Cirrus owners react to Klapmeier bid

June 30, 2009

The Cirrus Owners and Pilots Association held its annual Migration June 25 through 28 in Duluth, Minn., and the 389 owners and their families attending the event spent much of the time discussing Alan Klapmeier’s bid to control Cirrus’ SF50 Vision Jet project. (Klapmeier is Cirrus’ co- founder and chairman of its board of directors.)

Many didn’t want their names in print, but a common perception is that Cirrus Design’s majority investor, Arcapita, wants a return on its money and is thinking of selling the Vision project to Klapmeier to get that return.

The owners seem to characterize Klapmeier as innovative, engaging, and personable, but see Brent Wouters, Cirrus’ CEO, as the financial analyst that he is. “Without Brent Wouters, the company would have gone down by now,” said one attendee.

“Klapmeier’s is a good idea,” said Harlow Aerostructures’ Phillip C. Friedman. “I was a fund manager for years and it’s always simpler to give money to an R-and-D effort because you know where the money’s going. If you invest in a manufacturing company, the investment can go anywhere within the company.

“There’s a big, big market for an airplane like the Vision. I’d say there are 1,800 hedge fund managers out there ready to buy this sort of airplane. You know, type As who want and need to fly their own jet.” Cirrus says it holds 352 $100,000 deposits. About eight percent of depositors have asked for their money back. “And we’re returning it,” said Wouters. “Although not as fast as some of them would like.” Wouters said Cirrus has 120 employees working on the Vision.

Even so, Klapmeier is concerned that the project isn’t moving ahead as fast as it should. “There’s a window of opportunity,” he said at a Migration session. “And the sooner we get on track, the better.”

At the COPA event, it was clear that Klapmeier was the sentimental favorite to carry the project forward. “Alan’s got the personality for fundraising,” said Friedman, summing up the general opinion. “There’s a saying they use in the investment world: Always bet on the jockey.”