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Fri, Oct 07, 2011

No Good Deed Ever Goes Unpunished: Taking On The Cirrus Fiasco, Part 1

You Have Enemies? Good. That Means You've Stood Up For Something, Sometime In Your Life -- Winston Churchill

News/Analysis/Observations by ANN CEO/Editor-In-Chief, Jim Campbell

In a recent "Barnstorming" editorial, I decried the difficulties we have incurred in trying to obey what is possibly one of the most basic precepts of proper journalism… To tell the truth. And as previously noted, telling the truth tends to be a delight to those who want to hear it -- and anathema to those that don't.

Among those that have proven to have great difficulties with the truth we've been trying to tell is the Chinese owned company currently known as Cirrus Aircraft.

We have a complex story to tell, and at some point we may have the time and wherewithal to get into ALL the details, but I think because of actions we’re being forced to take and the effect of the threats, harassment and intimidation have had, that we need to explain ourselves a little bit now in order to avoid the inevitable rumor mill, misinterpretations and historical revisionism that is sure to be attempted as Cirrus attempts to deal with its recent past, with ‘new’ leadership.

It’s been a tough few months here at ANN as we had to deal with the extensive threats, interference and harassment we received for having the gall to attempt to tell what we knew about a company that was once one of the bright shining stars in the aviation universe… only to see it all pretty much trashed under leadership that differed greatly with what the company’s primary creator envisioned for it.

In late 2008, after a long, honest, constructive and positive history with what was then known as "Cirrus Design," the Aero-News Network entered into a long-term marketing agreement with CEO Alan Klapmeier. The agreement allowed Cirrus the advantage of freezing the pricing of an aggressive marketing program for a significant number of years, as well as anchor itself to a prominent position in ANN’s sponsorship hierarchy – and best of all, this agreement allowed us both the advantage of knowing that we had a long-term partnership. The deal also allowed us to put together a program whereby we acquired and purchased a Cirrus SR22 G3 Turbo. The contract that Alan and I reached was pretty clear, and we both were very happy to have reached an agreement that was a "win-win" for the both of us… And had the personal advantage of being conducted with a fellow I had known for a number of decades and had come to trust without reservation.

Alan, in no uncertain terms, had proven himself to be one of the ‘good guys.’

Unfortunately, and unbeknownst to both Alan and I, something of a trap was being set for Alan which would result (later in 2009), in Allen's position as the head of the company being taken from him. It would also lead, eventually, to his complete separation from the company he founded with no small amount of blood, sweat, and tears.

The former CFO of Cirrus ascended to the position of CEO, and in no small way decided to recast the personality of Cirrus. A company that had been known for quality, innovation, courage, and trustworthiness took on more negative aspects as the new CEO, Brent Wouters, made a number of changes and acted in a matter that seemed to be very "anti-Alan."

Over the course of the first year of Wouters reign, ANN detected a disturbing trend at Cirrus where nothing seemed to matter more than Brent getting what he wanted, when he wanted it, and without compromise – and most important of all, feeding his ego in the process. In our dealings with Brent, we were forced to wade through a fair amount of errant or decidedly slanted information, a great deal of hype, as well as Wouters’ escalating tirades and hate speech about anybody who displeased him or disagreed with him… Especially former CEO Alan Klapmeier. We were treated to profane diatribes against Alan and what he did at Cirrus, in which Brent arrogantly opined that Alan was an incompetent leader, and that only he/Brent had the requisite skills and intelligence to lead Cirrus into the future. We've had to deal with disparate and somewhat negative personality traits over the course of a number of interviews and stories before, and you have to take a lot of that with a grain of salt, and for a while that's pretty much what we did with Brent Wouters… Trying to ignore the hate speech and the hype and nonsense, and trying to get at the basis of the stories we were pursuing. For a while we were moderately successful, despite the fact that a lot of extraneous information started reaching us about difficulties at Cirrus and how Cirrus dealt with its suppliers, vendors, customers, and other relevant parties.

It didn't take long for us to start hearing detailed reports about Cirrus becoming a company that would not honor its contracts and obligations, that didn't take well to criticism, that attacked those who complained or criticized, that didn't have a whole lot of concern for interests outside of its own, and taking on an apparent willingness to do whatever it took to get its own way even when it cost others dearly. It was a troubling trend, and try as we might to broach the subject, our attempts to get to the bottom of these tales were shot down, ridiculed, and as 2009 became 2010 the message from Cirrus – as supplied by Brent Wouters, marketing flak Todd Simmons, or co-founder Dale Klapmeier -- was that Cirrus not only wanted to supply only one side of the story whenever we inquired, but that they expected us to believe and print everything they said without question. Worse than that, what started as moderately obnoxious suggestions and attempts to convince us that only Cirrus was right in any and all factual disputes, became outright belligerent and even threatening behavior over stories that they disagreed with, followed by aggressive attempts to coerce us into reporting stories the way they wanted them to be told.

The coercion attempts started subtly, but did not remain that way for long… With Cirrus eventually creating a number of conflicts to express their displeasure with the questions that we asked, and the stories that we published. Mind you, it wasn't just the stories that reflected upon Cirrus directly that created conflict, but any positive mention of Alan Klapmeier or others that earned their displeasure. I was treated to diatribes by both Brent Wouters and Todd Simmons in which positive mentions of Alan Klapmeier were criticized harshly and woven into the threats that grew as 2010 proceeded. It started simply enough… First we had problems getting paid, followed by numerous promises to catch up on overdue payments that were subsequently broken… Followed by lack of access to Cirrus personnel and Cirrus resources… Followed by threats against the honoring of my aircraft warranty, and eventually against the aircraft itself. When our inquiries into significant credible reports of Chinese interest in the potential purchase of Cirrus Aircraft created multiple lines of inquiry and attempts by us for a proper response by Cirrus, we were treated to ridicule and derision for not taking their word that the reports were false, told that our questions and assertions were foolish and stupid, and then told that we would be harming the company (and then, ourselves) if we suggested anything of the kind… Even after Cirrus co-founder Dale Klapmeier let slip that the Chinese had visited Cirrus in regards to looking at them for potential sale, and that one of the persons representing the Chinese at that time was the former head of Epic Aircraft, Rick Schrameck, a fellow with an extremely bad reputation in the aviation industry, the threats made against us for pursuing this story continued and escalated.

After ANN broke the news, publicly, that there had been inquiries from the Chinese into a Cirrus purchase, while also dutifully getting Cirrus's side of the story and repeating their denials of an impending sale, the "Fit Hit The Shan" and the relationship between ANN and Cirrus took an even greater dive. Shortly after the news broke with ANN's story about the potential Chinese sale, we had a conversation with Cirrus’ Jon Dauplaise… While preparing for the annual inspection of our airplane, which should still have been covered under the service plan/warranty agreement that we had with the company and the outstanding credits for such on that aircraft, we talked to John to let him know that we were in the process of getting ready to go to a service center to accomplish that. Dauplaise was very clear that our agreements were to be honored and actually said, “don’t worry, go ahead and get your airplane annualed, and we’ll take care of it…” Dauplaise was aware that I was in some disfavor with Wouters and Simmons and stated that ‘no one at Cirrus thought you (ANN) did anything wrong and were have always been happy with how you represented us.” He added that he had heard that Brent was awaiting a proposal from ANN to resolve unknown differences.

A day later, the story changed. John Dauplaise called me and explained that at the specific direction of Brent Wouters, he was instructed to tell me that my warranty/service plan would not be honored until I agreed to act according to the terms dictated by Brent Wouters. It was the latest in a series of "extortionate" demands and statements that clearly demonstrated that Cirrus was willing to use some fairly negative tactics to control our editorial process… And at no time did we give them any reason to believe that they would be successful. We argued vehemently that this was not the way that good journalism was done, and despite the way that others in the industry seemed to try to earn Cirrus's favor, that the only thing we owed Cirrus, editorially, was the truth – while offering them the opportunity to state their case on any story that involved them. And no matter how belligerent, aggressive, and threatening Cirrus became and in all of our dealings before and after that point, we have always made sure that when Cirrus had any involvement in a story, that we sought their side of the story…

Because, that's how good journalism is practiced.

It got a lot worse from there. Cirrus continued to drag their feet in paying their bills to ANN creating significant problems for our little company, and shortly thereafter we started hearing tales about how we were getting negatively characterized and badmouthed by Cirrus personnel. At the same time, the evidence of a chain of Cirrus practices that involved the breaking/abrogation/dishonoring of contracts, the breaking of other agreements, less than stellar customer service, numerous false or errant statements, and a litany of questionable business practices grew ever more numerous and ponderous. We received multiple reports that Cirrus had allegedly broken serious high-value contracts and agreements and created significant financial harm/risk to companies like L3, Avidyne, Tornado Alley Turbo, BRS, airshow pilot Patty Wagstaff, and others. Worse; there seemed to be a pattern to a lot of these complex actions whereby Cirrus would get pretty much what they wanted from a vendor supplier or contractor, then refuse to meet their contractual obligations including payment -- and then engage in rudeness, miscommunication, threats, derision, obfuscation, and legal threats. Adding fuel to the fire, ANN received internal documentation that was being leaked by folks disaffected with Cirrus, showing that Cirrus appeared to be playing games with their SF 50 jet program, the depositors, the refund program, and whether or not they were actually serious about producing the aircraft. Other issues involving the treatment of piston aircraft customers, and a number of other financial problems left one with the impression that Cirrus was a company being led to the slaughter. There was no lack of access to inside information about what was happening behind the scenes, because as Brent Wouters would publicly try to put a brave face on the "shared sacrifice" that he expected from all his staff and associates, there was also no end to the disappointments he created in extensive layoffs, not paying his bills, and threatening those that complained about their practices. Face it; with hundreds of people laid off, and hundreds of disaffected vendors, suppliers, depositors, and other parties, there was no lack of inside information about all things Cirrus… As the place pretty much ‘leaked’ such info like a sieve.

As 2010 started to come to a close, the escalating insistence by senior Cirrus personnel, that ANN bend to their will, do stories according to their terms, and act according to their direction took on even more aggressive proportions. Cirrus pretty much stopped paying us what they owed ANN and the full amount owed to the company as 2010 came to a close was considerable. The contract that Alan and I reached in 2008 was at first questioned, then ridiculed and denied. Thereafter; changes (to the contract) were demanded (to the same contract that they originally said didn't even exist), followed by threats of cancellation, followed by demands for changes, followed by more denials, followed by an eventual attempt to kill the contract according to terms that they wouldn’t make clear. Over the course of a number of weeks and months, our legal counsel attempted to get both a reason, as well as legal justification, for their actions and was ignored for weeks on end. When communication did take place, it was of limited use, minimal detail, and in many cases simply didn't make sense.

Eventually; after multiple inquiries by ANN's legal counsel, Cirrus attorney Peter Carter mentioned that he believed that they had the right to break our contract because of verbiage contained in a "Promissory Note." The claimed existence of this promissory note mystified me, because in all of the arrangements that Alan and I had worked through, I had no recollection of seeing, consenting to, or even signing such a promissory note. It took a good while for our legal counsel to get a copy (in PDF format), but when it did show up, we got quite the surprise. Aspects of the document either made no sense or were blatantly wrong. The so-called promissory note was supposedly signed by yours truly in late December of 2008 (ostensibly in Duluth), and makes references to Brent Wouters as the CEO of Cirrus Design, and further mentions the existence and involvement of Kindred Spirit Aviation… The promissory note was not notarized, nor was it even signed by Cirrus personnel.

The document’s validity was immediately suspect due to the fact (among other things) that I was not in Duluth, Minnesota to sign this document in December of 2008, Brent Wouters was not the CEO of Cirrus until later in 2009, and Kindred Spirit Aviation (the holding company under which we were to operate our SR22) did not yet exist and was not registered until 2009. In other words, there are very very serious questions with the credibility of a document that we have no recollection of, and made even more suspect by Cirrus attorney Peter Carter’s admission (despite the assertion in the December 2008 promissory note) that Brent Wouters was indeed not the CEO of Cirrus at that time. Additionally, quite a few things about the so-called promissory note simply didn't add up. And for the record, I don't recall signing any such thing.

This was not the only time we had to deal with paperwork from Cirrus that didn’t seem anchored in reality. We got quite a surprise when Cirrus issued a 1099 for a considerable amount of money… but against me (personally) and the company that we owned the airplane under. Neither of the two had any business relationship with Cirrus, all of our contractual relationships were accomplished between Cirrus and ANN, neither entity has EVER received any money from Cirrus, at any time. We weren’t sure what was going on, but the intent sure seemed designed to create problems for us with the IRS. When we complained to Cirrus’ accounting group, we were told that they were ordered to issue the 1099 as it was and refused to make any corrections… despite the fact that the only company that did business wasn’t even listed! Based on advice from counsel, ANN made a Federal complaint about the matter and is awaiting the determination of the IRS as to whether the document constitutes an attempt to deceive the IRS and/or defraud them or us.

As 2011 got underway, Cirrus refused all attempts by ANN to get answers to our continuing questions. The threats, however, continued. The badmouthing also continued. And despite numerous and proper attempts to get paid, Cirrus refused to meet their obligations (despite their legal counsel’s promise to do so). Over the course of some of the correspondence between Cirrus attorney Peter Carter and our legal counsel, Carter admitted that money was owed to ANN and even teased us with the possibility of paying it at various points -- without being specific as to when that may be and how much would be paid. But even more unbelievably; Carter wrote our counsel and seemed to infer that discussions about settling the issues between ANN and Cirrus could not take place while ANN continue to "critique" the company. I specifically asked our legal counsel if those statements sounded as extortionate to him as they did to me, and he agreed that they did -- leaving us once again with a clear understanding that Cirrus would continue to harass and damage us, through nonpayment and other actions, until we acquiesced to their demands to surrender our editorial principles and do what they told us to.

ANN, at all times, continued to perform properly in regards to our separate marketing agreement with Cirrus… And we have verbal and written confirmation of that fact, at various times through the course of our relationship, and even during the time when Cirrus was under Brent Wouters control. Without a justifiable basis for any changes to the contracted terms that we agreed to with Cirrus in 2008, we continued to perform well, fully, and obediently in accordance with the marketing terms and programs that we contracted with Alan Klapmeier. This occurred despite Cirrus’ continued threats, demands, and nonpayment -- until such a time as the situation was clearly ridiculous and could be construed in no way as demonstrating that we were the ones breaking our contracted terms. And yes, we took it a lot farther than we were comfortable with, but we just wanted to make sure that there was simply no question that Cirrus was not being their agreements and that we did. In fact, by July of 2011, ANN declared Cirrus in default of their contract, for non-payment, and demanded full payment and damages for their breach.

Halfway through 2011, ANN’s original stories about the Chinese interest in the purchase of Cirrus Aircraft were proven, of course, to be true. Despite the numerous denials by Brent Wouters, Todd Simmons, and Dale Klapmeier; Cirrus Aircraft looked both dishonest and evasive, as the news was finally publicized that they had entered into an agreement with a Chinese government owned firm, CAIGA, to sell the aircraft company. ANN reported that matter, and apparently earned Wouters extreme displeasure, by releasing copies of previous interviews, recorded as digital audio files, in which Wouters denied the China sale, demeaned our questions, and pretty much told us that a sale to China made "no sense." It was an interesting bit of vindication, but the positive effect of having been right was quickly replaced by even more aggressive behavior by Cirrus as they continued to target ANN.

Over the course of a number of opportunities at various public events where Cirrus could not avoid our questions (like press conferences), ANN continued to voice serious concern about the direction of Cirrus Aircraft, its truthfulness, its business practices, and expressed concern for Cirrus vendors, customers, and associates. We asked serious but respectful questions and received responses (remember, these are press conferences where they pretty much would've looked really stupid if they told us to go to hell) that were often demonstrably errant, and appeared to be designed to misdirect us and the aviation public. The situation was particularly serious at Oshkosh 2011, where Cirrus Aircraft's Brent Wouters ridiculed ANN in a public setting, and then gave answers to our questions that did not meet up with the facts.

ANN got through Oshkosh 2011 despite continuing reports of character assassination from Cirrus Aircraft, and after a particularly alarming e-mail was sent to ANN CEO Jim Campbell threatening our attendance at Oshkosh, the safety of our airplane and other risky actions. The e-mail demanded that we stay out of Oshkosh and while the e-mail did not specifically state that it was from or about Cirrus Aircraft, it specifically mentioned the airplane and the fact that the sender considered that we were hassling them. The e-mail threatened to hurt us "one way or another." We referred the message to proper law enforcement authorities.

We were actually getting ready to head home from Oshkosh 2011, when a phone call to ANN showed that Cirrus, now under Chinese ownership and guidance, had decided to step up their attacks against ANN.

A phone call from Cirrus Owner’s and Pilot’s Association official Andy Niemyer (no fan of Wouters by any means), started out with the phrase "That (Expletive) Brent Wouters…" while he proceeded to tell me that Brent Wouters had demanded that COPA forbid ANN from any attendance at the forthcoming annual COPA Migration -- The annual convention and tradeshow for the Cirrus Owner’s and Pilot’s Association. ANN had spent several weeks talking to Andy Niemyer about the agreement we had reached with COPA over a year before to conduct a number of media efforts on their behalf -- efforts that we successfully concluded to much positive response, in 2010, and were prepared to do so yet again in 2011. There was no question about the nature of our agreements with COPA, as verified by the number of emails, calls and other communications that documented our agreement. We had a number of obligations, expenses, and organizational efforts already well underway since the upcoming COPA Migration was but days away. Niemyer indicated that while the COPA Board Of Directors did not agree to our being banned, that they did weasel under to Wouters demand that we not perform again as COPA's media partner. Instead, Cirrus would pay for a private entity to do so under THEIR control and direction. We were astounded that COPA would agree to such a thing, until it was explained that COPA President Curt Sanford had made the decision to bend to Wouters demands and acted on it without informing the rest of the board. We expressed our extraordinary disappointment, explained that we were already heavily invested and fully engaged in preparing for the COPA Migration, and that not only was the decision foolish and in violation of the agreements we had reached with Niemyer and COPA previously, but that it was undoubtedly legally actionable… Astonished; I couldn't believe that COPA would be so foolish as to invite that kind of liability upon themselves, destroy their credibility in the process, and force that amount of damage upon ANN. ANN quickly disclosed the details of this situation to our readership. Shortly after the lid was off the story, the COPA board reportedly met (telephonically) and decided to take on the media responsibilities previously contracted with ANN themselves, so as to NOT let Cirrus pay for/control them, but still cut ANN out of the arrangement – despite their previous promises/agreements. When Niemyer called me back to tell me of this; he apologized profusely, admitted that he fought against it (as did other Board members) and thought that it was something of a better compromise than what he had told me originally. Still all prepped up and with no place to go in this deal, and after having spent a lot of money to prepare and made agreements with others to perform, we expressed in no uncertain terms that we thought that the decisions made by COPA were incredibly foolish, unethical as all hell, and pretty much proved that COPA was nothing more than a tool of Brent Wouters and a co-conspirator in Wouters extortion and harassment campaign against ANN.

At the 2011 COPA Migration we were stunned to find that in an opening statement, prior to Brent Wouters speech before an assembly of COPA members, that Cirrus co-founder Dale Klapmeier not only admitted to Cirrus' interference in ANN's business agreements (in front of CAMERAS, no less!) with COPA but he then 'congratulated' COPA for agreeing to their terms and seemed to be admitting to Cirrus' continued complicity in acting on the threats to damage and silence ANN. One thing that was said during the course of Dale's remarks, that mystified me, was Dale's apparent assertion that the original Cirrus Aircraft ‘offer’ to pay for and conduct COPA media efforts instead of ANN, was actually refused by COPA, at first. That is not the case and seems an outright falsehood. Andy Niemyer told me right after Oshkosh, in no uncertain terms, that they had accepted Cirrus’ offer for payment and control of the media partnership, and that story changed only AFTER ANN published the fact that COPA had caved in to Cirrus Aircraft's demands to harm ANN and interfere in our business relationship. We also noted some alarm at the colorful effort that Wouters made during his speech to paint COPA President, Curt Sanford, as a close friend… which offered some potential insight as to why Sanford had made the original decision to cave into CA demands without consulting his own board. It was not COPA’s best moment and at that point, I and a number of others wrote them off as nothing more than a 'gutless tool for Cirrus propaganda.'

I won't belabor this issue too much more, because throughout my short attendance at COPA’s 2011 migration, I met with virtual unanimity among COPA members as they expressed their feelings that the organization had screwed ANN, had caved into Cirrus Aircraft, and that it was a particularly low moment for the organization. Many of the folks I had come to admire and befriend at COPA were nearly as unhappy as I was... and expressed it (and to all of you... thank you... you made what should have been an unbearable event, tolerable). Within days of Niemyer's initial notification and admission that Cirrus had so aggressively tried to shut ANN out of the COPA migration, we started hearing new reports of anonymous packages being sent through the US mail to Aero-News sponsors that contained material that appeared to be designed to leave a negative and misleading impression of ANN and its CEO Jim Campbell. Further, ANN’s attempts to work out marketing programs with potential sponsors began to get reports from Cirrus vendors and other companies that showed that a number of them were afraid that sponsoring ANN or entering into a business agreement with ANN, would incur the wrath and displeasure of Cirrus Aircraft and that this was used a reason to not sponsor ANN.

It was not a good time for us. It was tremendously disappointing, and more than a little stressful as it became very obvious that we were in the midst of a war with a company that seemed to have few ethical boundaries in their desire to harm ANN as a result of their failed attempts to shut us up. But what truly concerned us, and concerned a great number of our friends and associates, was wondering just how much of these new and aggressive threats were incurred with the knowledge of (or even with the agreement) of Cirrus' new Chinese bosses. A number of our friends expressed concern for our safety and well-being, noting that a Chinese government owned Cirrus may have as little problem in harming us as that same government did in threatening its own citizens when it tried to squelch the rebellion at Tiananmen Square. It was a sobering and worrisome possibility...

Next... In Part Two (set for release on Monday), we encounter more harassment leading to one of the most bizarre episodes ANN has yet experienced with a Cirrus employee lying to our FBO to gain access to, and remove, our airplane from our hangar, whereupon it gets tampered with and disabled, the cops get called, things go missing and... well, then it gets REALLY weird... 

FMI: A 'Few' Stories From The Decline Of The Cirrus Empire:


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