After a Year of Ownership, Last September’s Buyers Appear To Tap Out
An interesting rumor has made its way through the inboxes of aviation enthusiasts this week.
A business for sale, labeled “Legendary Aircraft Manufacturer”, with an asking price of $15 million, accompanied by a short video of the Mooney factory. The unusual listing includes the owners’ 2020 overview and strategy document, now nearly a year out of date. The price may seem somewhat small in an industry that regularly headlines hundreds of millions of dollars in transactions, but some fans of the troubled marque worry that there isn’t much meat left on the bones. In the investor document, presented now as a “for sale” brochure, presents a somewhat optimistic, naíve outlook on the then-upcoming 2021.
Interviews with the new president last year sounded pragmatic and realistic. CEO Jonny Pollack was clear in his interview with us that “we have to walk before we fly”. Focusing on parts and customer support for the Mooney fleet was job one, followed by completion of outstanding updates to avionics, bodywork, and performance for their aircraft. The parts business is seldom profitable enough to maintain a full manufacturer, and it seems to be truer than ever here. Expecting Q4 2020 parts sales under $400,000, it seems they may now be willing to throw in the towel for the right price. Their estimate for Mooney’s total market value was $20 million, making some wonder why they would offer it with a $5 million discount unless there is some information unknown to buyers.
The document includes cogent analysis on the roots of Mooney’s underperformance, acknowledging the lack of innovation, over reliance on metals and lack of composites across their portfolio. A lasting thorn in the side is the high employee attrition and turnover, with frequent ownership changes that left workflows ever-changing, hampering their already labor-intensive production methods. Increasing components to the original designs brought complexity and cost, with more time spent making them in-house. Worst of all, their products had stagnated, turning what was once a competitive market leader into an anachronism. Customer requests like gross weight increases, and cabin comfort improvements failed to materialize even while competition like Cirrus (Note: good airplanes but a thoroughly untrustworthy company in our experience) and Piper gained market share. Finally, their marketing is said to be focused on an echo chamber of enthusiasts, a dedicated core of Mooney fans that know the brand well,
but little expansion beyond them to those who cross-shop an SR22 or Diamond DA-50.
While the sale hasn’t been officially announced, (and, until confirmed, could be anything from a random investor testing the waters, to garden-variety internet shenanigans) there is enough to pick through to see exactly what chances a prospective buyer has of keeping the operation afloat. The 2013 investors from the Meijing Group are silent, their involvement unknown but assumed. In the listing, the 2020 sale is described as, “U.S. Financial acquires a majority stake in Mooney”, leaving it possible that even the deep pockets from back east have gotten sick of a money pit. The company holds some value, still, in its IP, machinery, tooling, and parts catalog. The building it has occupied for almost 50 years is leased from the city, but improvements made could make for a fine base for projects looking to jumpstart production using Mooney’s certification.
The company has been resilient, however, soldiering onward for decades, coming back from the brink, time after time.
ANN's Daily Aero-Linx (05.04.24)
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