Editorial

A popular end-of-year project for newspapers and magazines is publishing their picks of the biggest stories of the past 12 months, five years, or decade. Now is not exactly the end of the year, but let's play that game for a moment. What have been the blockbuster stories in general aviation over the past, say, 10 years? Certainly, the decline in sales of new aircraft — a 94-percent drop since 1978 belongs on the list. On the positive side, a steady and significant decline in the general aviation accident rate is big news. Add to that the unplanned, unanticipated, and, thanks to the advent of microprocessor-based receivers, the enthusiastic embracing of loran navigation by general aviation.

At least one other story must be included on the ballot, one that epitomizes much of what has gone wrong in general aviation: the fall of Piper Aircraft Corporation.

When William T. Piper, Sr., moved his newly acquired and renamed Piper Aircraft Corporation from its burned-out shop in Bradford, Pennsylvania, into a former silk mill on the south bank of the West Branch of the Susquehanna River in Lock Haven in 1937, he launched a company that, over the next half- century, would become one of the world's dominant producers of light general aviation airplanes. Piper's very first model, the J-3, still is a generic symbol of the fun, spirit, and challenge of light aviation. Some 129,800 Pipers (including nearly 8,000 military aircraft) have been built over the 54- year history of the company. Most still are flying. The company is not.

Piper is in bankruptcy. It is still functioning, building parts and finishing 66 airplanes that had been in some stage of completion when virtually all production ceased in 1991. But if Piper is to survive in some fashion, it or many of its assets must be sold. And that is not easily done, as events of the past year have demonstrated.

How did this come to be? How did one of general aviation's Big Three end up the odd one out? And if an old-line company like Piper, with a familiar, respected, and varied product line, can't make it today, can any general aviation manufacturer hope to?

The answers to the first questions are explored in "What Went Wrong at Piper?" beginning on p. 67 in this issue. Like all general aviation manufacturers, Piper was crippled by the precipitous drop in sales of new aircraft, which began immediately after a record 17,000 plus aircraft were delivered in 1978. Changes in the ownership of Piper brought changes in business philosophy. The emphasis shifted from production of a variety of light singles to fewer and more expensive business aircraft. The company shrunk. For a time, it seemed Piper's various non-aviation parent companies had absolutely no in- terest in building new airplanes.

Product liability became a debilitating influence in the 1980s, both in terms of the legal fees, judgments, and out-of-court settlements Piper paid and in the potential liability exposure represented by the tens of thousands of older Piper aircraft still being flown.

All of that seemed to change in 1987 when the company was bought by M. Stuart Millar. Suddenly, Piper returned to the things that made it grow and succeed in its infancy: the strength of personality and the vision of one man who espoused a primary emphasis on "personal" aviation, actively encouraged flight training, and pledged a commitment to customer and product support.

It worked for a time. Then, if you believe Piper, product liability won out. Despite aggressively defending itself against what it perceived as unwarranted lawsuits, Piper succumbed to the liability monster. The company never was able to line up significant financial backing because of its vulnerability to huge product liability expenses, so it withered on the vine.

As "What Went Wrong at Piper?" makes clear, however, product liability was not the company's only problem. Questionable decisions about loss-leader pricing of the Cadet and Super Cub, overzealous production schedules, expensive experimental projects, and some bizarre management practices, among other problems, exacerbated Piper's very real product liability woes.

It's easy to Monday-morning quarterback the decisions made by a company attempting to feel its way out of one of the darkest periods in its history. That is not our intention. We want Piper to succeed, to bounce back from its current troubles and begin volume production again, preferably in the country where it was founded, grew, and prospered. Our concern is that the total blame for Piper's current state is being laid at the feet of product liability. If that is true, then it was inevitable even before Millar arrived in Vero Beach that Piper would end up in bankruptcy court.

We don't believe that to be the case. Piper had the emotional and the economic support — in the form of a large order backlog — of the general aviation community. If, regardless of that support, Piper was doomed, then the only conclusion one can come to is that it is impossible for any general aviation manufacturer to make a go of it today.

We don't believe that to be the case, either. Piper itself says its product liability problem has more to do with perception than reality — the perception among potential financial backers that the company is a poor risk because of its liability exposure. Maybe so, but that hasn't been proven beyond a doubt. It's just possible that had Piper not taken several wrong forks in the road over the past four years, it might be living up to its "We are Flying" slogan. That, too, would be one of the biggest, and maybe the best, general aviation stories of the decade.