Thursday, November 30, 2006

Posturing - But for what reason?

After an uncharacteristically long period of silence, Vern has emerged and is once again posturing. His recent mea culpa to customers was a shameless plea for money.

The airplane does not do what we said it will do. We want to deliver units that have severe limitations and will need mods at some future time, and we have just been fun'n you on delivery dates. When we say a few days, we really mean a few months and we promise to be more forthright when we encounter problems, though you have to understand that it is sometimes hard to reveal all of our secrets because we don't want our competition to exploit the situation, they have stolen enough from us as it is. Just trust us, show your love and support for Vern. Get out that check book and write us up for another half-mill. I can look out my window now and see your airplane coming down the production line.

Then the latest is Capt. Zoom's interview, 11-30-06. We can always count on Capt. Zoom to toss Vern those really tough questions.

Here is what Vern said was delaying buy off for the first airplane, "To approve a Production Certificate, the FAA requires detailed written guidance on both the building and inspection process."

Had Vern been reading this blog, he might have noted my statement last September, one of the objectives of the PC is to provide "100% accountability, who did the work, who did the inspection."

Vern claims he will build 500 units next year. This boast is no different than his boast that he would start delivering airplanes a few days after receiving the Type Certificate. After six years in the aircraft industry, he did not understand the basics of the FAA quality requirements until a couple of weeks ago when he and his QC people went to Ft. Worth for a sit down with the FAA and took the 101 course in FAR Part 21.

He still maintains Eclipse will deliver 500 units in CY 2007. Neither Vern nor I suspect anyone on his staff, has went from zero to 500 in 365 days. It is another hollow boast that will not happen but he will have some poor supplier to blame. I can hear the words now, "Eclipse could have done it if so and so had not let us down."

Further down in the interview he gives himself an A+ for "achievements in design and certification."

The airplane has fallen well short of its performance goals, his highly touted breakthroughs in avionic systems integration have yet to see the light of day and certification delays have been measured in years. This deserves an A+ grade?

IMO this kind of posturing is setting the stage for an IPO as soon as the first airplane is delivered. Ramping up production takes big bucks. Company survival in the near term may depend on those 60% progress payments due for those airplanes Vern projects will deliver before June 30. 2007. Then an infusion of cash from an IPO would provide sustaining capital until....they run out of money again.

Prediction from this end, look for a very proactive Vern, out on the stump, providing reassurance that all is well and the company and it's airplane will provide stellar performance in 2007. It is such a good deal we are going to let the investing public share in the bounty. Get your check book ready.

Monday, November 27, 2006

Wing Fittings

The attached photo was taken at Oshkosh 2003.

The suspect wing fitting is just above the flap track in the image. It is not real beefy so it was never intended to carry much load.

The forward link is also pretty light and would not be able to do much work, leaving the center or main spar fitting to carry the majority of the wing loads.

All of this has been static tested to the predicted loads. It is conceivable the bushing in the aft fitting was incorrectly installed causing the .100" slop. It is also conceivable loads in the real world were higher than predicted causing the the holes to elongate.

In either event, a fix would not be too tough to achieve.

Saturday, November 25, 2006

Extreme Views

En route home during the 9+ hours across the Atlantic, I got to thinking about how the extreme views towards the Eclipse have changed in the 7 months since this blog started.

On one side there were those who held Vern had overreached and the program was doomed for failure. On the other side, that Vern would succeed and would achieve most, if not all of his goals.

In the ensuing months, the difficulties at Eclipse have been validation for the prophets of doom. On the other side, these same difficulties have made it harder to maintain the faith for those who one day expected Vern to walk on water.

Were not talking about teething problems typical with new companies and new products. This is a troubled company with numerous problems that may be spiraling out of control. From a technical standpoint, the wing fitting is probably not a big deal, the glass problem is potentially far more serious.

I don't buy into the fatigue explanation. It sounds more like a fundamental design problem. Band aid fixes might work, then again, a real fix might mean some serious structural modifications. The principles of glass installations are pretty well understood, provide uniform support around the periphery and don't allow any stress concentrations with clamping forces or fasteners.

The cumulative effect of the various problems is now beginning to bite. Just consider the FAA's role in the program. Last July, the Marion Blakey, the FAA Administrator on the occasion awarding the Provisional Type Certificate proclaimed, "What I have in my hand is probably the most significant piece of paper in America today, a piece of paper that will truly change the face of aviation." A powerful statement and one that should have greased the skids for final certification and the Production Certificate.

Things don't work that way in the real world. Technical problem after technical problem make the FAA foot soldiers more wary. They will look twice at everything because these guys and gals do not want to risk making a decision that might cost lives, cost them their jobs and their hard earned pensions.

One comment suggested the board of directors should be taking a harder look at the company. Who do they answer to, Vern or the investors? When the subject of an IPO gets serious, watch these guys scatter like rabbits. In this day of post-Enron scandals, boards are being held responsible for corporate malfeasance and it may not be that much fun to be on the board of the world's greatest airplane company.

At what point do the current investors get nervous? Technical problems won't hurt their image because technical failure is a common occurrence for new products that push the limits. Questionable business practices and loss of millions of dollars of customers deposit money, put up in good faith, is another matter. Failures here are going to reflect back on the investors and their carefully manicured images.

How long can Vern keep the vendors on board. The story that "were gonna turn this thing loose next week or next month" is going to get to be too familiar. And one wonders if they still expect to schedule their deliveries for 1,000 units per year or is it 500 or even 200?

In July, the infusion of another $200 million looked like all the money the company would need to get the production line going. Then let's see, there was the delivery of another 50 or so units by the end of 2006 which would bring in another $50 million or so. The cash flow manager must have been one happy dude...may not be sleeping so well today. Where will the next $200 million come from?

Had a great trip, it was good to get away, will share a couple of memories from Italy:

Florence, the museum of science. Great display of Leonardo da Vinci's note books and drawings. Plus the holy grail of aviation, his "Codex on the Flight of Birds" dated 1505-1506 which diagramed a mechanism which man could use to fly. Brought tears to my eyes to see the detailed sketch in person.

St. Peter's Basilica, The Vatican. Climbed 491 steps including 320 that were in between the inner shell and outer shell of the dome. Reached the top without having a heart attack. Felt that the Aviation Gods may not be too angry with me. But just in case, when I walked around the Cupola on top, I didn't get too close to the edge.

The interior of the Basilica is a wonder of art and engineering. There were confessionals scattered throughout the church. Suggested to my wife that perhaps I should stop in. She shot back that there would not be near enough time for my long list of transgressions.

The Spanish Steps, Rome. Our small boutique hotel was near the base of the steps. On our last evening there, we walked up the hundred or so steps to take photos from a higher vantage. Just down the street was a crowd gathered in front of the Hassler Hotel so we walked down.

Barricades were set up adjacent to the lobby and across the street. TV cameras were in place as well as the paparazzi and a hundred or so fans all under the strict control of 14 or 15 hotel security guards.

As we stood there, a black Mercedes with blackened side windows pulled up to the open area and out of the lobby popped the "Top Gun" himself on his way to the wedding. It took him about 3 seconds to cross the open area, and through the crowd, I seen his toothy grin for maybe a half-second.

Tom's Mercedes sped off and another pulled up to take its place. This time Will Smith and wife popped out of the lobby. He posed for the cameras on both sides and waved to the crowd. Security was outnumbered and the crowd pushed us forward until we were at the rear bumper of his car when he finally was ready to leave. He smiled and I waved. Gosh!

Security shooed everyone back to allow a black Italian mini-van to pull up. Next out was Brooke Shields. She too posed for the cameras, looking absolutely stunning in her dark maroon evening gown. The crowd fell almost silent as they were seeing a true goddess.

Next out was Posh, the Spice Girl, looking a little frumpy by comparison. By then security was getting more frustrated and the crowd more aggressive, it was time to leave.

It is good to be home though, there is a lot to write about.

Saturday, November 11, 2006

One Buyers Experience With Eclipse

Stan-You ask about the Eclipse Owners Forum. Been there. In order to explain what I found, you’ll need some background.

I deposited on the Eclipse just prior to the July Conference Call. Immediately upon wiring the funds things started to go downhill.

The confirmation receipt I received stated, Eclipse reserves the right to revise the assigned serial number up to six months prior to the delivery of the Aircraft which revision shall not constitute a change to the Deposit Agreement. Customer will be advised, in writing, of any such change to the assigned serial number, if any." This was in direct contradiction to the Agreement that I had signed which stated, "Your serial number reflects the specific manufacturing order of your aircraft.

Meantime I had been on the owners’ site. This is what I found:
- It wasn’t super active
- Most were True Believers, especially those trying to sell early positions
- There was some concern about insurance, but very little in the way of critical thinking or tough questions. It was quite clear that the individual Depositors wished to maintain the best possible standing with the Company and didn’t want to lead any charge.

I was only on the site for a couple of days; that’s as long as it took me to demand my money back and for Eclipse to show me the door. First I brought up the issue of Eclipse’s statement that they were canceling all Serial Numbers ” Serial numbers may be changing for everyone based on refunds taking place, etc”. Early Depositors were surprised, as they’d received their framed Orders, complete with Hull Number, among great fanfare. Then I posted a link to this blog and asked if anyone knew what axe you had to grind. The silence was pretty much deafening. I felt as though I’d just kicked someone’s puppy.

Back to the Eclipse Exchange:

Micah explained by email that this was due to a change in documents and that they were no longer assigning SN’s; even if they did, that might change! I refused to accept the ad hoc change and explained that my agreement to such change would allow Eclipse to hold my Deposit, without delivery, for as long as it would like. I then posted me email on the owners’ forum. The post was promptly deleted. (If I recall correctly, ALL of my posts were). Shortly thereafter, my Login was locked and Micah responded that they’d be returning my Deposit (though it took two weeks to do so). Best Hundred and Thirty Grand I ever saved!

Below is the email that got me shown to the door:

You’re right, Micah, I am feeling misled already.

The fact that you no longer assign Serial Numbers puts your customers completely in the dark as to the number of units you have on order, gives us zero transparency as to internal “bumping” of positions, provides absolutely zero collateral to your purchasers and is a completely non-standard practice whether it be in buying a car, a boat or a plane. Additionally, in the present case, I am left little choice but to assume that Eclipse has no intention of executing the document that it required me to execute; despite the fact that you have accepted my money.

Sorry for the confusion?

I’m sorry for the confusion also. Unfortunately, it wasn’t mine yet is apparently about to cost only me. I think not.

Kindly advise as to whether we have a purchase contract or, in the negative, just how clear we are on the issue of IMMEDIATE wire return of the funds you have taken for a contract you will not execute.Yes, I’m feeling just a little misled; and my confidence in your company’s organizational and communication abilities is severely shaken. From what I can tell, your single source of revenues is from wire transfers such as find out, in retrospect that you’re not all on the same page as to the terms of receipt of that income is simply unthinkable.


Avio Cockpit Display

Flight following provided the image. Moment arms are apparently programmed into the unit. Nice display. Thanks ff'.

CG starts at 19% and goes to 22% with fuel burn.

Empty 3,550 lbs
Fuel 1,410 lbs
Payload 915 lbs
Gross 5,875 lbs
Available 75 lbs

Pilot 180 lbs
Co-pilot 165 lbs
Pax (1) 150 lbs
Pax (2) 135 lbs
Pax (3) 195 lbs
Baggage 90 lbs

Without the moment arms, we can't really prove or disprove anything. The 3,550 lb empty weight is the latest Eclipse claim. I would bet the Avio is just set up for demos and does not represent a real airplane..

IMO, 2.5 inches of CG travel at gross is inadequate for this airplane and is a show stopper.