A Look Into The Lycoming Factory

[cliffy]

 

[EricJ]

That's pretty cool!    It's neat to see that there's still investment in modern techniques to produce these engines.

[DonMuncy]

With that neat an operation and production line, why is there still such a terrible wait time for a new engine. Or am I misinformed.

[PT20J]

2 hours ago, DonMuncy said:

With that neat an operation and production line, why is there still such a terrible wait time for a new engine. Or am I misinformed.

Part of Lycoming’s strategy to control costs is to shift from having a lot of parts made outside to making more in house. Another part is to run only one line for non-custom engines. So, new, overhauled and rebuilt are all made on the same line with the same techs and the same QA. Custom engines are built in a separate area by a single tech.

When I visited the factory a couple of years ago, they admitted to having lots of start up problems when they brought the cylinder head machining in house. That was part of the problem. They were also shut down for a while during COVID and at the same time, orders went way up because a lot of people figured the pandemic was a good time to get their engine overhauled or buy one for their kit project. 

I am surprised that they are still so far behind. Lycoming’s largest customer by far is Van’s and apparently the bankruptcy hasn’t slowed RV building down much.  Business must be very good if they can’t catch up.

[skykrawler]

Wasn't there a strike that contributed to the backlog?

 

[LANCECASPER]

13 minutes ago, skykrawler said:

Wasn't there a strike that contributed to the backlog?

There was a threat of a strike but it never happened. https://www.sungazette.com/news/top-news/2023/10/new-lycoming-engines-contract-effective-immediately/

[Flyler]

I'm not sure if there was a lot of background noise, or just strange audio layovers, but some of the sounds were comedically incorrect for the equipment.  I liked the "spooling up" sounds that the CMM probe was making 

[Schllc]

There is another insidious issue with products like this, which is based on bad policy. 
I used to work in a manufacturing plant that made specialty tools for the oil production industry. It was started by three guys in their home workshops and grew into a 300 million dollar a year business. Almost all of the items they made were highly specialized and complex, either in machining, metallurgy, or both.  
The company was privately owned, so when a customer ordered a tool that wasn’t in stock, we evaluated the situation based on machine setup time and margin. 
What this means is that some parts took dozens of hours just in machine programming and setup just to make one part.  Even though the actual machining of the part may have only taken a few hours or even minutes to produce. 
So the owners decided it was cheaper and more efficient to make 20, 30 or a hundred of the part and just store the extras in inventory. 
This worked well for the 30 years they owned and ran the company. 
I was hired right out of college with an industrial mechanical engineering degree and two years after I started they sold the company to a publicly traded company. 
The bean counters came in and discovered what they called “dead inventory” which was this massive stockpile of parts, and wrote it down to the tune of  about $80,000,000, and nearly ruined the company. Apparently when you add value to raw stock to create inventory you have to pay tax for it sitting on the shelf, and if it isn’t sold in some arbitrarily determined amount of time, they say it’s worth zero.  Which is strange because when the “one” part was ordered the price for all the setup was billed, so the next time they sold the part the absolutely crushed it with the profit, and the people were happy to have it on hand so quickly.  It was called a win win  

The point being, it is a great disincentive to companies to stockpile, and figuring out what to keep in stock and what not to becomes a lot more challenging, and it seems to be an unnecessary burden on manufacturers.  There is no doubt in my mind that this plays a role with something as niche as aircraft engines and parts. 
 

For any industry to be able to able to tell customers you must wait two years for a product that you aren’t capable of replacing with anyone else is insane, and deeply broken. Especially when it is something as simple as an air cooled engine. 
these engines were made in the hundreds of thousands a year in the 30’s and 40’s. 
The technology is old, and it is no where near as complicated as some of the parts we used to make.  
It’s also a function of the captive nature of our genre. Where else will you go?  They can tell you whatever they want. And if they want to wait until they can make 50 engines in a run and it takes two years, well that’s that. 

[KSMooniac]

I wish we could reform the tax system and/or change the accounting rules that have driven nearly every industry to a just-in-time model, because it really fails the customer in the lower quantity/niche markets like GA products.  Automobile manufacturing, sure, I think it likely works very well once you get everything humming along, but that is just not possible in our little world.

[Grant_Waite]

Not to mention, the price differences between lycomings and continentals. I can get a new io550 for the same price as an io360. Albeit everyone seems to say lycomings are better and make tbo more consistently. Not to mention the maintenance cost is higher on continentals. Even with all that I find it hard to understand how there’s such a large price cap between the 2. The lead times for continentals aren’t as bad as lycomings. A flying club I was in got a new io520 for a V35a in about 4 months, like 2 years ago. The fact that engines waiting times are years and not month or so is insane. Something is completely wrong and I’m not surprised if the higher powers want it that way. 

[toto]

Wasn’t there a period of time when Superior was going to make brand-new Lycoming engines under license?

[1980Mooney]

23 minutes ago, toto said:

Wasn’t there a period of time when Superior was going to make brand-new Lycoming engines under license?

I think there was an AD in 2020 that recalled all the Superior built Lycoming IO-360 and O-360 engines due to bad crankshafts.  FAA finalizes Superior Air Parts crankshaft AD - AOPA

Between the Superior cylinder Airworthiness Directives in 2013 and 2019 and then the crankshaft problem:

"Superior = Inferior"

 

Edited October 8, 2024 by 1980Mooney

[toto]

1 minute ago, 1980Mooney said:

I think there was an AD in 2020 that recalled all the Superior engines due to bad crankshafts.  FAA finalizes Superior Air Parts crankshaft AD - AOPA

Between the Superior cylinder Airworthiness Directives in 2013 and 2019 and then the crankshaft problem:

"Superior = Inferior"

 

Interesting, okay so it did happen …. but wasn’t a great business. 

[1980Mooney]

11 minutes ago, toto said:

Interesting, okay so it did happen …. but wasn’t a great business. 

Superior filed bankruptcy in 2008.  The Chinese bought them.  In addition to building up Lycoming licensed engines, they also tried to bring out their own 4-cylinder engine for the Experimental market:

"In March 2019 the Superior Air Parts XP-400 and Superior Air Parts XP-382 engines were withdrawn from service and all customer engines were subject to a mandatory, immediate buy-back by the company to remove them from service. The company made this decision based on detonation problems found in some XP-400 engines that could not be resolved. Due to parts commonality, the decision was made to buy-back the XP-382 engines as well."

There was a news story that they paid Vans $5 million in a settlement when the crankshaft broke on an XP-400 that killed 2 people.

Just about everything Superior has touched in the last 15 years has turned to crap.

Edited October 8, 2024 by 1980Mooney

[1980Mooney]

11 hours ago, Flyler said:

I'm not sure if there was a lot of background noise, or just strange audio layovers, but some of the sounds were comedically incorrect for the equipment.  I liked the "spooling up" sounds that the CMM probe was making 

The video is gone.  It says "Copyright claim by Lycoming Engines"

[cliffy]

YEP Looks like they pulled the rope on it   OH well, it was good while it lasted

[PT20J]

I emailed my Lycoming rep and got this reply:

"If it is the video I’m thinking of, it was posted by a company that used our video content without our permission and generated captions throughout that was spreading inaccurate information. All videos posted directly from our page have the accurate and Lycoming specific information that was falsely discussed in that video, please enjoy any of our uploads! Thank you for reaching out."

Lycoming's Youtube page is: https://www.youtube.com/user/LycomingEngines

[MB65E]

Dumb!! 
Almost makes you want to fly a sell out Continental engine….

Almost! No thanks. 

-Matt

[Schllc]

I watched the three videos on the site and they talked a lot about the updating of their production line with new CNC machines. They claimed they were ramping up production to meet the demands of aviation. Is this why they are two years out to produce an engine?  

[Pinecone]

A lot of the machines are not things you order for delivery next week.  Those companies are having long lead times also. 

 

So Lycoming decides to set up another line with mostly CNC, they shop for equipment.  They go through a bid and tech eval process.  They negotiate the order.  They place the order.  They wait. And wait, and wait, and the machines are shipped.  Then they have to be installed.  And set up.  And tested. And any problems addressed.    And then they can start building engines.

And before they decide to do that, they need to determine that the need will remain long term.  Would not be good to spend that money, and in a year or two reduce the backlog to the point is it sitting idle.

[A64Pilot]

On 10/8/2024 at 6:39 PM, toto said:

Wasn’t there a period of time when Superior was going to make brand-new Lycoming engines under license?

Pretty sure Titan did the IO-540, neighbor has one in his Experimental helicopter they were bought by Continental and they pulled the plug, makes me wonder why because Continental doesn’t seem to mind building Lycoming cylinders?

Oh and you don’t need a License if you have PMA you can build anyone’s parts and they can’t stop you, exception I think is if the part has an AD on it.

Traditionally manufacturers shied away from building each others parts but I guess at least with Continental that has changed?

On edit it seems they still build the four cylinder Lycomings, stroked Exp ones anyway, the 540 was also Exp

https://continental.aero/titan-experimental-engines/

Edited October 17, 2024 by A64Pilot

[1980Mooney]

On 10/16/2024 at 7:30 AM, Pinecone said:

And before they decide to do that, they need to determine that the need will remain long term.  Would not be good to spend that money, and in a year or two reduce the backlog to the point is it sitting idle.

And this is the point that everyone misses.   The long term demand for new and factory replacement (overhaul and rebuilt) Lycoming engines is flat at best in the future.   The total fleet of GA piston singles and GA piston twins has been in a long term decline over the last 40 years.  For the past few years and going forward it appears that the GA fleet to have flat lined with new deliveries roughly offsetting fleet loss from crash/scrap.  There is no material growth projected in the GA fleet going forward.  And even in a flat market Lycoming will struggle with share as it faces a market with certified Diesels (Austro and Continental. And DeltaHawk promising to deliver) and a certified Rotax. These non-Lyc's are creeping into the fleet.  In the Experimental market ULPower Aero engines is growing share along with stalworth Rotax.  Electrics are a wild card but for now are a novelty. 

Even if there is a short term backlog due to some temporary increased demand (like Covid), there is little financial incentive (cash payback) for Lycoming to build additional capacity (specialized high cost, long lead automated machine tooling) that will go idle as soon as they catch the backlog back up.  Additionally they need highly skilled employees and hiring only to lay off will be costly.  It is more cost (payback) effective to add overtime and work it through as long as it takes. It doesn't have anything to do with tax law or accounting. 

FAA shows that there were about 160K certified Piston Singles in 2022 and they estimated that only 126K were active.  20 years earlier, in 2002 they showed that there were about 182K certified Piston Singles, and they estimated that only about 143K were active.  Average hours flown by certified Piston Singles dropped from about 114 hr./yr. in 2002 to about 103 hr./yr. in 2022.  

Another way to look at Certified Piston:

• Single engine piston total hours flown
  • 2022 - 13.0 million
  • 2002 - 16.3 million
  • That's a 20.2% decline
• Twin engine piston total hours flown
  • 2022 - 1.43 million
  • 2002 - 2.55 million
  • That's a 43.9% decline

Yes I know everyone will say "look at the growth in Experimental".  But the stats show that Experimental's on average fly a lot less hours per year than Certified and they have a lot of different engines -roughly a bit less than half the number of hours per year per aircraft that a Certified piston aircraft flies on average. 

 The fleet of Registered Experimental's was about 30K in 2002 and about 33K in 2022.  However, the percentage active was much lower than Certified (only about 60-66% for Exp. vs. about 79% for Certified Piston Singles).  And the hours flown by Experimental's was significantly less at about 45 hr./yr. in 2022.

Another way to look at Experimentals

• Total Experimental fleet - Hours flown
  • 2022 - 1.28 million
  • 2002 - 1.35 million
  • Statistically not much of a change

The growth in GA is in turbines. Turbojets, turboprops and turbine rotorcraft are all way up.

FAA's most recent 2024-2044 Market Forecast:

FAA 2022 Fleet Analysis:

FAA 2002 Fleet Analysis:

Edited October 18, 2024 by 1980Mooney

[mmcdaniel33]

1980 Mooney….spot on!  Any competent company lives in the present, but plans for the future.  Short term demand does not equal long term payback!

 

[Schllc]

25 years ago, I  managed a job shop with 225 highly qualified machinists.  
Most of those guys had 20 years of experience when I knew them. They did a lot of things with hand measurements and pure skill. If you ever watched a guy given a plan view drawing with multiple thread patterns and o ring groves, etc, and crank it out flawlessly on a manual lath you would understand the skill and intelligence required. Some of these guys were making $50+ per hour in the early 90’s!
At the time we were transitioning and investing heavily in CNC technology. This greatly reduced the issues with quality, and minimized the skill needed for the actual machine operators.   This is not to say they could have no skill, and certainly  benefited from experience but it was not as important as it once was.
The folks who wrote the code for the machines, and understood tool path and metallurgy were responsible for managing schedules on machines.  
This meant than 10 lesser skilled machinists could do the work of 30 highly skilled machinists in about half the time.
Lycoming appears to be investing heavily in automation so that the need for a huge workforce to keep up with demand is not as important.  
Once the machines have returned their investments, idling them is much easier than people.  
I don’t see products like engines being built and assembled without human input in our lifetime, but they aren’t producing the skilled labor we once had either so it’s progress or die, adjustments have to be made. 
I do wish there was a path to incentivize GA again, but given the policies in place today and the last 50 years, you would be hard pressed to find any evidence suggesting the government didn’t wish GA would go away all together. 
 

I don’t know how many engines Lycoming produces each year, but 10,000 engines at 75k average price per is $750,000,000.  
So i would say their investment is safe for at least the next 20 years. 

[cliffy]

My father was one of those who could make any manual machine tool sing and dance. He started during WWI and retired in the 70s as Manager of Mechanical Production for a large oil exploration company where he held 2 patents. He also bought the first Moog automatic tape controlled machining center  in  Los Angeles back in the early 60s.

Time has a way of marching on regardless of what we want or do. 

We are in the inevitable decline of the airplanes built during the heyday of GA aviation (of the 60s and 70s) to a newer type/style of plastic airplanes and not traditional sheet metal construction.  Brought to market by a plethora of manufacturers rather than the limited big 3 or so we are familiar with. 

Our form of aviation (Cessna. Piper. Mooney etc) is a dying breed. We can prop up our antique airplanes for only so long until age takes its final toll. Its no different than the hot rod culture of the 60s and 70s with the 327s and 440s, modified sedans and pickups. That too is a dying pass time as we move into more emissions/modification controls and rules. They too will be mostly gone in 25 years as the subject vehicles reach the 90-100 year old arena AS OUR AIRPLANES ARE TODAY.    

They don't make them any more and we kill more of them every year than what they do make. 

Enjoy them while you can. They will be gone in the not too distant future.

Just like the skilled machinist of yesteryear.