October 22, 2000 - Lawsuits Again Threaten Piper Aircraft
Less than a decade after legal problems drove Vero Beach's biggest private
employer into bankruptcy, the New Piper Aircraft Inc. again must defend itself
in court.
A $ 75 million lawsuit filed last month questions Piper's credibility as a maker
of safe, reliable aircraft, while another, year-old suit portrays the
manufacturer as racist.
Despite the suits, Piper officials hope to regain the altitude the company lost
when it filed for Chapter 11 bankruptcy in 1991. It employs 1,400 people in Vero
Beach and projects sales this year of $ 200 million, up from $ 146 million last
year. Chuck Suma, Piper's chief executive and president, told the National
Business Aviation Association in New Orleans earlier this month that he expects
the company to do $ 300 million in sales next year, cranking out 530 planes and
employing up to 1,500 people.
Rather than lawsuits, Suma focused on the newly released Malibu Meridian, a
luxurious $ 1.5 million turboprop that is Piper's answer to more expensive
corporate jets - and its first new plane since emerging from bankruptcy in 1995.
But the suits are impossible to ignore, especially for a company that largely
attributes its unraveling nine years ago to product-liability claims.
Depending on their outcomes, the cases could hurt Piper's credibility as both a
manufacturer and business leader.
Tyrus Bowers, a former summer intern at Piper, filed a racial discrimination
suit last November in the U.S. District Court in West Palm Beach, alleging he
was turned down for a permanent job because he is black. A month later, his
father, Herman Bowers, and 17 other current and former black employees joined
the suit.
The plaintiffs say they were repeatedly denied the opportunity to earn overtime
pay, passed over for promotions in favor of less-qualified whites, exposed to
racial epithets on bathroom walls, paid on a separate scale and forced to adhere
to tougher standards.
The lawsuit also states that Piper had no blacks in top management and ignored
repeated complaints of a racially hostile workplace.
Specifically, the suit says Piper allowed whites to display a hanging noose that
intimidated black employees, let racial graffiti such as "KKK is #1" stay on the
bathroom wall for a month while removing nonracial, sexually crude graffiti
within a day, and applied a "white-glove" test to jobs completed by black
employees but rarely to those of whites, the suit states.
"There is evidence of extreme conduct," said Saul Smolar, a Fort Lauderdale
attorney who's representing the plaintiffs. "It's hard to believe that something
like that happened. I had doubts myself."
Smolar, who was reluctant to talk about the case, said both sides will continue
taking depositions over the next three months. Meanwhile, he said, an economist
will be hired to decide how much money the plaintiffs should seek. The case
could go to trial in March.
Piper denies the allegations.
"Piper is dedicated to maintaining a workplace that is free from all forms of
discrimination," Suma said Thursday. "This type of legal procedure . . . follows
a pattern of attacking healthy, growing companies such as ours in an effort to
extract settlements and legal fees."
Meanwhile, a lawsuit filed Sept. 20 in U.S. District Court in Fort Pierce could
prove even more troublesome, particularly to Piper's bottom line. The $ 75
million suit, which seeks class action status, targets Piper and Textron
Lycoming of Williamsport, Pa., for a faulty engine part in the Malibu Mirage, a
six-seat airplane that lists for $ 869,800.
The plaintiff, Dallas businessman William Montgomery, contends Piper and Textron
knew about the engine problem for several years and did nothing about it,
jeopardizing people's safety and costing owners hundreds of thousands of
dollars.
Piper said in a news release that it's working with Textron to resolve "all
known component issues" and "maintains that the Malibu Mirage is a safe and
reliable aircraft."
But Charles Ames, one of Montgomery's attorneys in Dallas, says Piper was too
slow to act after learning of the engine problem.
"Piper is at the mercy of Textron, who is producing a bad engine, and what makes
it worse is Piper knew all along it had a bad engine and yet continued to put
out a product with a bad engine," said Ames, the previous owner of 13 Piper-made
planes.
"I think it hurts their credibility with potential customers."
Piper officials call the Montgomery suit frivolous and say they are unwilling to
settle.
Ames filed a related suit last month in Beaumont, Texas, for $ 3.5 million on
behalf of four plane-crash survivors who allege that the Mirage engine problem
caused their accident. Three other Malibu Mirages have crashed in the past four years, Ames said. No
fatalities resulted.
Piper, founded in 1937, is one of the older names in general aviation. It builds
personal and business aircraft ranging in price from $ 135,000 to $ 1.5 million.
The company is privately held, though Suma is interested in going public.
Suma, who grew up near the Vero Beach Airport, joined Piper as a riveter during
its heyday in 1976, when it produced 4,000 planes a year and employed 3,600
people.
He rose through the ranks to become director of manufacturing operations in the
1980s; at the same time, Piper passed through three owners before winding up in
bankruptcy court in 1991.
A year later, Suma was promoted to president and chief operating officer, but it
wasn't until 1994, with the passage of the General Aviation Revitalization Act,
that Suma was able to taxi Piper out of bankruptcy.
Under the federal law, a manufacturer is liable for a plane up to 18 years after
production. The General Aviation Manufacturers Association, a Washington
lobbying group, says the law largely explains the industry's resurgence during
the past five years. The industry built 2,504 planes last year, accounting for $
7.9 billion in sales, compared with $ 2.3 billion in sales on 928 planes in
1994.
"We were basically devastated by the number of lawsuits. Piper went bankrupt
mainly because of product liability lawsuits," said Shelly Simi, spokeswoman for
the manufacturers association, which is made up of 53 companies, including
Piper. Suma is chairman of the association's board.
"Since that time, Cessna has gotten back into production of single-engine
airplanes," Simi said. "Piper has the new Malibu Meridian, and we're now looking
at several other business aircraft produced by various manufacturers."
Suma said the lawsuits against Piper pale in comparison with the sheer number of
suits it faced in the 1980s. He also said he does not expect the recent lawsuits
to slow Piper down.
"It's just an indication that the company is healthy and growing," Suma said.
"The trial lawyers have not gone away because of the General Aviation
Revitalization Act. They've just found a new way to come at us."
Editor's note: Staff writer Amy Martinez' sister, Tracey Ellerson, is an
associate with the law firm Akerman Senterfitt & Eidson in Orlando, which has
been hired to defend New Piper Aircraft Inc. in the racial discrimination
lawsuit. Ellerson is involved in the suit but is bound by a confidentiality
agreement with Piper and has not discussed the case with Martinez.
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