EDITORIAL: Gulfstream Continues to Lead Market
October 17, 2014
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  • On Tuesday morning in Savannah, an idea born in the aftermath of World War II bore fruit of a substantial kind.

    It came in the form of an announcement from executives with Gulfstream Aerospace and its parent firm General Dynamics who introduced a pair of new business jets, the G500 and G600.

    “This is another extraordinary day in the storied history of Gulfstream,” said Larry Flynn, Gulfstream president. “I could not be more pleased to announce the next generation of Gulfstream aircraft. The G500 and G600 build upon the technology present in our G650 and our latest aircraft, the G650ER.”

    That “storied history” began when Roy Grumman, co-founder of Grumman Aircraft Engineering Corp., proposed the development of a purpose-built business aircraft at the end of World War II.

    Grumman envisioned leveraging the company’s expertise from building robust Grumman warplanes to create scaled-down airliners that could facilitate the post-war economic boom, according to Gulfstream’s website. Thirteen years later, the company’s history reads, Grumman introduced the Gulfstream I, an aircraft that revolutionized general aviation and positioned the company as an industry high-flyer charting a course for all others to follow. For Savannah, a key event came on Sept. 29, 1967, under this headline: ‘Gulfstream production shifts to Savannah, Georgia, facility.’

    As Gulfstream’s website explains, Grumman moved its Gulfstream operations to Savannah … to split its aircraft manufacturing business into military and civilian divisions and improve efficiency. Officials cited labor supply, land availability, transportation facilities and favorable weather conditions for choosing Savannah as Gulfstream’s permanent home. At the time, Gulfstream had 100 employees.

    Twenty-two years later, on July 30, 1999, defense giant General Dynamics bought Gulfstream for $5.3 billion. The new corporate parent made research and development a priority.

    By the time Larry Flynn and General Dynamics CEO Phebe Novakovic announced the birth of the G500 and G600, the number of employees in Savannah had mushroomed past 10,000 — and continues to grow. Its overall staffing has gone north of 15,000.

    With that growth has come financial success. An examination of a series of General Dynamics’ quarterly financial reports finds the following headline repeated over and over: ‘Gulfstream’s performance boosts General Dynamics.’ A secondary headline, also found repeatedly, suggests ‘Aerospace company grows revenues, earnings, increases margins’

    To get a sense of how perceptions have changed in Gulfstream’s favor in the aerospace industry, it’s useful to look at a few reports from 15 years ago. In July 1999, a Savannah Morning News article reported that Bombardier Aerospace had delivered its first Global Express jet and called it “the first real threat to the Gulfstream V.”

    A Bombardier executive was quoted as saying “the highest end of the business aircraft market has historically been seen as a one-company (Gulfstream) show, but his company’s new $38 million jet would be “the perfect capstone to what is already the broadest line of business aircraft on the market.’’

    By October 1999, some industry analysts were giving Bombardier a competitive edge.

    ‘’I think Bombardier is in much better position than Gulfstream because they have a much broader line of jets,’’ said Rich Laggan chief financial officer of Aero Toy Store, a plane dealer based in Fort Lauderdale, Fla. It didn’t quite turn out that way.

    Canada-based Bombardier still manufactures business jets but, since that announcement, has fallen well behind Gulfstream competitively.

    By February 2000, some critics were complaining that Gulfstream’s mainstay Gulfstream IV was past its prime, but it kept selling even as the company introduced its new flagship plane, the G-V.

    The company said the next improvement on its agenda would be to add high-speed Internet access in its jets.

    In the years since, the G450, G550 and, of course, the G650 and G650ER have joined the Gulfstream fleet, with the two versions of the G650 becoming the showpieces.

    When the first G650 was delivered about 18 months ago, Gulfstream had more than 200 orders and a wait time of nearly five years. Now, the wait time for the G650 and G650ER stretch out for several years. Some owners, in fact, have been able to make a profit on their planes by ‘flipping’ them to buyers unwilling to wait for one of the planes.

    Continuing speculation has focused on Gulfstream’s potential for building a business that will surpass the speed of sound. For more than a decade, the firm has dedicated a team of engineers and other researchers to finding a way to diminish the bone-jarring sound of an aircraft breaking the sound barrier.

    Last month, the company won U.S. Patent 8,789.789 for a “supersonic aircraft with spike for controlling and reducing sonic boom.”

    Beyond Gulfstream’s manufacturing success and the economic impact of its expanding payroll, the company contributes to the community around it in a variety of other ways.

    In May, Gulfstream donated $1 million to the Children’s Wellness Program at The Children’s Hospital at Memorial University Medical Center to help in the fight against childhood obesity.

    In November 2013, the company and its employees contributed $2.7 million to the United Way of the Coastal Empire.

    And that barely touches the tip of Gulfstream’s role as a good citizen. It’s worked with Savannah Tech to develop a training center to develop the workforce it needs, and it works with the Savannah-Chatham school system to groom students for leadership.

    In announcing the G500 and G600, Larry Flynn, the Gulfstream president, noted the company’s growth.

    “In the process,” he said, “we’ve gone from a Savannah-based company that did some international business to an international company with global headquarters in Savannah.”

    And we’re more than glad to have you here. Congratulations.