G120TP at the centre of Grob's second rebirth

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André Hiebeler is refreshingly frank about finding himself last year co-owner of one of the most venerable brands in training aircraft. "We bought the company like a cat in a sack," he says of the acquisition of insolvent German light aircraft manufacturer Grob by his family investment firm. "We didn't know anything about the training business."

It is perhaps surprising then that, 21 months on, the renamed Grob Aircraft is positioned for a credible assault on a market for first-stage military pilot instruction that the company's former owners had all but abandoned. Its new flagship is a radically revamped version of Grob's single-engined piston trainer - the G120 - which has been turned into a much more capable aircraft thanks to a Rolls-Royce turboprop engine, an Elbit Systems avionics suite and a pair of Martin-Baker ejection seats.


The G120TP is Grob's great hope as it re-enters military trainer market. Picture: Grob Aircraft
The certification of the G120TP has been the obsession of Hiebeler and his colleagues since they acquired many of the assets of Grob, along with the rental of the company's factory in the Bavarian village of Mattsies, in January 2009. They have spent most of that time securing a risk-sharing partnership with Elbit and the deal with Martin-Baker before pitching the aircraft at a number of potential clients, including a highly lucrative urgent requirement from India for 75 basic trainers.

Grob Aerospace, which had sold 3,500 trainers, gliders and experimental aircraft since being founded in 1970, got into trouble in late 2008 after a three-year attempt to develop an all-composite light utility or business jet, the SPn. Four SPns had flown (one crashed in 2006 killing the test pilot) and Grob had secured around 100 orders, but programme delays were sucking up funds at a time when the light business aircraft market was collapsing.

ExecuJet chief executive Niall Olver, who had taken over Grob in 2005 with a new business strategy based around the SPn, was forced to summon the administrator when his main financial backer suddenly called in his loans.

At the time, Hiebeler - a long-time aircraft salesman - was looking for a suitable project for an investment company he had set up with his brother and sister called H3 Aerospace (the H for Hiebeler and 3 for the siblings). Their plan was to design and build a utility aircraft in Oberpfaffenhofen, former home of Dornier, tapping the experience of the many aircraft craftsmen in the area.

DAREDEVIL APPROACH

 
Hiebeler: bought "cat in a sack". Picture: Grob Aircraft
However, when the Grob opportunity came up they decided to seize it. With the administrator looking to dispose of assets as quickly as possible and Christmas coming up, Hiebeler and his co-investors were forced into declaring their hand without having much chance for due diligence. "We just bought it," he says. "It was a bit of a daredevil approach."

Daredevil or not, they decided that taking on what had become Grob's major programme - the SPn - was a gamble too far. "We were offered it, but the SPn was not our business," says Hiebeler. With Olver retaining SPn rights - albeit without a financial backer to resurrect the programme - the business taken on by Hiebeler and his two new directors (co-chief executive Johann Heitzmann and chief financial officer Andreas Kohl having joined Hiebeler's non-active siblings on the board) was a much smaller enterprise than six months earlier.

Shortly after insolvency was declared, Bombardier cancelled a contract under which Grob was to have designed and built much of the Bombardier Learjet 85 composite business jet. Together with the loss of the SPn, it left just 78 employees on the payroll of the more than 500 that had been at the plant in summer 2008.

There were two segments of the company remaining, says Hiebeler. Training aircraft, which was "ticking along, although it had lost its focus in the company", and a capability in high-altitude surveillance aircraft, that was "completely dormant although with a high level of expertise still left in the business". In the late 1980s and early 1990s, Grob had developed two experimental designs that had never gone to full-rate production.

Those two areas of competence were enough to convince Hiebeler and his colleagues that they had a viable niche business in their hands. They set about finding partners to help to inject new life into the company's portfolio and identifying potential customers. And while the G120TP is the main prospect, Hiebeler is also in negotiations with "two global players" in the unmanned air vehicle world about developing optionally piloted versions of its G520 Egrett and G850 Strato 2C.

The Egrett is a single-turboprop long-endurance aircraft capable of flying up to 11h and at altitudes of 50,000ft (15,250m). It was certificated in the early 1990s and four are still in service. The twin-engined Strato 2C is even more of a museum piece. Commissioned by the West German aerospace research body in the late 1980s as an ultra-high-altitude spy aircraft to patrol the East German border, the project was axed at the end of the Cold War and the only example built sits next to Grob's offices at Mattsies. An announcement on a new partnership, hints Hiebeler, could be made before the end of the year.

Although parts of the factory, which sits alongside Grob's own airfield, are still empty, Grob Aircraft is beginning to recruit again. The workforce has risen to 127 and Hiebeler expects to be employing 160 people by next year. Surprisingly, however, it is not easy to recruit the right skills. Many of the 500 who worked for Grob before the insolvency were jobbing engineers from around the world, attracted by good salaries and the challenge of developing a brand-new aircraft, says Hiebeler. With virtually all of them having moved on, Grob has had to rely on local talent. "Very few people who used to work here pre-SPn have left," says Hiebeler.

The result is a smaller, but highly motivated workforce, staffed with many Grob veterans. "It is funny only having been here for two years to be presenting long-service awards to people who have been here for 25 or 30 years," says Hiebeler. It is also a more tightly run and egalitarian business, he says. Suites built to accommodate senior executives at Grob Aerospace are being used as normal administration offices, while instead of full-time caterers the local village restaurant now supplies the works canteen. Even named parking bays have been done away with. "Being small is our strength. It means there is a good elan throughout the whole company," says Hiebeler.

When the new owners were deciding what to do with the business, they adopted a very "un-German" approach, says Hiebeler. "We used a market driven process, by asking potential customers what they wanted rather than designing a product that we thought the market would buy. The first three or four months I was constantly on the road and our biggest assets at that time were our existing customers."

The findings, says Hiebeler, were fascinating. While the global market was almost saturated with piston-powered elementary trainers built by the likes of Grob and dozens of other indigenous manufacturers from the 1970s, there was little that filled the gap between that first rung on the training ladder and the faster, more modern and more complex turboprops, such as the Pilatus PC-9 and Beechcraft T-6 Texan that were the next level up.


Grob is rebuilding its trainer business after SPn failure left predecessor insolvent. Picture: Grob Aircraft 
BUDGET TRAINING
Hiebeler's solution was to equip the lightweight and capable G120A, first produced in 2001, with some of the features found in these bigger, higher-powered aircraft, including a turboprop engine, glass cockpit and ejection seats. That way, budget-constrained militaries could train students in many more missions at a fraction of the cost of a higher-priced aircraft before the transition to a jet. "It's all about building as much simulation capability as possible into a lower-cost platform," he says.

Grob is competing the G120TP in India and intends to take part in a contest in Indonesia due to be announced later this year. It will also offer the aircraft to participants in the UK's Military Flying Training System contest. It hopes to complete certification of the G120TP, which was unveiled at the ILA air show in Berlin in June, by early 2012 with a turbo-powered version of the "classic" G120A, with old-style cockpit, available from next year.

Hiebeler is confident about the G120TP's prospects. "There is a market for 1,200-2,400 basic and elementary trainers in the next 15-20 years, and we are looking at selling 40-50 a year. If we win in India, we could be a third of the way to our target." From knowing little about the training business, Hiebeler has become somewhat of an expert. Just as the SPn heralded a fresh beginning for Grob Aerospace in the then-exciting emerging market for light business jets four years ago, so the G120TP is the great hope for Grob Aircraft as it attempts to make its mark with a new generation of military trainers.