Big Factory on the Prairie

Pass through Independence, Kansas, and you would be hard-pressed to differentiate it from hundreds of other small Midwestern towns. The streets — lined with neat, modest homes — are aligned perfectly north/south and east/west. There's a Royal Typewriter store in the business district, bars that sell Budweiser, a couple of antiques stores, and a bank on the corner. The John Deere dealership is bigger than the K-Mart. This is ag country, after all. A sign near downtown directs you south on Highway 75 to "The Little House on the Prairie."

Barrel down that two-lane highway, straight as a plumb line, at the posted 65 mph and you would easily drive right by the biggest thing — quite literally — that has happened to general aviation in a couple of decades.

Instead, hang a left into the industrial park just south of town. Turn right onto Russ Meyer Boulevard, a narrow, two-lane road. If it weren't for a few scrubby trees, you would think you could see orever. Soon, a huge white-and-gray building seems to heave itself up out of the prairie. Turn right onto Cessna Boulevard and then left into the divided driveway past the imposing brick sign welcoming you to "Cessna Aircraft, a Textron Company." Round the bend into the parking lot and prepare yourself for one of the most surreal sights you can imagine — a 10-acre ramp stuffed wing tip to wing tip with brand-new 172s and 182s. For anyone who has followed the decline of this industry for the last two decades, the scene looks more like a set from an X-Files episode than real life.

Without knowing the history, it's difficult to appreciate the significance of all those airplanes glistening in the sun, lined up as straight as the houses downtown. It's also difficult to believe that just three years ago this month, this place now completely dominated by all the airplanes and three enormous new buildings — the factory, the paint shop, and delivery center — was nothing but prairie next to Independence's run-of-the-mill municipal airport. Just building such a complex in that period of time would be an accomplishment. Filling it with skilled laborers and equipment, and sending more than 500 airplanes out the door seems almost impossible — and yet it happened.

In 1994, Cessna Chairman Russ Meyer vowed before Congress that he would resume production of single-engine, piston-powered airplanes if product liability reform legislation was passed. The last time Cessna had built a piston-powered airplane was 1986. Production stopped in part because Cessna and other airframe manufacturers faced skyrocketing product liability insurance premiums.

After a decade of lobbying by the industry and AOPA, President Clinton signed the General Aviation Revitalization Act in August 1994. It limited airframe manufacturers' liability to 18 years. Cessna almost immediately started scouting out small Kansas towns that had an airport and other resources capable of supporting a new factory. Cessna's mammoth Wichita facilities were maxed out, the company said. It wanted a clean start for the new single-engine production line.

In December 1994, Cessna announced that Independence, about 100 miles southeast of Wichita, would be the site of the new factory. Amid much fanfare the groundbreaking occurred in May 1995. Meyer promised the crowd that the factory would open on Independence Day 1996. Amazingly, the complex was dedicated on July 3, 1996 — one day ahead of schedule. Manufacturing started shortly thereafter, and the first 172R was delivered on February 1, 1997, to AOPA member Sharon Hauser, who won the landmark airplane in the association's 1995 annual membership sweepstakes.

All the while, many pilots and industry watchers were suspicious of Cessna's intentions. Were they serious about building airplanes, or was this all just some charade? Why, with the lion's share of the lucrative business-jet market cornered, would Cessna bother investing in the single-engine line?

Mary S. Bryant, manager of the Cessna Pilot Centers program, answers the questions most succinctly: "We are a strategic marketing organization," she says pragmatically. "We don't make much money on flight training. We see it as a goal to increase pilot starts and retention. It's a very long-term project." Tomorrow's new business jet buyers have to come from somewhere, and Cessna sees them coming from the ranks of today's student pilots. No new trainers and no quality flight schools means no new buyers down the road.

The path to success in Independence has not been nearly as smooth or straight as the highway that leads to the new factory. When the single-engine production plans were being developed, Meyer made bold claims that the company would produce 1,000 airplanes in 1997 and would be at an annual rate of 2,000 by the end of 1998. These statements came at a time when the entire industry was building only a few hundred piston-powered airplanes. Cessna missed the 1997 goal by more than 50 percent when it produced only 360 airplanes, 287 Skyhawks and 73 Skylanes. The new target for 1998 is about 800 airplanes, according to Pat Boyarski, general manager of single-engine piston aircraft. The problem is not the market. Cessna has months-long backlogs for both models, and you'll wait until nearly 2000 to get a 206 or Turbo 206. Instead, the company has simply not been able to ramp up production fast enough to meet the lofty goals. When it did attempt to increase production quickly, quality suffered — leading to a string of service bulletins, airworthiness directives, and service difficulty reports.

An AD issued last summer on the172R required an increase in clearances where the gascolator standpipe and tailpipe pass through the cowling. The AD came about after vibration apparently caused the gascolator standpipe to break off from a Skyhawk that was being ferried to Europe. The pilot noticed the fuel leak while over the Atlantic. He turned around. But the engine quit from fuel exhaustion as he neared land, causing him to (safely) dead-stick the airplane onto a runway at St. John's, Newfoundland. The 172 also was hit with an AD that required pulling the floor off some delivered aircraft to inspect for placement of rivets at the door-post attachment. Some airplanes had left the factory without the rivets. ADs on both models required replacement of vendor-supplied mufflers found to be defective. Another AD affected the alternate static air valve.

John S. Daniel, director of assembly, points out that almost all of the problems were discovered at the factory and that by the time the SBs and then ADs were issued, fixes were in place on the production line, and often aircraft in the field were already repaired.

One of the biggest challenges, says Boyarski, has been bringing the skills of the new employees up to a level where they can not only build the airplanes, but also recognize potential quality control problems early in the process. He believes that the staff as a whole is now to that point.

Cessna built the plant in Independence knowing that the employees in the region would have no sheet-metal or manufacturing experience. "Traditionally you look to hire people with the skills you need," says Jerry L. Hiatt, director of human resources for single-engine. "We knew we didn't have that here, so we looked for people with the right attitudes and behavioral skills that we knew we could train to learn the hard skills." The company has received more than 9,000 applications and to date has hired about 950 workers in Independence. In addition, Cessna in Wichita has added about 500 workers to fabricate the components needed to assemble the airplanes in Independence.

The entire assembly process is based on the team concept. Employees work in teams of eight to 12, with each person developing an expertise in at least one area, according to Hiatt. For example, one employee working in the "back shop," the first stages of the assembly line, might be trained in materials. He or she knows how to inventory and inspect materials fed into the area from other parts of the plant. Another member of that team is trained in cost control. Another becomes expert in quality control. Still another is trained on safety issues. In the end, they may all be building up fire walls and tail cones, but their expertise goes beyond that one task. They watch over the entire team to ensure that it functions efficiently in their respective areas of knowledge.

Given the chance to start over again, Boyarski says, he would hire employees more slowly and give them more training. To infuse a new level of knowledge into the young work force, Cessna tapped employees who formerly worked on the single-engine airplanes back in the 1980s or who had retired since then. They were asked to come to Independence to aid the new staff. As many as 50 of the more experienced workers at a time were in the plant throughout the last quarter of 1997. Some came a day or two a week; others were there every day on a temporary basis. Daniel said that he was pleased that the newer workers did not feel threatened by the experienced temporary employees. Instead, they accepted the help and learned a great deal. Some of the retirees are still helping in certain disciplines.

Before being permitted to work on the assembly line, each new employee goes through several weeks of training at great expense to the company. And, much to the frustration of Cessna executives, other airframe manufacturers have attempted to steal these newly trained workers. Boeing, which operates a large manufacturing plant in Wichita, ran full-page advertisements in the Independence newspaper last fall inviting people to interviews at an Independence hotel. Boeing was offering big salaries and transportation to and from Wichita to those willing to work there. Cessna's Hiatt reports that only a few employees opted for the commute and several who did are now interested in returning to Cessna.

While the hiring and training process has not gone as smoothly as hoped, the supply of components to the factory floor has been a raging success, says H.D. Cartwright, director of single-engine materials. Before the factory was even completed, Cartwright tapped a local Independence aircraft engine shop to run Cessna's parts supply operation for outside vendors. Now dubbed Supplier City, a hangar near the factory acts as a depot for some 110 different part numbers worth more than $2 million. The vendors contract with the owners of Supplier City to maintain a supply of components at the ready. Cessna employees then come by each morning to pick up a day's worth of widgets. Only then is Cessna billed for components by the vendor. If it weren't for Supplier City, Cessna would need to maintain that $2 million worth of inventory on its own books, instead of incurring the expense at the last minute as the airplane is being built.

Similarly, AlliedSignal, which supplies the Bendix/King avionics for all of the single-engine airplanes, maintains its own certificated avionics shops right in the factory with its own employees and inventory. The AlliedSignal employees build up the avionics stacks and deliver them to the production line as each aircraft is ready for them. Cessna is not billed for the equipment until the aircraft's airworthiness certificate is issued.

Each airplane contains thousands of small hardware parts — rivets, screws, nuts, and various other components. Normally, Cessna would dedicate several employees just to stocking and inventorying those items. Instead, at the Independence factory, the hardware supply is maintained by a separate company that contracts with Cessna. Cartwright estimates that Cessna will save $1 million in employee and inventory costs over the three-year contract with the supplier.

So you build the airplanes as efficiently as you can, but how do you sell them? Cessna believes that it has learned a thing or two about that, too, since the last time it was selling piston airplanes. Fifteen or 20 years ago, Cessna dealers were required to inventory a number of airplanes — inventory often foisted on them by a glut of airplanes at the factory. That forced dealers to slash prices to move inventory, which disrupted sales territories as customers shopped for price, which caused even more discounting; in the end, no one made any money, the dealer and service network eroded, and customers did not receive a high level of support.

To keep the entire process healthy, the company now requires that its Cessna Sales Team Authorized Representatives (CSTARs — the C is silent) inventory only one demonstrator aircraft, or at least have one on order, according to John Doman, director of sales. In addition, Cessna employs a team of regional sales managers, whose job it is to make the CSTARs successful. The regional managers, each of whom flies a new demonstrator, work closely with the local shops to ensure that the customer gets the level of attention that Cessna feels is appropriate. As of early April, Cessna had 139 CSTARs worldwide — 93 in the United States and Canada and 46 elsewhere. There are still some open territories, but the total number of CSTARs will be limited so that each has a big enough territory to be profitable. "Our goal is to ensure that each CSTAR has a profitable territory [and] sells a competitively priced airplane, and that each is sold at a retail price," says Doman.

Cessna stopped advertising its piston-powered airplanes at the end of 1997. Asked if that was a financial decision or a marketing one, Boyarski replied, "We don't have a bottomless pit of money." He emphasized that the products will be advertised later in 1998, but the advertising will be directed toward the company's learn-to-fly efforts. In addition, Cessna will be doing a lot of direct-mail marketing to prospects that it has identified through its earlier promotion efforts. The details of the learn-to-fly campaign have not been finalized, but they will undoubtedly focus on the Cessna's new computer-based instruction (CBI) product. The CBI system will be the keystone of the revived Cessna Pilot Centers, according to CPC Program Manager Bryant. Developed in partnership with King Schools, the CBI is a highly interactive ground school and flight instruction program that, when it ships in early July, will probably take up some 20 CD-ROMs. Chock-a-block with video clips and clever testing methods, the program will lead the student from the first preflight all the way to the private-pilot checkride. Each lesson features the theoretical information required in a ground school and a "lab," which is a video that shows how the theory applies in the airplane. After each lesson the student completes a test on the computer. If a question is missed, the computer patiently offers an explanation and then retests the student until the material is understood.

Each CPC will have the program for students to use at the school. In addition, students who have a multimedia computer can elect to purchase the program (along with a plotter, E6B computer, and other materials) for about $200. Students who use the system at home can copy a couple of files to a floppy disk and take it to the CPC to update their progress on the machine there.

Besides the computer, each CPC is required to have access to a 172 that is less than two years old. The aircraft can either be leased from an individual or purchased from Cessna. To accommodate the purchase, Cessna has created an innovative financing program that gears payments to flight activity. A CPC can purchase an airplane with zero down on a 15-year term at three-quarters of a point over the prime rate. To ease the payments for CPCs during slow winter months, the payback is made through a $10-per-hour utilization charge. In slow months the payments are lower; during busy months they are higher. An airplane that flies 100 hours per month can be paid off in less than six years, according to Cessna.

As of early April, Cessna officially still had 328 CPCs on its roster. Many of those are left over from the early 1980s. By the time you read this, the company will have sent the CPCs a contract renewal letter that outlines the new requirements. Bryant anticipates that some companies may elect not to continue their relationship with Cessna. At that point, Cessna will begin to recruit new operators. It will be a slow process, but eventually as many as 500 operators may join the CPC network, she estimates.

As with the CSTAR program, Cessna employs regional CPC managers who will fly new airplanes to operators in their territories. Their task is to make the CPCs successful by helping the owners to offer the level of customer service and support that Cessna insists on.

To help it achieve its goal of increasing the number of student pilots, Cessna is employing a number of creative promotional efforts, explains Alan Goodnight, director of marketing. Among them is a partnership with Microsoft. Through the partnership, Cessna supplies aircraft flight data and materials to Microsoft for use in its Flight Simulator software. In exchange, Cessna gets exposure in Flight Simulator promotions, including the right to put Discovery Flight certificates in every Flight Sim box. To date, more than 2,500 Flight Sim buyers have redeemed the certificates for a flight at a CPC.

In addition, like AOPA and other industry leaders, Cessna is a major contributor to GA Team 2000, the effort to promote general aviation to the public. Some 14,000 individuals have responded to GA Team 2000 promotional efforts, and each of those names has been passed by Cessna to one of its dealers or CPCs.

Although Cessna certainly has its plate full building the CPC and CSTAR networks and ramping up production, it has not stopped listening to customers. Many high-altitude flight schools and speed-hungry individuals have expressed an interest in a 180-horsepower 172. Cessna responded in March with the 172S, which features the same Lycoming IO-360 as the 160-hp 172R. However, instead of turning at 2,400 rpm, the new version turns at 2,700 rpm. Goodnight estimates about one-third of Skyhawk sales will go to the 172S.

Many customers have also been asking for the option of leather interiors. Cessna now offers leather as standard in the Skylane and 172S; it is an option in the 172R and the 206 models.

Currently, a Skyhawk soldiers off the production line every four work hours, a rate that will be maintained throughout 1998. A new Skylane rolls out about every 6.5 hours; that rate will increase to one every four hours by the third quarter of the year. Boyarski notes that when manufacturing started, it took Cessna 84 days to build a 172 from start to finish. Now it takes 84 hours.

Meanwhile, 206 and Turbo 206 rates lag at about one per week. Even then, the airplanes are coming off the line with no engines in them. Earlier this year Cessna made the difficult decision to switch engines from the promised 300-hp Lycoming IO-580 to the tried-and-true Lycoming IO-540. The decision came after months of testing and certification work. However, Cessna and Lycoming determined that the reliability of the new IO-580 was not up to their standards. As a result of the change, certification of the 206 and Turbo 206 has been pushed back until late this year.

Is a ramp full of nearly 100 completed 172s and 182s a good thing? Cessna says yes, because many of them have already been paid for and are awaiting pickup by their new owners. Others are in some stage of flight test. One of the three full-time test pilots flies each aircraft for about 1.5 hours, putting it through a complete stall and spin series. After that, any minor adjustments or fixes noted by the pilots are made. Then, the aircraft goes through another short test flight before it is delivered to the customer.

Despite the announcements of major fleet sales to the likes of the Civil Air Patrol, as well as Embry-Riddle Aeronautical University and other large schools, Cessna says that some 90 percent of its deliveries are to individuals anxious to fly away in their new airplanes. A few of them stop by during the production process to watch their airplanes coming down the line.

Success can be measured in a lot of ways. Dean Hayse, a young industrial engineer who helps ensure an efficient assembly process on the factory floor, says that he sees success every time a customer climbs away from Independence in his or her new airplane. While the rest of the industry looks on and judges success on meeting production promises and sales goals, Hayse and the other new employees at the big factory on the prairie see success every day as shiny new airplanes take to the sky for the very first time.

E-mail the author at [email protected].