Sunday, October 22, 2006

Watching the Eclipse - Production

This is the third in a series of topics that will be revisited now that the Eclipse is certified and deliveries are about to commence.

At the beginning of 2006, deliveries were projected to be 100 units by the end of the year. In April the number had been reduced to 86.

On October 1, on the occasion of full certification, Andrew Broom was quoted in the Albuquerque Journal as saying the company would deliver 30-40 by year end.

At NBAA, Vern forecast that deliveries would total 525 by the end of 2007 and that a two per day production would be achieved.

Where do these people get these numbers?

a.) They are naive and don't know any better.

b.) Just enjoy saying something that sounds good and people will forget the statement anyway.

c.) Just make statements to calm apprehensions of investors, supplies and buyers...if they are picked up by the media, they must be true.

d.) All of the above.

At times the company has acknowledged this is a difficult task:

Difficult for an established company to start up a new line.

More difficult for a brand new company to start a line with a new product just out of the box.

Even more difficult for a new company with a new airplane and a very long and very wide. international supply chain.

Can it be done? Yes. Will it be done? Time will tell, but this company has a long history of promising more than it can deliver.

Plus there was a recent name change on the door of the head of manufacturing. According to the September 8 press release, Ron Holter left the company for "family reasons". While he may have left for family reasons, Holter is back at Cessna and heading up efforts in Independence, Kansas to set up the Mustang production line.

The interesting twist is that Cessna management now has pretty intimate knowledge of the inner workings and problems within Eclipse. So next time you hear Vern say certain information is proprietary for competitive reasons, it is likely Cessna already has the information.

Holter was replaced by Paul Schumacher. The press release said he came from Raytheon and was responsible for "all manufacturing and facility operations." My sources say he was a Beech VP in manufacturing, one of several, not the "Head Dog" in manufacturing.

It doesn't matter if it was an embellished resume or public relations puffery, the guy can either do the job or he can't. But starting up a production line at a new company is not the same as turning the crank on an existing line.


Niner Zulu said...

The latest rumor is that Eclipse is now planning to deliver only 10 jets in 2006.

flight guy said...

I am just thinking outloud, but 10 deliveries may be a stretch given the holiday season.

Eclipse Insider said...

Latest Eclipse projection given to their suppliers for 2006 is 15 A/C.

Niner Zulu said...

Question for Eclipse Insider - why do the same bunch of people seem to have an almost endless supply of Eclipse positions available for sale in Controller? When one sells, two more pop up to replenish their inventory. I assume they don't own the positions personally, and are just working on commission. But where are they finding the sellers?

Bambazonke said...

Many of these positions are being sold by sellers who hold multiple slots. The interesting thing to note is that the aging of the aircraft for sale is getting longer, is this a sign of early saturation of the market? IF this is the case, Vern might start to look at signing up the National Carriers, the only market he has yet to tout as being targeted for this wonder jet.

In a previous posting I mentioned that these multiple position holders had dillusions of starting Air Taxi operations and many of them purchased aircraft before they took the calculator out of the drawer. Whilst the KOOL AID was flowing, heck whatever KKA said appeared to be a prophetical revelation, after all, remember this he was the prophet of the 'new paradigm' in aviation.

As these planes start to roll off the assembly line, the numbers for sale will increase incrementally, this is going to be incredibly damaging for downwind serial numbers because once market saturation is reached, values will plummet.