As part of my introduction to the new FIKI-approved Cirrus SR22, I sat down with newly crowned Cirrus CEO Brent Wouters.
Wouters originally joined Cirrus back in 2002 as the chief financial officer; in 2008, he was named president and chief operating officer. On February 1, 2009, Wouters took over as CEO, replacing Cirrus cofounder Alan Klapmeier, who now serves as the chairman of the board of directors and as an industry ambassador.
Though he originally joined the company in a finance capacity, Wouters has had a broad and diverse exposure to aviation, from the ground up. As reported on Cirrus’ corporate website, Wouters holds an M.B.A. from Georgia State University, an M.S. in aerospace engineering from Iowa State University, and a B.A. in math and physics from Iowa’s Graceland University. As an FAA-rated pilot, Wouters can not only talk the talk, but also walk the walk.
He has also worked as an aircraft and flight-simulator engineer at Delta Air Lines and has worked with Lockheed Martin in overseeing proprietary software design as a technology consultant for Andersen Consulting.
“When I worked at Salomon Smith Barney as an equity analyst, I saw thousands of business models…learned a lot about business there. [I] learned what works and what doesn’t, from the capital structure and operations of their business.”
At this writing, Wouters had been at the controls of Cirrus for approximately two months, and when asked if any specific changes in strategy or tactics have been put in place, he responded, “We as an industry, and we as Cirrus, need to make changes in the way we approach the customer. We are a transportation company, not just a cool product company, and we need to make [the product] more available to the user…change the business model to expand the availability of personal aviation to a broader market.
“We need to take lessons learned from air taxi, fractional and whole aircraft sales that can make this a recurring business. Additionally, we absolutely need to change the cash-flow dynamics and increase the size of available market that can fly. The business model needs to change.”
Just prior to Cirrus naming Wouters as CEO, the company was going through some pretty difficult times. In September 2008, Cirrus had as many as 100 “white tails” (built aircraft that didn’t have a specific customer attached to them) sitting on the ramp in Duluth.
One of Wouters’ first changes at Cirrus was implementing a demand-based production model. “No more of this building 14 planes a week and hoping people will come,” said Wouters. Currently, there sit less than 10 aircraft. The reduction in Cirrus’ inventory is largely a result of Wouters’ efforts.
In what can be a touchy topic to discuss, Wouters’ replacement of Alan Klapmeier is the subject of current intrigue. When asked about the Klapmeiers’ pullback from daily operations at Cirrus, Wouters said, “Both Dale and Alan are still active in the company, and are helping set the path for future product improvement. In addition to his role as chairman, Alan is still and will likely always be Cirrus’ ambassador to the world.”
In response to questioning related to the company’s finances, Wouters responded, “We were very aggressive in taking cost out of the system. We had to do several painful tranches [furloughs, layoffs, efficiency improvements] and we were and are very aggressive in removing cost. All that being said, we’re very fortunate to have a strong capital partner based in Atlanta [Arcapita, Cirrus’ principal investor].”
Wouters personally has a strong relationship with the principals at Arcapita: They introduced Wouters and Cirrus to each other back in 2002.
“I’m very hard-headed, and the last thing I want to do is go ask for money,” says Wouters. He has worked hard to try implementing a strategy to protect pricing in this economic down cycle. “We have zeroed in on the supply side and are actively working on pricing integrity. We’re in a better position today than we were in September. Debt is lower, the balance sheet is stronger, costs are lower, and inventory is down.”
In all, it appears that Cirrus has a very capable captain at the controls. Wouters is realistic about the tough climate general aviation is living in, and is aggressive in doing whatever he can to keep the company moving forward.