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GARA: the General Aviation Revitalization Act of 1994

by GlobalAir.com 13. October 2015 16:35
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The General Aviation Revitalization Act of 1994, or simply GARA, is a federal act that was implemented to amend the Federal Aviation Act (FAA) of 1958.

With a few exceptions to the law, it gave general aviation aircraft manufacturers much stronger protection from prosecution for accidents which were previously said to have been caused by manufacturer fault. Manufacturers embraced this amendment as it put an 18 year time-frame on how long they could be held responsible for a design defect. However, prior to the enactment of GARA, it was a different story altogether for many manufacturers of single and twin engine piston aircraft.

The Rise, Fall, and Rise Again of General Aviation Aircraft Manufacturing

The late 1960's and early 1970's were said to have been the golden years for the aircraft manufacturing industry involved in building single and twin engine piston airplanes. However, towards the end of the 70s, during the period from 1978 to 1988, industry-wide employment fell by a devastating 65 percent. Aircraft manufacturing overall saw a massive decrease in new aircraft shipments, falling 95 percent, and over 100,000 people lost jobs in fields directly related to aircraft manufacturing in the United States.

Cessna Aircraft Company, Piper Aircraft and Beech Aircraft (now Beechcraft), the three leading general aviation aircraft manufacturers who accounted for over half the production of general aviation aircraft in the US, were among the hardest hit.

Cessna, who had been producing general aviation aircraft since its founding in 1927, posted the company's first annual loss in 1983. Virtually handicapped by previous liability exposure, Cessna was forced to halt production on all its single engine aircraft by 1986.

Piper Aircraft Company went in an out of bankruptcy, and was forced to suspend production on some of its most popular models, such as the Super Cub and PA-32 Cherokee Six / Saratoga.

Beech Aircraft shifted its emphasis away from piston / propeller aircraft, keeping the Beech Bonanza and Beech Baron in production and discontinuing all other piston / propeller aircraft models.

The cause for such a drastic drop in both jobs and the manufacturing of single and twin engine piston aircraft were the frequent lawsuits against the manufacturers. Manufacturers were able to be sued for manufacturing defects regardless of the number of years since the actual aircraft design had been developed, or used by customers. This was especially hard on aircraft manufacturers, as general aviation aircraft remained in use several decades after being manufactured, much longer than cars, or even most commercial airliners. These lawsuits became so prevalent in the 1980s that many attorneys began successfully specializing in targeting general aviation aircraft manufacturers and insurers with often frivolous lawsuits.

In fact, between 1983 - 86, Beech Aircraft defended itself against 203 lawsuits, each case costing them an average $530,000 to defend. Interestingly, while researching these cases, the NTSB found that none of the accidents could be attributed to manufacturing and design defects. Most were simply pilot error or another indirect fault.

The effect was widespread. In 1978, 18,000 general aviation aircraft were built, compared to only 928 aircraft in 1994, the year GARA was finally passed. The general aviation industry was suffering from a lack of new aircraft, particularly in the area of training, rental and charter use. The three most popular trainer aircraft, the Cessna 152, Piper Tomahawk and Beech Skipper had all been removed from the market by the mid 1980s, never to return. Russell Meyer, the CEO of Cessna at the time, cited product liability concerns as the sole reason for the halting production of single and twin engine general aviation aircraft.

The Birth of GARA

During the 80s and 90s, guided by Cessna CEO Russell Meyer and Ed Stimpson, the President of the General Aviation Manufacturers Association (GAMA), the general aviation industry began applying pressure to congress. Their main request was for Congress to enact limits on product liability for aircraft manufacturers, and Meyer promised that if such legislation was enacted, he would bring single engine general aviation aircraft back into production at Cessna. Adding their voices to this cause were the Aircraft Owners and Pilots Association (AOPA), the largest US organization of private pilots and general aviation aircraft owners; the International Association of Machinists and Aerospace Workers Union (IAM/IAMAW), representing workers at several general aviation aircraft factories; and a group of Kansas politicians, led by Senator Nancy Kassebaum. This proposed legislation became known as the “General Aviation Revitalization Act,” or GARA.

GAMA, as one of the biggest advocates for the enactment of GARA, pointed out the fact that the money being put towards defending aircraft manufacturers against lawsuits could be better spent on improvements in overall aircraft safety and helping to develop new technologies for the good of the industry overall.

GARA is Signed into Law, and Aviation History

Finally, in 1994, GARA was passed by the Congress and signed by President Bill Clinton on August 17th, 1994. In its final form, GARA was a mere three pages long. Those three pages, however, provided manufacturers of general aviation aircraft (defined as aircraft containing less than 20 passenger seats, and not being operated in scheduled commercial service) with an exemption from liability for any of their products that were 18 years old or older from the date of an accident. There were some exceptions detailed, and this was a “rolling” statute, meaning that the 18 year time period was reset whenever modified or replacement parts were installed on an aircraft. In effect, a 25 year old aircraft could still be the object of a successful suit against a manufacturer if it contained manufacturer modifications or parts installed within the last 18 years.

GARA was immediately hailed by Cessna CEO Russell Meyers as a landmark step towards saving the general aviation industry.

“By placing a practical limit on product liability exposure, Congress has literally brought the light aircraft industry back to life.”

Resuscitating a Dying Industry

Within five years of GARA coming into effect, the industry produced over 25,000 new aerospace manufacturing jobs. In addition, he U.S. Department of Labor estimated that there were also three extra support jobs created for every new manufacturing job. And the aircraft manufacturers begin to show signs of life, including the big three.

True to his word, Cessna CEO Russell Meyer brought back single engine aircraft manufacturing to Cessna, though in a much more limited manner. They resumed manufacturing their three most popular, and statistically safest single engine models. They began with the Cessna 172 and 182 in 1996, and added the 206 (developed from the popular retractable gear Cessna 210 model) back into the mix in 1998.

Piper Aircraft continued to experience financial troubles, but did continue producing the models that survived the 1980s, and even managed to restore some models to production that had been previously cut. This included the PA-32 Cherokee Six / Saratoga, and the twin engine Seminole and Seneca models. Eventually, Piper did emerge from bankruptcy, and some credit GARA for helping them survive that process.

Beech Aircraft continued producing the two piston-egine aircraft models that had survived the pre- GARA depression, the single engine Bonanza, and the twin-engine Baron, but never resumed production on any of the models it had cut during the 80s.

In addition to the increase in jobs, in the first five years following the passage of GARA, overall production of general aviation aircraft doubled. However, this was still far below the high point of the 1970s. And though production has continued to increase over time, it still hasn't returned to those levels.

In Conclusion

There is still ongoing debate about the overall effect, and effectiveness, of GARA. Opponents say that it had little effect, and mostly served to encourage attorneys to shift liability and lawsuits for accidents to new and different targets. Proponents, however, say that though the production rate has continued to climb, the general aviation accident rate has declined, pointing to safer manufacturing and advanced technology in the area of engines, avionics and navigation equipment. Glass cockpits now come standard in most new general aviation aircraft. National Business Aviation Association (NBAA) President and CEO Ed Bolen had this to say:

“GARA is a tiny, three-page bill that has generated research, investment and jobs. It is an unqualified success.”

Others share this optimistic view of GARA, such as former Piper Aircraft President and CEO Chuck Suma, former AOPA president Phil Boyer, and Cirrus Designs co-founder Alan Klapmeier. And though this debate on the overall effect of GARA is likely to continue well into the future, this simple, three page document played a key role in helping shape the future of the general aviation industry.

Sources:

GARA: The General Aviation Revitalization Act of 1994..." 2003. 30 Sep. 2015: http://www.avweb.com/news/news/184254-1.html

Kovarik, KV. "A Good Idea Stretched Too Far - Seattle University School of Law..." 2008: http://digitalcommons.law.seattleu.edu/cgi/viewcontent.cgi?article=1843&context=sulr

"General Aviation Revitalization Act | GAMA - General ..." 2009. 30 Sep. 2015

http://www.gama.aero/advocacy/issues/product-liability/general-aviation-revitalization-act

https://en.wikipedia.org/wiki/General_Aviation_Revitalization_Act

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