While the news stirred hope among fretful Hawker Beechcraft employees, their reaction was hardly universal. “What an exceedingly odd announcement,” comments Richard Aboulafia, vice president-Analysis, at the Teal Group. “If AVIC/Caiga [established Chinese aircraft manufacturers] were behind this, that would be one thing. But we're talking about a much smaller and less well-connected entity.”
Indeed. Hawker Beechcraft identified Superior as an “aerospace manufacturer,” but the adjective appears inflated.
The Chinese company, which is 60% owned by a private entity and 40% by the Beijing municipal government, came into being in 2010 when the venture bought Superior Air Parts, a bankrupt Texas parts maker for general aviation piston engines. A few years earlier the same Chinese venture purchased Brantly, an often-failed maker of small helicopters. Those subsidiaries are now co-located in Coppell, Texas. However, all of Brantly's tooling was moved to China, where the helicopter is being developed as a UAV. Meanwhile, Superior Beijing manufactures small piston aircraft engines for the Asian market.
Jack Pelton, the former head of Cessna Aircraft, expresses surprise at the acquirer. “It's not a complete unknown,” he says, “but it's a small business compared to Hawker Beechcraft.”
The deal is also a surprise to Frederico Fleury Curado, CEO of Embraer, a competitor in both business jets and military trainers. “We were expecting a Chinese buyer, but not this one,” he said. “We were expecting an established buyer.”
Aboulafia is less guarded. “We're looking at the people who bought Brantly,” he says. “They're not showing up with $1.8 billion here; that's not going down.”
A Superior takeover will have to receive bankruptcy court approval and be blessed by the Committee on Foreign Investment in the U.S., a federal inter-agency group that will weigh the deal's national security implications.
While HBDC would not be involved, the King Air would, and the Pentagon operates hundreds of them, most importantly as intelligence, surveillance and reconnaissance (ISR) platforms.
The idea of a King Air produced by a Chinese-owned company does not bother Lt. Gen. Larry James, U.S. Air Force deputy chief of staff for ISR. “If you are talking just about the airframe, it's not a state-of-the-art,” he says. Nevertheless, it is impossible to predict how a sale to the Chinese of such an iconic American brand might play out in Washington.