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

[1980Mooney]

1 hour ago, LANCECASPER said:

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.

 

54 minutes ago, LANCECASPER said:

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.

 

Good numbers are hard to come by.  In 1977 there was less complexity - 24 of those were short body C's, the rest mid-bodies, the cheap Royalite interiors, no turbos, 4 cylinders only, no rudder trim, etc.

Now the article above notes that it was taking 4,300 hours to build a Mooney.   Valencia claims that they got it down to 2,900 but we know for a fact that merely 17 months after that article, Mooney filed for bankruptcy in July, 2001.   So either those "savings" were not real or they were losing lots of money elsewhere.

In 2022 at MooneyMax, Jonny Pollack said it took 9,000 hours to build a Mooney.  I suppose it is possible that he doesn't really know what is going on at Mooney.  He also said that direct costs (ie Cost of Goods Sold) eat up 85% of revenue leaving only 15% gross margin (contribution) to cover all the fixed costs (legal, management, engineering, accounting, insurance, etc).  That won't cover the costs. Healthy manufacturing companies usually have gross margins of 33-50%. 

 

In 2020, when interviewed Pollack  said it takes 1,800-2,000 man-hours alone to build a wing.

https://aviationweek.com/business-aviation/aircraft-propulsion/sounding-board-five-minutes-mooney-international-ceo-jonny

 

 

 

[toto]

56 minutes ago, BlueSky247 said:

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.

The DA-62 is pretty amazing if you just want a second engine.  The automation is impressive.  It's not faster than a single, and it's not as fast as a Baron, but it runs two engines on about the same fuel burn as a larger single - and it has seven seats.  

Not really my thing, but if I was in the market for a twin and I had new airplane money, the DA-62 would be hard to overlook.

[LANCECASPER]

6 minutes ago, 1980Mooney said:

 

Good numbers are hard to come by.  In 1977 there was less complexity - 24 of those were short body C's, the rest mid-bodies, the cheap Royalite interiors, no turbos, 4 cylinders only, no rudder trim, etc.

Now the article above notes that it was taking 4,300 hours to build a Mooney.   Valencia claims that they got it down to 2,900 but we know for a fact that merely 17 months after that article, Mooney filed for bankruptcy in July, 2001.   So either those "savings" were not real or they were losing lots of money elsewhere.

In 2022 at MooneyMax, Jonny Pollack said it took 9,000 hours to build a Mooney.  I suppose it is possible that he doesn't really know what is going on at Mooney.  He also said that direct costs (ie Cost of Goods Sold) eat up 85% of revenue leaving only 15% gross margin (contribution) to cover all the fixed costs (legal, management, engineering, accounting, insurance, etc).  That won't cover the costs. Healthy manufacturing companies usually have gross margins of 33-50%. 

 

In 2020, when interviewed Pollack  said it takes 1,800-2,000 man-hours alone to build a wing.

https://aviationweek.com/business-aviation/aircraft-propulsion/sounding-board-five-minutes-mooney-international-ceo-jonny

 

 

 

In 2022 since he was sitting at my table I asked if they just took all company payroll and divided it by numbers of airplanes made. He said yes.

This subject that’s come up many times over the years at MAPA. Number of hours to build an airplane used to be a frequent subject they would talk about. They used to take manufacturing hours and divide it by number of airplanes made. You don’t get a good comparison when you compare apples to oranges. 

[1980Mooney]

1 hour ago, toto said:

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.

Think about it another way.

Take a Cirrus SR22T vs. an Acclaim Ultra or a SR22 vs and Ovation Ultra

If Mooney were building in volume and could get the same volume purchasing discounts as Cirrus what costs are the same and what are different.

Same:

• Continental 550's
• Hartzell Props
• Garmin Avionics
• Tires - Goodyear?
• Maybe the cost/time to make a modern interior

Different:

• Fixed gear on Cirrus (lower cost) vs Mooney retract (Eaton actuator high cost, etc)
• Parachute system (CAPS) on Cirrus
• Composite construction man-hours at Cirrus vs Steel welding, Aluminum fab/riveting manhours at Mooney.

I suspect that the man-hours to build a composite Cirrus is much, much less than a Mooney.

[BlueSky247]

7 minutes ago, toto said:

The DA-62 <snip> if I was in the market for a twin and I had new airplane money

 

Completely agree. Even if I did have that kind of scratch, I look at that 1.5 price tag and the EXP options begin to look very appealing. Some people have mentioned that the FAA certificated rules need to be redone for GA to have any kind chance at resurgence, and IMO, this sure proves that point. 

[1980Mooney]

38 minutes ago, LANCECASPER said:

In 2022 since he was sitting at my table I asked if they just took all company payroll and divided it by numbers of airplanes made. He said yes.

This subject that’s come up many times over the years at MAPA. Number of hours to build an airplane used to be a frequent subject they would talk about. They used to take manufacturing hours and divide it by number of airplanes made. You don’t get a good comparison when you compare apples to oranges. 

Agreed - good comparisons are hard to come by.  But results of the bottom line "acid test" are clear  - (does more money come in than goes out)

• In mid 2001, when Mooney was building about 100 long-bodies per year supposedly efficiently (per VP. Ops Valencia article above) they failed the "acid test" and went bankrupt
• In late 2019, when Mooney had been building 10-14 long-bodies per year, (inefficiently per comments from Pollack) they ceased all production, laid off 229 employees, including all employees on the aircraft production and parts lines because they were failing the "acid test" and needed to stop the negative cash flow.

Edited July 12 by 1980Mooney

[philiplane]

I have plenty of friends who buy a new Cirrus every 3-5 years. They spend between $900k to $1.35 million for a fixed gear piston single.

And another friend just bought a new Piper Archer LX, and it was $559,000 with a/c and two other options. Fully loaded it would have been $630k.

But, overall there is a declining population of pilots who buy airplanes, coupled with airplane prices that have tripled or quadrupled since the heyday of GA in the late 1970's.

That is the insurmountable obstacle:

https://www.forbes.com/sites/erictegler/2021/04/28/prices-for-new-general-aviation-aircraft-may-be-pricing-pilots-out-of-the-market/

“In 1970 a Cessna 172 was 1.3 times the average salary in the U.S. and a Bonanza was 5 times the average. Today it is 6 times the average salary for a 172 and 14 times the average salary for a Bonanza. Anyone else wonder how [the manufacturers] are staying in business?”

According to Plane & Pilot magazine, the price of a new Cessna 172 was $12,500 in 1970 and the average salary in the United States was $6,186. In 2021 dollars the 1970 sticker would equate to about $85,000. But with the current ask for a new 172 at $432,000 minimum, the ubiquitous Skyhawk has even outpaced the Bonanza (which cost around $50,000 new in 1970) in terms of cost growth.

Piper’s venerable Cherokee, the latest edition of which - the Piper 100i - debuted at the recent Sun ‘n Fun airshow in Florida, cost about $13,000 in 1970. Today, the price for one ranges from $259,000 to $285,000. Chinese-owned Cirrus Aircraft has only been making production piston-singles since 1995 but the list price for its parachute-equipped, fixed-gear SR-22 was $755,000 in 2020.

[MikeOH]

@philiplane

"But, overall there is a declining population of pilots who buy airplanes, coupled with airplane prices that have tripled or quadrupled since the heyday of GA in the late 1970's."

I disagree with 'coupled'. I believe the entire problem of the declining pilot population is BECAUSE of the fact prices have quadrupled, or more!  Back in the '70s, if you wanted a plane enough, you could find a way to afford it on an average salary.  I.e., flying was a middle class hobby. Not anymore.  Sadly, I don't see the trend reversing; the inflection point of the death spiral has already been crossed.  Absent a change in the regs as someone mentioned earlier I just don't see a recovery on even a distant horizon.

[Pinecone]

20 hours ago, MikeOH said:

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.'

I wonder what the savings in construction costs (time and less skilled labor needed) would to develop the current airplane into a matched hole assembly like the RV series

[MikeOH]

1 hour ago, Pinecone said:

I wonder what the savings in construction costs (time and less skilled labor needed) would to develop the current airplane into a matched hole assembly like the RV series

That's a really good question; how does the 3,000 hours of labor breakdown. I have no idea what percentage is spent on drilling holes and bucking rivets vs. jigging, cutting metal, etc.  Would your idea eliminate enough manual labor to reduce costs enough, or would more reductions be required to make production economically viable?

[redbaron1982]

32 minutes ago, MikeOH said:

That's a really good question; how does the 3,000 hours of labor breakdown. I have no idea what percentage is spent on drilling holes and bucking rivets vs. jigging, cutting metal, etc.  Would your idea eliminate enough manual labor to reduce costs enough, or would more reductions be required to make production economically viable?

wait, what? The manufacturing process included manually drilling holes.

Sure, it would require some investment in CNC machines, but that process can be 100% automated.

Same as cutting metal, if laser is not possible due to micro-fractures caused by localized heating, I guess a water jet could be used.

Same with wiring, I guess a glass panel has less wiring (data bus vs discrete IO), and the wire harness manufacturing can be automated 100%.

 

[LANCECASPER]

5 hours ago, 1980Mooney said:

Agreed - good comparisons are hard to come by.  But results of the bottom line "acid test" are clear  - (does more money come in than goes out)

• In mid 2001, when Mooney was building about 100 long-bodies per year supposedly efficiently (per VP. Ops Valencia article above) they failed the "acid test" and went bankrupt
• In late 2019, when Mooney had been building 10-14 long-bodies per year, (inefficiently per comments from Pollack) they ceased all production, laid off 229 employees, including all employees on the aircraft production and parts lines because they were failing the "acid test" and needed to stop the negative cash flow.

How it takes 229 people to make an airplane a month is beyond me.

[flyboy0681]

The only billionaire who ever took an interest in Mooney was Michael Bloomberg, who actually owned (and flew) one in the 1990's.

[BlueSky247]

Something else to consider is the current astronomical backlog for new engines. As of May, Van’s builders are still waiting two years to get new lycomings. Be mighty hard to crank out new Mooneys with those kinds of shortages. 

[Mooneymite]

21 minutes ago, BlueSky247 said:

Something else to consider is the current astronomical backlog for new engines. As of May, Van’s builders are still waiting two years to get new lycomings. Be mighty hard to crank out new Mooneys with those kinds of shortages. 

Absolutely no problemo....we'll all be flying behind electric fan motors in the very near future.  

[N201MKTurbo]

11 minutes ago, Mooneymite said:

Absolutely no problemo....we'll all be flying behind electric fan motors in the very near future.  

I don't mind flying behind the electric fan, but the extension cord keeps catching on trees and such...

[1980Mooney]

25 minutes ago, BlueSky247 said:

Something else to consider is the current astronomical backlog for new engines. As of May, Van’s builders are still waiting two years to get new lycomings. Be mighty hard to crank out new Mooneys with those kinds of shortages. 

Except Mooney hasn't put a Lycoming in a Mooney in nearly 2 decades.  The last Lycoming 4 was installed in the Mooney factory in 1998 and the last Lycoming 6 was installed in 2007.  The Lycoming backlog at Vans is because those are non-certified low cost engines.  It makes sense that Lycoming would give priority to their higher priced certified engine customers.

I don't think that there is a 2 year backlog of Continentals.

[toto]

1 hour ago, 1980Mooney said:

Except Mooney hasn't put a Lycoming in a Mooney in nearly 2 decades.  The last Lycoming 4 was installed in the Mooney factory in 1998 and the last Lycoming 6 was installed in 2007.  The Lycoming backlog at Vans is because those are non-certified low cost engines.  It makes sense that Lycoming would give priority to their higher priced certified engine customers.

I don't think that there is a 2 year backlog of Continentals.

Cirrus is putting an IO-390 in every SR20 these days, and I assume they aren’t waiting months or years for engines.

[BlueSky247]

29 minutes ago, toto said:

Cirrus is putting an IO-390 in every SR20 these days, and I assume they aren’t waiting months or years for engines.

Oh really????  (Puts on a ski mask and grabs a crowbar)

[philiplane]

6 hours ago, MikeOH said:

@philiplane

"But, overall there is a declining population of pilots who buy airplanes, coupled with airplane prices that have tripled or quadrupled since the heyday of GA in the late 1970's."

I disagree with 'coupled'. I believe the entire problem of the declining pilot population is BECAUSE of the fact prices have quadrupled, or more!  Back in the '70s, if you wanted a plane enough, you could find a way to afford it on an average salary.  I.e., flying was a middle class hobby. Not anymore.  Sadly, I don't see the trend reversing; the inflection point of the death spiral has already been crossed.  Absent a change in the regs as someone mentioned earlier I just don't see a recovery on even a distant horizon.

Sorry to say, but the real reason we have fewer GA pilot/owners is due to a lack of enthusiasm for aviation. More on point, we have a generation of soft people who don't like hard work and challenges. They would rather play video games than explore the world. And GA is not simple or easy.

[MikeOH]

47 minutes ago, philiplane said:

Sorry to say, but the real reason we have fewer GA pilot/owners is due to a lack of enthusiasm for aviation. More on point, we have a generation of soft people who don't like hard work and challenges. They would rather play video games than explore the world. And GA is not simple or easy.

I guess I’m not quite as cynical about the next generation. Flying has always required more dedication and work than most other pursuits. Consequently never a huge number.

With today’s aviation costs way out of proportion to the past I’m not surprised at the lack of enthusiasm today.

[T. Peterson]

I don’t know whether Mooney can ever make airplanes again or not, but how long can Mooney stay in business building parts for a shrinking fleet? 

[EricJ]

1 hour ago, philiplane said:

Sorry to say, but the real reason we have fewer GA pilot/owners is due to a lack of enthusiasm for aviation. More on point, we have a generation of soft people who don't like hard work and challenges. They would rather play video games than explore the world. And GA is not simple or easy.

Every generation says something similar about those who follow.   It was TV and rock music, drugs, whatever.

[toto]

7 minutes ago, T. Peterson said:

I don’t know whether Mooney can ever make airplanes again or not, but how long can Mooney stay in business building parts for a shrinking fleet? 

When they made all of the investments in the factory, I was hopeful that it would make a modern outsourcing business profitable. So even if they aren’t making brand new Mooneys for the moment, they could be making major components (including composite components) on contract for other manufacturers. 

But I don’t know what I’m talking about. I would need A64 to weigh in on that

 

[T. Peterson]

3 minutes ago, EricJ said:

Every generation says something similar about those who follow.   It was TV and rock music, drugs, whatever.

It may be that the former generations overstated some things, but it is foolish to dismiss all their observations. To gloss over obvious cultural decline, is to learn nothing from the historical decline of many previous civilizations.