Cirrus axes 8 percent of its workforce

by philg

Cirrus, maker of the popular SR20 and SR22 piston-powered four-seat airplanes, has been forced to lay off 8 percent of its workforce due to declining sales (full story). Thanks to low Avgas prices, some favorable federal tax treatment for airplane purchases after 9/11/2001, and an innovative product, it looked as though Cirrus would defy the conventional wisdom that you’d have to be crazy to invest in a new piston-powered airplane company.

There is some hope for Cirrus, however, in that the company has been working on a single-engine jet that is apparently remarkably spacious and comfortable inside. The plane is limited to 25,000′ and is supposedly simple to fly. If everything goes smoothly with FAA certification, the plane should be ready in 2011.

3 thoughts on “Cirrus axes 8 percent of its workforce”

  1. Cirrus is actually doing very well compared to say, Piper or Mooney. I speculate that after NBAA (early Oct.), other pistons manufacturers will be announcing bad news. How can Piper have the funds to develop their new single engine jet while shipping few piston airplanes? At least Cirrus has over real 400 deposits for their new jet, which at $100,000 each has paid a big chunk of the jet’s R&D ($40M). Piper has no such luxury.

  2. Piper is owned by American Capital Strategies (NSQ- ACAS) which in a nutshell is a mid-market buyout shop. These guys buy companies, reinvigorate the product/do financial engineering/clean up bad management and then spin the thing back out. I think what we’ve seen with Piper is that they are doing a full scale brand makeover. The Matrix is a hit relatively speaking (who would’ve thought), the Meridian is doing well and after the Thielert debacle Seminole and Seneca business has perked up. The twin info is anecdotal from Diamond and Piper dealers I know. We’ll know more when the GAMA reports come out but I think Piper is healthier than one might suspect.

    Piper has a deposit book on their jet. It stood at 186 as of 4/07. Who knows what it is now. If they are leveraging their experience with the Meridian in designing the pressure vessel and other systems, I’d say this thing has a better chance than most.

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