc to fulfill the contract, everything is going great, then Boeing comes in contract renewal time and tells you they will only pay a lot less, you having hired people you don’t want to lay off and have payments to make on those machines, agree because you have no choice, but you scratch to break even.

You can make money doing contract work, but it’s tough, really tough and you have to be careful, lots of completion it seems.

The money we made was actually not in one big killer contract, but in many nickel and dime ones, making parts for Twin Otters, a guy that had an STC to replace magnesium skins on some kind of Beech, not the V tail, we pressed the skins etc. Made parts for lots of people.

All of the throttle lever quadrants for the Reaper drone we built. Think about that for a minute, why does a drone need a throttle quadrant? I don’t have an answer for that, the control stations of course, but the drone?

Perhaps for the crew chief to start and run up the engine before takeoff?

[KSMooniac]

8 minutes ago, A64Pilot said:

I wish them luck honestly, Fred Ayers especially went down the contract work hole, even built MD 600 helicopter fuselages and lots of Boeing work, hush kits and cargo doors for 727’s back in the day etc.

It’s really easy to lose money in contract work so you have to be careful, Boeing in particular is very sneaky, not the word I was looking for, but Boeing will come in with a very lucrative contract, so you hire people and maybe buy new machines etc to fulfill the contract, everything is going great, then Boeing comes in contract renewal time and tells you they will only pay a lot less, you having hired people you don’t want to lay off and have payments to make on those machines, agree because you have no choice, but you scratch to break even.

You can make money doing contract work, but it’s tough, really tough and you have to be careful, lots of competition it seems.

The money we made was actually not in one big killer contract, but in many nickel and dime ones, making parts for Twin Otters, a guy that had an STC to replace magnesium skins on some kind of Beech, not the V tail, we pressed the skins etc. Made parts for lots of people.

All of the throttle lever quadrants for the Reaper drone we built. Think about that for a minute, why does a drone need a throttle quadrant? I don’t have an answer for that, the control stations of course, but the drone?

You're not wrong about that assessment of sub-contracting.  My current employer was a victim of Gulfstream doing that, and I expect we've done it to our subs.  A former co-worker of mine worked at Gulfstream for a couple of years and he overheard a conversation with a couple of their folks bragging about how many contractors they had driven to bankruptcy, as if that is something to be proud of!  We lost hundreds of millions on the G650 program...partially due to our own naivete as a newly independent big supplier, but certainly because of their behavior in writing and executing contracts.  Nowadays, 25 year old MBA's are dispatched to suppliers to beat them up on price because a spreadsheet might say that a part of such-and-such characterstics should cost $xx/lb according to "data" even though the MBA might not know what it is, or how it is made.  That is unfortunately endemic in the industry...

Having said all that, I still think there is a viable (goat) path for Mooney to pick up a lot of this work, and make some money if they're diligent.  Anyone with a modern milling machine would have to really put in some effort to hide from work in this environment!  

[1980Mooney]

34 minutes ago, Schllc said:

I think that given the entanglement with the Chinese ownership, they haven’t been eligible to work on defense projects. 

Spot on.  Back in September 2020, Mooney made the announcement that " Wyoming-based financial group, U.S. Financial, announced that they had purchased an 80% share of Mooney International."    All the news sources and publications quoted that only 80% was sold. 

That means that 20% remains with the Chinese, Meijing Group.  Additionally, everyone recognizes that Meijing put a lot of cash into Mooney - some estimating more than $150 million, perhaps closer to $200 million for development, improvements, etc.  Most likely much of that money was made available to (transferred to) Mooney via loans from Meijing and not by "equity" infusions.  That "debt" could still be on the books - and could be a huge "senior IOU" to Meijing with seniority over equity. 

The "devil is in the details" which have never been explained....for some reason.

Mooney Reveals New Ownership - FLYING Magazine

Present Position (themooneyflyer.com)

Pilots, aircraft owners buy Mooney International - AOPA

MOONEY CHANGES OWNERSHIP – SA Flyer

 

 

[glbtrottr]

Soooo….

We are supporting a company to sometimes manufacture replacement parts for our mooneys so they can focus on making money on defense contracting and not really mooney parts…though maybe one day they make make new airplanes again….maybe.

I’ve called for parts on my K model and zip…not making them.

Got it.


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[glbtrottr]

Soooo….

We are supporting a company to sometimes manufacture replacement parts for our mooneys so they can focus on making money on defense contracting and not really mooney parts…though maybe one day they make make new airplanes again….maybe.

I’ve called for parts on my K model and zip…not making them.

Got it.


Sent from my iPhone using Tapatalk

[A64Pilot]

7 hours ago, glbtrottr said:

Soooo….

We are supporting a company to sometimes manufacture replacement parts for our mooneys so they can focus on making money on defense contracting and not really mooney parts…though maybe one day they make make new airplanes again….maybe.

I’ve called for parts on my K model and zip…not making them.

Got it.


Sent from my iPhone using Tapatalk

I’m afraid that they are just trying to stay alive, by any means necessary.

Example, opening a repair center, yes it’s viable, but your dealers aren’t pleased because of course you in competition with them.

It’s a balancing act, like selling parts direct, your dealers don’t want you doing that because of course your cutting them out, but also dealers don’t want to stock parts, they want them direct shipped from the factory, but they want 20% for placing the order.

I’ve wondered why none of the PMA parts houses aren’t making and selling Mooney parts like they do for Ercoupe, Piper, Cessna, Taylorcraft etc.

I can get just about any part I need for my 46 Cessna, but not my Mooney?

I paid $1,000 a year ago for a NBS to a reputable MSC, but still don’t have a NBS? I can only assume that it’s because Mooney owes the actual manufacturer and has been placed on credit hold? Pure speculation, not based on any facts, but it’s not uncommon for a cash strapped manufacturer.

[rbp]

2 hours ago, A64Pilot said:

Example, opening a repair center, yes it’s viable, but your dealers aren’t pleased because of course you in competition with them.

 

this could be true if there was more repair capacity than demand, but its the other way around. 

[hubcap]

The folks at Mooney seem to be trying to remain viable and relevant in a very competitive capital intensive industry. Good for them for staying in business!

That is hard enough just in and of itself. 

 

[rbp]

If mooney made a "modern" J model with a glass panel and acclaim-like interior for $750,000, would you buy it? 

Note that a new NA 182 is over $700K (https://pilotpassion.com/how-much-does-a-cessna-182-skylane-cost/)

An SR20 is $579,900 and an SR22 $772,900

[1980Mooney]

57 minutes ago, rbp said:

If mooney made a "modern" J model with a glass panel and acclaim-like interior for $750,000, would you buy it? 

Note that a new NA 182 is over $700K (https://pilotpassion.com/how-much-does-a-cessna-182-skylane-cost/)

An SR20 is $579,900 and an SR22 $772,900

Let's take the "modern J" $750K proposition a step further. 

• Insurance will be $9-14K per year
• Hangar will be - let's say $5-6K per year
• Cost of money or lost earnings on cash invested - Let's say 6% on $750K or about $45k per year
• You still have an Annual - let's say $4K per year to start while in warranty
• Data subscriptions, Foreflight, etc - let's say $2K per year

Assuming no loss in value over time, no depreciation (not realistic over time but anyway) that will cost you $65-70K per year to just sit on the ground.

Oh you want to fly? ...Operating costs! - 10 gph, oil changes, training, landing/tiedown/temp hangar fees... - let's add another $10K per year maybe more.

Spending (costing) about $75k per year to fly a "new" J (a small plane that can't get over weather or handle icing conditions, no air conditioning) may be fine for some.  Of course that will buy a lot of charter flights too.

[Schllc]

LOL, it’s always interesting to see planes and costs evaluated in rational economic terms. 
people buy planes because they want to fly, money is part of the equation as a function of what the individual can afford to waste on a hobby or interest.

very few cirrus owner I have ever met are real aviation enthusiasts, those planes are primarily investments. Cirrus did an amazing job with marketing and helping people use them as tax shelters, the parachute brought the spouses into acceptance, and the whole culture they created is undeniably successful. 
The majority of the rest of GA piston are just folks who love flying and the idea of being a pilot.  
I am not suggesting a 750k J model with sell like hotcakes,  but I’d be willing to bet they would sell better than all the cb Mooney guys here would predict. 
Lastly, one of the most frustrating parts of aging for me is remembering what things used to cost. The reality is 750k today is more like what 200k was worth in the late 80’s. 

the reality is unless the FAA was to be dragged out of the 1920’s and their internal bureaucracy was given intensive shock therapy and a thorough house cleaning, aviation is dying a slow death, and I’m just glad it’s still around for me to enjoy. 
I’d love Mooney to start making planes again, and if I hit the powerball, id waste a couple hundred million making a go of it!

[toto]

We’ve talked a lot about the “new J model” concept here on MS a bunch of times, and I’m still pretty well convinced that we have a demand problem, not a manufacturing problem. If Mooney had demand for 1000 airframes a year, they could optimize manufacturing processes to shorten the time-to-build, and they would have some real negotiating power to reduce costs on major components. The problem is that there aren’t buyers at any price. 

All that being said, most of the used airplanes I could buy with $750k would have operating costs I couldn’t afford. There isn’t much better than a J model bang-for-buck. 

[bcg]

Let's take the "modern J" $750K proposition a step further. 

• Insurance will be $9-14K per year
• Hangar will be - let's say $5-6K per year
• Cost of money or lost earnings on cash invested - Let's say 6% on $750K or about $45k per year
• You still have an Annual - let's say $4K per year to start while in warranty
• Data subscriptions, Foreflight, etc - let's say $2K per year

Assuming no loss in value over time, no depreciation (not realistic over time but anyway) that will cost you $65-70K per year to just sit on the ground.
Oh you want to fly? ...Operating costs! - 10 gph, oil changes, training, landing/tiedown/temp hangar fees... - let's add another $10K per year maybe more.
Spending (costing) about $75k per year to fly a "new" J (a small plane that can't get over weather or handle icing conditions, no air conditioning) may be fine for some.  Of course that will buy a lot of charter flights too.

I know a guy with a Lear45, his annual operating costs are around $800k, it's really expensive to get over weather and have real icing capability. Turbines aren't cheap to operate.

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[Fly Boomer]

13 minutes ago, toto said:

All that being said, most of the used airplanes I could buy with $750k would have operating costs I couldn’t afford. There isn’t much better than a J model bang-for-buck. 

Yep.  That's why twins are so cheap -- nobody can afford to fly them.

[rbp]

40 minutes ago, toto said:

we have a demand problem

Exactly. “Efficient” is the #2 attribute used with Mooneys, right after [Mooney] “zoom”.
 

A 201 mph modern J would probably not be any more efficient, at 4-5x the cost 

[A64Pilot]

7 hours ago, M20Doc said:

One of my clients just took delivery of a new Sling TSi for something like 275K.  It seems some manufacturers are able to build at reasonable costs.

That’s some kind of home built?

[PT20J]

Jacques Esculier got the factory ISO 9000 certified and saved Mooney with contract manufacturing back in the early ‘90s, so it worked once before.