Piper Aircraft seeks to hire engineers for the PiperJet
Hopes that providing millions of dollars in taxpayer incentives to Piper Aircraft might bring new high-paying jobs to Vero Beach finally seem on the verge of being realized with news that the area’s largest private employer is seeking to hire 50 engineers to work on the new PiperJet.
“Our ownership group is supporting the development of the jet and it is full steam ahead,” new Piper CEO Kevin Gould told Vero Beach 32963 in an interview. “If you go on Piper.com and go to the jobs section, you’ll see postings for engineers. We are hiring for the jet program.”
Gould, who took over the top job at Piper on June 26th, said the new Bruneibased owners, Imprimis, are committed to funding the PiperJet – which is likely to accelerate development and getting the plane to market – and “are committed to Vero Beach.”
As Gould looks out the window of the trailer from which he will soon be moving, he realizes he has two courses he must chart simultaneously.
Gould said he was instructed by Imprimis to plan for the future by building a leading-edge international plane company, while at the same time to avoid losing money at the Vero Beach plant during the current recession which has had a severe impact on general aviation.
The xx-year-old executive, who holds a law degree from the University of Southern California and a master’s degree in business administration from Harvard Business School, has good news when it comes to the future: the company is one of the few in the aviation industry that is actually looking to hire new employees.
However, despite everyone’s best efforts, he said the current economic outlook means continued furloughs for Piper’s factory workers until the economy begins to improve. The closest thing Gould was able to offer to a silver lining was that he does not foresee more layoffs if the conditions stay the same and do not worsen.
“I look at our business in two distinct categories, we’ve got the ongoing business of the airplanes we are building and it is a very tough market right now,” Gould said. “Our new ownership group did not buy the company to fund a bunch of losses, we have to run that and take care of ourselves.
“Separate from that is the forwardlooking part of the company, the strategic effort we are going to make, both in sales and marketing internationally and product development, that’s where our new ownership wants to see it happen. Our challenge is to see that we continue to run the base business in an effective and efficient manner.”
Gould has one advantage his good friend and former boss Jim Bass did not – ownership that actually wants to be in the aviation business. To the end Imprimis has already given the green light to move forward on the PiperJet and backed that up with an influx of capital that allowed the company to post job listings for engineers.
Gould was one of the first people Jim Bass hired in 2005 when he took over a company that had been through a series of “interesting” ownerships, not-so-great relations with its employees and had been devastated by hurricanes Frances and Jeanne.
“I think the Bass era was about getting Piper out of the intensive care unit and bringing it back to health and even getting it up to the point of being an athlete,” Gould said. “We had a lot of structural damage, the company was in debt and the product line was stale.
“There were bad employee relations, everything was wrong and we have worked real hard over the last four years and have been able to not only bring the company back to health, but to make it vigorous.
We proved that by launching the Matrix last year, which was a product that hit the ball out of the park. We sold a hundred units in the first year, it’s a fabulous airplane.”
As if to mark the turnaround, Gould and the rest of the executive staff will be moving out of the trailer they have occupied since the hurricanes hit. It is the realization of a promise Bass and his team made to employees that they would upgrade the rest of the plant before they would consider fixing the executive suites.
“One of the things we decided was we were going to take care of all the hurricane damage,” he said. “We were going to fix everything else first and the last thing (the employees) were going to see fixed was the executive offices because we were putting the company and (them) first. And that is exactly what we did. In about 30 days or so, it will mark the culmination of all the repair work we have done and we will finally be back to normal.”
While the Bass era returned normalcy to a proud and productive brand, Gould has the challenge of making the world aware of the Vero Beach-based company.
“The Gould era is going to be taking what we have created as an athlete and turning it into an Olympic champion,” said Gould. “We’ve got new ownership now and they have a much more strategic focus. That means expanding internationally and continuing to broaden our product line.
“In the international portion we certainly will have much more focus on Asia, our ownership group resides there and more importantly, that is where global growth is going to be in the next 20 to 30 years. We see that as a real opportunity and we are going to work very hard on Asia and other parts of the international marketplace to really expand Piper’s reach. We are also going to expand our product line and the first thing at the top of the list is the PiperJet.”
Gould said orders for the PiperJet have remained relatively stable. The advantage he has now is that Imprimis wants to help fund getting the jet to market, where the previous owner, American Capital, expected Piper to raise the necessary capital on its own.
In a show of support, five Imprimis officials were in town recently for a board meeting. Gould said all indications are that the group intends to keep operations local, “they are committed to Vero Beach” he said.
Gould is clearly excited about the future and the PiperJet. A pilot himself, he has had a chance to fly the plane during one of its test runs. “It’s fabulous, who would not fall in love with that,” he said. “It’s a hot rod in the air, it’s like a Corvette with wings. I can hardly wait to get it into production.”
Yet to get it into production, he must mine the present and keep the company afloat during a time that has seen other aviation companies shut their doors. The goal is to match labor with sales and produce only the number of planes that have been ordered. The company likes to say that if you see a lot of planes sitting on the ground at the factory, then something is amiss.
To avoid such pitfalls, Gould says sometimes twice a day he checks with sales staff and looks at other economic indicators to make sure Piper stays on track to produce just the right number of planes. Such calculations have led to the layoffs and furloughs, but have kept about 650 local residents drawing a paycheck.
“Overall, the market is still soft,” he said. “A lot of our customers have watched their stock portfolios and real estate portfolios and other investments decline in value dramatically over the last year. So some of them have decided to postpone purchases and that hurts from a demand standpoint. Those that want to purchase, go into the bank for a loan and the terms are completely different. Instead of 10 percent down, it is 40 percent, so even those that want to buy are having some difficulty.
“All of this contributes to a situation where the demand for aircraft is down dramatically. For someone like us, you’ve got to watch the demand at the retail level very carefully and adjust production accordingly. If you don’t, you have overbuilt and you have unsold airplanes on the sideline.
“We call them whitetails because if they don’t go to the retail customer, you don’t paint the tail. If you see us with a lot of white airplanes out there, you’ve got trouble, working capital trouble. So we took the action early, it was very painful, but we matched our production output with the retail level demand.”
While Gould is uncomfortable trying to predict the future – especially as it relates to the world economy – he is hopeful that are signs of improvement, even though he admitted that Piper will sell only about half as many planes this year as it sold in 2008.
“Going forward, the demand I see for the second quarter has been international,” he said. “Beyond that, it’s all a matter of the economy. We know that the stock market hit the low point in March and seems to be coming back a little bit. I don’t think we will see a V-shaped recovery, but I think we will have a slow, steady recovery here and people will get used to that and we will see some strengthening in the demand for retail aircraft.”