Cirrrus Gets nice Mention in Forbes 5/01/00

Industrial Management & Technology
Cessna Tackles Lean Manufacturing Introducing modern methods at a new plant has been a struggle for the top maker of business jets. But the whole company is learning from the experience.
Philip Siekman
Fortune Magazine
Time Inc.

Page I222 B+ [Not Available In All Editions]
(Copyright 2000)
Stand on the mezzanine of Cessna Aircraft’s new factory in Independence, Kan., look down on the crowded assembly lines below, and you might conclude you’re in a time warp. From up here, the single-engine planes taking shape on the line look no different from those in a Cessna factory 40 years ago: high wing, boxy fuselage, fixed landing gear. It’s as though you walked into a GM plant and found it busily turning out '57 Chevy BelAir hardtops. The planes are being built by carefully riveting thin sheets of aluminum onto a metal skeleton. World War II’s Rosie the Riveter could show up for work tomorrow morning and be up to speed before the first break.
By lunchtime, Rosie and you, if you join her on the production floor, will discover that neither the planes nor the way they are built is nearly as retro as you thought. Up close, any pilot will notice that the aircraft are stuffed with new technology where it counts most–in the cockpit and under the engine cowling. Rosie will find that she’s expected to know more than one job and to play a part on a team that has a lot to say about how its work gets done. Just about anywhere on the shop floor you’ll come across other clues that Cessna is adopting modern manufacturing practices: supplier-managed inventories, production in cells rather than by “batch and queue,” and outsourced parts and pieces even if the supplier is, often as not, another plant owned by Cessna or, in the case of the engines, by Lycoming, which, like Cessna, is a Textron Inc. subsidiary.

Cessna opened the Independence plant on a sweltering July day in 1996 to put itself back into making small, single-engine piston- powered planes, a business it had abandoned a decade earlier. It had been battered by juries holding it responsible for just about any accident involving a Cessna regardless of the age of the plane or the competence or sobriety of the pilot. Only six months after the plant opening, Independence delivered its first plane, a four-seater 172 Skyhawk, a model widely used as a trainer for beginning pilots.

The new factory, the world’s biggest and most modern maker of single-engine planes, turned out about 900 aircraft in five versions last year with a fit and finish better than Cessna managed 20 years ago. What it has yet to deliver is performance on the plant floor. It still hasn’t reached an annual output of 1,000 planes, the first year’s ambitious production target. And the plant is still taking at least twice as many labor hours to build a plane as first planned. Thanks to its success with business jets, Cessna has popped its return on invested capital from 6.5% to 14.4% in the past five years, but surely the company can’t have made a dime on its $75 million investment in the light-plane startup.

The slow start has to be kept in perspective. Planes are, after all, extraordinarily complicated machines. Unlike cars or refrigerators, they can fall out of the sky when something doesn’t work right. Cessna made things more difficult for itself, first, by starting with workers who had never built a plane and, second, by choosing Independence to explore how to move aircraft production down the path long since taken by other industries–from craftwork to modern manufacturing.

The lessons the company learned were painful, but they are starting to pay off not only in Independence but also at Cessna’s older jet plant in Wichita. Ken Kirby is part of a team from the University of Tennessee that began helping Cessna implement “lean manufacturing” this year. He observes, “In the past two or three years, they were searching for what they called ‘operational excellence,’ but just didn’t know exactly what that was.” Now, from its parts plants to its business-jet assembly lines and the executive suite in Wichita, Cessna’s managers are starting to figure it out.

It’s not as though Cessna has to hustle to catch its competitors in general aviation–the business of building planes other than those used by airlines and the military. The company dominates the two high- volume sectors of general aviation: light to medium business jets and single piston-engine planes, which span a price range of more than two orders of magnitude. The flight-school version of the 172 retails for $153,900. The top of Cessna’s twin-engine business-jet line, the Citation X (as in “ten”), costs $17,875,000 and has a top speed of Mach 0.92, better than any civil aircraft except the Concorde. In 1999, Cessna delivered 36 X models plus 188 other Citations, a total more than double the shipments of business jets by either of its Wichita neighbors and top competitors, Learjet and Raytheon Aircraft.

At the light end of the market, the chief competitor is Piper, now named the New Piper Aircraft Corp. to distinguish it from its bankrupt predecessor. Based in Vero Beach, Fla., Piper builds conventional twin-engine planes as well as singles, but still lagged well behind Independence with sales of 341 aircraft last year. Cessna doesn’t compete with the large executive jets built by Gulfstream, Dassault, and Bombardier, or those offered as airliner conversions by Boeing and Airbus. Gulfstream Aerospace, now part of General Dynamics, is first in that market segment. Last year it got $2.4 billion for just 70 planes and had another $500 million in sales of service and spares. But Cessna’s not far behind. In 1999 its sales totaled $2.2 billion, of which jets accounted for $1.6 billion and light planes $178 million.

Cessna is well out in front in number of planes sold. Out of 2,525 general aviation planes shipped by all U.S. companies in 1999, almost half, 1,210, were Cessnas. This year the company could do even better. It has orders for about 650 Citations, three years of production at current rates, and a total backlog of some $5.3 billion. In its financial reports, Textron lumps together Cessna’s contributions to its operating income with those from Bell Helicopter. But Bell’s sales, $1.5 billion last year, have been flat, and expenses are up because the unit is spending heavily on the development of vertical-takeoff aircraft. Cessna, however, is described by Textron as one of its “strongest performers” and probably accounted for a large share of the group’s $363 million contribution to the parent’s $1.2 billion in operating income.

Together, Cessna and Gulfstream share over half of general aviation’s sales. In any other industry, this dominance would be forcing others out of the market or into the leaders’ or each other’s arms. But in general aviation, while there have been some departures, there have also been arrivals. The same problem exists today as in 1925, when Clyde Cessna, Walter Beech, and Lloyd Stearman joined to build the Travel Air biplane: Too many people make too few planes of too many different types. Each of those three, for example, soon went off on his own. (Beech’s company is now Raytheon. Stearman’s grew up to be Boeing Wichita, which, among other things, builds large chunks of the 737.) Last fall Flyer, an aviation trade newspaper, counted 59 companies, mostly American, offering 162 different general-aviation airplanes in the U.S.

Nearly three decades ago when Cessna introduced the Citation, FORTUNE (and this reporter) thought the then small, slow, and short- range business jet might be, as the article’s title put it, “The Plane That Could Teach an Industry to Fly” (April 1971). The expectation was that high-volume Citation sales, added to then healthy shipments of single-and twin-engine aircraft, would give Cessna industry leadership and the cash flow to modernize production and cut costs. The rest of the industry would be forced to consolidate to survive.

It didn’t happen. The Citation has been a success; more than 3,000 have been delivered since 1972. The Learjet, sold for eight years longer, only recently hit the 2,000 mark. But beginning in the early '80s, Cessna and the rest of the general-aviation business flew smack into thunderheads that just about tore off everybody’s wings: inflation, zooming interest rates, a stagnant economy, and a hailstorm of tort cases.

Sales of general-aviation aircraft in the U.S. plummeted from more than 17,000 planes in 1979 to fewer than 12,000 the next year and kept diving, bottoming at 928 in 1994. Cessna fired three out of four employees as sales of its piston-engine planes went from more than 8,000 in 1979 to 600 in 1985. The next year Cessna quit making all piston-engine planes and, not incidentally, fell into the arms of General Dynamics. By the '90s, Piper was bankrupt. (New Piper is being prepped for a public offering.) Lear had been passed from hand to hand and finally found refuge with Canada’s Bombardier. And in 1991, Cessna was flipped to Textron, a move that General Dynamics shareholders today might deeply regret.

During the stormiest days, Cessna stayed aloft selling several models of the Citation and one singularly successful turboprop, the Caravan, which it introduced in 1985 (see box). Then, in 1994, as business-jet sales headed up in a reviving U.S. economy, hard lobbying by the industry paid off with the General Aviation Revitalization Act. It bars product-liability claims in almost any accident involving planes older than 18 years. That dramatically reduces the industry’s exposure.

Before President Clinton’s signature dried on the 1994 act, Cessna was gearing up to get back into small planes. Leading the team to do that was Pat Boyarski, a so-called A&P, or licensed airframe and power-plant technician. He started with Cessna in 1978, teaching dealers how to service propeller planes, and continued to be involved with propeller aircraft, including the Caravan. Now vice president in charge of the single-engine business, Boyarski contends that Cessna had to return to light aircraft: Pilots imprint on their first plane and stay loyal to the brand up through jets.

Even so, self-image and nostalgia, not just business necessity, had a lot to do with Cessna’s decision to jump back into the single- engine business. Company management is full of pilots with thousands of hours in the air and years on the payroll stretching back to the days when “Cessna” meant “small plane.” This year 56-year-old Gary Hay became only the third CEO after Clyde Cessna in the company’s 72- year history. Hay started working in a Cessna factory while still in college and can fly almost anything the company makes. Charlie Johnson, the 57-year-old chief operating officer, jockeyed F-105s in Vietnam and was the pilot on Arnold Palmer’s Citation. He joined Cessna 20 years ago in flight test. Hay’s immediate predecessor, 67- year-old Russ Meyer, now chairman, has been with the company since 1974. Like Johnson, he’s “type-rated” up to the Citation X. These men didn’t need a business plan to persuade them to restart the small- plane lines. The message from the top, recalls a middle manager, was simply “Let’s go do it.”

What to build wasn’t much of a problem. Boyarski says that when people owning late-model aircraft were surveyed, they wanted Cessnas just like the one Daddy flew. That’s what the company wanted to hear. Tooling for the small planes was waiting in storage, and recertification by the FAA would be relatively easy since the aerodynamics wouldn’t change. The planes made today in Independence are the four-seater Skyhawk in a basic and pepped-up version; a faster and roomier four-seater, the 182 Skylane; and a six-place 206 Stationair with a standard or turbocharged engine.

From 50 yards even an experienced pilot cannot see the difference between these planes and the same models made 20 years ago. However, there are differences. The avionics–the navigation and radio equipment–are all new. Most of the planes come with simple autopilots and GPS (global-positioning satellite) receivers, making it easier for pilots to stay on course and know where they are. Beefed-up seats are more comfortable. Headliners of molded plastic instead of fabric look better and are easier to install. And the Lycoming engines are efficient and fuel injected.

Where to build was a more difficult choice. Cessna’s Wichita plants were full of Citation and Caravan business. Adding on was possible, but Boyarski says management feared “absorbing the jet mentality: low volume, high customization, slow move rates on the line.” Getting out of town would help. Leaving behind the International Association of Machinists and Aerospace Workers wouldn’t hurt, even though Kansas is a right-to-work state and not everybody belongs to the union. But Cessna didn’t want to leave its native Kansas any more than Dorothy did. Thus Independence, 120 miles away–with the choice encouraged by a little tax abatement, some help with worker training, and a two-runway city airport 40 minutes or so by air from the ramp at headquarters.

Independence was planned as a plant that would assemble parts and pieces made and shaped elsewhere. Production starts with a simple metal pressing, the firewall between engine and cockpit, and builds from there along the fuselage and out to the wings, using parts and sheet-metal shapes shipped from other Cessna plants and outside suppliers. Every four hours a new 172 rolls out onto a taxiway “in green,” that is, flyable but unpainted. The pace is slower on the combined 182/206 line. Since these aircraft sit longer at each assembly station than planned, Cessna crams more in by moving every other plane tail first down the line, so the wings of one overlap the next. From the lines, planes roll to a separate building for painting. Unless they buy five or more planes, customers get to choose only one of two trim schemes on white paint. Since last summer the Mexican air force has flown off with 73 Skylanes, which Cessna was glad to paint olive green. After painting, it’s flight test, installation of the seats (test pilots use a temporary seat so they don’t smudge the upholstery), and a final polish.

Cessna once had a network of dealers for its piston-engine planes that took what was sent them, maintained a large inventory, and wheeled and dealed to get rid of it, just like auto dealers. Today Cessna builds to order as it does on the jet lines. The company bills retail and pays sales representatives a commission. Buyers frequently pick up their planes on the Independence flight line. John Daniel, director of assembly, started with Cessna 20 years ago as a mechanic on the flight line and contends that the fit and finish of the new planes is better than it was then, which is just as well since today’s buyers are finicky.

Getting Independence going was no easy task. In early 1997, less than a year after Cessna opened the plant, the company’s Wichita archrivals, Raytheon and Lear, as well as Boeing, raided the work force. They ran ads in the Independence newspaper offering work in Wichita starting at $10.50 or better an hour, plus a $1,500 moving allowance. Cessna was then paying new hires just $8 an hour after a four-week training period at $7.50 an hour. When it saw its just- trained people start to defect, Cessna quickly made a matching offer in its Wichita plants. And to encourage workers to stay in Independence, it boosted its hourly rates by 50 cents, promised a two- year-anniversary bonus of $500, and pointed out that by then most people would be up to $11 an hour. The Independence plant also went from five eights to four tens, that is, ten-hour shifts Monday through Thursday with three-day weekends, an arrangement that suits the true Kansans who farm on the side. Last year, after losing more than 250 workers from 1997 through 1998, Independence cut attrition to 53, plus 17 who moved to Cessna Wichita–high, but bearable for a plant with nearly 1,000 on the payroll.

Productivity was another major headache. Experienced aircraft workers were scarce in Independence. What’s more, in staffing the plant, Cessna had made a bold commitment to the so-called team approach: It recruited workers not primarily for their sheet-metal skills (though such qualifications were welcome) but because tests showed them to be good team players willing to take on responsibility. The company was betting it could simultaneously train them and get production going at a modest pace. As John Daniel recalls, “A first-year target of 1,000 planes didn’t seem like a big deal”–after all, Cessna had once built more than 7,000 single- engine planes a year. But it was a big deal: Actual output in 1997 was just 360 planes. Last year, after more than three years of operation and with an order backlog of as long as five to six months, the plant delivered 899 planes, and had 13 more waiting on the flight line for their new owners to show up.

Daniel tires of hearing how quickly the team approach got going at GM’s Saturn plant. “The difference is that Saturn started with a work force that knew how to build cars. What we did was kick off the team concept with a whole new work force.” When that led to poor output the first year, says Daniel, "we decided, ‘Let’s take a break from this team thing and make sure we know how to build the product.’ " To help, some 60 retirees who had built these planes in the past were recruited as temporary mentors. What they found was less a lack of basic skills and more a lack of self-confidence.

On the assembly lines in Wichita for the Caravan, the average worker has 18 years’ experience, Daniel points out. “In 18 years, you’ve done it. You’ve got the T-shirt and the hat. Nothing’s a surprise. Down here, every time we hit a new situation, it was grounds to shut everything down.” Daniel and the mentors instilled confidence with the help of homegrown coaches, talented workers who had been hired early and now teach. The coaches also devise ways to work better on the line. By mid-1999 the pace started to pick up and the emphasis shifted from skill development to conflict resolution, problem solving, and flexibility. Some teams now have the combination of skill and cohesion to shift as needed across the assembly lines, for example, to install the interior on any of the models rather than just one.

Independence had ambitious plans to cut costs and raise efficiency by outsourcing many jobs. That meant shaking off part of its heritage: Cessna has long been vertically integrated–a philosophy CEO Hay still describes as “controlling our destiny.” The new plant still relies heavily on sister plants. A Cessna-owned sheet-metal plant in Columbus, Ga., for example, builds control surfaces-- rudder, elevators, ailerons, flaps. Independence also does more in- house than was first intended. Boyarski was sure he would be able to outsource the assembly of wire harnesses and seats, but couldn’t get competitive bids. Either there wasn’t enough volume or suppliers’ prices escalated past Cessna’s in-house costs.

Even so, Independence has a lengthy list of outside suppliers. Outsourcing gives H.D. Cartwright, the materials director, the opportunity to push inventories back up the supply chain and move toward just-in-time, just-in-place deliveries. Cartwright left Cessna for a few years to work for a high-volume van-conversion company and came back knowing how purchasing is done these days in the motor- vehicle business. Fastener and rivet bins representing about $2.5 million in inventory are monitored and automatically restocked under a blanket purchase order by a Honeywell hardware-products group. A weekly supply of interior door panels for the 172 is delivered from a plant in nearby Cherryvale directly to the spot on the line where they are used. A 30-day, $30 million avionics inventory is maintained onsite by two Honeywell field engineers who also help when problems occur after installation. That inventory might be too big, but Cartwright figures it’s up to Honeywell. The storeroom is no larger than a decent-sized motel room. And Cessna isn’t invoiced until planes are flight-checked and thus within days of delivery.

To tighten the supply chain, Cartwright persuaded a local entrepreneur to open a warehouse in a hangar about a quarter mile down the taxiway from the assembly lines. He then persuaded about 20 suppliers to maintain an inventory there. “Initially,” he says, “some dragged their feet, but now most seem to like it.” Supplier City, as the warehouse is called, has started to do more than keep inventories- -for example, it mounts tires from Goodyear on wheels from Parker Hannifin. Supplier City is also getting tied tighter to the assembly lines. The lines now pull in a week of inventory at a time; by year’s end deliveries will be daily. Independence’s purchased-parts inventory is down to some $4 million, not bad for a plant that buys $80 million of stuff a year, including engines costing from $15,000 to $43,000 each.

Cessna is one of those companies where people say “opportunity” when the rest of us might choose the word “problem”; it could therefore be said that the assembly lines in Independence remain a great opportunity. The plant still takes about twice as many hours to build a 172 as Cessna did in the '80s, and with the other models the gap is even greater. With one shift working, the theoretical capacity of the plant is 2,000 planes a year. But this year’s target is just 975 planes, and today’s mantra is “controlled growth.” Output of 1,500 a year isn’t likely before 2003. Nevertheless, there’s an air of self-confidence in the plant, an attitude that things have just about been figured out–that everybody now knows how to build a plane, where the business is going, and how they’re going to get there.

Back at Cessna’s Wichita plants, confidence in the move to modern manufacturing has been slow to develop. Here, history haunts the hangars. Here, there are nearly 10,000 employees and probably at least that many fixed habits. On the Citation and Caravan lines, Hay admits, “we probably got into a mode of doing things for the future based on how we’d always done things in the past.” One problem has been growth so explosive that Charlie Johnson, the COO, says the company has had a hard enough time just following established systems: “Our planning, procurement, production-control systems–all of those got compromised.” So did training. Cessna has been hiring some 1,500 people a year to fill 1,000 new jobs and cover 500 slots left by employees tempted away by higher wages at Boeing or in some other greener pasture. Even supervisors lack training and experience. Johnson describes these challenges as an “elephant” that “we’re swallowing right now.”

Managing rapid growth has been complicated by changes in the Citation product. In 1990, when Cessna had $745 million in sales, it sold 101 Citations in three versions, two of them derivatives of the first 1971 plane. Last year, with triple the revenues, it delivered a little more than twice as many planes, but in six versions, all introduced since 1990. Cessna will introduce three upgraded models of the Citation this year and next. They will be followed in 2003 by a completely new plane, the $12 million Sovereign.

Johnson says operations are now enough under control that the focus can shift from “sheer, brute force in building our business to a business where we have operating excellence.” Goals fall into two categories: cutting the time from concept to market for new aircraft, and cutting the cost and time it takes to build them. Cessna has learned, however, not to get too hasty. In the mid-1990s it ran into trouble rushing out the CitationJet and had to spend the next couple of years issuing “change bulletins”–fixes and part replacements-- and soothing customers whose planes were stuck in the shop. Craig Estep, just promoted from director of Wichita assembly to vice president of completions (responsible for paint, interiors, and flight testing), says that the root of the CitationJet problem was “engineering would design the airplane and throw it over the wall to manufacturing who would take what they got” and move on to production- -a classic failure. New designs are now developed by “co-located” teams with members from all sections of the company working out of offices within shouting distance of one another. That’s helping. It took six years to get the Citation X from concept to delivery. The Sovereign will get out in five.

Tightening the wait time between order and delivery of a Citation, now at least 15 months, would cut work in progress, help retain customers, and, to Cessna’s pleasure, give buyers less time to change their minds. The magic number is now six months from order to delivery. To hit that is going to take a lot of work.

Wichita managers are well aware of what’s going on in Independence, and everybody’s going to school on “lean manufacturing.” But not everything new can be adopted on the Citation lines. They don’t have the necessary production volume. Planes move only once every 56 hours along the X line even though it works full- time with three eight-hour shifts. The fastest line, also working three shifts, rolls out an Excel model once every 24 hours. There are some common parts like seat track assemblies. The wing is the same for about 22 feet in from the tip on three models. Even so, says Rod Holter, director of assembly support, “there aren’t many suppliers that want to build next door to you if you’re only talking about a few of something every three days.”

The assembly lines do have two Wichita plants ready to help, since both are owned by Cessna. One, known as Prospect (a town now absorbed by the city), is just across the road from the main facility. Parts made there are racked on small trailers and towed over to the lines with a small tug. The other, Pawnee (for the street), is on the spot where Clyde Cessna built planes in 1929. It’s 12 1/2 miles away on the east side of town. Over the years jobs and equipment were parceled out to each plant mostly on a basis of which had space and equipment available. One part can require processing in both plants. The blank for a brace used on the frame of the Skyhawk is made in Pawnee, shipped to Prospect for initial forming, sent back to Pawnee for another step, returned to Prospect for a third process, then sent back to Pawnee for painting. That’s 62 1/2 miles, not counting travel inside each plant.

Rod Holter, who supervises the parts plants, is now sorting out equipment and tasks to eliminate cross-town travel. Sheet-metal forming is going to Pawnee, or to Columbus, which has lower labor costs. And both Wichita plants are getting “lean,” starting cell production instead of the old “batch and queue.” In place of shearing here, bending there, drilling in another part of the plant, those tasks are done in one area. Pawnee is also removing its heavy presses and outsourcing that work; buying aluminum with the first shear cut already made by Alcoa; and moving production of low-volume spares to outsiders. As space opens up, Prospect, which already assembles tail sections and wings for some Citations, will do more subassembly, easing the load on the lines so they can move faster.

Cessna isn’t totally unfamiliar with outsourcing. The wing for the Citation X was designed with Boeing’s help. To fly at close to the speed of sound, the wing is so thin that some of the load has to be carried by the skin rather than the frame; this skin must be machined out of plate rather than formed from sheet metal. Two companies supply extrusions and plate. Two others machine structural parts and the skin. A fifth “shotpeens” skin sections to final shape–using tiny shot to pound the metal into shape against a form. Finally, Aerostructures Corp. in Nashville rivets together spars and skin to form four subassemblies that are then joined on the Wichita assembly line.

The wing work went outside largely because Cessna didn’t have the equipment or expertise. But Hay says he now accepts that “there are powerful, compelling business reasons” to outsource. The company will probably have a supplier assemble the complete tail section of the Sovereign.

However, on the assembly lines, with so much to do and so many orders in hand, changes will take place gradually, seeping in model by model. There’s no point changing how a plane is assembled if it’s going out of production in a year or so. Caution is also Cessna’s style. The company has been relatively quick to adopt advances made by its suppliers in engines and avionics, but slow to try anything else new. (Not that people who fly in its planes necessarily think that’s all bad.) The company, for example, is using graphite carbon fiber and other composites instead of riveting sheet metal for various parts of its planes, including all the Citation X’s control surfaces. However, elsewhere in Wichita, Raytheon is building the entire fuselage of the Premier, a small business jet, completely from carbon-composite material laid down by computer-driven “fiber- placement” machines.

While not even implying that there’s a safety concern, Cessna executives think much is yet to be learned about the life of large composite parts. More important, says Craig Estep, Cessna believes the cost of composites is too high andthat it can design new planes quicker “with a blend of all the different materials and technologies.” Quicker is important. Raytheon is paying for being venturesome with delays in getting to market. Besides mastering a new technology, it has had to educate the FAA, which understandably moves slowly when faced with a radical change in material and construction. Raytheon started on the $4.9 million Premier in 1995, targeting buyers of the CitationJet first sold in 1993. It hopes to deliver the first one later this year. Meanwhile, Cessna is already delivering an upgrade, the $3.8 million CJ1, and by early next year customers will be flying the CJ2, a faster, stretched, seven-passenger $4.6 million version that will have gone from concept to customer in only a bit over three years.

Cessna’s conservatism is best seen in the Independence-made planes. Two companies, Lancair Group in Bend, Ore., and Cirrus Design of Duluth, Minn., are introducing competitive four-seat, single piston-engine aircraft that are made with composite material rather than riveted aluminum (see box).

Cessna would have had to wait years to get back into small planes if it had designed and sought FAA certification for entirely new aircraft.

Cessna’s COO, Charlie Johnson, says it will eventually offer planes “stronger, better, easier to operate, and more efficient” than the Cirrus and Lancair models. Before that, the company is more likely to start to fill the gap in its line between the piston- engine 206 and the CJ1 jet, which is ten times more expensive. Cessna once covered this part of the market with nearly a dozen models, mostly twin piston-engine planes.

Here again, smaller competitors are leading the way. But Gary Hay hinted recently that Cessna may be contemplating an innovative entry in the gap. He pointed out that Williams International of Walled Lake, Mich., has developed a turbofan engine weighing only about 85 pounds and delivering 770 pounds of thrust. A pair would have the oomph to give a relatively inexpensive personal plane the zip of today’s business jet. Cessna, with more experience with small jets than anybody, isn’t likely

The Plane With The Parachute

For laymen, at least, the question has to be, Why didn’t they think of that before?–a parachute that can be deployed in an emergency and lazily drift a plane and its passengers to the ground. Now a reality in production in a Duluth, Minn., factory, the plane is the SR-20 from Cirrus Design, one of several light-plane builders more adventurous than Cessna. Sleek and, for its class and $188,300 price, fast, the SR-20 is in high demand: Cirrus is building over seven a month and more than 550 customers await delivery.

To try out the parachute concept–and win FAA approval for its design–Cirrus has dropped test planes without passengers. But so far, no pilot has reached up and pulled the red handle to deploy the chute. Some wonder whether any pilot ever will. The parachute rockets straight up through the fuselage, ripping shroud lines out of buried channels in the skin. Though the chute will prevent a crash, the trip down will be fast and the landing hard. The occupants should walk away, but the plane will probably be too damaged to fly again.

The SR-20 is one of several new planes being introduced that are not made with riveted aluminum but by hand-layering fiberglass sheets in semicylindrical molds and coating the sheets with liquid resin. The halves formed this way are then joined and cured in an oven. Lancair Group in Bend, Ore., is building a small, swift resin-and- fiberglass four-seater, the $250,000 Columbia 300. Advanced Aerodynamics and Structures in Long Beach, Calif., is working on such a plane with room for six. The $1,250,000 Jetcruzer 500 aircraft is an unusual canard-design, pusher turboprop. The engine is in the rear and the wing is toward the back with a horizontal stabilizer up front.

Both the Cirrus and the Columbia have large flat-panel displays in the cockpit for navigation and other uses. Both also have small side- mounted controls instead of the usual yoke and wheel. The setup gives the pilot a clear view of the instrument panel–but also, at first, the uneasy feeling that something important has been forgotten. Imagine getting into the driver’s side of a car with no steering column and wheel.

Ummm, that’s Cirrus getting a nice mention in FORTUNE, the evil twin of Forbes.

Interesting dispatch nonetheless.

Of course the question for RK, publisher of Forbes, is when his magazine is going to get on the bandwagon? (Note to journalism ethics police: this is a joke.)

Jim — sorry to be so gear-down, full-flap slow to answer your quip. Excuse: I spent the day in bliss . . . cruising around Napa Valley in my A36.

As for a Cirrus story, I’ve pitched the Cirrus story to Clayton Christensen, the Harvard Business School prof. and author of Innovator’s Dilemma, a biz book besteller. Clay’s well-known thesis is that disruptive technologies — oh, say, composite airplanes — bubble up from below, never from above. The old guard invariably dismisses the newcomer’s products as toys (e.g.,PCs versus minicomputers) or as junk (e.g., steel minimills) . . . or as not worth getting into, because of initially small markets and low margins.

Clay predicts, for example, that golf cart manufacturers will be the ones that produce the first bestseller electric cars. The Big 3 and Toyota are too hidebound, too top-down. Their electric cars are too expense, too disconnected from the market. Meanwhile, the humble little golf cart guys are sneaking up from below.

The Cirrus story fits Clay’s thesis perfectly . . . a humble little kit airplane company bets the ranch on a breakthrough design. The old guard — Cessna, Piper, Beech — shrugs it off. But the new product develops a rabid following.

Beech, Piper and Cessna may not regret ceding the low-end to Cirrus. After all, they have turbines and jets to make. Much higher margins. They forget to look out below.


Ummm, that’s Cirrus getting a nice mention in FORTUNE, the evil twin of Forbes.

Interesting dispatch nonetheless.

Of course the question for RK, publisher of Forbes, is when his magazine is going to get on the bandwagon? (Note to journalism ethics police: this is a joke.)