Is Cessna going low-wing? Company makes pitch for Columbia

[Snickersnwa]

From AOPA's website:

http://www.aopa.org/aircraft/articles/2007/070925columbia.html

Is Cessna going low-wing?
Company makes pitch for Columbia

By Nathan A. Ferguson


Cessna Aircraft wants to expand its reach in the small airplane segment of the general aviation industry by acquiring Columbia Aircraft. Although such a move had been rumored for days, it wasn’t confirmed until Cessna and Columbia both sent out brief news releases on Sept. 24, revealing that Columbia has filed for Chapter 11 bankruptcy. Cessna, meanwhile, has signed a letter of intent with Columbia to “acquire selected assets and certain liabilities.”

For Cessna, the acquisition would fill a gap in its product line, which lacks single-engine airplanes in the 200-knot range. But the composite Columbia models represent a vast departure for Cessna, having built its reputation on high-wing metal airplanes. For Columbia, such a move would obviously save the company and provide reassurance to customers by stabilizing a two-model operation.

It’s not clear how Cessna would run both operations since its manufacturing is already located in Independence, Kan., while Columbia is in Bend, Ore. Cessna chief Jack Pelton hinted toward the future by mentioning its next generation of aircraft. The company has been showing off a slicked-up, high-wing airplane aimed at the fast cross-country market at various trade shows. He said in a statement that the Columbia acquisition “could provide our customers with the option of an outstanding low-wing, high-performance piston airplane. We believe the combination of this superb product line and Cessna’s world-class support structure and brand will be unbeatable.”

The Columbia 400 and 350 models would put Cessna in direct competition with high-end Piper, Mooney, Cirrus, and Diamond models. Columbia has filed a motion with the bankruptcy court, seeking approval of the sale to Cessna while establishing bidding procedures so that others can submit offers at an auction tentatively scheduled for November. Cessna’s agreement is obviously intended to send a signal to other potential bidders that it means business.

Under the agreement, all Columbia product warranty and service issues would be honored after the acquisition. Columbia officials said they had to file for bankruptcy to continue operating. The company has received $3 million in additional financing to keep it afloat during the court proceedings. Columbia expects to produce about three airplanes per week in the interim.
September 25, 2007

 

[aloft]

Re: Is Cessna going low-wing? Company makes pitch for Colum

Columbia's profit margins are pretty phat--a new turbocharged 400 costs somewhere north of $600k--and I'm guessing Cessna knows how to fix whatever their business problems are.

I'd love to see an all-composite low-wing Cessna, maybe this might be the beginning of a cross-pollination.....

 

[wheelsup]

Re: Is Cessna going low-wing? Company makes pitch for Colum

Looks like a way to compete directly with Cirrus as well.

 

[OnTheFly7]

Re: Is Cessna going low-wing? Company makes pitch for Colum

Pretty smart business move if you ask me. Maybe the possible aquisition of Colombia would bring in enough profit to allow Cessna to explore the "Large Cabin Class" business jet (even more so than they already are).

A low wing Cessna would be a sight. Although I like the high wing for GA aircraft.l

 

[skidz]

Re: Is Cessna going low-wing? Company makes pitch for Colum

Maybe they will re-design it and put the wings on top?

 

[skidz]

Re: Is Cessna going low-wing? Company makes pitch for Colum

Columbia's profit margins are pretty phat--

Why would they file for bankruptsy with phat margins like that?

 

[OnTheFly7]

Re: Is Cessna going low-wing? Company makes pitch for Colum

Why would they file for bankruptsy with phat margins like that?

The may not be selling enough to cover thier fixed cost and capital expenditures. They are a sweet bird, but I think Cirrus is putting the smack down on them!

Also, it seems (at least to me) that people are getting into larger a/c such as the Meridian, Mirage and TBM's!

 

[killbilly]

Re: Is Cessna going low-wing? Company makes pitch for Colum

The may not be selling enough to cover thier fixed cost and capital expenditures. They are a sweet bird, but I think Cirrus is putting the smack down on them!

Also, it seems (at least to me) that people are getting into larger a/c such as the Meridian, Mirage and TBM's!

Composites cost a LOT more to manufacture than metal does. Bend, OR is probably a more expensive place to manufacture, and I'm guessing that Columbia doesn't have Cessna's financial resources. Even the low-end Columbias cost around $400-500K - which is a lot of dosh. I'm guessing that Cessna could keep the price point the same and lower the cost of goods on the thing enough to make it profitable - something that Columbia couldn't do.

Here's something else - I have only ever seen ONE used Columbia for sale. Are they not very popular or do people buy them and keep them?

 

[deadstick]

Re: Is Cessna going low-wing? Company makes pitch for Colum

Cessna sales was getting killed by the plastic planes. They tried, but I don't think they could get the performance numbers they needed from the NGP, AND they needed a place to build the new plane. IDP was getting crowded with the Mustang line. I imagine they will keep the Columbia factory for the time being.

 

[killbilly]

Re: Is Cessna going low-wing? Company makes pitch for Colum

Cessna sales was getting killed by the plastic planes. They tried, but I don't think they could get the performance numbers they needed from the NGP, AND they needed a place to build the new plane. IDP was getting crowded with the Mustang line. I imagine they will keep the Columbia factory for the time being.

They oughta come to Texas. We've got land, airports, low tax base, lots of skilled aviation people here. (Raytheon, Bell Helicopter and others.) We almost got Boeing. Stupid Chicago.

 

[surreal1221]

Re: Is Cessna going low-wing? Company makes pitch for Colum

I think Cirrus has some other competition in the SE, low wing, category. . .

The DA50 looked like a beast at NBAA. Four blade prop, massive interrior space compared to the SR22.

 

[killbilly]

Re: Is Cessna going low-wing? Company makes pitch for Colum

I think Cirrus has some other competition in the SE, low wing, category. . .

The DA50 looked like a beast at NBAA. Four blade prop, massive interrior space compared to the SR22.

Similar price, too.

This is the point - if Cessna can make the Columbia for less money than Columbia was, they can afford to sell fewer of them and still be profitable. Cessna used to be "the GA company that also made a jet" and is quickly becoming the "jet company that also makes GA airplanes."

They know what they're doing. If they make the Columbia competitive and can be profitable doing it, I think you'll see a lot more of them sold.

 

[tommychuck]

Re: Is Cessna going low-wing? Company makes pitch for Colum

Must be the AOPA cover curse.

In that article they talked about how Columbia had to lay off all their employees for a few weeks while Garmin fixed something on their panel. I thought that was a little sketchy.