Last year when Bend, Oregon, company Columbia Aircraft exhausted its last gasp efforts at getting enough cash to stay in business and declared bankruptcy, there was immediate speculation that Cessna would buy the company’s assets at auction. As it turned out, Cessna had been looking at that possibility for some time already. And by the time of the inevitable fire sale in November of 2007, Cessna was ready to make its move. The Wichita manufacturer’s $26.4 million offer won the day and earned Cessna the business, including the type certificates to the naturally aspirated Columbia 350 and the turbocharged Columbia 400, as well as a new niche in a market that it had aspired to for some time.
And the acquisition gave new life to a pair of marvelous single-engine designs and signaled an important change in strategy for Cessna, an 80-year-old company that had previously developed every one of its hundreds of certified airplane designs in house.
A Surprisingly Good Fit
One of the most compelling reasons for Cessna to make the acquisition of the assets of Columbia was that the 350 and the 400 were surprisingly good fits for Cessna.
Of course, at first glance the opposite appears to be true. The Bend airplanes are low-wing, composite designs. They are, in fact, as dissimilar to Cessna’s current single-engine piston lineup as you could imagine. Even its business jets are all-metal designs, and the under-development model 162 SkyCatcher LSA is a sheet-metal airplane, as well.
This apparent flaw was in reality a big selling point. Cessna has been interested in developing composite piston designs for years now. It was, in fact, well into the design phase of the Next Generation Piston (NGP) program when it announced it at AirVenture Oshkosh a few years back. At the time, Cessna President Jack Pelton acknowledged that versions of these composite construction airplanes being developed would likely take the place of the all-metal 172, 182 and 206 in Cessna’s lineup at some unspecified point in the future.
So with the NGP strategy being public knowledge, there was no need to be coy. Cessna was moving toward composites anyway, and with their best-in-class performance, the Columbia airplanes were that much more attractive. Capable of great speed — better than 190 knots true for the 350 and better than 235 knots true for the 400 in the flight levels — the airplanes would add a level of performance that Cessna couldn’t offer its customers, maybe not even with its under-development high-performance NGP.
In addition to the airplanes, Cessna was buying expertise, a fact that Cessna President Jack Pelton admits up front: “One of the other things they have that we didn’t have was that [composite] experience. We valued the fact that they had 400 employees … and some management also … who had been working in composites for many, many years. So that’s what we bought … that know-how.”
But the deal never would have happened, Pelton says, if it hadn’t been the right fit: “For a good acquisition there has to be some level of synergy,” Pelton said. And he added that while Columbia had what Cessna regarded as “probably the best in the industry in that class of airplane,” it was lacking a lot of other elements to success that Cessna could immediately provide.
Service Advantage
From the point of view of an owner of an existing Columbia airplane, the biggest coup was landing with a company that could and would support the airplane. John Stack, Cessna VP in charge of strategic planning, told me that Columbia owners immediately “took a keen liking to Cessna and what we could bring to bear in terms of protecting the value of their existing airplanes … which was critically important to not having a bunch of orphan airplanes out there.”
“But more importantly,” Stack added “we could take the business forward and really make the Columbia product a sustainable platform, adding the improvements to the product that the former Columbia wasn’t able to.”
It’s no secret that despite its long-term plans, Columbia was a long ways away from the kind of world-class aftermarket support on which Cessna prides itself. Indeed, Cessna will add selected existing Columbia service centers to its already extensive network. Cessna 350 and 400 owners will be able to get their airplanes serviced (with the exception of some composite repair work, which will be done at specialized centers) at any authorized Cessna Service Center. This is a huge and immediate benefit to Columbia owners, some of whom in the past have had airplanes on the ground for lengthy stretches awaiting service.
Low Wing Not a Barrier
For the piston single-engine segment of the market, Cessna has long been known as the high-wing airplane maker. But the truth is, Cessna has never had an aversion to low-wing airplanes and has built hordes of them. From the multiengine T-50 “Bamboo Bomber,” introduced way back in the late 1930s, to the thousands of low-wing light twins, cabin-class twins and Citation business jets it has churned out over the past half century, Cessna has committed simply to building airplanes that make sense and provide great value regardless of their configuration. That’s exactly how it is with the 350 and 400.
Moreover, Cessna’s main competitor for the past many years in the piston market has been Cirrus Design, the manufacturer of the hugely popular SR22 high-performance, fixed-gear single — the high-performance, low-wing, fixed-gear single, that is. The 350 and the 400 have always been natural competitors with the SR22 and SR22 Turbo. And with the stability and support that Cessna brings to the equation, the competitive picture changes.
Stack told me that the acquisition in essence jump-started the NGP program. While Cessna clearly could have developed the airplanes in house, the questions were, how much would it have cost and how long would it have taken? An educated guess: a few years and a couple hundred million dollars. The Columbia acquisition slashed the cost figure dramatically and got Cessna high-performance singles out the door in a matter of months after it took over in Bend.
Being in Bend
When Cessna’s new general manager of the Bend plant, Mark Withrow, got into town, he said that he began by making no changes at all. “I just wandered around the plant and asked a lot of questions.” He continued, “It was immediately apparent that while the former Columbia employees were the composites experts, Cessna could bring a wealth of manufacturing acumen and process sophistication to the Bend plant.”
In addition to its expertise in making airplanes efficiently, Cessna brings to Bend the kind of clout that Columbia never dreamed of having.
“They didn’t have the supply chain buying power that we have,” Pelton said. “So when you look at a company that’s distressed like that, and you look at their bill of material, you find that we buy a lot of the same components from the same suppliers. Well, we have long-term relationships, long-term purchase agreements with much more favorable terms than what they were able to garner, so immediately we’ve brought some cost savings to our supply chain.”
For former Columbia employees and residents of this Central Oregon town, what Cessna’s arrival brought to town was something far more tangible. The acquisition brought, in Withrow’s words, “instant stability, credibility, and that fact that you knew when Friday rolled around, you were getting paid.”
There were approximately 430 Columbia employees on the books when Cessna moved into the facilities at Bend Airport (KBDN) in January, and by May it had added 20 new workers as it began the rampup process, turning out at that point three airplanes a week.
When the big sign out front changed to read “Cessna,” employees immediately got, in addition to steady jobs with a successful company, brand-new healthcare and other job benefits, including paid holidays and a pension plan. To say that the acquisition was popular with the workforce is a huge understatement.
Touring a Busy Plant
I visited the newest Cessna plant just a couple of months after Cessna had taken possession, to see how things were shaping up. Frankly, my expectations were modest. After all, ramping up production from zero to 150 airplanes a year is a Herculean task, and two months hardly seemed time enough to get up to speed.
How wrong I was.
Now, if you’ve never been to Bend, well, you should go. Nestled in the heart of the snow-capped Cascades with a white water river (the Deschutes) running through downtown, Bend is a great mix of high-tech and high-style living with a heady blend of outdoor activities — from mountain biking to rock climbing — thrown in for good measure.
Just outside of town situated on the east side of the one-runway airport is the former Columbia plant, an attractive facility just a few years old. I showed up at the plant with Cessna’s VP of Communications Bob Stangarone (not only my guide for the visit but my CJ2+ pilot for the trip from Wichita, as well). After chatting with Withrow about the challenges of the adoption process, I went on a tour of the plant with former Columbia employee and current Cessna Technical Marketing Specialist Doug Meyer.
One of the big lessons I learned on the tour — and there were more than a few — was that the former employees of Columbia were very proud of the airplanes they built. The 350 and 400 were fine airplanes before the transition, and they know it. And seeing the production process, as a collection of loose-draped sheets of composite material were turned into shiny, high-end flying machines, now with Cessna’s name emblazoned across the tail, gets the point across nicely.
The employees I chatted with were all thrilled to be with Cessna. In part, that’s thanks, as I said, to their employment picture improving immediately. But also it’s because the change will allow them to put a lot more of their airplanes in the hands of pilots and do that without any of the compromises on service and support brought on by Columbia’s financial woes.
The factory tour underscored something I already knew, that the former Columbia airplanes are very intelligently engineered. They are largely composite airplanes but make use of metal where it makes sense, like on the landing gear, where steel helps dissipate the heat generated by the brakes, or in the horizontal tail spar. Even the use of composites is smart, with lighter but much more costly carbon fiber used where it makes sense — and its use is extensive — and e-glass used in other places. Even the way the components are cooked is smart, with high-enough temperatures used in the cure, so unlike most composite airplanes there’s no restriction on what color they can be painted. (Want to see more? Come along with me and Doug Meyer on the new Cessna Bend factory tour by checking out our photo gallery.)
Flying Cessna’s Newest Model
After my tour I had a chance to go flying in the new Cessna 400, an airplane I’d never flown before, at least not one that said “Cessna” on it. But seriously, it had been a few years since I’d gotten the chance to fly the 400.
The airplane had only recently been introduced, and the Garmin G1000 cockpit was still a couple of years away. It was a great flight, a short cross-country hop from Westchester County down to Atlantic City and back. Well, short for that airplane anyway. In my subsequent flight report, I gave the airplane a very positive review.
As far as the airframe is concerned, it was, in nearly every regard, the same airplane it is today.
Since that time, I’ve started flying turbocharged airplanes on a regular basis, and I’ve come to appreciate more fully the value and challenges they offer. I’ve also gotten a lot of G1000 time in a wide variety of airplanes, so I was looking forward to seeing how Garmin’s flat panels worked in Cessna’s new piston flagship.
I won’t go into a lot of detail, because this isn’t a flight report on the newest Cessna but, rather, a story about how a couple of brand-new airplane designs (well, in aviation anyway, 10 years passes for brand new) fit into the scheme of things for their new owners, a long-established Midwestern company called Cessna.
As I taxied out in the brand spanking new airplane with Cessna Product Specialist Emily Watters in the right seat and Doug Meyer in back, I found I felt very much at home in the airplane, thanks in small part to my smattering of 350 and 400 time, but more because of all of the G1000 time I’ve gotten over the past few years. I think that a Cessna customer moving up into a 350 or 400 from a 182 or 206 will feel the same way about their transition.
In fact, when we spoke at Sun ‘n Fun earlier, Pelton underscored the importance of the G1000 in the acquisition calculus, as did company strategist John Stack. The 350 and 400 G1000 installations are not identical to those in Cessna’s Independence airplanes, no more than a Mustang’s is to a 172’s, but the overriding system commonality gives customers a real leg up in transitioning to Cessna fast glass. It also gives Cessna one more avenue to move its famously loyal customers up through the product line to ever-faster airplanes.
Now, I’d had my arms around the concept for a while by then, but I have to admit that when Emily, who was handling the radio calls, announced that “Cessna 400 40387” was taxiing to Runway 34, I almost corrected her and said “Columbia.” She saw my reaction and volunteered that she was only now getting used to the sound of it herself.
We had a great flight in the 400. We took it to its ceiling of 25,000 and saw how fast it was (very), flew some WAAS approaches with the G1000, and I rediscovered that it was indeed a very pleasant airplane to hand-fly. Since I flew it last, the big change is to the panel. The G1000 system (with the integral GFC 700 autopilot), as we’ve reported in previous stories on the airplane, brings a whole new and entirely appropriate level of sophistication to this remarkable cross-country machine. And pilots love the keypad controller, as I did.
I have to admit that my perception of things was probably colored by the fact that so many uncertainties about the company — questions about its ability to provide support for its products and about its long-term financial prospects — were suddenly moot. The Cessna 350 and 400 are here to stay, that is unless they’re replaced by even better versions of themselves. That fact seems to make them fly more solidly than ever.
Going Forward
Cessna plans to build around 150 airplanes in Bend in 2008, a plan that Withrow and Pelton both feel might even be a little conservative given how well the transition has gone. How many airplanes they build in 2009 will depend, says Pelton, on customer demand, though he says that he’d like to see it go to 250 airplanes a year, a level of production that Withrow says can be easily accommodated with the current facilities.
And the rampup has gone better than Cessna had ever imagined it would. One of the biggest reasons for that, undoubtedly, is that Columbia did such a good job developing and building the airplanes that there are simply no big rough spots for Cessna to fix. Instead they can focus on getting the products back into production and into the air.
There will be a few near-term improvements. Both airplanes, for example, will soon get Garmin’s Synthetic Vision product, SVT. Furthermore, Cessna is evaluating the ice protection on the airplane and will possibly offer it with factory-installed TKS ice gear.
And Pelton says that there will likely be follow-on products at some time in the future, perhaps even a pressurized model, though such introductions are years off.
For now it’s time to transition from buying and taking charge of a new company and model lineup to building and turning out those airplanes reliably and consistently. The Midwest airplane manufacturing giant whose vision took root in the dawn of aviation and whose product line today runs the gamut from an emerging two-seat sport plane to an emerging widebody intercontinental business jet, has fully welcomed these new airplanes, a new company and new workers into the Cessna family. And it can now get down to the business of building, selling and supporting its newest single-engine piston airplanes, the 350 and 400, proudly built in Bend, Oregon, by a company called Cessna.
