Let's play a game - billionaire investor determined to revive Mooney

[BlueSky247]

Let's suppose you bought the company and assembled a good team to lead it. Let's ignore economic cycles and fluctuating market trends for the sake of discussion.

 

What would it really take to bring the brand back and have it be profitable?

 

Model thoughts:

Pressurized Acclaim

LSA/Mosiac two seater

 

Tech thoughts:

They were always about making the plane slick. They went with a composite fuselage at the end, but I think composite wings would be the next step. If Deltahawk continues to mature and are able to scale, that would be a nice powerplant option as well. Would certainly open up more global markets with that increased fuel availability. (edit: obviously, a team of top engineers would be hired as well.)

 

What do you guys think? Would it be possible to save them, or have the likes of DA and Cirrus shut that door permanently?

[redbaron1982]

I would take three steps (I have no idea so that they might be completely non-sense):

• Focusing on servicing the existing fleet could make the company profitable again. If the market is not large enough with just Mooneys, we could even consider extending support for other makes, like Cessna.
• Design a killer trainer aircraft, assuming the greatest demand for small single-piston engine airplanes is on the pilot training market.
• With a profitable production line running, I would design the new M20J/K. Basically one airframe, with turbo and non turbo versions.

I would make sure to offer a jet-a piston engine in all the airframes.

[BlueSky247]

Yes! An excellent trainer would be a great idea.

 

I meant to include that I would absolutely be focused on an outstanding support team, as well as marketing.  I have a friend in the bizjet world I'd tap to lead that effort and include an AOG response team for Acclaim owners.

[LANCECASPER]

While the cabin is composite on the Acclaim Ultra (the engine cowling is carbon fiber on all Acclaims), it stops there. To make a pressurized "Acclaim" you'd need to start over and design a pressure vessel and build the airplane around that. There is a lot of competition in that market right now - M600, M700, TBM, PC-12, Epic, etc.

[tls pilot]

California Dreamin’…oh Texas Dreams  ……credit Mamas and Papas

Stopped into Mooney
We passed along the way
Well, we got down on my knees 
And we pretend to pray, one day Mooney will rise
You know that Mooney is not making any planes and the buildings are only a guise
They know I'm gonna stay flying my Mooney

But they simply are not making them

All the buildings are brown 
And the tools are rusted 
We’ve been for a flight and we look down at Kerrville with a frown
We’ve been flying Mooney because we trusted

Well, That is Texas Dreamin’ on such a summers day….

 

 

[1980Mooney]

22 minutes ago, LANCECASPER said:

While the cabin is composite on the Acclaim Ultra (the engine cowling is carbon fiber on all Acclaims), it stops there. To make a pressurized "Acclaim" you'd need to start over and design a pressure vessel and build the airplane around that. There is a lot of competition in that market right now - M600, M700, TBM, PC-12, Epic, etc.

Except that is only a thin composite shell over the traditional 1950’s-origin steel tubular load bearing fuselage frame. A true composite cabin is structurally load bearing. The Ultra cabin is really just a “composite facade”. 

Edited July 11, 2024 by 1980Mooney

[Pinecone]

9 minutes ago, LANCECASPER said:

While the cabin is composite on the Acclaim Ultra (the engine cowling is carbon fiber on all Acclaims), it stops there. To make a pressurized "Acclaim" you'd need to start over and design a pressure vessel and build the airplane around that. There is a lot of competition in that market right now - M600, M700, TBM, PC-12, Epic, etc.

And remember that the TBM started as the Mooney 301.

[1980Mooney]

The title of the topic is appropriate. The wish list so far (new “killer trainer”, pressurized Acclaim, redesigned J/K line) will relieve someone of the most part of a $Billion. 

[LANCECASPER]

12 minutes ago, Pinecone said:

And remember that the TBM started as the Mooney 301.

Sort of  . . . but not really.  In 1983 the 301 was a Roy LoPresti concept of a piston pressurized single to compete with the Piper PA46. Due to lack of capital the project was scrapped but the idea of a single engine pressurized turbine, instead of piston, came out of that.

in '85 Mooney was bought by a French company that bought Socata the same year. In '87 a clean-sheet design project started on the TBM 700. Nothing carried over from the 301 to the TBM 700 except the concept of a single engine pressurized turbine. For Mooney's part they were supposed to build the wing in Kerrville to provide steady work for the factory, which never happened. But yes "M" in TBM is for Mooney and TB is for Tarbes, the city in France where they ended up being built

[1980Mooney]

1 hour ago, redbaron1982 said:

 

• Design a killer trainer aircraft..

 

1 hour ago, BlueSky247 said:

Yes! An excellent trainer would be a great idea ….I meant to include that I would absolutely be focused on an outstanding support team, as well as marketing.  

BTW - “Killer Trainer” probably would not be great marketing….

[KSMooniac]

1 hour ago, redbaron1982 said:

I would take three steps (I have no idea so that they might be completely non-sense):

• Focusing on servicing the existing fleet could make the company profitable again. If the market is not large enough with just Mooneys, we could even consider extending support for other makes, like Cessna.
• Design a killer trainer aircraft, assuming the greatest demand for small single-piston engine airplanes is on the pilot training market.
• With a profitable production line running, I would design the new M20J/K. Basically one airframe, with turbo and non turbo versions.

I would make sure to offer a jet-a piston engine in all the airframes.

You essentially outlined exactly what the plan was with a Chinese billionaire backer and Jerry Chen's vision as CEO... except the killer trainer aircraft turned out to be a dud thanks to awful execution.  It was a great vision, but terrible execution.

My billion+ powerball dream is close... 

1.  Continue M20 support with spares, service, and upgrade kits (& installation)
2.  Expand production of parts and assemblies for third parties to keep the workforce busy and growing.  Composites included to grow that capability for step 4 below!
3.  Put the M20U & V airframes on diets, finish the landing gear improvements and get a GW increase to make payload a strong point in the market.  Also re-do the composite shell to increase cabin width, at least for the front seats.
4.  Purchase the Lancair/Columbia/Corvalis/TTX IP and Tooling from Textron and re-start production in Kerrville as the next-gen Mooney airframe.  That airframe could use a diet as well, and it was planned all along to have low HP (trainer) and turbo + RG variants so that could be fun... perhaps an alternate engine solution might make sense in there too.  I would likely very begrudgingly add an option for a parachute since it does help sales despite my dislike for them.
5.  Execute the above plan until the billion evaporates, since it is aviation after all!    I would be Owner, CEO and Chief Engineer... and I figure I could do that until I retire to the gorgeous TX Hill Country

[M20F]

2 hours ago, BlueSky247 said:

Let's suppose you bought the company and assembled a good team to lead it. Let's ignore economic cycles and fluctuating market trends for the sake of discussion.

 

What would it really take to bring the brand back and have it be profitable?

Spin off everything, keep the name, design a profitable airframe, profit.  
 
Legacy Mooney is never going to be profitable.  While that is what everyone wants from a financial perspective, no chance. 

[toto]

Out of curiosity, at $795k or whatever Mooney was charging for an Acclaim Ultra, were they making money? I mean, if we had a steady flow of MooneySpace lottery winners and we bought, say, 30 M20V models a month, was that going to be a profitable business?

[redbaron1982]

Maybe getting into the UAV market? Not quadrotors but fixed-wing unmanned aircrafts?

[Mooneymite]

Brings to mind the age old adage:  "To make a small fortune in aviation, start with a large one."

You may need $2 billion in this economy to break even.

[MikeOH]

Due to labor cost the manual nature of traditional sheet metal/rivet construction has been rendered obsolete; the ONLY way I see 'traditional' Mooneys being built is if AI and sophisticated robotic automation could be found to 'hand' assemble current designs without humans.  Whether that could be accomplished technically the approach would still be limited by payback on what would be a huge capital investment.  I doubt it would 'pencil out.'

OTOH, with huge funding you could 'reinvent' Mooney, develop a clean-sheet modern design, and compete with Cirrus.  The question, again, is payback after investment and if the market share you could take from Cirrus would work.  With present demand, I kind of doubt it especially as you would to undercut Cirrus pricing.  At least initially to gain market share.

[McMooney]

I would complete the composite transition.  maybe sell some composite parts and mods for the old fleet.

then i would spend most of the money on making it possible to mass produce airplanes and lower cost. 

Major problem with planes, they are too damn expensive

[1980Mooney]

4 hours ago, toto said:

Out of curiosity, at $795k or whatever Mooney was charging for an Acclaim Ultra, were they making money? I mean, if we had a steady flow of MooneySpace lottery winners and we bought, say, 30 M20V models a month, was that going to be a profitable business?

I believe Jonny commented that they were losing money on every plane.

[toto]

3 hours ago, 1980Mooney said:

I believe Jonny commented that they were losing money on every plane.

I know they were losing money at the rate they were selling, but they weren’t selling 30/month. I just meant to ask - if the market were there, do the numbers pencil out? Do we have a Mooney success story today if they’re selling Ultras at 795k?

[1980Mooney]

3 hours ago, toto said:

I know they were losing money at the rate they were selling, but they weren’t selling 30/month. I just meant to ask - if the market were there, do the numbers pencil out? Do we have a Mooney success story today if they’re selling Ultras at 795k?

First of all Mooney was not just operating at a "book loss", it was hemorrhaging cash losses.  We don't know the details but we know the Mejing Group invested a lot of cash (rumored to be $150-200 million) and got nothing back but losses.

At the meager rate that they were building Ultra's, they were not getting volume pricing and were probably paying Continental, Hartzell and Garmin $350,000 cash per Acclaim for full powerplant and avionics.  They probably had to pay another $100,000 for all the materials, bits and pieces that Mooney does not make (Eaton was sticking them at least $15,000 - maybe $20,000 - for just a single new landing gear actuator.) So Mooney is already out $450,000 in cash costs per plane.

Now add direct manufacturing labor and variable manufacturing overhead which are real cash costs.  Jonny commented once that the wings alone were taking 3,000 manhours.  If a plane could be built in 5,500 manhours (direct including painting and testing) [FYI -Jonny once mentioned 9,000 manhours per plane] and let's assume that they were paying a measly $30/hour (add 20% for vacation, medical, benefits so that costs Mooney $36/hour in real variable direct costs) then labor adds another approx. $200,000 - maybe more.  So now cash costs are at least $650,000. 

Now Mooney's are not just going to sell themselves (regardless how passionate we are in our thinking).  This is not a case of people lined up and the Factory are just order takers like at McDonalds.  The planes have to marketed with a sales organization.  Regardless of factory or dealer sales/marketing structure, it costs more cash per plane before it is sold.  Another $50,000 - 75,000/per plane?  Maybe.  Now costs total $700,000-725,000 and that is variable cash cost/outlay.

So might Mooney receive $70,000 - 95,000 in cash contribution to go towards paying the fixed cash costs like Legal, insurance policies, building rent on main buildings, inventory and property taxes (Texas has one of the highest business property taxes in the nation), management salaries and benefits, etc.

Might it cover?  At 2018 sales rates - absolutely NOT.  They were losing cash.  At your "30/month" case?. Possible .  But then there is the amortization of investment "book" costs - all the investments in building, tools, Ultra engineering, etc.  Will it cover the historical investment costs?  Doesn't sound likely.

But your "case" is nonsensical.  30/month.  That is like saying if Piper could have still sold 30 Saratoga's per month, or Commander sell 30 114's/month or American sell 30 Tigers per month - would they all be profitable and still actively built?

First, for Mooney to ramp up production by a factor of 20, with that many manhours/plane, Mooney would need about 1,000 direct workers in manufacturing.  That demand would probably drive up wages in Kerrville and materially raise costs.

But more importantly there is no demand for 30 Ultras/month.  Just like there is no demand for 30 Bonanza's/month.  Unlike Mooney, Textron can still build them if when there is demand.  But for Mooney or the Bonanza to jump to 30/month demand, it would take a complete redesign and as said a marketing/price war to steal a major share of customers away from Cirrus and Diamond. And that takes a huge investment which in turn saddles the new plane with heavy amortized costs.

So you are back to more losses.  And no return on your investment.  We just need a billionaire that buys into the vision and doesn't really care about losing his wealth.

[LANCECASPER]

5 hours ago, 1980Mooney said:

First of all Mooney was not just operating at a "book loss", it was hemorrhaging cash losses.  We don't know the details but we know the Mejing Group invested a lot of cash (rumored to be $150-200 million) and got nothing back but losses.

At the meager rate that they were building Ultra's, they were not getting volume pricing and were probably paying Continental, Hartzell and Garmin $350,000 cash per Acclaim for full powerplant and avionics.  They probably had to pay another $100,000 for all the materials, bits and pieces that Mooney does not make (Eaton was sticking them at least $15,000 - maybe $20,000 - for just a single new landing gear actuator.) So Mooney is already out $450,000 in cash costs per plane.

Now add direct manufacturing labor and variable manufacturing overhead which are real cash costs.  Jonny commented once that the wings alone were taking 3,000 manhours.  If a plane could be built in 5,500 manhours (direct including painting and testing) [FYI -Jonny once mentioned 9,000 manhours per plane] and let's assume that they were paying a measly $30/hour (add 20% for vacation, medical, benefits so that costs Mooney $36/hour in real variable direct costs) then labor adds another approx. $200,000 - maybe more.  So now cash costs are at least $650,000. 

Now Mooney's are not just going to sell themselves (regardless how passionate we are in our thinking).  This is not a case of people lined up and the Factory are just order takers like at McDonalds.  The planes have to marketed with a sales organization.  Regardless of factory or dealer sales/marketing structure, it costs more cash per plane before it is sold.  Another $50,000 - 75,000/per plane?  Maybe.  Now costs total $700,000-725,000 and that is variable cash cost/outlay.

So might Mooney receive $70,000 - 95,000 in cash contribution to go towards paying the fixed cash costs like Legal, insurance policies, building rent on main buildings, inventory and property taxes (Texas has one of the highest business property taxes in the nation), management salaries and benefits, etc.

Might it cover?  At 2018 sales rates - absolutely NOT.  They were losing cash.  At your "30/month" case?. Possible .  But then there is the amortization of investment "book" costs - all the investments in building, tools, Ultra engineering, etc.  Will it cover the historical investment costs?  Doesn't sound likely.

But your "case" is nonsensical.  30/month.  That is like saying if Piper could have still sold 30 Saratoga's per month, or Commander sell 30 114's/month or American sell 30 Tigers per month - would they all be profitable and still actively built?

First, for Mooney to ramp up production by a factor of 20, with that many manhours/plane, Mooney would need about 1,000 direct workers in manufacturing.  That demand would probably drive up wages in Kerrville and materially raise costs.

But more importantly there is no demand for 30 Ultras/month.  Just like there is no demand for 30 Bonanza's/month.  Unlike Mooney, Textron can still build them if when there is demand.  But for Mooney or the Bonanza to jump to 30/month demand, it would take a complete redesign and as said a marketing/price war to steal a major share of customers away from Cirrus and Diamond. And that takes a huge investment which in turn saddles the new plane with heavy amortized costs.

So you are back to more losses.  And no return on your investment.  We just need a billionaire that buys into the vision and doesn't really care about losing his wealth.

In 1977 they built 400 airplanes with between 600-700 employees. Kerrville is small town and they were busing people in from surrounding areas to fill that number of employees.

[redbaron1982]

9000 hours per airplane (4.5 men years), seems awfully large amount. 

I'm sure that even with the Mooney old design that number can be significantly reduced. 

[toto]

5 hours ago, 1980Mooney said:

But your "case" is nonsensical.  30/month.  That is like saying if Piper could have still sold 30 Saratoga's per month, or Commander sell 30 114's/month or American sell 30 Tigers per month - would they all be profitable and still actively built?

I picked 30/month just because that would be a successful SEP aircraft manufacturer in 2024, on par with a good year for Textron or Cirrus.  My question was only about the 795k, which undercut the Cirrus pricing in 2018 by at least 100k, and I was curious whether Mooney would make money on the Ultras if they were selling Cirrus volumes - independent of any other factors.

[LANCECASPER]

25 minutes ago, redbaron1982 said:

9000 hours per airplane (4.5 men years), seems awfully large amount. 
I'm sure that even with the Mooney old design that number can be significantly reduced. 

In an interview in 2000 the VP of Operations at Mooney then said it was 2900 hours to build a Mooney. They built 100 airplanes that year so it's going to be a lot more efficient building 12 per month than 1 per month.

 

[BlueSky247]

Okay, so it is possible in theory. I guess the real question is  - what would it take for modern buyers to choose this brand over the "sexier" options? I don't think price alone would get it there unless we got into the fleet/trainer markets. 

 

What about a twin? It would be interesting to go after the Baron clientele, but I just don't see that working out. IMO, both engines would need to be stout performers and it would need to deliver actually usable single engine climb rates to be worth of carrying the badge. Ideally figure out an automatic trimming/feathering mechanism in the event of an engine out to improve the safety numbers and attract more buyers.