Cirrus Aircraft acquired by China

[Jim Logajan]

OK - the news reports say it was acquired by a Chinese company, not China. But the "company" is state owned:

http://en.wikipedia.org/wiki/Aviation_Industry_Corporation_of_China

So does this immediately make it an inferior product, or is there a grace period involved? :wink2:

(Link to press release: http://news.cirrusaircraft.com/files/press-release-2-28-11-1.pdf)

 

[Jim Logajan]

First and foremost, they get all of Cirrus' technology for making aircraft. As some have pointed out, they'll probably do it poorly -- but who knows?

The longer-term reason they're buying these companies is more subtle, I believe. And the Chinese tend to think in very long terms. Way longer than our idiotic "must have quarterly growth" system here...

They know we can't put import restrictions on Cirrus, so when they start making new aircraft in China in the future, they "own" a U.S. company to sell under that name. Import restrictions won't EVER count against any product the parent makes and dumps here.

Great business chess move. Their government's manipulation of their currency value makes it all possible.

Chinese companies already make parts for Boeing and Airbus (the latter has an assembly plant there for A320s.) They are hot to compete head on with them in the big jet market, too. So I don't think Cirrus has anything useful to provide them, manufacturing-wise.

But by buying Cirrus they get something that they can't get quickly other way: a quality brand name. Here's a 5 year old article that claims to explain why China purchases struggling American companies:

http://www.slate.com/id/2121095/

"But for a Chinese firm like Haier, even Maytag's tarnished good name is a vast improvement over what it has. It can take decades and tons of money to build name recognition among U.S. consumers. Now Haier can buy it in a matter of weeks"

 

[Jim Logajan]

They have not been 350k in 5-10 yrs.

http://textron.vo.llnwd.net/o25/CES.../single_engine/skylane/skylane_pricesheet.pdf

Link above indicates $390k for a new C-182T.

A new C-T182T (turbo) has a list price of $424k:

http://textron.vo.llnwd.net/o25/CES...ingle_engine/skylane/skylanetc_pricesheet.pdf