March 30, 2011
By Dave Hirschman
Cirrus Aircraft Chairman Dale Klapmeier defended the company’s planned sale to a Chinese firm March 30 at the Sun ’n Fun Fly-In, saying it will be good for Cirrus employees and the U.S. aviation industry.
“China is building airports as fast as they can,” he said. “They want to see general aviation grow, and we as a company will be front-and-center in that.”
The proposed sale of Cirrus has been criticized by some as a threat us U.S. jobs, and a risk for transferring sensitive technology. But Klapmeier said the sale to China Aviation Industries General Aircraft will solidify Cirrus jobs at its manufacturing centers in Duluth, Minn., and Grand Forks, N.D., because the company will receive new investment and expand its product line.
It takes about 1,700 hours of labor to produce a Cirrus SR22, Klapmeier said, and that’s a relatively small part of the total cost of producing the airplanes. There would be no economic advantage in reducing the labor cost by shifting to Chinese labor because the company would face huge additional costs in replicating its specialized facilities, gaining FAA certification, and transporting finished aircraft.
“We’re not going to build in China and ship to the U.S.,” he said. “They’ll build in China when the market in China supports building airplanes there. But there has to be an organic market for finished aircraft there first. Right now it’s far more cost-effective to produce Cirrus aircraft in Duluth and Grand Forks.”
Klapmeier said he expects U.S. and Chinese regulatory approval for the deal late this year. When Cirrus receives new funding it will direct additional resources to its Vision jet program—long stalled by a lack of money.
“The Vision jet has been progressing at the speed we can afford,” he said, “and that’s not nearly fast enough.”
Klapmeier said it will take about three years from the close of the deal to FAA certification and initial jet sales, and that the Chinese buyers see the jet—and not the existing SR20 and SR22 product lines—as the company’s growth engine for the future.
“It’s the jet that brought them to us,” he said. “There’s no other jet like the Vision jet. It’s an extremely unique airplane.”
The five-seat, single-engine, V-tail aircraft is meant to fly at about 300 knots and appeal to a broad spectrum of owner/pilots.
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