Lawyers gone wild!
December 2009
This month, Shop Talk will deviate from the usual on how to upgrade or maintain your Mooney. Instead, we will pass along to the readers information about Lycoming Mandatory Service Bulletin #569A and Airworthiness Directive 2006-20-09.
First, a bit of history. [Caveat: this history is greatly simplified.] Lycoming contracted Interstate Southwest, Ltd. Of Navasota, Texas to manufacture crankshafts for them for approximately four years, 1997 to 2001. Unfortunately some crankshafts failed in flight on 300hp and higher turbo-charged engines (540 engines). These failures prompted Lycoming to issue Mandatory Service Bulletin 550, superseded by MSB552 (August 16, 2002). The FAA followed with AD 2002-19-03 (September 17, 2002). Then MSB566 (July 11, 2005) begat AD 2005-19-11 (October 21, 2005). This expanded the affected engines to include counter-weighted 360s. Lycoming expanded the affected engines to include 390s, 580s and 720s when they issued MSB569 (Feb. 21, 2006), superseded by MSB 569A (April 11, 2006).
In May, the FAA began the process to issue an AD based on MSB569A. AOPA tried to intervene, but to no avail as AD 2006-20-09 was issued September 26, 2006. Simply put, all Lycoming counter-weighted crankshafts produced from 1997 to 2001 by Interstate Southwest must be retired. In issuing AD 2002-19-03, the FAA grounded all turbocharged Lycoming engines, 300hp or higher (all had Interstate Southwest crankshafts in them). The crank had to be removed and replaced with a serviceable crank before further flight. This is serious stuff and we’ll get to the grounded planes shortly, but let's continue with the history.
Subsequent ADs were for retirement of crankshafts, not immediate replacement. So it’s off to court with Lycoming suing Interstate Southwest for $183 million in damages. Lycoming attempted to blame Interstate Southwest for improperly heat-treating the crankshafts. Interstate Southwest claimed they made them per Lycoming data and that the design was faulty. The jury finds that Lycoming's defective design is the sole cause of the crankshaft failures and awards Interstate $96 million for wrongly accusing Interstate Southwest. On appeal, Lycoming managed to have the award reduced to only having to pay for court costs (not quite $10 million).
Lycoming continued its pursuit of Interstate Southwest, appealing to Texas' Supreme Court. The Court denied Lycoming's appeal affirming that Interstate made no mistake in manufacturing the crankshafts. This effectively ends this battle, but other battles loom. For instance, individual and class action suits have been brought in California, Pennsylvania and Illinois against Lycoming concerning damages to owners of these defective crankshafts.
In California, the Court certified a class action in September of 2007. On March 28, 2008, the Court decertified the class. Lycoming argued that owners would suffer no dimunition in aircraft value and/or other costs for replacement of the crankshafts because Lycoming provides a free replacement with a purchased Lycoming factory overhaul or remanufactured engine with engine exchange.
So what is the big deal about 569A? It states that no crankshaft has failed that is in an engine less than 300hp. Based on 569A alone, private operators with affected crankshafts would not have to comply. But when the FAA issued AD2006-20-09, a twelve year clock which has been ticking for some time now, suddenly was heard around the world. All Interstate Southwest cranks must be removed from service within this twelve-year period. The list of affected crankshafts may be found by perusing MSB569A. The twelve-year period comes from Lycoming's recommended TBO. Here are the retirement criteria, directly copied from the AD:
(1) The time of the next engine overhaul as specified in Lycoming Engines Service Instruction No. 1009AS, dated May 25, 2006; or
(2) The next separation of the crankcase; or
(3) No later than 12 years from the time the crankshaft first entered service or was last over-hauled, whichever is later.
Until February 21, 2009. Lycoming offered a warranty replacement kit for $2,000. A typical new 6 cylinder crankshaft from Lycoming is about $15,000.00 and that does not include all the mandatory replacement parts you need when you split the crankcase to replace the crankshaft. So, if you missed the warranty period it will cost you the charges to remove and reinstall the engine, the engine shop's flat rate to break the engine down and replace the crankshaft plus the $15,000.00 crankshaft, plus the mandatory replacement parts for splitting the case. This can easily be a $25,000.00 bill on a Mooney Bravo. The alternative is to pay a mechanic to remove the engine, ship it to Lycoming and pay them for a engine overhaul. They will provide a replacement crankshaft at no additional cost. You must still pay to have it shipped back and reinstalled on your airplane.
The most likely Mooneys to get caught by this AD are the Mooney Bravos, the M20Ms that have engines in them from 1997 to 2001. This might be the scenario when you bring your Bravo in for the next annual. Your IA mechanic says, “Oh, you have the original 1998 engine with the Interstate Southwest crank and twelve years is up.” Your IA cannot return the airplane to service. Your airplane at that point is un-airworthy. You brought your airplane in for a $3,000 to $4,000 annual and now you are faced with a $25,000 to $30,000 bill.
Grounded!
With the $2,000 warranty ending just before the first twelve year replacements become due, in this author's opinion, it appears Lycoming has pulled a fast one on its customers. Yes, Lycoming paid big money when the crankshafts were failing in the Piper Navajos and the larger turbo-charged engines and I’m sure that was financially painful. But Lycoming should show continued responsibility to all of its customers.
Unfortunately this practice of parts retirement programs and the customer paying for it is not an uncommon practice. Hartzel just recently had the FAA issue an airworthiness directive requiring certain Y shank series propeller hubs be replaced with an updated version. The FAA in this case allowed the owners to do a repetitive eddy current inspection on the hubs if they did not want to buy a new hub. Unfortunately all that does is devalue the plane when someone goes to buy it because they want the new hub. They do not want to do a reoccurring eddy current inspections.
It is a similar situation with the Bravos and other aircraft affected by this AD. If the AD has not already been complied with, no one will purchase an aircraft without factoring in the cost of the crankshaft replacement when it becomes due. You, the owner, are left out in the cold paying the bill and Lycoming has no intention of supporting you. As far as Lycoming is concerned, they offered a three-year warranty period to sell you a crankshaft kit and just because you missed that warranty period is not their fault.
Do you have any options if you are affected by this Lycoming crankshaft fiasco? For some engines there is a possibility of finding a used serviceable crankshaft to purchase. I did this recently with a turbo-Aztec engine, a much more common engine than the one in the Mooney Bravos. A used crankshaft cost $6,000 and again it does not include any of the other parts that are required for the swap. As you can see, even buying a used crankshaft is still a very expensive experience.
As more owners catch on to what is happening, the used crankshaft market will dry up and you will be forced to purchase a new one. Because you’ll only be able to purchase a new crankshaft from Lycoming, they can charge what ever they want; they have the market cornered. Consider, also, the effect on independent engine overhaul shops. To make an informed decision as to how to do an engine overhaul, the owner must determine if the engine contains an affected crankshaft. If it does, it is unlikely, with the Lycoming no-cost replacement of the crankshaft, that an independent engine shop can beat Lycoming's price for the overhaul. Most owners will have to waste the hours remaining on their engines, prior to when they were going to be overhauled. TBO on a privately operated engine is advisory; here it becomes mandatory.
Here is another bad scenario: You probably have insurance to financially protect you if you suffer a prop strike or lightning strike on the prop or spinner. If either occurs, the crankcase must be split for inspection. If you have an affected crankshaft, if you split the case, retire the crank. Therefore, no need to agonize about a bent or pitted crankshaft; a new one is mandated. The best you will probably get from your insurance company now is a prorated value on the cost of the crankshaft. I suspect also that some insurance rates will increase because of the added fiscal risk.
Airworthiness Directives are the laws of the land. As an owner of a certificated airworthy aircraft, you have to obey these laws. It appears to this author that Lycoming is trying to recoup their losses for a faulty crankshaft design. From a a rough count from MSB569A (59 pages), 744 O-360 engines and 3870 O/IO/TIO-540 engines are affected. The total crankshafts affected are over 5,000.
As an adjunct to this article, MAPA has reprinted Mandatory Service Bulletin 569A. Compare your engine model and serial number. If you find it in there or if the crankshaft has been replaced in the time frame stated in this article then take the next step. Pull the propeller and flywheel. On the flange of the crankshaft will be engraved a number. If that number is listed in this service bulletin then you must replace your crankshaft within the twelve-year period. If the number engraved on the crankshaft is not in the service bulletin, have your A&P mechanic record the number and sign the engine logbook so will be no question at the next annual or when you go to sell the aircraft.
Here are a few links to court filings and to the FAA and Lycoming web sites:
Class action certified in Pennsylvania District Court -
http://www.paed.uscourts.gov/documents/opinions/07D1160P.pdf
Lycoming V. Interstate Southwest appeal, Texas District Court -
http://www.14thcoa.courts.state.tx.us/opinions/HTMLOpinion.asp?OpinionID=83989
FAA Airworthiness Directive search page. Enter the AD number in the Search window -
http://www.airweb.faa.gov/Regulatory_and_Guidance_Library/rgAD.nsf/Frameset?OpenPage
Lycoming Service Bulletins. Enter the bulletin number in the Search window -
www.lycoming.com/Lycoming/SUPPORT/TechnicalPublications/ServiceBulletins.aspx
As always, if you have any questions on this article or any other I have written feel free to contact me at my aircraft repair facility 307-789-6866 or via e-mail. Our website is knr-inc.com.
Until the next ShopTalk, enjoy flying your Mooney.
