Pelton's Long-Term View Cut Short
On the Fiddlin' Around America tour in 2009 after we landed at Cessna headquarters in Wichita I asked for directions to a bathroom after the bumpy and coffee-fueled morning flight from South Dakota. I was directed to a recession-empty reception and administration building steps from the parking space of our DC-3. As I walked through the sparkling facility, I saw something that briefly dampened my enthusiasm for a day that had started so spectacularly. Carefully swaddled in protective tarps was the mock-up of the Cessna Columbus large-cabin business jet that I'd examined in detail in a video six months previously at NBAA in Orlando. At the time, the program had officially been delayed in response to the economic collapse but the care with which the mock-up had been tucked away suggested it might have a future. Every CEO has a pet project and I think it's fair to say that, as Jack Pelton liked to put it, the Columbus was his "game changer." When Cessna was creating the 500 series, the goal was to make jets as accessible as possible so they made business sense. That's as true today as it ever was. The thousands of Citations, Hawkers and others that soldier on each day must not only earn their keep, they must appear to earn their keep. I know Pelton believes that to his very core but he's also one of the most astute observers of the industry any of us in the aviation media have come across. He's also one of the best interviews. He's frank, honest and engaged. He likes taking questions and if he doesn't know something (rare) he'll tell you. From what we've heard, his staff felt the same way. The message we get is that Pelton is a straight shooter and he's interested in every aspect of the business and everyone involved. Anyway, as he watched his engineers shave pennies from the production costs of Bravos and Encores, as he huddled with his advisors to scrimp and save while at the same time innovate, he was also aware of a market sector that was all but oblivious to that kind of parsimony. In Bombardier's, Gulfstream's and, increasingly, Embraer's world, performance, luxury and prestige are the competitive factors. Most prospective buyers couldn't care less what other people or governments think of them (many of them are governments themselves). They don't have to prove the value of their airplane to anyone and they set high standards for those who want to supply them their preferred mode of travel. I think Pelton saw a place for Cessna in that mostly recession proof market with a product that met its performance and esthetic expectations but employed the efficiencies and innovations that would be obvious to those writing the checks. A perfect example is the company's decision to make the Columbus the launch customer for Pratt and Whitney Canada's geared turbofan engine, a game changer in the world of jet engine efficiency. Development costs for the Columbus were in the $700 million range and that's a big risk for companies of Textron's size. Had it not been cancelled, the Columbus would be in certification testing about now with first deliveries in 2014. Take a look at the schedule for Gulfstream, Bombardier and Embraer's newest airplanes and the comparatively solid performance of that sector of the industry in the last few years and you'd have to agree that there was a place for the Columbus in that mix. Textron brass obviously didn't What happened on Monday is anyone's guess, but what we've been hearing is that Textron CEO Scott Donnelly didn't go to Wichita to fire Pelton. The most repeated and reasonable explanation that I've heard about Pelton's sudden "retirement" (who retires "effective immediately" at age 52 on a Monday morning when the boss is in town?) was that Textron wanted even bigger axes wielded at Cessna after a first quarter loss of $38 million. Pelton countered that cutting any more would make the company unable to respond to the uptick that everyone seems to agree is coming by the end of this year and into next. From there it seems likely the meeting basically went to hell and Donnelly was as surprised as anyone. Textron and Cessna have one of the slickest PR machines in the industry and if this was pre-ordained then the supporting paperwork would have been flawless. Instead, the news came out in a hastily prepared release that amounted to a phone and email fanout. Both entities have been silent ever since. The table may have been kicked over on Monday morning but I think it had its roots in that tarp-wrapped mock-up I saw in Wichita. I doubt Pelton will be gone for long and that's a good thing for the industry. He will likely end up as Cessna's competitor, though, and that might not be the best thing, long term, for Cessna.