Future of the Piston Aircraft Engine, Part 1: A Visit to TCM (Teledyne Continental Motors)
We expected our recent visit to the Teledyne Continental Motors factory in Mobile to be depressing, but we came away feeling surprisingly upbeat about the future of TCM.
|Will the piston engines of tomorrow incorporate new technology of will they just be more of the same? Do piston aircraft engines even have a future? To answer these questions, we've been touring the country talking to as many engine experts as we could find. This is the second article in a periodic series on the current state and future of the engine business. The second article in this series recounts our visit to Textron-Lycoming and our revealing one-on-one interview with Lycoming's CEO.|
The visit that almost wasn't
When we first called TCM's public relations office last winter to arrange a plant tour and management interview, it became quickly obvious that the company wasn't exactly thrilled with the idea. It took nearly six months of dogged persistence before TCM agreed to our visit in mid-May. Even then, we were told that we would not be permitted to take photos or use tape recorders, and that management interviews would be strictly "off the record."
Fortunately, we were able to arrange a breakfast meeting with TCM president Brian Lewis and persuade him that we weren't there to do a hatchet job on his company. Lewis reluctantly but graciously relaxed most of the restrictions originally placed on us. During the next day and a half, we talked at length with Lewis and all of the other top TCM managers, and saw as many parts of the manufacturing operation as time allowed.
To be honest, we arrived in Mobile with some preconceived notions about what we would find there. We'd been told horror stories about quality assurance problems at TCM. We'd heard rumors that Teledyne was on the brink of shutting down TCM and getting out of the piston aircraft engine business. And TCM's reluctance to let us visit made us suspicious about just what they were trying to hide.
Given this background, we were pleasantly surprised by much that we saw and heard at TCM.
TCM's rollercoaster ride
Continental has been building piston aircraft engines for 65 years. In 1930 Continental introduced the A40, a 38horsepower 4cylinder horizontally-opposed air-cooled engine used in the Piper Cub and Taylorcraft. The A40 was the first of a long series of Aseries engines that culminated in the A225 engines that powered early Beech Bonanzas in the late 1940s. The A40 evolved into the O200 and O300 engines used in the Cessna 150 and 172. The A-225 was the progenitor of today's big-bore 470, 520, and 550 Continentals.
Continental's original factory was in Ohio. The company expanded into its current Alabama location starting in 1966 when the Air Force decided to close down Brookley AFB (now Mobile Downtown Airport) and Continental was able to lease the old hangars and buildings for a song. In 1969, Continental Motors Corporation was acquired by Teledyne, a diversified conglomerate with operations ranging from weapons and aerospace to shower heads and Water-Piks. Teledyne acquired additional space at Brookley and relocated all TCM operations to Mobile.
TCM prospered during the heyday of general aviation in the 1970s. By 1979, the firm was turning out more than 10,000 engines a year, mostly new engines for Cessna, Beech, and other OEM customers. The TCM workforce reached 950 people, and the company expended into virtually every available building at the Brookley site.
Then disaster struck. In the early 80s, the general aviation industry experienced a devastating downturn. New piston aircraft production virtually ceased. Cessna (TCM's biggest customer) shut down piston production altogether, and other manufacturers slowed to an insignificant trickle. Virtually overnight, the market for new TCM engines vanished.
The 1980s was a traumatic decade for TCM. The company was forced to downsize drastically, and to transform itself from a manufacturer of new engines into a supplier of parts and rebuilt engines to the aftermarket. In essence, TCM became a giant overhaul shop
The trauma was compounded in 1989 when TCM's management and labor union reached an impasse in contract, resulting in a long and bitter strike that crippled TCM's production. One legacy of the strike was a customer perception of poor quality control that persists to this day.
In the aftermath of the strike, Teledyne brought in a new TCM chief executive, Brian Lewis, and a new top management team tasked with repairing the company's relationship with its workforce, solving the quality problems, and re-engineering the company in response to TCM's different and downsized market. The company was reorganized into business units, manufacturing cells, and quality circles reminiscent of a Japanese car company.
TCM's new realities
Today, TCM is down to about 600 employees, and produces about 3,600 engines a year. Only about 15% of those are new OEM engines. The remaining 85% are remanufactured engines for the aftermarket. These engines represent about half of TCM's revenues; the other half of the business is in selling replacement parts to overhaul shops and other field maintenance facilities.
Brian Lewis is convinced that TCM's worst years are behind it. He sees positive signs for the first time in fifteen years, and anticipates slow but solid growth for some years to come. With Cessna resuming piston aircraft production, Piper expected to exit bankruptcy soon, and the kitplane business growing rapidly, Lewis expects the market for new OEM engines to revive.
TCM's future OEM business won't come from Cessna, who stated that engines for its new piston production would be 100% Lycomings. Since Cessna and Lycoming are both divisions of Textron (another 1960s-vintage conglomerate), Cessna's decision came as no big surprise. Lewis's comment: "we're disappointed that Textron made its decision along corporate lines."
Piper is a different story. TCM is the lead member of a creditor group that is attempting to acquire Piper and bring it out of Chapter 11. If the court approves the buyout plan, TCM will become the largest shareholder of the new Piper, and would presumably become Piper's primary engine supplier.
TCM's other OEM customers include Beech, Mooney, and several overseas manufacturers. In addition, TCM is the dominant engine supplier for the high-performance kitplane market (Lancair IV, Questair Venture, etc.), which TCM expects to become an increasingly important segment of the OEM market.
Although he doesn't see the OEM business returning to the heady levels of 1979, Lewis thinks that TCM's business might reach a 50-50 ratio of new vs. reman engines by the end of the decade if all goes well.
For decades, Continental and Lycoming have displayed very different attitudes toward innovation. Lycoming spends relatively little on R&D, and tends to make engineering changes very rarely and only when absolutely necessary. In contrast, Continental has a much bigger R&D budget, and makes changes much more frequently. Take a side-by-side look at engine parts catalogs sometime: a TCM parts catalog is dominated by hundreds of change pages, while a Lycoming parts catalog has hardly changed in years.
Continental has pioneered many important engineering innovations like fuel injection and turbocharging. But TCM's predisposition toward innovation has been a two-edged sword. Some of their "improvements" have not worked out well in the field (such as Nitralloy exhaust valve guides and cast steel-belted pistons). And the company has spent many millions on R&D programs that have not paid off. The innovative geared high-RPM Tiara engine that TCM developed the '70s appeared briefly on one agplane and then disappeared into oblivion. TCM's promising liquid-cooled "Voyager" engine developed in the '80s has yet to surface except in a relative handful of RAM-converted Cessna 414As.
Nevertheless, TCM's enthusiasm for R&D seems undiminished. Brian Lewis made it clear that he considers innovation to be a key factor in providing tomorrow's OEMs and converters a reason to choose TCM rather than Lycoming. TCM intends to keep and enhance its reputation as the most innovative company in the piston engine market.
For example, TCM expects to start shipping engines using the new Slick LASAR electronic ignition system as soon as Unison can get FAA certification. Also, TCM holds an STC to install liquid-cooled IO-550 engine in the Beech Bonanza, and is trying to get it to market via a licensing arrangement with a (yet unnamed) airframe converter.
We talked at length with TCM's engineering chief, John Barton, about what the TCM engines of tomorrow would look like. Barton's roadmap includes lots of small product improvements, several new but evolutionary engines, and a major thrust to incorporate electronics into TCM engines.
Barton showed us a number of new product improvements in his engineering lab. We saw a new line of rocker cover and accessory gaskets that have an integral raised rubber-like bead to improve sealing and eliminate pesky oil leaks. We examined a new O200 cylinder assembly that incorporated dozens of significant improvements. And we looked at a brand new clutchless starter that TCM is introducing to replace the old and failure-prone O200 starter.
Future engineering direction
Barton's engineers are working on several new engines to meet specific needs. TCM is developing a pair of new high-power geared engines, a normally aspirated GIO-550 and a turbocharged GTSIO-550; the turbocharged model will be rated at nearly 500 hp. At the opposite end of the horsepower scale, TCM is creating a new 125 hp IO240 engine, basically a four-cylinder version of the current IO360, to power trainers and medium-sized kitplanes. Finally, a lightweight 250 hp version of the IO-520 is in development, dubbed the IO-520-LW.
TCM engineers are focused on the increased application of electronics to the piston aircraft engine, much as the auto industry did a decade ago. Expect to see this occur in small increments. The first use of electronics will be variable-timing electronic ignition, most likely the Slick LASAR system. TCM is also working on an electronic engine instrumentation package to replace the traditional steam gauges we now use.
Longer term, TCM is investigating an electronic fuel control unit that would provide optimum mixture control. Ultimately, TCM's goal is a single power lever system that reduces pilot workload while assuring optimum power and mixture settings.
Although TCM's geared high-RPM Tiara engine was a commercial failure 20 years ago and its liquid-cooled Voyager engine has yet to gain much acceptance, John Barton still believes that they were both steps in the right direction. His long-term vision of TCM's piston engine of the future (what he calls the "Advanced Core Engine") is a geared, high-RPM, finely-balanced, liquid-cooled engine with variable-timing electronic ignition, electronic mixture control, electronic instrumentation, and a single power-lever control, capable of operating on low-octane unleaded fuel. There's no target date for such an engine, but it gives a good indication of where TCM engines are most likely headed.
Meantime, TCM is making major changes to their manufacturing operation. The company is investing big bucks to retire decades-old manually-operated machine tools and to replace it with state-of-the-art computerized numerically-controlled (CNC) equipment.
The first portion of the factory to be retooled was the cylinder fabrication facility. Howard Atwood, TCM's vice-president and general manager of operations, took us through the cylinder shop and showed off his expensive goodies. Over the past three years, TCM has installed four new Mori Seiki CNC machines that cost $1.5 million, and were able to retire almost 75 ancient manually-operated machines. The new cylinder shop is one-third the size it used to be, requires substantially fewer workers, and has almost twice the production capacity of the old facility.
Cylinders are now manufactured with greater consistency and less dimensional variation than before. Most importantly, the retooling allowed TCM to cut the price of new cylinder kits by 30% to 40% last year. (We discuss the new economics of cylinders in "The Jug Jungle.")
TCM's modern Mori Seiki CNC machines are the same kind we saw when we visited the Dallas production facility where Superior's Millennium cylinders are built. Such equipment was conspicuously absent during our visits to Lycoming, however.
Next in line for retooling at TCM are the crankshaft and crankcase production areas. New CNC machines will replace old tooling wherever it is advantageous to do so. Some of the old equipment will remain, because CNC isn't always the best solution. For example, gang-boring crankcase halves with custom-built boring jigs is both faster and more reproducible than drilling holes sequentially with a CNC rig. Nevertheless, Atwood expects to achieve significant productivity increases and cost savings when the crank and case cells are retooled.
When Atwood took us though the area where final assembly of engines is performed, it was not quite what we expected. Most of the TCM factory looks like a gigantic machine shop: huge, sprawling, dark, smelly, hot, with row after row of big metalworking machines. In contrast, final assembly is done in a separate room that is air conditioned, brilliantly lit, laboratory clean, and surprisingly small (perhaps 1,000 square feet). Every TCM engine is built in this one little room.
Every engine has its own assembly dolly, its own parts cart, and its own serial-numbered assembly manual. These all move down the line together as engine assembly progresses. There is just one assembly line that every engine traverses, whether new or reman. (This differs from Lycoming, where new and rebuilt engines are built on separate parallel assembly lines.)
The assembly dollies allow the engines to be assembled with the crankshaft horizontal. Pivots on the dolly permit the assembler to turn the engine on its side or even upside-down for easy access during various assembly steps. (Lycoming uses a similar scheme.) In contrast, every field overhaul shop we've visited assembles engines with the crankshaft vertical and supported by the propeller flange.
Because TCM builds such a wide variety of engine models and spec numbers, the assembly manual for each engine is customized for each particular engine serial number. The manual contains hundreds of pages of computer printout, itemizing each individual assembly step, detailed procedures, torque values, and so forth. TCM is in the process of digitizing their assembly drawings so that the computer can incorporate graphics into these manuals. We saw a mixture of old-style (text only) and new-style (text plus graphics) manuals when we visited.
After final assembly is complete, each engine is wheeled to an instrumented test cell where it goes through a test run that normally lasts 45 to 60 minutes. The test cells are old and low-tech, using steam-gauge instrumentation and manual logging of results. (TCM has one high-tech computer-instrumented test cell that is used by engineering.)
TCM has also created major new data processing systems to support its manufacturing operation. Production and materials control are now computerized with an order-driven scheduling system. Ron Caton, TCM's manager of production control, showed us how the new system works. When an engine order is received, the computer instantly allocates all necessary parts based on the proper bill-of-materials for that particular engine model and spec number. If any of the required parts are in short supply, corrective action can be taken immediately so that production is not impacted. If an urgent situation arises (such as an AOG order), the computer is smart enough to realloate parts from lower-priority orders.
Caton told us that this system proved invaluable during production crunch following the recent Chevron fuel contamination crisis when demand for reman engines and parts suddenly went ballistic. It was impossible for TCM to keep up with the unexpected order surge, but things would have been a whole lot worse if the new scheduling system hadn't been in place. The computer allowed TCM to provide fairly accurate delivery time estimates to customers during the Chevron crunch so that they knew how long their aircraft would be down and could make alternate plans.
Questions about quality
Innovative engineering and efficient manufacturing may be well and good, but what customer care about more than anything else is quality. Prior to our visit, we'd heard numerous stories about the poor quality of the engines coming out of Mobile. So we sat down with Bill Thornbury, vice-president of quality assurance, and asked him to give us a detailed show-and-tell about TCM's approach to Q/A.
Thornbury started out with a highly technical presentation that was frankly over our heads: Cpk=2, 6-sigma, SPC analysis. When he noticed our eyes starting to glaze, he graciously started over in plain english.
Although detailed inspection is the last line of defense against out-of-spec parts, Thornbury explained that TCM's emphasis is on monitoring and improving each manufacturing process so that problems can be caught and corrected long before out-of-spec parts start appearing. Critical dimensions are logged and analyzed to determine whether dimensional variations are random or whether a trend can be detected. Red flags go up any time variation exceeds one-half of the allowable inspection tolerances.
In support of this kind of analysis, TCM is now phasing in state-of-the-art measurement tools that we'd never seen anywhere else in our travels. Thornbury showed us electronic torque wrenches, micrometers, depth gauges, and surface roughness testers, all with digital outputs to permit direct computerized logging of measurements. The use of these fancy new instrumentation was particularly in evidence when we visited the cylinder cell. Special emphasis was given to certain critical measurements such as the roughness of cylinder microfinish which TCM considers critical to proper break-in.
At the opposite end of the Q/A spectrum is engine audit inspections. One out of every 25 engines that comes out of final assembly and test-cell run is pulled off the line and subjected to a complete teardown inspection. A long list of critical dimensions—Thornbury called them "key characteristics"—are measured and logged. The audit engine then goes back through final assembly and gets another test-cell run. (Lycoming uses a similar procedure.)
No matter how thorough a company's Q/A procedures are, sometimes "stuff happens." To deal with such problems when they arise, TCM has created a "Product Integrity Council" which includes Atwood, Barton, Thornbury, and various other key managers. These folks meet to evaluate a quality problem and decide how to deal it. What happened? Did it occur in-house or at a supplier? Have any defective parts or engines reached the field? Can we identify precisely which serial numbers are affected? Is a service bulletin or airworthiness directive required? Is priority notification required? How can we ensure that it doesn't happen again?
A basic ground rule of this Council is: if there's any safety issue involved, no matter how remote or improbable it might be, go public with it. As a result of this policy, TCM sometimes finds itself getting bad press when another company faced with the same situation might have elected to say nothing.
Perception versus reality
We came away with the vivid impression that TCM is working both harder and smarter to assure product quality and consistency than what we saw at Lycoming, Superior, or any of the overhaul shops we visited. So why does TCM have such a bad reputation for quality in the field? Neither Thornbury nor anyone else at TCM could give us an answer. But we have our own theories.
A piston aircraft engine has an average life of about ten years before it is majored or replaced. This means that an average owners' last contact with the factory was about five years ago. And five years ago, TCM was in the throes of a labor dispute that severely disrupted its manufacturing operations and had devastating impact on product quality.
Perception seems to lag years behind reality in this business. In this regard, it's similar to what happened to the U.S. auto industry. More than a decade ago, Detroit developed a reputation for building terrible cars, and droves of Americans started buying Toyotas and BMWs instead of Chevys and Dodges. The U.S. automakers redesigned their cars, updated their tooling, overhauled their Q/A procedures, and started to build excellent cars that were every bit as good as what the Germans and Japanese were making. But it took many years before the stigma associated with poor quality American cars was erased from the mind of the consumer. We suspect that the same phenomenon is partly responsible for the perception of poor TCM quality.
Also, it is an irony of today's market that TCM's principal customers (authorized distributors of TCM reman engines) are also TCM's principal competitors (overhaul shops). Consequently, there's a love-hate relationship between TCM and many of its distributors. Since many of them make more profit selling an overhaul than they do selling a factory reman, they have a vested interest in making TCM remans look bad. These firms used to compete with TCM on the basis of price, but with today's aggresively-priced remans this is no longer possible. A number of high-profile shops are quite overt in marketing their overhauled engines as better than what the factory turns out. (Capehart, RAM, and Victor come to mind.) And frankly, those shops are doing a far better job at telling their story than the factory is. We can't help but conclude that this is a factor in perpetuating the perception of inferior quality from TCM.
TCM seems to have come light years from the bad old days of '89 and '90. Contrary to widespread perception, TCM appears to be working harder on product quality than anyone else in the industry. Based on what we saw in Mobile, we'd feel just fine about buying a TCM factory reman.
The last department we visited at TCM was customer service. These are the folks that process orders, deal with warranty claims, and provide field support. We spoke with Tim Archer, director of sales and service, and with several of Archer's managers.
TCM is in the midst of a major reorganization of its customer service department that at last recognizes the realities of today's market. Prior to the Great Downturn, the word "customer" in the TCM lexicon was defined as "airframe manufacturer." Today, a miniscule fraction of TCM's product goes to OEMs. Consequently, Archer has been tasked with re-inventing his department so that it serves the customers of today: the aircraft converter, the distributor, the FBO, and aircraft owner. In our judgement, this change is very welcome and about a decade overdue.
Archer is a big believer in computers, and has invested heavily in automation of his department. Last year, he deployed TCM-NET—a PC-based system providing 24-hour on-line dial-up access to TCM's distributor network. The system allows distributors to place and track orders for engines and parts, to submit and track warranty claims, and to obtain price and availability information.
TCM-NET is presently being used by 70% of TCM's distributors, and Archer expects the number to reach 99% by year-end. The system has eliminated most of the access problems associated with time-zone differences, and has produced a tremendous savings in paperwork, particularly for overseas distributors. About 30% of TCM's business is overseas, but that business involves vastly more paperwork than does domestic business. Archer used to have four full-time people preparing export documentation. With the advent of TCM-NET, export documentation is now handled by one person working half-time. Overall, TCM's customer support headcount decreased from 48 to 36 over the past few years, but the number of people in direct customer-contact roles increased from 23 to 27.
The next phase of the automation initiative is called FBO-LINK, and is basically a version of TCM-NET designed to allow field maintenance shops to have direct access to TCM factory support. FBOs will have 24-hour on-line access to warranty status, warranty claim tracking, service bulletins, and technical briefs, and a broad range of troubleshooting help. FBO-LINK will be introduced later this this to a hand-picked group of large FAA repair stations, but ultimately should become available to any field maintenance shop that wishes to participate. Eventually, FBOs may be able to use their PC to videoconference with factory support experts (Archer is experimenting with this right now, and showed us a demo).
A third phase of this program, slated for rollout next year, is TCM's "Gold Medallion Club." This is a version of TCM-NET that will be available to aircraft owners who have new or reman TCM engines. Owners will have on-line access to warranty status, service bulletins, and tech briefs. This program should provide yet another incentive for owners to choose a factory reman over a field overhaul.
In addition to the headquarters support organization, TCM has 10 field technical reps—8 regional reps in the U.S. plus 2 international reps. These are the guys your mechanic calls for technical help or warranty support when you have an engine problem. Each regional rep is an experienced A&P with extensive expertise in troubleshooting TCM engines. Each rep is equipped with a borescope, a fancy digital thermocouple test set, a Chadwick-Helmuth balancer, and now (since the advent of TCM-NET) a laptop computer, modem, and cellular phone. A couple of the reps who serve geographically-large territories also have company airplanes.
We have first-hand experience dealing with a few of these TCM field reps. We've found them to be technically sharp and good folks to work with. The biggest problem is that they travel a lot and are not always easy to reach on short notice.
In one respect, what we saw in the course of our visit to TCM was what we expected to see: a big, old, dark, smelly factory packed with hundreds upon hundreds of antiquated metalworking machines operated by hundreds of sweaty machinists. And yet we saw lots of things that we found suprising, and most of the surprises were pleasant ones.
TCM is clearly a company undergoing profound change. After a decade of denial following the precipitous industry downturn of the early '80s, TCM has brought in a new management team and appears to be turning the company around and doing almost all of the right things.
TCM definitely is not behaving like a company on the brink of getting out of the business, as rumors might have you believe. TCM is investing millions in state-of-the-art machine tools and computer systems. The new cylinder cell has yielded impressive results in productivity and cost-cutting, and is a prototype for what TCM will be doing to the rest of the factory during the remainder of the decade.
Also contrary to common perception, TCM seems to be doing everything right in the area of quality assurance. They're clearly working harder at Q/A than anyone else we visited (including Lycoming). There's no queston that TCM had big problems 5 or 6 years ago during the period of labor unrest. But today we're inclined to think that most of the horror stories about TCM's poor quality are outdated and a bum rap.
TCM management believes that the OEM market for piston engines will rise again, and they are making the R&D investment that they think is needed to give the airframe builders of tomorrow a good reason to select TCM engines rather than Lycoming. TCM can be expected to be the engineering front-runner in liquid-cooled, geared, turbocharged, and electronically-managed engines.
If there's anything that TCM isn't doing well, it's communicating with the world outside of Mobile. In our judgement, TCM's advertising is ineffective. Their public and press relations stink. And their new customer support initiatives, although certainly welcome, are coming ten years too late.
If we had one piece of advice for Brian Lewis, it would be this: go hire a top-notch Vice President of Corporate Communications. TCM today has a teriffic story to tell, but it's doing a lousy job of telling it. We think TCM's public image is way past TBO and needs a major overhaul.