Axe Falls At Mooney

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Senior Managers Let Go...

Belt-tightening at Mooney Aerospace Group (MAG) has led to the departure of two senior managers. MAG's new CEO and former general counsel Nelson Happy told AVweb the former CEO L. Peter Larson and Operations Manager Dale Ruhmel were let go for financial reasons. Larson, you'll recall, was brought in to replace Roy Norris, who tendered his resignation August 15. "We were top-heavy in good management," said Happy. He said the company's board of directors made the decision. Happy said the restructuring reflects the company's new way of doing business and its determination to make a success of the Mooney Aircraft Company, which it scooped from bankruptcy earlier this year.

...Custom Orders The Goal...

Happy said MAG's goal is to be building airplanes to order by the end of the year. "Our plan is not to inventory any aircraft," he said. He said there were 20 Mooneys in varying stages of completion as part of the acquisition and 10 have been sold. He's hoping the remainder will be finished and sold by January. From then on, Mooney will custom-build aircraft, and the company hopes to increase production from five per month sometime in the spring. "Historically, Mooney has sold 70 to 80 aircraft a year," he said. If the factory-direct sales force of five can muster those orders, Happy said the company will likely be profitable.

...SEC Filing Paints Grim Picture...

That's a pretty rosy outlook, considering the Securities and Exchange Commission filing the company submitted October 16. The report puts MAG's loss thus far at $99.2 million and warns the company could go under if it doesn't find new financing. "We will need additional financing; failure to obtain financing will lead to a cessation or curtailment of our operations," MAG writes in the federally-mandated disclosure. Happy downplayed the ominous-sounding report in comments to AVweb, characterizing it as a "boilerplate" SEC language. He said most of the red ink has spilled from the abandoned JETCRUZER project, which is now for sale. The company, then operating as Advanced Aerodynamics & Structures Inc., built prototypes of a rear-engine turboprop business aircraft. The whole project will go to the highest bidder. "If the right person comes along, I think it could potentially be a good deal," he said.