Cessna Aircraft Company Business Information, Profile, and History
Wichita, Kansas 67215
The Mission of the Cessna Aircraft Company is: to be the worldwide leader in the industry segments we serve by developing and producing safe, reliable, high quality aircraft that represent the best value in general aviation; to provide the most comprehensive and responsive support to every Cessna customer; to produce the financial results that create value for Textron shareholders.
History of Cessna Aircraft Company
Based in Wichita, Kansas, the aviation capitol of the United States, Cessna Aircraft Company is the world's largest manufacturer of private aircraft. Cessna began its operations building small propeller-driven aircraft for the private pilot market, eventually expanding into the manufacture of corporate jets. The company has since become the leading private jet manufacturer in the industry. Following the 1994 signing of the General Aviation Revitalization Act, the company resumed production of single-engine piston aircraft, which it had given up in 1986.
In 1911 the company's founder, Clyde V. Cessna, a farmer who was also employed as a mechanic and auto salesman for Overland Automobiles, attended an air show in nearby Oklahoma City at the Moisant International Aviation Air Circus. Cessna was immediately taken with the urge to fly. Aware of the large sums paid to exhibition barnstormers, Cessna sensed an opportunity and traveled to New York, where he purchased a French Bleriot aircraft from the Queens Airplane Company in the Bronx. He assembled the plane from a kit, using one of his own water-cooled engines. Having never before flown, Cessna wheeled the craft out onto a salt plain near Jet, Oklahoma, to begin practice runs. As his brother Roy watched, Cessna bounced his craft on a takeoff run, eventually ending up ditching its nose into the ground.
The pilot emerged without serious injury but, determined to fly, he repaired the Bleriot for another try. Cessna smashed the airplane 11 more times before he got the hang of it. On the thirteenth try he managed to get enough altitude to avoid crashing. But because he had not yet learned to turn, he was forced to set the craft down immediately. And because he had never landed, the flight ended with yet another crash. In June of 1911, after several modifications, Cessna made his first completely successful flight, and with practice he became a fairly good pilot. He was paid $300 to perform at an air show in Jet, and before the end of the season he flew three more exhibitions.
Through the spring and summer of 1912, and for several years after, Cessna made small changes to his airplane, customizing it by incorporating new controls and changing the balance and surfaces of the craft. Each year he gave flying demonstrations throughout Kansas and Oklahoma. In the fall of 1916 Cessna was offered a rent-free space at the Jones Motor Car factory in Wichita, Kansas, to manufacture a new model. In return he was asked to paint the words "Jones-Six," the name of a car model, on the bottom of the wings of his new airplane. This craft, built over the winter of 1916--17, was the first airplane manufactured in Wichita.
Cessna's next model, the Comet, emerged in 1917. With a partially enclosed cockpit, the Comet became the manufacturer's most successful model. Cessna planned to promote the design at one of the 60 air shows in which he was booked to perform during 1917, but American involvement in World War I forced him to abandon his sales efforts. Engines, propellers, and other important supplies were earmarked for larger manufacturers. Cessna, effectively, was put out of business. He returned to his home near Rago, Kansas, and resumed farming.
In 1925 Cessna was lured back to Wichita by two business partners, Walter Beech and Lloyd Stearman, who persuaded him to begin making airplanes again. The three men established the Travel Air Manufacturing Company, with Cessna as president. While the company built a line of biplanes, a conflict began to emerge between Beech and Cessna. Beech favored the two-wing designs and Cessna wanted to build a monoplane. In 1926 Cessna rented his own shop, where he designed and built his single-wing aircraft. He later flew this plane in a demonstration for Beech, who was forced to concede that Cessna's design was an excellent one, resulting in the manufacture of monoplanes by Travel Air. Two later models, the City of Oakland and the Woolaroc, were the first civilian planes to be flown to Hawaii.
Cessna-Roos Company Origins in 1927
Further differences with Beech and Stearman, however, led Cessna to leave the partnership in 1927. He established his own shop in Wichita and began work on a radical design that eliminated the need for wing struts, the bars that supported the plane's wings. After successfully building his strutless "A" series monoplane, Cessna organized another firm and sold shares in his new company. Victor Roos, a major shareholder, was made a partner, and the company was incorporated as the Cessna-Roos Company on September 8, 1927. Roos helped Cessna to acquire an 11-acre site at First Street and Glenn Avenue, where they established a 5,000-square-foot factory and an adjacent paint shop. Roos, however, received a lucrative offer to become general manager of the Swallow Airplane Company and left the business in December.
Cessna reorganized his enterprise as the Cessna Aircraft Company and began offering five variations on the "A" series, each with a different type of engine. These were called AWs--the "W" stood for Wright, the engine manufacturer. Cessna then began work on a heavier BW series. The Commerce Department, however, which then certified aircraft designs, would not approve the use of a more powerful Wright engine without a lengthy stress analysis. To maintain sales, Cessna was forced to substitute a smaller engine in the BW. But he soon began work on an even more powerful third series, the CW-6, which featured a 225-horsepower engine.
In 1929, on the success of these models, Cessna financed development of an improved "D" series. Members of this series, the Chief and the Scout, were to be built at another new facility, an 80-acre site southeast of Wichita. Here, Cessna was building a 55,000-square-foot plant, although it was during construction that the stock market crashed, plunging the country into the Great Depression.
By 1930 the demand for private aircraft all but disappeared. In an attempt to bolster sales Cessna designed a glider, the CG-2, which he sold for only $398. He attempted several other experimental designs, but by 1931 was forced to close down his plant and rent out his buildings. Although the Cessna Aircraft Company did not go bankrupt, no airplanes were built for three years. In fact, Clyde Cessna and his son Eldon were prevented by the company's board of directors from even attempting to restart operations at the plant. Instead, the pair opened another small shop and founded the C.V. Cessna Aircraft Company. At this site Cessna and his son built the CR-1, CR-2, and CR-3 racing models and the C-3 cabin cruiser.
Meanwhile, in June of 1933, Cessna's nephew Dwane L. Wallace graduated from Wichita University with a degree in aeronautical engineering. He went to work for the Beech Aircraft Company, which occupied a section of the closed Cessna factory. When Beech later moved to another plant, Dwane and his brother Dwight persuaded Cessna's board to allow their uncle to reopen the plant. Production was resumed on January 10, 1934, and the Wallace brothers joined the company as officers. The new team designed another cantilevered--sans wing struts--craft, the C-34 Airmaster, which test pilots George Hart and Dwane Wallace flew on nationwide demonstrations. The new model put the company back on its feet, particularly after it garnered numerous prestigious awards.
In 1935 Clyde Cessna, now age 55, sold his shares in the company to the Wallace brothers. He remained president of Cessna Aircraft until October 8, 1936, when he retired. He returned to his 640-acre farm in Rago and invented new farm implements until his death in 1954. Under the Wallaces, the Cessna Aircraft Company built its first twin-engine aircraft in 1938. The T-50 Bobcat was designed and built in nine months&mdash′oduction had barely started in March 1939 when priority military orders for the new plane began to come in. The U.S. Army used the T-50 as a trainer, designated AT-8. Meanwhile, the Royal Canadian Air Force weighed in with similar orders, calling theirs the Crane I.
Expansion During World War II
With a growing backlog of military orders, Cessna was forced to expand. The company, which employed 200 people in July 1940, had more than 1,500 workers just seven months later. As hostilities in Europe began, with Germany's invasion of France, the army increased its orders from Cessna. The company delivered several new variations on the T-50, including AT-17 trainers and UC-78 utility cargo aircraft. The basic T-50 design, however, was the mainstay at that time. In April 1942, during the darkest days of the war, the army ordered Cessna to manufacture 1,500 C-4A troop/cargo gliders. These craft, which were designed by the Waco Aircraft Company, were intended for use in an allied invasion of Europe.
Cessna built a new plant for the gliders at Hutchinson, Kansas, 60 miles northwest of Wichita. Although half the order was later canceled, Cessna and other builders were kept busy subcontracting for other manufacturers. In addition, Cessna designed a large twin-engine cargo airplane, called the C-106, that was made from freely available nonstrategic materials. The company received an order for 500 of these planes, but this was later canceled when the army decided to use planes from Douglas and Curtiss. Had Cessna been able to build its C-106s for the army, the company may have graduated into another class, with such manufacturers as North American, Boeing, Consolidated Vultee, Douglas, and Lockheed.
In 1944 Cessna occupied 468,000 feet of factory space--nearly ten times the amount it had in 1939--and employed 6,074 workers. With the end of the war imminent, however, the company was forced to turn its attention to the inevitable evaporation of military orders. Futurists had long predicted the emergence of family flight, describing sedan aircraft suitable for jaunts to grandma's house, a picnic spot, and even the grocery store. These planes were to be simple, light designs that were affordable and rugged. Before the end of the war, Cessna began work on a fabric-skin model, the 190/195 series P-780. But pilots of these air sedans would first need to learn how to fly, so the company briefly shelved the P-780 to rush two small trainers, the 120 and 140, into production.
The revolution in flight materialized shortly after the war, and although it never reached the proportions--an airplane in every garage--that futurists had envisioned, it seemed everyone was learning to fly. Cessna built nearly 8,000 trainers by the early 1950s, but the boom was short-lived. Output of 120/140s fell from 30 per day to only five. Demand for the 190/195--now with metal skins--and a new model, the 170, remained strong, however.
After the war, Cessna had established a fluid power division that manufactured hydraulic components. With limited applications in aircraft, the hydraulic products were sold mainly to manufacturers of farm equipment, though the fluid power group later became one of Cessna's most profitable divisions. In 1952 Cessna purchased the Seibel Helicopter Company. This small concern flew its first helicopter in 1954, celebrating the event a year later with a demonstration landing on the summit of Pike's Peak. The company built a YH-41 helicopter for the U.S. Army in 1957, and by 1961 was building CH-1 Skyhook models. With declining sales, however, the business of Cessna Helicopters was wound up in 1963.
Entering the Business Aircraft Market in 1954
Meanwhile, the company had begun to cultivate a new market for its winged aircraft: corporations. As executives found a greater need to travel long distances in less time, a market for business aircraft emerged. Cessna was one of the first to exploit this opening by producing the 310, an airplane designed specifically for executives in 1954. That same year Cessna entered the jet age when it began production of T-37s. These small jets were used as trainers by the Air Force, which purchased more than 1,000 T-37s. In 1959 Cessna brought out an all-metal, 100-horsepower plane, the Model 150. This aircraft was extremely popular with flight schools and flying clubs and was singularly responsible for Cessna's strong growth during the 1960s.
Output reached 3,000 per year by 1966. The following year, production of the popular 150 was relocated to a facility at Strother Field in Winfield, Kansas. The 150s were again manufactured in Wichita for a brief time during 1969 when a recession dried up the market, but production resumed at Winfield in 1973. With strong growth from the 150 program, Cessna began acquiring numerous companies in related fields. The company purchased the Aircraft Radio Corporation in 1959, and the following year took over the McCauley Company, which manufactured propellers and other aircraft components.
In 1960 Cessna became affiliated with SNA Max Holste, a French manufacturer located in Reims. Cessna later purchased 49 percent of the company, which changed its name to Reims Aviation. As Cessna's agent in the European market, Reims Aviation assembled a variety of Cessna designs, principally the Model 150. Cessna upgraded its position in the business market in 1965, when it introduced the 411, a cabin class airplane. The company also turned out its first general purpose agricultural airplane, the Ag Wagon. In 1968 Cessna began production of the A-37B twin-jet attack aircraft for the U.S. Air Force.
Lear, also located in Wichita, entered the business market in the mid-1960s with a line of business jets. As a result, Lear nearly cornered the corporate market, forcing such companies as Cessna--with the broadest product line in the industry&mdashø respond in kind. Cessna began work on its first business jet, the Citation 500, in 1969, although the first of this series was not delivered until 1972. Nevertheless, the Citation became an important source of strength for Cessna, whose private plane business had begun to fall flat. Amid financial reverses, Cessna launched a productivity campaign and its executives--including chairman Dwane Wallace&mdashøok salary cuts. In addition, the number of employees, which was 16,200 in 1974, was cut to 13,000 by 1976.
The outlook for Cessna began to improve as it delivered its 100,000th single-engine airplane in 1975 and introduced the large Titan cargo plane a year later. In 1978 the company redesigned the successful 150, redesignating it the 152. Questions had begun to arise, however, about the integrity of Cessna's construction. Several highly publicized plane crashes seemed to indicate some propwash (the force stemming from the propellers' wake) problems with Cessna tail sections. According to a Wall Street Journal article, the Federal Aviation Administration (FAA) grounded one model--the Conquest--in 1977 after the National Transportation Safety Board concluded that a particular crash was the result of "poor-inadequate design." The FAA allowed the planes to return to the sky, however, after Cessna made some significant changes to the tail section.
Eager to make up for lost profits on the redesign, Cessna's chairman, Russell Meyer, who had succeeded Wallace in 1975, stepped up production of Conquests and Citations, which were in demand as business planes after the energy crisis caused airline prices to skyrocket. Before long, inventories of crucial parts became so low that Cessna was forced to store $40 million worth of half-completed jets. In addition, the company found itself competing for an appropriate number of skilled workers with such formidable rivals as Boeing, Lear, Beech, and Piper, all located in the same area. As these problems began to take their toll, the short-term debt needed to cover Cessna's faltering operations began to mount, and before long the company also was facing a $92 million debt crisis.
Meyer's response was to close the jet production line for several weeks while parts inventories were replenished. Stocked aircraft were completed and sold, and production was resumed at lower levels. By 1979 Cessna was outselling Lear, and in 1980, the year Cessna's sales topped the billion dollar mark, Cessna achieved a record high market share of 54 percent. In an attempt to get more airplanes out of the factory, Cessna inaugurated a clever marketing scheme in 1982. Rather than try to sell its planes in a recessionary economy, Cessna offered leases with maintenance contracts. Companies now could finance the new Citation I, II, and III business jets with money from their operating budgets, rather than purchasing them with capital funds. Although customers could cancel the leases on short notice, Cessna was allowed to depreciate the aircraft, an important tax shelter.
The 1980s: New Aircraft and Ownership
In 1983 Cessna sold its ARC Avionics division to the Sperry Corporation, predecessor to Unisys. In the meantime Cessna identified an important new market: fleet sales. That year Federal Express placed the first of several bulk orders for Cessna's new Caravan turboprop utility aircraft, suitable for serving smaller metropolitan markets. With Cessna's business increasingly dominated by corporate and fleet jet sales, the private plane business became an ever smaller part of the company's operations. Still, the flight schools Cessna had established in 1970 continued to train private pilots in great numbers.
As the company's product liability insurance costs began to mount--annual premiums were in excess of $35 million--Cessna solicited bids from companies that were interested in acquiring the aircraft manufacturer. In October of 1985 General Dynamics, a large defense contractor, purchased Cessna for $663.7 million. Both companies stood to benefit from the transaction. Cessna would be able to take advantage of General Dynamics's stable cash position, technology, and experience in contracting, while providing its parent company with expertise in lightweight structures that could prove useful in cruise missile projects.
That same year, in response to increasingly stronger competition from the used aircraft market, Cessna began a campaign to refit and upgrade older Citation jets. In 1988 Cessna sold its fluid power division to the Eaton Corporation, and the following year the company's 40 percent interest in Reims Aviation, which had been manufacturing the Caravan, was purchased by Paris-based Compagnie Françse Chaufour Investissement. Cessna continued its production of the successful Caravan, however. Although a part of General Dynamics, Cessna was allowed to maintain managerial autonomy. Self-insured against lawsuits, it was now also self-funded and producing a profit for its parent company, but by 1991 General Dynamics, seeking to concentrate on its core defense businesses, announced its intention to sell Cessna. Textron, parent of Bell Helicopter, offered $600 million for Cessna. The deal was completed in January 1992 with Cessna's autonomy intact, while Meyer continued as chairman.
The Early 1990s: Success as Part of Textron
Following the company's purchase by Textron, Cessna continued to expand its line of Citation business jets. The year 1992 saw FAA certification of the Citation VII and the entry level CitationJet models. The following year the prototype of the Citation X, touted as the world's fastest business jet, was unveiled. The Citation Ultra model, the successor to the Citation V, also was announced in 1993. That year the company celebrated delivery of the 2,000th Citation. Cessna also sold its McCauley Accessory Division during 1993.
Production of single-engine piston aircraft had ceased for Cessna in 1986 due to the prohibitive cost of liability insurance. In 1994, as a result of lobbying by the aircraft industry, the U.S. Congress passed the General Aviation Revitalization Act, which established a limit of 18 years from date of manufacture on lawsuits against plane manufacturers. Cessna CEO Russ Meyer flew to Washington for the signing by President Clinton, and the company quickly announced plans to resume building piston aircraft. A site for a new manufacturing facility was selected in Independence, Kansas, some 120 miles from Wichita, and in late 1996 the first plane rolled off the assembly line. The company revived, with minor modifications and updates, its popular models 172 and 182 from the 1980s, rather than designing entirely new aircraft.
Cessna continued to do well in 1996, receiving large orders for Citation Ultras from the U.S. Army and for Citation VIIs and Xs from Executive Jet of New Jersey. The latter deal, for 45 jets, was worth a record-setting $600 million. The company delivered a total of 229 airplanes during the year. The year 1997 was even better, with the company registering a 35 percent jump in sales. A total of 180 Citation series jets, 78 Caravan turboprop aircraft, and 360 new piston planes were sold, and Cessna celebrated delivery of the 2,500th Citation in September.
The company's good fortunes continued unabated in 1998 as the Citation Excel received certification and entered production, and orders for all of Cessna's aircraft remained strong. A total of $40 million in construction projects in Wichita were planned, comprising painting, interior installation, and warehousing facilities. In October, four new Citation models were announced. Three were variations on existing planes, with the Citation Sovereign to be an all-new design. By the beginning of 1999, the company's backlog of orders topped $4 billion.
As it prepared to enter the 21st century, Cessna remained the largest private aircraft manufacturer in the United States. With its line of cargo craft and advanced private jets, including the new Citation X, Cessna still offered the broadest product range in the industry. With the company's relationship to owner Textron on solid ground, Cessna looked certain to remain America's leading small aircraft manufacturer.
Principal Subsidiaries: Cessna Finance Corporation.
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