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Airframers say China fears overblown

Top executives at Piper, Cessna and Cirrus are not worried by the increasing number of attempts by China's AVIC and its many subsidiaries to purchase general aviation companies based on US soil. Flight International quizzed the officials at the Sun 'n Fun air show in Lakeland, Florida on 29 March.

An agreement in February between AVIC subsidiary China Aviation Industry General Aircraft (CAIGA) and Cirrus for the purchase of 100% of the Minnesota-based company by mid-year, pending several government approvals, has ignited a "keep it American" drive by investors, says aerospace consultant Brian Foley. Cirrus is 60% owned by Bahraini investment group Arcapita.

CAIGA is also trying to buy out of bankruptcy the assets of UAE-based Emivest Aerospace, which builds the SJ30 business jet. An attempt by CAIGA to purchase Epic Aircraft out of bankruptcy was only partially successful.

Foley says he is organising a group of investors who are interested in countering CAIGA's offer, which is believed to be about $200 million. Sources familiar with the deal say Cirrus's debt is about $170 million.

"Interested investors have identified themselves to us, and we are now in the process of having them formally commit to the programme," Foley told Flight International on 5 April.

Cirrus shrugs off the move. Chairman Dale Klapmeier says: "We were turning over every single rock worldwide to find a funding partner [over the past three years]. We have talked to everyone and [Foley] has not talked to us. In our minds, it's not real."

Klapmeier, who calls the CAIGA deal a "terrific outcome" for cash-starved Cirrus, says concerns about moving the company to China are unfounded, as are fears of losing a "US" company. "There's not enough market in China to do it," he says. "Currently, we're foreign-owned, and in the future we'd be foreign-owned."

Klapmeier adds: "China has been the Holy Grail of this industry for years. China knows it needs GA and every manufacturer here is looking to China from a growth perspective."

He points out that AVIC's purchase of SR22 engine maker TCM is not linked to the Cirrus deal. "It's a different entity within AVIC," he says.

If and when the CAIGA Cirrus bid is approved, Klapmeier says he will remain on the board of directors but will no longer be chairman.

Piper chief executive Geoffrey Berger sympathises with Cirrus's plight. Piper changed hands from US investor American Capital to Brunei-based Imprimis in 2009. Piper produces aircraft in Vero Beach, Florida.

"A lot of people have drawn the conclusion that Piper plans to move overseas," says Berger. "There are no plans to move and we're continuing to invest in Vero Beach.

"Fear of the Chinese is irrational. Investors are global, just as businesses are global. Whether an investor is foreign or not is irrelevant. Smart investors choose the best places to invest money, and North American aircraft manufacturers are the leaders."

Berger notes that a big percentage of cars built in the USA are made by foreign-owned companies, but production remains in the country.

Cessna president Jack Pelton, who says his Textron-subsidiary is safe from Chinese acquisition, has sympathy with Klapmeier's position, assuming the company's financial situation was as dire as observers had presumed.

Cessna builds its lowest-cost aircraft, the light sport Skycatcher, in China and is selling an increasing number of C172 Skyhawks to that country as trainers.

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