Continental General Aviation Piston Engines sold to the Chinese

aero-news staff ^ | 12/14/2010 | aero-news.net

[taildragger]

TCM Acquired By Chinese Aerospace Group, Deal Expected To Close by 1Q/11

ANN RealTime Update, 12.14.10, 0435 ET: Chinese aerospace interests have just scored a major acquisition with the news that AVIC will be purchasing TCM. Just moments ago, Teledyne Technologies Incorporated and AVIC International Holding Corporation ("AVIC International") announced an agreement to sell Teledyne's general aviation piston engine business to Technify Motor (USA) LTD., a subsidiary of AVIC International, for $186 million in cash. Under the transaction, AVIC International will acquire Teledyne Continental Motors, Inc. and Teledyne Mattituck Services, Inc.

[taildragger]

According to the release: Headquartered in Mobile, Ala., Continental Motors is a leading manufacturer of FAA-certified piston engines, as well as spare parts and components, used in small propeller-driven general aviation aircraft around the world. Continental Motors employs approximately 400 workers in Mobile, and has been a highly reliable manufacturer of commercial aircraft piston engines for more than 80 years. Continental Motors also maintains service centers in Fairhope, Ala. and Mattituck, N.Y.

With major customers such as Boeing, Airbus, Honeywell and Snecma, AVIC International is a trusted supplier and partner of leading aviation companies in the U.S. and around the world. The transaction will enhance the ability of Continental Motors to compete globally, especially in growing overseas markets, such as China. Today, Continental Motors' primary markets are the U.S. and Europe. On the other hand, China opens one of the world's largest potential markets for general aviation aircraft, due to its growing population, large geographical area and expanding infrastructure. Compared to 230,000 general aviation aircraft in the U.S., China has approximately 900 small aircraft operating in the country. That number is expected to grow over the next decade, raising demand for FAA-certified piston engines.

AVIC International was attracted to Continental Motors' long history in the general aviation market and the company's reputation for product quality, safety and service. With the acquisition of Continental Motors, AVIC International is making a principal commitment to the Mobile region. AVIC International expects to retain the senior management of Continental Motors and maintain Continental Motors' global headquarters in Mobile, Ala. Furthermore, the transaction sets the stage for new hires of skilled workers in Mobile, as international demand for piston-powered aircraft would result in increased engine manufacturing at Continental Motors. AVIC International also plans continued investment and upgrades in Continental Motors' operations, as well as increased research and new product development.

"I am excited about the opportunity to work with the AVIC International team," said Rhett Ross, President of Continental Motors. "AVIC International will greatly strengthen Continental Motors' market access. In addition, increased investment will accelerate new products, such as Continental Motors' TD-300 diesel engine, which is well-suited to growing regions given international fuel availability. The transaction will allow Continental Motors to continue to be a global leader in the general aviation piston engine industry."

"The sale of Continental Motors to AVIC International is the right long-term solution for Continental Motors, its workforce and the Gulf Coast Community," said Robert Mehrabian, Chairman, President and Chief Executive Officer of Teledyne. "This sale allows Teledyne to focus on its core businesses, while ensuring a bright future for Continental Motors to build on its long, successful history as a manufacturer of proven piston engines for general aviation aircraft. This will significantly enhance Continental Motors' opportunity to enter the global market for the sale and service of general aviation piston engines."

"AVIC International is eager to begin its collaboration with Continental Motors, continuing its reputation as a highly respected maker of FAA-certified piston engines," said Wu Guangquan, President & CEO, AVIC International. "We are impressed with Continental Motors' products, employees and facilities. Furthermore, we were attracted to Mobile's international environment focus and the continually growing concentration of aviation-related international companies in the Mobile area. We look forward to working with current leadership at Continental Motors to expand the Continental Motors' facility to supply expected growth in the general aviation market worldwide, in particular, to ensure safe and reliable aircraft operations for all customers."

The transaction is expected to close in the first quarter of 2011. The acquisition of Continental Motors by AVIC International is subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act and by the U.S. Government's Committee on Foreign Investment in the United States (CFIUS), as well as obtaining all relevant Chinese Government Approvals.

[blackdog]

Is Lycoming still American owned?

[taildragger]

Excuse me for being un-PC but this truly sucks. 2 manufacturers and now one is sold off shore. Only Lycoming remains.

They ought to be ashamed of themselves for selling out to them.

This division and their small turbine ( expendable ) have been for sale for a while. For less than 200 million they let this gem go? What a shame. The board that approves this ought to be ashamed of themselves...

[taildragger]

Yes I think it is...

[calex59]

Does anyone make 2200 HP engines for piston driven aircraft any more?

[Seaplaner]

no...no...no!

[blackdog]

I have a 320 in my Cherokee which is run out. I was hoping to replace it when my 2nd daughter graduates college. Got the first one thru. No loans, no grants. Just a few academic scholarships based on her performance. Fate being what it is, that one is now going to law school in the fall.

I had a cylinder separate in half back in 93. I thought the whole plane would shake out of the sky. I had to shut it down and dead yoke it from 8,000 feet. The experience was interesting. I'm glad I went to Flight Safety, where they really do prepare you for that kind of stuff. We were IMC with my wife and child on board. At that time they just put a new jug and piston in, not a rebuild.

[blackdog]

I don't think so. Most aircraft with those kind of needs have conversions to turbo prop powerplants. They are lighter, simpler, more reliable, etc.....I've seen some very cool DC-3's the Forest Service operates for smoke jumpers and they are amazing.

I would think though that for the purist out there who wants to singly support a machine shop, and with deep enough pockets, there are people who will keep engines like that alive.

[blackdog]

I think Lycoming is part of Textron, who is also a defense contractor. At least they were in the 90's.

I also think that such engines are being used in such highly successful predator drones. That may explain why the sudden interest from the chicoms.

[blackdog]

And wait a minute, Teledyne makes components for our JDAM’s (precision GPS Guided Bombs). How can the Chinese buy into this? It’s like Clinton Loral all over again!

[stickandrudder]

Hate to see this happen. Continental makes good engines. Lycoming does too. Think I will stick to Lycomings from now on.

[BerryDingle]

Clinton Loral

Linda Daschle. She's still at it.

[blackdog]

I'm series. The acquisition puts chicoms way too close to the military contracting components of Teledyne. The Continentals are used on predator drones and the electronics division makes many of the components for advanced bombs.

I'm sure the second tier market for predator knock-off's is hugh.

[taildragger]

If I am not mistaked the Predator A uses a Rotax 914, the B uses a Turboprop and the new Semi-Stealthy C or D uses a Turbofan. Therefor, I do not think their is a Continental on the Wing.

[blackdog]

So the booming US aircraft engine market has china excited? I guess you’re right as drones are currently configured, but I couldn’t help but notice they all use engines similar to continental’s in weight and horsepower.

[Cacique]

For several years now the United States has been in the process of de-industrializing. We are dismantling our manufacturing capacity. We don’t have an unemployment problem, we have an excess labor capacity problem when all jobs and manufacturing are moved out of the country to pay our debts and and get higher profits for the corporations.

[taildragger]

Yes the pursue higher profits by utlizing comperative advantage (Econ 101 term) with a twist via outsourcing. But the people we are outsourcing to are esentially Facist that even utilizes slave labor.

We should be standing against China from a moral standpoint nevermind economics. At this point it is just wrong.

A lot of companies are doing it because of the EPA, you can't make anything here anymore. So send it to China they don't give a rat's behind and are polluting their country. It is not that we were doing anything that bad. But the EPA has gotten so anal you can't paint or plate anything.

Talk to an engineer that is close to manufacturing, they will tell you this. And the big question what are their metal "Certs" and what is their real quality. They play games with that too.