![]() ![]() Although there was worry that AVIC would pack the company up and move it to China, that wasn’t a realistic possibility and may still not be. They had other priorities, so to speak, one of which was a line item in the five-year plan that called for investment in aviation. ![]() And evidently, the Chinese had minimal expectations on return or at least ones we’ve heard about. Foley thought it was overvalued at that price, but for a government atop a then $7 trillion economy, we’re talking coffee money. Once the hero of Wall Street, Welch is now credited with having destroyed a once-great company and saddled investors with the kind of quick-hit ethos that surely made Cirrus so unattractive.Įnter the Chinese, who paid a reported $210 million for Cirrus in 2011, although we don’t know how the deal was structured. Welcome to the world of western capitalism, or more specifically, Jack Welch-style capitalism, the famed GE CEO who pioneered the idea of shareholder value at the expense of long-term planning, product quality, customer service and worker satisfaction. There’s no doubt that the opportunity was there, a good chance that it could have returned on the investment within the decade-which it has, in fact, done-but it certainly wasn’t flipable for a quick profit. And among some investors, it’s a few quarters. In the U.S., it’s two to five years,” he told me. “What we learned in the end is that the western investor has a very different mindset than the Chinese. “It was an esteemed brand and something that pilots aspired to,” Foley says. Veteran aviation consultant Brian Foley saw both value and potential in Cirrus and knew his way well enough around the world of investment banking to try for a deal. A Bahrain-based equity company called Arcapita then owned 58 percent of Cirrus and was desperate to unload it. In the absolute, the company had value and sales potential, but also a significant amount of debt (about $80 million) and it was digging itself out of the 2008 downturn. If you doubt that, recall that when Cirrus was wandering in the wilderness looking for a buyer circa 2009, western investors weren’t beating a path to its door. That leaves the backwater of GA pistons which sort of float along on a sheen of low-volume sales but which few western industrialists consider a business worth being in, much less purchasing. The GA turboprop world is relatively vibrant and largely owned by a few players, none of whom are Chinese. Aviation consists of the have and the have mores, and the latter populate the bizjets and the Boeings, where the Chinese have no significant market presence. Or is it just the cumulative weight of Chinese general aviation ownership or the fact that Cirrus is owned by the Chinese government through the Aviation Industry Corporation of China that seems to position it for particularly vitriolic opprobrium? By comparison, Continental Aerospace Technologies, also owned by AVIC, Diamond Aircraft and Mooney are all owned by Chinese interests, but seem to generate only sidelong smears rather than the full measure of abuse Cirrus gets.Īnd, of course, the ire is largely misplaced. It’s hard to know if one specific thing unleashed the bile. What happened since the TRAC video, of course, is the spy balloon fiasco, saber rattling by the Chinese military in the Taiwan Straits, Chinese support for a war in Ukraine and just general bullying on the international stage. “Friends don’t let friends fly a Cirrus,” thundered one commenter. The rest are bitter variations on the theme of Chinese mal intent. Of 194 comments, barely a dozen have to do with the airplane’s technical merits, market potential or the fact that it’s, you know, a new airplane design. The TRAC video elicited hardly a peep about China as a bad actor. The three years I’m referring to are what passed between the time I did this video on the Cirrus TRAC trainer in late 2019 and this more recent one on the newly revealed SR10 trainer. I can promise you that other people are thinking about that. I wonder if owners enjoying the expansive view from the front of an SF50 ever stop to think that it was Chinese government money that got them there. To say it has shifted to Cirrus being a dark force is to do violence to the word understatement, even as Cirrus booms along selling ever more piston aircraft and its single-engine jet. AVweb’s audience is generally well-informed and sophisticated, thus the comments and letters we get are a fair representation of industry zeitgeist. My source for this conclusion is there for all to see. ![]()
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