Tuesday, December 05, 2006

Guest Contribution - Eclipse Correspondence

bambazonke posted the following three messages from Eclipse. They were a bit off the radar screen and deserve higher visibility:

Of utmost importance to Eclipse is the trust that you, our customer community, has placed in us. More specifically, we are sensitive to your concerns that our production schedule will not be met and that the additional payment (to bring your cumulative deposit up to sixty percent) is therefore premature.

To address your concerns Eclipse is announcing that for customers with a scheduled delivery date on or before September 30, 2007, we will reduce your final payment due at delivery by 0.5% per month (6% annual interest rate) of the additional payment we are asking you to pay now.

Attached is an Aircraft Purchase Agreement Addendum that will be added to all Aircraft Purchase Agreements where aircraft delivery is scheduled on or before September 30, 2007. Please note that Eclipse has a one-month grace period before the interest calculation takes affect.

Sincerely,
Vern RaburnPresident & CEO

and another one;

Earlier this year, we announced that the Eclipse 500 had fallen short of our guaranteed performance numbers and we declared a refund event. At the same time we committed to a plan to improve those performance numbers. We also told you that there would be two different configurations of the airplane based on our implementation plan for the performance improvements.

The following Customer Technical Communication outlines the final Eclipse 500 Performance Improvement Program and I am pleased to report that the performance improvement program has met our expectations. Through engineering re-design and flight testing, Eclipse has identified and tested improvements that enable the Eclipse 500 to achieve the promised speed of 370 knots (TAS) and 1,125 nm range (NBAA IFR with 100 nm alternate).

In addition, contrary to our previously announced plans, Eclipse is now committing to go beyond our initial pledge. We will retrofit all aircraft with these performance modifications, ensuring that there is a singular aircraft fleet with the above mentioned performance numbers.

I, and the entire Eclipse team, are listening to you, our customers and working diligently to deliver your Eclipse 500.

Sincerely,
Vern RaburnPresident & CEO

Customer Technical Communication Item No.: 2006-12-004
Title: Eclipse 500 Performance Improvement ProgramOverview:

This past summer, Eclipse Aviation revealed the performance numbers for the Eclipse 500 and the plans to improve those numbers. We are pleased to report that the performance improvement program is progressing quite well. Through engineering re-design and flight testing, Eclipse has identified and tested improvements that enable the Eclipse 500 to achieve the promised speed of 370 knots (TAS) and 1,125 nm range (NBAA IFR with 100 nm alternate). In addition, contrary to our previously announced plans, Eclipse has now decided to retrofit all aircraft with these performance modifications (paying for labor and parts), ensuring that there is a singular aircraft fleet.

Background:

The initially-certified Eclipse 500 has fallen short of its performance guarantees in speed and range. Eclipse embarked on a performance improvement program one year ago to improve this situation and committed to meeting the speed guarantee of 375 knots (TAS) +/- 2.5%, but would not meet the range guarantee of 1280 nm +/- 5%. This work resulted in a plan that would yield a speed of 370 knots (TAS) and a 1,125 nm range (NBAA IFR with 100 nm alternate).

Based on that fact that the Eclipse 500 would not meet the published range, Eclipse declared a refund event for our customers. During this event, Eclipse announced a performance improvement plan that included different modifications for the first 100 aircraft versus subsequent aircraft. The first 100 aircraft would only see a speed of 360 knots and a range of 1,055 nm. Additionally, Eclipse committed to its customers that the company would continue to explore the possibility of retrofitting additional improvements to these aircraft. We realized that the best and most expeditious solution is to have one fleet; therefore, we will be retrofitting all aircraft with the performance improvements that yield a speed of 370 knots (TAS) and 1,125 nm range (NBAA IFR with 100 nm alternate).

Corrective Action:

To date, two flight test aircraft have been fitted with the extended tip tanks (ETT). Additionally, one of these aircraft has also been fitted with additional prototype performance modifications. This aircraft has completed development flight testing and proven that these modifications will give the anticipated performance results. Once the wing bushing installation is completed (due to the previously communicated wing issue) on these two aircraft, we will start the certification program for these improvements. Procurement of the production parts and mod kits are well under way.

The changes to the airplane to achieve this performance include:

1. Extended tip tanks (ETT): ETT modifications are finalized and add 25 gallons of fuel.

2. Horizontal/vertical (bullet) fairing: A newly-designed tail bullet fairing has been incorporated to smooth out the flow between the interface to the horizontal and vertical stabilizers.

3. Flight controls: We have added covers over the hinges on the elevators, rudders, and ailerons. The elevator and rudders have been extended eliminating the gurney tabs that added significant drag. This change has also improved the control forces.

4. Engine pylon and nacelle: The pylon skin will be stiffened and the trailing edges modified. In addition, the lower nacelle panel has been modified to reduce the aerodynamic losses.

5. Landing gear and wheel assembly: Main landing gear fairings and more aerodynamic wheel covers have been added.

6. Engine thrust schedule adjustment: The Full Authority Digital Engine Control (FADEC) software will be changed to enable thrust preservation at cruise altitudes from 25,000 feet through the certified max altitude of 41,000 feet. This is NOT an increase in the 900-pound thrust rating of the engine, but results in more thrust at typical jet cruise altitudes.

7. Miscellaneous: Drain hole scupper and rig pin hole covers have been aerodynamically improved.

Note:

Modifications to the wing de-ice system are no longer needed to achieve these performance numbers.Aircraft

Operational Impact:

The results of the performance improvement program have been phenomenally successful. With the drag reduction fixes in place, we now have data and flight testing that give high confidence that the speed and range specifications will meet the target of 370 knots (TAS) and 1,125nm (NBAA IFR range with 100 nm alternate). These improvements will be reflected in an updated Aircraft Flight Manual (AFM) and Aircraft Maintenance Manual (AMM).

Implementation of Modifications:

* All aircraft will be modified to meet the specification of 370 knots (TAS) and 1,125 nm (NBAA IFR range with 100 nm alternate)* Aircraft modification will be conducted at an Eclipse Service Center.

* Eclipse will assume the cost of the modification (labor and parts only). The modification is estimated to take three weeks. We are working various approaches to reduce this time.

* At this time, we expect to have this configuration certified sometime between mid-March and mid-April 2007.

* We are refining a production incorporation plan that deliver aircraft with these full modifications immediately upon certification of the configuration.

* Aircraft delivered prior to certification of this configuration will be modified on an as-scheduled basis after aircraft delivery. This activity will be coordinated through Customer Care, which will be providing further information in the coming weeks to clarify specific serial number impact, and provide more detailed performance data and modification details.

THIS IS NOT AN ECLIPSE AVIATION SERVICE BULLETIN.

104 comments:

Bambazonke said...

Reading these 3 letters to Eclipse owners I get the sense that KKA is concerned about longer delays. This sets the stage for him to say 'quit whining I am paying you interest'. IF deliveries were imminent there would be no need for this.

As for the letter that they would retrofit all the aircraft, this has been on the cards for sometime for aircraft after AC-37, however when the powers at KKA's fountain were asked to put this in writing they deferred saying, that did not want to put this in writing because it would commit them to doing the first 36 planes as well. This displays the ethics of this company that are so transparent, they are prepared to try and BS their marquee customers, those that came to the KA fountain first, I am not sure how they were thinking of handling this in the long term, but I suppose 'long term' is not in the KA factory lexicon.

KKA is putting himself in a difficult position, people are buying his snake oil salesman pitch today, but this is getting old quickly with position holders and potential buyers in the market, in my opinion he has reached the point of no return, he will not be able to come back and say, well we said it would do 270 knots and 1200 miles, but I didn't EVER say it would do both on the same day! Of course it will do 270 knots with our 80 lbs pilot with loads of ballast in the back to get the elevator forces down to get the best speed, but this can only be done at FL-340 and we need to get down pretty quickly because at the weight where we acheive this there is very little fuel in the plane, and on, and on, and on......

KKA is still saying that he is delivering 10 planes this year, the calendar that I and the rest of the world shows 13 working days before the end of the year. Stan we should keep a scoreboard based on KKA's promises, in some kind of visual format, Date Promised -- days past promise vs units delivered.

I can't wait to get my dirty little mits on one of his POH's..........

Gunner said...

I'm truly sorry to say it but the frenetic pace of broken promises, band-aid solutions and finger pointing appears to be coming to a crescendo.

Vern's comments about Avidyne are reminiscent of his comments about other vendors, with longer and better track records than Eclipse. You just can't insult a vendor partner in that manner, if you're involved in a productive relationship with them.

I'm gonna stick my neck out and make a couple of predictions:
1) The Avio system is about to go the way of the Williams engine.

2) Within a few months Eclipse's public honeymoon with the FAA will come to an end, as Vern begins to blame them for delays in production.

3) IPO? Don't kid yourselves. Wall Street may SELL hype, but they won't BUY it. Successful IPOs require institutional investors. There was a time when Eclipse might have done an IPO. Unless my first two predictions are way off; unless Eclipse starts delivering fully functional aircraft, their opportunity for IPO will have passed forever.

More important (and urgent) than any of the above, however, is the fact that Eclipse's relationship with its Depositors is at an all time low. Yet, it appears from this email, they are announcing a retroactive rewrite to deposit contracts. In return they offer insultingly low financial reward for what amounts to Venture Capital risk.

I cannot believe the position holders will stand for this. If they don't, what you're hearing is the sound of the wheels coming off.

Gunner

Stan Blankenship said...

bambazonke,

The range reduction from 1,280 nm to 1,125 nm does not appear to be significant except, the 1,280 nm figure included:

- four occupants, 710 lbs payload.
- A direct climb to FL 410.
- Cruise at 375 kts
- Land with NBAA IFR reserves

If the potential owners want an honest comparison of how much performance has been lost, they should ask Customer Care for specific details on the 1,125 nm flight profile.

Or better yet, ask how much range the "new" Eclipse will provide with four occupants (710 lbs payload), with NBAA reserves? What are the cruise altitudes and cruise speeds?

gunner,

An Avidyne switch is not going to be easy. The Avio system is the airplanes brains and deeply embedded in the certification.

A switch to Garmin would be costly in terms of both time and money, neither of which does Eclipse have an abundance of at this point in time.

EclipseBlogger said...
This comment has been removed by the author.
Stan Blankenship said...

eclipseblogger,

What is the speed at LRC and what is your source for this information?

Has Eclipse put this specific information in writing?

Gustaf said...

The way Eclipse has thrown Avidyne under the bus, I seriously doubt a vendor like Garmin would even entertain the idea of doing any work for Eclipse. They did so much blame-assignment this summer that I don't think Eclipse could get any new vendors. I imagine Eclipse is on thin ice with the many vendors who joined the game with the now-fantasy production numbers in mind.

Gunner said...

Interesting commentary on the Eclipse/Avidyne relationship here:
http://www.ainonline.com/Issues/10_06/10_06_Eclipse_18.htm

Key quotes:
Raburn told AIN that Cessna did a “much better job of picking vendors” for its VLJ, especially Garmin, which provides the G1000 integrated avionics system for the Mustang. “If I had to choose an avionics supplier today for the Eclipse 500, we’d certainly have to go with Garmin and its G1000.”


[snip]

Avidyne has delivered “fully functioning” software to Eclipse but has yet to complete verification and validation as required by DO-178B, the guidelines for development of aviation software.

Gunner

EclipseBlogger said...
This comment has been removed by the author.
airtaximan said...

Can Eclipse deliver aircraft without the complete verification and validation as required by DO-178B?

I imagine that this is a hassel, given the complete avionics system is not functional...in the future, the SQA might involve testing the whole system - nightmare, if a problem should show up.

After all this time, my impression is that E-clips never really finished the plane. Nice argument posed by some, that the design continues with improvements and mods forever...but this is today's reality, trying to deliver the first airplane, not improvements. One could argue, they are fixes to a plane that has fallen short of what was sold.

A way to keep the music paying, since many are balking at writing more checks?

Bambazonke said...

"Range of 1125nm is specified in writing in purchase agreements, deposit agreements, and on the website as Long Range Cruise (LRC) speed at 41,000, 710lbs of payload, NBAA IFR reserves".

Valuable point, however, the contracts also said delivery 2000, 2002, 2004, 2006 now 2007. Many of the promises have changed over time, and this might not be the end of the broken promises. The solution from KKA has so far been to light a fuse on cancellation :- what he did when the range was not met, most people stayed the course, and more recently offer a platitude of some interest on monies paid for aircraft that were supposed to be deliverd within 6 months of the date the funds were called for. When the 6 month call went out, KKA was aware of the window cracking, spar issues, skin thickness issues and the fact that the FAA were having fits about awarding him his PC, in my IHO this is tantamount to fraud. KKA was well aware that he was more than 6 months off, he can only make a time prediction when he has his PC, and who knows how long this will take.

I think the conversation in the KA factory board room probably went something like this:

Production: 'Vern, we have some serious issues with the PC, our guys have been busting shipments out of crates, 'stir frying' the wrong skins all over the place, and the feds are coming down on us big time as this is a 'qaulity prolapse'. Whilst we figure all this out the Feds have grounded all the aircraft.'.

Finance: 'Vern, our suppliers want their money, with the planes being grounded no more aerial tours, no AOPA and this means no more deposit money rolling in to keep the cash flow rolling. Would you mind giving Bill a call and ask him for a couple of million more?'

KKA: 'Don't worry guys, I have the solution, Bill's hands are not going down into his pockets as far as they used to so here is the plan, we will need to get a note out to the market and tell them that there are no more tours until we get the 'upgrades' done to the plane, this might cause some static on that eclipse blog, but we'll handle that as it develops. Give the position holders the understanding that the PC is being issued any day, maybe hint at a plane being delivered at AOPA, and get those 6 month call letters out to the suckers who have bought into our project. Yeah I know that when their planes are not delivered they will squeal, but we will Kool them down with some sub market interest offering. Hell fellas this is another KKA coup, we get some cheap financing in the deal. Any time you fellas are in a pinch, just call me I'll come up with some creative reason for the show to go on"....

Kaptain Kool-Aid said...

With Christmas just around the corner, I present a modern adaptation of the The Twelve Days of Christmas. Be sure to click on the following link for musical accompaniment: http://tinyurl.com/y5v6ev

On the first day of Christmas,
Vern Raburn sent to me
A scam from Albuquerque.

On the second day of Christmas,
Vern Raburn sent to me
Two larger tanks,
And a scam from Albuquerque.

On the third day of Christmas,
Vern Raburn sent to me
Three blank screens,
Two larger tanks,
And a scam from Albuquerque.

On the fourth day of Christmas,
Vern Raburn sent to me
Four more delays,
Three blank screens,
Two larger tanks,
And a scam from Albuquerque.

On the fifth day of Christmas,
Vern Raburn sent to me
Five cramped seats,
Four more delays,
Three blank screens,
Two larger tanks,
And a scam from Albuquerque.

On the sixth day of Christmas,
Vern Raburn sent to me
Six owners bitching,
Five cramped seats,
Four more delays,
Three blank screens,
Two larger tanks,
And a scam from Albuquerque.

On the seventh day of Christmas,
Vern Raburn sent to me
Seven cracking windshields,
Six owners bitching,
Five cramped seats,
Four more delays,
Three blank screens,
Two larger tanks,
And a scam from Albuquerque.

On the eighth day of Christmas,
Vern Raburn sent to me
Eight lame excuses,
Seven cracking windshields,
Six owners bitching,
Five cramped seats,
Four more delays,
Three blank screens,
Two larger tanks,
And a scam from Albuquerque.

On the ninth day of Christmas,
Vern Raburn sent to me
Nine loosened bushings,
Eight lame excuses,
Seven cracking windshields,
Six owners bitching,
Five cramped seats,
Four more delays,
Three blank screens,
Two larger tanks,
And a scam from Albuquerque.

On the tenth day of Christmas,
Vern Raburn sent to me
Ten service bulletins,
Nine loosened bushings,
Eight lame excuses,
Seven cracking windshields,
Six owners bitching,
Five cramped seats,
Four more delays,
Three blank screens,
Two larger tanks,
And a scam from Albuquerque.

On the eleventh day of Christmas,
Vern Raburn sent to me
Eleven vendors griping,
Ten service bulletins,
Nine loosened bushings,
Eight lame excuses,
Seven cracking windshields,
Six owners bitching,
Five cramped seats,
Four more delays,
Three blank screens,
Two larger tanks,
And a scam from Albuquerque.

On the twelfth day of Christmas,
Vern Raburn sent to me
Twelve mentors crying
Eleven vendors griping,
Ten service bulletins,
Nine loosened bushings,
Eight lame excuses,
Seven cracking windshields,
Six owners bitching,
Five cramped seats,
Four more delays,
Three blank screens,
Two larger tanks,
AND A SCAM FROM ALBUQUERQUE!

Bambazonke said...

kkx

Best one yet, bravo!!

Niner Zulu said...

Kaptain Kool Aid - you are TOO funny!

Merry Christmas!

unsafe@anyspeed said...

kaptain kool-aid is now officially the funniest person in aviation! This should qualify him for the Collier Trophy.

Stan Blankenship said...

kkk,

You win the prize for being the funniest on the blog but probably not everyone is laughing, your biting humor cuts very deep.

The last chorus reminds me of the effectiveness of the Gettysburg Address; very few words, very well said.

SRMach5 said...

HALLELUJAH! AMEN! KUDOS!

How many other words could we possibly describe the best version of this classic we have ever heard?

GREAT JOB KKA!

Kaptain Kool-Aid said...

I'm glad everyone enjoyed it.

Stan, I don't think it compares with the words of Abraham Lincoln... but it does feel like Vern has been making promises for nearly "four score and seven years"!

Merry Christmas!

cherokee driver said...

I heard a rumor today that the first flight of the first production Mustang was to Albuquerque and they parked it in front of Eclipse. I’m not sure Cessna would stoop to such a tactic but I would be interested to hear if anyone could confirm it.

Densityaltitude said...

N403CM did visit ABQ, not sure where it parked.

DAL 11-22-2006 19:07 ABQ 11-22-2006 21:00 Landed Details
ABQ 11-22-2006 22:09 FAT 11-23-2006 00:33 Landed

Stan Blankenship said...

kka,

Last week I was "stupid", this week I am straight man to a comedian.

density,

GMT or MST?

Densityaltitude said...

Those details were off the flight plands so GMT (UTC/ZULU)

Densityaltitude said...

Those times were from the flight plans so GMT (UTC/ZULU. Local times were as follows:

11-22 14:00 N403CM C525 Arrived from DAL Departed to FAT 11-22 15:09

EclipseBlogger said...
This comment has been removed by the author.
airtaximan said...

eclipseblogger,

You disappeared for a while...I was getting worried Vern laid you off!

Funny thing is, Eclipse WAS GROUNDED during that visit. Probably just a reminder what it's like to have a real certified plane flying, even if it was designed, manufactured and certified by a "fossilized" company!!!!

What do you think of Vern’s offer of 6% for depositors with the courage to pony up?

EclipseBlogger said...
This comment has been removed by the author.
cherokee driver said...

There is another problem no one has addressed yet and it has to do with Eclipse’s Production Certificate. The information I have is there are approximately 30 airframes in various stages of production. I also understand that most of their parts are produced by outside vendors. The problem is until you have your PC the FAA is reluctant to allow you to produce more than about 10 airplanes before you get your PC. Cirrus was allowed to build around 25 before PC but the FAA thought that was excessive and they wanted to limit Adam to 10 airplanes.

In order to build airplanes before you have PC, every part produced to an Eclipse drawing by an outside vendor has to have a Request for Conformity submitted to the FAA. The parts have to be inspected by a DAR who fills out an 8130-3 tag for the parts and the tag has to be with the parts when they are received by Eclipse.

Now if Eclipse was able to convince the FAA that 10 airplanes worth of parts was not enough, and they got their RFC’s submitted and 8130 tags for all their parts they are in the clear.

If they forgot about that and they received these parts into their unapproved quality system, my understanding of the FAA’s system is those unapproved parts and the airframe’s they built are scrap metal. Also, if they expect to produce 200 airplanes by June, they probably need more than 30 airplanes worth of parts stashed around their facility now. How are they producing all these parts?

Gunner said...

All joking and recriminations aside, this 6% ROI offer takes real cheek. The Depositors are invariably people of means who understand business. That said, they must certainly see that the decision to purchase a jet needs to be separated from the decision to invest Venture Capital in Eclipse.

After all, if Eclipse was sitting on a decent sized War Chest or continued Deep Pockets, this acceleration would not be necessary. So, the question is, "If Vern offered you an investment opportunity whereby you could loan Eclipse a Dollar (or a million) in return for the unsecured promise of 6% interest, would you take it?"
Of course not. No sane person would.

Seems to me, those who are willing to step up to this loan/investment have some real bargaining power at this point. If they believe in Eclipse enough to make the accelerated progress payment, they certainly believe the company stands to hit a market home run.

What they need to do is to recognize that they are essentially 2nd round Venture Capitalists, and expect returns that VC's would expect. That means stock options that go along with the loans.

If Vern brings Eclipse to market even close to his predictions for performance and sales, this is a multi-billion dollar company. There'll be handsome returns for everyone and plenty to go around.

It would also be the smart play for Eclipse. In the stroke of a pen, they'd be converting hundreds of anxious customers into venture partners.

Here's some simple math:
- 200 depositors accelerate their deposits by $500K each.
- Each is offered options to buy .002% of the Company any time within the next 3 years for an additional $100K
- Company succeeds and is valued at $10 Billion after IPO (Minimal Valuation).

Results:
- Company raises $100MM in immediate capital and $20MM in future option capital.

- Company gives up 4/10ths of one percent of its equity down the road.

- Customer gets his jet and, for an additional $100K, stock value of some $2 Million.

- Eclipse creates a Romance Story that the press would absolutely eat up.

Considering that Vern was willing, in '02, to give equity ownership AND exclusive Air Taxi Rights to a company with zero real assets and an LOC from a barely existent "bank", this should be a doable deal for the Owners.
http://www.inc.com/magazine/20020601/24256.html

Gunner

Stan Blankenship said...

According to a bug I don't have in Vern's sugar bowl, he was still in his pj's having his coffee this morning when he placed two urgent calls.

The first to his head of QC. As best I could make out, he wanted the guy to go in to work this morning and check to make sure there were 8130-3 tags on all the vendor parts in the stockroom that have been there for years gathering dust. I thought I heard Vern say, he might have some tags in a drawer somewhere.

The next call was to the head of finance. He used a word not in my vocabulary, something about an epiphany. I started losing the signal from the bug but I could tell Vern was excited.

He had a new plan to entice existing customers to fork over their next progress payment. All Eclipse would have to do is give them a stock option in return for their payments, then the director of finance could forget about all the embarrassing due diligence business in the IPO. Shoot, this scheme could raise up to a half-billion dollars just from our customer base.

He kept using the terms brilliant, free money, doesn't cost us anything...sounded as happy as any kid ever was on Christmas morning.

ColdWetMackarelofReality said...

Vern is apparently trying to raise somewhere near $190 million on the cheap and the quick (~375 deliveries @ $500K each), and they are willing to treat their customers as if they are morons, offering sub-market returns, demanding a 30-day grace period, rewriting purchase contracts.

This is like the teen boy trying to score with his girlfriend - 'if you love me you'll say yes'.

This deposit scheme will take the total money invested in this aeronautical ponzi scheme to near $1 Billion, with a "B", near as I can tell. All that for half a dozen flying airplanes, a $20 million\month burn rate, 30 airplanes in 'varying stages' of production, and a sleigh full of broken promises and missed schedules.

Reviewing the various articles linked from here, we see that FMS functions are at least six months away, and full functionality is at least 12 months away. This led to the 'bone-us' handheld GPS with each delivery (Vern is very generous - lol). What about charts and procedures? What about checklists? What about the MIA AFM\POH?

And does anyone believe that Eclipse is not essentially giving away $500,000 with each airplane delivered below $1M?

Extorting customers into becoming venture capitalists ought to be criminal, if it is not, in fact, actually criminal.

What will it cost to requalify what must be tens of thousands of parts in the system that can be re-inspected by the broken quality system? What of the assemblies and the existing airframes, wings, etc.? Can these be pencil-whipped to the satisfaction of the FAA?

No wonder there are dozens of QA jobs on the Eclipse website lately.

My prediction, this company will not deliver an airplane in 2006, and maybe not even in Q1 '07. The cause-du-jour will go from QA to manufacturing to Avidyne, to other vendors, to the performance mods, to the FAA.

There will always be an excuse and Vern will be in the spotlight each time, pointing his finger at somebody else, all the while saying 'pay no attention to the man behind the curtain'.

If they have not made a delivery by early-mid Q2, the company will fail and leave a Billion dollar smoking hole. Even deep pockets have limits.

My advice to current position holders - stick to your guns and make Eclipse live by the original contract, every word - if they balk, run, don't walk away.

My advice to air taxi operators - there are dozens of TBM 700's, Citation I-SP's and King Air C-90's in Trade-A-Plane right now. At least with existing hardware you can start your proving runs tomorrow and find out if passengers are willing to trade size, comfort, and convention for a modicum of convenience.

One last thought for today, for all the talk about being easy to maintain, it is not at all clear that the Eclipse was intended to be maintained like a mini 737, and that has to be considered possible if not likely given the FAA's decision on scheduled 135 carriers several years ago.

If the FAA insists on Part 121 style maintenance programs for unscheduled 135 operators, what will the fallout be - remember Air Midwest and the 1900's? Is DayJet prepared to be forced to care for their flying yellow-cabs like MD-80's or 737's? Is Eclipse capable of creating a 121-style maintenance program for each of its' operators or will that be the customers' responsibility?

History shows that Air Midwest grounded their 1900's and switched to a jet fleet that was intended to be maintained like big jets - what is the alternative for DayJet and the other would-be air taxi operators if the Feds change the rules for unscheduled 135?

These are questions with Billion dollar ramifications that need to be answered with real world information and solutions, not more smoke and mirrors from PT Barnum.

Green-or-Red said...

cherokee driver
Are 8130s only required for structure or for all the systems currently not working on the aircraft?

Where are the 8130s for the thin skins, wind shields, the aft spar or its joint?
What will be next?

Gunner said...

Stan-
For a fact, I quizzed both Finance Directors at Eclipse and Adam on this very subject, before I deposited with Eclipse. My question was simple, and flowed from the information that deposits would not be held in Escrow, but would be used for working capital. The question went something like this:

"Why would I give you a $130K loan against an unsecured promise of $130K in future aircraft parts? I could use that $130K to buy into your current private placement. If the company doesn't make it, I wind up in the same position either way. If it does make it, that $130K will generate enough value to buy out an early Deposit Position, fully fund delivery AND leave me some serious pocket money."

Eclipse responded that their PP was closed. Perhaps so, but there are always secondary markets to purchase positions in such vehicles. One only needs to know who to call.

Adam came back with an exploratory question regarding my stepping up to a Million in minimum investment. At least they considered it. Perhaps because they knew that their secondary market was accessible thru W Capital Partners http://www.wcapgroup.com/portfolio/pe_industrial.asp

So, why didn't I go that route, rather than send in my deposit? Well, my interest in the Eclipse was greater than in the Adam and Eclipse's investor positions would be tougher to locate, since they were all individual (except, of course, the $10MM invested by the State of New Mexico).

More important, I reckoned I could move quicker to get a deposit back than to sell an investor position. I was right. Only took me two weeks! ;-)

Bottom line: ColdWetMack is right on the money. With everything that has come out on this company and aircraft, current depositors have to begin to see themselves for exactly what they are: Venture Capitalists with zero upside. The Deposit Acceleration program is an insult to any Depositor who can divorce their business sense from their cognitive dissonance.
Gunner

ColdWetMackarelofReality said...

green-or-red,

From what I understand, the 8130's are for when the parts are produced by Eclipse or by vendors under their approved quality systems.

In most 'dinosaur' aircraft companies, if the parts do not meet the type design, they are supposed to be identified as such by the vendor, or caught by internal quality when received. If they do not meet type design, they get a non-conformance, and are evaluated by engineering to determine if they can be used 'as-is', used as modified, or need to be scrapped.

There are times when non-conforming parts are fine for use (e.g., missing a hole, etc.), but there are also times when non-conforming parts should not be used (insufficient edge distances, material properties, etc.).

As I have said before, my suspicion is that the wing bushing and windshield issues led the FAA to be more vigilant in reviewing the Eclipse quality system as it exists in terms of receiving inspection, and production quality inspection, and that Eclipse was found severely lacking - both in how well (or not) it follows procedures, as well as in how focused the inspectors are in reviewing assembly work.

The real issues are probably not so much 8130's but more so in the use of non-conforming parts which adds an additional level of information tracking to each affected part - as well as more work for what must be a busy engineering team, to determine if non-conforming parts can even be used.

But be sure and send your $500,000 check today, we'll include for free this Popeil collapsible fishing rod.

ColdWetMackarelofReality said...

OK I said one thought for the day but here is another practical question for the group that has been looming large in my mind since the recently 'improved' communications.

If the Performance Mod is not certified until Q2 of '07, and Eclipse succeeds in its currently public plan to deliver 10 aircraft this year (or was it always only 4 to 6, or was it 30, or was it 50 - I get confused), and it is on pace to deliver over 500 aircraft next year, let us say it delivers 150 aircraft WITHOUT the modification. Vern said the modification takes 'approximately 3 weeks', and it will be done at Eclipse's expense on an 'as-scheduled' basis, that is 450 weeks (8.6 years) worth of work for what two service centers, maybe 3?

How many guys does that assume? What is the shop rate? How many of these fit into a service center at a time? Is that based on a 5 day work week, or 6 days, or 7 days?

Let us be like Vern and be overly optimistic (after all, 'we' are not a dinosaur airplane company) and say it takes only one man, and the shop rate is $90\hr. That would equate to 144 hours of labor per mod ($13,000 labor) PLUS parts, plus any downtime\loss of use that any contracts might contain. $1.95M plus parts.

If we assume 2 man full time per mod, it is $26,000 in labor, plus parts. $3.95M plus parts.

Optimistically, this mod could cost Eclipse ONLY $2M in labor plus parts (anybody's guess), to perhaps way over $5M, or, an extra $40K on the first birds (my guess).

This is in addition to whatever the actual loss for the early deliveries ends up being (my guess is $500,000 minimum).

So say Eclipse is losing $550K on each of the first 100-150 aircraft due to the cost being much higher than the selling price and the cost of the mod - that is a $82M loss. What are they going to do, make it up on volume?

Eclipse will continue to lose money on at least what, the next 150-200 airplanes - say a smaller amount, maybe $250,000 each. Another $30-50M.

In the meantime, there are tools to be bought or recalibrated, employees to hire and fire, contract clauses with penalties from vendors and customers alike.

Add to this that Eclipse seems intent to barge into aircraft support (a complicated business space in and of itself) with their JetComplete and given the track record with the airplane, one can only guess how well that program has been put together. The costs for JetComplete which we have looked at before appear to be the real costs for other planes, scaled down to match the Eclipse size or selling price, and seem too low to be even remotely profitable. And that does not include any parts not living up to expectations (good thing that hasn't happened on this program so far - whew, dodged a bullet there).

All I see is loss on loss on loss. I could see Eclipse losing a quarter billion in '07 even if it was fairly successful at meeting the challenges that are publicly known right now - what do we not know about yet?

Where is that money going to come from?

I give the house of cards 18 months max without being purchased by another, experienced OEM or a total overhaul of the executive team and maybe Board.

IPO? No F'ing Way!

airtaximan said...

how do you recoup the non-recurring development cost (which are still ongoing...)?

So far, perhaps $500,000,000...at 1,000 planes that 500,000 per plane. At 2,000 planes, that's $250,000 per plane. If one believs there's esentially no margin on the first few hundred...perhaps even losses, theres a few thousand planes maybe even 5,000 planes that come before profits.

If someone asked me to invest in Eclipse 5 years ago, my answer would have been "no". Today, when the risk is supposed to be lower, my answer is "no way".

Honest information in a disclosure document for another raise/IPO would not likly yield a good reaction from the investment community.

Looks like the die-hards are being asked to foot the bill for the company, not their plane.

airtaximan said...

Eclipseblogger,

I don't agree with your comment that Vern Raburn is more beautiful than Brooke Shields...

airtaximan said...

Interesting comments about the G1000:

“If I had to choose an avionics supplier today for the Eclipse 500, we’d certainly have to go with Garmin and its G1000.” Vern Raburn.

I wonder if he knows that the G1000 cannot be used for air taxi? It lacks the proper SQA certifiction level. Their plan is to have the certification for the Phenom 300...down the road.

Vern could always offer to pay for the delta certifaction costs...

Anyone else hear this about the SQA level for the G1000 being an issue for air taxi?

Stan Blankenship said...

re: the ipo,

Agree it will be difficult to pull off but there may be an investment banker lurking in the background waiting to pull the trigger as soon as deliveries start. The company and its investors have connections.

Eclipse "Hot Jobs" has an opening for a finance person (job FIN006)with experience in GAAP, SEC and Sarbanes Oxley compliance.

Then again, the job was posted in August and a lot has happened since then.

flyforfun said...

Stan, learned an interesting note today. If you don't purchase the Jetcomplete service ($115/hr) then all SB's after delivery on the plane are at your expense. Even during the warranty period. I know that Columbia covers all SB's for their $500K airplane, you would think Eclipse would do that for a 1.5MM+ airplane. Also was told that hots on the engines will be 25K and the replacement cost on each engine is $300K. Sure sounds like the margins on those first planes at $995K will be a little slim.

Bambazonke said...

When are we going to see a reporter put KKA on the carpet about his lies?

The records are replete with bold statements from this charlatan about how excited they and the world are about Eclipse and it's success, all the time knowing that the plane doesn't do the range, has windows cracking, rear spars moving, and a host of other rumored issues.

Take this statement made in early May:

"Thursday, May 4th, 2006
Eclipse Aviation announced this week that the Eclipse 500 should receive FAA certification by the end of the quarter. They also expect EASA certification by the end of the year.
“It’s amazing to see the Eclipse 500 excitement build as we near certification and first customer deliveries,” said Vern Raburn, president and CEO of Eclipse Aviation.

KKA knew at the time that he would not have a plane delivered in the near future, here we are 7 months down the road and these clowns are still trying to decide what the configuration of the Radaralt is going to be in the AVIO system as of this week!

Then he has the audacity to say "we're kicking Cessna's ass". KKA could not find his ass with both hands and a mirror. What I don't get is why there is not a mass revolt by the position holders!

airtaximan said...

fllyforfun,

"Also was told that hots on the engines will be 25K"

Is this included in any service plan as part of the hourly cost, or additional cost no matter what?

Thanks

twinpilot said...

Lets say you were an Eclipse position holder and Vern asked you to fork over the next 500K because your delivery was 6 months away, but if it is more than one month late he would pay you .5% per month until it was delivered. That wouldn't make me very happy or make me feel very secure. If they file bankruptcy you are out the 625K you have paid to date let alone your measly .5% interest. I wonder what he would say to this reply: Since the delivery is not assured and the date can't be accurately projected or believed, why don't you just deliver the airplane and when you do I will pay the full amount plus .05% interest per month times 6 months (I won't even ask you for the one month grace period) on the 500K. In other words, just add $15,000. to my bill on delivery. You could even offer to put the money in escrow so Eclipse would know the money was there, and even offer to pay the prime rate on the money if Eclipse didn't want to accept the .5% per month they offered you. Of course I am sure the answer would be that you could forfeit your 100K plus deposit since they think they could sell your line position to someone else for more money. It would take a concerted effort by numerous customers to afford the legal battle.
And by the way, when are you going to change out that AVIO system for a Garmin system? (assuming Garmin would even talk to Eclipse) How motivated do you think Avidyne is to work with Eclipse and get all the bugs out after Vern's comments?

flyforfun said...

Airtaximan, for the Jetcomplete you get training, Jep updates, SB's (there will be many) and a bunch of feel good promises. For an additonal $95/hr. you get hots and engine OH when due (3,500 hrs.) But and this is a big but, it does not include any coverage for engine failure. Your $46K a year ins. covers that they say. So if you want to fly around with liability only then you are covering the damage from the bird or rock that goes in the front of one of those 300K engines. Also after talking to three different people today at Eclipse no one seems to know what condition inspections will be required. The only inspection they are owning up to is the 300 hr. engine inspection. These guys have no clue what is going on. Before I spend 1.5MM on a plane I would like to know what the inspection schedule is and if I have to pay for them. I know what a 1-5 on a Citation cost.

Vmc said...

twinpilot said, "How motivated do you think Avidyne is to work with Eclipse and get all the bugs out after Vern's comments?".

Just a hunch here, so I'll lob ya one for the homerun. The Emperor is simply nailing the Avidyne coffin shut at this point in the game. It's safe to assume that Avidyne was written off long before public comment was made by Vburn. After all, Vburn's MO is typically to dress-down and attempt to shame his target before pulling the plug. History is full of Vburn's casualties: Williams, BAE, Paul W. Marino Gages Inc., and numerous others of which I haven't the time to research. So, is it possible that Avidyne is about to be thrown under the Eclipse train? Hell yeah. Do they have someone in the coffers to save the day? Absolutely--Vburn may appear to be careless about his long-term vendor relationships, but it is usually a calculated carelessness. In other words, there is most certainly a pinch-hitter on deck.

As for IPO...I believe that the pockets and connections are much deeper and far more influential than many of us can begin to comprehend. Considering the kool-aid drinking media, the number of non-aviation folks looking to cash in on the next "disruptive technology" for the aviation industry, and it should be possible to attain a high P/E at IPO which equates to big payouts for equity investors and option holders. However, the last ditch effort at trying to get customers to pony up the capital as a way to float the company until a full-on production run smells of a desperate attempt by Vburn to avoid any more private equity financing. Afterall, that would equate to DILUTION of current shareholders (and option holders), which is not in the best interest of anyone with a possible financial gain from an EAC IPO. The other alternative is debt. Hell, why take on additional risk through debt financing when you can bilk the $$ from existing customers for a measly 6% annum return only if late? Wow, I wish I had thought of this seven years ago...

Gunner said...

vmc opined Just a hunch here, so I'll lob ya one for the homerun. The Emperor is simply nailing the Avidyne coffin shut at this point in the game. It's safe to assume that Avidyne was written off long before public comment was made by Vburn.

As I said earlier in this commentary:
I'm gonna stick my neck out and make a couple of predictions:
1) The Avio system is about to go the way of the Williams engine.

2) Within a few months Eclipse's public honeymoon with the FAA will come to an end, as Vern begins to blame them for delays in production.


As for an IPO, please understand that all those individual, uninformed investors, hot for the hype, do not amount to a hill of beans in developing a doable IPO. Institutional Investment makes that stew tasty.

Yes, Institutional Investors can be and have been hoodwinked, outsmarted and/or simply mistaken about a trend or a plan. But the VLJ/FractionalOwnership/AitTaxi business, while sexy, is hardly DotCom guesswork. The numbers already exist; as do the pros who advise these Institutional Investors.

One need take about two hours researching Eclipse developments (retrogrades) since July to recognize that, absent a miracle, this is a Wanna-Have toy for rich pilots; not a viable Air Taxi business pillar. One need spend less than half that time looking at Cessna, Adam, Embraer and Honda business models to know that only Vern sees the George Jetson age around the corner. I wish it were here; it's not.

Gates and company, if they're even still on board (which is questionable, given the latest squeeze on owners for additional capital) are big boys. The know that, absent a business model or product/market that has never been seen before, they'd have to pony up about 70% of the IPO funds to drag the 30% individual "suckers" in. There's no percentage in it for them.

In short, Vern missed his window back when he was the darling of the New FAA. He can offer only one thing now: SUBSTANCE. Barring that any IPO attempt is a non-starter; which brings us back to the Depositor Squeeze. If it looks like desperation.....????

Gunner

EclipseBlogger said...
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EclipseBlogger said...
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Vmc said...

Eclipseblogger (EB): Compadre--me thinks you misunderstood Gunner's statement. Most folks with coherant thoughts that appear to fall somewhere in the middle to right side of the bell curve tend to do a little research before plastering their thoughts to binary media. It's more likely that Gunner was referring to Gates as "still being involved" by his statement "on board". Any monkey can pull the names of the ominous Board of Directors with a few swift key strokes. If those simple facts are being misconstrued, then we have a lot more to be concerned about since these same people are flying over our homes and schools everyday.

EB: Give intellect a little credit here...and let's stay on task.

EclipseBlogger said...
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Gunner said...

eclipseblogger-
I'm aware that Gates is not a Board Member. I'm also aware that he is a very important investor; so important that the Eclipse Sales Staff (at least mine) drops his name when they think it will help close a deal.

My point had nothing to do with the Board. It had to do with existing Stakeholders (ie: investors). In Eclipse's case, that means Gates and Company. I am simply pointing out, from personal experience with IPO's, that an IPO for Eclipse is off the table unless and until the point that they provide substance.

One does an IPO for two reasons:
1) To cash out. Eclipse is not market-ripe for this.

2) To take advantage of untapped business opportunity. Since Eclipse's story is that they have thousands of orders and are already delivering, they can hardly make the missed opportunity claim. (Unless it leaks out that the Air Force is interested in having them update the F-18).

My comment on the existing investors was a simple observation that Eclipse may well have problems with that group since a 6th round of Private Financing is not being discussed; strong-arming Depositors is.

But you can clear much of this up for us. Tell me: How well are the depositors taking the news that they need to pony up a Half Mil each in return for a deferred 6% interest credit? Have any of you floated the idea that you, too, should become Stakeholders in return for this commitment?
Gunner

Gunner said...

In fairness to Eclipse, there IS another explanation to the Deposit Acceleration:

The jet is good to go.
Assembly and Q/A is good to go.
FAA has no major issues with what's happened on the line.
Orders abound.
Eclipse simply needs a few more ten of millions for Working Capital to get over the top. Since they don't wish to dilute existing equity, they're hoping to gain this from Depositor Cash Flow.

This IS a possibility and I'd be remiss in not mentioning it as such. The facts we know, however, make it something of a, ummm, long shot.

Gunner

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Stan Blankenship said...

eclipseblogger,

The reason there is so much speculation on this blog (myself included) is that there are so many questions surrounding the program and so few answers.

I suspect at this point Vern does not even have all the answers. Nothing is going as planned. Late certification, late deliveries, significant technical problems; meanwhile cash flow goes unabated causing the company to try and tap into the most ready source for capital, one component of his customer base, the users.

I say one component because the other two components are probably not too excited about further progress payments at this time. Do you think the fleet air taxi operators are in a position to make major progress payments?

And the speculators, their original bet was to put up $125k in the hope of a $625k return, a 400% ROI. Good pot odds. Now, Vern has re-raised another half-million. With all that is going on, it is a tough call. One option is to figure out a way to get your $125k ante back, perhaps a 'contract escape'.

A switch from the highly touted multi-tasking Avidyne system (that made the airplane so easy and safe to fly), to the more generic Garmin system might just provide that 'contract escape' not only for the speculators but all other fence sitters as well.

EclipseBlogger said...
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Stan Blankenship said...

eclipseblogger,

We all have to be honest, except for the initial deliveries (the first 30 or so?) the airplane is a good buy if you can get in for a million and small change.

airtaximan said...

eclipseblogger,

What you write is pure rubbish...making us all think you are either severly intellectually challenged, or just a paid promoter for E-clips.

- Your misunderstanding of the statement on-board, as part of Vern's Board, is simply not credible. Throwing it in someone's face as inaaccurate is absolutely silly. A poor attempt at distraction.

-Your reference to me having to fly a VLJ or get overrun by Dayjet is equally silly. There are thousands of planes flying million of people right now in profitable Part 135 operations - my industry is growing at 25% per annum WITHOUT the VLJ. Why trade that for an unproven tiny private jet that has not been designed for any sort of utilization? The Garmin-guided VLJs (cessna, Phenom100, etc...) cannot even be flown for Part 135, I'm told (and trying to verify further)...and Cessna is not even selling the Mustang as a taxi-plane. Why would I fly an E-clips? You know that makes no sense.

- Any reference to Dayjet as a viable company that threatens Part 135 operators is silly at this point. They have had a bunch of false starts, including a dumb contest in place of the rollout of their first E-clips, and they are delayed again. They are among the few that are starting up based on their trust of Vern. They have paid the price, dearly - $millions blown waiting, all the while lapping up the Vernspeak. I am hearing more and more in the industry and on Wall Street that they lack a real plan and have no clue what they are doing. Vern has cost them dearly, in credibility and money... waiting in vain. The communication is so poor between E-clips and Dayjet that they keep announcing the start of operations, only to fail at the last minute and delay and delay, all the while Vern had to know there was no way they could meet their dates. It’s been funny to see how Vern has treated his best customer – his fleet order for hundreds and hundreds of planes -perhaps more than half his order book. I'd hate to be just a depositor with only 1 deposit. The only way I can get overrun by Dayjet is if Ed falls on me or runs me over in his car.

- I'm glad you state emphatically that you understand this is a blog while you cry about the questions and speculation regarding E-clips. You act as if people lack the right to pose questions, and bring up things they hear. This forum has been superb at raising facts to dispel myths and provide support to speculation that turns out in most cases to be true. There’s been a lot of effort to piece things together about E-clips (imagine how sad that fact is) due to the doubletalk and lies from E-clipse. That is why there is so much interest in this blog. Literally dozens of people have emailed me in the last few weeks directing me to this site. Pilots, CEO, media, even manufacturers.

You should stop stating that the blog is full of misstatements and inaccuracies - there's a lot more of that coming maliciously from your favorite aircraft company and their CEO, most of which has been uncovered here.

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wonderabouteclipse said...

Somewhat related, did anyone read this article yesterday's ABQ Journal? Why is Eclipse screwing around with this stuff when there are so many other issues to deal with?

Tuesday, December 12, 2006

Avionics Company Asks Judge to Throw Out the Eclipse Aviation Claim

By Andrew Webb
Journal Staff Writer
The founders of Aspen Avionics say their company's flagship product was developed long before they were employed by Eclipse Aviation, which sued them in October claiming ownership of the device.
Furthermore, Peter Lyons and Jeff Bethel say in a response filed last week that invention and nondisclosure forms they signed before a pre-employment tour were invalid.
The pair have asked that a judge dismiss Eclipse's lawsuit and rule they are the sole owners of the AT300 Hazard Awareness Display.
Albuquerque-based Aspen Avionics designs and sells multifunction digital avionics devices designed to fit in the instrument panels of older, propeller planes sold with analog instruments. Its first product, the AT300, received Federal Aviation Administration certification in 2005 and has gone on to receive accolades from aviation trade publications.
In its lawsuit, Eclipse claimed Bethel and Lyons, who joined Eclipse in fall of 2002 and worked in different departments, developed the product, set up their company, and began fundraising and marketing while on Eclipse company time.
Eclipse is seeking sole ownership of, and receipt of any proceeds derived from, the AT300. Eclipse included portions of its invention and nondisclosure agreement as exhibits in its suit.
Bethel and Lyons, in their Dec. 7 answer and counterclaims, say the only invention and nondisclosure agreements they ever signed were when, in 2002, and on separate occasions, they toured Eclipse's Albuquerque facility as part of employment interviews, before they were offered positions with Eclipse.
When they protested the word "employee" on the forms, Bethel and Lyons say, they were told there would be no interviews without the signed documents. The pair claim they never signed such agreements while employed by Eclipse.
Upon leaving Eclipse in 2004, after two years' employment, Bethel and Lyons were asked to sign invention and nondisclosure agreements, which they declined to do, according to their response.
The pair claim that they and other engineers developed the terrain awareness instrument, as a retrofit for older piston-engine planes, in 2001 and 2002, before they were employed by Eclipse. They submitted the device for FAA certification in March 2002 and sought patent protection for it in 2005, according to court documents.
They allege Eclipse filed a patent application for the AT300 in June 2006 to "create confusion as to the ownership of the AT300 technology."
Lyons and Bethel also accuse Eclipse of "misleading" investors, potential employees, customers and others about the progress of the Eclipse 500 program. The pair allege Eclipse created a "hostile" environment by blaming employees and vendors for problems plaguing the $1.5 million plane, which was certified in September but is still undergoing FAA evaluation.
The pair said in court documents that this environment "materially contributed to their decision to leave Eclipse's employ."
Bethel and Lyons in court papers allege Eclipse "maliciously" waited until Aspen Avionics had achieved some successes before filing the patent applications and suit.

Stan Blankenship said...

wonder,

Thanks for sharing the ABQ Journal article.

It's another reminder, there are more questions than answers surrounding the Eclipse program.

Gunner said...

Style, Stan.
It's a predatory, "Me First; Me Only" style that we've seen before. It's a mimicked Microsoft style, only without the "share the wealth with insiders" brilliance of Microsoft.

Gunner

flyforfun said...

The suit against Aspen is another example of playing the blame game and wanting to claim something that someone else put years of sweat and blood into. I know Jeff and he had been working on this for many years before he took the job at Eclipse. The AT300 is a complex instrument and took years of work to bring it to the place it is today. Vern is full of it on this one and is just throwing a wrench in the works to mess Jeff and Peter around. They avoided drinking the coolaid and saw through the dog and pony show Vern was putting on. Them leaving pissed him off and this is the result.

Stan Blankenship said...

gunner,

The integrity of the program is suffering which is going to reflect back on the investors.

They can't be too happy with the situation nor can they escape the linkage.

Plus, as many times as Vern has been to the well, isn't a safe bet their equity position has been diluted?

The board is ceremonial, so when would you expect the investors to start pulling some strings?

yenolo said...

This was in Flight International today;

"A total of 40 production PW600s have so far been delivered from the company's new assembly plant at Longueuil, Quebec, with a steeper ramp-up expected in 2007 when some 500 engines are scheduled to be handed over.

The bulk of these will be PW610Fs for Eclipse Aviation, with the majority of the balance being PW615Fs going to Cessna for its Mustang".

My read on this is P&W have delivered 40 -600 series engines this year, I would speculate that they are distributed as follows; 6 to Cessna for their 3 flying aircraft, 10 to KKA for his 5 flying aircraft, so this leaves 24, enough for 12 planes. If you were in P&W's shoes where would the rest of these engines be slated for; the contender in ICT or the pretender in ABQ?

The other part of the maths that is interesting, KKA says the he is going to deliver over 590 aircraft next year, that is 1080 engines from P&W, as they are only building 500 next year, what the hell is he going to tie on the back of his pocket rocket? You can be sure with Cessna's clout at P&W they will get all the engines they need, this is going to lead to KKA's next tirade, this one against P&W for not building enough engines, mark my words.

This leads back to the subject discussed above, is KKA an inveterate liar, in that he has no intention of building those numbers of planes, and he is trying to hype the position holders into sending him deposits on aircraft that they will not be getting?

Stan Blankenship said...

eclipseblogger,

A few days ago, you said the blog was getting "tiresome". The same handful of contributors and not much constructive discussion.

Careful what you wish for eb. Along comes wonderabouteclipse and yenolo, new guys with a new slant to the discussion. Both add to the mosaic of what is going on down in Albuquerque, and it is not a pretty picture.


yenolo,

Thanks for your contribution!.

Last year we built some Mustang tooling for a Cessna supplier. As part of the bid package sent to me, was Cessna's ramp rate for the Mustang. Here is there numbers, and keep in mind this is parts needs, not projected deliveries:

2006 - 28 ship sets
2007 - 75 ship sets
2008 - 152 ship sets

But keep in mind, Cessna is one of those fossilized aircraft companies that has yet to figure out the production equation.

EclipseBlogger said...
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Vmc said...

Poor Paul...there's no wireless connectivity in the unemployment line.

On a more serious note, a point was raised by Stan about the equity holders being diluted. The answer is yes, they were diluted back in 2003 when Alfred Mann "saved the company". It was a major dilution that resulted in the loss of one of the few major stakeholders that had a passion for avation, not just money. Just another Vburn casualty. All shareholders and those with options suffered the effects of Al's generous offer...which had to be accepted to keep the UG harddrives spooling. Many speculate that Gates has the majority of the stake in EAC, but last known by many is that it is Al. Anyone with better info?

Gunner said...

Stan-
In answer to your question, I'm not at all certain Eclipse's Board is ceremonial only. There's some real talent there and it would depend on who put them in place. If some of those Board Members were appointed by investors, their role could be significant.

As to stock dilution, again it depends. It depends on whether Vern's Business Plan was as out of touch with reality as his public promises; it depends on how the private offerings were constructed; and it depends on how much stock was owned by Vern and other principals. Agreed, each new round of financing dilutes stock: the questions are "Was it an expected dilution" and "Who's stock was diluted?"

Yenolo-
The quote from P&W regarding ramp-up next year, in juxtaposition to Vern's promise of 590 jets, is one of those pieces of info that we get chastised for as "pure speculation" because we "hate" Eclipse. ;-)

Gunner

Gunner said...

vmc-
We were cross posting. Thanks for the info on Al Mann. According to one source, he and Gates are the two largest investors:
http://www.aviationnow.com/avnow/news/channel_awst_story.jsp?id=news/aw042406p01.xml

As such, there's little doubt that his position on the Board is far more than titular. Whether he's happy with the progress and promise of Eclipse is anyone's bet.

Gunner

Gunner said...

A bit more on the Board issue. Sorry for the piecemeal manner, but Stan's question got me interested.

There are five Board Members at Eclipse:
Vern Raburn
Harold Poling
Brian Barents
Alfred Mann
Kent Kresa

Poling, Barents and Kresa each have impeccable credentials in the Aircraft or Automotive industries. Kresa is also on the Board of Alfred Mann's Mannkind Corporation.; Mann has an extraordinary background in successful startups and IPO's; entrepreneurial genius.

So, if I had to guess, I'd guess that this is a working Board and that Mann controls at least two of the five seats.

Gunner

Stan Blankenship said...

My ignorance on the 'ceremonial' BOD, was not aware Al Mann was a major investor.

Barents headed Learjet for a short time, not while I worked there. A fellow who did work closely with him said Brian couldn't walk by a mirror without checking to see if his tie was straight and his hair in place, but he has an impressive resume.

Green-or-Red said...

From the AvWk article dated 4/23/06 “The 600-employee company has raised $475 million, much of it through tech industry titans such as entrepreneur physicist Alfred E. Mann and Microsoft co-founder Bill Gates, the venture's two largest backers. By Raburn's calculations, it needs to sell 500 of the jets each year just to break even. Raburn expects the company's assembly facilities on the grounds of Albuquerque International Airport to be producing two jets a day by the end of the year and four a day by the end of 2007. That's 1,000 a year, based on a five-day workweek.”
There have been lots of changes at E-clips since then. Close to 1000 employees now. Also, the institutional influx of over 200M has now made Mann and Gates # 2 and # 3. The last I heard AM had about 20% of the investment. Prior to the institutional 200+M he had over 30%.
Green-or-Red

Stan Blankenship said...

Thanks to the collective knowledge and wisdom of the individuals who participate on this blog, it has often been out front on issues that eventually surface down in ABQ.

So today, in spite of all that is happening down in ABQ, our focus has turned to the BOD. Is the blog out front on this issue as well?

Even though it is largely none of our business, we sit here wondering how long the board will allow the illusion to continue.

Vern is running reckless and it is the board's responsibility to tighten the reins.

paul said...

Hardly unemployed. I just do not wish to be part of the bickering that has been posted lately. I know what is going on inside of Eclipse on the production side, but feel that I share it will just be accused of fabrication. Not to mention the litigation happy Vern that I may expose myself to.

EclipseBlogger said...
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airtaximan said...

eclipseblogger,

You have called for Paul's return and additional facts a few times, plus you are so one-sided and energetic about protecting Vern and E-clips that I would be worried if I were Paul as well.

It's too bad. He has been right on so far. Goading him has eliminated a good inside source. I am sure you have a sense of accomplishment, eliminating intel from within E-clips.

Our loss. Depositor's loss. Investor's loss. The media's loss.

Stan Blankenship said...

Here is some interesting reading that should light up the blog:

www.lightjetage.com

Click on the Michael Press December Report.

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yenolo said...

Eclipse Boooger I am not sure who you are accusing of poor reporting but here is the article: http://www.flightglobal.com/Articles/2006/10/17/210013/NBAA+2006+PWC+starts+testing+of+Phenom+100+powerplant.html

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airtaximan said...

eclipseblogger,
you state: "That can't be right. Garmin has already announced a King Air C90 retrofit for the G1000. They are taking orders and rework positions for aircraft now, for work to begin 1Q2007 following STC of the installation."

Please explain further. Many Kingair C90s are flown under other than Part 135...

Are you really offering that since they are doing a C90 retrofit, that MEANS they have SQA level for part 135?

My receptionist is telling me your attempt to refute the issue with G1000 not being fully certified for part 135 operations make no sense...

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Stan Blankenship said...

Eclipse has updated their website and added more performance information.

They show a long range flight profile with a direct climb to FL 410, range with NBAA reserves 1,100 nm, block time of 3 + 45 resulting in a 293 kt average speed.

For a 500 nm trip, climb to FL 350 and the block time is 1 + 42 or 294 kt average speed.

This must represent the 'New Eclipse' with bigger tanks and a higher gross weight than what is published in the Type Data Sheet.

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Stan Blankenship said...

eclipseblogger,

I am not tracking Mustang performance, but would like to see a comparison of the Eclipse performance in the real world where 30, 50 and 80 kt headwinds above FL 250 are common.

Let's face it, the Eclipse is not a fast airplane and may also hold the distinction of being the slowest jet ever produced. But as Vern told us, it can easily get out of the way of faster jets.

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Stan Blankenship said...

eclipseblogger,

You put a lot of faith in Eclipse's published numbers.

The Mustang has .34 pounds of thrust for each pound of takeoff weight.

Thrust to weight for the Eclipse is .30.

Which airplane do you think has the better performance? The paper airplane or the one out running around the pasture?

Guess we will have to wait for Mac to fly the 500 to get honest numbers.

Planet eX said...

eclipseblogger:

AFM and OM are available for the Mustang provided you pony up the money for it.

I've been in tech pubs for years and I've yet to see an operator give away AFMs or OMs.

Why don't you pony up the cash ($181 for the AFM) and prove everyone wrong?

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Stan Blankenship said...

eclipseblogger,

It is very simple, headwinds affect slow airplanes more than faster airplanes.

The airplane Eclipse is talking about is still a paper airplane, the mods have not been certified yet, the revised flight manual does not exist because the testing is not complete.

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flightfollowing said...

Stan, could you start a new thread, once you start approaching 50 postings, much less 100, it gets hard to figure out where one left off last visit. Start a new thread even if you don't have much of a specific subject for the header, just for readability.

yenolo said...

Stan you are right you just cannot trust their numbers. Firstly their website says that they are certified, so one knows that the truth serum is in short supply. Next they say their MTOW is 5920 lbs, the FAA TCDC says it is 5800 lbs.

Then let's take a gander at their numbers;

Empty Weight using their numbers;3550. (Real life closer to 3700).
FAA MTOW: 5800 lbs.
Less 4 jockey club passengers: 710 lbs (no baggage) = 5090 lbs.
Available weight for fuel: 1540 lbs.
Reserve fuel: 402 lbs
Fuel for flight = 1138 lbs.
Fuel burn (low guestimate) 402 lbs/hr and about 1/2 ff of the Mustang.
Hours to fly 1125 miles 2.8 hrs.
Block Speed 402 knots!

We all know that this is outright impossible, period, end of story..

I am sure that Eclipsebooger is going to come back with some attempt to discredit this, but these are numbers straight out of KKA's data.

BTW, try and buy a Flight Manual from Eclipse...They cannot be had for love nor money.

Stan Blankenship said...

guys,

Don't make it tough on me. It is not fun to delete a comment when there is otherwise good content.

Needling is OK, name calling isn't!

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yenolo said...

Eclipseblogger, you have blinders on!

I will ignore the comments against the Citation I, this is not germane to the discussion, nor is it relevant to what KKA is offering for range and speed. BTW, check what the full fuel on the Citation is before comparing it to the full fuel on the Eclipse.

So back to the subject matter. You are right, the information is not on the website, the website leaves off key numbers I would suggest to you deliberately so people cannot figure out the numbers and come to the conclusion that this 'dog won't hunt'.

I gave a fuel flow number conservatively weighted in Eclipse's favor of 60 gallons per hour, we then divide that number into the pounds of fuel we have for cruise to see how many hours this plane is going to be flying, that is how we come up with that number of 2.8 hrs.

Now if we use the numbers that you are supplying, assuming we agree that the 402 lbs is the correct amount of reserve fuel for 100 mile NBAA reserves ( I personally think that this number is dangerously low) then using your numbers you need to take the 3.75 hours and divide it into the fuel remaining for the flight which is 1138 lbs, and you come up with an equally incredulous number an average fuel burn of 303 lbs per hour. Do you really believe that this plane will burn an average of 303 lbs per hour?

If you believe this then I guess you will believe anything..

Eclipse DOES NOT HAVE CERTIFICATION TO 5950 LBS, this is a another area where you are gullible. Yes I know that they are working on it, but they are not Certified to fly at that weight. Certification for the those of us in the industry is not a PROVISIONAL TYPE CERTIFICATION, you will not hear serious Aviation Companies claiming they have Provisional Certification and claiming that they are CERTIFIED, this is acinine, if you take comfort in this then you are in for some real disappointments coming your way.

I appreciate that you are trying to present the other side of the story, but your posts are more biased than the posts I read on the other side of the table. I think if you moderated your opinion, tried to be a little more objective, you might gain more traction.

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airtaximan said...

average fuel flow of 53 gallons per hour is not credible.

yenolo said...

Eclipseblogger, I will try and make the maths really simple for you;

MTOW 5800 LBS.
Payload 710 lbs
Empty Wt 3550 lbs
Wt for fuel 1540 lbs.

Reserve fuel 402 lbs.
Remaining fuel 1038 lbs.

Back to the Snake oil means of accounting, where does the fuel for the flight of 1232 lbs come from???

Again, with 1038 lbs available for the flight, simple maths, divide this by 3.78 hours, fuel burn per hour 303 lbs per hour. Really simple stuff, I am surprised you don't get it.

Now, if you take your example and use the fuel for the flight of 1232 lbs, and you add the fuel you now say is reserve fuel of 'about' 450 lbs of fuel, it means that you had on board a total fuel amount of 1682 lbs of fuel.

Going back to the example of the loading, you cannot put that much fuel on the plane you will be 142 lbs over weight.

Or if you use Eclipse numbers for the Cruise fuel of 1232 lbs, you are telling me that this plane will do an approach, climb to 4,000 feet, fly 100 miles and do another approach on 308 lbs of fuel, it simply will not do that.

So the Eclipse, as "Certified" by the FAA cannot do the numbers...

Let's also state for the records, we are talking about a stripped down version of the plane, that is approximately 150 lbs lighter than what is being seen on production aircraft. Add also the fact that these production aircraft are not flying with the full compliment of equipment and have not been Certified for Known Ice.. who knows what this will add to the plane when Eclipse goes for that Certification.

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yenolo said...

Eclipse Blogger, my last post on this subject. To humor you let's use the figures on the Eclipse website in for their non-certified plane;

1100 nautical Miles.
1232 lbs block fuel.
3.8 hrs flight time.

Fuel flow - 48.4 gallons per hour or 324 lbs/hr.

O.K. so tell us, do you really belive that a twin engine jet will hae a block fuel burn on a flight of 1100 miles of 324 lbs per hour? You see, this is why people in the industry just do not believe the lofty claims of Eclipse.

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airtaximan said...

eclipseblogger,

Do you really buy into everything Vern says...

if the "improvements " he is now claiming will give the aircraft the added performance, why didn't he just incorporate them in the type design to begin with? Do you think they had the computing power and advanced design talent to know how far short they were going to fall with the certified E-500? Well in advance? Why didn't they certify a better performing airplane? Are these "improvements" so high tech and revolutionary that they took a few years to come up with? They are tuning a FADEC, adding tiptank (1960's era) size, and tweaking draggy cripcrap hanging off the plane...NONE OF THIS IS ROCKET SCIENCE...why wait until years later after post-certification to intorduce these improvements which are designed to get back to approaching the guarantees?

Just one more thing that does not add up in this program...


My gut is that something is up...and these improvements will be required to basically meet the current stated performance when all is said and done...just a hunch...a big mess...