Sunday, 2 August 2009

A short guide to the Cirrus battle

There's a lot of confusion surrounding the events at Cirrus, so here's a simple guide followed by a few guesses.

  • 25 years ago Alan and Dale Klapmeier founded Cirrus Design
  • In 1998 the FAA certified the SR20
  • In 2000 the FAA certified the SR22
  • In 2006 Cirrus started taking $100,000 deposits for the jet. It is said that at one point they held 40 deposits
  • In 2008, Alan Klapmeier was replaced as CEO by Brent Wouters, Klapmeier remained as Chairman
  • In early July, Alan Klapmeier announced that he was putting a team together to buy the jet project from Cirrus Aircraft
  • Brent Wouters and Alan Klapmeier appeared to not be reading the same script in interviews following that announcement
  • At Oshkosh, Wouters and Dale Klapmeier said that selling the project to Alan (while retaining an interest) was a win win
  • Later that week Alan Klapmeier said that he was withdrawing from the negotiations
  • Brent Wouters responded by suggesting that Cirrus had alternative capital options

  • A few thoughts (and guesses)

  • It's clear that there's a rift between Alan Klapmeier and Brent Wouters
  • It's clear that Alan and Dale are not as close as they once were
  • From comments made by Wouters, it's clear that the Jet will take a very long time for Cirrus to bring to market without significant additional investment
  • In these tough economic times, Cirrus needs deposit holders asking for their money back like a double dose of swine flu
  • Arcapita (who own Cirrus) should, in theory at least, be very motivated to do the deal - it would remove the jet deposit liabilities and going forward would mean that Cirrus would not need to spend 'every development dollar' on the jet.
  • Wouters has stated that the negotiations had got very, very close
  • Does Arcapita have another deal on the table?
  • Has Alan really withdrawn, or is that a negotiating tactic?

  • More news when I get it...

    Update: As far as I can tell the withdrawal was for real, and wasn't part of any negotiation strategy. It is impossible to say that Alan Klapmeier and his team will never buy the project, but all the signs are that when his Chairmanship of Cirrus Aircraft ends later this month he'll be spending his time working on non-Cirrus matters.

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