Max's personal history of Varga Aircraft.
In 1974 I was attending what should have been my Senior year at Arizona State University when an instructor told me that there was a posting on the bulletin board for a temporary Christmas break drafting job. Although I know most people think it is always warm in Arizona, the 25 mile ride to the job interview from south Phoenix to Varga Aircraft in Chandler was very cold and by the time I got there, I had decided not to take the job. Mr. Varga understood, gave me a tour of the infant factory and told me that, if I wanted, I might be able to come back at the end of the semester for a summer job.
The Varga factory was a 125' x 128' metal building with a 30' x 75' block office area at the front. It was located at the southwest end of the Chandler Municipal airport runway. About a fourth of the hanger and about half of the office space was taken up by Mr. Varga's primary business, Powerplant Supply Company. It was the success of this aircraft supply and surplus parts business that made it possible for Mr. Varga set up the factory and finance early aircraft production.
Anyway, when school got out at the end of May in 1975, I went back to Varga Aircraft for summer work. Although Mr. Varga would pay me only $2.50 an hour, he told me that if I took the job, he would teach me to fly. I took the job.
When I started work, they were just finishing their second airplane for delivery to a customer. I think it was a man named Ernie Moser. Varga also owned a Shinn that they had refurbished to use as a sample part to help them assemble the first Varga Kachina (N5062V which now belongs to Pat and Lee Beery). At the time there were only a handful of people to do the work.
Mr. Varga and his son George III were the salesmen and also bought all of the parts and raw materials for the airplane while simultaneously running their surplus airplane parts and supply business. Powerplant Supply Company also had a secretary and a parts clerk who also sometimes did double duty for both companies. An old fella named Al Wilson was responsible for making all the manufactured airplane parts and ensuring that they were assembled properly. Three of the people that I remember who worked in the assembly area at the time were Howard Athey, Ivan Smith and Jim Siddons. Howard mostly assembled the wings and Ivan and Jim assembled the rest of the airplane.
We also had an invaluable part time toolmaker and fabricator named Everett Miller There was a welder, a machinist and a few other fabricators and assembly workers but it's been so long, I don't remember their names. I was the only draftsman at the time.
At first, most of my work was helping Al Wilson update and create drawings and engineering orders. Engineering work was done by a consultant named Dave Chelgrin who I worked with mostly on Saturdays and occasional evenings. Both an FAA Manufacturing Representative and an FAA Flight Test Pilot were required to inspect and test each airplane prior to delivery of every airplane so Dave would also come in whenever the FAA came to review design data or to sign off an airplane.
Other than as pilots and parts vendors, neither Mr. Varga or his son George had any experience with the manufacture of small airplanes. Al Wilson had extensive experience with the fabrication and design of aircraft parts and tooling as a long time employee of Goodyear Aircraft (Aerospace?) and other sheet metal product manufacturers and, in my opinion, the Varga couldn't have been built without him.
As small airplanes go, the Varga is fairly complicated and expensive to build. Compared to a Grumman Trainer (TR-2), which has about 700 fabricated parts, the Varga has about 2000. In 1975 and early 1976, with so few people and with so little experience, it probably took more than 2000 man hours and many weeks to build each airplane.
At the time, it was probably just as well that Mr. Varga was such an optimist and didn't really understand how difficult it would be to continue. He might not have kept going for as long as he did but, in hindsight, I think he never really gave up on the idea that we could build a successful airplane company.
Eventually, even though I started
out as just a draftsman, I began to take on more and more other duties by
default (there was no one else to do them). Every airplane part needs a
manufacturing record and Al Wilson was hand writing a new triplicate work order
for each and every part number. This took an enormous amount of time from his
job as shop manager. To help him out, I created a standard form and began
writing the work orders for him so that they could be duplicated on a copy
machine. The inspection and part layout area was in the drafting room so I got a
chance to observe how tooling was created and parts were inspected. The FAA was
I lived near downtown
The Varga factory was a 125' x
128' metal building with a 30' x 75' block office area at the front. The office
area was on the south side of the hanger with the 040 end of the runway on the
north side of the building. With such close access to the runway, it was an
ideal location for the factory. Excluding the Powerplant Supply
The machinery in the
fabrication area was tightly spaced in order to have room for everything we
needed to build airplanes.
The assembly area took up the remaining west
two/thirds of the hanger. There was a large rolling hanger door on the west side
facing a dirt ramp that we used for temporary parking and run-up. There was also
a small out-building near the northwest corner of the building that was used for
The fabrication and assembly areas were loosely
divided by a row of north to south parts shelves. There was no well planned
assembly layout area.
Beechcraft, Mooney, Piper and other factories must be
long and large because the wings need to be installed fairly early in the
assembly process and, once the wings are attached, the airplanes take up a lot
At Varga Aircraft, we could get by with such a small
building because space requirements for the assembly are better than for most
airplanes due to the Varga's detachable wings. The outer wings can be left off
for about 95% of the assembly work and then installed just a few hours before
the airplane is ready for flight.
One of the unique things about Varga Aircraft was
that, even though the factory was very small (as airplane factories go), we had
all of the equipment and the ability to build every airframe part on the
airplane. From 1967, when he bought the Varga tooling and Type Certificates,
until 1975, when I got there, Mr. Varga had been accumulating the important
machinery and tools necessary to build airplane parts. He had bought a Shinn
2150A to use as a sample part and started out by hiring a few very capable and
very dedicated people to begin the work. If you stood on top of the tool crib on
the south side of the building (which I did occasionally to retrieve parts or
tools stored there) you could, literally, watch raw materials (sheet metal,
steel tubing, etc.)
One of the reasons why I was hired as a draftsman was
that, although adequate to get the airplane certified in the first place, the
drawings did not quite keep up with the changes that happened to the airplane as
it passed from Morrisey to Shinn to Varga. Morrisey and Shinn had made very good
tooling so it wasn't hard to build good airplane parts, but many times when the
FAA came to
Speaking of the FAA, we actually had a pretty good
relationship with most FAA personnel. The FAA test pilots really liked the
airplane and were always very helpful. The FAA procedure for getting an airplane
certified as "airworthy" was really fairly simple. It only involved a
thorough review of the assembly records accumulated during the construction of
the airplane, a few appropriately
In any event, at that point in time, sales were never
a problem. From the time I got there in 1975 we gradually increased our
production rate to just over 2 per month. Relatively high demand and such a slow
rate kept a constant backlog of 20 to 30 airplane orders and we didn't even need
In the August 1976 issue of Private Pilot magazine a
nice cover article on the Varga generated a lot of interest and probably many
My records show that in 1977 we made 26 airplanes.
Even with such a rosy sales outlook, the profits from Mr. Varga's personal
business, Powerplant Supply
In early 1978, in an effort to get some financial
help, we contracted with a consultant named Mario Trenti. From February through
March, I worked with Mario to gather as much production and financial data as we
could in order to give him enough information to re
To Mr. Varga's credit, I don't think many people can
imagine what kind of resources it takes to put an airplane factory together and
I seriously doubt if there were many people besides George Varga who could have
gathered those resources the way he did to get the Morrisey/Shinn back into
production. He (and son George) had the desire and strength of will that few
people might have to try and create a successful airplane
Unfortunately, the ability to create an aircraft
factory and the ability to run one are two different things and we were often
taking two steps back for every one step forward. With much effort by Mr.
Varga's son George, Al Wilson and a few others we continued to slog along from
crisis to crisis.
In 1979 another consultant came along who promised to
work for free until he made the
Up to this point, at our low production rate, we always had a backlog of more than 20 airplane orders. We were able to borrow construction money against each order and pay back the loan upon delivery of the aircraft. This worked OK but didn't leave us any money to grow to a profitable production rate.
The consultant was convinced, and convinced Mr. Varga, that we were making a small profit on each airplane and, with just a minimal amount of extra money, we could increase the profit to some self-sustaining point. There was an attempt to tell the consultant that the only reason we could possibly be making a profit at the 2-3 a month production rate was because some of us were working 60+ hour work weeks. There wasn't enough free time in a day for those of us putting in that extra free labor to make enough parts to double or triple the production rate. And, if paid labor was used to fill in for all the free time, the profit would go away. The complaint fell on deaf ears and we forged ahead anyway.
By using the extra money to buy more raw material and hire more production people, we did increase the production rate of 2 aircraft a month in April of 1980 to almost 5 aircraft a month by October of that year. In addition, the consultant convinced us that we should pursue Model 2180 certification and we began the conversion of a borrowed airplane (N1901A) for that project. This consumed additional resources that were already stretched too thin and added significantly to the engineering and production burden.
Unfortunately, although our production rate did double, our sales rate stayed at 2-3 a month. We ate up our backlog without an increase in sales and, towards the end of the year, had to lay off our extra employees and cut back to our original production rate. We were back where we started except that Mr. Varga now had an additional debt to service due to the cost of the attempted expansion. We also had an added production problem caused by the premature advertising of the Model 2180. Although our backlog started to return, people who already had orders in for 2150's wanted to switch to 2180's and all new orders were for Model 2180's. The time it took to ramp up production parts for the new model and certification delays almost halted production and, by the end of 1980, things were real tight. We were in dire need of more money to keep going and, personally, after about five years of long hours at low pay, I was beginning to run out of steam.
This was at the end of 1980 but I forgot to mention an attempt to sell the company to one of Mr. Vargas friends in late 1978 or early 1979. The deal was supposed to be an exchange of Varga stock for an exchange for the stock from another company that would ultimately control Varga Aircraft. Although the arrangement fell through because the exchange rate was much too low for Mr. Varga to accept, everybody parted friends and both companies went their separate ways.
While looking through my accumulated paperwork in trying to remember what transpired 20 years ago, I found a brochure that listed Varga prices as follows:
August 1, 1980: Basic Price:
2150A & 2150ATG = $26,750
2180 & 2180TG = $30,500
These prices didn't include any options but I think about $10,000 was the norm which would have put the 2150's at about $37,000 out the door and the 2180's at about $41,000.
Unfortunately, we didn't even have the Model 2180's or taildraggers certified for production at the time we listed those prices. We didn't finish flight testing our first production model 2180 until early in 1981. My notes say that the 2180 Airspeed calibration test was completed in late October of 1980 and the Type Inspection Authorization was issued by the FAA on November 5, 1980. The taildragger airplane would not be certified by the FAA until March of 1982. The borrowed prototype model 2180 that was converted from a model 2150A was returned to its owner when we were done using it for testing.
Somewhere near the end of 1980 or early 1981, Mr. Varga negotiated the sale of the majority of Varga Aircraft's assets to a new partner.
Although, in my estimation at the time, the new partner wouldn't have enough money to turn us around and I was pretty discouraged by that, the extra cash flow did make a significant difference at first. Until that time I had always worn two hats as the Quality Control Manager and Acting Engineering Manager. To me this was too much work to do either job as well as it needed to be done and to the FAA it was somewhat of a conflict of interest and came to be unacceptable.
Shortly after the new partner took over, there was a fatal accident involving the failure of a critical flight control component. Prior to the accident, we knew about the problem, had provided a Service Bulletin to the owners to inspect the part at regular intervals and the FAA had issued and Airworthiness Directive to make the inspections mandatory but it was not enough. It turned out that the owner was taking shortcuts in the inspection process and, though Varga was not at fault, the cost of mitigating the damage and providing a permanent solution was significant.
On the other hand, with the new partner, we were able to hire a full time Quality Control Manager, Dick Kenney, who had lots of QC and production experience. Dick came highly recommended by the FAA which made a big improvement in our relationship with them. Dick also immediately began to reorganize things and unburden my time so I could devote it to keeping up with the engineering work that I was distracted from by my QC duties. Although sales were slow due to the premature announcement of the model 2180, we started to make a lot of progress in improving our production processes.
In August of 1980 we submitted the model 2180 Engine Mount and Forward Fuselage Truss Stress Analysis to the FAA.
October saw the completion of the factory Model 2180 Unusable Fuel Test and, using a borrowed FAA airspeed/pitot system boom, we completed also the airspeed calibration test.
In November the FAA issued Model 2180 Type Inspection Authorization which allowed FAA inspectors to review the new design data and the FAA test pilot to fly the airplane as soon as the inspectors determined that the aircraft conformed to the type design data that we had submitted.
After months of writing, drawing, typing and editing we finally completed our Maintenance Manual in December of 1980.
In June of 1981, we contracted consultant Mario Trenti for a second time to help us with an expansion plan to help organize an increase in production. Unfortunately, his advice was ignored this time too.
As usually happens, costs had gone up and by August we had a new Basic Price List:
August 1, 1981: Basic Price:
2150A & 2150ATG = $30,490
2180 & 2180TG = $34,250
In September, we got the Type Inspection Authorization allowing FAA inspection and test of the model 2180 fuel system to verify unusable fuel quantities.
In December of 1981, Specialized Testing Service sent us a report showing vibration test results from the design changes that we made to the elevator horn and balance arm assembly that would eliminate the Airworthiness Directive against that part. On Varga's behalf, Consulting engineer, Harold Dale sent the Static Test Report to the FAA to tell them how we would load test this elevator horn and balance arm assembly for approval. That month, Harold also sent a letter to the FAA for Taildragger Master Drawing List changes that would help us put the taildragger in production.
Just before Christmas of '81, I sent a model 2180TG and Larger Rudder certification schedule to Harold Dale for review.
In January of 1982, Harold submitted the Varga Elevator Horn and Mass Balance Weight Static Test Report which contained the test results to the FAA for approval. By February, I had completed the testing on the larger rudder for the taildragger and sent the test results to Harold.
The Model 2180TG Weight and Balance and Equipment List was completed and submitted for approval in March and shortly after this submittal we received the Supplemental Type Certificate (SA4412NM). The Model 2150ATG STC (SA4309WE) was OK'd by the FAA in April.
Unfortunately, all the money and time spent on the new model airplanes in order to increase sales was happening at about the same time that the General Aviation market was experiencing a significant decline.
Varga closed it's doors in June of 1982. My memory of that last day was when George called us all together on the factory floor. Apparently, because we had diverted funds to production and was unable to pay the required payroll taxes, the IRS had just been to the bank and had taken all of Varga's remaining money. He said that, since he couldn't pay us for the week, we all may as well go home. Most of us met again the next day on the unemployment line.