Layoffs Reported At Terrafugia

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Flying car maker Terrafugia has laid off the majority of its employees at the company headquarters in Woburn, Massachusetts, according to a report from Forbes on Tuesday. Between 80 and 100 people are believed to have been affected. It has also been reported that Terrafugia, which was sold to Chinese conglomerate Zhejiang Geely Holding Group in July 2017, plans to close down operations in the U.S. later this year in favor of moving to China.

So far, Terrafugia has refused to comment on either the layoffs or its plans for future operations. As previously reported by AVweb, the company received a Special Light-Sport Aircraft (SLSA) airworthiness certificate from the FAA for its two-seat Transition roadable aircraft last month. At the time, Terrafugia stated that it was aiming to have it the vehicle both sky- and road-legal by 2022.

Terrafugia was founded in 2006 by a group of five Massachusetts Institute of Technology (MIT) graduates led by former CEO Carl Dietrich, who left the company in 2019. The Transition prototype flew for the first time in March 2009.

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32 COMMENTS

  1. A predictable result. Use the American workers to get you what you need–in this case an SLSA certificate–and then cast them aside to move the manufacturing jobs to China.

    As a reminder, Textron tried to manufacture the Cessna Skycatcher in China to lower the cost. How did that work out for them?

  2. No American company or investment firm wanted to invest and continuously supply “American” designed Terrafugia with sustainable, long term money. The Chinese are willing to invest in American designs. Whether, Cirrus, Continental, Diamond, and Terrafugia are profitable remains a mystery. But since the Chinese continue to buy our debt, and with American greenbacks becoming less valuable, why not buy the American companies with American money, and end up with something tangible? Plus, by keeping, all, some, or part of the company(s) in America, the Chinese have unlimited access to Congress and the state legislators where the company is “headquartered”.

    That access is worth far more than their present investment dollars. This way, no matter what the current political rhetoric might be from the Red or Blue occupant of the White House, simply being grist for the media, the Chinese are relatively unencumbered within the legislative halls whose present occupants dole out our tax money , dispensing political favors with business as usual as part of their daily lobbying of our elected “public servants”. Pretty slick arrangement. We do the same overseas as well. All countries participate in having each others hands within the pockets of others. That is what it means to be part of the “global” community.

    We do aviation pretty well. We do the dreaming, engineering, and development. Most of the time in backyards, garages, shops, and small businesses all over the USA. We have a pretty good track record. I wouldn’t be surprised that some members of Chinese aviation military, yeah, the owners of Cirrus and Continental…have lifetime memberships in the EAA. Who needs the White House when you have this kind of access to America’s talent and the purse strings?

    • Sir, you are spot on. We Americans by our very nature, are impatient, we strive to be, create and do better whether it is making a toaster, mouse trap, airplane or Mars explorer. The Chinese Communist Government is very patient, smart and forward thinking.
      Let the Americans expend treasure of the pocket and mind creating. The Chinese will patiently await its fruition and buy it with our own money. They are a truly amazing people, too bad they are Communist’s that yearn for our destruction.

    • I agree that we have allowed far too much Chinese control over our industrial base. We should have a law that prevents more than 49% of any US business from being owned by foreign investors without Congressional approval. Other countries do this, why not us? That would at least keep control here and prevent export of critical information, engineering, design, etc. The Chinese have not as stolen our knowledge as much as simply purchased it.

  3. You guys are saying what?
    a) Congress should prohibit people from starting new aerospace companies in the US, lest China should buy them.
    b) Congress should prohibit people from selling aerospace companies to China, making it harder to finance them to start them in the first place and making it more likely that companies that do start will fail due to inability to raise growth capital later.
    c) American investors should step up and buy these companies at higher prices than the Chinese would do.
    d) This was the best outcome, given the realities. Sure is a shame the realities weren’t better.

    • Thomas B…I never said nor suggested any of your a thru d. I am saying, this is another clear case, of aviation business, particularly American aviation business as usual. I cannot change the business climate. It is what it is. The inevitable result, there seems to be someone willing to purchase American ingenuity when American investment does not.

      The Chinese, namely the Chinese companies well integrated with the Chinese Communist Party and its military, have purchased a lot of notable American aviation companies, Cirrus, Continental, Diamond, Terrafugia including collaborative arrangements with Textron, Boeing, and I am sure, quite a few more. This reflects to me, the aviation market in general. My conclusion to all this is China gets a whole lot of access to federal agencies, political leadership, including those who make decisions regarding spending our tax payer money, in exchange for buying our national debt as well as, buying hard asset American aviation companies.

      If you have a solution for fixing “greed”, I would be interested in your solution. Until a solution is discovered, this is aviation business as usual. And every country on this blue orb, including the USA, does business similarly.

      • You are quite right, although one might expand on the, “access to federal agencies, political leadership” thing as a bit of an understatement. Thanks to Chinese legendary patience, frugality, thoroughgoing U.S. Federal corruption at the highest levels, and a little hocus-pocus, we have a bogus POTUS, owned by the CCP via the same technique they have used to own our technology: stealing – fair and square.

  4. I believe Terrafugia indeed perform market research resulting in many people interested in a flying car. Most people in the US do not fly, cannot envision themselves as pilots, have no intension of becoming a pilot, let alone an aircraft owner. But when asked about a flying car, the response is usually positive. People can relate to a car far better than an airplane. That question implies, I believe, the flying portion would be car like regarding training and everyday utility.

    The EAA Young Eagles program has been an outstanding success in directly exposing over 2 million young people to flight in a GA airplane. Likewise, millions of parents have been indirectly exposed to GA aircraft through their child’s participation including the possibility, they too can become pilots. So, somewhere between 2-4 million people have had better than average direct/indirect exposure to GA flying. Many great stories have emerged from the Young Eagles program detailing the climb to professional flying careers. However, the percentage is very small of aviation careers in relationship to the exposure. It would be interesting to see what that actual percentage of aviation careers that have resulted from the Young Eagles program from the 2 million plus flights given and combined exposure to flying by those 2-4 million people.

    Having said that, in my opinion, Terrafugia did not do their market research regarding how long, costly, and protracted the process is in getting FAA certification. Over time, those of us who have become pilots and aircraft owners, including those who have built their own airplanes, have gotten used to the endless, useless and utterly ridiculous claims that they will be the one to design, build, test, certify, and deliver airplanes in a matter of a couple of years or so. Terrafugia was one of them getting flying a prototype March 2009 only three years after inception. Twelve years later, the got an S-LSA approval…and that’s all. Epic learned the hard way the same thing on a far more conventional design with a previous track record of some minor success in a kit-built version. Epic survived with Russian investment.

    Epic, Terrafugia, Icon, Fury, and SkyCatcher come to mind as cool ideas that had enough PR to get pilot interests up enough to place deposits further bolstering the market research demonstrating interest. Maybe this will be the airplane that will break the certification logjam that inevitably eats up all the cash reserves these company’s might have had in the beginning. Then we hear the on and off stories of investment needed as they struggle to keep the dream alive. Think about Icon, EPS, and Deltahawk.

    China is no dummy. This aviation business and development pattern is so clear, well demonstrated, and predictable. So, it is easy to get fantastic innovation, even to the point of production capability in the case of Cirrus and Continental, buying very mature aviation endeavors at bargain prices. Those overseas sales of American aviation assets are quickly followed by glowing press reports by the still employed US company management how selling to overseas companies is preserving US jobs and adding to the economy. But I believe this kind of foreign investment, particularly from China and Russia in struggling aviation companies opens the door to Chinese/Russian influence in areas far beyond the company itself. And that influence is far more valuable than the company ROI itself. The USA does likewise, investing in all sorts of countries and businesses gaining much influence internally. So, this is not the bad guys vs the good guys. This is global finance which includes global politics. And we get our ruffled feathers soothed by words of being partners in a global community.

      • Generally Government decisions are bad as many are based on political payoffs, but as the Chinese demonstrate, given good advice Gorernments can make good business decisions. And of course these are both economic and strategic decisions the Chinese are making. The Chinese are good at the “charm offensive” but like a psychopath, once you cross them you get sliced and diced as they say ( I have some personal experience ). The pilfering of intellectual property is legendary. I am not in manufacturing, so what follows are two chance encounters. One was an engineer who designed a construction lift, who noticed the Chinese were now selling one that looked exactly the same. Taking the matter to court is always difficult, but what made it easier was that the Chinese also exactly copied his companies logo on the side of the equipment. Another was an excellent LSA ( made in Australia ) that the Chinese were interested in, they loaned one aircraft for evaluation in China but what they meant by evaluation was to take apart and reverse engineer it. Problem was they could not put it together again.
        I think the Chinese may win, they play a nasty long term game and will wait till the USA comes undone by race issues, environmental challenges and overpopulation.
        And by the way, what a great list of comments.

  5. The “flying car” is one of those perennial nutty ideas, like perpetual motion, that recurs with regularity. I grew up in the 50s. Over the decades this impractical idea has surfaced again and again. Popular Mechanics sometimes had articles about the latest such flying car. But anyone familiar with general aviation should realize the impracticality of this. The fragility of aircraft relative to cars is stark. How would such a vehicle stand up to potholes, road grime, fender benders? The air traffic issues are large. The roads are cluttered with power lines, trees and obstructions. It’s a nutty idea, and always has been. At my age, I am a “grumpy old man”, pouring cold water on new fangled nonsense. I’ll save my rant on drone delivery of packages to your front steps. That’s another thing that won’t happen.

    • Terrafugia’s flight testing is based at my home airport (KASH). I’ve seen it fly. It’s really cool. But I never once thought there was any real market for it. Sure, it would be great to be able to fly somewhere, drive to a restaurant for dinner, then fly home – but you can pay for a lot of Uber trips before it makes sense to invest in something like a flying car. I am a “grumpy old man” as well! My rant about what’s not going to happen except in very limited applications is electric airplanes.

    • Its a niche product. You have a long smooth road from your home to the airport, perhaps its your own long driveway. But wait, why don’t you just drive you car anyway to the plane?
      On reflection I think the naysayers are right.

  6. The “flying car” concept seems like a great idea to some people. If someone manages to build a practical one-off and it works, well, great! The problem seems to be the thinking that everybody will want one so they try to manufacture them. The customers stay away in droves. Maybe because it’s easy to see if your airplane has a problem, your car does as well. You lose two vehicles when one isn’t running.

  7. Like John D, I grew up in the age of Mechanix Illustrated, Popular Science, and other such magazines which touted amazing nutty ideas which appealed to 12 year olds, like flying cars, snow machines, water cycles, and such. Unfortunately, many folks never got beyond the 12 year old level, so that when they grew up, they wanted to build those things—and there were always some others with 12 year old mentalities and large wallets willing to finance the beginning efforts. And some worked out, like the snow machine and jet ski industries, which appealed to the “lots of fun, no training required” segment of society—more 12 year olds.

    But aviation isn’t that way—it’s not just the certification cost, which is admittedly archaic in many ways and extraordinarily expensive. It’s the fact that one cannot just hop into even a relatively inexpensive airplane and safely fly it. It’s not a car with wings, and the average person with a 12 year old mentality can’t safely “drive” it. Even those with seemingly natural abilities take hours and hours to learn to handle it well, not to mention the hours and hours of study necessary to understand what they’re doing and how to do it safely in the aviation environment.

    Over the course of my lifetime, I’ve seen multiple nutty ideas come to fruition, things like the aforementioned snow machines and jet skis, and also transistor radios, handheld computers, and color TVs, and rockets to the moon, and now rockets to Mars, and on and on, but I’ve yet to see a truly successful flying car. Eliminate the outrageous cost, and it’s still a nutty idea. But it’s a nutty idea that won’t die—I suspect to see yet another, maybe more than one, in my remaining lifetime, touted as the answer to gridlock. But it won’t be any more successful.

  8. There is no US money because there is no value to US investors. The regulatory environment is poison. The industry itself has become backwards in part because of it. The customer base hates most anything new, while exalting the old and proven deadly, and is vocal about it. Most the money in aviation is made by regulators, insurance and tort lawyers. I’d include the lobbyists, but I’m not sure AOPA is still bringing in the big bucks.

    The Chinese find value because they are even farther behind and they also see opportunities for evil doing.

    It’s perhaps unachievable, but being a real success would likely involve complete vertical integration where your customer comes to your airfield, your school, and rents then buys, your planes. At least you need to approach that goal.

  9. I’m another old fart who has seen these things come and go. In my view, the fundamental fallacy has always been that your average licenced driver has no idea what is involved in the process of earning and maintaining a pilots licence.

  10. To me, the really question is: is it worth EVEN think of a thing that, at the same time is a car and an aircraft? Those are two completely different things and a blend of technologies in just one is only affordable in cartoons.

    • I saw the online video of the first flight I thought, its climbing very slowly, and then I also realised that they had probably looked around for the lightest test pilot is the USA ( perhaps even a chimp ) and put in a whole gallon of fuel.