Tuesday, December 19, 2006

Guest Contribution - Eclipse Correspondence

yenolo provided the following, I guess it means we won't be seeing 50 units delivered by the end of the year, or ah make that 10, or ah maybe just 3 or 4...just wait until next year, were gonna do 500:

Dear Eclipse customers:

As we anticipate the end of 2006 we can reflect upon a year of great strides, frequent challenges and significant progress. As the year ends, I and all of the Eclipse Aviation employees wish to extend to all of you a peaceful and joyous holiday season. We want to wish you a happy New Year.

Prior to the end of the year, I want to update you on the manufacturing progress and recent developments at Eclipse Aviation.

We are making steady but slow progress toward delivering the first aircraft and obtaining our production certificate. The FAA has been very good about staying over weekends and is working diligently with our team to evaluate our manufacturing and quality processes. The 37th aircraft has now started friction stir welding and there are 11 aircraft in final assembly positions resting on their own landing gear. Production aircraft three has completed production flight test and recently emerged from our new Sunport 3 paint facility with a black and red striped LX-3 paint scheme. Two additional aircraft are in production flight test and should fly sometime this week depending on the Albuquerque winter weather.

I am also happy to report that the pre-production flight test fleet is progressing as expected through the fleet wide modification period. N505EA has been flying for more than two weeks and has been performing exceptionally well. This aircraft has been flown by the FAA and is being used to validate the training program. N502EA will be back in the air by the end of this week with the larger tip tanks. In January, N503EA and N504EA will also be back online. So, overall, you should feel confident that the flight test fleet will be completely up and running at the beginning of 2007 with the goal to certify the remaining performance modifications as soon as possible.

On an organizational note, I also want to let you know that our CFO, Peter Reed, has decided to retire at the end of this month. Peter will turn 62 next year and wants to transition from the hectic 80 plus hour work week that he has done for 35+ years to a lifestyle where he can afford the time to travel with his wife. While we are sad to lose a great and long-time team member, we wish Peter the best of luck in his much deserved retirement. I must emphasize that this is in no way whatsoever related to the health of Eclipse Aviation. Peter will be the first to tell you that his past seven plus years at Eclipse have been both rewarding and challenging. He is proud to have participated in our growth from two employees (Peter was the second Eclipse employee) with only a concept to almost 1,000 employees and a certified aircraft. A search for Peter's replacement is underway.

As I promised in an earlier communication, we will continue to give you regular updates on the progress at Eclipse Aviation. The next communication will come in January, following the holiday break.

Your Customer Care team will be available for routine business December 27th, 28th and 29th. In January routine business will commence on Tuesday, January 2nd. In the event of a serious problem during the holiday period, please call the Eclipse Aviation main number at 505-724-1140 and customer care will be notified to return your call.

Once again, thank you for your continued support and contributing to a great and monumental 2006.


Vern Raburn

President & CEO


Stan Blankenship said...

Regarding the departure of Peter Reed, it's like Confucius said, "The smart rats are always the first to jump off a sinking ship"!

ColdWetMackarelofReality said...

I take a different view here than Stan apparently.

I would like to ask Vern, err, I mean EB,

Has the Board of Directors at Eclipse finally started to act like they have a pair?

A driven professional like Peter Reed does not suddenly 'decide' to retire and be gone in the next 2 weeks - all that was missing from that non-admission was the perennial favorite 'to pursue other interests'.

I wonder if Reed was 'retired' for any part he might have played in the numerous lawsuits and near-lawsuits that Eclipse has been involved in, like Williams, or Aviace, or Aspen Avionics? Was that not his specialty at AM General?

Given the massive technical and regulatory issues even a well-managed company has to deal with in bringing a new aircraft to market, the suit-happy and not-so-well-managed Eclipse sure appears to have been wasting precious time and money pursuing unrelated issues and only bringing more and more negative attention on itself due to the behavior of certain executives and the trickle-down effect that has on any organization.

With the Aspen suit especially, it looks like an attempted Intellectual Property grab, disguised as a frivolous lawsuit, since the product was allegedly designed well before either guy joined Eclipse. Reviewing the articles in ANN and AIN, it appears the Aspen counter-claims paint a very different picture of Eclipse than we have seen in the mainstream aero media - one of a company that lies to its vendors and investors and employees as well as to its customer base.

Let us hope that this is just the beginning of a long overdue restructuring of the executive team at Eclipse and hopefully one that results in some experienced aerospace executives to join Dr. Masefield and Ms. Bilson. This could be the most positive news to come out of Albuquerque for some time.

Stan Blankenship said...


My take:

Reed busted his balls and was counting on those stock options he figured would be worth at least a couple of million. Then something that felt like a cold wet fish hit him in the face and he realizes, that ain't going to happen. Plus there is no point in getting tainted with the financial smell when several hundred trusting customers lose their deposits in what may become the world's biggest aviation scam.

Stan Blankenship said...


BTW, I am impressed with eb, he knows his stuff. Did you notice when he described the FSW process how precise his words:

"The tooling to hold down the parts is quite substantial including vacuum hold-down of the skins, and bolt-down clamping bars for the parts. As I understand it...".

Yes, he understands it well and must have taken good notes when he took his tour through the ABQ factory.

eb, we do sincerely appreciate your participation.

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

My pals in the land of never never tell me that like their range, cruise speed and fuel burn, Eclipse is going to miss another mark, the deliveries this year. Certainly nothing before Xmas, and the Feds will be back there on the 26th, but the more they dig the more they find, the more work Eclipse needs to do.

I am told that the Kool Aid hangover is starting to take it's toll, Peter Reed was one of those that could not take the pain, apparently there are others that are about to take early retirement as well.

The letter itself is really a downer for a position holder, all it is saying really is BELIEVE all this shall come to pass...This must have been written by someone else, it does not sound like our buddy KKA..

airtaximan said...

Vern on Reed's departure:

"I must emphasize that this is in no way whatsoever related to the health of Eclipse Aviation."

I think what he MEANT to say was:

"I must emphasize that this is in no way whatsoever related to the POOR health of Eclipse Aviation."

..."read my lips: NO NEW TAXES!

A "normal" transition usually involves findng a replacement before you leave. Sounds like someone gave someone two weeks notice...

Green-or-Red said...

Let me see if I understand what is going on.
Current openings :
Director of Structural Analysis
Manager of Fatigue Analysis
Fatigue Analyst
Structural Analyst
Maybe the company cannot function without engineers who take the blame. But can they function without a CFO to raise money and pay the bills?

Niner Zulu said...

I just checked out the Eclipse Owner's Forum, and there is no mention in the most recent posts about the lack of deliveries for 2006 or the departure of the CFO.

In fact, it's kind of creepy. It's more like a Stepford Forum. There is a post about a factory tour where every Eclipse employee was described as being "happy, busy and nice". Another where an owner is asking others what options he should select for his aircraft (which he still believes is going to be delivered on time). It is riveting discussion....no really.

Anyway, there's no gloom and doom at the Eclipse Forum - the weather is fine and it's a zippity doo dah day!

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

It probably isn't a good sign that the CFO is leaving this suddenly. With all of the other "problems" that currently appear to exist such as not being able to get the production certificate or otherwise deliver product this may be a sign that the BOD is beginning to get involved. One of the first actions for the BOD could very well be to place their rep in the CFO spot so there is absolute transparency.
If I were a customer or investor I would be deeply concerned that Eclipse can not find a way to deliver airplanes now that they are certified. It isn't unheard of for the PC to trail the TC by a long period of time. But in that situation airplanes are usually delivered by involving the FAA in Airworthiness inspections so they can be assured that the airplanes were built to Type Design. The fact this is not occuring leads one to believe that something else is going on. Very disturbing.
Merry Christmas and Happy New Year to everyone that has been involved in this blog. See you next year.

yenolo said...

My insider sources tell me that the letters have gone out for the next batch of 60% funding deposits. This mailer is now covering over 300 planes, this in simple maths is about $180m in unsecured interest free (for 6 months)funding that KKA is playing with, assuming that they all pony up.

KKA reminds me of Michael Milken, he has the panchant for messing with peoples minds telling them all is well, "we are kicking Cessna's ass", whilst he has his hands in their pockets.

I am waiting to see KKA announce that he has engaged Tony Robbins to come and boost the Kool Aid Brigade in ABQ to help them realize their target of 300 planes from January to June, on most of our calendars that's 6 months or 130 working days. That is a production rate of more than two planes a day!

Even if he could produce this number of planes, he cannot train his customers (followers) at that rate, each of them are taking 3 weeks, so just to get them into planes, assuming that 100 of the 300 planes he will be delivering are going to end users, (and I think that this number is low as Day Jet are not starting their ops until May now), he needs to have 300 training weeks available. Apparently there are but a handful of pilots that have gone through the training todate, this is going to present the next problem for KKA. I can see it already, ABQ journal news, "Pilots estate sue Eclipse for improper training" and this wil be followed by another of these mea culpa "lapeses in quality"but we are diligently working on this with the FAA from KKA. I don't know the law in NM, but there are states with onerous vicarious liability statutes, if NM is one of those, the corporate veil is not going to help KKA.

Good businessmen see these disasters coming and do something about it, KKA thinks the light at the end of the tunnel is daylight, the rest of the world are screaming at him that this is a speeding train, but he cannot see this. It is about time that he came clean with a revised business plan, scaled down to something that is acheivable, viable, safe and stops the bull.