A Matter of Insurance

One wouldn’t expect the 1999 crash of a Cessna 150 trainer to interrupt the world’s supply of Marvel Schebler (MSA) float carburetors and parts. However, that’s exactly what has happened. As a result of that crash — which injured flight instructor Nicholas Grace and student Mark Godfrey — and subsequent litigation, MSA float carburetor manufacturer Precision Airmotive has been unable to obtain liability insurance. “The insurance firms wouldn’t even offer us a quote,” says Scott Grafenauer, president of Precision Airmotive.

The result? Without liability insurance, the world’s only source of MSA float carburetors — used in roughly 100,000 Lycoming, TCM, and Franklin engines — has shut down production, and laid off employees at the Precision Airmotive plant in Marysville, WA. “Float carburetors and parts account for about 30 to 35 percent of our total business,” Grafenauer tells AMT magazine. “We’re still manufacturing fuel injection and FADEC systems, but no more float carburetors.”

At press time, Precision Airmotive had signed a tentative agreement with a group led by Aero Accessories Inc.’s president Tim Henderson, to sell its MSA production line to his company. As reported by EAA News (www.eaa.org), the deal would see the production line moved to AAI’s plant in Gibsonville, NC, with the carburetors sold under AAI’s Tempest brand name. However, this move would not be completed until Jan. 31, 2008, leaving a gap in production until that time.

How did float carburetor users end up in the middle of this mess, and what does it mean for aviation maintenance as a whole? To find out, AMT has put together the pieces of this puzzle.

The crash
On the night of July 26, 1999, flight instructor Nicholas Grace and student Mark Godfrey took off in a Cessna 150, from a small airport near Daytona Beach, FL. It was a night training flight: Godfrey was lifting off from a touch-and-go landing when the Cessna’s engine failed. According to www.lawyersweeklyusa.com, “The pilots attempted an emergency landing on a nearby roadway, but clipped the top of a tree and crashed nose-first into the ground.” Both men were injured.

Afterwards, Grace and Godfrey contended that their crash was caused by a defect in their Cessna’s float carburetor — one made by Precision Airmotive and installed by Teledyne. After years of litigation, a jury found for the plaintiffs in Godfrey vs. Precision Airmotive, and a judge awarded a $54.5 million verdict. The judge assessed $38.6 million against Precision Airmotive and $15.9 million against Teledyne. According to Grafenauer, the defendants are fighting the decision.

The context
The Marvel Schebler float carburetor can trace its history back to the early days of internal combustion engines. In fact, George Schebler of Batesville, IN, is credited as being the person who invented the carburetor. According to www.batesvilleareahistoricalsociety.org, Schebler, “a local farmer and tinkerer, devised a gadget out of a tin can and butterfly flap which he eventually marketed and manufactured under the name Schebler Carburetor. His invention remained basically unchanged from his original patent in 1902 until the fuel injection process was begun in the mid 1960s.”

Schebler apparently sold his stake in 1912, but his carburetor firm lived on and became the Marvel Schebler Carburetor Company by 1928. In 1982 the aviation side of the business was purchased by Facet Aerospace. Eight years later, Precision Airmotive bought it from Facet.

This sense of history was very much present in the Nov. 1, 2007 letter that announced Precision Airmotive’s shutdown of floating carburetor production. “These FAA-approved carburetors were designed as early as the 1930s and continue to fly over a million flight hours a year,” writes Precision Airmotive general manager Roger Hall. “After decades of service, the reliability of these carburetors speaks for itself.

“This year, despite the decades of reliable service and despite the design approval by the Federal Aviation Administration, Precision Airmotive has been unable to obtain product liability insurance for the carburetor product line,” he continues. “While we firmly believe that the product is safe, as does the FAA, and well-supported by dedicated people both at Precision and at our independent product support centers, unfortunately the litigation costs for defending the carburetor in court are unsustainable for a small business such as Precision.

“Therefore, as of Nov. 1, 2007, Precision Airmotive LLC has been left with no choice but to cease production and support of its float carburetor line.”
The impact

Debating the merits of the Godfrey vs. Precision Airmotive decision belongs in the pages of other magazines. What AMT is concerned with is how this decision affects the people who fly and service float carburetor-equipped aircraft.

Simply put, it has hit those without a backlog of float carburetors and parts pretty hard. This is not surprising, given that Precision Airmotive is the only source of these components.

Fortunately for float carburetor users, Aero Accessories’ acquisition of Precision Airmotive’s product line will restore the supply of these components in 2008.

“We’re pleased to hear that Tempest [owned by Aero Accessories] has acquired this critical engine accessory business from Precision Airmotive,” says H.G. Frautschy, executive director of the EAA’s Vintage Aircraft Association, as quoted by EAA News. “While the issue of parts with only a single-source supplier still remains one for concern, it’s good to know that aircraft owners and operators will experience minimal disruptions to the supply of carburetors and parts for their aircraft.”

Frautschy is being reserved in his assessment. The fact that a $38.5 million judgment — one that is being disputed — can effectively end the world’s production of critical aviation components is mind-boggling. Still, that is what has happened here: as a small company of 43 employees, Precision Airmotive doesn’t have the deep pockets to ride out an unexpected $38.5 million payout without suffering serious damage. This is why the insurers balked at providing it with liability insurance. Aero Accessories is larger, which is why it can make a go of the float carburetor business in the current business climate, insurance premiums included.

Now the damages assessed against Precision Airmotive and Teledyne could be cut during a future appeal; such things commonly happen. Even if the damages are cut, this company will still have lost a third of its business and a historic product line, plus those employees who have been laid off. Add the impact on parts supply worldwide, and the fallout from the Godfrey vs. Precision Airmotive decision is considerable.

Sadly, the cause of this disruption is neither the float carburetor, the 1999 Cessna crash, nor the $38.5 million charged against Precision Airmotive. Rather, it is the insurance industry’s unwillingness to stand by a long-term client before the final verdict has been rendered.