Below is a reprint of a 1982-83 Wall Street Journal article written about Don Love Aircraft Sales in Wichita, Kansas.
Top Cessna Salesman Becomes The Object of Hate-Love Affair
Don Love of Kansas Gambles On Jet Delivery Positions, Draws Flak of
Producer
Reprinted In entirety from WALL STREET
JOURNAL. By Neil Maxwell
Staff Reporter of THE WALL STREET
JOURNAL (1983)
Don Love sees
himself as a gambler but not a high roller. "If I lose $5,000in a night, I
quit," he says. But his job involves unquestionably high stakes and enough
anxiety to make a poker player switch to solitaire.
Mr. Love, a dapper
57-year-old Kansan who is addicted to cowboy clothes and expensive cars, deals
in corporate jet aircraft built by Cessna Aircraft Co. in Wichita, Kan., where
Don Love Aircraft Sales Inc. is also located.
He says he has
sold about 100 new or used Citation jets, about 10% of the total built,
although he doesn't work for Cessna. He even has a letter of commendation from
the company proclaiming him its all-time best salesman - at a time when he
worked for a Cessna dealer.
So how does the
factory feel about Mr. Love? It is a definite hate-Love relation- ship, spelled
out clearly in a letter from J. Derek Vaughan, senior vice president of the
Citation marketing division, warning Mr. Love to "keep off Cessna property
at all times and until further notice." That was in 1978, and Mr. Love
says further notice still doesn't appear to be imminent.
Cessna's Position
Mr. Love, in effect, competes with Cessna in sales of its
planes. He buys delivery positions on inbuilt Citation jets and later resells
the positions at a profit to buyers who want to avoid the long wait for a plane
(more than three years for a Citation III ordered today) and the higher pries
posted by Cessna in the meantime.
Two things have to
happen to make his gamble work: Delivery times have to remain long, and pries
have to keep rising. So far, the System has paid off like loaded dice. Mr. Love
says he has held delivery positions on 38 Citation jets and made money on every
one - except maybe the last, and he expects he is breaking even on that one.
The reason he
may have problems on his latest deal is that with some models supply is
catching up with demand, and price increases aren't as steep. In the past, Mr.
Love says, Cessna has raised prices "unmercifully." He adds that the
Citation II nearly doubled in price in four years. "That's not inflation,
that's greed," he says.
Now he thinks the
days of profitable speculation on earlier-model jets may be ending, but the new
Citation III promises to be another big-pot winner for Mr. Love, at least at
first. The Citation III hasn't yet been certified for production by the Federal
Aviation Agency, but 150 buyers have already signed up for deliveries starting
in December.
Among the early
order placers, unbeknownst to the factory, which refuses to sell him planes, is
Don Love. He has about $350,000 tied up so far in advance payments on a
Citation III. He hopes to clear a personal record of $800,000 by selling his
place on the waiting list to an impatient corporate buyer - or actually take
delivery and resell the plane at a profit.
The profit won't
be ail his in this instance, because he has had to use partners to place his
orders since Cessna stopped letting him buy its aircraft. "They thought
they could cut me off, but they just made me go underground. Now I'm the silent
partner in what they think is a legitimate purchase," Mr. Love says.
Mr. Love is
particularly piqued at Cessna's cutting him off, because he insists (but the
factory denies) that it was Cessna's idea for him to buy and resell places on
the delivery list in the first place, back at a time when early Citations
hadn't caught on.
"They came to
me and said 1 could double my money by buying early-delivery positions on the
Citation I," Mr. Love says. "For them, it was a great way to get
sales moving. It's a tremendous advantage for a factory to be sold out a year
or two in advance. You can get your subcontractors lined up, you can negotiate
for prices, you can predict costs. And your customers aren't buying an airplane
from somebody else."
But when they
saw how well he was doing, Mr. Love says, "They tried to cut me off. They
thought they were losing control of their marketing, and they were."
Cessna agrees that
its decision not to sell any more aircraft to Mr. Love "has to do with
marketing." The company says, "He puts down $100,000, and if he can
turn it, he makes a lot of money. If he doesn't, we have an airplane sitting on
the ramp. Those delivery positions turn into metal airplanes, and if there
isn't a buyer, there's a problem."
The company adds
that its practice now is to try to ascertain that delivery positions are taken
by bona fide final users instead of middlemen. Most other aircraft makers
similarly try to discourage speculation in their aircraft.
Mr. Love isn't the
only one speculating in aircraft-delivery positions. Doctors and other
individual and corporate investors have tried to get in on the gamble to such
an extent that some industry observers predict a marketing shakeout when buyers
can't be found and the speculators can't take delivery of the finished
aircraft.
Mr. Love sees
other reasons for Cessna to try to squeeze him out. "It was very
destructive for the marketing people to know that 1 had a Citation for sale for
less than their customers could order one from the factory," he says.
Different Styles
Mr. Love thinks his flamboyant ways were part of the
problem, too. Cessna is a coat-and-tie company, he says, and "they didn't
like to see me show up out there wearing jeans and driving my Excalibur"
when he would go along with a customer to accept delivery of a plane.
But whatever the
reasons, the attempt to make Mr. Love stop buying Cessna airplanes didn't work.
"They thought they were going to stop me, but what they did was just
motivate the hell out of me," he says, sipping a Chivas at a Houston hotel
bar while he waits for an aircraft sale to jell.
The motivation is
easy to understand, because the stakes are high, and so are Mr. Love's costs of
living, what with a second house at the Grand Lake of the
Cherokees in Oklahoma, life at a local country club and his car, currently a
Lamborghini Espada. But beyond ail that, he feels he has a wager to settle with
Cessna, and he is dog-determined to win.
He got into this
business in 1975, when he bought out a partner in his used- aircraft business.
He got a bank in Clinton, Iowa, to go into a partnership with him to buy $2
million in used aircraft from Cessna, which was getting out of the used-plane
business.
Bread and Butter
But the speculation in delivery positions soon became his
bread and butter. And he sees no reason for that to change, despite Cessna's
objections. What's important is the length of the waiting list, which remains
long for the Citation III, and price increases, which continue to be hefty. The
Citation III started selling in 1977 for $3.9 million, but four price increases
have brought the current price to $5.2 million plus escalators to compensate
for inflation, so that the actual price isn't determined until about six months
before delivery.
Sometimes the
spreads are great enough to allow Mr. Love to wheel and deal on the spot and be
assured of coming out ahead. For instance, he was calling Kansas from an
airport in Munich, Germany, one time, when someone over- heard him and asked
whether he worked for Cessna. It turned out to be a pilot whose boss had two
Citation jets on order but decided to substitute a Learjet for one of them and
thus had a Cessna delivery position he didn't want.
Mr. Love quickly
offered $50,000 for the position, which was accepted. He caught the next plane
for Kansas to get the money, caught the next back to Munich to deliver the
check and sign the papers, and shortly resold the delivery spot for an
additional $50,000.
Another easy-money
deal came along when Mr. Love learned that a unit of Texas Eastern Corp. wanted
a Cessna jet in a hurry, and he knew that Ryan Aviation in Wichita had one
coming up for delivery that it didn't really need.
Because of price
increases, he was able to make early delivery of the jet to Texas Eastern for
the same amount as the one the company would have had to wait for and split a
difference of$ 100,000 between himself and Ryan.
Happy Customers
His customers are
pleased with the relationship, it seems, even if Cessna
isn't. Texas Eastern says it is happy about its transaction, and Roy Ryan of
Ryan Aviation says that in a business that has some unsavory practitioners, Mr.
Love flies above that crowd. "I don't know of anybody he's sold an airplane
to that says he lied to them or cheated them."
Sometimes Mr. Love
helps to bail out plane buyers who can't come up with the purchase price. On
one occasion, he heard about a doctor on the West Coast who couldn't afford to
take delivery of a Citation jet. He made a quick deal to sell the plane to
singer Wayne Newton for a modest profit.
"I think I made $10,000 and the doctor made $ 10,000.00," he recalls.
But timing is
always important. "You sell your spot too quick and you lose profit; you
hang on too long and the economy could turn sour or you can't find a buyer in
time," he says. The state of the economy posed a problem with his latest
deal, involving a Citation II on which he and his cover-up partners had to take
delivery. He sold it recently but had to take a trade-in he didn't want, and he
won't know until he resells that plane if he has made or lost money on the
transaction.
Don and Barbara Love
tour the Excalibur plant in Milwaukee, where Barbara chose her very own Series
III Excalibur.
Editor's note:
Barbara Love was
on a business trip in California when she recalls seeing an Excalibur for the
first time. "That's the kind of car I want," she told her husband,
Don Love ... and that's the kind of car Barbara is driving today.
It took a bit of
searching before Barbara found out where she could buy one, but a year later,
her dream came true in the form of a Series III Excalibur.
When Barbara went
to the bank to request a cashier's check to pay for her Phaeton, her banker
asked what this money was going to buy. When she told him an Excalibur, he
insisted on accompanying the Loves to the factory in Wisconsin to personally
deliver the check ... and he did!
This Wichita
couple is not new to the world of fine automobiles. Don is the owner of a
Lamborghini Espada, and Barbara has owned and driven both
Mercedes and Jaguars. They also own an Excalibur boat, made by our good friends
and fellow Excalibur owners, Bill Farmer and Don Abel in Sarasota, Florida.
"Everybody thinks we bought the boat to match the car. It is purely
coincidental. I'm just afraid someone will pull the 454 engine from my
Excalibur and put it in the boat, because we've been having some problems with
the 454 engine in the boat. Believe me, there'd be no easier way to 'make a
Love, hate'!"
Being one of the
few owners of an Excalibur in Wichita surely makes Barbara distinctive when she
drives around. Forget- ting that she had "Barbara" written in script
on both doors, she is often shocked when admirers give her the thumbs up sign
and yell, "I like your car, Barbara!"
Barbara likes her
car, too. In fact, it was "Love" at first sight.
