Piper sales -- and jobs -- take off
The buzz is starting to come back at Piper Aircraft.
The PiperJet -- the company’s big gamble to get into the Very Light Jet market -- remains on its new course for a 2013 delivery of its first planes. But more importantly for the local economy right now, Piper is selling propeller planes again, and hiring back hundreds of workers to get them to market.
Piper is expecting to increase sales by more than 50 percent in 2010 from the 90 planes it sold in 2009. To build them, it has hired back 240 people from its recessionary lows and that is good news for a county that is experiencing 14.3 percent unemployment.
“Our growth strategy has enabled our business to grow and come back strong in recent months, and the resulting rise in demand has made it possible for us to bring back hundreds of people, many of whom are friends and neighbours who were laid off when sales dropped dramatically,” said Piper President and CEO Kevin J. Gould.
While no one at the company is willing to say the recession that crushed the general aviation industry is now in the rear view mirror, Piper executives are pointing to a new growth strategy – especially in Asia and the Pacific Rim – as a primary reason why the company is projecting growth at a time when others in the industry can’t.
And for those who are skeptical, one look at the fuller parking lot at the Vero Beach headquarters indicates things are getting better.
Once the largest private employer in Indian River County, Piper cut its workforce by almost half -- to 570 people at the depth of the recession -- as the company hunkered down in survival mode and matched the number of workers on hand with the number of orders it had for planes.
But the company has been on a roll since late last year, and has begun hiring not only engineers for the PiperJet -- 60 in all thus far -- but factory workers to fill new propeller plane orders, including substantial increases in what had been a significantly reduced trainer market (Piper Warriors, Arrows and Seminole twin trainers).
Even better news is the company is not done hiring; its Web site currently lists over 35 jobs and in more areas than just the factory floor. Piper is looking to hire in marketing, human resources and information technology as well.
“While we’re seeing some optimistic signs domestically, we are definitely seeing tremendous response to our initiatives in Asia and much of the rest of the world,” said Gould. “Piper continues to expand its business model to ensure that we are in tune with the times and that we meet the needs of our customers at every level. The result is that we are striking a resonant chord in the marketplace. At the end of the day, we have a serious game plan and an ownership group that is committed to our long-term growth and success.”
Still, the workforce of about 800 is a far cry from the 1,185 jobs Piper promised it would have by Dec. 31 2009 as part of the deal it struck with the county and state to keep its operations in Indian River County to build the PiperJet.
That long-term deal was placed on hold after the recession hit. Piper had accepted about $10.7 million of the $32 million it negotiated from the local and state government to stay in Indian River County before the bottom fell out. According to terms of the contract, that money was spent to shore up the plant which was ravaged by the 2004 hurricanes.
Piper continues talking with the county and state, giving officials updates on progress since the recession, and clearly is hopeful the agreement can pick up where it was when put into suspension in 2009.
But those were different times, and in many ways, Piper was a different company back then, banking on entering the Very Light Jet market with the PiperJet under the leadership of then President & CEO Jim Bass and removing the burden of being in the portfolio of American Capital, the holding company which owned Piper.
American Capital was struggling for its own survival in the stock market meltdown and had no cash to pump into Piper, which needed development money to move forward with the PiperJet.
Things started to change in May of last year when American Capital sold Piper for an undisclosed sum to Singapore- based Imprimis, an investment company with ties to the Brunei government.
As part of the restructuring, Bass left the company and Gould took over, changing the company’s focus to promoting not only its entrance into the small private jet market, but to building up the brands that have made Piper a household name in aviation since the 1930s.
He struck a deal in January to enter the light sport aircraft market by reaching a licensing agreement with Czech Sport Aircraft, a move the company hopes will attract and keep young pilots buying Piper products for years to come.
Imprimis has fully supported and funded the PiperJet, which is expected to hit the market in 2013 with a $2.2 million price tag. No one at the company is saying how much Imprimis has invested so far, but it is likely in the millions of dollars.
What has been just as beneficial for the local economy is Imprimis’ help in making headway in the fledgling Asian private plane market. It is that success which has fueled Piper’s ability to hire back some of the hundreds laid off during the economic downturn.
“We’ve all been through a very difficult period in the wake of the recession, but no one has had it worse than those who lost their jobs when the economy came to a standstill,” Gould said. “We were forced to reduce staff as aircraft orders declined, but we were committed from the beginning to bringing people back to work as soon orders began increasing.
The company has made it a priority to break into Asia, even setting up a sales and marketing operation out of its Vero Beach offices, and the results have been impressive. The company lists sales to outfits in Australia and Pacific Rim countries among others.
“Last year trainers were 15 percent of our total mix; this year they are going to be about 50 percent,” said Chief Corporate Spokesperson Mark Miller. “We are seeing a lot of growth in the Asian market, especially with fleet sales for flight training schools.”
When you go down the list of aviation companies that did not make it out of the recession or are barely hanging on (Adams Aircraft and Eclipse Aviation come to mind), Piper’s survival and resurgence is the more impressive.
Once Imprimis took ownership in May of 2009, change followed quickly. CEO Bass was gone before the end of June, with Gould taking his position as CEO and John Becker being named president. By December, Becker had also departed and Gould – now president and CEO – made more changes, tapping Dennis Olcott to become vice president of engineering to keep pushing development of the PiperJet.
Olcott has spent much of his time building the engineering staff to carry the PiperJet forward, as the company is staking a large piece of its future on the very light jet market.
“Development of the PiperJet, as well as other new products and innovations, is crucial to Piper’s longterm growth strategy,” Gould said, “and Imprimis has earmarked funds to ensure that we move forward on these vital programs.”
Perhaps the last piece of the puzzle for Piper came April 1, when the company hired industry heavyweight Randy Groom as Executive Vice President of Sales, Marketing and Customer Support of Piper Aircraft.
Groom, who has 36 years in aviation management, served as president of Global Customer Service and Support for Hawker Beechcraft Corp. (formerly Raytheon Aircraft Company,) as well as President of Beechcraft. He has also held senior management positions on the sales side.
“Randy knows the business from both sides of the aisle,” Gould said. “As a seasoned corporate executive and a professional with extensive dealership experience, he has the breadth of knowledge and experience that are vital to Piper`s growth strategy.”