May 26, 2000 Dynamic Resurrection

Volume 3 | Issue 3

Now soaring in a steady, iron-willed ascent, Mooney Aircraft Corporation survived a life-threatening plunging spiral.

It had a houseful of unprofitable contracts. Its aircraft assembly rate was low. Its business processes were operating outside of normal limits. Its aircraft manufacturing hours were high, and its costs of quality metrics, (scrap, rework, repair) were not being measured. Its aircraft manufacturing costs in general were extremely hard to extract and report, from the archaic systems that were in place. Not exactly a success story.

So how did Mooney Aircraft Corporation (MAC) of Kerrville, Texas, pull it off? The company’s story is one of faith, tenacity, and good old fashioned, nose-to-the-grindstone hard work.

Business Reinvented
Mooney – which has become a name synonymous in all languages with speed, efficiency and performance – began with the first aircraft certified in 1954.

Among light general-aviation manufacturers, Mooney now sets the benchmark with unmatched structural integrity, superior workmanship and value retention. With more than 10,500 aircraft produced, and millions of proven flight hours, Mooney has firmly established an unprecedented record for safety, quality and performance that surpasses the industry average. Sounds like a success story now.

But this story has a hook that goes beyond the corporate logo: Mooney Aircraft Corporation has been reinvented as a solid, no-nonsense business entity. Prior to being purchased by Paul S. Dopp (chairman of the board), and Christian E. Dopp (president and chief executive officer), the enterprise was suffering through significant business issues.

“When the Dopps bought the company, it seemed as if the enterprise had a sound business base. One of the significant elements of this interpretation was the sheer volume of contract hardware being produced for the prime aircraft manufacturers, in the commercial and military worlds,” says John L.Valencia, senior vice president of operations.
The magnitude of Mooney’s contract work was staggering. As an example
of this enormous volume, a single contract from one of these prime contractors was for 3,600 part numbers. Mooney was manufacturing and shipping approximately 250,000 piece parts in a 12-month moving period.

The Dopps hired a nucleus of experienced talent from the prime aircraft manufacturing arena and established the rules, conduct and ethics for engaging the Mooney Aircraft Corporation into the forefront of today’s industrial complex.

The executive management team at Mooney applied parametric analysis to the business practices and the financial statement. The result was a realization that contract work, as de-fined at that time, was not only unprofitable; it was weakening the company’s core business, which is aircraft manufacturing. So the management team made a significant decision to divest MAC from all unprofitable endeavors, and focus on
the core business.

“When we arrived at MAC in 1997, there were 638 employees,” explains Valencia. “Today we have 298 employees. Performance has shown a dynamic improvement and the rate of productivity has improved into double digits. Performance is not the only thing soaring; so is employee morale and confidence.”

Participatory Management
The Dopps and the executive management team introduced bold and proven business practices into the manufacturing process, in order to bring this struggling company to life. The results are dramatically positive, even after slightly more than two years under the new ownership and management. “We paid a lot of attention to the details of management,” explains Valencia. The company is now focused on process-based management (PBM), through which the process rather than the hardware is controlled. Integrated Product Teams (IPTs) streamline the manufacturing process. The three IPTs, composed of members from every discipline, include the Fabrication IPT, the Assembly IPT and the Completion IPT. “These teams concentrate on improving and ensuring quality, lowering costs and improving performance throughout our entire product line,” says Valencia.

One of the most important improvements Mooney has achieved is reformation of employee morale. “At first they were skeptical about the techniques we brought because this was the third management team they worked for,” says Valencia. “But today, without exception, we have a real cohesive team. Each division used to have its own separate goals; for example, one discipline would complete its part of a process and then, metaphorically, throw it over the fence to the next discipline. We no longer have that kind of attitude. It’s all team effort now.”

“Before this metamorphosis everything was hierarchical, everything started at the top and seemed to stop at the top,” adds Valencia. Now the board of directors explains what they want, in one-, three- and five-year periods. The executive management team then drafts a milestone plan. They take this plan to the troops and ask them how the company can achieve these goals. “Nobody had ever asked them before,” Valencia says. “We made them a part of the business.”

Standard business practices were unknown to the general population at MAC, so the company began training to instill business awareness. Each Mooney employee now understands the company’s philosophy of return on investment (ROI) and return on net assets (RONA). “We don’t expect our employees to be accountants, but we do want them to be cognizant of the fact that this is a for-profit business and we want more dollars coming in than we want going out,” explains Valencia. In 1997, it took more than 4,300 hours to build each plane; today, that number
is 2,985 hours, and the company’s goal for this year is 2,400 hours.

Earning Wings for Quality
When the Dopp family purchased the company; Chris and Paul Dopp were astute enough to bring in a management team with more than 20 years experience in manufacturing airplanes. This expertise and the solid work ethics of the Mooney employees have resulted in a synergistic workforce capable of reacting to a dynamic business environment. At the time of its purchase, the company was operating under the auspices of a Type Certification (TC), for aircraft manufacturing. Issued by the local Federal Aviation Administration (FAA) office, the TC allowed MAC to function with a certain amount of regulatory oversight. This past year Mooney improved the manufacturing/assembly process so much and re-engineered the quality system so significantly that its certification was upgraded from the TC to a Production Certification (PC), meaning the FAA has given the company more autonomy to build its planes. This confidence and achievement is quite remarkable since the company has not held a PC since 1968. In conjunction with this higher-level certification, MAC implemented the ANSI/ ASQC Q9001 model for quality assurance in design, development, production, installation and servicing. MAC is currently compliant and will be registered by the third quarter of this year.

Fly Like an Eagle
Mooney’s M20S Eagle features an airframe that’s solidly constructed to deliver startling performance. An elongated fuselage, now standard for all Mooney aircraft, redefines space. The Eagle’s body provides an average useful load of 1,000 pounds, with a quiet cabin and ample room for four adults. It cruises at 180 knots on less than 15 gallons per hour.

The M20R Ovation 2 includes a new-generation, two-blade propeller that picks up 6 knots of cruise speed more than that of its predecessor. This aluminum masterpiece delivers 192 knots at 8,000 feet. The beauty and intrigue of the Ovation 2 goes deeper, with a structurally superior welded tubular steel frame around the cabin that sits atop a continuous, carry-through main spar assembly. For those back-to-earth moments, the Ovation 2 includes semitrailing link landing gear, cushioned by minimal-maintenance shock absorbers. Designed for greater reliability, these features are standard construction on all Mooney products.

The M20M Bravo is a turbocharged, high-altitude aircraft capable of cruising at 220 knots. “This is the fastest certified-production, single-engine piston aircraft in the world,” Valencia says. Its remarkably well-designed, intercooled power plant – the Lycoming TIO-540-AF1B – delivers 270 maximum continuous power through all operations. The Bravo is engineered to deliver stellar performance in every respect. Streamlined to reduce drag, it includes an optional TKS Known Ice System to further enhance mission capability.

Runway to the Future
The company has completed a 100 percent modernization project for the operations support functions. This modernization now provides a state-of-the-art, ergonomic work environment for approximately 90 percent of the support population. MAC will break ground this year (around the third quarter) on a new sales, delivery and executive administrative center, which will add another 40,000 square feet to the existing facility. This new complex will be capable of holding six airplanes in a modern showroom configuration, says Valencia.

“Improvements like these haven’t been realized at Mooney for more than 20 years,” he states. The excitement being shared throughout the company is contagious. Everyone feels great about the expenditures in the facility, because it shows a significant amount of confidence by the ownership, the board of directors and the executive management team. This investment in the future is a signal to the general aviation community, and the industrial community in general, that Mooney Aircraft Corporation is getting healthy.

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