Mobile company defining its niche
By Kaija Wilkinson
December 2014
...Continental Motors Inc. President Rhett Ross spent the majority of 2014 traveling --
to China, where parent company AVIC International is based, to Europe and to
various parts of the Americas.
...“There are a lot of opportunities,” Ross says. “We’re visiting a lot of customers and
making a lot of acquisitions.”
...On Nov. 21, Continental closed on its latest purchase, Mobile-based Southern
Avionics, marking the continuation of an effort to beef up its service department that
Ross says will progress into 2015 and beyond. The acquisition adds a new element
-- avionics -- to Continental’s service division, which Ross envisions as a “one stop
shop” for the growing number of high-end turboprop business jets that will be flying
into and out of Mobile, especially after the $600 million Airbus manufacturing facility
comes online in 2015.
...States Ross: “Before, our service department could only work on aircraft engines
and exteriors, but now we are adding the capacity to work on actual avionics and
interiors. And that’s great because when a customer brings in a jet in for service,
they typically want more than just one thing done.”
...The services division, based in Fairhope, across the bay in Baldwin County, has
grown from fewer than 10 employees in 2012 to 35 by the end of this year. Ross
expects it to double in 2015. The division, however, is only a small part of a much
larger operation that, since 1967, has been exclusively providing engines and related
products and services to commercial clients. The company has more than 650
employees worldwide, including 450 in the Mobile area. Members of its service
division have the ability to move back and forth between Mobile and Fairhope
locations, depending on what is most convenient for a customer.

A deep legacy
...Continental Motors was founded in 1904 in Muskegon, Mich. It produced internal
combustion engines for cars, trucks, tractors and equipment such as generators.
The company also built truck engines for the U.S. Army. In 1927, it certified its first
commercial aircraft engine, the Continental A40, for a Piper Cub.
...In World War II it supplied engines in some models of the Sherman tank, and
engines for the Grasshopper fleet of observation/liaison planes.
...“Most of our military work in World War II, believe it or not, was not in aviation but
manufacturing engines for a variety of different marine and land vehicles for the
Army and Navy,” he says. “We did provide some aircraft engines, but mostly for
military training planes and spotter aircraft.”
...After the war, Continental made engines for the Army’s Patton tank, and expanded
its commercial business significantly, building engines for Beechcraft and Cessna,
both in Wichita, Kan., and Piper in Vero Beach, Fla.
...It also supplied the IO-240 piston engine for the Rutan Voyager, which
circumnavigated the globe in 1986 without refueling.
...In the mid-1960s, it sold its military division to General Dynamics and its commercial
component to Teledyne Technologies Inc.
...Since its move to Mobile Aeroplex at Brookley in 1967, Continental Motors has
been providing engines for small commercial aircraft. Ross elaborates: “It’s almost a
retail kind of business where we do one-off orders. We are not like ST Aerospace
that does big, long-term contracts, not because we wouldn’t want to, but it’s not really
the nature of our business segment.”
...Washington, D.C.-based aerospace analyst Richard Aboulafia describes the
segment as “a very small backwater of the aviation business.” Continental does not
build engines for large commercial or business jets, but what they do, he says, they
do very well. The industry has more in common with the auto industry than it does
with planes. He believes Continental is wise to diversify and cast its sights on upper-
echelon clientele.
...“That’s a smart strategy,” Aboulafia says. “The farther you go up on the food chain
in private aviation, the less economic pain you’re going to feel. You’re getting away
from the general public and into the rarified air of corporate flight departments.”
...The business also looked attractive to AVIC, which, through subsidiary Technify
Motors, acquired Continental Motors in summer 2013.

Adapting to change
...Since it has been at Brookley, Continental has physically shrunk. But that’s not
because of lagging business, but rather changing technology.
...“Manufacturing has changed so dramatically since the 1960s, ’70s and ’80s in
terms of the amount of real estate you need to build product,” Ross says. “What
used to take five or 10 pieces of equipment now takes one.”
...The market, too, for small, primarily recreational aircraft, which peaked in the mid to
late 1970s in the U.S., has also changed, due to two factors: Product liability lawsuits
“killed the industry almost overnight,” starting in about 1980s, he says, while Baby
Boomers, which made up a large portion of the customer base, have aged out of
their flying years.
...Continental has adapted, continually shifting its strategy for changing times. The
expansion of the service facility is part of that. Established in the mid-1990s, the
facility began to expand in earnest in the 2000s, and is continuing to gain
momentum. Ross attributes the success to “very good employees and a focused
marketing team with a clear strategy.”
...He continues: “We made expansion of that division a conscious focus beginning in
late 2012. Part of that involved moving our upstate New York operations down here. It’
s all about leveraging the available space. Rather than running a separate engine-
maintenance facility, a separate fixed-base operator and a separate airframe facility,
we combined all those.” That, he says, is more attractive to the customer.
...Besides the service center expansion, Continental aims in 2015 to increase the
number of products it exports to Europe, Australia and South America. Such exports
account for about 25 percent now.
...“New products we’re developing in diesel-engine technology and low-horsepower
gasoline engines promise to drive solid growth,” Ross says. Its top selling products,
both domestic and export, are its long-running gasoline engines, which it sells to
clients such as Cirrus Aircraft Corp. of Duluth, Minn.
...Continental developed a new six-cylinder, 180-horsepower alternative fuel engine
for a four-seat conceptual aircraft developed by German light-sport aircraft
manufacturer Flight Design. A team from there recently visited Continental to learn
about the operation of the engine, about which Continental is optimistic.
...“It’s a totally brand-new product that will take market share from our competitors as
well as allow us to have a product in the growing international pilot training market,”
Ross says.
...And in addition, the company’s newly developed line of diesel engines holds some
promise worldwide, since diesel fuel is much more readily available than gasoline.
...The company is hiring several staff members in Mobile to help support the new
products. There are several openings in the service division. These are Airframe &
Powerplant (A&P) positions regulated by the FAA and requiring approximately two
years of specialized training offered through entities such as Alabama workforce
training agency AIDT, which has a Brookley location and, by the time the Airbus
assembly line is up and running – a $2.5 million training center at the H.L. “Sonny”
Callahan Airport in Fairhope.

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