AOPA Pilot Magazine - April 2012 - 28

WAYPOINTS

BY THOMAS B. HAINES
EDITOR IN CHIEF

The implosion of globalization?

scorecard seems necessary to keep track of who’s who in aviation today as globalization of company ownership continues. And while foreign

built in China, with final assembly in the United States. And, like Hawker Beechcraft and others, Cessna also has many major subassemblies for its various models built in Mexico. And it’s not just airframe manufacturers that are being gobbled up by foreign companies. Continental Motors was bought by the Chinese government in 2010. It’s important to keep in mind that this globalization of aviation is not new. Israel Aircraft Industries purchased several Rockwell Jet Commander models ownership of traditionally U.S.-owned companies decades ago and successfully morphed them into causes consternation among some American pilots, the Astra and Galaxy business jets. The product Editor in Chief Tom Haines has been we have no one except ourselves to blame because line was sold to Gulfstream Aerospace a few years covering the it is the lack of U.S. investment that is, for the most ago, but IAI continues to build them. Bombardier, a general aviation part, driving the sale of these companies. Canadian conglomerate, bought the cash-strapped industry for more A generation ago, the top piston-aircraft and iconic Learjet Corporation in the early 1990s. than 25 years. producers were as predictable as the top auto manChina’s purchase of Cirrus a year ago seemed to ufacturers. Cessna, Piper, Beechcraft, and Mooney spark the most outcry from pilots, but don’t forget were the GM, Ford, Chrysler, and everybody else of the aviation that the Duluth company has been foreign-owned since 2001 world. Today, the world looks quite different. As has happened in when it was acquired by the Bank of Bahrain. So what’s China’s interest in U.S. aviation companies? Brian the auto market during the past 20 years, foreign aircraft manufacturers have made great inroads into U.S. markets. Today, the Foley, an aviation consultant who monitors such things, said top manufacturers of piston airplanes are Cessna (413 piston shortly after the Cirrus acquisition, “What we’re seeing is a twoairplanes), Cirrus (255), Diamond (185), Piper (102), and at press pronged strategy. First, the Chinese government is developing time Hawker Beechcraft (28), although Hawker Beechcraft had civil aviation as a national priority. Second, these are deals that not yet released its fourth-quarter shipments. Mooney produced make good economic and business sense. China is fortunate no airplanes in 2011. to have abundant cash from massive exports at precisely the Some of the names are not the only things that have changed time when general aviation is at the bottom of its market cycle, over the past 20 years. So have the corporate ownerships. Cirrus making it a logical buy.” But it’s not just about the money. “In buying up established is owned by the Chinese government. Diamond is Canadianowned and Austrian controlled. The Sultan of Brunei owns companies, China gets the management know-how, brand, Piper, and a Canadian company owns half of Hawker Beech- distribution, and technology in days—not decades,” Foley craft. Only Cessna, which is owned by conglomerate Textron, explained. is still primarily U.S.-held. Furthermore, it is worth noting that Foley agrees that short-sighted U.S. investors are partly to not all piston-powered aircraft are airplanes. Family-owned blame for the exodus of American ownership. “Perhaps the West Robinson Helicopter, based in California, produced 268 piston- is risk-averse on general aviation because of previous bets that powered helicopters (and another 88 turbine-powered ones). didn’t work out well,” he said. “That’s certainly understandable, All in all, the number of piston-powered airplanes delivered but it’s playing now to patient China’s benefit.” was down 1.5 percent in 2011 compared to 2010, according to But stay tuned. Things may be about to take another turn. the General Aviation Manufacturers Association. Cirrus claims With the growing efficiency of U.S. workers and China’s burthe best-selling model again in 2011, a position its SR22/SR22T geoning middle class demanding higher wages, the pendulum has held for a decade. Cirrus also claims to have sold more certi- may start to swing back. Brazilian manufacturer Embraer in fied single-engine piston airplanes than any other manufacturer, 2011 opened a new factory in Florida to assemble its Phenom which is correct if you discount the 168 Skycatcher Light Sport business jets. Companies outside of aviation are recognizing Aircraft that Cessna sold. LSAs are technically not certified air- that expected savings from building products in the Far East planes; they are built to an ASTM standard. Cirrus sold more and Mexico are not materializing, causing them to rethink that airplanes in the fourth quarter than it has in any quarter since strategy. Can aircraft manufacturers be far behind? And in the the end of 2008—a potential sign of an improving market, or end, will such changes spark much-needed innovation in gena validation of the importance of the federal government’s eral aviation manufacturing? Time will tell. 100-percent depreciation program that ended with 2011. So you might think that if you want to buy American, you Email the author at thomas.haines@aopa.org; follow on twitter. should buy a Cessna. But keep in mind that the Skycatcher is com/tomhaines29. 28 • APRIL 2012

AOPA PILOT •

http://www.twitter.com/tomhaines29 http://www.twitter.com/tomhaines29

AOPA Pilot Magazine - April 2012

Table of Contents for the Digital Edition of AOPA Pilot Magazine - April 2012