On the Record with
CHUCK PIEPER, CHAIRMAN AND CEO, FAIRCHILD
AEROSPACE
New Owners Strengthen Fairchild Plans

Chuck Pieper

IlA 2000: Two years ago ILA was the venue chosen by Fairchild Aerospace to launch a whole new family of regional airliners-the 70 to 90 passenger 728 and 928 twinjets, as well as a stretched 44-passenger version of its Dornier-built 328JET. Eighteen months later many saw a company crippled by success, and wondered if it was going to make it. A burgeoning order book forced Fairchild to spend more on keeping up with business at the same time the new models devoured cash for their development.

The crash was averted in March when investment bankers Clayton, Dubilier & Rice stepped into the breach with $1.2 billion, including $800 million from Allianz AG and German banks. In April, CDR's Chuck Pieper was named chairman and CEO of Fairchild with the task of building it, transforming it, and selling it for a profit some five or six years down the road.

"That's our business," he told Show News. It's what CDR did with Allison Engines, and how Forstmann Little rescued Gulfstream.

"It only makes sense if we can sell a really thriving enterprise. So the interests of the people in the organization and ours as investors are the same," he pointed out.

The first signs of this sincerity have been to move the headquarters of Fairchild Aerospace from San Antonio, Texas, to Dornier Luftfahrt at Oberpfaffenhofen, to unroll a plan to encourage investment in the company by senior managers and-unusual in the aerospace industry-to provide stock options to every employee. This will link everyone directly to the market success of the products, he said.

Pieper-for many years a top executive in GE's Asian and lighting businesses-sees tremendous potential in Fairchild and its products. "We're going to grow this business from $800 million a year turnover to five billion by 2008," he said. "That's a lot to build. When you add a new platform roughly every year for three years in a row -the 328JET, 428, 728 and 928-that's a heck of a piece of work. There's a lot of heavy lifting to do; people here will have to have a high level of energy-it is no place for those who, as they say in the Navy, are looking for their twilight tour."

With such a tight product timetable, and the need to build a whole new company to execute it, Pieper says there is a great danger of confusing speed with progress.

"Clearly, having the prod-uct available is central, but if it requires the customer to jump through hoops to use it, then speed is a negative."

There is also a danger of agonizing over every decision. "We have to build a culture with a bias for action, that accepts it is going to make some mistakes. But it will have fast cycle time, observe itself critically and go back and fix those mistakes," Pieper said.

Fairchild Aerospace currently has openings for 25-30 key executives, and 150 key engineers. Finding them is a priority for Pieper's managers. "If you're not spending one third of your time trying to find the best people, you're not going to get your job done." he said.