Cirrus competes for high-flying expansion

Despite Cessna agreement, company eyes Columbia Aircraft


Oct. 22--Columbia Aircraft Manufacturing Corp. is searching for a soft landing and, though it has filed for bankruptcy, the company suffers from no shortage of airstrips from which to choose.

Cirrus Design Corp. of Duluth is one of the suitors hoping to land the Bend, Ore., airplane-maker. But it has competition from others, including Cessna Aircraft Co., which has signed a letter of intent to purchase the beleaguered aviation company.

Randy Bollinger, whose marketing firm, AMPT Associates, represents Columbia, said the letter of intent doesn't bind the company to Cessna. He said that, ultimately, a bankruptcy court probably will approve the sale of Columbia to the highest bidder.

"The letter of intent basically establishes a minimum baseline for other bids," Bollinger said.

Cessna has agreed in principle to a $22 million deal that consists of a cash offer plus the assumption of some of Columbia's outstanding debts.

Cirrus CEO and co-founder, Alan Klapmeier, considers that price a bargain.

He pointed out that Cirrus invested about $60 million before it was able to obtain the Federal Aviation Administration certification needed just to begin mass-producing its first plane, the SR20.

The buyer of Columbia could acquire an already certified design for a fraction of that cost.

Cirrus and Columbia simultaneously came forward with sleek new designs for four-seat low-wing aircraft in 1998. Both companies had their roots as makers of kit-built planes and chose lightweight composites as their material of choice.

Klapmeier said Cirrus' primary design considerations differed from Columbia's, however.

"We wanted to build an airplane that was easier to use, rather than just focusing on performance," he said.

Cirrus also dedicated itself to improving safety, becoming the first aircraft manufacturer to installa parachute system as standard equipment aboard every airplane it makes.

Columbia produced a slightly higher-end airplane that is a bit faster than Cirrus'.

Although Klapmeier admits he's still partial to Cirrus aircraft, he believes the Columbia 350 and 400 would fit well with within the Cirrus product line, broadening the company's market.

"If you look at what Cirrus brings to the table, it's an understanding of how to build composite airplanes," Klapmeier said. "I think we can use our knowledge to improve Columbia's production and lower its costs. If we can't build those airplanes profitably, no one can."

If Cirrus is successful in its acquisition bid, Klapmeier said the company will continue to produce airplanes in Bend, Ore., where Columbia employs about 400 people. The plant produced 185 airplanes last year.

By comparison, Cirrus employs about 1,300 people and produced 721 airplanes in Duluth in 2006.

Robert Stangarone, vice president of corporate communications for Cessna, believes the Columbia 350 and 400 also would strengthen his company's line of single-engine airplanes.

For its part, Cessna, too, could help Columbia grow, he said.

"We're by far the largest general aviation company in the world," Stangarone said, pointing out that Cessna has 190,000 airplanes in the field.

"We have 80 years of experience in this industry, and we have a very refined and extensive sales and marketing infrastructure that would benefit Columbia tremendously," he said. "We could really increase their reach and bring financial stability to their operations."

Cessna has been working to develop a new composite single-engine airplane to better compete with the Cirrus SR22, which lays claim to being the best-selling new airplane in the world. Purchasing Columbia could give Cessna a leg up in this effort.

Cirrus' entrance into the bidding for Columbia is hardly a surprise to Stangarone.

"We certainly expected there would be other bidders," he said.

"When you look at the number of interested buyers, it validates the fact that Columbia makes a very good airplane," Bollinger said.

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