Back on topic: how can Cirrus be spending 1/3 of annual production to pay for product liability?
Personally, I don’t believe it. I could perhaps believe that that is how much certification and liability insurance and provisions cost.
They could easily be spending that. A US airframe manufacturer has enormous potential liability.
What are current Cirrus sales in $?
They could easily be spending that. A US airframe manufacturer has enormous potential liability.
Can you put some figures on that Jason?
From the 2013 GAMA report, Cirrus sales in 2013 were $180,400,278
http://www.gama.aero/files/documents/2013ShipmentReportAH02192014.pdf
That is a lot less than I thought. Clearly business is pretty depressed right now.
I would guess the gross profit would be c. 100M. Have there been payouts worth 30M? That would be a lot of crashes with big injuries or fatalities, for a start.
Figures lie. Flying has never been this cheap and booming 
- I would guess the gross profit would be c. 100M. Have there been payouts worth 30M? That would be a lot of crashes with big injuries or fatalities, for a start
Question is, have there been 30M payouts EVERY year?
I have the impression that Cirrus is following a strategy of limiting production and concentrating on GM per aircraft rather than trying to sell as many planes as they can.
As a single data point, Cirrus Europe have a G5 turbo for sale that is over $1M including tax. (No “gulp!” smilie available )
I’ll be buying it as soon as the nice man in Nigeria sends me the money he has promised….
I would guess the gross profit would be c. 100M. Have there been payouts worth 30M? That would be a lot of crashes with big injuries or fatalities, for a start.
I don’t think so. That’s why I suggested that it would probably include certification costs which would include both the new G5 and ongoing work on the jet.
OK, may well be that, but that’s not what he apparently said. He said product liability costs 1/3 of the year’s production.
Maybe there is a PL provision one can make in the accounts, which is allowable against corporation tax. Is that really possible, on this huge scale? If you were doing that, eventually it will come back and bite you because one day you will end up with a vast provision for a liability which has not materialised and is obviously never likely to.
