View full sizeContinental Motors President Rhett Ross discusses the firm's electronic controls for piston airplane engines in front of a Cirrus SR-22 at the company's Brookley Aeroplex hangar in Mobile. (Press-Register/Mike Kittrell)AVIC International Holding Corp. said Tuesday that it had completed its $186 million purchase of Continental Motors from Teledyne Technologies.
Chinese-government owned AVIC International set up a new subsidiary called Technify Motor and said Tian Shan would move to Mobile to become president of Technify.
Rhett Ross will remain the president of Continental Motors, which will be a Technify subsidiary, and other Continental managers will stay on, Ross said. He said that the company is trying to hire 20 production workers and 15 engineers, which would raise its local employment to 435 people.
Ross said Continental's union contract remains in force through 2013.
"We worked hard over the last few months to make sure the employees see no impact" after the sale, he said.
Continental had cut around 100 employees during the recession as demand for small planes and engines plummeted. Ross said the planned hiring stems from an improving economy, plus Beijing-based AVIC International's push to invest in Chinese and other fast-growing markets. Ross said the new owners are already opening doors in China, with Continental in the running to sell engines for Chinese-only planes.
Future growth is likely to involve a diesel engine that Teledyne acquired and is further developing. Aviation gas is rarely available for sale in emerging markets. Jet fuel, which is basically the same as diesel, is much more widely available. Continental plans to start selling its diesel engine by early 2013 and already has a launch customer, Ross said.
"We really welcome Continental Motors to the AVIC International family," Tian said. "We expect further success for their advanced diesel technology."
For AVIC International to achieve ultimate success, it needs the Chinese government to open its airspace to general aviation. China is experimenting with open skies in one province right now, and has pledged to loosen control over the rest of country in coming years.
Jason VanWees, investor relations director for Teledyne Technologies, said that it's a "bittersweet moment" for the Thousand Oaks, Calif., firm to sell Continental after more than 40 years of ownership. But he said Continental needed help to pursue overseas growth.
"We either needed to find a partner or joint venture or someone to buy the business," VanWees said. "Now we're a pure-play electronics company, which is what we wanted to be."
Ross said that the sale doesn't seem to have affected Continental's attractiveness to plane makers. He said manufacturers were considering replacing other engines with Continental models or upgrading existing Continental engines on a total of seven plane models now.
Chinese government ownership "has no impact on how we're going to operate or run this business," he said.