In business, its axiomatic that eight of 10 startups fail within three years. In general aviation, if anyone bothered to track them, the odds are probably a little worse. Nonetheless, when Thielert Aircraft Engines GmbH went belly up in the spring of 2008, it was a surprise to many who had been following the company casually. Diamonds innovative DA42 was selling well, the engines seemed to be performing and with avgas threatened, the trend line appeared to point in only one direction: up. Yet in the summer of 2011, the company remains under the bankruptcy protection of German law. But it also continues to operate, delivering both new engines and parts, albeit at high prices. And despite market projections that persistently show Jet A piston engines as the wave of the future, Thielert still has more engines flying than anyone else and no competitor has yet challenged its dominance.
How Goes It?
With three years of reorganization behind it, we wondered if Thielert had gotten back on its feet, improved its engines and established a service network that owners and operators can rely on. The short answer is mixed. The company claims to be profitable, but parts and engine prices are high. Owners of Thielert engines say service has improved, especially in the last year, but some complain that the company is more interested in its bottom line than in satisfied customers. “The people running it now don’t have a feel for the aviation business,” we were told by one operator of two DA42 twins. “They are just interested in the business of running companies in bankruptcy.”
To put that comment in context, you need to understand that German bankruptcy laws are different than those in the U.S. Specifically, when a company files for insolvency, the government appoints a special master-in this case the law firm of Bruno Kubler-whose sole assignment is to right the companys finances, without regard to protecting customers, vendors or its market share. As a result, customers saw huge leaps in prices for such critical components as gearboxes, clutches and pumps and with no other sources, owners had the choice of paying up or grounding their airplanes. Turning aggravation to irritation, bankruptcy rules also require invoices to be paid in full before parts were shipped.
Thielert still exists as a business entity, but to keep from being hobbled by insolvency limitations, it provides parts and engines to Centurion, a separate company organized to act as a Thielert agent. If a buyer ever materializes for Thielert, it would acquire both companies, according to Centurion CEO Jasper Wolfson.
No Interruption
Our interviews with customers reveal a mixed pattern of customer service and satisfaction. Wolfson told us that despite its financial troubles-including a criminal investigation into false invoicing and reporting-Thielert never shuttered production. It continued to deliver engines and parts, albeit at much higher prices.
As Thielerts largest volume customer, escalating prices and complaints about service prompted Diamond to wash its hands of Thielert and start its own engine company, Austro. Austro makes its own version of the same Mercedes-Benz-based four-cylinder automotive diesel. Diamond offers this engine in the DA42 NG, and it has offered owners the option of converting from Thielert to Austro engines at favorable prices.
It has found some takers. Embry-Riddle Aeronautical University, for instance, recently converted one of its Thielert-powered DA42s to Austro engines and one of our editors flew it from London, Ontario, to Oshkosh. The reason for the conversion? “We had a very difficult time getting parts from Thielert,” said ERAUs Joe Maynard in an interview at AirVenture. “We would call Diamond in London, they would call Diamond in Austria…it was a communication breakdown. It was tough to get parts.”
In fairness, not everyone reported the same experience. Two operators we spoke to told us they didnt have the same kinds of problems getting parts, but they were less thrilled with the delays and having to pay for them up front. Centurions Wolfson said the company heard the complaints and has streamlined payments and invoicing so parts can ship the same day theyre ordered, or shortly thereafter. In