Mooney CEO Has Time For Financial Press Interview May 2024 - Current Focus on Manufacturing Parts For Other Aircraft Companies

[Texas Mooney]

Found this "Investment Reports - provided by Newsweek" article online dated May 28, 2024.  It is an interview with Jonny Pollack and seems to be current because Pollack says in the interview that he has been CEO of Mooney for four (4) years without taking a salary.

https://www.investmentreports.co/interview/jonny-pollack-1180

Key Points:

• "We currently enjoy good margins manufacturing parts for several other aircraft companies: our main challenge is scaling up."
• 35 employees
• "I believe the future lies in composite technology, which allows for rapid production in molds"
• "Our plan includes refining existing models to build more efficiently and increase their useful load."
• Interestingly blames the Trump Administration trade wars for the inability of Soaring America (subsidiary of Meijing Group) to continue funding the business resulting in shut down of aircraft manufacturing.  That means that Mooney remained a negative cashflow sinkhole with every Ultra that they built.

 

Content Provider for

• Interviews
• Jonny Pollack

Jonny Pollack

CEO

Mooney International

28 May 2024

You are an avid aviation enthusiast and have likened flying a Mooney aircraft to flying a Ferrari in the sky. What exactly makes the Mooney aircraft so unique?

Mooney aircraft stand out due to their engineering excellence. Each Mooney is handcrafted, ensuring meticulous attention to detail and quality. In general aviation, trainer aircrafts use cables and pulleys, which delays response time, whereas we use pushrods, allowing immediate feedback to any control input. It's also extremely fast, holding general aviation speed records at 240 knots true airspeed at 25,000 feet in ideal conditions - the closest competitor is 8 or 9 knots slower. We use a turbocharged Continental IO550 engine and a laminar flow wing featuring a sturdy aluminium spar extending from tip to tip, which enhances its efficiency and safety. This design has been a staple in Mooney aircraft for over 70 years. 

You joined Mooney as CEO in 2020 following a turbulent few decades consisting of financial troubles and multiple changes of ownership. Why did you join what many people considered a company on the brink of collapse?

I joined Mooney partly due to a personal connection to the brand and partly due to a vested interest given that I had previously purchased my own Mooney aircraft. For context, the previous owners - investment firm Soaring America - were impacted by trade wars under the Trump administration, could no longer fund operations, and had to cease production. Initially, I evaluated the company’s status and prospects, but driven by a sense of responsibility to our clients and the broader community relying on our aircraft, I ended up accepting the CEO position without a salary for four years.

Mooney faces operational challenges, mainly supply chain issues that affect our parts availability. It’s my responsibility to stabilize our financials and preserve the company sufficiently so that eventually, new leadership can turn things around and Mooney can return to manufacturing aircraft in full. I consider my tenure as managing the company through crisis effectively, aiming to set a foundation for future success so we can transition away from being a parts manufacturer to resuming full aircraft manufacturing under the Mooney brand.

As you focus on building a more solid foundation for Mooney, what economic uncertainties are keeping you awake at night?

The aviation business presents challenges in building aircraft efficiently. The complexity arises from managing thousands of parts and adhering to stringent Part 23 certifications. Such certifications demand a rigorous quality control system where every component must meet precise standards. This requirement not only enhances safety but also significantly raises costs. Moreover,

the dependency on a reliable supply chain has been a critical issue, especially post-Covid. The necessity for a robust infrastructure of engineers and quality assurance teams to comply with FAA regulations adds another layer of complexity. These factors combine to make aircraft manufacturing costly, with the net margin severely impacted by substantial overhead costs associated with maintaining the necessary quality controls.

Tell us about Mooney’s portfolio and geographical spread of customers across the US and the world?

We operate 7,000 aircraft worldwide, exclusively manufactured in the United States. Many are certified for international flights, such as in Australia and South Africa. We don't sell aircraft outside the U.S., yet interest has risen in our all-metal aircraft due to global warming concerns and structural integrity in extreme heat. Mooney aircraft, primarily aluminum, are known for efficiency and reduced fossil fuel consumption.

In the U.S., our main clients are individual pilots. While our competitors focus on family-oriented marketing with safety features such as parachutes, our planes have a slightly lower useful load like the SR-22. Due to our aircraft’s payload limitations and narrower cockpits, we cater to that specific demographic.

You have mentioned that Mooney operates like a startup but also uses 1970s technology. How do you plan to modernize the design and accelerate automation to keep Mooney competitive in 2024?

We will be modernizing both our manufacturing methods and the products themselves. Currently, we produce metal aircraft using traditional methods such as stamping and forming but I believe the future lies in composite technology, which allows for rapid production in molds—however, this method involves significant certification costs and time. All planes fundamentally use technology developed from the early days of aviation, with recent changes focusing on propulsion methods like VTOL and hybrid engines. Our plan includes refining existing models to build more efficiently and increase their useful load. 

Do you have a projected timeline for when Mooney might become revenue-neutral or cash-positive and begin a transition?

We currently enjoy good margins manufacturing parts for several other aircraft companies; our main challenge is scaling up. Unlike Cessna, which services thousands of trainers, our fleet consists of only 7,000 aircraft. Once we have acquired the necessary capital, I anticipate we could be revenue-neutral within a year. At that point, I'd likely step aside to let new leadership drive further growth. 

Given the intense competition, why have you opted to keep Mooney in Texas and not outsource for cheaper manufacturing labor?

Mooney's identity is deeply ingrained in Texas; it's part of our legacy. Our commitment remains strong due to significant incentives to retain manufacturing operations locally. Although our team size is smaller than ideal—35 instead of 235—our team embodies the spirit and dedication Mooney stands for. Licensing production overseas would involve complex and costly certification processes in those countries. We prefer to build kits in Texas and ship them abroad for assembly under strict regulations, maintaining our quality standards and supporting our local community.

JoeBen Bevirt

Joby Aviation

28 May 2024

Thomas Olivier

Omnos

28 May 2024

71-75 Shelton Street, Covent Garden, London WC2H 9JQ, UK

info@investmentreports.co +40 740 631 208

Investment Reports © 2024 All rights Reserved

 

 

[Schllc]

I took that comment about trade wars, more as a comment regarding limits of critical industries cooperating with Chinese owned companies. 
my understanding is that the real value in Mooney today is it’s manufacturing certificate, which coincidentally is not easy to obtain, or just move to another location. 
The fact that the Chinese still own a portion of the company precludes them from competing for any parts for defense, which is a a large part of many aircraft manufacturers revenue. 
Furthermore, while a lot of VC firms would look hard at Mooney for VTOL or aerospace, Mooney”s inability to bid limits interest. 
I agree with your comment about his answers though, they were overly vague and difficult to discern between what is, and what he would like it to be. 
All that being said, it is encouraging to see they have aspirations and something like a plan…

It would be nice if they could be a little more transparent with the owners, and give opportunities to crowd source funding for things. 
Even if there was a vendor to which they owed money, roll it into the cost of the new run and give owners the option.

It’s in the best interests of the owners to help with these things, at least within reason.  
I also believe if Johnny had a town hall with the MSC representatives, and perhaps some polling of owners, they could get make some decisions about parts that may be better to release control over rather than strangling owners.   
Also explain why some very obvious money making items like the NXI upgrade are just languishing, and arguably doing irreparable harm to the brands reputation. 

[Schllc]

If there are 7000 planes flying, and half of those owners agreed to crowd fund just $5,000 and receive either a future discount on parts or service and or maybe some stock, that would raise $17,500,000.  
 Before I get flogged by all the cb’s, it’s not so much a suggestion as an example of how we could help if allowed to….

[rickseeman]

I'm just glad they're still alive

[Matthew P]

On 6/19/2024 at 3:14 PM, rickseeman said:

I'm just glad they're still alive

If you can't get parts are they really alive?

[Pinecone]

You can get parts that they make.  Just not parts that buy and resell.