Deconstructing The Cirrus Hate

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Time can make all the difference. Sometimes it’s 30 seconds, or two weeks, or the 623 long days it took NASA to put Apollo back on track after a deadly fire. For my purposes here, it’s three years and a few months. That’s the time that passed between Cirrus just being one of those aviation companies the Chinese bought to an object of outright derision in our news coverage.

My source for this conclusion is there for all to see. AVweb’s audience is generally well-informed and sophisticated, thus the comments and letters we get are a fair representation of industry zeitgeist. To say it has shifted to Cirrus being a dark force is to do violence to the word understatement, even as Cirrus booms along selling ever more piston aircraft and its single-engine jet. I wonder if owners enjoying the expansive view from the front of an SF50 ever stop to think that it was Chinese government money that got them there. And how do they rationalize it?

I can promise you that other people are thinking about that. The three years I’m referring to are what passed between the time I did this video on the Cirrus TRAC trainer in late 2019 and this more recent one on the newly revealed SR10 trainer. The TRAC video elicited hardly a peep about China as a bad actor.  The SR10 video? Almost nothing but. Of 194 comments, barely a dozen have to do with the airplane’s technical merits, market potential or the fact that it’s, you know, a new airplane design. The rest are bitter variations on the theme of Chinese mal intent.

“Friends don’t let friends fly a Cirrus,” thundered one commenter. What happened since the TRAC video, of course, is the spy balloon fiasco, saber rattling by the Chinese military in the Taiwan Straits, Chinese support for a war in Ukraine and just general bullying on the international stage. It’s hard to know if one specific thing unleashed the bile. Or is it just the cumulative weight of Chinese general aviation ownership or the fact that Cirrus is owned by the Chinese government through the Aviation Industry Corporation of China that seems to position it for particularly vitriolic opprobrium? By comparison, Continental Aerospace Technologies, also owned by AVIC, Diamond Aircraft and Mooney are all owned by Chinese interests, but seem to generate only sidelong smears rather than the full measure of abuse Cirrus gets.

And, of course, the ire is largely misplaced. Aviation consists of the have and the have mores, and the latter populate the bizjets and the Boeings, where the Chinese have no significant market presence. The GA turboprop world is relatively vibrant and largely owned by a few players, none of whom are Chinese. That leaves the backwater of GA pistons which sort of float along on a sheen of low-volume sales but which few western industrialists consider a business worth being in, much less purchasing.

If you doubt that, recall that when Cirrus was wandering in the wilderness looking for a buyer circa 2009, western investors weren’t beating a path to its door. In the absolute, the company had value and sales potential, but also a significant amount of debt (about $80 million) and it was digging itself out of the 2008 downturn. A Bahrain-based equity company called Arcapita then owned 58 percent of Cirrus and was desperate to unload it.

Veteran aviation consultant Brian Foley saw both value and potential in Cirrus and knew his way well enough around the world of investment banking to try for a deal. “It was an esteemed brand and something that pilots aspired to,” Foley says. “And it was invented in the U.S.”

What happened? Nothing much. “What we learned in the end is that the western investor has a very different mindset than the Chinese. The Chinese don’t have a time scale. In the U.S., it’s two to five years,” he told me. And among some investors, it’s a few quarters. There’s no doubt that the opportunity was there, a good chance that it could have returned on the investment within the decade—which it has, in fact, done—but it certainly wasn’t flipable for a quick profit.

Welcome to the world of western capitalism, or more specifically, Jack Welch-style capitalism, the famed GE CEO who pioneered the idea of shareholder value at the expense of long-term planning, product quality, customer service and worker satisfaction. Once the hero of Wall Street, Welch is now credited with having destroyed a once-great company and saddled investors with the kind of quick-hit ethos that surely made Cirrus so unattractive.

Enter the Chinese, who paid a reported $210 million for Cirrus in 2011, although we don’t know how the deal was structured. Foley thought it was overvalued at that price, but for a government atop a then $7 trillion economy, we’re talking coffee money. And evidently, the Chinese had minimal expectations on return or at least ones we’ve heard about. They had other priorities, so to speak, one of which was a line item in the five-year plan that called for investment in aviation.

Obviously, the Chinese discussions did. Although there was worry that AVIC would pack the company up and move it to China, that wasn’t a realistic possibility and may still not be. The meat of Cirrus sales are in North America and Europe and it would make no sense to invest heavily in a startup factory in China only to ship airplanes halfway around the world. It is true that China has an acute unemployment problem, but moving an airplane factory to a country without the skill base would be a chaotic way to solve it. Ten years from now, it might look different.s

So who got the better end of the deal in the Cirrus purchase? I’d say for the medium term, the nearly 1700 employees of Cirrus got the best deal. They got to keep their jobs, investment brought the jet to market—the company just announced 500 aircraft sold—and the factory has been expanded and improved. The SR line continues to lead sales in the piston market. The tradeoff for that success is that Cirrus may throw off $100 million in profits to the Chinese government on about $765 million in direct aircraft sales. AVIC also gets some production and marketing expertise, but no significant technology transfer. Well, perhaps some in the Williams FJ33 engine used in the SF50. It presumably has cruise missile applications. Weigh that against Cirrus being a major employer in Duluth. I’ll admit to being conflicted, but also disinclined to believe those workers should give up their jobs in the national interest.

Alan Klapmeier told me he thinks Cirrus wasn’t in danger of bankruptcy without the Chinese purchase. While I agree, I wouldn’t bet the farm on that. Thanks to the solidity of its products and a loyal customer base, Cirrus actually weathered the 2008 downturn better than many companies did. Yet it still faced challenges. The Cirrus sale to China had to be approved by the Committee on Foreign Investment, which vets these sales for potential defense or technology related sensitivity. There was none. There is none now, except for the aforementioned FJ33. But it’s reasonable to believe CFIUS would reject the same approval now because, well, things have changed. Anti-Chinese sentiment seems unlikely to diminish.

In the broader context, consider where the innovation in light aircraft GA is coming from. It’s Cirrus, it’s Diamond and Continental Aerospace, with its diesel line. While this innovation didn’t originate under Chinese ownership of those companies, Chinese capital kept it perking along. Let’s not leave out Piper, which at least has a diesel version of the Archer and is doing well with its M-Class turboprops. Piper is owned by the government of Brunei, a wealthy petro state.

Meanwhile, Cessna has proposed and canceled two diesel projects and the leading news from AirVenture this year was exciting new interiors for the Skyhawk. Don’t forget the Skycatcher fiasco. But it’s actually worse than that. Recall that Cessna bought the Lancair/Columbia line in 2007, invested some capital in it, but then summarily killed it in 2018. It never made significant market inroads against Cirrus but many thought that with a lasting commitment, it could have. Someone who worked at Lancair at the time told me the culture clash with Cessna all but assured failure of the project, thus wiping yet another new aircraft from the market.

Would it have been better for Cirrus—Arcapita, really—to stand on the patriotic high ground and refuse to sell to AVIC? Given that Arcapita is an Islamic Bahrain-based company, it’s perhaps a little delusional to even consider it. As it was, the Arcapita shareholders took a bath on the deal.

In the end, if you feel like raging at Cirrus—and I understand the urge—your anger might be more productively aimed not at the people who work there but at your stockbroker or your wealth manager. U.S.-style capitalism is amoral and with the exception of a few companies and funds that specialize in onshore investment, not especially patriotic, either.

“End of the day,” says Bryan Foley, “it’s just all business.”

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80 COMMENTS

  1. Middle eastern businessmen have a saying. “Business is business, it’s nothing personal”. That is probably true the world over. Over my business career, I dealt with a number of Japanese and Chinese companies, and it was distinctly different than American or European companies. To them, a short term plan goes out 5 years. A long term plan for Americans may be that long, but sometimes less. That’s not to say that their way is better, just different. America rewards fast action and innovation. Asians favor slow and steady and careful planning. The classic tortoise and the hare. You mention Jack Welch and GE, and I agree totally with your view. One reason why Textron/Cessna seems to be a backwater for GA is that their top leadership team cut their teeth under Welch at GE and have carried it over to their current positions. Profit above all else, and Citation jets are where the real money is. The big news about Skylane interiors is a sad example of their attitude toward GA.

    I think that a lot of the animosity toward Cirrus and China stems from our soured political climate with the Xi government and their wanton stealing of any western technology they can lay their hands on. We pilots tend to flatter ourselves in thinking that Cirrus is a technological goldmine for China, when they have much higher aspirations. My personal feeling is that AVIC scooped up Cirrus in the hopes it would invigorate their aspirations for a thriving GA market in China. But that plan is kind of doomed to failure under a repressive government that cannot trust their people to really experience true freedom in the skies.

    • Your last sentence John is accurate in my China experience with flight operations in China. What with having to submit itineraries to obtain overflight permits a week in advance along with all the restrictions once one goes airborne, Chinese skies can hardly be describes as friendly. I’ll never forget flying through Chinese airspace on a flight from Inchon, Korea to Mandalay Myanmar. During the six hours we spent in Chinese airspace we spent more time flying offsets than we did actually flying on course, and most of that was to avoid military owned airspace. In my estimation it will take decades to undo that kind of unfriendliness toward GA unfriendliness.

    • Cirrus is a great lane I flew one a few times and loved it. Roomier than a 172 faster nicer glass cockpit . The fact that they got into serious financial trouble and needed a bailout is true. The fact the us investor mafia ignored it is ture also in fact that group ignores all manufacturers. They hav fallen in love with finding the next Facebook with a 100 to 1 ROC.

      This has had the effect that manufacturers turn to foreign money.

      Some investors like myself stick w manuoand have enjoyed a good return. But it take patience and nerve.

      The GA business is not very sexy and the growth numbers are very boring.

      Did cirrus give China a great amount of technology? I think nit.
      The glass epoxy nomex sandwich skins may be a big deal for GA but it has been in the world of commercial and military aircraft for decades prior to this purchase. China actually learned composite fabrication more fro the aborted Douglas / Shanghai deal that anything Cirrus brought to the table and is a leader in lightweight high modulus carbon epoxy structure production from thier dominance of the middle cost bicycle industry which again the US could not bother with modernizing.

      The avionics are not part of the deal. What did China get a solid business that long term makes mkney dull, boring and profitable.

      If Vans need money how about a mini public offering to the VAF? Sell 20 percent of the firm that group would probably run the share price well above book value by a large multiple.
      That would provide the dollars to get through this crunch and not really have to pay it back.

      How every a cost cutting move with a more flexible work force they may wind out being like Maule… designed to make a lot of product or very little as the market demands without going broke.

      Maule has been unique in being owned by the same family since inception.

      • I would say Maule’s true uniquity in the GA Industry is that they have been managed well enough that they haven’t needed outside money desperately enough to sell their corporate soul. Aviation companies have a long standing tradition of horrific management when run by their founders who are aviation folks – not management folks. Companies like Cirrus are merely companies that would have failed back in the day, but the “venture capital” industry created in the 90’s needed something to eat. The real alternate scenario is not Cirrus as an American Controlled company – that would never have happened. In fact I would argue without China’s unique political position, even they would likely have passed on Cirrus at the time. That would have meant no Cirrus company. Between none and Chinese, Chinese is far better for aviation.

        Now before you get excited, I think China needs a major international “attitude adjustment” and that the US still ought to have an embargo on financial interchange with them. I also dislike Cirrus’ more than just about anyone you’ll meet – and don’t get me started on Cirrus drivers.

        BUT…

        If it’s China or nothing – and China is still a legal option even though I don’t think it ought to be – China is infinitely more beneficial to our shared interest.

  2. The Cirrus hate on started well before AVIC bought it. Cirrus did something unforgivable, it got serious about delivering what the market wanted, which was safe and attractive transportation.

    Cirrus owners were derided as lesser pilots unworthy of putting up with possible situations where their survival was totally dependent on skill and usually luck. Many were not even licensed and wanted to learn to fly in their nice new airplane not some beater 50 year old flight school Cessna or Piper.

    Cessna and Piper could have followed their lead but instead are content to just sell their airplanes to pilot puppy mills.

    Who owns Cirrus is immaterial, the company’s success is an example of American Entrepreneurship, a concept that is foreign to the Chinese and they know it, which is why they have avoided trying to run the company and just look at it as an investment opportunity.

    The worst thing that could happen to GA is the Chinese government deciding to get out of GA investing.

    • Cirrus marketed CAPS and high class interiors to non-pilots and at the same time dumped on legacy technology and airplanes (e.g., “some beater 50 year old flight school Cessna or Piper”), all while claiming to be transformative (see Free Flight by James Fallows). Bringing new pilots into aviation is always good, but Cirrus hasn’t been transformative. Legacy technology and clapped-out trainers are easy targets, but it’s no surprise that pilots who came to aviation from a different path than the Cirrus demographic aren’t fond of the brand.

  3. Voters in this country don’t seem to care that the politicians that are sent to Washington borrow all kinds of money to feed the national US government from the Chinese. If China buys American companies, I fail to see the difference. Sooner or later Cessna/Textron and Piper sitting on their behinds milking out 70 year old designs, this attitude come back and bite them in the behind. Just look at what has happened to Boeing with the 737.

    • Starting in 1975 I spent many years ferrying new Mooney’s and even a few Lake amphibians to Europe and Australia. The arrogance and lousy customer support at Mooney and Lake was shocking with the result now apparent; GA was then producing 15,000 aircraft a year and now they are pushing 1000. Ten years ago I spent 2 weeks with a Chinese tuk tuk manufacturer in Chongqing and have never forgotten how courteous and helpful they were. I own a Lake amphibian and I love the US open skies; I live in Switzerland. If complimenting is in order it is AOPA and the FAA who are deserving and ICAO who deserve the brickbats.

    • Mostly true, but I think your 737 example is a little weak. They seem to be doing quite well selling that old tried and true airframe. Keep in mind the A320 is now reaching forty years of age. Not exactly cutting edge. Southwest with their recent order just guaranteed a very good ROI for any investments Boeing made on that hated 737 airframe. Other than that, you’re right on.

    • Deconstructing the Cirrus Hate?

      IMO, the People’s Republic of China’s acquisition of American companies, including those in aviation, is like another step in an ongoing effort to consistently gain more and more influence and control over critical aspects of the U.S. economy. While these acquisitions are at times peddled as job creators and economic drivers, concerns surface regarding national security risks, economic competition, and the potential for unbalanced, biased societal and ideological influence. The argument that the “1700” jobs held by Americans are being leveraged as a justification for PRC takeovers should not be the topic.

      Perhaps an article with the title of “Examining the People’s Republic of China’s Takeover of American Companies: National Security, Economic Competition, and Societal Influence Concerns” would have been more appropriate.

      • Full agreement with Raf on this. All these “investments” from China are done with the explicit permission and involvement of the Chinese government. This government is not interested in saving 1700 jobs, they have one objective, which is to permeate western technology and where possible, obtain financial leverage within the capitalist markets. Pretty smart way to keep your enemies under surveillance.

      • It’s like the concept of “operational security”: one individual piece of information won’t give you the full picture, but if you get enough pieces of information, you can reconstruct the full picture. The more businesses we allow to be owned by the Chinese government, the more they gain and the more we lose. Eventually, it will add up to a serious disadvantage for us.

      • Much closer to reality than our man Paul. Someone buy him some Avgas, put him back in his cub, and send him on a trip to some company making better plane stuff. He’ll snap out of it.

  4. “ U.S.-style capitalism is amoral”. Just wow. What an ultra liberal viewpoint. You blew off the Chinese balloon fiasco and now you trash Capitalism? You have more in common with China than America at this point. And China is an enemy to America. Full stop. Guess you picked your side.

      • Correct. Paul used a word unfamiliar to many. Since amoral sounds similar to immoral, well, off go the angry retorts.

        • What could a Chinese ballon see that I can’t when looking at US missile sites on Google Earth?

          If capitalism is only amoral , the stock markets are even worse and therefore immoral in my opinion.

          Many economic super powers have been replaced by new ones who did “better”. Are you advocating force to curtail economic superiority?

  5. Years ago I bought a name brand set of specialty pliers from an American company, thinking that said pliers were made here in the USA. Wrong. Seems that China bought the company and the name.

    I put the pliers in my tool box. Only to have them start rusting. These pliers had more rust on them than a set of American sockets I purchased 30 years ago.

    Maybe this is why people hate on China and their products. It’s not just the cost difference.

    • Your ire directed at China is misplaced. It’s the American consumer who would gladly click on the 10% cheaper item on Amazon, regardless of source, than pay extra for quality. It’s a highly simplified version of capitalism we believe in here in the US–“cheaper at all costs” could be our mantra.

      Just look at the decline in Amazon over the last few decades. 20 years ago, I got 2nd day shipping for free, and overnight for $2 more. Now, I get 3-4 day shipping free and no upgrade option. The marketplace is filled with garbage products from fly-by-night suppliers and Amazon claims they’re helpless to weed out the vast number of frauds. Amazon’s top 20-30 search results are paid results, not based upon quantity, quality, or price. That item that has 3000 positive reviews? Take a look at the earlier reviews, they were almost certainly for a *different product* and the vendor just “updated” the profile to some new product to reuse the positive reviews.

      It’s all exactly what we consumers are demanding–cheap at all costs. It’s also what the stock market demands–more profit every quarter, or no more investment for you.

      • Here’s the problem with admonishing people to “buy American.” You don’t get a choice. There’s no box to check to get “Pay more for American-made.”
        Here’s an example: My lovely wife was trying to make me appear more presentable, and she went to LL Bean and got me two pairs of drawstring pants and a Henley-style shirt. $70 per item. Made in India, Indonesia and Vietnam.
        (Okay, here’s a exception: Fender makes guitars in many countries, and they will let you pay a staggeringly higher price for one made in the U.S. Given the excellent action and intonation of my Indonesian Stratocaster, I’m not tempted.)

  6. Then there are the many who oppose Cirrus but are not vocal and verbose enough to be called “haters”. There’s a feeling that the Chinese government gets plenty of US consumers’ money from other sources and products, and given the choice, aviation does not have to be one more.

  7. That same PRC investment in other GA manufactures has driven them into the bankruptcy.

    That aside, is there a follow on piece called Deconstructing the Rotax Hate.

  8. This whole argument focuses on a nano-industry, which is important to AvWeb readers but on an electron-microscopic scale when contrasted to, say, foreign purchase of US Government bonds. There is nothing to the argument that you get to 6th generation fighter technology via investment in GA technology – or the “takeover” of Van’s Aircraft. US economic development floats like a butterfly and stings like a bee, stays connected to morality via ESG and DEI programs, and keeps us growing in the long term. If an industry is inefficient or prices are too low, it falls by the wayside and investors look elsewhere.

  9. Paul is correct that capitalism is amoral. Like most amoral things, they can be turned to good or evil ends.

    The problem with short sighted investment strategies is government, not capitalism. SEC required quarterly reports are used, and intended to be used, by investors to make investment decisions. Any movement in a quarterly report will have an impact in shareholder activity, so businesses are reluctant to take short term hits for long term gains. They are always playing the short game and are inhibited from long term strategy. Under the current rules, losing the short game will kill you and you won’t be able to show that long term success.

    • Oh, it’s much worse than the quarterlies. There’s a lot of short term incentives from Uncle Sugar and other government bodies that lead to bad outcomes. If nothing else, we’ve trained businesses to get while getting is good and trained business leaders to grab and get out.

  10. Thanks, Paul. Yet another well thought-out piece about an issue that is far from simple, and far too often talked about from an emotional standpoint, rather than a reasoned one. While I doubt it has changed the minds of many, I admit that it’s gotten me thinking about the issue differently.

  11. Most don’t realize how much of this country (US) is already “owned” by China
    Cirrus is just a drop in a very large bucket.

  12. I 747ed a lot into Beijing, Shanghai. The days that had excellent VFR conditions around Beijing, I can count on one hand. Already then (15+ Yrs ago) there were rumours about the airspace opening up for VFR GA.
    I seriously doubt that it will ever happen, at least not the way we experience VFR GA. The air pollution with, at times, unexpected weather, the treacherous terrain, the militaries, the political system’s attitude towards GA (it “reeks” to freedom). Many non-democratic governments just don’t like that, all those pesky eyes prying down above places they don’t want to be looked at…..
    GA is not something one can start from scratch, one needs “old” hands that were honed by Years of experience but also scarred by mistakes and mishaps. At all levels.

    • After all, in this country, GA came first. Long before commercial. It was a case of the cat being out of the bag. I’m quite sure that if the commercial interests in the free world could do it all over again, GA wouldn’t be treated any differently than the Chinese do. Covid definitely gave us a taste of that and how precarious this pastime really is.

      • A very good observation. However, it is not a foregone conclusion that GA originated here. France, Germany and Brazil claim to have invented the airplane first (hence GA). I believe the key reason why GA flourished here is because of the notion of free movement that is baked into our psyche. We have a large number of tinkerers, adventurers and risk takers. I can’t imagine another country hosting an event like Airventure, where crazy people with their crazy flying contraptions stand proud. Perhaps this is why the Chinese ownership of a icon of US freedom is bothering us.

  13. It seems to me that this is a very long article that basically describes what we Americans have always done since before the dawn of the “information age”. That is respond to internet articles that make the mistake of adding a comment section. Facebook and most sites like this gave us the opportunity to voice our opinions and ever since we’ve heard all sides. In this case, the Chinese just gave us another subject. Nothing more.

    Just like “Ford vs Chevy”, and “Boeing vs Airbus”, light aircraft owners had their own opinions and prejudices, and those have always been “Cessna vs Beechcraft”, “high wing vs low wing’, and in the later years, anything old versus Cirrus. There is nothing new about this and it’s been around since long before the Chinese threw some money at Cirrus. Us “haters” of Cirrus never needed the Chinese to provide a reason. That’s an awfully strong word to describe folks who post their opinions. [hate] And if there is any hate, it’s against the Chinese, not Cirrus. I don’t hate Cirrus, I just don’t like their product. Never have and the Chinese had nothing to do with that.

    The writer seems to put a lot of credence in the opinions of “contributors” who just like to take any opportunity to voice opinions about things they usually know little about. Could it be that all of those Cirrus owners out there just didn’t see your article?

  14. I wonder how much our short term investment strategies are related to the significant inheritance tax that the US now has? Don’t hang up on me quite yet. We are talking about long term thinking, yes? When companies were owned by families – the people who ran them were thinking about their children and grandchildren. The advent of extremely high inheritance taxes made it less attractive for families to pass on businesses to their progeny.

    Then again, one could blame the disintegration of the family – who has offspring to care about any more? When a person’s primary interest is fully and only themselves – short term profits are a given.

    For a large corporation example look at the Weyerhaeuser company. They were a customer of mine for nearly twenty years. The corporate focus changed most dramatically when the family finally pulled out. It was very sad.

    If we changed the laws to encourage, rather than discourage, inheritances – would we see better long term thinking over time? Better investment in companies with decades long planning? I believe so.

    • That tax never effectively hit the truly wealthy outside a few sectors of the economy like agriculture.

      The real root is taxing income and profit. Go back and study the arguments about the income tax from when it was first deemed unconstitutional until the amendment was passed. You can find wisdom and prophecy among those trying to prevent the tax. No one wanting the tax foresaw what would happen, or if they did, they were quiet.

    • Sorry. You’re wrong.

      US Tax code currently does not impose tax on any estate under 13.5 million $. For 99% of the American public there is already no tax penalty to inheritance. And still we have no increase in long term financial planning in the country.

      It is a problem of absence. None of us are brought up exposed to long term saving – planning inheritances to benefit the family for centuries – or anything like it. The average person wouldn’t believe it was possible even if you showed them the math.

  15. Paul, you had me at “Western Style Capitalism”. In my opinion the whole concept of only playing the short game and everybody focusing on the quarterly earnings is what really kills progress in our country’s market. Our businesses, and jobs, would be far more long-term stable if we focused on the long game. This is true of not just Aviation but most all business. We need to invest in a long-term future.

  16. I’m sad that the Columbia/Lancair deal killed Cessna’s NGP – Next Generation Piston. Remember that? They had a flying prototype and everything. Jack Pelton was trying to update the entire Cessna line – from a new 2 seater (162) to the Columbus top end jet. None of those projects survived.

    • Pelton was the last “airplane guy” at Cessna. The current management at Cessna are following the Boeing model, starve the product development pipeline and milk the existing obsolete design for every penny in order to maximize short term return.

      Another chapter from the Jack Welch how to wreck an industry and get rich, book.

      • Pelton was great at Cessna (but couldn’t overcome the system) and now he’s great at EAA. We win either way.

    • Cessna has killed so many great piston designs. A partial list:
      152 Aerobat, the best trainer ever — and a good traveling airplane for people not in a hurry.
      162 — the modernized trainer, killed because they made it an LSA, and it had too little useful load.
      177 Cardinal & Cardinal RG — beautiful planes, and the only airplane whose back seat has too much legroom
      180 & 185 taildraggers — Alaska workhorses
      210 — a personal six-seat airliner
      336/337 — the in-line twin.
      All those other twins. From what I’ve read, the 340 sounds like it was the best.
      Some of these designs were flawed in version 1.0, but got killed instead of improved.
      Such a waste.

  17. Western investors: everybody’s bogeyman.

    The trope that western capitalists have a short-term focus, and asian investors have a long-term focus, is an old one. When people thought the Japanese were going to take over the world, back in the 1980s, a standard explanation was that the Japanese thought in decades and Americans thought in quarters. Well, we saw how that worked out (for those of you under 45 or so, Japan did not take over the world but instead descended into an economic doldrums from which it is only now emerging). Still, there was some truth in it: Japan had succeeded by focusing on quality and investment in the future of their high-growth industries, at a time when western managements had adopted a “harvest for bonuses” approach in many of the same industries. More on this below.

    One way to be “able to think in decades” is to have a very low cost of capital, which is essentially the same as having very few good investment opportunities. That’s what happened in Japan in the late 80s, and it’s happening in China now. “Having a long-term perspective” puts a positive spin on a bad situation.

    Another way to be able to think in decades is to have a healthy cost of capital, but a high expected growth rate for a long time. Western investors are perfectly willing to invest in these; this is why Tesla (an American company) seems to have a higher market cap than the entire European auto industry (or, you know, some wow statistic like that). It’s why Amazon was able to raise money for ever and ever without making a profit: it had high growth potential, and western investors were happy to step up (and of course it’s now very profitable).

    The “GE Disease” – or what I’ve called “harvest for bonuses” – is a real, persistent, perennial problem. Jack Welch didn’t invent it. The US auto industry was all over it, in the 1960s and 1970s. Investors in a mature company get fooled by a management team that cuts future-oriented spending, thereby boosting profits – but only for a short time (generally years to a decade, not a quarter or two). The managers collect their bonuses and head for the hills. When investors do realize that’s what’s been going on, they often don’t like it one bit – which is why the stock price craters at that point.

    • I think that’s mostly correct. Central planning promises to rid industry of this nasty greed, but doesn’t really. It steals from elsewhere in the economy until it craters under its own weight. It’s the worse evil.
      There’s little wrong with “western capitalism” that wouldn’t be improved by government more concerned with real crimes and cheating than easy fixes to non problems. Get government thinking long term and the corporations will follow. Until then, they will all try to get while the getting is good.

    • Concur. Much of Berto’s article was based on parroting tired old tropes. In the end, the market wins, and even in the largest GA market in the world, aviation has been a terrible business as a whole.

  18. Some of the hate is jealousy. The Chinese connection is just a vector for the transference.

    Analogous to California bashing.

  19. Bingo! Of all your many good and correct points, the last about where anger should be placed is spot on. While it has always been fashionable to knock Cirrus (not a pilots plane, or for pilots who don’t want to fly, etc…) many pilots aspire to fly modern, safe aircraft. That makes them no more complicit with a wrongs of the Chinese government than automobile driver complicity with oil company’s that manipulate data about environmental impacts, or dare I suggest….climate change.

    • I agree that the long-term impact of the acquisition of Cirrus Aircraft by AVIC is murky and a point of contention. Some people are concerned about negative consequences, such as the loss of jobs or the transfer of sensitive technology to China as miniscule as the problem may seem to some in the big picture. Others are optimistic about the future, believing that AVIC’s investment will help Cirrus to grow and expand.

      What is NOT a point of contention is the goodwill and loyalty of the Cirrus employees. With a dedicated workforce and a strong brand, Cirrus Aircraft appears to be well-positioned to lead and continue in GA.

  20. Paul, this article is SPOT ON, particually the consequences of what Jack Welch did to many publicly traded companies. My company being one of them. They sacrafice innovation for the next Qtr, promise more innovatino and when it costs $’s and the stock may be impacted, no innovation for you.

    Do I worry about China? You bet ya. But I also know that if something between the countries happens, Cirrus is here, China is there. I also believe the Chinese see their $’s coming from us to valuable to give up. It’s a true love hate relationship.

  21. Over all, anyone with a heart has to rejoice at the way capitalism (communist style but capitalism) has lifted nearly a billion people in China from poverty of a couple of bucks a day type, to the several hundred bucks a month for the most unskilled worker, middle class you have today.
    The arrogance and name calling from the Chinese government is annoying and dangerous — they seem to be copying another country well known for arrogance and name calling. Which has had bad experiences in Asia.
    Back in the 1990s it was Japan taking over corporate America which was all over the media, while as Michael Moore showed, General Motors was shutting down Flint for Mexico.
    I am sure Michael Moore is a hate figure for most Avweb commentators, while General Motors, still mainly in Mexico, a company so wrapped in the Stars and Stripes it advises Presidents — go figure.

      • “End of the Day, It’s Just Business”: The article concludes with a quote emphasizing the pragmatic and amoral nature of business, where profit and business interests often take precedence over patriotic or moral considerations.
        -OpenAI

  22. I cherish the existence of CAPS but I do not like how it has been used to justify a series of FAA-blessed design decisions that are either annoying (fragile seat cushions) to those that increase other risks, like higher stall, impossible spin recovery, autopilot is MEL, etc.

  23. As a keen observer of US manufacturing for the past 40 years, written a couple books on the subject, participated in expansion of US manufacturing overseas and worked with most of the commercial aerospace and defense companies, I feel compelled to offer an alternative view as to why opinions of China have become so negative. People have recognized that the rulers of China are not the benevolent capitalists we all thought they were, me included. Yes, I have spent time in China and worked with several Chinese companies.

    Typical of these topics, the CCP purchase of Cirrus is just not that simple. As the world renowned Economist Thomas Sowell points out in his many books and essays on the subject of globalization, for the most part, people have benefited from the spread of capital throughout the world. Simplistically, the Chinese government encouraged the transfer of component production to China by enabling cheap labor (relative the US). Cheap labor appeals to managers trying extract a profit. The CCP reinvested these profits in the United States. All good.

    I have learned through these experiences that the rulers of China, the Chinese Communist Party (CCP), have ulterior motives. The dark side of the Chinese investment in and ultimate takeover of US businesses is the Chinese Communist Party’s plan to become the world hegemony 2049, the centennial of the CCP’s revolution. This is not hyperbole. This plan is well documented in the book “The Hundred-Year Marathon” by Michael Pillsbury. The CCP expects to exert complete global control as they do today in China. What does this mean? In 20 years, if you want to purchase an aircraft, you will have to get permission from the CCP. You will have to be one of the anointed few to be allowed to purchase and ultimately pilot and aircraft.

  24. Oh, I also forgot to point out that many US companies are moving their manufacturing operations to India. As India enacts policies to become pro business and reduce corruption, US companies are finding India an attractive alternative to China.

  25. Something not to overlook when it comes to the Chinese. You can assume the Chinese government is lurking behind many company purchases. The Chinese will buy a company just for the technology. Technology gathering/stealing is sanctioned by the highest levels. Take a look at Meiya Group Global as an example. They don’t have to make money. They need to look legitimate, while any technology deemed worthy is accessed by the mainland.

  26. Great article Paul,
    It takes some “calyoons” to open for dialogue, Pandora’s proverbial box. China is not looking for war. They want to do business. When you are at war with other countries, it’s very unlikely they want to do any business with you. China does not need our technology, our military hardware, nor looking for our culture. They want to do business with us and other nations. They have not expanded their borders, nor are they trying to rule the world. They are capitalists tailored for their culture. The only nation who wants war, looking for “empire growth”, support, and long term sustainability under the guise of “democracy” with 900 overseas military basis outside is borders seems to be headquartered in the western hemisphere between the Atlantic and Pacific Ocean. Weaponize this “empire’s” debt based money by destabilizing foreign governments, threaten all dissent via economic sanction, followed by military intervention if sanctions do not work, whose narrative of “peace” by the threat of war is promoted by a corrupt press, and then ask “by the way, how about those items we ordered from you for our domestically assembled widgets?”. I wonder which nation fits those attributes with a historical track record easily demonstrated. Actions always speaks louder than words. China bought Cirrus voluntarily not under pressure of a gun or economic sanction. They purchased what nobody else wanted. Then they produce their product in the heartland of their “adversary”? China is employing their “adversaries” middle class to continue to build a world class product? And they are our new “enemies? Seriously? Once again, actions speak louder than words.

  27. Is China the new Christopher Columbus, seeking new markets and resources?
    Exempli gratia, the RAND Corporation’s (as well as other conservative and liberal think tanks) research on China’s acquisitions in the United States has found that these acquisitions are motivated by several factors, including access to technology and innovation, access to new markets, securing critical resources, and expanding China’s global influence.
    RAND has also raised additional concerns about China’s acquisitions in the United States, including national security risks, risks to intellectual property, and risks to jobs. RAND recommends that the US government closely monitor China’s acquisitions in the United States and take steps to reduce the risks posed by these acquisitions.
    The US government has already taken some steps to address these concerns, however, RAND argues that more needs to be done.
    In conclusion, China’s acquisitions in the United States are a complex issue with both potential benefits and risks. It is important to weigh these benefits and risks carefully, and to take steps to reduce the risks.

    It’s not Cirrus Aircraft, it’s China!

    • RAF,
      I see nothing wrong with China wanting to do business with us. I see nothing wrong with China purchasing whatever asserts we have for sale. Cirrus determined they could not continue to do business in the US under US rules, US regulations, and US capitalism with out significant long term investment. US capitalism decided by US investment companies that no US investment organization was interested. China looked at Cirrus from their unique capitalistic culture and saw something they felt they could get an adequate return on investment from. As many others have already opined, China has a much different investment worldview than the US. That does not make them an enemy. The US does not have a monopoly on capitalism. China has plenty of experience with supplying the US consumer with what the US consumer wants. No different in aviation products. They still build in the US, they still employ US workers, they still dominate the piston GA market, and have a very successful, very high customer satisfaction rating to back up their US investment. Why hate that success? Why attach a cold war mentality to China? Mao is dead, and his communism has died. Walmart, Target, Hobby Lobby, Stanley, McDonalds, KFC, GM, etc enjoy their overseas consumer business and China’s supply of the US consumer. Using think tank info from Rand Corp or Brokering Institute whose leadership are the “waterboys” for our Industrial Military Congressional Complex, whose leadership is a revolving door between Capitol Hill and their boardrooms is akin to having the “monkeys guarding the bananas”. Rand Corp and many others have projected their narcissism onto China… and the US public has been drinking their Koolaid for a long time. China is not perfect. Neither is the US. But our actions speak volumes about our “empire” building and our lack of plain ol’ diplomacy. China’s investment in Cirrus has been good for Cirrus, the US, China, and aviation globally. What’s wrong with that?

  28. We’re living in an age where vast numbers of people on social media make posts that hate puppies. Parents are paying astronomical sums to send kids to universities where they learn to be professional victims. It all starts from from envy, and groups that leverage that for their own purposes.

    So no surprise, just like the Bonanza pilots that came before, that small minded people have found reasons to hate Cirrus. Thinking that it will ever change is endearing, but naive.

  29. I’m so disgusted with the short-term thinking of American investment, as Paul has very aptly summarized in this article. It’s all about the quick buck. No focus on building a company for the long term. And it has ruined countless formerly great companies.

    • And yet… Americans are still the world leaders in innovation. Maybe the pressure of short-term investment thinking is what makes America Great?

  30. Jim Holdeman: “What’s wrong with that?”

    China’s Impact on US Employment
    The impact of China on US unemployment has been a controversial topic for many years. Some think tanks argue that China’s rise as a manufacturing powerhouse has led to the loss of millions of US jobs, while others suggest that the overall job decline has been relatively minimal. Additionally, China’s economic growth has intensified competition for US businesses, especially in the manufacturing sector. However, it has also opened new opportunities for US businesses, particularly in the service sector. For instance, US exports to China have significantly increased in recent years, resulting in job creation in the US transportation and logistics sectors. As a former small manufacturing business owner, I believe that the impact of China on US employment has been mixed. While there have been some job losses in the manufacturing sector, there have also been gains. According to the Peterson Institute for International Economics, quantifying the net impact on US employment is challenging, but from what I’ve read, it’s likely that China has had a relatively small negative impact overall.

    Cirrus Aircraft Acquisition and Chinese Intentions
    The acquisition of Cirrus Aircraft and other undercapitalized entities by the Chinese Communist Party (CCP) government has sparked debate about their intentions regarding improving relations between the two countries. In my opinion, it’s a situation that calls for a methodical scan. On one hand, some see these acquisitions as a signal of the Chinese government’s willingness to invest in US companies under domestic management, interpreting these transactions as a positive development for both countries, aimed at dispelling the notion that China poses a threat to US interests.

    On the other hand, some argue that these acquisitions may pose a national security threat. Concerns revolve around the possibility of the Chinese government using its hands-off ownership of companies like Cirrus Aircraft to set a calming precedent, to gain access to other technologies, or influencing US policy. Intellectual centers, or as per your description, the Kool Aid stands, contend that these acquisitions are part of a broader Chinese strategy to acquire US companies with minimal resistance while seeking influence and control in key industries, including print and digital media. Ultimately, time will tell whether the acquisition of Cirrus Aircraft benefits the United States. While some view it as an opportunity for economic growth and cooperation, others raise concerns about national security implications. Surprisingly, a recent poll by the Pew Research Center’s Global Attitudes Survey, conducted in March 2023, reveals that 52% of Americans believe that the Chinese government’s acquisition of US companies poses a national security threat, while 48% believe it is positive for the US economy.

    However, it’s important to note that the Chinese government has a history of using its economic power to influence other countries. For example, China has employed trade sanctions to pressure countries like Australia, Belgium, and Canada when they criticized its human rights record. Additionally, China has faced accusations of interfering in the internal politics of other nations through its economic influence. Given China’s history of leveraging its economic power, it is understandable why some people are concerned about the Chinese government’s acquisition of US companies.

    The People’s Republic of China (PRC) appears to be executing a carefully planned and well-supported strategy that includes Chinese acquisitions in US media as part of a broader plan to expand China’s influence and control over information flows. The Chinese government views the media as a powerful tool for shaping public opinion and promoting its interests. By acquiring US media companies, the Chinese government gains access to a large audience and can influence how Americans perceive China. This dynamic may explain the 52% to 48% poll statistics mentioned earlier. I’m in the 52%.

    The Chinese government has been particularly assertive in acquiring US media companies in recent years, raising concerns about the potential for Chinese influence over US public opinion. Intellectual centers argue that the Chinese government might use its ownership of US media companies, the list is long and getting longer, to promote Chinese propaganda and censor content critical of China, and to use media holdings to influence American elections and undermine US democracy. So, there are concerns about the consequences of Chinese ownership in the US media industry, particularly regarding potential propaganda, censorship, and political influence. And I think there’s a lot wrong with that.

  31. Global “empire” expansion has been demonstrated quite well by the Red/White/Blue under the guise of “National Security”. Our “empire” leaders plays the “national security” card to the US public thru the ownership of our “free press” whenever it needs to print money to pay for our globalist led leadership’s desire to acquire another country’s assets, namely manufacturing and raw materials. To gain access to another’s assets you economically sanction the intended victim first, then militarily intervene under “national security” concerns, installing pro West puppet leadership by any means available to ensure US control. The US leveraged the Allies victory in WW II to make the US dollar the world’s reserve currency. The US dominated the decision to carve up and define Europe and Asia’s countries and borders. Lend Lease bankrupted Great Britain and the Soviet Union removing Great Britain from “empire” status. The new expanding Red/White/Blue “empire” then began being the world’s police force justified over and over again by its constant “national security concerns”. Eisenhower was quite vocal including warning over and over again the Industrial Military Congressional Complex’s donor led political coup of our government. He knew better than any previous President the complexities, human carnage, economic costs, and the inevitable atrocities of war. Mao Se Tung over-through the US backed Chang Hai Chek Chinese government recognizing the the US led puppet government installed prior to and during WWII. WWII was a global fight for national resources thru the guise of “national security” as a result of WWI’s treaties stripping various participants of access to national resources, keeping them economically hobbled to the “empire’s” control. Diplomacy and statesmanship vanished with economic sanction backed by military threat combined with toppling foreign governments from within thru corruption/intelligence backed coups replaced by pro West leadership. This kind of empire building constantly requires an “enemy” of the day to keep the Red/White/Blue’s population focused on the “enemy” not on its government. This “empire “ has and continues to create global conflicts, chaos, and wars under the guise of democracy and freedom as a moral justification for global intervention thus saving various countries from themselves. That is the Koolaid you and most Americans are drinking. This Koolaid justifies war in Ukraine, Yemen, Lebanon, Iran, Iraq, Syria, Somalia, Taiwan, Bosnia, Niger, El Salvatore, Grenada, Nicaragua, the recent US invasion of Haiti, etc. You don’t think Mexico, South America, Russia, and China has not felt that constant US stirring of global unrest? BRICS, the Belt and Road Initiative, and gold restored as the worlds reserve tier one assert/currency instead of the “greenback” is the result. Now we have a currency tied to NOTHING with Treasury Bonds held by CHINA, Japan, and others being sold. Guess what? We are economically imploding just as any other”empire “ who have used “national security concerns” to justify its out of control taxation and spending by attempting to corral the planet’s resources , removing governments at will, destroying each counties unique culture and national identity in its attempt to homogenize them into a US version of global hegemony based on our morally superior version of capitalism. As history shows, especially the last 50 years, it does not matter who sits in the White House or Congress. Donors rule this country. Money determines policy and war. And we are asleep as a population for the moment. We will awake when we feel it in the pocketbook enough to finally push back. We are in the worst condition a country can be in…right now. What that pushback might look like is not pretty.

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