Contract Number Game (long)

Guest Discussion
1
  • Contract Numbers - One mans opinion…

The contract number is simply a “numeric identifier” of a legal document executed between the customer and supplier. Common sense tells me these “numeric identifiers” follow an orderly sequence, #1,#2,#3…#145. If this is not the case for some reason the contract still has a dated signature by both parties. Contract order therefore is no mystery. Cirrus needs to simply sort the contracts by “date” and fill the orders accordingly. A simple listing of contract dates with corresponding contract “numeric identifiers” would go a long way to clear the mystery of trying to relate contract numbers to actual production.
It should be safe to assume a contract dated 1/1/98 is ahead of contract dated 1/1/99, regardless of the “contract number”. In those cases where contracts were completed on the same day some type of “seniority order” must be established. Flip a coin or whatever but this must be done! For example Larry, Moe and Curly all executed contracts on 2/14/99. Given the low volume of production it makes a significant difference to Larry, Moe and Curly what their “senority order” is. This is a real issue but easily solved.

We have now established the fact there is no “direct relationship” between the contracts “numeric identifier” and actual “aircraft production commitment”. The contract date therefore must establish “order of production commitment”. In other words contract date 1/1/98 gets his plane ahead of contract date 1/1/99, regardless of plane type!! These aircraft are so similar that the inline production process can handle a mix of both 20Â’s and 22Â’s. If Cirrus is aligning their production schedule based on “margin contribution”, (i.e. SR-22 vs SR-20), without regard to the legally binding contract date then you may be upset however your signed contract may have some fine print that allows thisÂ… better read the fine print…

Consider the following real world issues and see if Cirrus can help you guys with the answers.

1.Customers who got “refunds”. These are the ones that simply got their money back and canceled the contract. The question is. What did Cirrus do with this contract. Did they stick it in their pocket for a company demo plane or incentive for a future investor? Cirrus may very well of legally “purchased” the contract from the customer.

2.Customers sell their position. These are the ones that bought the plane as an investment and wanted to make a few bucks. Does the new contract owner retain the original contract date? I would think so.

3.Customers have converted from a 20 to 22. Is it possible for a new -22 contract to jump ahead of the guy that holds an earlier -20 contract?

In any event the “contact date” should go to the new owner any they simple maintain their place in line. If Cirrus is putting later -22 dated contracts in front of earlier dated -20 contracts then you should be very upset. Am I missing something? I believe clarification of these issues would help reduce the frustration level I sense on this board. The planes are great and I want Cirrus to keep moving forward as much as anyone else. Perhaps with Sun N Fun just around the corner some of you guys can sit down with Cirrus and get the answers you deserve.
2

FWIW. The delivery date on my SR22 contract is the same as the date on the SR20 contract which it relpaced.

Lou

  • Contract Numbers - One mans opinion…

The contract number is simply a “numeric identifier” of a legal document executed between the customer and supplier. Common sense tells me these “numeric identifiers” follow an orderly sequence, #1,#2,#3…#145. If this is not the case for some reason the contract still has a dated signature by both parties. Contract order therefore is no mystery. Cirrus needs to simply sort the contracts by “date” and fill the orders accordingly. A simple listing of contract dates with corresponding contract “numeric identifiers” would go a long way to clear the mystery of trying to relate contract numbers to actual production.
It should be safe to assume a contract dated 1/1/98 is ahead of contract dated 1/1/99, regardless of the “contract number”. In those cases where contracts were completed on the same day some type of “seniority order” must be established. Flip a coin or whatever but this must be done! For example Larry, Moe and Curly all executed contracts on 2/14/99. Given the low volume of production it makes a significant difference to Larry, Moe and Curly what their “senority order” is. This is a real issue but easily solved.

We have now established the fact there is no “direct relationship” between the contracts “numeric identifier” and actual “aircraft production commitment”. The contract date therefore must establish “order of production commitment”. In other words contract date 1/1/98 gets his plane ahead of contract date 1/1/99, regardless of plane type!! These aircraft are so similar that the inline production process can handle a mix of both 20Â’s and 22Â’s. If Cirrus is aligning their production schedule based on “margin contribution”, (i.e. SR-22 vs SR-20), without regard to the legally binding contract date then you may be upset however your signed contract may have some fine print that allows thisÂ… better read the fine print…

Consider the following real world issues and see if Cirrus can help you guys with the answers.

1.Customers who got “refunds”. These are the ones that simply got their money back and canceled the contract. The question is. What did Cirrus do with this contract. Did they stick it in their pocket for a company demo plane or incentive for a future investor? Cirrus may very well of legally “purchased” the contract from the customer.

2.Customers sell their position. These are the ones that bought the plane as an investment and wanted to make a few bucks. Does the new contract owner retain the original contract date? I would think so.

3.Customers have converted from a 20 to 22. Is it possible for a new -22 contract to jump ahead of the guy that holds an earlier -20 contract?

In any event the “contact date” should go to the new owner any they simple maintain their place in line. If Cirrus is putting later -22 dated contracts in front of earlier dated -20 contracts then you should be very upset. Am I missing something? I believe clarification of these issues would help reduce the frustration level I sense on this board. The planes are great and I want Cirrus to keep moving forward as much as anyone else. Perhaps with Sun N Fun just around the corner some of you guys can sit down with Cirrus and get the answers you deserve.

3
  • Contract Numbers - One mans opinion…

The contract number is simply a “numeric identifier” of a legal document executed between the customer and supplier. Common sense tells me these “numeric identifiers” follow an orderly sequence, #1,#2,#3…#145. If this is not the case for some reason the contract still has a dated signature by both parties. Contract order therefore is no mystery. Cirrus needs to simply sort the contracts by “date” and fill the orders accordingly. A simple listing of contract dates with corresponding contract “numeric identifiers” would go a long way to clear the mystery of trying to relate contract numbers to actual production.
It should be safe to assume a contract dated 1/1/98 is ahead of contract dated 1/1/99, regardless of the “contract number”. In those cases where contracts were completed on the same day some type of “seniority order” must be established. Flip a coin or whatever but this must be done! For example Larry, Moe and Curly all executed contracts on 2/14/99. Given the low volume of production it makes a significant difference to Larry, Moe and Curly what their “senority order” is. This is a real issue but easily solved.

We have now established the fact there is no “direct relationship” between the contracts “numeric identifier” and actual “aircraft production commitment”. The contract date therefore must establish “order of production commitment”. In other words contract date 1/1/98 gets his plane ahead of contract date 1/1/99, regardless of plane type!! These aircraft are so similar that the inline production process can handle a mix of both 20Â’s and 22Â’s. If Cirrus is aligning their production schedule based on “margin contribution”, (i.e. SR-22 vs SR-20), without regard to the legally binding contract date then you may be upset however your signed contract may have some fine print that allows thisÂ… better read the fine print…

Consider the following real world issues and see if Cirrus can help you guys with the answers.

1.Customers who got “refunds”. These are the ones that simply got their money back and canceled the contract. The question is. What did Cirrus do with this contract. Did they stick it in their pocket for a company demo plane or incentive for a future investor? Cirrus may very well of legally “purchased” the contract from the customer.

2.Customers sell their position. These are the ones that bought the plane as an investment and wanted to make a few bucks. Does the new contract owner retain the original contract date? I would think so.

3.Customers have converted from a 20 to 22. Is it possible for a new -22 contract to jump ahead of the guy that holds an earlier -20 contract?

In any event the “contact date” should go to the new owner any they simple maintain their place in line. If Cirrus is putting later -22 dated contracts in front of earlier dated -20 contracts then you should be very upset. Am I missing something? I believe clarification of these issues would help reduce the frustration level I sense on this board. The planes are great and I want Cirrus to keep moving forward as much as anyone else. Perhaps with Sun N Fun just around the corner some of you guys can sit down with Cirrus and get the answers you deserve.

I think, as an early SR20 position holder, that Cirrus has a moral, but not legal obligation to keep the delivery in sync with the order flow. My observation is that they have done this, with the exception of the SR20/22 issue, in which I think they have grouped production by plane, which would be understandable.

Reply:

I know someone who ordered an SR20 two weeks before me, and later upgraded to a 22. I’m getting my 20 earlier, which would dispel the notion that they are moving the higher margin production forward. If anything, I think the opposite is true.

I have found with Cirrus that when all of the information is out on the table, they have done things right and fairly. Hope it continues!

4
  • Contract Numbers - One mans opinion…

FWIW. My original contract date on my SR20 was Sept '98. Just as I swapped into the SR22, I received an ‘actual’ delivery date of 12/26/00. My ‘Actual’ delivery date of the SR22 is 4/8/01, a 3 1/2 month additional delay.

I think that you can rest assured that anyone who converted to SR22’s, at least at numbers below 100, have not moved ahead of people remaining in the SR20 queue. If fact the opposite is true, they have had an additional wait.

As for future production, IMHO it is not necessarily reasonable or fair to expect Cirrus to manufacture planes solely in order of the contract date. Very few manufacturers do this. Other than the typical manufacturing issues, CD also has other things to be concerned about and the biggest is cash flow. The SR22 is clearly a more profitable deal for CD.

There really is nothing wrong with delivering SR22’s faster than '20’s provided that they are not giving ADDITIONAL delays to the SR20 contract holder to do that.

In the short run, however, it looks like those folks in the 100 - 200 SR20 contract numbers have had a big acceleration of their delivery dates (Yes, I know that they are still delayed from their original dates) by virtue of the folks who converted to SR22’s ‘stepping out of line’.

5

… Cirrus needs to simply sort the contracts by “date” and fill the orders accordingly. A simple listing of contract dates with corresponding contract “numeric identifiers” would go a long way to clear the mystery of trying to relate contract numbers to actual production.

There are two queues: the SR20 queue and the SR22 queue. Within each queue, they are ordered by contract number/signing date, but as you point out, you can’t calculate a delivery date from the number, because there are gaps in the numbers.

The people who converted from SR20 contracts to SR22 contracts before the deadline last year were placed in the SR22 queue, ordered by the SR20 contract number. People who signed a new SR22 contract, or converted an existing SR20 contract after that time were placed at the end of the SR22 queue as the signing/conversion occurred.

… These aircraft are so similar that the inline production process can handle a mix of both 20Â’s and 22Â’s. If Cirrus is aligning their production schedule based on “margin contribution”, (i.e. SR-22 vs SR-20), without regard to the legally binding contract date then you may be upset however your signed contract may have some fine print that allows thisÂ… better read the fine print…

According to a recent letter from Cirrus, they will produce only SR22’s from April to July. This is to achieve profitability, since the SR22’s have a higher margin. SR20 delivery dates are being slipped, and a new schedule was sent out with the letter.

Consider the following real world issues and see if Cirrus can help you guys with the answers.

2.Customers sell their position. These are the ones that bought the plane as an investment and wanted to make a few bucks. Does the new contract owner retain the original contract date? I would think so.

Absolutely. The contract date transfers along with the contract.

3.Customers have converted from a 20 to 22. Is it possible for a new -22 contract to jump ahead of the guy that holds an earlier -20 contract?

Yes, because they are now in different queues.

In any event the “contact date” should go to the new owner any they simple maintain their place in line. If Cirrus is putting later -22 dated contracts in front of earlier dated -20 contracts then you should be very upset. Am I missing something? I believe clarification of these issues would help reduce the frustration level I sense on this board. The planes are great and I want Cirrus to keep moving forward as much as anyone else.

The letter from Cirrus explains this very well. The decision they made is painful in the short-term for SR20 position holders, but better for the company, and therefore all position holders and owners, in the long term. It is a wise decision on their part.

-Mike

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3.Customers have converted from a 20 to 22. Is it possible for a new -22 contract to jump ahead of the guy that holds an earlier -20 contract?

I think it’s important to remember that the folks with early contracts who converted from -20s to -22s were actually pushed BACK in line. In other words, Cirrus “skipped” them while continuing to produce SR20s. Now that the 22s are in production, it should be expected that Cirrus would have to produce a large number of SR22s just to “catch up”.

Steve

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3.Customers have converted from a 20 to 22. Is it possible for a new -22 contract to jump ahead of the guy that holds an earlier -20 contract?

I think it’s important to remember that the folks with early contracts who converted from -20s to -22s were actually pushed BACK in line. In other words, Cirrus “skipped” them while continuing to produce SR20s. Now that the 22s are in production, it should be expected that Cirrus would have to produce a large number of SR22s just to “catch up”.

Unfortunately Alan K.'s letter says just the opposite. While it is true that a few early converters have had a slight delay in delivery for the privilege of owning one of the first SR22’s, the letter clearly says, We are going to build only SR22’s from mid April to July because we make more money on them.

What it doesn’t quite say but I suspect is that they will favor the production of Sr22’s over SR20’s after that time frame even if it means moving a later contract date ahead of an earlier one. My basis for that is that my Position number has been bumped back 6 months, and at #619 my delivery should be immune to “short-term” adjustments in order to catch up I suspect that the LAST SR22 CURRENTLY ordered will be delivered months ahead of the last SR20 on order at this time, as they continue to favor SR22 production to maintain profitability. I intend to try to get this clarified unequivically tomorrow.

While I agree it may be a good business decision, it is in direct contradiction to what we were told when we had the opportunity to convert i.e. once the SR22 was introduced into production the flow of 20’s and 22’s in production would essentially mimic the waiting list make-up.

Steve

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Give em he… Steve!!Let us know what you find out. Sun N Fun should be interesting. I suspect the Cd team will be wearing bullet proof vests… :slight_smile:

I intend to try to get this clarified unequivically tomorrow.

9

I respectfully disagree with your position. I hold position 271 and have patiently waited for over two years for my delivery date. I was supportive with delays, specs that weren’t quite as promised, hidden price increases as old equipment was “updated”, etc. I kept the faith until this last step.

Here I am waiting in line, and the manager sees a favorite customer way behind me. He goes and pulls this person to the front of the line and says “you don’t mind do you-I will make more money off of him”. The worst part is that as I wait in line, the cost of my product goes up. We all remember that our contracts have inflation riders in them-right.

This is a bait and switch tactic and is illegal. They are playing with out money interest free so they can make higher profits on their higher margin items. Once they sell out that list, they will reconsider the rest of us.

I am planning to make as big a rukus as I possbily can, starting at Sun-and-Fun and going from there. >Reply:

I know someone who ordered an SR20 two weeks before me, and later upgraded to a 22. I’m getting my 20 earlier, which would dispel the notion that they are moving the higher margin production forward. If anything, I think the opposite is true.

I have found with Cirrus that when all of the information is out on the table, they have done things right and fairly. Hope it continues!

10

Keeping in mind, by making 20 now the money will run out and the production will stop.

By stopping 20’s and making 22’s for a while will allow them to continue the 22’s and also make 20’s. Isn’t that great? Look on the bright side of things, they will get better at what they are doing and may be your 20 will be better quality then if they made it now. About prices going up, your price should be locked, if you get new equipment, you may luck out and it will weigh less. Do you see the light now? If Cirrus would not say anything and just do what they need to survive, we would complain. Now that they are telling us what they feel is better for everyone (keeping the Co. alive) we still complain. Go figure…

Have a great Cirrus day, today for the lucky ones that have one today and the rest of us will get our chance in the future…

Cheers,

Woor

I respectfully disagree with your position. I hold position 271 and have patiently waited for over two years for my delivery date. I was supportive with delays, specs that weren’t quite as promised, hidden price increases as old equipment was “updated”, etc. I kept the faith until this last step.

Here I am waiting in line, and the manager sees a favorite customer way behind me. He goes and pulls this person to the front of the line and says “you don’t mind do you-I will make more money off of him”. The worst part is that as I wait in line, the cost of my product goes up. We all remember that our contracts have inflation riders in them-right.

This is a bait and switch tactic and is illegal. They are playing with out money interest free so they can make higher profits on their higher margin items. Once they sell out that list, they will reconsider the rest of us.

I am planning to make as big a rukus as I possbily can, starting at Sun-and-Fun and going from there. >Reply:

I know someone who ordered an SR20 two weeks before me, and later upgraded to a 22. I’m getting my 20 earlier, which would dispel the notion that they are moving the higher margin production forward. If anything, I think the opposite is true.

I have found with Cirrus that when all of the information is out on the table, they have done things right and fairly. Hope it continues!

11

Here I am waiting in line, and the manager sees a favorite customer way behind me. He goes and pulls this person to the front of the line and says “you don’t mind do you-I will make more money off of him”. The worst part is that as I wait in line, the cost of my product goes up. We all remember that our contracts have inflation riders in them-right.

Um, no. The longer you wait, the more the cost of the product goes down. The inflation rider stops ticking once you reach the original delivery date, and then inflation works in your favor.

This is a bait and switch tactic and is illegal.

It may be many things, but it is not bait-and-switch, and it is not illegal. The only thing they contracted to is to deliver you the specified airplane at the contracted price (with inflation rider) by the delivery date specified. The contract provides you with a remedy if they do not deliver within 90 days of that date–you can take your deposit and go home. If you asked for your deposit back prior to the contract becoming invalid, they’d almost certainly give it back to you even though they are under no obligation to do so.

The contract says nothing about whether you get your plane before or after the guy that signed his contract after you did.

Delayed gratification is a bitch, but life is hard. This is a company that is trying to stay in business, not an appliance salesman trying to improve his commission. If you find this turn of events unpalatable, vote with your feet.
3-88604-PassengerEmergencyChecklistver8.doc (1.22 MB)

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-----------Andy; I am beginning to agree with you ----they are holding my entire $30,000 deposit now, and still not a word-- AND I AM A STOCKHOLDER AS WELL-------I havent even gotten the “letter” everyone is talking of. Maybe its time to start a list of ourselves, and find an attorney who will file a class action suit. Id rather keep the faith, but as a two way exchange. I respectfully disagree with your position. I hold position 271 and have patiently waited for over two years for my delivery date. I was supportive with delays, specs that weren’t quite as promised, hidden price increases as old equipment was “updated”, etc. I kept the faith until this last step.

Here I am waiting in line, and the manager sees a favorite customer way behind me. He goes and pulls this person to the front of the line and says “you don’t mind do you-I will make more money off of him”. The worst part is that as I wait in line, the cost of my product goes up. We all remember that our contracts have inflation riders in them-right.

This is a bait and switch tactic and is illegal. They are playing with out money interest free so they can make higher profits on their higher margin items. Once they sell out that list, they will reconsider the rest of us.

I am planning to make as big a rukus as I possbily can, starting at Sun-and-Fun and going from there. >Reply:

I know someone who ordered an SR20 two weeks before me, and later upgraded to a 22. I’m getting my 20 earlier, which would dispel the notion that they are moving the higher margin production forward. If anything, I think the opposite is true.

I have found with Cirrus that when all of the information is out on the table, they have done things right and fairly. Hope it continues!

13

Um, no. The longer you wait, the more the cost of the product goes down. The inflation rider stops ticking once you reach the original delivery date, and then inflation works in your favor.

Gee my contract doesn’t say anything about the inflation rider stoppint. I was at sun and fun and they said that it’s “their policy” but that only means that they can decide later.

Inflation doesn’t work in my favor unless my salary increases keep up with the inflation rate and unless I mis-read national statistics. most peoples don’t. Lastly, I am providing a compounded interest free loan to Cirrus so even if I walk with my feet, I am out lots of money.

I don;t know what the marginal profit is on the 22 over the 20, but in most manufacturing games, you are almost always better producing the product that you are familiar with (lower marginal cost) than introducing short product runs with higher profit (plot it out and see). This of course is related to the changes necessary in the product line.

As to voting with my feet, I am but not beofre asking a court to decide whether what they did was illegal or not.

I just returned from sun and fun, where I overheard many angry discussions (and some not angry) with the Cirrus staff. There seemed to be a general level of distrust with new inquiries. The questions I heard asked were in the vein of “are you solvent? I heard you laid off a lot of employees”.

This is a bait and switch tactic and is illegal.

It may be many things, but it is not bait-and-switch, and it is not illegal. The only thing they contracted to is to deliver you the specified airplane at the contracted price (with inflation rider) by the delivery date specified. The contract provides you with a remedy if they do not deliver within 90 days of that date–you can take your deposit and go home. If you asked for your deposit back prior to the contract becoming invalid, they’d almost certainly give it back to you even though they are under no obligation to do so.

The contract says nothing about whether you get your plane before or after the guy that signed his contract after you did.

Delayed gratification is a bitch, but life is hard. This is a company that is trying to stay in business, not an appliance salesman trying to improve his commission. If you find this turn of events unpalatable, vote with your feet.

14

As SR20 #199, my experience is consistent with what Marty says. I moved up to mid April, after the sr20/22 places were sorted out.

  • Contract Numbers - One mans opinion…

FWIW. My original contract date on my SR20 was Sept '98. Just as I swapped into the SR22, I received an ‘actual’ delivery date of 12/26/00. My ‘Actual’ delivery date of the SR22 is 4/8/01, a 3 1/2 month additional delay.

I think that you can rest assured that anyone who converted to SR22’s, at least at numbers below 100, have not moved ahead of people remaining in the SR20 queue. If fact the opposite is true, they have had an additional wait.

As for future production, IMHO it is not necessarily reasonable or fair to expect Cirrus to manufacture planes solely in order of the contract date. Very few manufacturers do this. Other than the typical manufacturing issues, CD also has other things to be concerned about and the biggest is cash flow. The SR22 is clearly a more profitable deal for CD.

There really is nothing wrong with delivering SR22’s faster than '20’s provided that they are not giving ADDITIONAL delays to the SR20 contract holder to do that.

In the short run, however, it looks like those folks in the 100 - 200 SR20 contract numbers have had a big acceleration of their delivery dates (Yes, I know that they are still delayed from their original dates) by virtue of the folks who converted to SR22’s ‘stepping out of line’.