IS THERE A MAGIC BULLET THAT CAN INSURE A KIT HELICOPTER MANUFACTURERS SUCCESS?
I got interested in helicopters shortly after I graduated high school in l958. It was about this time that Igor Benson was heating up the rotary wing world with his newly minted gyrocopters. I saw his ads picturing him taking off in a sort of rotary wing boat and I was hooked.
I immediately sent for his $3.00 package and waited on pins and needles, when it finally came I was ecstatic. Not only were there lots of photos, but a complete cross-sectional view of both the rotor control mechanism and rotor blade were included. This was almost too good to be true, but Igor had made a serious mistake and given us most of his design secrets for a very nominal fee.
Two college buddies and I decided right then and there, that we didn't need to buy the expensive building plans from Benson, we would create our own masterpiece right from the three-view drawings they had provided.
Okay, what's the point of this story? Simply put, in over a quarter of a century of dealing with prospective helicopter customers one glaring thing stands out, ninety five percent of them are just like me, they want to build this contraption right from the three view drawings. In other words, price has everything to do with their ability to purchase a kit helicopter, they want twice the helicopter for half the price. As most everyone knows, if you want to be successful in business you better listen to what your customers are saying.
I can tell you in spades, that down through the years I tried, I really tried hard to build the most affordable kit helicopter . However, the harder I tried the more our costs and prices increased. I just couldn't understand it at the time and looking back on it now, the answer is quite easy for me to see. We were pioneers with no real model to follow and we were determined to constantly improve our product.
Here is a list of some of the firsts that we introduced to the sport helicopter manufacturing business over the past three decades:
1. The purchase of a foundry so we could produce our own castings on site (1973).
2. The introduction of our own scratch built 4-cycle power plant (1975).
3. The establishment of a flight training program in a dedicated facility, using our helicopters as training ships (1976).
4. We purchased CNC machining equipment very early on to help reduce part costs. (This was before CNC equipment was very user friendly.)
5. To my knowledge, we were the first kit manufacturer to use video in our marketing program.
6. We pioneered a road show sales program and took it all over the U.S. for many years.
7. We had composite rotors flying in research & development test programs, just as the composite airplane idea was just starting to become popular.
Now you can see why our prices kept rising, innovation costs money. At the time all I could think of was how to hold costs down. I felt extremely pressured to keep working harder and harder personally to improve our manufacturing efficiency. In spite of my efforts, costs did keep rising and by 1982 the price of the Exec had risen to $36,000.00. At that point we were finally able to stem the tide and maintained that price for several years.
I have just described to you what our learning curve was like during the formative years, like topsy, out of control, but learning all the while. Everyone has to start somewhere, we don't dwell on our mistakes or on the high cost of our education. We determined however, that if we ever started over, things would be very different. To satisfy our frugal customers appetite, we would cut costs dramatically and the one major way to achieve that goal is to reduce labor and overhead costs. This is The Magic Bullet. Our goal is to stay under $40.00 per hour as our manufacturing cost burden.
The difference in this number and what we experienced during the Rotorway years is so dramatic that I doubt if we could sell one HELICYCLE© today at those rates, much less a full production run. Local auto repair shops have higher overheads than $40/hr and they're definitely not into aerospace manufacturing. What was the last hourly rate you paid that technician to fix your water heater? Now you see what we mean.
We praise God, for we have actually been able to achieve our overhead goals and here are a few of the reasons why:
1. We started with a well tested design.
2. We carefully engineered it for production.
3. We do aerospace quality work for McDonald's (hamburger) labor costs.
4. We require each member of our management team to take a vow of poverty.
This may sound funny to you, but it's reality to us. You don't get into this business unless when you cut yourself, you bleed little helicopters.
We don't sell helicopters, we enter a partnership with our customers. It's a partnership that costs us both time and energy, but our pay off is the ability to produce a high quality sport helicopter that will more than satisfy our customers desires. Concern for the success and safety of each of our builder/pilots is uppermost in our minds.
Heli-cycle, n, def.:
TWICE THE HELICOPTER/ HALF THE PRICE.