Concerns with acquiring spares

[Schllc]

I have only owned modern mooney’s so I have not had the challenges some others are sharing, but I’m not so sure that the net effect of mooney going out of business would be better in the long run for these folks. 
I would suspect that the vast majority of owners will not have the will or the knowledge to go about the owner produced route, and this would likely drive the value of the airframes into the ground. 
From the outside looking in, there appear to be a lot of places that that Mooney could improve profitability, but I have to believe that current management is aware of most of them and that there are factors, that we on the outside are unaware of, that preclude executing. 
Given the uncertainty that was expressed in Johnny's comments about potentially not being open in 8 weeks speaks to the volatility of the situation.  
they appear fighting to stay alive, and this means triage. 
We can only hope it gets better, because the whole fleet is at risk. 

[LANCECASPER]

7 hours ago, Barneyw said:

I get the feeling that the nice clean cut way to handle this is the sell the type certificate along with all the IP and facilities ie the whole lot to someone like a Univair, LASAR or any other suitor who has the requisite imagination to move things forward. I just don't think it continues on its present trajectory.

Having said all that I know these things are not simple.

If you were to tour the "Hammer House*" at the Mooney factory, where the huge hydraulic presses shape the metal parts that go into our airplanes, you would realize that a little operation like LASAR that modifies small landing gear parts and puts together hardware kits couldn't possibly come up with the equipment needed to make the vast majority of parts for our airplanes. 

* Here's a link to some pictures: http://www.davemorris.com/PhotoViewer.cfm?Subdirectory=Mooney Factory Tour

Here's a link to an article of someone who toured the factory https://airfactsjournal.com/2019/05/visiting-the-mooney-family/

 

PLAN A: Those who have placed orders for parts that Mooney manufactures through a Mooney Service Center have found that they received the parts sooner than what they thought . They are working to fill orders. If you're just checking to see if an obscure part is is stock it won't be. They would have to pay an inventory tax for parts on the shelf and even if they had the capital to fill up the shelves with parts they aren't going to do that. If you need the parts make sure you place the order and get in line. Let them know you are AOG (Aircraft on Ground). They do put priority on that.

PLAN B: If you have actually placed the order for the parts you need, like the bell crank you mentioned, that's keeping your Mooney on the ground and preventing you from flying, and you're still waiting, list the part numbers you need on here and let the community come together to help you find the used parts to get you flying again.

You list a 1967 F-model in your profile. I think it's amazing that the factory still has any interest in making parts for a 57 year old product that they sold. It may not be a great business decision, but their willingness to make any effort to support the fleet is beyond admirable. Trying going to Ford or GM and see if they'll stamp out a fender for your 1967 automobile. They couldn't if they wanted, the tooling is long gone. To support that vintage car you'd have to find another source (salvage, knock-off parts etc). I realize that supporting a vintage car and an FAA certified airplane are two different things. However vintage Cessna, Piper, Beechcraft, Grumman, etc. owners are faced with the same challenges we are, even though Piper, Cessna and Beechcraft (both owned by Textron) are still in business. If you had a 1967 Beechcraft or Cessna and tried to order a bell crank from the factory I think you'd be facing a similar challenge (www.txtav.com shows zero in stock for either). Owner groups help each other out with these vintage airplanes as well. (On the same airpark where I am is a company called Fletchair - they support older Grumman airplanes. As airplanes come out of service they travel around the country buying salvage airplanes to keep the fleet going.)

 

[LANCECASPER]

 
Let’s take the elevator AD as an example.  Mooney’s service bulletin said to inspect my 60 year old airplane (which they grounded), before the next flight because of a corrosion issue that should have been caught during an annual years before.  When Mooney gave the service bulletin to the FAA, it should have come with an assessment of the system effect (I got it, it could have been catastrophic) and the probability of occurrence.  The probably of occurrence drives the time to comply.   Do you think the probability of occurrence was a 1 which drives you to ground an entire fleet?  A better answer would have been to inspect at the next 100-hour inspection.  To make matters worse, if you had a bad counterweight, there were no parts available to correct the issue.  That’s not supporting the owner operators. 

They said it must be inspected with magnets to see if it was a hybrid weight - these were dissimilar metals and could cause the corrosion that was pictured in the service bulletin. "During the inspection, if the weight is determined not a 430018-1 balance weight, the aircraft may be flown and no further inspections are required for Service Bulletin M20- 345A. Record this inspection in Aircraft Log Book." That's not grounding the fleet. They are duty-bound by the FAA to do what they did. If they weren't supporting you, like you claim, they never would have brought this serious issue to the attention of the owners and the FAA. 
Of course they didn't have parts available. They didn't realize there was a problem until December 2022. By the end of February 2023 they had parts available for all of the affected airplanes. If that isn't supporting the owners I don't know what is.




If you owned another 60 year old airplane that didn't have factory support you still wouldn't have parts. 

[tony]

11 minutes ago, LANCECASPER said:

They said it must be inspected with magnets to see if it was a hybrid weight - these were dissimilar metals and could cause the corrosion that were pictured in the service bulletin. "During the inspection, if the weight is determined not a 430018-1 balance weight, the aircraft may be flown and no further inspections are required for Service Bulletin M20- 345A. Record this inspection in Aircraft Log Book." That's not grounding the fleet. They are duty-bound by the FAA to do what they did. If they weren't supporting you, like you claim, they never would have brought this serious issue to the attention of the owners and the FAA. 

Of course they didn't have parts available. They didn't realize there was a problem until December 2022. On March 13, 2023 they had parts available for all of the affected airplanes. If that isn't supporting the owners I don't know what is. If you owned another 60 year old airplane that didn't have factory support you still wouldn't have parts. 

No, that’s not how its works.  The FAA reacts to the data they are provided.  I understand you have a very close relationship with the principles at Mooney and you feel the need to defend their actions.  I’m just giving you another perspective.  If you don’t want to hear it, that’s fine. 

[LANCECASPER]

12 minutes ago, tony said:

No, that’s not how its works.  The FAA reacts to the data they are provided.  I understand you have a very close relationship with the principles at Mooney and you feel the need to defend their actions.  I’m just giving you another perspective.  If you don’t want to hear it, that’s fine. 

I'm quoting from the Service Bulletin and providing you proof of when parts were available and that they supported owners during this by providing engineering and manufacturing parts and you're telling me that's not how it works?
If my quotes or proof is wrong then please correct me with facts.
How long was your airplane down for this Service Bulletin?
 

Are you saying that they should have ignored what is in the pictures in the Service Bulletin?




They had a legal obligation to the FAA and a moral obligation to the owners to at least have their airplanes inspected. If out of an abundance of caution the FAA went further that was their call.

This thread has been about people feeling that the factory isn't doing enough, now you're saying they are doing too much by issuing this Service Bulletin back in December 2022?

[Barneyw]

21 minutes ago, Schllc said:

I have only owned modern mooney’s so I have not had the challenges some others are sharing, but I’m not so sure that the net effect of mooney going out of business would be better in the long run for these folks. 

 

17 minutes ago, LANCECASPER said:

 

You list a 1967 F-model in your profile. I think it's amazing that the factory still has any interest in making parts for a 57 year old product that they sold. It may not be a great business decision, but their willingness to make any effort to support the fleet is beyond admirable. Trying going to Ford or GM and see if they'll stamp out a fender for your 1967 automobile. They couldn't if they wanted, the tooling is long gone. To support that vintage car you'd have to find another source (salvage, knock-off parts etc). I realize that supporting a vintage car and an FAA certified airplane are two different things. However vintage Cessna, Piper, Beechcraft, Grumman, etc. owners are faced with the same challenges we are, even though Piper, Cessna and Beechcraft (both owned by Textron) are still in business. If you had a 1967 Beechcraft or Cessna and tried to order a bell crank from the factory I think you'd be facing a similar challenge (www.txtav.com shows zero in stock for either). Owner groups help each other out with these vintage airplanes as well. (On the same airpark where I am is a company called Fletchair - they support older Grumman airplanes. As airplanes come out of service they travel around the country buying salvage airplanes to keep the fleet going.)

 

Schllc I have never suggested that Mooney should go out of business, quite the contrary I want Mooney and the owners to succeed. I just don't believe, right now, that the right people are in the job.

LANCECASPER while I appreciate what you are saying I don't think it is reasonable to conflate the two industries one being highly regulated and specialised and one not so much made for the masses. I hear you about vintage aircraft but from what I can gather those vintage aircraft use a lot of common parts and in any event let's say for the sake of the argument all the pre "Js" were removed from the market - what then!? So I don't really buy that argument. Cubs are widely supported so much so everyone is copying them. I don't know how Beech, Piper and Cessna promote themselves but I would suggest they are in the business of still selling new aircraft whereas Mooney promote themselves as being the great supporters of the group. The point you made about LASAR is valid and I don't know all the ins and outs of anyone's financial position but that doesn't necessarily disqualify them. Just for the record The order for the bellcrank went in 8 weeks ago and I was told there was a  6 week lead time. Last I heard it wasn't arriving any time soon. In the end we resolved the issue and i am becoming quite acquainted with the salvage markets ...not ideal or desirable but workable nontheless.  

Anyhow I can sense that this argument will start gaining some circular motion.

I think the owners deserve better.

Cheers

Barneyw   

[LANCECASPER]

2 hours ago, Barneyw said:

Last I heard it wasn't arriving any time soon. In the end we resolved the issue and i am becoming quite acquainted with the salvage markets ...not ideal or desirable but workable nontheless.  

The salvage market is really the best way financially to justify keeping an older airframe flying. Buying a new part at new parts pricing is not going to happen for most owners of 50-60 year old airframes. Even on a 16 year old airframe like I have I would prefer to source an airworthy used part if needed.

Textron doesn't have any of these bell cranks in stock for a Beechcraft, but the price is $1481.36. Most owners would be better off sourcing a good used part.  But yes there are structural parts that we need from Mooney at times.
 

 

The important thing is that you're still flying (https://www.flightaware.com/live/flight/VHWBH/history). That's what we're all trying to help either other do.

[dkkim73]

1 hour ago, LANCECASPER said:

If you were to tour the "Hammer House*" at the Mooney factory, where the huge hydraulic presses shape the metal parts that go into our airplanes, you would realize that a little operation like LASAR that modifies small landing gear parts and puts together hardware kits couldn't possibly come up with the equipment needed to make the vast majority of parts for our airplanes. 

* Here's a link to some pictures: http://www.davemorris.com/PhotoViewer.cfm?Subdirectory=Mooney Factory Tour

Here's a link to an article of someone who toured the factory https://airfactsjournal.com/2019/05/visiting-the-mooney-family/

This is a good point. A picture is worth a thousand words. The factory is pretty impressive in terms of the amount of human and physical capital previously invested. They literally go from raw stock to finished parts. I saw a pretty sizeable parts cage when I was there a 8 months ago. 

OTOH it does feel like it's in caretaking mode. They were running contract jobs, and active, but a lot of lights were off. It gave me kind of an "All The Bridges Rusting" feeling, like visiting parts of Johnson Space Center, talking to those who worked on Apollo, the old machine and glassblowing shops at a top-5 science university, etc... a lot of knowledge and institutional capital that you feel is in danger of being lost. But you do get the sense that the people there care. 

I read the above posts on separating out assets and functions with interest. I wonder if there'd be a way to do that such that one entity holds the big IP and airframe risk, and the other (parts business) has a perpetual license (with escrow) to what it needs, in return for some contractual provisions for sharing back any upside? Ie. something that would satisfy any minority claims. That would however probably get in the way of repackaging and selling the whole thing. Just speculation from a non-specialist. 

[Schllc]

1 hour ago, Barneyw said:

Schllc I have never suggested that Mooney should go out of business, quite the contrary I want Mooney and the owners to succeed. I just don't believe, right now, that the right people are in the job.

Wasn’t directed at you, Others have suggested it’s a solution. I suppose it is, I am just not convinced it would be the best one. 

[Fly Boomer]

4 hours ago, LANCECASPER said:

If you were to tour the "Hammer House*" at the Mooney factory, where the huge hydraulic presses shape the metal parts that go into our airplanes, you would realize that a little operation like LASAR that modifies small landing gear parts and puts together hardware kits couldn't possibly come up with the equipment needed to make the vast majority of parts for our airplanes. 

* Here's a link to some pictures: http://www.davemorris.com/PhotoViewer.cfm?Subdirectory=Mooney Factory Tour

Here's a link to an article of someone who toured the factory https://airfactsjournal.com/2019/05/visiting-the-mooney-family/

 

PLAN A: Those who have placed orders for parts that Mooney manufactures through a Mooney Service Center have found that they received the parts sooner than what they thought . They are working to fill orders. If you're just checking to see if an obscure part is is stock it won't be. They would have to pay an inventory tax for parts on the shelf and even if they had the capital to fill up the shelves with parts they aren't going to do that. If you need the parts make sure you place the order and get in line. Let them know you are AOG (Aircraft on Ground). They do put priority on that.

PLAN B: If you have actually placed the order for the parts you need, like the bell crank you mentioned, that's keeping your Mooney on the ground and preventing you from flying, and you're still waiting, list the part numbers you need on here and let the community come together to help you find the used parts to get you flying again.

You list a 1967 F-model in your profile. I think it's amazing that the factory still has any interest in making parts for a 57 year old product that they sold. It may not be a great business decision, but their willingness to make any effort to support the fleet is beyond admirable. Trying going to Ford or GM and see if they'll stamp out a fender for your 1967 automobile. They couldn't if they wanted, the tooling is long gone. To support that vintage car you'd have to find another source (salvage, knock-off parts etc). I realize that supporting a vintage car and an FAA certified airplane are two different things. However vintage Cessna, Piper, Beechcraft, Grumman, etc. owners are faced with the same challenges we are, even though Piper, Cessna and Beechcraft (both owned by Textron) are still in business. If you had a 1967 Beechcraft or Cessna and tried to order a bell crank from the factory I think you'd be facing a similar challenge (www.txtav.com shows zero in stock for either). Owner groups help each other out with these vintage airplanes as well. (On the same airpark where I am is a company called Fletchair - they support older Grumman airplanes. As airplanes come out of service they travel around the country buying salvage airplanes to keep the fleet going.)

 

I ordered a part recently (via MSC).  Got it in about 10 days.

[1980Mooney]

4 hours ago, dkkim73 said:

I read the above posts on separating out assets and functions with interest. I wonder if there'd be a way to do that such that one entity holds the big IP and airframe risk, and the other (parts business) has a perpetual license (with escrow) to what it needs, in return for some contractual provisions for sharing back any upside? Ie. something that would satisfy any minority claims. That would however probably get in the way of repackaging and selling the whole thing. Just speculation from a non-specialist. 

That's what happens in a bankruptcy reorganization.  The viable parts business is unhitched from all the past liabilities and high overhead costs of the airplane making business.  The problem in your analogy is the the viable parts making business will need to also own the IP (engineering data, drawings, specs, certs, etc).  The airplane making business becomes a dormant dead company/legal entity that just pays out claims.  The trick is convincing a Bankruptcy Court that there are enough assets/cash in the dead airplane making legal entity that can pay out claims.  Otherwise the Court will go Chapter 7 Liquidation and just auction everything off in pieces to pay off those that are owed money or have claims.  Anyone with a secured claim (like a secured loan, tax authority, maybe a big vendor like Garmin/Cont. etc) stand at the head of the line and get the most - maybe all.  That is probably Meijing.  

The challenge for any "white-knight" or "enthusiastic" investor is that they need to come with two (2) pots of cash.  One pot is to buy the stock in the company from US Financial and Meijing.  The other pot of cash is to provide start-up/turn around/working capital for Mooney to actually operate.

• When an investor buys the existing stock of a company, none of the cash goes into the company.  It goes into the pockets of the former owners.  (That may help you understand why US Financial was perusing a quick flip of the company about a year after they entered - remember the Offering Powerpoint and the lame BizQuest.com advertisement in 2021?   https://www.aero-news.net/index.cfm?do=main.textpost&id=37B810E4-8C5F-4A32-9069-F9E524F2E459)
  • If a new buyer does not pay cash for the stock then they may need to write a big IOU.  "pay me now - pay me later",  It still will cost the buyer.
• A new buyer would also need a pile of cash to rehire, replenish inventories, come to terms with 3rd party suppliers that are owed money and start up full manufacturing.   Suppliers that have been burned will likely demand payment up front with sizeable orders.  And then there is the talk of new or improved models - that will take big cash as the failed Chino M10T spending showed.
• Above there is a comment " near a deal with some investors for a large cash infusion."  OK - that's possible. 
  • Note that he said "some investors" and not "current investors". That means current investors have no desire or means to put more cash in.
  • So that means yet another party coming to the table with all the other current investors.
    • But if you were the "new" investor, what would you want for your money?  US Financial owns 80% and Meijing owns 20%.  Do you want some of their stock? - that just puts money in US Financial and Meijing pockets (not into Mooney and does not help fund working capital).  Do you want Mooney to issue more new stock that puts cash into the company but dilutes everyone?  In either case it would likely be a minority investment without control.  Do you want to secure or even buy something like the IP and certificates? - how does that work with everyone standing in front of you?   Last money in usually is at the highest risk. Would you make a large cash infusion "no strings attached"?  Or would you demand senior rights that wipe out the other investor rights?

Just food for thought

Edited September 29 by 1980Mooney

[EricJ]

1 hour ago, 1980Mooney said:

• Above there is a comment " near a deal with some investors for a large cash infusion."  OK - that's possible. 
  • Note that he said "some investors" and not "current investors". That means current investors have no desire or means to put more cash in.
  • So that means yet another party coming to the table with all the other current investors.
    • But if you were the "new" investor, what would you want for your money?  US Financial owns 80% and Meijing owns 20%.  Do you want some of their stock? - that just puts money in US Financial and Meijing pockets (not into Mooney and does not help fund working capital).  Do you want Mooney to issue more new stock that puts cash into the company but dilutes everyone?  In either case it would likely be a minority investment without control.  Do you want to secure or even buy something like the IP and certificates? - how does that work with everyone standing in front of you?   Last money in usually is at the highest risk. Would you make a large cash infusion "no strings attached"?  Or would you demand senior rights that wipe out the other investor rights?

Just food for thought

I think the main mechanism for additional cash infusion would be from selling debt/bonds, which would secure the investment with whatever could be recovered in bankruptcy, including the IP.   It's probably hard to buy debt in a business that has already demonstrated an inability to leverage the IP and existing facilities, so that's probably not a winner, either.

The main value in the company appears to be centered in the facilities, reflecting an ability to build some things, and the IP, reflecting the ability to sell some things into a small, captive market.  Getting a return on either seems pretty sketchy, so I'm not surprised that they're having trouble.   We'd probably serve ourselves best by just preparing for the time when the factory ceases to exist, as that's likely coming sooner or later.  The more we get skilled at OPP, VARMA, etc., I think the better off we'll be.

[Barneyw]

2 hours ago, EricJ said:

I think the main mechanism for additional cash infusion would be from selling debt/bonds, which would secure the investment with whatever could be recovered in bankruptcy, including the IP.   It's probably hard to buy debt in a business that has already demonstrated an inability to leverage the IP and existing facilities, so that's probably not a winner, either.

The main value in the company appears to be centered in the facilities, reflecting an ability to build some things, and the IP, reflecting the ability to sell some things into a small, captive market.  Getting a return on either seems pretty sketchy, so I'm not surprised that they're having trouble.   We'd probably serve ourselves best by just preparing for the time when the factory ceases to exist, as that's likely coming sooner or later.  The more we get skilled at OPP, VARMA, etc., I think the better off we'll be.

Just thinking out aloud but has Mooney ever tried diversifying their operation into something else other than aviation. I can think of a few examples where the engineering skills were put to other uses other than aviation to keep the company afloat. As I said earlier it takes a requisite imagination and maybe a good old fashion SWOT analysis to be in and, moreover, stay in business.

Cheers 

[EricJ]

1 hour ago, Barneyw said:

Just thinking out aloud but has Mooney ever tried diversifying their operation into something else other than aviation. I can think of a few examples where the engineering skills were put to other uses other than aviation to keep the company afloat. As I said earlier it takes a requisite imagination and maybe a good old fashion SWOT analysis to be in and, moreover, stay in business.

Cheers 

I don't know details, but word was that the factory capacity was being used for other contract aerospace manufacturing, which makes sense.   That's still a tough business, though.

 

[Pinecone]

On 9/29/2024 at 8:30 AM, tony said:

Or let’s take Matthew P problem.  His airplane is AOG.  He’s trying like hell to get it flying again and he can’t get support from Mooney to get some lousy gears.  Mooney refuses to make the parts and refuses to provide the engineering data.  Someone in the factory decided that there was not a business case for it.  Or maybe they don’t have the expertise to procure the part anymore or.  Ok I accept that but not to provide Mathew the data or a way to get the part made from a third party isn’t right. 

I hope this shed’s a little light on my frustration.  If I had a modern Mooney perhaps my experiences would be different. 

 

I am pretty sure that Mooney did not make those gears.  They contracted a gear company to make them.  So for Mooney to get some, they have some minimum order that they need to meet.  And they are cash poor.

A number of people have suggested (me being one) that owners could pay up front and cover the cost of the minimum order for Mooney.  And Mooney has considered this, but they cannot guarantee they will be open when the gears actually arrive for QA inspection and to be shipped out.   Mooney has stated that they have a list of parts like this, that they are ready to order once they get a cash infusion.

And they cannot just release the IP, as that is an asset of the company.  And the company that makes the gears, can't make and sell them unless they jump through the hoops to get FAA PMA approval to do so.  Plus their contract with Mooney does not allow this.

[Fly Boomer]

On 9/29/2024 at 7:30 AM, tony said:

Mooney refuses to make the parts and refuses to provide the engineering data.

@Pinecone covered it pretty well, but I will add that Mooney may already owe the gear manufacturer a bunch of money.  So, if Mooney contracts with the gear manufacturer to build a run of 10 or 20, and they already owe several hundred thousand dollars, how would that price out?  Pretty sure the gear manufacturer will not extend further credit, and will expect to be paid everything that's owed, plus the cost of any new manufacturing, and probably something additional for insult.  Once a business gets behind the eight ball like this, it's extremely difficult to dig out.  If we could see the true extent of the debt side of the Mooney balance sheet, we might all be surprised.

[Marc_B]

The problem with outsourcing parts or components of parts that are used for manufacture, is that there is typically a minimum order number...especially if it is a custom part that not currently active.

i.e. take for example the return springs in the Precise Flight speed brakes.  It's a piano wire spring with a set spec and probably easy to turn out.  Precise Flight probably orders these several thousand or so at a time and typically has an ongoing shelf stock in the interim.  Century Spring can easily set up the equipment for a production run, but they don't sell 2 springs...ever.  They sell runs of 1000's.  Century Spring also doesn't keep these on the shelf...they make money off a production run and sell it in total.  So if Precise Flight needed a spring, they're taking it off the shelf if they have them or they're ordering a 1000 minimum.  So for me to order a return spring, I'm either ordering from Precise Flight and they charge me $1000 per speed brake for complete service, or if I order from Century Spring they have a minimum order of 1000 springs.  What do you think that would look like if Precise Flight was no longer manufacturing speed brakes and they didn't have springs on the shelf?

The "hope" is that Mooney has better success at other parts manufacture that 1) they have a better stock of common parts on the shelf for things that also are used in Mooneys, 2) that they are solvent enough that it's a trivial expense to have 500 rod ends on the shelf and place an order for a 1000 springs when they only need 2 right now, and 3) the factory is actively manufacturing parts so that the personnel overhead is already paid and it's an easy process to pull a mold over for short run of part Mooney "D" when they're producing other companies "parts X, Y and Z" that day.

Visiting the factory drives home that the people that made up the Mooney factory were/are VESTED members of the Mooney family.  When those people are gone, they can't easily be replaced.  Some of the "IP" is contained in those people themselves; and all the drawings, diagrams, molds, etc. with Mooney are unlikely to wind up in your hands unless it's sold off and picked up by companies like McFarlane or another FAA-PMA parts manufacturer.  My personal impression is that the IP is more likely going to be held up in defunct corp or legal issues rather than sold off as that's part of the biggest "capital" that Mooney has right now outside of the factory equipment.  So personally I'm rooting for Mooney's success and will continue to support them when I can.  Under the right circumstances I think there's a way forward, and I'm hoping that Mooney eventually finds it!