Tuesday, February 27, 2007

Bambazonke's Views on the Secondary Market

Reading the market econometric studies that are being promulgated by my learned blogger colleagues, let me make a few comments, based on what I KNOW;

1. The Eclipse market has fallen like an oak felled by an axe. Inquiries that were reasonably brisk up until the news broke, have just died.

2. Platinum positions are languishing on the market, look at the days since listed, they are growing by the day. You can get a Platinum position, for under $1,6m and not even try.

This is a position that includes the options and includes the fact that there is no CPI unless the CPI rises above 3.6% then you pay the difference between 3.6 and the prevailing CPI for the term it was above 3.6.

Contrast this with the position that EAC is selling, you will note that you can purchase a plane today from them for 2-300k less than one that will be delivered 2-3 years after yours. This is bad economics for EAC, it means that because their order book is so deep, that they have created their own 'boogie man', the person that purchased a position in 2000.

So as hard as they try and peddle their planes, there will always be others out there that can undercut them for the same product by significant margins and deliver it sooner. This is a sure fire recipe for EAC to go broke, if the other plagues and pestilences that are afflicting them don't perish them before this.

3. All buyers want to know when delivery will take place. Right now no one can answer that question and EAC has gone into mum mode, so there is no possibility of getting an answer from them. Whilst this atmosphere prevails, the chance of making a sale on an EAC-500 wonder jet are slim to none.

4. There is something interesting about the prospective buyers that are in the market. EAC has managed to generate interest in the non flying fraternity. This you might say would be a plus, but not really, they are less trusting of the mantra that is emanating from ABQ of 'trust me it'll all be fine' than the position holders that have enough aviation knowledge to be drunk on their own perceptions of what is good and bad.

So this segment of the buying public is harder to impale with a sales contract than the pilot with the ego-jet mentality.

5. In this Internet day and age, where information is disseminated to the four corners of the globe at the flick of a send button, the price that the last wonder jet sells at, is the price that the next one starts at. Unfortunately for KKA and his merry gang of followers, many of these sellers are not banking on making the mortgage payment based on what they realize on the sale of the jet.

So whatever one of these sellers lets the wonder jet go for in the market, is not necessarily going to change his lifestyle. BUT, as each plane changes hands at a lower number, forever spiraling down into the abyss of the price range of the Barons and other lesser planes, the life style of one Vern Raburn and his crew of desert imbibers will be immeasurably altered, unless of course he can resurrect Milton Friedman and come up with some economic spin on how as you lose x dollars on each plane, the market economies are such that you can make up the short fall on volume.

Kenny, EO38X and EB, take it from your sparring blogging buddies, this is the time to sell, it won't get any better than it is now

100 comments:

Stan Blankenship said...

Can hardly wait to see what kind of a happy face Mike Press paints on the current situation.

Gunner said...

I've made the Enron culture comparison before. I'm not comparing Ken Lay to Vern Raburn, because I don't think Vern has that kind of larceny (desperation?) in his heart at this point in time. But I use Enron because it's provides an important object lesson.

Question: Does anyone know when Enron's stock crashed?

Answer: It didn't. Here's some price history:
Aug 2000: $90
Aug 2001: $46
Oct 2001: $15
Nov 30 2001: Zero

So, why did so many people lose their life savings when they could have sold at $80, $60, $40 or $20? The answer is simple. They were "marks". They didn't start off as marks, as the company didn't start off as a scam. They became marks when the Company's continued existence and the CEO's unflagging ego came to overshadow all other concerns.

Some were True Believers. Others had already planned on how they would spend the huge profits when the stock rebounded and climbed to $130, as promised.

In then end, though, they were ALL "marks".

Gunner

EclipseBlogger said...

BOOBazonke's Views on the Secondary Market

Reading the market econometric studies that are being promulgated by my learned blogger colleagues, let me make a few comments, based on what I KNOW;

1. The Eclipse market has fallen like an oak felled by an axe. Inquiries that were reasonably brisk up until the news broke, have just died.


I guess your job must be manning the inquiry phone lines. Since you state that you KNOW these statements to be true, please explain how you know? What positions are you trying to sell that would give you this information? This is SPECULATION.

2. Platinum positions are languishing on the market, look at the days since listed, they are growing by the day. You can get a Platinum position, for under $1,6m and not even try.

This is a position that includes the options and includes the fact that there is no CPI unless the CPI rises above 3.6% then you pay the difference between 3.6 and the prevailing CPI for the term it was above 3.6.


Platinum positions are protected for CPI up to 4%, not 3.6%. I guess you didn't KNOW that. Unless you have a position for sale, or have called on the positions listed, you simply cannot tell from the listings which one have sold, which ones are willing to deal, and which ones are just "feelers".

Contrast this with the position that EAC is selling, you will note that you can purchase a plane today from them for 2-300k less than one that will be delivered 2-3 years after yours. This is bad economics for EAC, it means that because their order book is so deep, that they have created their own 'boogie man', the person that purchased a position in 2000.

Let's say you bought one of these positions. You would have to pony up the full 60% deposit plus the sellers profit premium of (just a rough low-end number) say $300,000. The total sales price for the aircraft would be about $995,000 + $140,000 in options + $300,000 premium for an all up price of $1,435,000. Your total cost today for the transaction is $981,000 owed to the seller, now. Until Eclipse gets into production and deliveries of scale, to put up that kind of cash, I would expect that you would get a discount off the Eclipse sale price where you would only have $150,000 deposit and an additional 2 year wait.

So as hard as they try and peddle their planes, there will always be others out there that can undercut them for the same product by significant margins and deliver it sooner. This is a sure fire recipe for EAC to go broke, if the other plagues and pestilences that are afflicting them don't perish them before this.

It doesn't cost Eclipse anything other than back-end sales. You've already stated that the order book is so deep, it can support any production rate Eclipse can muster, or even propose. Assuming that this is a viable business, the back-end sales will fill in further as deliveries take place. If this is not a viable business, it won't matter.

3. All buyers want to know when delivery will take place. Right now no one can answer that question and EAC has gone into mum mode, so there is no possibility of getting an answer from them. Whilst this atmosphere prevails, the chance of making a sale on an EAC-500 wonder jet are slim to none.

Here I agree with you, but for some strange reason Eclipse continues to sell new plane positions each month.

4. There is something interesting about the prospective buyers that are in the market. EAC has managed to generate interest in the non flying fraternity. This you might say would be a plus, but not really, they are less trusting of the mantra that is emanating from ABQ of 'trust me it'll all be fine' than the position holders that have enough aviation knowledge to be drunk on their own perceptions of what is good and bad.

So this segment of the buying public is harder to impale with a sales contract than the pilot with the ego-jet mentality.


I've got to disagree with you here. Those mantra-toting non-aviation types are probably just as eager to say that they own a jet, and therefore just as blind as current position holders. It's the corporate flight departments that have to show capital justifications that will stay away.

5. In this Internet day and age, where information is disseminated to the four corners of the globe at the flick of a send button, the price that the last wonder jet sells at, is the price that the next one starts at. Unfortunately for KKA and his merry gang of followers, many of these sellers are not banking on making the mortgage payment based on what they realize on the sale of the jet.

So whatever one of these sellers lets the wonder jet go for in the market, is not necessarily going to change his lifestyle. BUT, as each plane changes hands at a lower number, forever spiraling down into the abyss of the price range of the Barons and other lesser planes, the life style of one Vern Raburn and his crew of desert imbibers will be immeasurably altered, unless of course he can resurrect Milton Friedman and come up with some economic spin on how as you lose x dollars on each plane, the market economies are such that you can make up the short fall on volume.


If that is true, what were the prices that the last three position sold for? You should be able to tickle a few keys and get me that information. Of course, all of your proposed spiralling also means that positions are moving, but at lower prices, which is in direct contradiction to your previous premises of stalled sales.

Kenny, EO38X and EB, take it from your sparring blogging buddies, this is the time to sell, it won't get any better than it is now.

You may be right. Unless Eclipse raises the list price, position sale prices will probably not go up much.

airtaximan said...

With all the predictions of demise and collapse of the market for E-clips positions...it dawned on me that:

1- Vern's only a freind's check away from being OK for another 6 months, and its been this bad before (OK, almost this bad)
2- The business case for the plane was never there, so why should it make a difference now, unless Dayjet folds sooner rather than later. They are only a friend's check away from another 6 months in business as well...
3- the guys who bet on an E-clips position being worth a premium, probably still believe - to them, not that much has changed recently. They were (I'll be polite) INCLINED to believe from the beginning, and have stayed along for the ride this long.
4- the guys who wanted the plane to fly have already sucked up the performance shortfall, poor quality and delays...so what should turn them off now? They are probably not going to do anything different right now, either.

So, I don't see a dramatic affect, at least not the one predicted. I just think the "die-hards" are just that. The companies that have bought in as suppliers are not going to cut and run - they probably believe Vern can get more money, so why cut now?

I'm not saying any of this is rational and reasonable, just consistent with the decision-making up until now.

We'll see.

Stan Blankenship said...

Hey Frank,

FAA records show one Mustang delivery.

You are sitting on a full up TC w./FIKI, a PC, an established manufacturing organization bolstered by those folks driving around Indy with New Mexico plates, what's the excuse for Cessna non-performance?

Gunner said...

EB said,
Eclipse continues to sell new plane positions each month.
If you talk the talk of challenges, you must walk the walk of answers.

Source, please.
Gunner

Green-or-Red said...

EB said,
"Eclipse continues to sell new plane positions each month."

At one time the head of sales instituted a "bell-ringing" for every sale. That only lasted a few weeks and then it got quiet. I wonder why?

On another note, I hear that Eclipse is looking for a new VP of Engineering. Seems like the old one is being made VP of New Business Development to expand Phostrex.

bambazonke said...

EB,

I guess your job must be manning the inquiry phone lines. Since you state that you KNOW these statements to be true, please explain how you know? What positions are you trying to sell that would give you this information? This is SPECULATION

This is not speculation, it would be more correct to call it observation. Look at the days on the market for the aircraft out there, if they were selling, the days on the market would not be increasing, if they are not selling the days on the market increase. This is not rocket science..

Platinum positions are protected for CPI up to 4%, not 3.6%. I guess you didn't KNOW that. Unless you have a position for sale, or have called on the positions listed, you simply cannot tell from the listings which one have sold, which ones are willing to deal, and which ones are just "feelers".
This information was supplied to be me by a seller, I will see if I can get him to verify this. In doing my research for that little op ed on the market, I also came to the conclusion not all contracts are created equally. Either that or the sellers don't know what their contracts actually say, and that would not be surprising after reading about the waiver clauses..

It doesn't cost Eclipse anything other than back-end sales. You've already stated that the order book is so deep, it can support any production rate Eclipse can muster, or even propose. Assuming that this is a viable business, the back-end sales will fill in further as deliveries take place. If this is not a viable business, it won't matter.

We differ on this slightly. If a buyer can get a plane for less money sooner,do you think he is likely to pay more and wait longer? I don't think so. Now this assumes that EAC are in production, I agree with you if the production line is stalled a buyer would not want to speculate on the position to the extent of purchasing a platinum position. However, this explains why the market has stalled, buyers are in no hurry to step up, they are still being told by EAC that 2008 is when they can expect a delivery, so that date is static,(and has been for at least 12 months to support the view they are not selling any volume of aircraft), but this dynamic will change as soon as KKA get's on his soap box again and advises the world that production has resumed and wonder jets are being made at a rate of 1.4 a day, or whatever number he chooses this time. When that happens normal buyers logic will apply and he will take a less expensive aircraft sooner. Cessna, Piper and others learned this lesson of too long an order book years ago, KKA is learning the lesson the hard way, and this lesson is going to be an expensive one for him. Most manufacturers, for example Piper on the Meridian, limit their orders to prevent this kind of impact on their pricing. The fewer the number of launch planes, the less erosion there is on price when the retail customer sells. Now remember one record EAC can claim, is the longest development record of any aircraft in the 6000 lb or less category. Position holders needs have changed, business requirements for an aircraft in many cases have been satisfied with readily available solutions, position holders may have had a divorce to change their dynamics, medicals could have been lost, etc. etc, but avarice is likely to have been the reason that some of these position holders have held on, but when the plane is finally delivered they are going to sell, and the sudden supply on the used market, or slight used, nearly new, however you want to describe it is going to bring into effect the normal supply/demand forces, and prices will fall. This will severely hamper EAC's ability to continue to sell positions down stream for higher amounts of money. Their only salvations would be to come out with a new model and raise the price and change the demand that way, but KKA and his merry band of followers, have locked themselves into contracts way down the production stream.

If that is true, what were the prices that the last three position sold for? You should be able to tickle a few keys and get me that information. Of course, all of your proposed spiralling also means that positions are moving, but at lower prices, which is in direct contradiction to your previous premises of stalled sales.

This paragraph was not well written, I am predicting what will happen as these positions will unload. As for the prices that the last 3 positions that sold, I have given you already the price that a plane in the low 300 serial numbers changed hands at before the latest debacle, I am prepared for a little wager with you, the next plane in the low 300 serial number range will go for less than the last one, loser makes a donation to the winners favorite charity, are you on?

This is not my field of work so I cannot tell you what the last 3 aircraft sold for, but I sure that someone in the business like Mike Press could rattle those numbers off for you if you are interested in knowing them.

Black Tulip said...

As a newcomer to this debate I have a few questions. They relate to the Eclipse 500 being designed as a scaled down version of a 'business' jet.

Economics: Is this a viable product as currently priced? You wouldn't expect that cutting the size of a car in half would cut the cost by half. Does a 6,000 pound Eclipse cost half as much as a 12,000 pound Citation to manufacture? You wouldn't think that important components like engines, avionics would cost much less. What is the manufacturer's plan to deliver returns to the shareholders if scaling is an issue?

Performance: In developing a reduced size jet, two things don't scale down - the size of people and the viscosity of air. However, the aircraft volume goes down as the cube root of linear dimension. Will the half-size aircraft achieve near full-size speed, range and payload?

Training: Half-size jets presumably risk making smaller, shallower craters but training is still important. Simulators have long proven optimal for the regulator and insurance company. What are the plans for the Eclipse 500? Will piston-twin pilots have their first vee-one cut in the aircraft?

Fleet Size: Combined estimates of fleet size for Very Light Jets would have the sky dark at noon - an overcast of VLJs at FL410. Does the real demand support the proposed supply? Will the air taxi market emerge for Eclipse? Scaling is again the issue - will folks squeeze into a VW taxi rather than a limo?

Black Tulip

The tulip mania peaked in the Netherlands during the 1630s. The black tulip was the most sought after, until found to be biologically impossible.

Stan Blankenship said...

black tuplip,

Welcome aboard, black tulip is a nice metaphor for the Eclipse program.

Many of your comments related to the scaling issues.

Scaling was addressed in Part 1. on the very first post last April.

Problems with down sizing the engine were discussed May 18, 2006 "The Problem With Small Turbines."

And somewhat in the August 4 post on "Cinderella's Magic Slipper."

Training was discussed February 18, "Training/Mentoring."

Don't know what the training requirements might look like but the airplane weighs less than 6,000 lbs so the AFM does not need to display engine out performance.

The FAA has confirmed what others reported here that Vmc is less than stall speed so a multi-engine ticket is not required for the airplane.

This is really a remarkable situation because normally when we think of a jet we think of power, don't you just love to hear the sound of a jet engine spooling up?

It gets a guys testosterone going!

Sorry to disappoint,the Eclipse doesn't have much power, doesn't produce much thrust so an engine out event on takeoff isn't going to put you over on the parallel taxiway.

It is a non-event unless that is, the end of the runway is coming up fast and you don't have balanced field length!

Ken Meyer said...

Stan wrote,
"The FAA has confirmed what others reported here that Vmc is less than stall speed so a multi-engine ticket is not required for the airplane.


Sorry, Stan. That's not right. The airplane has no published Vmc, so it is considered centerline thrust. You still need a multiengine rating to fly a centerline thrust twin. What this issue relates to is whether or not a pilot with a centerline thrust limitation has to get that removed to fly an Eclipse. Many of the military pilots have that limitation because F-18s and other twin military jets have no published Vmc. Pilots of the Cessna 337 and A500 have that limitation.

Furthermore, if you get you multiengine rating in an Eclipse, it will come with a centerline thrust limitation.

I think most people with much piston twin time would agree that having Vmc below stall in all configurations is a good thing. I don't agree that the absence of a published Vmc somehow indicates a lack of power anymore than the categorization of the F-18, F-111, A-10, F-15, F-4 and others as centerline thrust means they lack power.

Ken

mike said...

I've got to comment, I worked in flight test as a QA inspector. I left Eclipse because my integrity got the better of me.

I have one comment to everyone, I know first hand the plane is dangerous. It's built like a Yugo with bad bearings pre-installed. It's a piss poor design that will eventually have a critical failure when least expected.
Having been offered several rides on the test fleet, I never took one out of my personel safety concerns.

I am happy to see them fail though, unfortunately, I still have a few friends (real aircraft folk from out of state) that are still obligated to work there for a short period of time.

It's funny how all the New Mexican's got suckered, the whole thing sucks.

One last thing, to whoever wants to buy one of those flying Yugo's, thing hard about it.

Gunner said...

Mike-
Welcome and thanks for coming forward. Hopefully, it'll encourage others to do so. Certainly, former employees of a different mind should have no qualms. Anybody seen any of them, yet?

In any case, yours is perhaps the most important post I've read on this Blog from the beginning. That is, if you are who you claim to be, which I expect will be vociferously challenged any moment now.

D-Jet is looking better to me by the day.
Gunner

gadfly said...

mike

Not all New Mexicans were suckered . . . we were “out voted” by our king . . . er, governor, Bill Richardson, who holds the purse strings, and is running for president.

Here’s a couple recent quotes from the media:

“Richardson also raised hackles in New Mexico in June 2005 when he earned another speeding ticket in his Lincoln Navigator, and earlier when he coaxed the legislature to buy a pricey $5.5 million private jet with leather seats and a wet bar.”
and . . .
“Gov. Richardson's new Cessna Citation Bravo.” . . . paid for by New Mexico taxpayers.
At least the man has good taste!
gadfly

mike said...

I've been reading this blog for about a month now. I have nothing to prove and don't really care if anyone believes me. Guess I'm just getting it off my chest. Ask away I say.

EclipseBlogger said...

Gunner said... If you talk the talk of challenges, you must walk the walk of answers. Source, please.

The source was a recent conversation with my internal contacts. I know you won't be satisfied with that, so check the recent Flight International email reports on the Asian Convention. Eclipse sold 7 new positions. I'll see if I can come up with the actual report, but cannot find it at the moment.

EclipseBlogger said...

BOOBazonke said... This is not speculation, it would be more correct to call it observation.

That is not what you said. You specificly stated: "let me make a few comments, based on what I KNOW"

BOOBazonke said... We differ on this slightly. If a buyer can get a plane for less money sooner,do you think he is likely to pay more and wait longer?

The guy buying the early position has a great deal more cash invested and at risk than the new purchaser. The cost of money alone would be about $50,000 per year.

BOOBazonke said... This paragraph was not well written, I am predicting what will happen as these positions will unload.

Yes, poorly written. It also is not the "what I KNOW" that you stated to begin with. It looks like you KNOW very little. It must be quite an OpEd piece.

bambazonke said...

EB,
Firstly the Asian Aerospace Convention was before the latest rift, I daresay that they would not get the orders today if they were aware of the current status, the point of my piece.

What do you think EAC would say to a customer with a Platinum position that went to them today, assuming they will communicate with their customers, who asked to rescind his contract because of the delays and the false information that they have put out about how far along in the process that they are? This question is asked sincerely, I am not having a go at you, do you think that EAC would allow him out whole?

The reason for the question is this is the real test of values, if the prices are really as good as EAC and you think they are, here is a position that would have equity in it, in my mind they should write him a check and let him out.

airtaximan said...

just a little reminder...

Robert J. Collier Trophy

The Robert J. Collier Trophy is awarded annually "for the greatest achievement in aeronautics or astronautics in America, with respect to improving the performance, efficiency, and safety of air or space vehicles, the value of which has been thoroughly demonstrated by actual use during the preceding year." The list of Collier winners represents a timeline of aviation, as many of the awardees mark major events in the history of flight. Robert Collier commissioned the trophy in 1910 with the intent to encourage the American aviation community to strive for excellence and achievement in aeronautic development.

Gunner said...

Mike-
You said, "Ask away" and so I will.

I'm still trying to get a real good handle on this AVIO deal and just how integrated it was with Avidyne software.

Questions (if any answers are proprietary, by all means defer):
- Was Avidyne providing the actual hardware or only programming third party hardware in accordance with Eclipse engineering specs?

- Was the AVIO system (as I ASS-ume) basically a customized and name branded Avidyne, of-the-shelf product or was it an Eclipse designed system from ground up?

- Were the system buses proprietary to Avidyne or standard third party?

- What machine language does Avidyne use? How about Honeywell? I keep getting conflicting reports that C+ is the standard, but it simply doesn't seem to provide the necessary reliability factor.

- Finally, and this I would dearly LOVE to know, does the Eclipse contract call for ownership of source code created by Avidyne?

Thanks in advance for any answers you might provide.

Gunner

Ken Meyer said...

"What do you think EAC would say to a customer with a Platinum position that went to them today, assuming they will communicate with their customers, who asked to rescind his contract because of the delays and the false information that they have put out about how far along in the process that they are?"

I expect they'd take his money and thank him.

Guys with Platinum positions are able to sell them at a steep premium on the secondary market (because of course their price was so attractive in the first place).

I can't imagine anybody with a Platinum position would want to give it back to Eclipse for just his deposits back when he could sell it for a profit. But if for some reason he wanted to, I imagine they'd gladly take it back.

Eclipse did acquire a few early positions last year and put them on the market at a pretty good premium as I recall.

Ken

paul said...

Hi Mike-
Glad you saw the light. Taking abuse from the feds on behalf of the company wasn't fun was it?
Is that young woman that was made an inspector with six months total experience still up at SP2?
Or is all that is left twelve week wonders?

gadfly said...

And the night got deathly quiet, and his face lost all expression.
‘Said, if you’re gonna play the game, boy, ya gotta learn to play it right.

. . .

You got to know when to hold em, know when to fold em,
Know when to walk away and know when to run.

. . .

And somewhere in the darkness the gambler, he broke even.
But in his final words I found an ace that I could keep.

. . .

You got to know when to hold em, know when to fold em,
Know when to walk away and know when to run.
You never count your money when you’re sittin’ at the table.
There’ll be time enough for countin’ when the dealins done.

Apologies to Kenny Rogers

EclipseBlogger said...

BZ said... Firstly the Asian Aerospace Convention was before the latest rift

The recent "rift" is only days old. I don't think even you could have an accurate picture yet of the effect. The news will be out shortly, I'll let you wait until then.

BZ said... What do you think EAC would say to a customer with a Platinum position that went to them today, assuming they will communicate with their customers, who asked to rescind his contract because of the delays and the false information that they have put out about how far along in the process that they are? This question is asked sincerely, I am not having a go at you, do you think that EAC would allow him out whole?

Ken beat me to it

Looks like Paul is back with another hit and run. I can hardly wait.

paul said...

Hit and run? I no longer have any information about the little airplane that can't, so I haven't posted anything.
The only info I can add is that I am now working on a military prototype with several ex-eclipse employees, and more arrive weekly.

gadfly said...

Seriously,

Ninety five years ago, some engineers had designed and built a revolutionary method of transportation. Their motives were of the highest moral level. But on April 15, 1912, their best intentions did not save the lives of over 1,400 persons.

Today, we have a little vehicle, based on the flamboyant bragging of certain persons who claim that they know more than the others who have based their methods and design on over a century of empirical testing and application.

Some of you are concerned about your “investment” . . . I can appreciate that. I have lost hundreds of thousands of dollars in investments based on trusting people . . . taking them at their word. And I am not one of the “independently” wealthy. “Pushing 70", I still put in a full nine or ten hour day.

Somewhere is all this discussion, each of you must decide “which is important”, your potential profit or loss, or the lives of future passengers on this little unproven aircraft.

As our new “blogger”, mike, has expressed, he would not take a test ride in this jet. And from my understanding of the construction of this little aircraft, I would neither fly in it, nor allow a member of my family to ride in it. And I am an ex-submariner in the old “diesel boats”, and a pilot, and a licensed “A&P” mechanic.

Since I could “walk and talk”, I have watched my father and others invent, design, thoroughly test, and manufacture various devices which keep each and every one of you safe, as you fly in today’s commercial and military aircraft. Never have I observed the casual attitude in the design and manufacture of an aircraft, as I have seen in this present product. To say that it is a travesty, is to give it a complement.

You people that spend your time discussing your “place in line”, scare me. You don’t even have a product. And you discuss the price of the “can of beans” . . . that wasn’t meant for eating, but for selling.

When the story comes to an end, who eats the beans?

gadfly

Black Tulip said...

Gadfly states the case well. When speculators lose sight of the subject of their speculation but only discuss paper profits then panic is sure to follow. Please see 'Tulip Mania' in Wikipedia.

Black Tulip

The tulip mania peaked in the Netherlands during the 1630s. The black tulip was the most sought after, until found to be biologically impossible.

Cessna Fan said...

This is my first post, and as a former employee I have to back up what Paul and now Mike are saying, the company has been gutted of anyone with experience, a lot of us have fled with our morals and careers intact, all that is left I hear is a few with a good deal of experience and a whole lot of 12 week wonders fresh off the grease fryer to the stir fryer, I have been watching this blog for about 2 months now and have to say it is pretty spot on.

Gunner said...

Looks like things may get interesting around here. Specifics would help.

Gunner

bill e. goat said...

Gunner, I agree with your assessment. I think Enron was blatantly, obscenely, crooked. I don't think they particularly wanted to cheat their employees- after all, the needed them, and besides, they represented chump change. But, in the end, it was necessary to deceive the employees so they would be unwitting participants in spin control (hmmmm). Enron was after big money- they wanted to cheat the public in general- their specialty was manipulating loopholes to extort exorbitant price increases, at the expense of the public. Legal, sort of (til they started cooking the books); legit- noooo way. Eclipse, on the other hand, does (well, eventually will) produce something. I agree that Vern is not a crook, just incompetent at running an airplane company. It's like he's the boss's idiot son or something: no matter how badly he screws up, he doesn't get canned (can you say, George Bush?- ha). I guess if you're the owner, you can get away with that. But when it's not your money, hmmmmm. How long will the BOD be tolerant. I am definitely against personal attacks, and by virtue of his stunning accomplishments in other arenas, think he is quite intelligent and capable, but just not at doing the airplane manufacturing thing. So far, anyway. Maybe he will get better, as he gets more fossilized or whatever he accused Cessna of. (Or maybe he will just become extinct around Eclipse- loss of habitat, as they say).

gadfly said...

The “Black Tulip” is a classic by Alexandre Dumas, and takes place in Holland in 1672. Here are some interesting lines, taken “completely out of context”, but amusing in light of our new blogger, “The Black Tulip”. So, to welcome you “on board”, here is the following:

"Oh, sir, fly! fly quick!" cried the servant.

"Fly! and what for?"

"It's a bargain, isn't it?"

"Let him laugh that wins."

"How high?"

"Black as jet."

“They had never been so near the destruction of their hopes as at this moment, when they thought themselves certain of their fulfilment.”

. . . what fun to find a “straight man”. Thanks, BT, for the opportunity! It’s been real!

gadfly

bambazonke said...

Ken,

I expect they'd take his money and thank him.

I sure that they would do that, I am asking if you think that they would refund his money?

Guys with Platinum positions are able to sell them at a steep premium on the secondary market (because of course their price was so attractive in the first place).

Do you know of ANY platinum positions that have sold in the last 10 days? If so which positions? What do you consider a steep premium?

Eclipse did acquire a few early positions last year and put them on the market at a pretty good premium as I recall.

Past tense, this is not the prevailing market.

You made the comment that this is the time to buy, would you buy a Platinum position today at $1,5m inclusive of options?

Old Troll said...

Several people (even the critics) have defended Vern as only being incompetent and egomaniacal, not criminal. How do you explain the Nimbus "deal"? In order to get more money, he fabricated a story about selling 1,000 jets. If this were a publicly traded company, that would have been criminal behavior.

BigJim said...

Stan asked Frank where all the Mustangs were. The answer is a little good news, a little bad news. The first delivery was always scheduled well ahead of the others, to get the leaseback for demo purposes. Actual customer deliveries for units 4 and 5 (3 was the leaseback) were scheduled to start in late Feb. Unfortunately a glitch with the Garmin system has delayed the deliveries. Nothing that changes software happens fast.

Mustang deliveries are running a couple of weeks behind, but the plan never had more than two or three out the door by this time. Cessna never planned to 'darken the skies' immediately after PC. There's a planned, gradual ramp up in rate over the next few months.

Ken Meyer said...

Bambi wrote,
"Do you know of ANY platinum positions that have sold in the last 10 days? If so which positions? What do you consider a steep premium?"


Indeed I do. I know of one that was sold this week for $1.625M--that's a nice profit for the seller and still a good deal for the buyer.

And that's not the only position that sold. I know of two others, so your contention that the market has died is a little bit wrong (that's like being a little bit pregnant!).

"You made the comment that this is the time to buy, would you buy a Platinum position today at $1,5m inclusive of options?

Depends on the terms, but that's in the ballpark for me.

Ken

Ken Meyer said...

BigJim said,
"Actual customer deliveries for units 4 and 5 (3 was the leaseback) were scheduled to start in late Feb."


Well, see now that's a little bit wrong, too (again like being a little bit pregnant!).

On 12/21/06, Cessna said they would deliver two more Mustangs "in the first weeks of 2007." Hmmm...that didn't happen did it?

BigJim says the problem is the Garmin system is fouled up. But that's not what I'm hearing. I'm hearing their problem is--get this--the windshield!!!

The owner of Mustang S/N 10 was told to expect a 3 month delay! So don't tell me Eclipse is the only VLJ company with delivery problems.

Ken

Niner Zulu said...

Ken,
With all due respect, Eclipse doesn't deserve defending. I'm sorry that you put down a deposit - I think many of us here really do hope that Eclipse will be successful and you will be vindicated. I would like nothing more than to be wrong, although I do admit I feel just a wee bit of satisfaction for being right so far and sparing myself and my family of the agony of enduring the slow death of the Eclipse (at least, as we knew it. In fact, most of the old Eclipse we knew is ALREADY gone - engines, avionics, paint...not much left. We're aleady on Eclipse The Sequel).

Eclipseblogger - are you somehow involved in reselling positions? Somehow, you just don't sound like a future owner. In fact, you sound a lot like a broker I was emailing back and forth a few months ago when I almost bought a resale position. Not that it matters but it would be nice to know if you have a vested interest in Eclipse.

Anyway, both of you guys sound intelligent - how can you look at what's going on and not think it looks fishy? The whole Eclipse story is taking on a weird, smelly life of its own.

Last thing - Ken you have obviously done well, but I doubt that you made your money jumping into business deals that smell as bad as this one. Don't let your desire to own THIS jet blind you to the truth. You'd look just as good - maybe better - sitting in the cockpit of a Phenom, Mustang, Djet, Piper or whatever.

Gunner said...

Ken-
Promising 3 jets by today and delivering one is a far cry from promising 76 and delivering one, n'est ce pas?

To even compare a company like Eclipse to a company like Cessna is truly comical.
Gunner

airtaximan said...

BE goat,

for Vern's track record, see SLATE, and check out how he did at Vulcan Ventures managing Paul Allen's money.

he is not the success he makes himself out to be... his real accomplishment is being friends with Gates and Allen.

This does not a successful aircraft company CEO make.

airtaximan said...

Eclipse advertising spending increases!

There's a full page ad for the E-500 in the March issue of Forbes magazine.

Folks, this takes big balls.
- E-clips cannot deliver planes, and claims to have 2500 jets sold.
- E-clips has major supplier problems, certification problems, etc.
- E-clips has 1,000 employees, incinerating cash with no revenue
- E-clips is demanding more depositors money, and they have no revenue - NONE.

So, if I'm someone who just sent in my 60% "progress" (I would not even call it this) payment, I would be really pissed.

I'm starting to think that the parody of the depositors showing up in ABQ and claiming their parts is a "best case scenario"

...at least in the parody, their money was spent on parts.

airtaximan said...

Ken,

Notwithstanding Gunner's correct statement...

Eclipse has been developing the e-500 since 1998...so I think we can cut Cessna a little slack on the delay.

In my book, they are a few YEARS ahead of Eclipse.

You have been cleverly misdirected

Metal Guy said...
This comment has been removed by the author.
Plastic_Planes said...

I, too, am a former "Eclipser". I had been heavily involved with the planning of production for them. I have been reading this blog for quite some time now (even before I left), but have finally felt compelled enough to write. While I am not one of those who'll ever have the money to buy one of these planes, I feel that having been a "part of the family", I should be able to contribute.

I have heard a lot of comments about Vern and the company. Obviously, on a blog titled "Eclipse Aviation Critic" one would not expect to find a great many supporters of EAC. This reply is not intended to sing the praises of the "little plane that could", but to lend a different slant to the whole industry.

I am glad I left EAC when I did. The long days and continuous weekends took their toll on my personal life and health. I did it because I wanted to be part of something truly revolutionary. I was there for many "first flights", and I was heavily involved in developing the production lines in use today. When it stopped being a career and started becoming a job, I looked elsewhere. I still have many friends and associates employed by EAC, and I hope they manage to keep afloat long enough for then to find something else that supports and challenges them.

My main reason, though, for hoping that EAC succeeds is because I fear that Eclipse is going to be a harbinger of other start-ups also trying to make inroads (Excel, Spectrum, Adam, Diamond, et. al.) If EAC goes down in flames, these others are going to find a much more difficult market place and a much more difficult time trying to raise the capital necessary for continued funding. I think a few of those will succeed simply because they are much farther along in the process, but it will still be another hardship to overcome. Cessna, Bombardier, Raytheon, Embraer (the "bigs") will not be hurt by Eclipse's failure. They have much too much organizational "inertia" to be hurt by EAC's ultimate demise.

Truthfully, I have seen many of the EAC employees simply throw up their hands in disgust and walk out the front door. Most of them have found homes in other aviation companies (I did), and those that I have remained in touch with are happy to have their lives back. Many folks are trying to decide whether or not they are going to be part of the success or part of the failure.

I realize this is a long-winded reply, but there truly are good people there at EAC. They are trying hard to get done what everyone says can't. While I may not agree with the management direction at Eclipse (I didn't, and I left), there is hope that they can pull this one out. If that does happen, I hope Vern and Peg publicly and graphically thank the hard working (over worked), and loyal employees that make up Eclipse Aviation.

/s/

Cessna Fan said...

I have seen aprox 200 people depart Eclipse, some gave notice, other's up and left midshift.

I left because I no longer believed what I was being fed, I hope the friends I have left behind can pull it off but seeing what they have to work with I would bet everything I have that it won't, not until the company is sold and production moved to mexico.

Oh well it was an experience, and I'm working for a real aviation company now, it may be prehistoric but I can sleep at night.

Frank Castle said...

Ken,

You can kiss my lily white tushkus, tovarisch.

"WE" are sitting on a full up TC w./FIKI, a PC, and "WE" are an established manufacturing organization, with over 1,200 aircraft delivered last year alone, and many with NO SQUALKS !!!

- E-clips cannot deliver planes, and claims to have 2500 jets sold.
- E-clips has major supplier problems, certification problems, etc.
- E-clips has 1,000 employees, incinerating cash with no revenue
- E-clips is demanding more depositors money, and they have no revenue - NONE.

No, no balls involved. Just another "legend in his own mind".....he learned from Vern all too well.....

Yes, there are glitches with the Garmins, Garmin and the FAA are working on a solution. We're not going to "wind down" our relationship because of a momentary glitch in the PFD. And as far as I know, "10" is going along just fine.

Frank

Frank Castle said...

And welcome to all the new folk at Cessna!

It's not just a job, it's an adventure !

Good luck to those who have left. I also have friends who went out there, hoping to be in on something extraordinary, revolutionary, etc. etc. They got burned, some very badly.

They are VERY lucky someone hasn't gone "postal" on them yet.....

Frank Castle said...

I think I'm gonna bitch a minute, and get on my box, if so allowed.

I wonder, since I have a conscience, my take would be, if I held any positions, after all the BS crap being pushed out of the ABQ orifice, I would dump them back on KKA and tell him to stuff his little plane, and give me my money back.

I think some of you position holders are self-serving @#$%&* who do not consider the long-reaching implications to the aviation industry that others have alluded to in past blog entries. EAC going under will not be pretty, even for the "Bigs".....

Then again, I said I have a conscience.

mike said...

QA turnover rate for 2006 was like 80%, that's what I know of. I know at this time, that almost all of the QA that was there when I started is now gone ( almost a year later). Makes me wonder, why did all the QA get up and leave? That's a question you can answer for yourself.
The shear talent of all the 'real' inspectors will never be replaced by eclipse, let's face it, everyone in the 'real' aviation business is getting the word about the place.
I also gotta ask perspective buyers how they feel about McDonalds works building the plane's they're goona fly in? Makes me laugh - Oh yeah, Eclipse has the 2 week wonders. LOL
It's too late for me to add anything else of substance, but I'm starting to think this blog might be a good laugh for the next 2 months. I'll comment again later.

bill e. goat said...

Frank! Tsk tsk, how harsh!

I think we would be a bunch of guys preaching to each other, without the views of EB, EO387, Ken and other proponents, who seem to be on the receiving end of the stick lately. They've had some pretty bum news from Eclipse, lately, let's not add insult to injury. I'm sure they are counting the days until it's their turn- I would expect that to be around the end of the year. In the mean time, we all benefit from their input, even if not everyone agrees, and I hope they don't get fed up and leave the blog. HANG IN THERE, GUYS! Please keep us informed and educated, and correct our mis-statements.

Positive, constructive, corrective feedback is what keeps us all on track. I've sure learned a lot about this program, and GA development in general, by reading this blog- there sure are a lot of smart folks visiting here. I have to say- reading this beats reading Av Week- pretty heady compliment to all the contributors. Let's keep it “balanced”, and court opposing views, not hammer them- otherwise we'll wind up like Faux News.

I'm probably going to post some harsh critiques myself, of the program, but not of our fellow bloggers. We are all part of the “family” of aviation enthusiasts, and are interested in the program (whether antagonists or protagonists), or we wouldn't be here.

(In the same vein, Frank- thanks your news about happenings at Cessna. We all deserve an occasional "soap box/ bitching session" pass, especially when it is annnotated as so :)

airtaximan said...

For all of you die-hards who tried to spin the e-clips windshield debacle by relying on the 14 cracked airliner windshields a few weeks ago...wrong again, but nice try.

The NTSB determined the cracks were due to 48 MPH winds kicking up FOD, actually sand used on the runways for traction.

I do not believe this is the casue of the E-clips cracking windshields.

Nice try, again.

Gunner said...

metalguy-
Thanks for the Avionics primer. It helps. Basically what you've described is what I had thought of AVIO: a private branded form of Entegra that would allow Eclipse to recapture all maintenance fees, much like auto companies. I've no problem with the model, just with the ramifications of the separation.

If what you say is correct (Avidyne hardware and customized software) Eclipse truly IS starting from scratch on avionics. There is no way that Avidyne would give them the Entegra Source Code to hand to a Honeywell for "tweaking". That source code constitutes Entegra's entire Asset Base. Nor is a Honeywell gonna start writing "patches" to Avidyne code and then warranty and take Product Liability for the whole shebang.

The statement that the change will not effect deliveries is a flat out lie. The demand for the second round of Depositor monies (if not the first) would absolutely be considered fraudulent by most. Eclipse had to know the Avidyne relationship was on the rocks for some time...look at Vern's Oct(?) statement and their admission that they've been working "behind the scenes" on a solution for months.

This is not a hiccup; it's a major seizure.

plastic-planes-
What you step around in your statement is telling for anyone willing to read between the lines. Welcome. It may be that the employees at Eclipse can pull this off, IN SPITE of bad management. If so, it'll be a business first.

Mike-
80% QA turnover in one year? That pretty much substantiates the concerns of this Blog in itself.

Strap yourselves in, people. When Eclipse's next Press Release comes out, I expect a REALLY bumpy ride. The curtain has pretty much fallen. All that's left is for the man behind it to say, "Pay no attention to me. I'm not even here."
Gunner

Gunner said...

BTW, plastic_planes-
I, too, would like to see Eclipse succeed, but in a different fashion and for a different reason. I'd like to see them succeed in producing a safe, reliable, affordable twin engine jet. Hell, at this point, I'll settle simply for "Safe", though it would still mean the company fails ultimately.

You state if they DON'T succeed in production it'll negatively affect the VLJ market. I disagree. Eclipse has already carved out an Alice in Wonderland market that nobody else is chasing. Cessna, Embraer, Cirrus and Diamond are in no jeopardy. They have successful track records. Honda is a no-brainer fr success. Adam will be just fine, so long as they keep going the way they're going and ASSUMING their products prove to be safe and reliable. Already, within the Eclipse competitive market, there is discomfort whenever their name is brought up; they have truly become the Clowns of the VLJ, I'm sorry to say.

No, the others won't be affected if Eclipse goes away. They WILL be affected if Eclipse brings an inferior product to market and we start seeing smoking holes appear around the country side.

If Eclipse fails now, it'll simply demonstrates that you really can't buy a safe, reliable twin jet for $700K or even $1.5 mil; that the magic number is north of $2 million. That will be a sad day for everyone who can justify a $1.5 mil price tag, but not $2.1 mil. It will hardly ripple in the aviation market, however. Those investors will simply settle for longer rides at lower altitudes.

Gunner

airtaximan said...

Gunner,

FWIW, I suspect Vern will try to get Honeywell to bolster the statements about how simple this is going to be, and how minimal the delay will be. If they succeed at getting Honeywell to state something, I would double the amount the delay they admit to.

If its just Vern without Honeywell in the statement regarding the delay due to the switch, I would multiply by 3-5.

If they admit to a 3 month delay, it will become 9-15 months.

Jet_fumes said...

I too want (and need) to see Eclipse succeed, and I'm contributing to this blog to vent my frustration at their blunders.

Vern Raburn needs to be dismissed from Eclipse - I predict he will not last more than a few weeks from now - and the program needs to be turned around ASAP.

What really worries me is that Eclipse cannot afford more management errors. The long term financial viability of the company is based on the know-how that has been established at great expense. If the experienced guys are leaving the company the know-how will be gone. As AASI has proven not long ago, the TC doesn't mean squat in terms of assets.

Gunner said...

Jet_Fumes-
How do you "turn around" a project that is already in production after a billion dollar investment and for which the problems appear to be, in some cases, related to basic design and already purchased (acid etched) materials?

They've got something like 30 of these aircraft in various stages of production and we're hearing that the QA on all of them is suspect.
Gunner

Stan Blankenship said...

From reliable sources:

Eclipse had a company wide meeting scheduled for yesterday. It has been rescheduled for next Wednesday.

Final fuselage ass'y for unit 036 started this week. All of the "A" mods will be incorporated into this unit. The first 35 deliveries if they ever occur, will require retrofitting.

Eclipse has yet to develop a fix for the windshield problem.

EclipseBlogger said...

Gunner said... How do you "turn around" a project that is already in production after a billion dollar investment and for which the problems appear to be, in some cases, related to basic design and already purchased (acid etched) materials?

Gunner you are so full of yourself I can hardly stand it any more. You read a statement posted here and think it to be gospel. Acid etching of parts has been around for some time and is currently being used by both Boeing and Airbus. The Avidyne displays have little in common to the Entegra other than the symbology that user sees. You really lost sight of any reasonable assessment of the facts, or the search for the truth. You're quite happy to take any opinion stated here as fact. Your biggest contribution to humanity is to organize an Antarctic expidition to shoot a few leopard seals. Big man.

Stan Blankenship said...

A reader sent a nice msg and made a valid point:

Great job with the blog... It is so refreshing to see the Eclipse fallacies reported for a change as opposed to the print media which
robotically believes anything their advertisers tell them.

Keep it up!

P.S. One idea to consider re: the air taxi idea. Even if the obstacles you describe could be overcome, another problem I see is that in the air charter industry, the free market has resulted in a 0% or slightly negative rate of return on the capital cost of an airplane.

If you run the numbers on most charter operations you will see this is true. And it makes sense rationally - if I could buy a jet or twin turboprop and break even on its cost by chartering it, surely I'd do it. In fact, thousands of people would do so just for the pride of owning a jet.

So the result is that the free market factors this in; charter prices only cover a profit on incremental operating costs but do not allow for recovery of capital costs.

Thus DayJet can never turn a profit if they own their jets.

Gunner said...

EB-
You are also getting quite testy. Why is that?

Leopard Seals really wasn't my greatest contribution to humanity (though pretty tasty, I'd imagine). I took IBM on in the 80's and won. I also took on Handgun Control a few years back and they're now known as The Brady Center, largely as a result. If you're gonna dig for stuff, son, at least do so thoroughly and bring back tidbits that are pertinent to the discussion at hand. ;-)


Now, let's turn to your rant:
"Acid etching of parts has been around for some time and is currently being used by both Boeing and Airbus.
Do tell. Down to 25/1000ths on exterior skins? Source, please.

"The Avidyne displays have little in common to the Entegra other than the symbology that user sees."
Sounds like a quote from the Dark Lord hisself. What on earth is "symbology"? Are you suggesting that the entire AVIO system was designed, engineered and produced by Eclipse and Avidyne was hired only to make the data appear as green circles and red triangles? You've avoided specifics, while continuing to explain there's nothing to Avidyne's work. How 'bout some facts; or at least a cogent rebuttal to metal-guy's specific explanations.

"You read a statement posted here and think it to be gospel."
Well, lessee. We have at least four players here that seem to be pretty intimate with the internals of the company. I note you haven't refuted a word said by Paul, by Mike, by plastic_planes or by cessna_fan.

Why is that?
And I'm "full" of myself? How about you start making sense rather than offering company buzzwords? Symbology? Disruptive Technology? What's next, "It's an 'iterative' process"?

Gunner

Stan Blankenship said...

gunner,

You have been asking about Avio and who was doing what to whom.

As conceived, I was told last night by one of the early Eclipse engineers (eyeball to eyeball), there were eight different companies (including Avidyne) interfacing with Avio electronically.

Gunner said...

Thanks, Stan.
Now we're getting somewhere. Any idea of the ramifications of the Avidyne pullout?
Gunner

Stan Blankenship said...

gummer,

I don't see the problem, they had eight companies interfacing with Avio, one pulls out that leaves seven left.

How many engines do you have on your Baron?

Gunner said...

Thanks, Stan.
Based on that, and barring more detailed info on the role of Avidyne, I'll stand down on that issue. (See, that, EB. It really isn't so hard.)

Gunner

Ken Meyer said...

Gunner wrote,
"Paul, by Mike, by plastic_planes or by cessna_fan"


Gunner please tell me you're not honestly hinging your pitch on the sour remarks of disgruntled fired employees with names like "plastic plane" and "cessna fan."

Why, pray tell, do you suppose they do not have real names? Are they afraid Eclipse will send some guys after them? Or is it so nobody can verify their story?

I could log on the blog as "Eclipse Insider" and tell you all the factory burned down yesterday. Their stories don't mean a thing because nobody knows who they are, nobody can verify their stories, and they don't have enough integrity to post their story with a real name on it.

No, it's hit and run. Spread the rumor and duck before anybody can check it out. Time honored technique when what you're firing is blanks.

Ask yourself, "Why does Stan post his name and his bio on the blog?" That's right; it's because that way his words have credibility. We know who he is; we can judge what he says. He's not just another nameless guy that nobody knows from Adam because he's "Eclipse Hater 732."

Ken

airtaximan said...

Stan's reader:
You say,

"So the result is that the free market factors this in; charter prices only cover a profit on incremental operating costs but do not allow for recovery of capital costs."

While I agree with you in general about daydream, I do not agree that any company owning jets would fail to make a profit in air taxi.

Since charter is now basically aircraft management companies making a percentage of gross revenue off managed airplanes, the cost of charter is deflated and the concern d ofr real profit is secondary. The aircraft management companies have sold a "bill of goods" to the owners, that they should feel happy with revenue to defer some costs. This is just defraying some costs. There is a dynamic once some companies artificaially deflate the real cost of charter this way - everyone who wants any revenue must lower prices. It has a systemwide affect.

Now, if someone would come up with an even lower cost solution, this could drive the cost of charter below where it is today, yet be profitable. The return could conceivably be there, if the price was low enouph, and yield was high enouph, based on new equipment.

Does this compute?

BTW, there's no way anyone will accomplish this in the E-clips. two basic reasons:
1- Linear Air et als are cannibalizing the business already (not just with E-clips planes, also with Phenoms a la Magnum, etc) by offering a model whereby the "manage" the planes and offer taxi service as a revenue play as described above. Profit will be unlikly for the reasons cited above. Then Daydream is sunk.
2- you cannot get the yeild from the plane with so little payload-range. The prices are already quoted at $1-$3 (read $779,000 E-clips - $1.5M E-clip....execs in kahoots and from the same school). At around $3 per mile, no ones boarding that little-plain (sp intentional). 'Specially not the Daydream target market of folks-driving-cars.

Make sense?

I've said it for a long time now on this Blog - that dog won't hunt, that jet ain't makin it as a taxi, AND..
No taxi = no volume;
No volume = no low cost;
no low cost = no reason to buy this E-thingy-jet

Wrong plane...from the start.

EclipseBlogger said...

Gunner said... You've avoided specifics, while continuing to explain there's nothing to Avidyne's work.

There's plenty to Avidyne's work. That's why they never finished. Even Avidyne described it as the "next generation" of their avionics. What I said was it had little in common to the Entegra, other than the appearance of what is being displayed. Otherwise, Eclipse could have used the Entrgra to begin with. Since you don't understand the term symbology, is that simple enough for you?

Gunner said... I note you haven't refuted a word said by Paul, by Mike, by plastic_planes or by cessna_fan.

Oh, Please. Paul has already said he has nothing to add. As to the others, I'll treat their entries with as much credibility as I do yours.

Gunner said... How about you start making sense rather than offering company buzzwords? Symbology? Disruptive Technology? What's next, "It's an 'iterative' process"?

Disruptive Technology - never used it. Symbology - sorry I didn't realize your education only took you through three syllables.

airtaximan said...

Ken,

if you goal is to bore everyone here by re-stating the same rediculous things over and over with no new substance, it could be working.

MAN! shut off the fixation with people's names. NO ONE BUYS YOUR SHIT on this. Get off it, no one thinks your point on this subject makes any sense. Its been flogged to death.

- Many folks whose names are not reflected, HAVE BEEN RIGHT.
-Your name is on your post nad YOU'VE BEEN DEAD WRONG, A LOT.
- VERN'S NAME has been on his press releases, and HE'S BEEN WRONG FOR YEARS.

It means nothing. Drop it. It's old.

Stan Blankenship said...

BTW, nobody has mentioned the anniversary.

Two months and counting since the first and only E delivery.

Ken,

I am wondering if the reports I have been receiving from some of the disgruntled fired employees you speak of could be making up stories about file drawers full of NCR's (Non-Conforming Reports).

Also wonder if some of your "fired" employees weren't fired for protesting their long hours and no days off regimen.

airtaximan said...

Stan,

Ken would have you believe they were fired...funny thing is:

1) they were fored becasue they could not do the job - how come they were hired? how come they are now elsewhere working in aerospace?
2) the workload was too tough for them, as Kenny would have you think - "disgruntled" - really? How does this result in the current problems at V-clips regarding quality, certification?

It's just one of those things that does not make sense - a VERNACUALRISM if I've ever hear one.

Gunner said...

Ken-
I'm not "hinging" anything on reports here. I'm just trying to piece stuff together from all the comments, as I don't have the more perfect info that you and EB obtain.

For instance, why would a company producing a $700K jet (oops, make that $1.5 mil), capable of 400+ knots at 41k ft (oops, make that 360kts at <35k ft), requiring progress payments payments from it's first 100 Depositors (oops, make that >386) to produce 1.4 jets per day (oops, make that zero), suddenly go mum after a non-essential supplier parted company with them? Why would they require a two week blackout to provide an explanation?

You haven't provided any information that fits a reasonable explanation, in context. Nor has EB. I certainly should give comments from guys like bambazonke, Mike, Paul, plastic_planes and cessna_fan as much weight as I grant y'all, no?

But, then, I've agreed to stand down on the Avidyne issue until new information arrives.
Gunner

SRMach5 said...

WORD ON THE STREET IS.....

From some very reliable sources I know of inside the program, I understand the avionics solution will now require the re-naming of the E500 to the B500 (which will stand for Bastard 500). The solution is going to be a mish-mosh of avionics suppliers including Garmin, Meggitt, Honeywell, and yes even NARCO. Not sure if this is the entire list, but it does comprise the majority of the solution to the Avio woes.

Plastic_Planes said...

Ken said:

Why, pray tell, do you suppose they do not have real names? Are they afraid Eclipse will send some guys after them? Or is it so nobody can verify their story?

To Ken:

I have been an avid reader of this blog since before I left Eclipse. I have chosen not to post my full name here because to do so would label me as a "disgruntled" aviation insider. That was never my point.

I am currently working in the industry (doing much the same as I was doing at Eclipse). Those who work/worked there probably know who I am. Had I publicly spouted the inner "going's on" at Eclipse, I would never again be hired in this industry. I love what I do too much to end up in that position.

As for the validity of my statements, I'd love to sit down with you and tell you all the stories from within the hallowed walls of EAC. They are good, but it wouldn't be fair to the 99% of the people who are trying to make this work.

I was a middle manager there heavily involved in the emerging production of the E500. That's enough on me.

If you feel the need, PM me and I start a direct dialog with you. But you'll have to promise to keep the stories to yourself....

gadfly said...

Pardon my use of a “pseudonym”, as our major customer who uses our tooling manufactures large high powered jet engines, used on highly visible commercial jets that often fly over our facility here in Albuquerque . . . they might not appreciate any of my comments about the quiet little jet that is being manufactured, daily, not five miles from where I sit. (Oh? . . . you didn’t know that GE has a large facility here for manufacturing portions of their engines? . . . been here for many decades!)

You see, I’m a coward, afraid to use my “real name”, which is often connected with another company, begun by my grandfather over a century ago, first known for marine and farm engines with a “ten year guarantee” . . . and was later known for motor-scooters, and industrial trucks, often seen around airports . . . it might indirectly affect our “bottom line”.

With the new “paint scheme”, it is almost impossible to see the new little jets, flying overhead as they take-off and land near-by. And they are so quiet! . . . virtually silent.

My number two son and partner raises pigs out at his ranch, here in New Mexico, and is presently teaching them to fly . . . Hey, anything seems possible these days! My oldest son, returning to ABQ from Dulles this evening, tells me he had his picture taken with his arm around Senator Byrd . . . now that’s much harder to believe, but knowing my son’s ability to raise money for his school system (he’s the “Superintendent of Schools” in his county), I realize that if he can get “Byrd” to give him a “hug”, then there is hope for the little jet.

Name calling is a sure indication of a person’s lack of facts. Those who have the truth need not stoop to this low level of argument.

Using a “pseudonym” in a blog site, is no sign of cowardice, but an opportunity to freely express opinion, without jeopardizing “employees”, families, and others, who could become victims of certain individuals in this strange world in which we live. I wish it were not so! There are some who share on this blogsite, who are not able to so freely kid around about these things, so give them slack . . . and back off on the “name calling”. OK? It does not help the “name caller” to gain credibility.

Anyone with the intelligence of an insect could, by now, figure out my identity . . . and that’s OK. A “Google” search can do the rest. But the rest of these folks are not in position to open their lives to the general public. Their private lives should receive respect, while many of us appreciate their input. It’s easy enough for any serious person to verify their stories. As for the personal attacks, Enough already!

gadfly

EclipseBlogger said...

Gunner said... (to Ken) You haven't provided any information that fits a reasonable explanation, in context. Nor has EB. I certainly should give comments from guys like bambazonke, Mike, Paul, plastic_planes and cessna_fan as much weight as I grant y'all, no?

You want my guess on all this? Here it is anyway. I'm going to stick my neck way out for you. I have no first hand knowledge of any of the actual details of the AVIO change, but I have heard many rumors, bits and pieces. My bet is that work on this has been going on behind the scenes for many months as a safety net. I heard initial rumor around third quarter of last year. Around that time Stan had ask me if I thought there would be future problems after the September TC. I alluded to one more major setback, but believed Eclipse would pull through. At this time, I'll bet that there are working prototypes in-house that can demonstrate as much functionality as Avidyne had completed to date. An announcement will come next week, as some here have suggested. And, of course, Vern will tell you that this is going to be a much improved system from what Avidyne was to provide (the spin will come) with all kinds of future expansion capability. How about a round of Kool-Aid all around.

Gunner said...

EB-
That's a fair, statement and makes some sense. No back handed compliment there. I mean that.

Now that you HAVE added additional info, I have 3 problems with your conclusions, in terms of squaring with the facts:
1) The AVIO system has repeatedly been referred to as the "Avidyne/Eclipse AVIO System". (Sources available on request) That gave me the impression that Avidyne was far more than "just another player" in its development.

2) In October(?) while bemoaning the Avidyne delays, Ven clearly stated, "If I had it to do over again, I'd have gone with the Garmin 1000". He did not say, "I'd have gone with Honeywell"; and he did not make the comments in context of questions an AVIO discussion but within the bounds of bad-mouthing Avidyne. So, if AVIO is so easily separated from Avidyne, why talk about a whole new system, rather than a single new "symbol" vendor?

3) If the Company has been as on top of this as you suggest and has been working on it with new partners, then those partners must have a contract. Why the "Don't call us, we'll get back with you in a couple weeks" blackout?

Sure, there's lots of explanations you might come up with. Occam would only come up with one: They have no "backup" contract in place and are now trying to negotiate one with the entire industry aware their back is to the wall. Such conditions do not make for good arms length negotiations.
Gunner

Green-or-Red said...

The OLD VP of Manuf is out after this week and a new one in. All the changes still amaze me.

gadfly said...

“Forbes” , March 12, 2007, just arrived in our mailbox.

Page 27 is a full page ad by “Eclipse Aviation”, with a couple pictures of the “Eclipse” landing into the sunset (who knows where) and an overhead view of “David Crowe, Randall Sanada, with Vern Raburn”: “YOU NEVER FORGET WHEN YOUR FIRST ONE LEAVES THE NEST.” “ECLIPSE AVIATION CELEBRATES DELIVERY OF THE WORLD’S FIRST ECLIPSE 500 VERY LIGHT JET”

“When Eclipse Aviation president Vern Raburn handed over the keys of N508JA to co-owners David Crowe and Jet-Alliance CEO Randall Sanada, the world’s first VLJ had been delivered. It was a (sic) historic event, but one that promises to be repeated thousands of times over. To learn more about our first delivery, visit www.eclipseaviation.com, e-mail info@eclipseaviation.com , or call 866-597-9496. ECLIPSE AVIATION”

If I were a lawyer, I would have a ball with this one . . . and maybe not. Maybe I would rather attempt to sweep up a spill of mercury with a whisk broom and a dust pan.

For you smart ones, you can make up a “thousand” scenarios that may be repeated “thousands of times over”. For the rest . . . just wait and wonder, how a company with “no cash flow” from a real product manages to buy full page ads in Forbes magazine.

. . . whatever, the picture is ‘pretty’ . . . ‘suspect “Adobe Photoshop CS2" had a hand in it, but that is pure speculation . . . who knows, maybe the picture was really taken by someone in a “row boat” and maybe the “little jet” really is about to land in the trees at the end of a lagoon, gear partly down, flaps up, and a solid line of trees and water directly ahead . . . no jet of which I know will be able to climb out in time. ‘Maybe it’s a prediction of what to expect in the near future?

gadfly

(The more I look at this picture, I don’t know whether to “laugh” or “cry” . . . no aircraft short of an Cessna 185, Helio’, STOL, helicopter, or “Osprey”, would survive . . . and yet, this is purely the product of Eclipse . . . Lions, and Tigers, and Bears, Oh My!)

bill e. goat said...

Green-or-Red: Which "old VP of manufacturing"? Didn't that change once last year too?

Mike: How many heads of QA have there been in the past two years?

Thanks.

UpsetWithTheTradePubs said...

From the volume of information that has been posted on this blog, much of seeming to have truth and validity, it seems reasonable to assume that there are genuine and significant problems at Eclipse.

While Eclipse seems to be unwilling to be forthright with the aviation community, I must say that I am truly disgusted with the fact that no words of question, concern or valid negativity about the Eclipse have been written by AIN, B&C A, Pro Pilot, AOPA Pilot, Flying etc. How about some honest-to-God journalism and investigative reporting? Everyone so wanted the Eclipse to succeed that they have been blind to the problems and complicit with Eclipse in hiding them. I have sent emails similar to this one to all of those pubs and have yet to recieve a response. It is truly a shame and these guys are sacrificing their credibility for what reason- ad revenue?

The trade pubs appear to be doing their best to emulate the network news- be agenda driven, blind to the facts that don't support their agenda, and losing readership as a result. Very upsetting, how about some credibility with these guys? Do I need to take evrything I read in these pubs now with a healthy grain of salt?

gadfly said...

To Upset . . . and so on,

In answer to your first question: "It ain't gonna happen, no how!"

In answer to your second question: "Yes"

In answer to your third question: (See answer to first question.)

In answer to your fourth question: (See answer to second question, but with more than a "grain" of salt.)

Those "smart pills" really do work!

gadfly

bill e. goat said...

Upsetwiththetradepubs:
I think the trade pubs have been generally charitable, because

1) they generally simply don't do expose's- they just do pilot reports, and run columnists. Some feature articles on technical and training stuff. Plus, they haven't had a real "production" airplane to wring out yet, and don't want to irresponsibly create bad press (at least not prematurely so).

2) They don't have access to the financial documents, or table napkins, or whatever is used, as it's still a privately held concern. (And, most airplane mags don't do much financial background documentary stuff- that's left to financial mags).

I think we are all anxious for some exhaustive mag articles (well, as exhaustive as a typical four page article is...).

I also am most interested in the financial aspects of this company- that is infinitely more puzzling to me than the technical challenges they have {faced/overcome/pick your verb} -daunting as those {are/have been/will be/were} in their own right).

Green-or-Red said...

The current VP of Manuf. Schumacher is out, I believe this Friday. Someone from Ford Motor Co has been hired. What a coincidence...another non-aircraft person in charge of something at E-clops.
And to answer your other question, the former VP of Manuf. Holter exited for Cessna last June.

Stan Blankenship said...

g-o-r,

Here is what the blog said about Schumacher 10-22-06:


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

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

Black Tulip said...

When the history of this grand adventure is written there will be need for book titles and subtitles. Here are a few candidates:

TOTAL ECLIPSE
"Plane or Penumbra"

FROM JULES VERNE TO VERN RAEBURN
"Twenty Thousand Leagues Under the Sea meets Six Hundred Million in the Hole"

MY DEPOSITS ON THE ECLIPSE 500
"First in an escrow account; later in my shorts."

TOTALITY
"If My Eclipse Deposit Becomes Worthless How Much Does the CPI Have to Increase to Recover My Investment?"

CLASH OF THE TITANS
"How Jim Bede Wrested Control of Eclipse Aircraft"

BOARD ROOM DEMENTIA AT 5,000 FEET
"How Oxygen Deprivation and Cosmic Ray Exposure Derailed an Albuquerque Company"

THE GATE GUARDS
"The Untold Story of How 2,500 American Communities Received Static Display Models for Their City Parks"

ADVANCED CHINESE COOKING
"Be the First on Your Block to Own a Chemically Etched Friction Stir Fried & Welded Wok"

A DOZEN USES FOR AN ECLIPSE
"Remove Wings and Add Trailer Hitch and It's Almost an Airstream"

YOU'RE SO VAIN with foreword by Carly Simon
"Then You Flew Your Eclipse Up to Nova Scotia to Look at a Total Eclipse of the Sun"

F.I.K.I.
"Faulty Idea Knocks-Out Investors"

AIR TAXI!
"I'm Still Waiting for Mine and Now It's Cold and Dark Here at the Airport"

Black Tulip

The tulip mania peaked in the Netherlands during the 1630s. The black tulip was the most sought after, until found to be biologically impossible.

bambazonke said...

The King has Spoken:

It is natural for
a new airplane company to experience growing pains as it transitions from development
to a predictable production rate. However, our journey has introduced far more
challenges than we anticipated. As a result, the 2007 Eclipse 500 production
schedule has slipped. This is very disappointing to us, as I know it is to you.


Our sole focus
is on delivering a safe, reliable, high-performance aircraft to you in the most
expedient manner possible. While there are challenges, which I have outlined
below, we have taken aggressive action to eliminate the problems and are making
excellent progress. The purpose of this letter is to fill you in on the specific
obstacles we have encountered, and let you know what we are doing to remove
them.

At a high level,
our production issues relate to the manufacturing process, and are not founded
in Eclipse 500 design flaws. At their core, these are issues with internal processes
and staffing, although parts shortages and quality problems have absolutely
contributed to the delay.

Following is a
detailed summary of the issues, and the actions we have taken to resolve them.

Summary of Production
Issues & Corrective Action


Issue
Description
Resolution



Functional Test Procedures
The initial Functional Test Procedures
documentation used to verify the accurate function of airplane systems was not
sufficient.
These documents have been completely re-written and approved by the FAA. They
will be re-written once again to eliminate system testing duplication, which
will dramatically reduce manufacturing cycle time.







Aft Wing Attach Fitting




A loose bushing was found inside the rear wing attach point.
The design has been corrected to ensure stable bushing placement, and early
aircraft have been reworked.



Manufacturing Workforce




Although we have been hiring many talented people in all areas of the company,
we are still short staffed in manufacturing.
We have been aggressively hiring contract workers, most of whom want to become
full-time employees. Tomorrow we will make an exciting announcement introducing
our new vice president of manufacturing, who brings us extensive high-volume
manufacturing expertise.





Parts Shortages




A number of suppliers experienced parts shortages as we kicked off production in
2006.
When original suppliers fell short, we moved quickly to find new component
sources. Although our new suppliers had some start-up delays, these issues are
now behind us.





Supplier Quality




Two suppliers have experienced significant quality issues that have caused
production line rework and delays.
Both of these suppliers are working through the root cause of these issues

and taking corrective action. We have worked extensively with the suppliers and
seen improvements.





Structural Requirements
Friction Stir Weld and thin skin construction of the Eclipse 500 fuselage
requires different handling, assembly and repair than conventional structures.
Every situation requires engineering analysis and DER approval.




We now have a deeper understanding of these structural requirements, and have
developed a standard repair document that is significantly reducing the amount
of time it takes to disposition manufacturing errors.



Component Failure Rates
We are seeing a higher failure rate on some components than anticipated.
We have been evaluating the root cause of the failures and are making progress
to quickly resolve the issues, but in the short term we have an adequate
replacement stock for all of these components.





Production Rate
Achieving our target production rates requires innovation within every facet of
the traditional aircraft manufacturing process.
We are employing four strategies to achieve high-rate production, which are: 1)
bring in experienced automotive production leaders; 2) build-in-position through
quality inspection buy-off; 3) leverage robotics in primary assembly to
eliminate human error and reduce cycle time; and 4) conduct automated system
testing early in the build process.





I would like to
offer my overriding view of this situation. We have had a series of unrelated
problems ranging from supplier delays, to design glitches, to leadership oversights
that have created something of a perfect storm in terms the start up of the
production line. Collectively, these issues have significantly impacted our
schedule, and challenged us more than ever before.

Of course, our
critics are eager to triumphantly say "I told you so!" And perhaps
they are right - for the near term. I have often told you that although Eclipse
is not yet as good I believe we will eventually be at avoiding problems, I'll
put our ability to solve tough problems up against that of any other individual
or company. Pundits have predicted our demise an almost incalculable number
of times. Even in extreme situations such as the Williams International engine
failure, we have prevailed. There is zero doubt in my mind that our current
challenges will produce a stronger company, and a better product. We've done
it before, and we will do it again.

One overarching
commitment we have not, and will not, waver from is to provide you with the
very best and the very safest aircraft possible. Although the delay in deliveries
is very frustrating to you (and to the entire team at Eclipse), I simply will
not allow anything to compromise the quality of this jet or the safety of our
customers.

Our focus now is
on catching up, and proving to the FAA that we are ready to take the next step.
While it is impossible to predict the exact timing for the receipt of our Production
Certificate (PC), we will keep you informed of our progress. It is very important
to note that we are working a parallel path with the FAA to produce aircraft
under the type certificate while simultaneously working toward PC. Prior to
receiving PC, we can and will continue to deliver aircraft by working with the
FAA to issue Eclipse 500 Certificate of Airworthiness.

As issues arise,
we will continue to move as swiftly as possible to drive to solutions that serve
your best interests. In the past, I have been unwilling to discuss problems
until I could also provide you with solutions. While we will always strive for
this ideal communication, I have come to realize that there simply will not
always be an immediate resolution to every issue. Thus, I intend to share updates
with you as often as possible, whether they highlight our successes or our
challenges.


As always, I thank
you for your patience, encouragement and belief in Eclipse.

Sincerely,

Vern Raburn

President & CEO

Eclipse Aviation

airtaximan said...

Pensacola News Journal

Published - February, 26, 2007

Heard on the street
AIR TAXI SERVICE: Still no word from Del Ray-based DayJet about when the air taxi service will start servicing the Pensacola area.

A spokeswoman for Pensacola Aviation said they have "not heard a thing" from DayJet. Pensacola Regional Airport's Belinda Zephir said they have no news on the startup company.

Last summer, DayJet announced Pensacola would be one five Florida cities -- the others Tallahassee, Lakeland, Gainesville and Boca Raton -- to be linked by its relatively low-cost, point-to-point, on-demand regional jet service.

http://www.pensacolanewsjournal.com/apps/pbcs.dll/article?AID=/20070226/BUSINESS/702260307/1003

CURIOUS-

airtaximan said...

Hmm...

sounds like someone told him to try to cover his ass...

nothing on the avionics,
nothing really specific.

General comments about how really screwed up things are.

No timeframe for any resolution.

The spin-meister:
"We have had a series of unrelated
problems ranging from supplier delays, to design glitches, to leadership oversights
that have created something of a perfect storm in terms the start up of the production line."

- Why "a series of UNRELATED problems"?
- how can we resolve "supplier delays, to design glitches, to leadership oversights" with his statements about commitment to "the safest possible aircraft"
- does not compute...

Sounds like the end -
You can almost hear Vern: "please don't ask for your deposit back"

Kaptain Kool-Aid said...

WCSYC 2.0

Of the many jabs at the industry issued from Eclipse over the past several years one sticks out in my mind above the rest, namely the WCSYC button. For those of you who were not there when these little keepsakes were being handed out at trade shows, or simply can’t remember that far back, WCSYC (pronounced “wick-sick”) is an acronym for "We Couldn’t, So You Can’t". This was Eclipse’s counter to the perception of the aviation establishment that their claims for the 500 were unrealistic to say the least.

Now, in light of the fact that, as originally conceived, the Eclipse 500 no longer exists –the Williams EJ22s were yanked in favor of more robust Pratts, which required an almost complete redesign of the airframe, and now the avionics suite is apparently going to be overhauled – I thought it would be appropriate to revamp Eclipse’s early mantra as well.

So far, I’ve come up with the following targeted messages:

To the aviation industry at large…

WE COULDN’T! SORRY! YOU’RE CORRECT!

To the FAA…

WOW, CERTIFICATION SURE YIELDED CHANGES!

To their own Customer Care Center…

WHOEVER CALLS… SAY YOU’RE CLOSED!

And finally from their long-suffering deposit holders…

WHOA! CANCEL SEVEN-YEAR CONTRACT!

Anybody else have any other variations?

Metal Guy said...
This comment has been removed by the author.
Gunner said...

Congrats to green-or-red and Stan. Once again, EAC has scooped the news outlets with the VP of Manufacturing news.

As for the rest, I'm not prepared to start dancing on Eclipse's grave and I'm taking Vern's latest as a breath of fresh air. I didn't expect him to admit he's a bullying, self aggrandizing boob and I DO give him credit for what he has admitted:

- Contrary to what Ken and others asserted, the wing bushing issue WAS a design flaw and DID affect the entire fleet

- They have real problems with the FAA just now

- The current problems are attributed to several causes, including MANAGEMENT

- Quality of some of the components is less than acceptable

I'm aware that he hasn't addressed many issues such as Avidyne and Depositor calls and has not given us a time frame for production. But, ASSuming, he's seen the light, this is a good thing. Much of the trouble he's gotten into is by providing hard numbers and times. This time he's hedging and that's appropriate, given the scope of problems he's admitted to.

This is actually the most hopeful news I've seen out of Eclipse in a year: admission that they are not as omnipotent as they've indicated in past.

The Bad News:
The decision to "bring in experienced automotive production leaders". As a Depositor, I would much prefer to know that there was a tried and tested AVIATION guy in that position. Automotive execs have a much higher focus on cost-savings at the expense of reliability as compared to Aviation experts. The automotive industry can deal with faulty parts thru recalls and warranty; the aviation industry deals with them thru body bags and liability suits.

To me, the VP change indicates that Eclipse is concerned about production costs. I don't believe their gonna solve that with automotive industry techniques, unless they trade off safety/reliability in the process.


Look for another price increase in the near future. That's how I read this. Perhaps Adam, Cessna, Embraer, and Honda are all correct, after all. Just maybe, the magic number for a entry level twin jet IS $2+ million.
Gunner

UpsetWithTheTradePubs said...

Mr. Raburn's decision to respond should be most welcomed by all with an interest in the Eclipse 500. It is unfortunate that he has not been up front with the development, certification and production problems of his aircraft though. Burying your head in the sand is never the smart way to tackle problems and most certainly does not instill confidence in the people who wish to own, operate and trust their lives to an incredibly complex machine that will be moving at several-hundred miles per hour, tens-of-thousands of feet in the air.

Mr. Raburn's comments were far too general and included very little soul-searching admissions. I think he would be smart to lay it all on the line with an aviation industry reporter before he reaches a point-of-no-return with his company. Simply speaking, his company and its aircraft are currently a mess. Certainly he can overcome the problems, but now is the time to bring in some ringers, concede on some serious new design considerations, raise the price to allow for this; and be honest about it for God's sake.

The Eclipse 500 is an impressive idea with loads of potential that unfortunately has been somewhat-poorly executed. A little more forethought up front coupled with a little less pipe-dreaming could have led to a hell of an airplane with enough ground-breaking features to garner a dedicated following. Would it have been the worst thing if it was always going to be a $1.5 or $1.7MM airplane with some honest range, performance and avionics? Maybe only 1,500 people would have deposits placed instead of 2,500, but perhaps there would be a fully-certified, fully-capable airplane slowly ramping up production now in ABQ.

I would really like to see it happen and you have got to feel for the guy a little. He certainly didn't intend to fail, but someone as smart as Mr. Raburn needs to confront reality and get some traction before the whole project careens out of his control.

Best of luck to he and his company, and here's to hoping that he'll start communicating honestly and frequently with us all.

Joe Patroni said...

The latest statements coming out of ABQ are just continuing to highlight the differences between what you have at Cessna, or any other OEM, and what you have at Eclipse; INSTITUTIONAL KNOWLEDGE!!!!

Believe it or not, there are a LOT of very smart people that work for the OEMs. Not just at the top levels of the company, but in every department; engineering, purchasing, manufacturing, all the way down to all the foreman/supervisors at the shop floor level. A lot of the stuff they know isn't written down in a manual.

Hiring one guy, even if he is "Super-Manufacturing- and-Certification-Man" isn't going to fix Eclipse's problems, in my opinion.

From the statements I've seen issued from ABQ, I'm convinced that they weren't even aware of all the requirements, much less how they were going to be addressed.

And rushing into production, before having a pretty good idea that your problems are solved and the airplane is going to do what you expect it to do, is just begging for trouble (see SB2C Helldiver, for one of the best (worst) examples)

The big question is, will they complete their education before they run out of money? And, will they be building a competitive product when they get all their issues addressed?

In my opinion, he would have been better off just buying Piper (...or Beech.....or Pilatus), and starting from there. But they wouldn't be able to claim that they were able to reinvent a more efficient wheel.

bill e. goat said...

Okay.
Vern has burned say, $750 mil so far. And delivered nothing.
P-l-e-a-s-e don't say that pathetic farce with David Crowe constituted a delivery (even Stan used that term to my chagrin).

Here's my idea of a superior business model:

Eclipse starts buying Mustangs at volume discount; say, in lots of a thousand, for a 20% discount, which would come out to around $2.0 Mil.

Then, removes an engine, knocking off, what, maybe another $0.2 Mil {And, might approximate the current Eclipse rate of climb, cruise altitude, and speed (ha- just kidding)}. That means they could buy each Mustang for around $1.8 Mil, and sell them for $1.7 Mil, thus loosing only $100K per plane.

So with that $750 Mil they could thus have delivered 7500 airplanes (or taken deposits, and sat on the money for a decade or however long it will take).

And, they could proclaim “we deliver airplanes that create half the pollution of our nearest competitor” and “are easier to fly- no need for a multi-engine rating” (Hmm, multi with centerline thrust, or single, with asymmetric thrust- I'm sure we can “work with our FAA partners to come to a solution”, like, make everyone sit on one side of the plane, or remove one wing, or something {hey, more weight savings, more cost savings, and drag reduction too!!! It would also solve the problem of providing a plane with twice the usable space of an Eclipse, if only one side of the Mustang could be used).

And, when the time comes for the customer to upgrade, they could market the “revolutionary” Eclipse model E502 (for, two engines), and sell a Mustang with both motors, both wings, and seats on both sides of the interior, for maybe $100K over cost, thus breaking even on the losses involved with the E501 (single engine). {Opps, I forgot, making a profit. Darn, I'll have to tweak my plan some to figure out how to dispose of that "excess inventory”. I know, I'll make up for this transgression by creating a 2 or 3 year “development” time table to incorporate the other wing and engine}

Man- I should be VP of marketing, or engineering, or procurement, or production (hey, I've read a lot of car magazines). Or at least VP of something- I can say “Good Idea Vern” and “Josh, you're right again as always” just as enthusiastically as anyone!

Just kidding guys.

Buckerfan said...

Oh Boy!!! If I was one of the first 10,20 or even 50 scheduled to take delivery of an E500 I would be very nervous. Who would want to be buzzing around at FL410 in a plane knowing that it might be full of faulty parts installed by inexperienced and overstressed operators on a line that did not have a PC. At the very least I would want to have a "put back" to EAC (and a parachute). When I made my deposit in 2005, a TBM700 owning friend of mine advised me: "you have to be crazy to be willing to act as a test pilot for a new design from a new aircraft company, wait a couple of years and see what happens, let someone else work out all the bugs". In those days I was still drinking the Kool Aid, but luckily came to my senses in 2006 when they failed to make the performance guarantees.
Comment on Vern's letter (I assume it is real?): His revelations relate to a whole new list of problems, namely supplier management, parts quality, build quality, production line control and staffing. This is incredible, he did not even touch on the previously acknowledged list of issues to resolve: FIKI, avionics, bogus proof flight of the B model, etc.
Also, this company has now run through almost all its VPs in the last months: VP Finance, VP Manuf (2X), VP Customer Relations, VP Training. About the only holdover is Mike McConnell the VP Sales. Any investor looking at this can of worms would have a fit.

mike said...

KEN SAID -
{Gunner please tell me you're not honestly hinging your pitch on the sour remarks of disgruntled fired employees with names like "plastic plane" and "cessna fan."}

Mr Meyers, I was not fired, I put in my notice on a Friday that the following Monday would finish up my 6 month obligation with the company (due to them moving my family). I gave notice to the HR manger, I even went and talked to Peg; HR said thanks for telling us your intentions. Peg on the other hand after I told her how screwed up her disillusioned management staff was, and how the 'Cessns/Bell boys' had been riding her and the company for all they were worth, plus how the Manufacturing DAR's she had, had been blowing smoke so far up her ass that I believed that Eclipse would never get a TC/PC. Furthermore, I took the oppertunity - because I moved my entire family (all 6 of us) out to that dirt hole and I figured I owed it to my family to tell her how "F'd" up it was that I had intentions of staying out there for the next 5,10, or 20 years. I was lied to - I felt better and Peg got a small glimpse of why most of all her 'good' staff was leaving.
Well, the rest of the story goes, I talked to my suppervisor about the my intentions and he asked for my badge and stamp on the spot.
Go figure, but I had planned on that; you see I didn't fit the E mold and thusly I had been preparing-Hence I work at a well established A/C company in Little Rock now(they got billions too-they are profitable).

So now that we know how I left, I will tell you why(or some of the reasons). It wasn't because of the people I worked with(they were good folks). Most of the flight test mechanics were licensed. It wasn't the free water and cokes. It wasn't the other inspector's,
It was the hours, the 84 hr weeks, with no days off. Like 3 months in a row. The loss of quality of life, the time with my family.
And most of all, It was the Management- for example, the Bell helicopter QC Manger that when I first got there I had asked him a simple question on a weight and balance that I was doing for one of the test plane's - I did the calculations pretty close in my head and wanted to know if the MAC % number was close. The QC manager said to me when posed the question - "what is a MAC number?". Now put that in perspective when this is the guy that is doing all of your TIA and Certification paperwork for the previous 2 yrs before I got there.He was the DAR!
This is just one example of of the incompentance that was leading the way for E gipse. Helicopter guys( betcha he knows all about rotor head stuff) that don't know crap about planes, not to mention FAR's.
I have many stories like that one. Too many in fact, those would be the reason my intergrity kicked in and I left. I left alot of good friends there.

So there is how and why KEN, here is a clue to all of those that worked there last summer, I was the guy that had the computer station right between hanger 1 and 2- right by the door.

So to continue on a few comments that you can take to the bank. First the instrument and avionics test beds and departments were about 20 yards from where I sat, having been involved heavily with the test fleet and the avionics personel, I know for a fact that E gipse could not have been testing a secondary avionics software package. They just didn't have the people to do it. Not to mention-you have to haave a dedicated enviromentally controlled test rig for doing that kind of testing. It wasn't there.

The comment on the ramifications of Avidyne - here it is simply. E gipse will have to re-TC if they don't find a company that can duplicate exactly all of Avidyne's "involvements" with the plane. Think about it, Avidyne is on the TC requirement for the plane. Hence when you lose part of that requirement of TC, the TC is no good.

Metal guys comments on the products/non-functioning ballast in the little wonder jet is right on the money.

Gunner - your questions I think were already answered for the most part by someone else.

The Cessna Single Engine idea is great - I would call them "HALFMOON 498'S" and the upgrades 499's.

And finally I want Mike Mcconnell to come sell my Montero its worth $5K, but I bet he could get me $100K. He's that good and I could use the extra cash.

The economics of the company, I don't really care to discuss, but the quality of the aircraft and how it got that way - those questions I can answer.

Well, hopefull that establishes who I am with E gipse.

Gunner said...

Mike-
Sure, but how do we know you're for real? ;-) After all, Ken's info here has been pretty much spot-on; well, maybe not spot-on, but it's been "consistent".


I know you believe my questions on Avidyne were answered. Unfortunately, I've received conflicting answers and would really appreciate your further input. This is important because I believe, above all else, if it's as bad as I suspected, it could sink this company in the near term.

How significant was Avidyne's contribution to AVIO? Do you believe a third arty can simply verify what they've done and move from there or will they have to (or insist upon) starting from scratch? Why do you think they pulled out?

Thanks much for anything you're willing to share.
Gunner

airtaximan said...

Gunner,

E-clips paid Adidyne for their work, and E-clips owns anythng novel that was developed during their relationship. They even had a royalty agreement, whereby if Avidyne incorporated the novelty into another system, there would be royalties to E-clips.

This is subject to whether or not E-clips actually paid Avidyne. If they did not pay them, I believe they would not own the IP.

It is possible this is what they are still wrangling about. LAst time E-clip could not pay Avidyne, Avidyne took equity plus a deferral until the receipt of the TC.

It is conceivable that E-clips owns and can use the code. It is conceivable that another manufacturer could use the code. The actual case for the practicality of this? From what I've been told, this is a hornets nest.

Most OEM's like Honeywell would not touch this. Perhaps Honeywell is providing some hardware and someone else is going to tackle the programming. They will have some added problems beyond just Avidyne completing..including becomeing familiar with the Avidyne code, architecture etc. New integration issues. Overcoming the issues that Avedyne themselves apparently could not fix or complete.
- either the technical problems were so tough Avidyne could not complete the job...I do not see this becoming easier with a new supplier
- or, they were not paid and refused to do additional work, hence, E-clips does not own the IP

In either scenario, the situation becomes more complex, not easier with a new supplier.

mike said...

As far establishing myself, if someone that was with the company last year from april to oct who dealt with flight test or hanger 5 would read this and came forward, they could confirm it.
I was the #2 A-hole inspector for the company, the #1 A-hole inspector was a 'REAL' maintenance DAR( not as I mentioned above the other DAR's were manufacturing DAR's, big difference) Stan can vouch on that fact in the differences. Those are enough clues for anyone in the company during that time frame to confirm what I say is real.

Metal Guy said...
Challenged more than ever before with inadequate test procedures, manufacturing labor shortages, parts shortages, significant supplier quality issues, abnormal structure handling, assembly and repair requirements, high component failure rates, design glitches, leadership oversight problems, refusal of the FAA to issue PC, no communication system, no navigation system, no transponder system, no flight management system, no flight display system, no FIKI, extraordinarily high employee turn-over, $20+ Million per month burn rate - but hey, everything will be fine!

The above is a true statement for the most part, so ask how many of those systems are involved with the Avidyne system and you can see the severity of the problem. If I speculate, I would guess that a new vender would try to use the exsisting system due to the TC requirements, but I believe that an entirely new software package would be needed. Just too many problems.

Like I said, it's no sweat off my brow on any of this. I resolved my problems with the company 2 months before I left. I decided to leave and made arrangements, so I don't think I was disgruntled and I am only sayng what I know. Take it or leave it.

Some things I want to comment on might actually get me in trouble, so if I refrain from somethings, hope you understand.

airtaximan said...

Mike,

You do not need to make a case for your credibility, no one except a few die-hards thinks we're all lying. They think Vern is always telling the truth, so that should give you an indication...

Find a way to post what you know...as much as possible. Use another name, or just email Stan and he'll post it.

Most of use just want as much information as possible - we can make our own determination as to whether it makes sense or not. We won't dismiss it as "disgruntled" unless it does not fit with the story as it has been unfolding since 1998.

Find a way, post as much as possible.

Thanks

Stan Blankenship said...

Mike,

Thanks for coming forward, you have added to the mosaic. It is not a very pretty picture we see emerging.