Friday, November 30, 2007

From T206H

Hello,

Long time reader, first time poster. Here goes:

Credentials seem to be important on this blog. Here are mine: I own a business; I’m an instrument rated private pilot and I own a Cessna T206, which I regularly fly to the flight levels with large loads and suck too much oxygen as a result. This works really well when eastbound and really poorly when going west.

As for my relationship with Eclipse, I have none other than being a prospective customer. I called the Eclipse factory early this year and inquired about a purchase. Shortly thereafter I discovered this blog. Whoever noted that potential Eclipse purchasers were likely to wander across this blog in their due diligence of Eclipse (both the plane and the company) was correct. Most everyone with internet savvy and some sense of fact checking will end up here sooner or later.

Here’s another credential: I used to be the CEO of a business that went through Ch 11. It was a long time ago... It was an emotionally bruising experience. I got to see most sides of the business bankruptcy issues in that process. For instance – how does a company get to Ch.11 (what mistakes were made?); what could have been done differently; could it have been predicted?; who (which personnel?) contributed to the process in both negative and positive ways. What had I done that allowed the bad business conditions to develop? It was a depressing experience myself and for many of my company’s employees, customers, vendors, investors and bank. It’s certainly not fun – never want to go there again – and I run my current business accordingly. As a result, I do understand many of the issues which financially contribute to the demise of a business.

I will not use monikers which mock the point of view of the ‘other side’, whatever that is. An example is EA499.5. Not going to go there.

Now, I just wanted to make a few comments:

1) What about the jet in question? The complete Eclipse EA500 would be a wonderful piece of transportation. No matter what, at the end of the day, if everything’s delivered, working, certified, supported, there’s a bunch of folks who would like that plane and find it ideal for their personal transportation requirements. It’s back to being a disruptive buy at $1.25mil.

2) How could *I* afford to buy one? I don’t have large sums of money socked away; I would be a cash flow purchaser, and full disclosure: I can’t afford it. I was surprised by the factory’s indication that I would have to give a deposit in order to get in line to buy their product, and that I would have to wait until 2009 for delivery. They offered some bank financing choices, but it immediately became clear that none of the banks would act remotely like Cessna Finance. (CFC has been a great business partner for me in the purchase of my T206. Basically, if you live and breathe, have adequate cash flow and credit history, and can put 10% down, you can get a Cessna. Cirrus seems to work the same way, and I’ll bet the rest of the GA world does as well.) If Eclipse didn’t have a factory finance option, then their ability to sell airplanes would (and is) greatly diminished. The alternative, from a business standpoint, is for their management to under price the product relative to its true market value, and allow the potential equity in that statement to draw cash from speculators and the customer base who are cash buyers. This seems to have been a conscious business strategy on their part. There are numerous ways for this strategy to backfire. One of them is the FUD (Fear Uncertainty Doubt) it puts into the existing customers who’ve already ‘deposited up’ and the other is the FUD it puts into future prospects like me and many others who wouldn’t touch it until the smoke clears, if it clears. And then there’s the FUD with the vendors – it’s got to be considerable for the smaller guys with unsecured moneys owed from Eclipse. I’ve read the comments on D&B. My old company’s D&B rating certainly never said we were going bankrupt – but we did. Such is the reality of business. It’s like the fog of war – you simply don’t know the real situation.

3) How could Eclipse afford to finance the continued development and production of their product? Eclipse clearly has a program in place, where the customer provides financing to the factory by providing cash many months prior to delivery. This makes customers, in the event of a BK, unsecured creditors to the company. The recent deposit request/bump highlights how much they are reliant on customer deposits to make it through.

4) Life has taught me to be prudent in financial situations. It is a rare situation indeed where something that looks like a dead fish, smells like a dead fish, isn’t a … dead fish. There are so many aspects of the Eclipse business model which create this air of business danger!

5) However, there are exceptions to the dead fish rule.

6) In business, cash is king. Those who have it live to fight another day, and those who don’t, … don’t. It would be unreasonable to assume that Vern Raburn hasn’t been working overtime for the last two months, trying to raise another round of money. He may have been offered money already; although it may appear to him to be a personal ‘Hobson’s Choice’, because I suspect the money he’s being offered is tied to significant dilution and/or loss of control of his enterprise and/or ‘cramdown’ and/or forced BK. Alternatively, he may be working on a rational round of financing, where he’s been given some stipulations which must be met prior to close. These stipulations require meeting some milestone (EG, increased production rates; increased customer financing; you name it…) prior to close of the round. My best guess is that he’s looking at a cramdown of some sort. The early equity investors probably are facing substantial dilution. That’s how new investors make their money: essentially, older and early investors are written off. Most of the benefits of future profits flow to the last round of investors.

7) It is also clear that all of the information required to make intelligent business decisions on behalf of Eclipse are only fully known to Eclipse management. In other words, if they pull it off, they pull it off!, and we don’t know why, and life is glorious for them. This is the corollary to point #5.

8) There is life on the other side of Bankruptcy. There's also life on this side of Bankruptcy, if aggressive moves are made in time. If I was ‘King For A Day’ at Eclipse, I’d make the following moves:

8.a Take the website down. Replace it with a retooled mission statement for a couple of weeks, then bring up a new website. The mission statement would be something like this:“Our mission to produce the finest, most economical to operate 5 place twin engine business and personal jet in the market.”Below that it would read:“We’d like to talk to you about our jet. We like it a lot; we think you will too. We’ve priced it fairly and we want to help you buy it. Give us a call.”

8.b Reject all customer purchase contracts which are not profitable. Who knows, this might be every last one of them. Obviously give reorganization preference to customers who’ve already placed the deposits. For goodness sake, raise the price of the product!! If any product truly has a 3 year lead time, then management made a huge blunder in under pricing the product to market demand. Management gave equity to the customer base, and that’s just stupid. I guess I’m trying to say that there’s no such thing as a free lunch, especially in GA.

8.c Dump AVIOng in favor of generic Garmin. Heck, just drop a couple of 430s or 530s or whatever in and get the planes rolling out the door, so they can fly IFR/GPS.

8.d Pray like crazy that FIKI gets wrapped up, and that the public announcements to date on FIKI are the truth.8.e Same for EASA stuff.

8.f Same for anything else that’s been rashly promised and not yet delivered.

8.g Reset quoted production levels and delivery times to rational levels which have already been demonstrated. Reprice the product so that operations are profitable at that level.

8.h Obtain bank DIP financing that would also provide a rational tie in to post-delivery customer financing. Create a customer delivery sales program that would work like this: 10% down at order; another 10% at delivery; balance of 80% on financing. That would stir sales at rational (EG profitable) price levels.

8.i Complete the equity financing round. As a lead investor, post BK, life might get a lot easier to raise money.

8.j Find a bigger partner who wants the product and the TC, and is willing to pay real value for it. Don’t have a realistic clue who that is… can’t imagine it would be Cessna.

That’s it for real comments.

326 comments:

1 – 200 of 326   Newer›   Newest»
fred said...

amen ...!

quite good !

i believe vern is actually doing a fund leverage ...

the matter is well stated in the post , the risk is dilution for prior peoples ...

but another risk (not mentioned ) is that vern with cash flowing is set back into old habits ( spend 2 times on blowing , 1/2 for doing)

another point = if the plane is to be good is going to be complete diferently target than it used to be for "high volumes" sales ( owner mostly ...)

apart that , yes it is a matter of choices :
leave the boat before harbor , because there is a hole in the hull

or wait prayng the coast guard are around ...

tough choice !

Shane Price said...

T206H,

Very impressive first post.

My problem continues. All you write shows you fully understand the importance of CASH when the going gets rough.

Where will Vern get the cash?

Locking in 50 odd customers to raise $30 mil is only a short term fix. The major problem is where the next 'percentage of what's already raised' comes from.

A few people have guessed what this figure might be, but the blog seems to average out at another 6 months burn or about $200 mil.

As Frog (and others) fully appreciate, that sort of money is not lying around somewhere looking for a high risk home.

CASH.

Businesses fold when they run out of it. No matter how good the product, or how clever the staff or how bouyant the market is....

I don't 'hate' anyone, least of all people I have never met. But I do have problems with some of the patterns I see in Eclipse. Most of The Critics come from the same corner of the field.

The end comes, sad though it is, when the CASH runs out...

Shane

andy said...

Let me ask a question. Do you all really think that Al Mann with 400M invested and a net worth of north of 2.2B is going to let the cash run out and lose control?

flightguy said...

If Al wanted to fund the entire Eclipse program, he could have.

If Al wanted to throw in more than $400M, he could have.

If Al wanted to bail them out of this crisis, he could have.

Will he give them another short term bail out? He can, but why? Throwing in good money after bad without changes is as good as lost. Eclipse and Vern knows that at this point. The cram down will soon begin.

JetProp Jockey said...

Assuming the numbers relative to investment and worth for Al Mann are accurate - a big if - Looking at a loss of 20% of ones estate is not a minor event. Considering adding to that loss would take some serious thought as to what is the chance of actually making a difference.

Ironically, to provide equity to to a sinking ship may not make as much sense as providing operating capital after a petition for reorginization.

The other point to consider relative to this gentleman along with the many depositors - No matter which major form of investments one holds - common stock or real estate - everyone has taken a hit in the net worth wallet over the past 6 months.

ColdWetMackarelofReality said...

Mann has taken additional hits on the inhaled insulin project as well, his investment tracke record re: 'disruptive' technologies right now is not good.

T206H, excellent post, pay no heed to the savagery that may gbe visited upon you by the Faithful, something about how not being able to afford one makes you unqualified to speak, and as a failed business owner you have no room to comment - something like that based on previous experience here.

You have suggested a number of good potential solutions, although you have also covered the many reasons why many, if not all, are unlikely.

Enjoy your 206 and please continue to participate - ignore the ankle biters, it is really only a nuiscance.

eclipso said...

While in ABQ, I saw and heard way too much blaming from the folks that did the hiring in the first place. It was the vendors first, then went so far as to be the highly experienced mechanics fault (Vern says they were too use to doing things the old way)Some things are tried and proven for years. Why would one NOT want to use proven method. "Just in time" is very well known in Detriot. IT IS AN AUTO MAKER WAY OF PRODUCTION!!! When Fords start flying, get the folks from Detroit. Until then, like many teams, they don't fire the whole team...THEY FIRE THE COACH!!! Get a new coach and maybe, just maybe they could make it a few more round. INSANITY??...The act of doing the same thing over and expecting different results...THIS TEAM CRIES OF NEED FOR A NEW COACH!!!!!!!!!!!!!!!

airtaximan said...

Mann, Gates... Abu Dabi.. others could come to the rescue- it also wouldn't be the first time for Vern or Eclipse - he's pulled it off before.

Consider:

from New York Times, Andrew Pollack, Nov 15 2007.

"...Despite Mr. Mann’s remarkable entrepreneurial career — he has founded more than a dozen aerospace and medical device companies — there are people who wonder whether he has so much invested in this latest effort, both financially and emotionally, that he cannot see any odds against him.

“I don’t know of an individual who has spent as much of a personal fortune on a long shot,” said Andrew Forman, an analyst with WR Hambrecht & Company. Mr. Forman said MannKind faced numerous regulatory and patent challenges, as well as possible competition from the leaders in injected insulin, Eli Lilly and Novo Nordisk, which are also developing inhalable products.

So far, Mr. Mann has invested $566 million in MannKind and owns just under half the company. He has also agreed to lend it an additional $350 million. The total of $916 million represents a “big part” of his estate, he said, declining to comment on an estimate by Forbes that he is worth $2.2 billion.

The money was necessary to keep the company afloat. MannKind, which has spent about more than $700 million on its insulin, has attracted some prominent investors, like Legg Mason’s marquee stock picker, Bill Miller. But it has faced skepticism from many other investors and has not yet attracted a big pharmaceutical company to market its drug and to help defray development costs. [MannKind’s shares, which were above $20 several times in 2006, closed Thursday at $8.66.]"

Maybe... just maybe...

FlightCenter said...

CJ3 said,

"this morning as posted on Controller:

S/N 923, 2nd quarter 2009 delivery... "

This would require that Eclipse meet all of its most recent projections for achieving production ramp rate.

This means achieving a production rate of:

1/day in Jan 2008,
1.5/day in Apr 2008, and
2/day in Jan 2009.

If that all comes true, then S/N 923 will be delivered in Jun 2008. Just to give you a perspective on how challenging that would be, achieving 1/day in Jan 2008 would require doubling the November production rate in the next 30 days.

If you look at the historical data, since May, when Eclipse shipped 8 aircraft, the Eclipse production rate has been ramping at an average rate of about one additional aircraft per month.

If Eclipse maintains that production ramp rate, then S/N 923 will be delivered in November 2010, about 18 months after the posting suggests. This ramp rate would result in Eclipse delivering 50 aircraft in the month of November 2010.

There are many highly probable risk factors, any one of which could prevent Eclipse from attaining even the historical ramp rate and push that projected delivery date out well past Nov 2010.

Bottom line, there is close to zero probability that S/N 923 will be delivered by Q2 2009.

Copernicus said...

T206H

You raise some good and valid points. A couple of further ideas:

1. Maybe the big money investors would do a sort of home-made DIP financing themselves. They might say, "enough is enough, now let's get out of this" and the best way might be for them to seek out a buyer the same way a bankruptcy trustee would do. They would keep the enterprise going with a loan to themselves (just like DIP financing)to bridge it to Cessna, EADS Socata, Dubai Aerospace, Mitsubishi or whomever. Without a bankruptcy, Eclipse could not chuck out its contracts and thus raise all prices instantly, but I doubt that a trustee would allow that anyway. If a buyer could be brought in who would keep all contracts fulfilled then the trustee would not allow those to be reneged so that more money could go to shareholders, right? That is suppose Dubai aerospace is willing to pay x hundred million for Eclipse. If, once they get it they must lose 100 million fulfilling contracts then they will offer 100 million less for the business. That's the way it would go, don't you think? It's only if the business is unsaleable because the loss on the contracts exceeds the value of the ongoing enterprise that a trustee would allow the contracts to be reneged upon and then maybe not 100%.

2. Minor point

Keep Avio NG. If we were back at the beginning, one could question a new avionics setup vs. established ones that work well. But Avio NG goes beyond Garmin with so much integration of everything that it will be better and it is truly almost here. I have flown with the imperfect Avio and even that is pretty good. At this point, I think I would see this one through but I would never do it again.

Gunner said...

T206H-
Welcome. One hell of an insightful intro. I'm not too worried about you being attacked by The Faithful just now. They only seem to do that on sunny days and, just now, things are downright gloomy over ABQ.

There's wisdom and experience in your words. Some might say, "But you don't know what the costs, revenues, expense, etc are". They just don't understand that we never "know" any of these things for certain about any private company. But there are key indicators of a death spiral; Eclipse is evidencing those indicators and has been for months.

Andy asked:
"Do you all really think that Al Mann with 400M invested and a net worth of north of 2.2B is going to let the cash run out and lose control?"

No offense meant, Andy, but I always get a chuckle out of questions like that. Lemme ask a simple question and you'll see why:

"How do you think guys like Al Mann got to be WORTH $2.2Bill?"
Gunner

AeroObserver said...
This comment has been removed by the author.
cj3driver said...

Thanks for the info AO.

BTW- Doesnt FlightOptions know they could have purchased Eight-hundred E500's for the same price?

cj3driver said...

FlightCenter said;

“...There are many highly probable risk factors, any one of which could prevent Eclipse from attaining even the historical ramp rate and push that projected delivery date out well past Nov 2010…”

FC…. Where does that put S/N 2,700?

Even Eclipse’s own website now places a new order in 2010.

WhyTech said...

Copernicus said:

"That is suppose Dubai aerospace is willing to pay x hundred million for Eclipse. If, once they get it they must lose 100 million fulfilling contracts then they will offer 100 million less for the business. That's the way it would go, don't you think?"

Well, the concept is directionally correct, and using this logic, Dubai would need to receive (not pay) around $100mm -$200mm to take E-clips given the potential liabilities and addtional cash requirements ahead.

WT

gadfly said...

“Bottom line, there is close to zero probability that S/N 923 will be delivered by Q2 2009.”

Actually, there is close to zero probability that “any” E500 will ever be delivered, complete. And if it were delivered, what might it actually be? Would it be the six place 370 knot, 1,100nm+ range, durable little economical jet that could be an “air-taxi”, etc., etc.? And “Safe”? (And the promise of an “inexpensive entry level jet” is a distant memory. Oh, and “very light jet” . . . stretches credibility beyond “elastic” limits . . . and maybe the “elastic limits” of the very airframe on which it all began.)

Sorry, but I think not! Expectations seem to be “lower and lower”, while price and delivery time increase. And little of this touches on the “innards” of the little bird.

When “the Big Guy” declares that the “little jet” is successful, and takes money out of escrow . . . and “THEN”, says (after the “money” is confiscated), ‘Oh, by the way, the first engines are not adequate, so we have to make some changes . . .’ . . . or words to that effect, that should have brought this entire thing to a major halt, and forced the “complete re-design”, beginning from the interface of “rubber tire on tarmac”.

At that point in time, I says to myself, “Myself,” I says, “This man cannot be trusted. Therefore, I will never seek to be a vendor . . . ever!”

But like a parent, with a spoiled kid, it seems easier to let the brat get away with murder, rather than take him to the woodshed, to apply the board of education to the seat of learning.

Friends, had the little jet been what it claimed to be, from the “get-go”, many of us would have been the beneficiaries . . . and “General Aviation” would have benefitted. But the entire scheme was (and is) based on assumptions that “just don’t fly” (‘sorry for the bad pun).

Most of this discussion is based on the finances . . . and I must leave that to others, such as “206", who has enriched the discussion enormously.

Those that have expressed themselves on this “blogsite” have been most careful, to not go beyond certain understood limits. But, for me, I would never feel . . . what word should I use? . . . secure? . . . safe? . . . “in control”? . . . whatever! Bottom line: Before you argue “financial viability”, it might behoove you to consider the viability of the “physical product”, first. The little jet is a long, long way from proving it’s long-term survivability . . . and when it does, it will be “years behind” in technology. In fact, even today, it’s already far behind the competition. So what’s the big deal? . . . it’s cheap? . . . Not yet, it isn’t!

gadfly

(Ramp up the present “E500" to “one-a-day” and you will still have no more than you presently have . . . except you will be even deeper in horse stuff.)

Niner Zulu said...

Gunner said: "How do you think guys like Al Mann got to be WORTH $2.2Bill?"

Gunner,

I think I know the answer....

Start out with $2.6 billion?

;-)

Shane Price said...

NZ,

Bold. Very, very bold.

I prefer to think that Verns' principle backer was a man with vast insight into the workings of modern business.

One who could judge when he had put enough resources into a project and expect (at that point) a return on his investment.

A man (pun not intended) who was clever enough to have build at $2.2 BILLION fortune would know...

... when it was time to pull the plug.

When will he?

Vern hopes to raise more money. He needs to. Clearly, the original investors would be his first port of call.

That makes the whole 'lock in' offer even more difficult to understand.

I am sorry, but the more I look at this, the less sense it makes.

'Something wicked this way comes', with Vern playing Macbeth himself...

Shane

gadfly said...

Shane

How many Pounds Sterling would have taken to plug the leak in the unsinkable pride of the White Star Line?

And you think that enough “$” can make the little bird a viable flying machine?

Dream on, friend, dream on!

gadfly

(‘Maybe a new “decor” on the “sun deck” . . . and maybe we can move the furniture over to the “Port” side . . . to balance that “slanting tendency”.)

Gunner said...

9Z-
Now THAT's funny!

Shane-
I suspect you probably have been an investor in a company going under. I also know you're aware of what I'm about to say; I say it for those who may not know the scenario.

If Eclipse is failing financially, the Investors and the Depositors are in the exact same boat. Just as the Depositors will lose, if Eclipse doesn't get more money in, so will the the Investors. And so, both groups will beat the bushes trying to come up with new investors or, in the end, money of their own in hopes of saving what's been previously invested.

In the same boat, yes; but meantime both groups are eying a less-than-sufficient number of life jackets; fully cognizant that, in the end, it's every man for himself in a VERY ugly Zero Sum Game.

Now, guess which group is generally first to cut its losses and dash for the jackets (as in, Bail No More)? That's right, the group with the best information. The Investors. I suspect they already have.

The Customers (Depositors), OTOH, are more likely to be valued by any potential buyout or salvage group....unless, of course, they constitute a financial liability. I leave the conclusions as to the value of a customer with a $1.25 Mil contract, half the price of which has already gone down the loo, up to the reader.

There are no two ways around it:
well north of a billions dollars American is no longer in the wallets of Investors and Depositors. Well less than a couple hundred million dollars has been converted into planes or valuable assets (hard or soft).

People are gonna get hurt here. Badly. And its not going to be a few people either. Add in the employees and you have an aviation industry catastrophe.

It did NOT have to go down this way. I suspect, however, the "train has left the station".
Gunner

gadfly said...

Gunner

At least there was plenty of warning.

gadfly

airtaximan said...

strange events in aviation these days...

$1 billion dollar order for development stage airplanes in the LIGHT JET category? from a company with 130 or so planes under management, around for quite some time... lots of experience... $6 million or more a pop... hmm...

A little while ago, Planesense placed an order for LIGHT JETS in developemnt as well... much more expensive LIGHT JETS.

Somethings awry? LIGHT JETS... at $6-$7 million or MORE? Insanity at its best, or SANITY?

Has there been one decent fleet order from an established fleet operator for the Eclipse 500?

I wonder why?

I guess all the established fleet operators missed the value proposition? Miscalculated the risk? After 10 years of looking, hearing, listening, analysing? Man, can THEY be wrong?

(maybe Ken should be looking to replace his car, instead of his plane with the 500? - is THAT the revolution the aircraft fleet operators have missed?)

Eclipse potential buyer?
On a brighter note Dubai aerospace seems to like the e-500 for a trainer. They deposited (OK, maybe no money...who knows?) for a bunch at the airshow, right? If they like the plane and bought a small fleet, PERHAPS they'll buy the company?

ColdWetMackarelofReality said...

Perhaps someone can attempt to explain how, when Cessna just defined that TC, PC, tooling and all other intellectual property for a reasonably successful airframer, with over 500 or so units in the field, is worth less than $5M.

This company had received way less than the $1.X Beeeellllion Dollllllars (in best Dr. Evil imitation) Eclipse has squandered, yet it had designed and certified not one but several variants - and had delivered them in the hundreds.

Why would anyone take on the liability of warranty claims for the unfinished airplanes currently being delivered BEFORE a bankruptcy wipes them clean?

Why would anyone take on several hundred aircraft that will cost at least $500K more to produce than they will bring in, BEFORE or even after a bankruptcy?

Why would anyone take on the investor expectations for an ROI on an already incomprehensible amount of money that simply cannot ever be paid back?

Why would anyone take on the challenge of designing and certifying an integrated avionics system, when the plane itself is unfinished?

Before a BK it just does not appear to make any sense, after a BK it may still not make sense, but it should cost a whole lot less - I would think less than $50M.

Niner Zulu said...
This comment has been removed by the author.
fred said...

niner ...

do not worry , the movie is finish ONLY when you see "the end" on the screen ...

honestly , there is not too many ways to save the product , the firm seems to be done for it anyway ...

so one of the first things that should be done :

weed-out all the one (i am NOT aiming at anybody...) whom have been gullible , stupid , naive (take out the word you don't want..) enough to do the whole thing by beliving it was a great occasion to HAVE something FOR NOTHING ...!

i don't want to be bad with anyone (and especially not play the "we told you so " part of the game )
but i was quite obvious that since the dot.com era , things were going on the wild side ...

so basically there is (i suppose) three kind of eclipse's customers ...:

1° the lovers : the ones that should looked after ... with or without cash possibilities , they are the true supporters ...
they should be the core-target of E500...
(somebody with true interest wouldn't mind to strectch a bit to get a full bird..)

2° the speculators : those do not deserve anything = they played , they have lost , who cares ?
if they are left naked to sleep outside in the cold ...well just ask yourself what they would have done to others in the opposite way ...

3° the "neither of the 2 first"
(once again , not aimed to pun anyone) the one who more or less stated "oh , i would like to get one" but tried to use "tricks" (once again tricks are not bad , when everything is working and does not endanger the whole matter ...)
to buy the thing they were looking for ... but without this way of mind (to pretend to love E500 and only proclame it to raise a little bit more on re-sale) that has been mostly negative to the firm , even if that's probably a good share of the "Orders"

so , May be E500 isn't finished , probably EAc's fate is already done ...

but the product in itself may be saved , it only depends on the abillity to a "group " of depositors to take the challenge by being able FIRST to analyse why they were wrong , why they have been dreaming , why they let a bunch of ... destroy the dream that (may be) should have not started right from beginning ...

that's may be what alan Greenspan was calling "irrational behaviour" ???

airtaximan said...

From AIN TODAY
Tail supplier sues Eclipse
By Chad Trautvetter
December 01, 2007

Litigation filed last month by Eclipse 500 empennage assembly supplier Hampson Aerospace in the New Mexico Second District Court against Eclipse Aviation quickly turned into yet another public feud between Eclipse and one of its suppliers. Eclipse’s previously publicized battles include those with former vendors Williams International, BAE Systems, Nordam and Avidyne, among several others.

Hampson is suing Eclipse for failing to pay the supplier “in accordance with the schedule and under the terms set out” in a contract initially struck in late 2003 but amended this past February. The long-term deal has an estimated value of $380 million. As per the amended agreement, Eclipse must purchase a minimum number of shipsets from Hampson or pay for that number each calendar year by the following November 30.

Eclipse is now claiming the February agreement “was procured by fraud,” thus voiding the scheduled payment arrangement. John Thal, a lawyer representing Hampson, countered that the “fraud claim is totally without merit.”

It appears that the fraud accusation stems from Eclipse Aviation president and CEO Vern Raburn’s claims that many of the assemblies that Hampson supplied had nonconforming components, alignment problems and poor riveting, among other problems. “The empennages have needed rework due to poor quality,” he said, which “has slowed down the production line” for the very light jets.

Howard Kimberly, finance director at Hampson Aerospace’s UK-based parent company Hampson Industries, told AIN that he takes exception to Eclipse’s claim that the empennage assemblies were not up to the required quality standards. “We’re a first-tier supplier to Boeing, Airbus and Hawker Beechcraft, and we’ve recently been selected to supply the empennage for the HondaJet,” he said. “Honda has the most demanding quality standards, so I’ll let you read between the lines here.”

Thal said it is “typical” of Eclipse to blame its problems on outside suppliers rather than look within. He lays the blame squarely at the Albuquerque, N.M.-based company’s feet, saying it has “inexperienced engineers due to high turnover” and constantly changing engineering.

While he vigorously defended the capabilities of his engineering staff, Raburn did acknowledge that there have been several engineering design changes to the Eclipse 500’s empennage and other parts and assemblies but said these are “normal” in a new airplane. In fact, he said some of the empennage changes even came at Hampson’s request to make it easier for the supplier to build the tail section.

Raburn also conceded, “A lot of the problems have been caused by us speeding up and slowing down the production line” as the company tries to ramp up output. Some suppliers get annoyed with this, he said, but the vast majority understand this situation and know that there will be a “good reward” later.

Show Me the Money
The lawsuit indicates that Eclipse has made only a partial payment–in March–but has refused to pay the amount due by the end of last month, even after Hampson agreed to revise the payment schedule. Hampson’s Kimberly told AIN, “We don’t enter into litigation lightly. Eclipse has forced us to take this action, but we hope it will be resolved amicably.”

Eclipse’s chief also hopes the dispute can be settled outside the courts. “We’re continuing to talk to them about the payment schedule,” Raburn said. “We don’t want to get rid of Hampson, and I don’t believe they want to get rid of Eclipse.”
In the meantime, Hampson is still shipping empennage assemblies to Eclipse from its Grand Prairie, Texas facility. Likewise, Hampson sister company Texstars continues to deliver Eclipse 500 composite nacelles from a plant also in Grand Prairie.

Raburn told AIN that he believes the lawsuit is unnecessary since it’s a “common payment dispute that happens all the time” between manufacturers and their suppliers. The heart of the matter, he said, is that “they want to be paid for assemblies they can’t even deliver.”

He added, “This has nothing to do with Eclipse’s ability to pay; we’re paying as shipsets are delivered.” Thal disagreed: “They’ve paid for only some shipsets sent this year, and even then Eclipse has been routinely delinquent in making those payments.” He confirmed that Texstars is also experiencing related payment problems from Eclipse.

“Eclipse could be at the sucking point,” suggested Teal Group aviation analyst Richard Aboulafia, referring to the point when outgoing cash far exceeds that coming in, draining funds. “The impossibly low price of the [$1.5 million] Eclipse 500 is based on impossibly high production rates and vice versa.”

Since Eclipse has thus far been unable to ramp up production to even one aircraft a day, let alone the planned three per day, Aboulafia said, the high-volume production has failed to pan out and threatens the company’s entire business model, which “has been dubious from day one.” Aboulafia believes it’s “obvious that Eclipse will need more cash by year-end.

“The next investor in Eclipse will need to ask a lot of tough questions before handing over any money,” Aboulafia noted. “And they probably will require some kind of supervision in the form of board seats or even control over executive management.”
For Eclipse to survive as a viable entity, “It needs to raise the price of the Eclipse 500, renegotiate existing sales contracts [to include this higher price] and set more reasonable production goals,” Aboulafia concluded.

NB.
- not that reporters get it right all the time... but this seems to still be an issue as of Dec 1.

- retails claim that Hampson was paid, end fo discussion (wishful) seems to be off base. Likely the reference was "payments' due prior to this summer... not the ones subject to the case

- specific staements about ongoing tardiness of payments to suppliers

- Vern comment about wanting to be paid for parts the CANNOT produce... Hmm.. "Hello...Pot, Kettle here..." Imagine someone wanting to get paid for stuff they cannot produce? Amazing.

Also, no one has to prove they CAN produce the product in "mythical" quantitity (never ordered) just to demand and collect on a order volume shortfall under a guarantee ... this is pure silliness.

- good news, they are still shipping tails...

- This is a lot of crap to deal with all at the same time...

- Seems like Peter Reed left just in the nick...

FlightCenter said...

CJ3,

In order to answer your question as to when serial number 2,700 would be delivered, you would have to make an estimate as to the maximum production rate Eclipse could achieve and how fast they could ramp to that rate.

Eclipse's latest published production plan and ramp rate show that they plan to achieve 2 / day in Jan 2009.

That plan projects that aircraft serial # 2,700 would be delivered in Dec 2011.

If you assume that they ramp at their historical ramp rate to 2 / day, then that results in aircraft serial #2,700 being delivered in Dec 2012.

If you assume that they ramp at their historical ramp rate, but to only 1.5 / day, then that results in aircraft serial #2,700 being delivered in Dec 2013.

Of course, these are best case scenarios all and there are many risk factors that could impede the steady ramp rate these numbers assume.

John said...

Dayjet Utilization Week 9

Total flight hours: 87
Training loop hours: 5.6

Total discreet flights: 103
training loop flights: 6

Maximum craft / day:
12 on Wednesday, 11/28 and 11 on Friday 11/30

Maximum flights per day: 35 on Wed 11/28 for 28 hours.

Discreet aircraft used in week: 17 tail numbers

Flights departing

Boca Raton (KBCT) 30
Gainesville Rgnl (KGNV) 28 (6 loops)
Lakeland Linder Rgnl (KLAL) 6
Naples Muni (KAPF) 6
Pensacola Rgnl (KPNS) 6
Sarasota/Bradenton Intl (KSRQ) 6
Ocala Intl-Jim Taylor Field (KOCF) 6
H L Sonny Callahan (4R4) 4
Tallahassee Rgnl (KTLH) 4
Brunswick Golden Isles (KBQK) 2
Destin-Fort Walton Beach (KDTS) 2
Leesburg Intl (KLEE) 2
Panama City-Bay Co Intl (KPFN) 1
TOTAL 103


Destination matrix has changed
Tallahasee and Lakeland drop dramatically in frequency. Ocala, Sarasota, Fairhope and Naples appear. Valdosta, Georgia drops off.

Black Tulip said...

Airtaximan,

Reminds me of a story my father used to tell. It dates to the end of World War I.

A mother is at an open window overlooking Broadway in Manhattan. Confetti is raining down as the returning doughboys march in a victory parade. The mother says, “Oh look, the whole army is out of step except my son Johnny.”

airtaximan said...

BT,

funny.. or dhall I say "drole".


Regarding Dayjet - it appears as if the "dayport" system failed. They have opened up many, many more markets, and are now flying to many more airports, probably increasing the dead heads, repositioning flights, or waiting. Someone might say there were always "Daystops"... but at the beginning, the plan was to charter to Daystops, and do the Dayjet service to Dayports like a mini airline.

They probably figured out fast that the 5 Dayports were never going to yield suficient passengers, so they opened up WIDE.

Efficiency for charter (daystop) as opposed to airline (dayport)type service is going to be much lower.

Anyone have a clue regarding pricing for the non-dayport service?

airtaximan said...

John:

flight hours per plane, and for the fleet inclding planes that they own but did not fly?

Stan Blankenship said...

John,

Do I interpret your numbers correctly?

87 flight hours accumulated in 103 flights = .84 hours (51 minutes) per flight.

103 flights over a 5 day period using 17 different aircraft = 1.21 average flights per day per aircraft.

87 flight hours accumulated in 5 days using 17 different aircraft = 1.02 hours per day per aircraft average utilization.

These numbers are presumed to include both revenue and dead-heading flights.

John said...

Craft utilization was quite uneven

Craft FLIGHT Hour
DJS109 6 6.4
DJS110 3 2.8
DJS115 5 4.1
DJS116 4 3.8
DJS119 1 0.2
DJS130 7 5.9
DJS131 5 4.1
DJS132 4 4.1
DJS135 5 3.9
DJS136 7 5.1
DJS141 14 9.1
DJS142 9 9.5
DJS145 8 8.0
DJS146 3 2.1
DJS147 14 10.6
DJS148 3 2.6
DJS150 5 4.9
Total 103 87.3

FlightCenter said...

Stan,

DayJet has taken delivery of 20 aircraft. John's numbers are reporting the 17 aircraft that did fly. 3 of the 20 DayJet aircraft didn't fly last week. (DJS126, DJS134, DJS139)

That means that the average utilization for the DayJet fleet is 1.0 flights per day per aircraft and .87 flight hours per day per aircraft.

Gunner said...

In the AIN Article, note who's making statements for Hampson and what they're saying:

The statements are being made by Howard Kimberly, finance director, and the company attorney.

The statements they are making are not "velvet glove" pats. They've come out and accused Eclipse of substandard engineering and they've disclosed the company is delinquent even when they do pay. Finally, they've pointed out that their sister company is experience the same collection problems.

The individuals occupy positions which are highly unlikely to be authorized to make these types of public statements, absent a green light from the very top to take the gloves off. And these are not statements meant to check the rumor mill, while keeping the pressure on Eclipse, as would be the case with a minor dispute among partners.


This is FAR more than a warning shot across Eclipse's bow. It's a dirty laundry airing by a business PARTNER. Hampsons has clearly thrown down the gauntlet to Eclipse and is obviously playing real-world hardball here. That means they place far less value on the contract than what's currently owed.

Hampson is also willing to risk a "$380 million contract". Hampson has better information than the rest of us. That's called a Clue.

Meantime, something bad happens at Eclipse on the 15th of December, 15 days after Hampson's Nov 30 payment deadline.

That's called a Data Point.
Gunner

hummer said...

Gunner
When a separate workstation (outside the production lines) has to be setup and used simply to modify or rework the tail assemblies, it indicates something is not right. Therefore,
Eclipse has a valid complaint concerning the acceptance and rework of the tail assemblies.
Frankly, if they are not right, would you pay for them?
Further, you would be all over there backs like a dirty shirt until the problem was resolved, right?

hummer said...

John
You are missing a/c 126, 134 & 139.
What happened to 152, 153, 156, 157, 160, 161 & 162 DayJets, positions 71- 81?
Are they delayed due to modification of business model or AvioNG?
Maybe they are headed to other part 135 ops?

Black Tulip said...

Gunner,

Figure it this way. Hampson probably couldn’t get anywhere with meetings, phone calls or letters. Also they noted this customer’s practice of ‘Blame the Vendor’. Why not get out in front of the situation before you get shot at?

There will always be some finger-pointing in a new product that technically intensive. But some have suggested that Eclipse keeps making engineering changes and the design would not seem frozen - even lately.

If Hampson is doing good work for others and being paid for it, they may even enhance their reputation by this move. Plus there is a slim chance that being near the head of the line of creditors with a valid claim may have some value.

Changing subjects, I still think it would be a nice idea for the bloggers to get together… wearing nametags with their handle. Sunriver, Oregon is a nice place in September. Maybe a block of rooms will open up next year.

Finally, I understand Santa was considering switching to an Eclipse 500 this year but won’t do so without known ice approval.

John said...

Hummer
I only included the planes that flew.
126 or SN2 did not fly
134 and 139 did not either

110 came back after being off 24 days. 126 flew on 11/21, but had been down 11/1 to 11/19

I don't know where the other Dayjet planes > SN62 are, they are not being reported on FlightAware at all, either by N number or fleet.

Flight aware may miss a very few flights based on skips between departure destinations. I have no idea if transponders are blocked on weekends and the planes used for private purposes.

The flight pattern doen't suggest that happens often, as you would expect skips in the departure record on Monday.

I do know that SN73, originally numbered DJS156 is for sale on Controller at 1.8 million, it is not yet reported as delivered.

The flight pattern indicates that Dayjet may have made more flight crews available this week. I'm guessing 8 crews are operating, but don't really have experience or information to evaluate that guess.

The social network "Linkedin" can be searched for Dayjet employee (office staff not pilots), no recent shifts in or out--one ex sales guy now in Texas-- lots (>20) fancy position titles. The ground crew burn must be substantial.

Dave said...

When a separate workstation (outside the production lines) has to be setup and used simply to modify or rework the tail assemblies, it indicates something is not right. Therefore,
Eclipse has a valid complaint concerning the acceptance and rework of the tail assemblies.
Frankly, if they are not right, would you pay for them?
Further, you would be all over there backs like a dirty shirt until the problem was resolved, right?


I agree it indicates something is not right, but that something isn't necessarilly on Hampson's side. By Eclipse's own admission they've repeatedly changed the designs. Taking what Eclipse said, there would have to be re-work done even if Hampson delivered 100% to spec if the work was completed prior to the specs changing. Hampson may be totally or partially at fault, but the existence of another workstation at Eclipse doesn't itself prove Hampson's negligence.

airtaximan said...

Observations:

Dayjet is doing about an hour a day (short week) operating time per plane.

Their plan was 1000 hours per plane per year. 1$-4$ per seat.

Looks like they are probably doing 1/4 the revenue per plane if all the flights have passengers at 1.3 (their desired load factor) load.

Realistically, with 20% of the flights empty and 1.3 load (give'm that)... they are at around 20% of their performance target.

260 hours of operation - 20% empty = 208 revenue hours/plane/year

pretty rough start.

airtaximan said...

one would think that if the problem WAS shoddy work, they would have corrected it (together) by now. 100 shipsets and 18 months or more later, and Eclipse is griping about poor workmanship, still? C'mon.

If Hampson is THAT bad, (it has been around 18 months since the first tails were manufactured) shouldn't eclipse have already done something about this? Its not like they are married to any supplier, really.

{;us they agreed to a new amount owing based on the missed garantees... this is the point - they agreed after all the quality issues were dealt with. The owe money, they are not paying.

It must be rough paying for parts under a guarantee - yet never required. It must suck - especially today.

paul said...

When I was at eclipse working on the tail mate, the tail was removed from the shipping container and immediately used. I asked if it went through a receiving inspection and the answer was "nope".
However the only faults I ran accross was short ED on the fwd lwr edge where it met the fuselage. Of course that was before it was beat on trying to make it fit.

Gunner said...

Hummer-
Dave and Paul have already answered your point.

I would only add this:
Just how many Tier One suppliers to Boeing, Airbus, Honda and the like have to be tarred with the "incompetent", "substandard" brush before ONE member of The Flock questions whether the problem might be properly made parts of an improperly spec'd design?

Williams, BAE, Avidyne, Hampson, Aerazur...I know the list goes on, but I can't possibly keep up any more without a written inventory.

Your "explanation" would make Occam wince.
Gunner

Redtail said...

Gunner said... Just how many Tier One suppliers to Boeing, Airbus, Honda and the like have to be tarred... Williams, BAE, Avidyne, Hampson, Aerazur

Williams still can't get the engine to work reliably such that they place the engine on their web site for a new launch user to come along... BAE couln'd get the ECBs and power systems to work... Avidyne couldn't get all of the AVIO functions to work or the Eclipse would now have a working moving map and GPS... workers on the line have re[ported problems with Hampson workmanship from a new facility and new inexperienced workers... and I don't know the situation with Aerazur - but I'm sure you do (yeah, right).

Gunner said...

"Vern said it.
I believe it.
And that's all there is to it!"

For my own part, I can't believe American aircraft manufacturers have ever gotten a plane off the ground, given the revelations that have come out now that Eclipse is on the scene, kickin' ass and takin' names.

Wonder how their gonna survive after Eclipse is gone?
Gunner

airtaximan said...

redatil,

glad you are back - thought you might have stuck a gun in your mouth and blew your brains out...

No matter what, every OEM must decide which technologies are ready for prime time, and which ones are just in development technologies.

No matter what, every OEM needs to do a riak analysis for make vs buy...

Eclipse screded up on two major systems and got a grade of F regarding these two fundamental principles of aircraft development.

The misunderstood the risk with the EJ22, and PAID for the development. It was noting but a NASA demo engine when they adopted it for their platform - BIG Error. Likewise, entrusting the engine company to do the aircraft development program was amateur-hour.

They misunderstood the risks and complexity associated with leading the integration of a new avionics suite. They paid for this work, as well. It was a disaster. Too much risk, terrible decision.

Tha lack success with the risky items noted above, leads me to believe they have no clue about risk. They do not know where the line is, and they probably don't know when its been crossed. This scares me about them.

Th lack of reliability regarding schedule, excuses for snafus, etc... leads me to believe this exists beyond just the procurement aspect of the business.

Finally, this has nothing to do with HAmpson, no matter how much YOU would like to think it does.

If Hampson is such a bad supplier - why have they not been replaced? WHy did eclipse agree to pay them at the renogotiation a few months ago... why are they still using them and their parts. Why have they not paid the subsidiary for the nacelles on time?

The ej22 and avio issues, and throwing those suppliers under the bus, have nothing to do with Hampson trying to collect on volume guarantees that never materialized.

This is not a risk error, its a marketing and strategy error on behalf of eclipse, coupled with a production rate problem. The market for their plane (volume) is not there, and the stratgey to forward prices has proven a big problem. Of course they cannot build the planes according to the stated delivery promises, either, and the guarantees must be pretty expensive for NOT producing planes.

Rough spot.

Metal Guy said...

Redtail Said : BAE couln'd get the ECBs and power systems to work... Avidyne couldn't get all of the AVIO functions to work or the Eclipse would now have a working moving map and GPS

These statements are patently false. The BAE contract fell apart when Eclipse completely changed the specifications and added loads of functionality that went well beyond the original specifications. When BAE upped the price accordingly, Eclipse cried foul and the deal came apart. Eclipse was simply not able to provide their vendor with accurate specifications to correctly price the development and ship-set costs.

Avidyne stopped trying very early in the program for unknown reasons. Apparently Vern really pissed Dan off somehow. Avidyne obviously have moving maps working on all of their other products.

Get the facts straight please.

Redtail said...

MetalGuy said... Avidyne stopped trying very early in the program for unknown reasons.

ATM said... The ej22 and avio issues, and throwing those suppliers under the bus, have nothing to do with Hampson trying to collect on volume guarantees that never materialized.

There you go. Both of you are absolutely right. The EJ22 was never a the viable product that Williams claimed they could produce. Avidyne stopped working on the AVIO design giving Eclipse little choice but to find a replacement. Thank you both for verifying the facts.

Metal Guy said...

Sure, Eclipse had to find a new supplier to replace Avidyne – that’s quite clear.

However, I never said it was either Eclipes or Avidynes Fault. Nor do you know for sure either.

Given the history of both, I would bet that Eclipse screwed the relationship up, not Avidyne. (But that’s just a logical extrapolation given all of the other failed vendor relationships.)

I have no idea on the Williams side, although I suspect it was simply too immature and Eclipse could not evaluate the risks appropriately.

In either case, please name any other top-tier air-framer who has had to completely redesign the avionics several times over, and had to change engines in mid design. I am not aware of any off hand.

So all data points to the fact that Eclipse screwed up, not the vendors, as you imply.

Gunner said...

Way to go, Red.
Irrefutable logic like that is certain to bring in the new customers. Just ask T206H.

Bet you already raised that $30 Mill, huh?
Gunner

ColdWetMackarelofReality said...

retail you just don't know when to quit do you?

Either you have to believe that a bunch of tier one suppliers with thousands and thousands of fully funtioning units, installed in thousands of planes, suddenly had major issues with their projects for only one company, or perhaps that one company caused those issues. Hmmmm, which could it be?

What did all of these issues have in common? Two words, FAILURE and ECLIPSE.

The ECB technology was from GD not BAe. The software portion of their operation (control) was an Eclipse function, not BAe.

The EJ-22 actually ran fine once the FADEC laid in the fuel correctly. Who programmed the FADEX, yup, that failure was Eclipse.

Avidyne has THOUSANDS of fully functioning displays in the field, with moving map and many other things - the failure was Eclipse in not being able to define what they wanted, then unable to stick to what they said they wanted, and then to properly integrate the feature set and coordinate activities between the hardware suppliers (BAe then Harco I think, and Avidyne).

These are all tests that the REAL airplane companies pass, every day, as they manufacture REAL planes that are delivered, without IOU's, without planned trips back home for modification, and without INOP placards installed all over the cockpit.

Name one other OEM that delivers certified aircraft with so many IOU's and INOP functions retail, just one....

That's what I thought.

hummer said...

Gunner
First I'm not part of a flock.
No more than you are part of the herd.
So beyond labels, it seems strange
that a mfg facility must hold up
production to rework or remanufacture
a tail assembly. This is when everyone in the facility is working to get to one unit/day, with credibility on the line.
My statement was that something is wrong. Dave stated he didn't know whose fault it was and I took that graciously. ATM, is that Jr. or Sr., indicated that it should have been fixed 18 months ago. Right.
So it was a problem, is a problem and needs fixing. So Hampson is a first class supplier. So what?
Fix the damn thing so it doesn't hinder production.
If they (Hampson) doesn't want to do business with start up operation, let them not contract with startup in the first place.
Other, accomodate and get the job done.
Finally Gunner, if you're so damn
smart, why have you gone from Eclipse, DJet and now the homebuilt. You seem to have your problems with suppliers, right?

ColdWetMackarelofReality said...

Hummer,

I know Gunner can defend himself but he already explained that his plan is to use the Epic to build up his turbine and pressurization experience, as it will be available before the D-Jet - actually a pretty good idea, making the transition from a good light twin like say a Baron or a 340 directly to a twin turbofan VLJ, even a single engine VLJ is quite a step, one insurance companies may have something to say about.

The price point on the Epic is also pretty good since most pre-owned single engine turboprops are appreciating and pricing on new aircraft is holding steady as well.

He has also clearly explained the reasoning behind his demand for a return of his money, when Eclipse changed the sales congtract without his agreement.

You see, a prudent and experienced businessman, with experience, say like Gunner, will have alternatives available and will be thinking of the future.

All lessons Vern and crew could have chosen to learn ay anytime.

Gunner said...

Hummer-
I wasn't referring to YOU as part of the Flock. I made a generic statement. Apologies offered if that wasn't clear enough.

But the facts remain:
a) Hampson's history and track record are known.
b) Eclipse's history and track record is known.
c) Parts were ordered.
d) Parts were delivered.
e) Parts were refit rather than rejected.

Why?
Oh, probably because Hampson is as incompetent as Williams, BAE, Avidyne and Aerazur.

What other logical reason is there. After all, we're dealing with Eclipse Aviation here, not some confused, arrogant, disorganized start-up. Face it, this company has well over a BILLION dollars in aircraft design experience.
Gunner

Redtail said...

FishLps said... The EJ-22 actually ran fine once the FADEC laid in the fuel correctly.

Then where's the engine today. Certainly not on the Williams web site as "the future of turbine technology". You have no idea what you are talking about.

Gunner said...

Hummer-
BTW, since you seem to be interested in my aircraft purchase history. Yes, I'm excited about the Epic order. I'm also excited about the Diamond order. Both are still in place. Neither is for sale.

Would it be even more damning to your image of me, if you learned I purchased a CJ, too? I haven't. But its real important to me that I not offend you by my choice of aircraft purchase.
Gunner

ColdWetMackarelofReality said...

retail,

The EJ was built for the Eclipse, the Eclipse was built for the EJ, they were a matched set.

As others have tried to explain, even going so far as to use small words to try and avoid confusing you (apparently to no avail), the EJ was an outgrowth of NASA research, Doc Williams and His VernNess were put together by Paul Allen - Williams had a cool little engine and Vern had, well Vern - the rest is $80M or so in history.

Nobody else would try and build a plane in the 4800 lb class, so there is no need for the 700lb thrust engine.

Williams DID exhibit an FJ-22 engine, at OSH, shortly before the public relationship between Eclipse and Williams began to deteriorate - you can look it up.

That the other experienced airframers have elected to NOT try and build an airplane around the -22 should be telling - turns out you cannot design and build a 6-place twinjet airframe with a MTOW of 4800 - just ask Vern.

Redtail said...

Yeah right, no use for an 80 pound 700 Ft-LB thrust engine that sips Jet-A. How nearsighted can you be? Who said anything about it had to be a six-place?

ColdWetMackarelofReality said...

Dude, when you take the rose colored Eclipse 3V glasses ling enough to regain the use of your frontal lobe you will look back on this period in your life and wonder what the hell you were thinking.

How much does a Bonanza weigh? Saratoga? Malibu? Baron? 340? How many seats? See a pattern?

4 seats, 6 seats, not real important, the issue is the MTOW which is a function of thrust, and then complexity which is a function of the number of engines and related equipment installed.

Maybe that is why the D-Jet and The Jet are single engines.

You can stop making an ass out of yourself and displaying your lack of experience and qualifications anytime retail, nobody is making you post this stuff.

Redtail said...

Yeah right, no use for an 80 pound 700 Ft-LB thrust engine that sips Jet-A. How nearsighted can you be? Who said anything about it had to be a six-place?

hummer said...

Gunner
Apology accepted.
Just like to think my way through
this always confusing mess; sometimes pro, sometimes con.
Congrats on getting your commercial.
Also on your aircraft selections.
To note, if I had your money I would
donate mine to charity.

Gunner said...

RT-
Why didn't Eclipse simply produce the engine themselves after Williams abject failure? After all, any company that can certify a revolutionary, full suite avionics package like NG in little more than a year, should have little problem with a simple engine; especially an engine with commercial enterprises clamoring for the technology.

Why, I bet they could easily spin it off and make it as sucessful ad PhostreX.
Gunner

Redtail said...

Gunnersaid... Why didn't Eclipse simply produce the engine themselves after Williams abject failure?

Gunner, try and keep up. It didn't work. It never worked as advertised. It still doesn't work.

Six Romeo said...

Redtail said: It didn't work. It never worked as advertised. It still doesn't work.

Think they'll stencil that on the hangars in ABQ next year?

Stan Blankenship said...

Redtail,

Since you like to nit-pick, what in the hell is a "700 FT-LB thrust engine"?

Redtail said...

It's the same as Fish's FADEX.

Redtail said...

Is that all you got, Stan?

flightguy said...

Stan,

Don't nitpick with Redtail. He still believes that Eclipse needed a 700 lb FN engine. That's why they have greater than 900 lbs with APR for each engine. When he dies he will still be saying it was Williams fault, they failed.

Redtail said...

Where's the working engine claimed by FishLips? The gross weight of the Eclipse has nothing to do with anything, if the engine's working at all. Where is it?

flightguy said...

Who said anything about gross weight? Oh ya you did. Thanks for confirming.

If I'm not mistaken the engine demonstrated the thrust. Correct? Did Eclipse decide to pay into the program for the development of their exclusive spec'd engine? No, they decided to take money from Pratt and Whitney and investors to stay afloat. That's the Eclipse way.

ColdWetMackarelofReality said...

retail,

Are you this dense on purpose?

Does it hurt?

As I said, look it up, Williams displayed an FJ-22 on the airshow circuit, based on the EJ-22 which Eclipse had 'exclusive' rights to based on projected volume (sound familiar, say Hampsons maybe).

Other than Eclipse, who failed to the tune of 1100 pounds too heavy, nobody was interested in trying to build a plane that could not weigh more than about 4800 - it is really that simple.

You see, if you knew anything about the airplane business you would know that in some cases the engine predates the plane designs that use them. One company in particular created a new class of engine for which no airframes existed at the time. The engine was clever and offered a good solution, making a new class of jet possible.

The result was the FJ-44 which now powers most of the entry level jets made, including all CitationJets, the Premier 1, a half doze or so re-engine programs for older Citations and Learjets. Williams makes that engine, and it is among the more successful jet engine families ever. These guys are not pikers, like Avidyne is not a piker, like BAe Systems is not a piker, like Hampsons, Aerazur, DeVore and others are not pikers.

Not all engine developments result in takers or successful airframes though and nobody with ANY experience or understanding thought they could build a commercially viable plane that would work with the thrust available from the FJ-22.

All that means is that they knew better - Williams tried to stir up additional interest in the engine family when there were still other new and inexperienced would-be airframers like Safire - nobody bit but if there were a launch customer they would bring the engine out.

I am beginning to believe you have absolutely nothing of substance to offer at this time retail, what DO you actually know about planes? Design experience? Operations? Passenger? Maybe fuel boy?

Stan Blankenship said...

Redtail,

If you want to be the engine expert, you will need to learn the correct terminology.

Mouse told us months ago, the problem with the engine was a problem with the FADEC which Vern insisted be developed by Eclipse.

While you can quarrel with his former point, the latter is a matter of record. So try using a little logic here - If the engine control is no good, how can you expect the engine to run properly?

Again, compare the track records. Williams with a string of successful small turbojet engines vs. Eclipse and their string of dismal failures on nearly every disruptive technological breakthrough they have tried to achieve.

Redtail said...

FishLips said... The result was the FJ-44

Oh, please. The FJ44 has NOTHING in common with the FJ22 other than both being engines. The cores are completely different. The 22 is not a scaled 44. And you consult for what? Women's' stockings, or was it braziers?

Redtail said...

Stan beamed... If the engine control is no good, how can you expect the engine to run properly?

If the FADEC was all that was keeping the engines from the hall of fame, why not rewtite the code correctly, and bring it out? Because it doesn't work. It never worked, It still doesn't work.

flightguy said...

Wasn't that engine disruptive according to Eclipse because it was unconventional and unproven other than in the cell? Was this another high risk technology miscalculated by Eclipse?

ColdWetMackarelofReality said...

What is wrong with you you dolt, I said nothing of the sort that the -22 and -44 are related, I was trying to help you see that sometimes you create a new engine and successful new planes result (the -44), and sometimes you don't (the -22).

I am the one who originally clarified that the EJ-22 was a 3-spool design, which is obviously not related to the 2-spool FJ-44 - if you knew anything about planes or turbine engines you would understand what that means.

Your fervor to try and latch on to something, anything, that rescues your belief that Eclipse is the victim in all this is as telling as it is desperate.

You want to hold that somehow everyone else is reponsible, it is 'them', not Eclipse, that is responsible for picking the wrong design point, the wrong engine, taking on software development, FADEC development, introducing a new manufacturing technology, and integrating a complicated avionics suite.

Again, the only common denominator in the failures we have discussed is Eclipse - for anyone able to rationally evaluate what is going on the signs are clear, for others, you choose to go on faith and belief in Vern, even when confronted with overwhelming evidence to the contrary.

So how well is that working out for you or the customers?

flightguy said...

Did it achieve the required thrust or not? You never answered the question. I thought pictures were taken that proved it would meet the required thrust.

ColdWetMackarelofReality said...

So retail you are saying that Williams could not get the Eclipse supplied and developed FADEC to work, as installed on the Eclipse aircraft.

Riiiiight. Of course it must be Williams' failure - could not be Eclipse who developed the FADEC and the code running it.

Funny thing is that EJ-22 ran in the test cell and on the flying test bed when using a Williams spec'd FADEC.

To quote Bugs Bunny, what a maroon.

Redtail said...

flightguy said...
Wasn't that engine disruptive according to Eclipse because it was unconventional and unproven other than in the cell? Was this another high risk technology miscalculated by Eclipse?

Absolutely, and it didn't work. Williams couldn't get it to work.

Redtail said...

FishLips said... Funny thing is that EJ-22 ran in the test cell and on the flying test bed when using a Williams spec'd FADEC.

Then where is it today? IT STILL DOESN'T WORK.

flightguy said...

It was Williams faullt, the failed in 2002. Williams failed in 2002. Williams failed in 2002.

It is now 2007, BK is looming what are you as an investor going to do to help Eclipse?--Blame Williams for eternity?

gadfly said...

Consider this for a moment: Given the former weight of the little jet (4,800 lbs?), and the most recent weight (5,900+ lbs?). “If” the “first” design found 700 lb thrust engines adequate, then the “latter” design would automatically require engines with thrust between 1,050 to 1,100 lbs each . . . simply to meet the same altitude and speed of the intended design. Do the “math” on your HP RPN calculator . . . or use your “slide rule”. (In this “what if”, I gave up less than 100 lbs in each case, to run all auxiliary equipment . . . but if you use a “smaller number” for comparison, the numbers come out much worse . . . not looking good for the “designers” of the aircraft.)

These comments have nothing to do with “brand” or “model” of engine, just the simple power required for a given shape and weight of aircraft at a given speed and altitude . . . the only variable in the formula being “weight”.

Now, seeing that the design weight needed to be increased dramatically, it might shed light on the “motive” for scrapping further work on the Williams engine. Otherwise, why not just go to P&W for another version of a 700 lb thrust engine?

gadfly

(Yeh, what do I know? . . . not much, for sure, but 'attempting to come up with some answers and a better understanding.)

ColdWetMackarelofReality said...

Keep asking and I will keep telling you retail, the engine development ceased when Vern stopped paying for it - where is the '52 Chevy?

Fact is the engine operated fine when on Williams spec'd FADEC, both in the test cell and on the flying test bed - you may recall there used to be all kinds of articles and announcments coming out of Eclipse when the EJ was in development - photos on the 707 test bed and such.

Williams displayed an FJ-22 based on the EJ-22 but nobody with any actual airplane experience thought they could make a commercially viable aircraft in the size range that the 700lb thrust engine demands - and they were right, see Eclipse's failure to do it.

And since you seem to be repeating yourself I'll answer again just to help you out:

Fact is the engine operated fine when on Williams spec'd FADEC, both in the test cell and on the flying test bed - you may recall there used to be all kinds of articles and announcments coming out of Eclipse when the EJ was in development - photos on the 707 test bed and such.

Williams displayed an FJ-22 based on the EJ-22 but nobody with any actual airplane experience thought they could make a commercially viable aircraft in the size range that the 700lb thrust engine demands - and they were right, see Eclipse's failure to do it.

Redtail said...

FlightGuy said... Blame Williams for eternity?

No, but don't blame Eclipse because the ENGINE DOESN'T WORK. Eclipse made the wrong choice for that powerplant.

flightguy said...

Your saying it doesn't work does not make it true. The system on the Eclipse did not work. You are right Eclipse made the wrong choice on the 700 lb FN Powerplant. That is why they changed thrust ratings and went to Pratt. Williams could not stand the BS out of Eclipse.

Redtail said...

FishLips said... photos on the 707 test bed and such.

I saw photos, but if you know so much about the program, you'd know it was on a Saberliner and not a 707. I didn't see photos of an operating engine.

ColdWetMackarelofReality said...

retail,

As prime integrator, it IS Eclipse's fault when things don't go right, regardless of where the failure originated - that is what it means to be prime integrator.

For anyone with any experience in industry, or even in business in general, or basically any common sense, the pattern is obvious, as is the origin of the failures - it starts and ends with the corner office overlooking the flight line on Clark Carr Loop.

Redtail said...

flightguy said... Your saying it doesn't work does not make it true.

Your saying it works doesn't make it true. Where is the working engine?

flightguy said...

Where is the cash to build it? Unlike Eclipse, the folks at Williams don't milk their depositors.

Stan Blankenship said...

Redtail,

Q. What if...the engine and FADEC would have worked, where would the company be?

A. In even deeper s___!!!

ColdWetMackarelofReality said...

retail asked, for the 4th time in the last hour so where is the engine.

Again, the fact is the engine operated fine when on Williams spec'd FADEC, both in the test cell and on the flying test bed - you may recall there used to be all kinds of articles and announcments coming out of Eclipse when the EJ was in development - photos on the 707 test bed and such.

Williams displayed an FJ-22 based on the EJ-22 but nobody with any actual airplane experience thought they could make a commercially viable aircraft in the size range that the 700lb thrust engine demands - and they were right, see Eclipse's failure to do it.

So exactly how do you know about the original Sabreliner tests? Are you an Eclipse or Williams employee? Come clean retail, how do you know?

flightguy said...

The fishee becomes the fisher!

Six Romeo said...

The Saberliner was no secret:

http://tinyurl.com/yrj9m7

Redtail said...

flightguy said... Where is the cash to build it?

The general concensus among those here that claim to "know", is it is working in some back room. Bring it out. No cash needed.

Redtail said...

Stan Blankenship said... Redtail,
Q. What if...the engine and FADEC would have worked, where would the company be? A. In even deeper s___!!!

Possibly.

flightguy said...

If I'm not mistaken the engine was running fine in 2002 when the contracts were canceled. Th engines made 700 lbs FN remember? Why don't you answer the question?

Redtail said...

FishLips said... So exactly how do you know about the original Sabreliner tests? Are you an Eclipse or Williams employee? Come clean retail, how do you know?

The question is why don't you, "Mister 707 consultant"?

ColdWetMackarelofReality said...

retail, here in the States the free market determines what is sold - there is no demand as no experienced airframer believes they can produce a commercially viable plane in the size required by the thrust available.

Eclipse proved these other companies to be correct, as Eclipse has failed to produce a commercially viable aircraft in the size required, or even more than half-a-ton heavier and twice as costly.

Redtail said...

FishLips said...
retail, here in the States the free market determines what is sold - there is no demand as no experienced airframer believes they can produce a commercially viable plane in the size required by the thrust available.

Then why doesn't Williams scale the engine upward and produce the thrust required to make it viable as a product? It was a light weight design, ultra quiet, and fuel efficient. What's not to like IF IT WORKED?

ColdWetMackarelofReality said...

I did not consult on the 707, but would have been proud to be associated with such a successful plane - you know, one which actually did what they said it would do, from day one - with over 1000 delivered during a production run of 20+ years, and with untold millions of miles flown.

I'll bet not one 707 was ever delivered that required return to Seattle or Wichita within months for modification to sort of almost maybe meet some of the revised performance guarantees.

I will also bet not one 707 was ever delivered with significant functionality placarded INOP.

Redtail said...

Did I forget to mention it was a Saberliner?

flightguy said...

Redtail,

Great idea to scale the EJ22 when they discontinue the 44 product line with paying customers.

Redtail said...

FishLips said... photos on the 707 test bed and such... photos on the 707 test bed and such... photos on the 707 test bed and such... photos on the 707 test bed and such.

Redtail said...

flightguy said... Redtail, Great idea to scale the EJ22 when they discontinue the 44 product line with paying customers.

Absolutely, quiet, high bypass, low cost, fuel efficient. If only it worked.

ColdWetMackarelofReality said...

Scaling the engine up or down is a significant design effort retail.

I have not said that the EJ-22 would have been a great engine, only that it did in fact work and that the issue with running on the Eclipse was the FADEC which was Eclipse's responsibility.

The engine did develop the spec required thrust, and even demonstrated the upgrade spec of 770 lbs required by the uncontrolled weight growth of the Eclipse itself.

I have questions about how durable it might have been, but I seem to recall rumors that the EJ-22 was intended as a throw away engine, no real overhaul - given the size of the components and the complexity of any three-spool design I would be surprised if it had been possible to get more than one overhaul cycle but that is not the issue.

The issue is that Eclipse blamed Williams when it was the Eclipse FADEC that failed, although they did fly it in August of '02 - are you suggesting that was a stunt designed to release monies from escrow? Are you suggesting that Vern pressed a flight test event that was made with substandard engines?

Now that would be an interesting conspiracy theory.

Redtail said...

FishLips said... I did not consult on the 707

Right over your head. What a waste.

flightguy said...

We could go at this all night. Williams failed in 2002 right?

I thought the original excuse from Vern and company said the EJ22engine was like a Ferrari (too fragile)when they needed a Volkswagen engine. How are the current Volkswagen engines doing in the shop? Got life?

Got $30 Million yet? Got a go forward plan? Dec 14 looms large. Why do you worry about things in 2002? Does it help the Eclipse case to bad mouth or justify their failures to suppliers?

ColdWetMackarelofReality said...

The pointless little jabs are funny retail, the juvenile pettiness is par for the course.

So tell us again what your qualifications are?

What is YOUR interest in this story?

Why should anyone listen to you?

cj3driver said...

New Mexico Business Weekly – December 20, 2002

Eclipse Aviation President and CEO Vern Raburn says he'll get it right the second time around. He means the contract with a company to produce engines for the Eclipse 500 jet airplane.
On the heels of a canceled contract with jet engineer maker Williams International over performance and quality issues of its EJ-22 engines, Raburn says that Eclipse's contract with a new engine manufacturer will be different.
The new contract will include performance standards, time frames and benchmarks that might have been lacking in Eclipse's contract with Williams, Raburn says. Eclipse doesn't want a "second kick," he adds.
Raburn is negotiating with Pratt & Whitney for new engines for the 500. He says that Eclipse has settled its contract dispute with Williams.
The new engines will be slightly larger and heavier than the EJ-22s. They will give the jet a faster climb rate and cruise speed, but will reduce its fuel efficiency. But the engines will be more durable than the EJ-22s, which is what Eclipse's air taxi service customers want, Raburn says. The need for more powerful engines became apparent earlier this year as design changes caused the 500 to grow in weight by 200 pounds, Raburn says.
"We understand what our customers need. Our air taxi customers will be taking lots of short trips and they need a massively reliable engine," Raburn says. "If you just look at them, you will probably not see a difference in the engines."
Eclipse suffered a major setback in its effort to develop an inexpensive, five-seat personal jet airplane when it canceled its contract with Williams in late November. Williams' EJ-22 engine was to have weighed only 80 pounds while delivering 770 pounds of thrust. It was to have been one of the key components to Eclipse's promise of being able to sell a jet plane for under $1 million.
But the engines never developed the promised thrust, and Williams balked at getting them to produce the 825 pounds of thrust that Eclipse requested, Raburn says. In addition, key components, such as fuel meters and generators on the EJ-22s also failed, Raburn says.
The engine problems have set Eclipse's test flight program back by 30 flights and will delay the plane's Federal Aviation Administration's certification schedule. Eclipse had hoped to have the plane certified by the end of 2003. It was to begin delivering planes to customers in 2004.
The jet first flew on Aug. 26. Eclipse had planned an aggressive test flight schedule that had the plane flying almost daily. But the engine problems surfaced and grounded the 500 after only one test flight.
Raburn says Eclipse tried to work with Williams to remedy the problems. The startup aircraft company even hired outside experts to evaluate the engines.
Only one of Eclipse's 1,357 customers has asked for a return of the deposit. That customer was refunded $150,000, Raburn says.
Raburn remains unfazed by the engine problems.
"If you have signed up to be in a startup, you have signed up for problems," he says.

=========

I assume Vern was reffering to Williams... or was he. go figure.

fred said...

redtail ...

what's YOUR interest in drowning EAc in a cup of water ???

the way your arguments are made and broadcasted somtime make me wonder if you are really a human being or just a "clever" computer trying never to loose an argument....

IT is really funny , i admitted long time ago , i do not have a hundredth of the aviation-knowledge of some (most?) writing here ...

but nevertheless , i think i can see a few things here...

like this post about engine ?? that was lost in what ?? 2000 /2002 ??

wake-up little pinktail ...!

it was just too many days ago ...! (anyway what the point to hide the forest of today with some tny bits of grass of then ??)

one thing amaze me about the whole matter , it is the way the bizz has been conducted since (apparently) a long time ....

it look (from far) each time something worth or good happened , Vern did everything to sabotage it or ruine the progress ...

you may not agree , but it stinks !

it look like everything has been done with one idea = we know that what we've promised , both to private and commercial , cannot be reached so we just have to make them wait and dilute time ..
may be by then the Technologies to make it a sucess will be invented ....
(not a first timer as well , pr Reagan did it with the SDI (nicknamed "starwars") spending 20/25 years ago billions on building defenses on technologies which remain to be invented Today )

this bird May Be saved ... but the cost is going to be FIRST that all the mouthfulledwithBS peoples have to be made swallow THEIRS onw lies ...

which can be an much too high price for most ...!


Keep-Up the good work , Tail ...

if you want anybody with some cash having NOT made-up his mind yet about EAc , to run away screaming ... keep up the good work ...!!

Black Tulip said...

Victimology…

Redtail has made it clear that Eclipse Aircraft is a victim. They are a victim at the hands of Williams, Avidyne and an ever growing list of perpetrators. Reparations are in order.

They’ve been worked out for other victims. Indians have their casinos. Former choir boys have their money. Former slaves have their wish list. What would be fair and appropriate for Eclipse?

flyger said...

In addition, key components, such as fuel meters and generators on the EJ-22s also failed, Raburn says.

Right, exactly the parts Eclipse demanded be different than what Williams wanted.

The engine excuse, regardless of whose fault it is, is 5 years old and out of gas. The real issue is that Eclipse couldn't build a plane at a weight that the small engine could support. And, yes, everyone in the industry knew they wouldn't make weight but Vern. This is the real reason Williams got publicly executed, Vern needed time to fix his error.

Too bad the depositors didn't treat Eclipse, a "vendor" to them, the same way Eclipse treats it's vendors. They should have, at the first sign of missed promises years ago, dumped Eclipse and bought something else. They would be flying now.

The best way to rally your followers is to create enemies, real or imagined, to rally them against. Eclipse has done this about once a year.

Eclipse is a study in human psychology more than airplane building at this point. At the Church of the Eclipse, Vern is passing the collection plate around one more time. What happens if they don't get $30M and fail to trigger escrow release? The silence on that question is deafening.

fred said...

flyger...

yes, the sound of silence sometimes is louder than anything else ...

this is what i was meaning in few precedent posts ...

the faithfull keeps on bragging that anybody not agreiing wit E500 is either stupid not to see the holy light , coward to risk money , or dinosaurs like old way of thinking ...

ONLY few things remain to be true : depositors can make a "coup d'etat" on EAc ( something like = VERN give us our money back NOW and for all ; or; step down !)

what are the chances for Vern to survive such a coup ? = none !

what are the chances for EAc to survive with vern's methodology ? = none !

what are the chances the plane could be finished for much fewer ones (forget the mega-orders and the fast/easy bucks , the unrealistic price , the 6 seats and one leg trip around half the world = it won't happen..) really interested to make it happen ? may be better , but anyway much greater this way than any others ...

so , it is a VERY good way for ALL believers to take over , risk a bit more better than loosing all ...

and stop moanning about things that has been achieved or NOT some years ago by some others ...
(an other word for = its not OUR fault! who cares ?? it is too late anyway ...! my father used to tell me " never go to the toilets and complain there is no paper when already too late ...think before")

it would be better for the ones writing all the time about the "so wonderfull qualities " of such a plane ... to put their said beliefs
into practice ... even to the point they would have to make such a coup ....!!

after all , it is such a brilliant plane ,they can risk to make it happen, so they say ...!!

Black Tulip said...

Victimology II…

Why don't we declare Eclipse Aircraft a sovereign nation and let them start a casino. They seem to like to gamble.

airtaximan said...

"Because it doesn't work. It never worked, It still doesn't work."

I agree... one thing that has always bothered me, is how can any self-respecting CEO demand non-refundable deposits based on what you wrote...

thanks for the clarification Redtail.

FlightCenter said...

As Eclipse struggles financially, it is having to push out the service center commitments it made to its customers in July of 2006.

"...in addition to its previously announced Albuquerque, NM, Gainesville, FL and Albany, NY Factory Service Centers, which continue to be developed on schedule, it will open four additional Eclipse service locations in 2006 to support and maintain the Eclipse 500 fleet. By 2008, an Eclipse Service Center will be within a 60-minute flight of virtually all customers in the lower 48 states."

The press release went on to say that the four additional service centers planned for 2006 would be located in:

• Van Nuys, CA
• Bay area, CA
• Boca Raton, FL
• Chicago area

The most recent communication sets expectations that ALB and Van Nuys will be operational in "early 2008" with no mention of plans for the other 3 service centers.

Gunner said...

After Redtail's in-depth analysis of the hurdles Eclipse had to face at the hands of incompetents like Williams last evening, I expect the phones are ringing off the hook in ABQ.

Oh, not just for the $30 Mill new money deposits, which they've probably already picked up by now; I suspect individuals, worldwide, are calling in to offer financial assistance in Eclipse's looming legal battle with Hampson's.

Hey, Vern...there's an idea for you. A December 12 Internet Telethon, complete with the fund-raising thermometer in the background and guest appearances from John Travolta.

Think about it. It could be HUGE.
Gunner

Black Tulip said...

Gunner,

Great idea. The telethon needs a catch phrase - "Think of the Children... of Employees, Depositors and Investors."

Gunner said...

BT-
I was thinking more along the lines of naming a disease that needs to be cured. Something like ridding the world of the scourge of reasonable expectations. Perhaps something like "Reality Stress Syndrome" or "Cognitive Dissonance Deficiency".

The pitch: Reasonable expectations create stress, which is a known, major contributor to heart disease and all immune deficiency disorders. Millions are afflicted. Tens of thousands die every year.

We could bring in personal success stories from Depositors and Investors, talking about how lowering expectations has changed their lives and the lives of their families.

Maybe get Peter Faulk, dressed in black, to do a soliloquy as the CEO of Williams or Hampson. No, that would be over-the-top, poor taste. Vern would never go for it....not even for $30 Million.
Gunner

Black Tulip said...

"Perhaps something like "Reality Stress Syndrome" or "Cognitive Dissonance Deficiency"."

Gunner, let's fine tune this. It needs at least one vowel for a pronounceable acronym.

"Jet Acquisition Deficiency Syndrome” – JADS

Of course, it could simply be, “Raburn’s Disease”.

ColdWetMackarelofReality said...

The Save Eclipse operations fundraising telethon began on the 27th, 5 days ago now - remember, Vern told us operators were standing by.

I for one would love to see the amount raised thermometer, I a guessing it is less than ten takers at this stage, but since faith trumps logic, they might already have the needed 50 suckers, I mean true-believer die hards.

Several people asked Ken directly i he would be ponying up $1.25M for his two reported slots? Come to think of it, he hasalso beenasled if he had to pony up his 60% progress payment already.

He has so far refused to answer any of those questions.

One would think that a man of his self-reported means would have little trouble cutting those checks, after all, he told us he was considering buying his wife a Mustang (maybe he meant the car, or perhaps a horse).

Gunner even offered up a $10K bet that Eclipse might not raise the needed money, Ken refused that too.

Only a non-believer would have not made the investment Vern requested or bet against Vern rasising the money he obviously, desperately needs.

I am thinking that Ken may be losing the faith, perhaps his absence here is a result of being stuck at the re-education camp, err, I mean spiritual retreat lodge, in ABQ.

And the question remains, what really happens on the 15th?

As much as it pains me to say it as I still have friends there - I suspect mandatory vacation time going into the Christmas vacation, with an open-ended return date based on raising the needed cash - last one out turn off the lights.

I truly hope I am wrong about this.

Ken Meyer said...

the Cold wet-lipped fish wrote,

"Several people asked Ken directly i he would be ponying up $1.25M for his two reported slots? Come to think of it, he hasalso beenasled if he had to pony up his 60% progress payment already.

He has so far refused to answer any of those questions."


Refused?

It appears you might benefit from some remedial English instruction:

re·fuse [ri fyz]
(past and past participle re·fused, present participle re·fus·ing, 3rd person present singular re·fus·es)
verb

1. vti indicate unwillingness: to declare a decision or intention not to do something

2. vt not accept something: to decline to accept something offered refused the promotion

3. vt deny something: to be unwilling to give, allow, or agree to something asked for by somebody
I refused them the use of my tools.

4. vti riding balk at jump: to stop and not jump over an obstacle (refers to horses)

[14th century. Via Old French refuser < assumed Vulgar Latin refusare , perhaps blend of Latin recusare "to refuse" + refutare "to repel"]

Microsoft® Encarta® 2006. © 1993-2005 Microsoft Corporation. All rights reserved.


I didn't answer your questions. I did not REFUSE to answer them.

Minor gaffe? Sure. But it ties right into the "loose lips," "engage the mouth with the brain in neutral" approach that you seem to employ in many of your comments. I prefer accuracy in the written and spoken word. Sorry.

Ken

ColdWetMackarelofReality said...

Ken, you made a choice not to answer them, that is a refusal in the common usage of the english language.

But I give you credit, not even Bill Clinton could parse like that.

Glad they let you out of the cell, I mean chapel, long enough to let us know you are still alive.

ColdWetMackarelofReality said...

So another thought occurred to me recently and that is to consider the margins other OEM's actually see in the real world, and compare that to the enormity of money owed to the various investors of Eclipse.

Boeing leads the pack at about 9%, then Cessna's parent Textron at 7.8-8.1, with Airbus bringing up the rear at less than 3%, down from a target of 10%.

Using any of those margins and the current rough price of $1.8M, and using $1.25B as the current investment, it would take almost 7800 planes JUST TO COVER the investment, that is, no ROI, just repay the dollars invested, at Boeing's industry leading margin, go to Airbus's anemic performance and it would take over 23,000 planes, just to repay the original investment.

That does not include providing an actual ROI.

Giving Eclipse credit for somehow figuring out how to double the real world performance of industry leading Boieng, and they still need to deliver almost 3900 planes.

What investor is going to wait around long enough for Eclipse to figure out how to deliver 3900, 7800, or 23,000 planes?

What about the 1000 or so claimed early customers with prices near $1M? Nobody will suggest they are profitable sales.

Nothing adds up.

Gunner said...

Ken quipped:
"loose lips," "engage the mouth with the brain in neutral"

Must have been reading one of Vern's Press Interviews...maybe the one where he admitted the company was on the brink of bankruptcy in July; perhaps the one where he warned Wall Street, "there will be retribution"; maybe even the latest Telethon announcement.

Then again, Ken IS the man who announced he was thinking of buying a Mustang for his wife in addition to the Eclipse for himself; the same Blogger who is "considering" ponying up $625K (or is it $1.25 Mil?) for the guaranteed returns offered by Vern; the self-same guy who continues to regale us with the virtues of avionics suites and jets that will be available on Tuesday.

Lighten up and lower your expectations another notch, Ken. You guys get way too acrimonious when the news out of ABQ is grim. You should be rejoicing. After all, "the train has left the station".

Being out of (your) money AGAIN is normal teething pains for Eclipse. No matter what, you still have a jet...almost, kind of.

Gunner

Stan Blankenship said...

CharterX has a new article on the Eclipse program written by Karen Di Piazza.

The article has some interesting quotes from Richard Aboulafia.

Metal Guy said...

What investor is going to wait around long enough for Eclipse to figure out how to deliver 3900, 7800, or 23,000 planes?

This is exactly why I think the existing investors have refused to pony up more cash, and Vern is having to make the sell to “outsiders” who do not get the whole picture. This includes the depositors who have no idea of the internal financial workings of what is going on here.

I can’t believe that anyone who invests in Eclipse at this point would be expecting an ROI based on profit from aircraft production, based on exactly what ColdFish states.

It would have to be some maneuver to leverage a bankruptcy or takeover of the company for re-structuring purposes.

This is bad news for Depositors who pony up the $30M based on the assumption that it’s just a bridge to the “next” round of standard financing. It ain’t gonna happen that way.

Gunner said...

Aboulfia is quoted as saying:
"Two hundred planes a year at $2.2 million might just be doable. But here's the central problem: if the Eclipse 500 is priced at $2.2 million or above, much of its competitive advantage against the Mustang or the Phenom 100 erodes."

Either Richard reads this Blog or several Critics here, myself included, use the same brand of calculator as Richard Aboulfia.

Regardless, it's nice to see the Blog's perspectives making it into the mainstream press; even if they're lagging by six months.

Kudos to Karen for being among the first to note the rather pallid hue of the Emperor's new wardrobe.
Gunner

Metal Guy said...

new article on the Eclipse program written by Karen Di Piazza.

"There may be a lot of dumb money out there, but this is asking for a mass outbreak of stupidity. They need 50 people to each provide $625,000. This, in turn, may or may not encourage a seriously risk-loving financial institution to provide another needed tranche of cash. And then, perhaps, one day, they might just turn cash-positive--as soon as they hit 600 planes per year! If this works, please introduce me to the people involved. I've got a few schemes of my own, including a flying monkey delivery service."

Yup.

Dave said...

This is exactly why I think the existing investors have refused to pony up more cash, and Vern is having to make the sell to “outsiders” who do not get the whole picture. This includes the depositors who have no idea of the internal financial workings of what is going on here.

No wonder Eclipse has been going about it's business with a focus on NDAs regarding finances. That way Eclipse can use customers as financiers while keeping them in the dark about the finances. Unsurprisingly there's no mention of Eclipse opening up the books to those who would consider ponying up the $600K...just take the money and keep those who pay for this round of financing in the dark.

ColdWetMackarelofReality said...

Flying Monkey delivery service - that is classic.

Anyone else see Vern with green face paint on, chasing after Stan

"And your little dog too!"

airtaximan said...

BT,

I laike Raburn's disease..

but,

BURN VICTIM

might be good. I like the ring of "Burn Victims" reporting on them in the past...

Anyhow, nice CharterX article... almost tought I was reading this blog for a second - no Dayjey or Eclipse ad on charterX I guess!!!

WhyTech said...

Cold Fish said:

"What investor is going to wait around long enough for Eclipse to figure out how to deliver 3900, 7800, or 23,000 planes?"

CF, this is not the way it works (usually). If by investors,you mean shareholders (not lenders), they realize a return (or not) by selling their shares at some point in time. The value of those shares is related to what buyers BELIEVE the company will do in the future. So, it wouldnt typically be necessary for investrors to wait until 3900 or whatever number of planes were produced to realize a return. If propspective investors believe that Eclipse will be wildly successful, this will be refelected in the price they are willing to pay, and current shareholders will be able to sell their share at a gain.

This scenario was graphically illustrated in the dot com bubble period when buyers were will to pay enormous sums for companies that were not even yet shipping products. Many investors have made excellent returns on companies that tanked not too long after they cashed out.

WT

Shane Price said...

I've been reading about Conrad Black today.

Most of you know the story. Man buys a load of newspapers, gets a British title, like dressing up as a King, lives the high life and throws lavish parties....

Then, when his fellow directors wake up to the idea that all this money might have to be repaid someday, the whole sorry deck of cards folds.

Conrad is now sitting (at home) awaiting sentence on Thursday next, which will probably be in the 10 year range, following his conviction for fraud.

Both sides of Hollinger are looking for the $175 million that has 'vanished' from the companies Mr. Black hoodwinked.

Or maybe some of you recall John DeLoren?

Nice car, a film star in it's own right.

BUT....

British Government not happy. Lots of other creditors out of pocket, some of them broken by the experience...

Why pick these two, today? Well, both stories shine some light into the darker side of business, and the men who allow their ego to expand beyond normal limits.

Bit like Vern Raburn.

And, towards the end, all three did some really, REALLY strange fundraising, in an attempt to delay the inevitable.

Remember John and the drugs deal?

Wonder will Vern stoop that low...

Shane

ColdWetMackarelofReality said...

WT, I agree with what you say, both about expectations and the similarity to the dot com bubble, I have made the comparison many times.

Usually though, there was something positive in terms of a track record, stock splits, big sales announcements, successful deployment of systems, etc.

The track record at Eclipse is horrendous, the only stock option holders are the investors and the employees and they have been diluted so many times it will cost them more to exercise options than they will likely make in any IPO, I also understand that stock options for employees have very severe golden handcuff clauses built-in.

As for sales, Eclipse has failed in any year to sell what it says is required for breakeven and those numbers (500-600 per year) are simply unheard of in this industry.

And last but not least, successful deployment. Eclipse has fialed to build even one fully functioning jet that offers the entire feature set originally promised and they are, by their own admission, no less than 6-8 months away from that (I figure well over a year and another $250M myself).

The irrational exuberance of the dot com bubble or the real estate market of the past five years only continues to show that unsophisticated and inexperienced investors remain easy prey for snake oil salesman.

Eclipse is now trying to shoe-in on the very speculative market it originally encouraged in order to fabricate a larger than life order book, and now that very order book, and the unprofitable price points it represents is one of the largest liabilities that any investor would need to know about.

Of course, going to the customers like Eclipse is trying to do, and suggesting it is an early payment for goods to be delivered in the future, removes the due diligence and disclosure requirements, as well as eliminating the individual investor qualifications that would be necessary if these marks were buying stock instead of some imaginary would-be jet that I predict 90% will never, ever receive.

This is truly an offensive scheme that should have the warning lights going off everywhere.

Eclipse did the same thing last year when it claimed it would deliver some 300 planes within the next 6 MONTHS, a claim that has proven to have been extremely wrong.

Vern seems to be counting on the short memory displayed daily by the Faithful, knowing they will have already forgotten the broken promises and missed schedules of the previous month, quarter or year(s), where he sent out the same essential message (we did some good things, some things may not have gone as well as we hoped but it's not our fault, please send money) at least two years in a row.

I think the symptoms we are seeing have more in common with battered wife syndrome - 'But he says loves me'.

Maybe Battered JetJockey Syndrome

Or how about Deposit Under Major Brain Anxiety Stress Syndrome?

gadfly said...

'How 'bout a new facility called the "Raburn and Trauma Unit"?

gadfly

Black Tulip said...

Totally Uncureable Raburn Disease

Six Romeo said...

No cure for the aforementioned syndromes. Time to face reality.

Raburn's
Eclipse
Aviation
Laments
Insolvency
This
Year

Redtail said...

WhyTech said... CF, this is not the way it works (usually).

What do you expect from FishLips? He still hasn't grasped the difference between a working engine and a non-working engine, or a 707 and a Saberliner. Garbage in equals garbage out. FishLips is King.

FreedomsJamtarts said...

Eclipsa-Seltzer for a severe case of Raburn?

That Raburn sure leaves a ring of fire huh Ken?

FreedomsJamtarts said...

The weird thing here is that this company may find a white knight to prolong the agony (actually more likely a Black knight of the Monty Python variety).

Vern should be hitting on:
Hugo Chavez
Paris Hilton
V. Putin
M Ahmadinejad

Any one of these head jobs could provide the loot, without getting all picky about ROI, integrity, sound management etc.

ColdWetMackarelofReality said...

retail, glad to see you woke up, that petty little attack must have taken a lot out of you, we were worried.

Actually, you are the one who seems to have tremendous difficulty listening to what people say or reading what they write.

Interesting that you keep harkening back to 2002, I thought you wanted to focus on the present.

Of course with Vern's most recent attempt to defraud more customers out of even more tens of millions of dollars I can understand why you might want to look back to the 'good old days'.

The issue remains that Eclipse blamed Williams when it was the Eclipse FADEC that failed, although the plane most certainly did fly in August of '02 with EJ-22's.

Are you suggesting that flight was nothing more than a stunt designed to release monies from escrow?

Are you suggesting that Vern knowingly pressed a flight test event that was made with substandard engines, placing the project, the plane, the test pilot, and any person unlucky enough to be underneath it at risk?

Your honesty is refreshing retail, thanks for pointing that out.

ExEclipser said...

Anyone else notice that the auction site is now 'member's only'? I guess openness is no longer an issue. I bet the sole bidder until the site went proprietary is pissed about the 1/2 down offer...

Black Tulip said...

Here’s a sobering thought. Assume a billion dollars has been spent on the Eclipse. Assume the average worker’s loaded wage was $100,000 per year. It follows that 10,000 man-years have been expended on this project. A billion dollars probably bought even more years of labor as some of this money was spent mining bauxite and producing petroleum offshore at lower rates.

Redtail said...

FishLips, just pointing out that for someone that claims to be in the know, is a "noted aviation consultant", with keen analytical powers, you certainly don't know a lot. But, you insist all the same.

ItsJustSad said...

ExEclipser said...
Anyone else notice that the auction site is now 'member's only'? I guess openness is no longer an issue. I bet the sole bidder until the site went proprietary is pissed about the 1/2 down offer...

Interesting too that Vern's latest plea hasn't been posted to the Eclipse Owners Forum. Yeah, it's news everyone there knows about, but the last "article" there is the release about the brokerage program.

ColdWetMackarelofReality said...

retail, I love the personal attacks, keep 'em coming - shows you got nothing, which we already knew, but it is nice to have you verify it for us.

Perhaps you would be so good as to explain to the class why the EJ-22 was flown on the Sabreliner for a while before the 707. I am sure you can do that, since you seem to have such intimate knowledge of the Eclipse workings at that time.

Just a coincidence I am sure.

Redtail said...

ExEclipser said... Anyone else notice that the auction site is now 'member's only'?

I have no problem getting in. All you have to do is register. But if you want to support your lame consiracy theory, you way "sound" much better, although totally bogus.

Gunner said...

"All you have to do is register."

I would do so, but Eclipse's latest, greatest offer of "easy money" is right on a par with those offers of money from ex-officials in the Somalian govt. And I so detest spam.

Quite honestly, I've no real desire to see the bidders' pain, knowing that this offer was certainly prepared before some of those Bidders had stepped up to the plate; or under the bus, as the case may be.

Reminiscent of the Williams engine flight scam; reminiscent of the 300 progress payments reaped with Avio already in the toilet scam.

Fear not:
The Train Has Left The Station; I suspect all passengers will catch a glimpse of the final destination on or about December 15.

Tick-Tock
Gunner

Six Romeo said...

Is it just me, or does it seem like Redtail and Ken never post at the same time? Has anyone ever seen them together? Hmmm...... Cognitive dissonance and schizophrenia...

airtaximan said...

Gunner:
"Reminiscent of the Williams engine flight scam; reminiscent of the 300 progress payments reaped with Avio already in the toilet scam."

Now that's my tune...

I firmly believe the galactic stupidity required to:

- suddenly "discover" the EJ22 wouldn't ever work properly and "never did" as Redtail says... just after asking for non-refundable payments, and

- just discover AVIO was garbage (all along claiming: "we've been working a substitute for a long time") just before asking for 300 progress payments

... was IMPOSSIBLE - even for THIS company.

If you argue they did not know the engine replacement and avionics failure was coming when demanding the money, you should never buy a plane from these folks - EVER.

If they were this stupid, there is no way they should ever be making planes and selling them to people as an OEM. No way - Period.

In my opinion, there's no possible way, with the time and money and people they had... Eclipse just "did not know". I believe one day, this will be investigated and someone will end up in stripes.

It was a complete fraud.

Legal definition of fraud respected, here.

Complete unmitigate fraud on the depositors.

I believe that even today, if there was a deposit event, or some possibility of calling non-refundable deposits, there's no way we would have ever heard about the Hampson case, or Vern utter "I won't predict - I'm always wrong". They would be painting a fraudulent rosey picture, and very shortly after the money was received, we'd hear of the mess...

If you are in the dark, refuse to see and hear, and still think that somehow the EJ22 failure was a surprise or scrapping the avionics was a surprise - both just after millions were called and ponied up by position-holders (pun intended) - you deserve to lose your money.

No one should ever buy a plane from a company that has trashed two major systems, the heart and brain of the airplane if you will, all taking them by surprise after many years and millions of dollars.

Deposits based on engines that flew once and were scrapped - plus 300 progress payments after working with an avionics supplier closely for 10 years, and just figuring out AFTER the millions in progress payments were received the avionics were going in the garbage, (all the while claiming they've been working a real solution to the failed avionics) and claiming this was unexpected enough to demand 300 progress payments as if nothing is going wrong??????

Die-hard? Ever wonder why Vern calls you die hards?... he knows what you are made of, how you think (or not) and what he can demand - he just did it again...

you have 2 choices in how you choose to think about Eclipse:

They are stupid as hell, and really did not realize all this regarding the engine and avioncs when asking for deposit money - in which case, they are the Marx brothers of aviation and should not be trusted with your lives.. or

they are thieves, demanding payments based on willful deception and utter dishonesty.

There's NO OTHER choice.

Wake up.

ColdWetMackarelofReality said...

The exchange between Carrie Fisher's Mystery Woman character and Jhn Belushi's Joliet Jake Blues in the sewer tunnel suddenly comes to mind.

Jake: Oh, please, don't kill us. Please, please don't kill us. You know I love you baby. I wouldn't leave ya. It wasn't my fault.
Mystery Woman: You miserable slug! You think you can talk your way out of this? You betrayed me.
Jake: No I didn't. Honest... I ran out of gas. I, I had a flat tire. I didn't have enough money for cab fare. My tux didn't come back from the cleaners. An old friend came in from out of town. Someone stole my car. There was an earthquake. A terrible flood. Locusts. IT WASN'T MY FAULT, I SWEAR TO GOD.
[Elwood covers his head in anticipation of more gunfire, Jake removes his sunglasses to make a wordless appeal, and the Mystery Woman visibly softens]
Mystery Woman: Oh, Jake... Jake, honey...
[Jake embraces the Mystery Woman and they kiss]
Jake: [to Elwood] Let's go.
[He drops the Mystery Woman and walks off]
Elwood: [to the Mystery Woman as he steps past her] Take it easy.


Replace Jake with Vern and Mystery Woman with Faithful - too darn funny and exactly what has happened, is happening now, and could well happen again if enough suckers pony up this time.

I wonder if the last round of financing may not have had some strings attached re: management and control of the company?

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

AT said:
Wake up.

Too late, AT.
The company has gutted all possibility of anyone getting out with their money....at least until the 15th, at which time, I believe other factors will come to light to make the planes just as unsavory as Vern has made them today.

I'm fairly certain the loudest sound in Mike Press' office these days is the hum of the A/C. Nobody's calling to buy a plane, a position or anything else with Eclipse's announcement of the new Low, Low Price. Besides, operators are standing by in ABQ.

THAT'S why they're called "Die-Hards".

CWMoR-
Were I a Depositor I'd be PRAYING that your scenario is what's in play; a management shake-out. But I suspect the hanging ax is far more ominous than that; and the Hampson suit is at the center...they renegotiated their payment schedule and price. It was due Nov 30. I doubt they forgot to put a "what if" clause in there.

Meantime, Vern has burned his bridges to them and Hampson has responded by setting fire to their side.

Simple management shake out? The employees, depositors and investors can only hope.
Gunner

rcflyer said...

Farewell
--------
I start a new position on Monday, and I won't have the time or energy to read or respond to the posts on this forum. This will be my final post.

If I could make one last plea, it would be to please stop the personal attacks and ridicule. Everyone posting here, critics and faithful alike, are human beings with feelings. Yes, even Ken. So, no matter which side of an issue you're arguing, attack the statements, not the person making the statements. It's the right and decent thing to do, even if the other person "started it first".

One last thing. I've seen audited financial statements for Eclipse Aviation, and 99% of the assumptions you're making about its financial health are wrong. They have plenty of cash.

I wish everyone a Merry Christmas and a happy and prosperous New Year.

R.C.

ColdWetMackarelofReality said...

To piggyback on ATM and Gunner's point I would like to ask the Faithful a serious question.

Do any of the Faithful think it bodes well that Eclipse was suddenly 'surprised' by a need to 'find' no less than $30M, and to need it so badly within the next 2.5 weeks that they will give up as much as $15M or more in potential revenues?

How can a would-be indsutry dominating company be so surprised, so often?

Surprised BAe couldn't build a system to meet an ever moving design target from Eclipse.

Surprised it would take more than $300M to design, build and certify a new jet.

Surprised the EJ couldn't propel the ever fatter Eclipse.

Surprised it would take more than $600M to design, build and certify a new jet.

Surprised Avidyne couldn't build a system to the same ever moving design target from Eclipse.

Suprised it would take more than $900M to design, build and certify a new jet.

Surprised Hampson couldn't build a tail section to the same ever moving design target from Eclipse.

Surprised it would take more than $1.2B to design, build and certify a new jet.

These guys are like chickens, they must wake up to a new world every day.

Sure, they got it all wrong the last several times but this time it will be different - not because they are different people, not because they have different management, not because they have demonstrated they have learned anything, no, this time will be different, but only because they will be spending different money.

The company and the Faithful should be embarassed.

airtaximan said...

RC,

one of my favorites.. thanks for the memories, level head, good jusdgement and insight.

I read osme of my posts from last year, and while not off the mark with intuition, probably off the mark in tone and timber.

Best of luck... you WILL have time to check back, I'm sure. Drop a line...

ATMan

ColdWetMackarelofReality said...

Ditto what ATM sez, may not agree with RCF's positions but they were nearly always respectful and logical - best of luck in your new position.

hummer said...

RC
Best wishes to you and yours on your new endeavor and holidays.
God Bless.

Metal Guy said...

Rcflyer said: They have plenty of cash.

It may be outstanding debts that are coming down the pipe. If they have plenty of cash relative to obligations, this latest offer from Vern makes no sense at all. He pretty clearly indicates outright that they need more cash:

“One consequence is that our need for capital has increased.”

“We are looking to raise funds now so that we can complete our financing in an orderly fashion.”

Clearly, if they don’t get additional cash, things will get “disorderly”. So even if they have “plenty of cash”, they apparently need more.

P.S.
Good luck and happy trails with your new adventures :)

cj3driver said...

RCFlyer said;

“… One last thing. I've seen audited financial statements for Eclipse Aviation, and 99% of the assumptions you're making about its financial health are wrong. They have plenty of cash…”

RC,

Sorry to hear you have decided to leave. But, please take a few minutes to clear up some bad air. Especially with this bombshell.

Why would Eclipse give away $15 million dollars to collect $30 million on such as short time-table if they have “plenty of cash”? Why would Eclipse “hide” this fact? If not for cash flow, is it for a management change ultimatum? A settlement fee? A stipulation for past or new financing round? A ploy to disrupt the secondary market? A marketing decision to generate additional sales? Why make this announcement in the middle of an auction with $1.8 million dollars and a few disgruntled bidders at stake? What about the equity of the Hundred(s) of 60% depositors (with funds already remitted)

Hope you can shed some light on this before you go. I’m sure it would do more good than harm.

Gunner said...

RC-
You'll be missed. Hopefully, not for long...computers are ubiquitous.

I'll have to agree with the posters above. If what you state is true, Vern Raburn needs to be committed to an institution for giving away 50% of the next $30 million is sales, for the loan of cash he doesn't require.
Gunner

Dave said...

I'll have to agree with the posters above. If what you state is true, Vern Raburn needs to be committed to an institution for giving away 50% of the next $30 million is sales, for the loan of cash he doesn't require.

According to Vern, that $30 million is "relatively small" of what Eclipse is seeking overall:
Raburn notes the customer program represents but a small portion
of the funding Eclipse is seeking -- and that amount, in turn, "is
relatively small as a percentage of the total capital we have
raised to date.
http://www.aero-news.net/index.cfm?contentBlockId=ef274887-97c7-4846-bb37-e706e78828b3
So if Eclipse has so much cash why are they throwing away millions of dollars to get $30 million dollars by the 14th? Worse yet, if they're doing so good with cash, why is $30 million dollars only a small percentage of the cash they are seeking now? For me to believe Eclipse is flush with cash, there would either have to be some sort of mental illness or drug use to explain these rash actions that are costing millions of dollars supposedly needlessly.

cj3driver said...

Its likely that RCflyer saw the financials a while back, during the summer, after the financing round when Vern hoped for high rate production. I would guess that there is a good chance RC has already got his plane, its coming soon, or he has sold his Platinum position (first 180).

RC’s posts from recent past”

“… I can't speak for Dayjet, but as far as I know, the Platinum position holders have the lowest individual purchase price -- $995k, with no CPI add-on (unless CPI exceeds a certain level, which it hasn't, yet).

I believe there were originally 180 Platinum positions….”

R.C.
9:59 PM, September 16, 2007

“… Yes, I am interested in an Eclipse 500. In fact, I have a Platinum position.

I'm keeping the King Air (actually 1/2 a King Air, since I have a co-owner) for those trips with 9 of my closest friends….”

R.C.
7:39 PM, September 17, 2007

“… BT, you might well imagine that, but you would be wrong. I am a member of the Eclipse 500 Club, so I can say that with authority.

If the tension that needs release becomes too unbearable for you, I suggest a cold shower :) …”

R.C.
9:54 PM, November 14, 2007
----------

But my favorite:

“… whytech said,

"There is a real chance that Pilatus has shot themselves in the foot (or worse) with the choice of Apex."

RC responded;

It could have been worse -- they could have chosen Avio :) …”

R.C.
3:11 PM, September 24, 2007






Best wishes to you RC.

airtaximan said...

So, the guy has a new "job" which will keep him from even emailing he's so busy... and he also has an eclipse... or one coming.

"I start a new position on Monday, and I won't have the time or energy to read or respond to the posts on this forum. This will be my final post."

He does not own his own business...is not themaster of his own time... not even able to log on and read or write a few lines?

Maybe he's running Flight Options under their new owners?

Strange...

Black Tulip said...

Let us all wish the best for someone in a new position. We hope the new position is comfortable.

gadfly said...

An observation:

Others may argue the finances . . . whether or not Eclipse has cash reserves . . . and the overall financial honesty, with “customers” and “investors” (whoever they all may be).

But I see a design, that “happens to be” user friendly in an extremely limited time frame . . . if only it were a finished product (which it isn’t). We all have seen that demonstrated, with its few successes, and many failures. The sum total of which is “failure”. Why? In my simple opinion, the little jet happened to achieve a “sweet spot” in some of the interface that impresses pilots . . . until the novelty wears off.

Unfortunately, the design has no place to grow. Because of its shape (contour), wing size, etc., and cross-sectional area, it cannot grow . . . to include the “potty”, the comfort, the power, speed, and range of a “real” jet. It is a dead-end design. And anyone who might understand how to “expand” to the E600 (or something) is long gone. Almost from the beginning, the requirements of manufacturing were less considered than the clever use of electronics, software, and “friction stir welding”.

‘No argument here as to the possibilities of all this new technology. But the people that wished to make the transition have demonstrated, in my opinion of course, an almost complete lack of understanding of all that has preceded these new possibilities.

The remaining design team may in time, become good designers, should they spend some time in the real world of manufacturing . . . in the “dirty fingernail world”, actually working in a machine shop, etc., and eager to “learn” the practical side of the “book learning”.

Until then, they seem to lack proficiency in the things that count . . . their theory may be “great”, but their practical understanding of the interface of design and manufacturing and maintenance is somehow lacking.

There needs to be a clear understanding of “machining/manufacturing”, and “human behavior”, and the integration of “tooling/manufacturing/assembly/final product” from the time a design is first sketched on a note pad over a cup of coffee. It’s an “inherent” sort of thing. The “greats” of the past didn’t just understand it . . . it was so much a part of them that their designs were the work of genius. And over the decades, we may have come to assume that “all” great planes would be another DC3 or DC8 or a Learjet or Boeing 707 or 747 or Lockheed Constellation or another “Vega” . . . or even a Bell “Huey” or Sikorsky.

‘Just because a “CAD” system can produce a 3D model to 14 decimal place “double precision”, does not mean that such tolerances are possible in the “real world”, nor are they realistic. So, a good inventor/designer already has a “feel” for such things, and the entire design will reflect such attitudes, and knowledge. All of this seems to be lacking in the “E500”.

Bottom line of my observation? . . . Eclipse doesn’t have a “soul” . . . someone who fully understands the design/manufacturing/operation of a viable aircraft, that is capable of delivering a safe/cost effective/ expandable (“growable”) product for the customer.

But, then, that’s just my own opinion.

gadfly

gadfly said...

It has been reported that one day, Mason told Dixon, "We have to draw the line somewhere!"

And so it seems that it's just about time to "draw the line" on the little bird that wanted so bad to grow up to be a "real jet".

gadfly

Jim Howard said...

Quoted from the 'Market Focus' column in the November 19, 2007 dead tree edition of Aviation Week:


Another small aerospace company isn't faring so well with Investors. Shares of Innovative Solutions & Support (IS&S), an Exton Pa.-based avionics supplier, are slumping amid concerns about the financial viablity of its biggest customer, Eclipse Aviation. Boenning & Scattergood analyst Michael Ciarmoli says the Eclipse was expected to account for 30% of IS&S's revenues in fiscal 2008. "Did IS&S hitch its wagon to a falling star?" he asks, citing delays in achieving mass production of the Eclipse 500 VLJ. IS&S closed at $15.22 on Nov. 15, down about 45% since June.


The above is not proven fact, it may only be the opinion of the author of the article.

FlightCenter said...

IS&S closed at $14.23 on Friday.

Their stock has lost all the value it gained with the announcement of AvioNG, even though they were awarded $7M at the beginning of the month in a patent lawsuit with Kollsman.

Q3 numbers will be announced on Dec 5th.

Niner Zulu said...
This comment has been removed by the author.
bill e. goat said...

R.C. (“Farewell”),

“I start a new position on Monday, and I won't have the time or energy to read or respond to the posts on this forum. This will be my final post”.

Goat: I know what you mean! I've unfortunately just had time to “skim” lately too. I sincerely hope you continue to “skim” along too, and that the new position goes very well, and that hopefully you will be able to drop in for a commentary from time to time in the near future.
--------------------------

“If I could make one last plea, it would be to please stop the personal attacks and ridicule. Everyone posting here, critics and faithful alike, are human beings with feelings”.

Goat: Well said indeed! The goat gladly re-bleats that, especially this time of year!
--------------------------

“One last thing. I've seen audited financial statements for Eclipse Aviation, and 99% of the assumptions you're making about its financial health are wrong. They have plenty of cash”.

Goat: I came to a similar conclusion a few weeks back, based on observations. I concluded that Eclipse is not going to run out of money now. Why not? Because they didn't run out of money last year, or the year before, or the year before that. Those dates, as much as the current ones, defy normal business-case logic. I don't have the inside details, as some proponents might justly protest. But I can't think of anything other than a state-run enterprise that could burn 1.xx $B-e-e-e-e-llion bucks, and still have the cash-flow incinerators cranked up, and still be in business.

That alone defies all logic. Except, from information provided here a few weeks ago, regarding Al Mann. A true philanthropist, in the highest, most noble sense of the word. And apparently, in the deepest sense of the word too, regarding deep-pockets. If Eclipse didn't go out of business a long time ago, well, it's never going to go out of business. This seems to be substantiated by accounts that Al is spending hundreds of $M on inhalable insulin treatment with no results to date. (Talk about Eclipse offering “vapor ware” :)

I admire Al's noble biomedical endevours, and if he can stomach those losses, then something as racy and glamorous as “the future of business jets” (quotes mine) must seem infinitely more enthralling, and I conclude he will keep paying the bills for another few years. (Maybe he figures one the insulin sniffers start paying off, so will Eclipse, or at least one will cancel the losses from the other).

Regarding the puzzling short-term financial crunch, re: selling E-500's at $1.25 M? This does seem weird, effective a short-term loan at what, 50% interest? UNTIL- you realize it's just the BoD or Al Mann's way of spanking junior's butt, and telling him he doesn't get any more allowance until next month- a way of embarrassing him into behaving and making do on his own for a few weeks.

That really is the way I read it. It does harm the company to do that, a l-i-t-t-l-e bit, but after pumping more than 1.xx $B in, what's a relatively minor loss of a few $10M? Just a way of making Vern scramble a bit. If he fails, well, they are still going to step in, but chastise him even more, I suspect.

(Vern probably knows this, and in addition to trying to avoid the embarrassment of not meeting the financial goals for the year, it might have to do with trying to preserve some annual bonus, I would suspect).
--------------------------

“I wish everyone a Merry Christmas and a happy and prosperous New Year”.

Goat: Well said again!! Best wishes to you R.C. (“Y'all come back now, Y'hear!” :)

gadfly said...

'Know when to fold 'em!"

Ken! Kenny Rogers, right?

gadfly

bill e. goat said...

Gadfly,
"Know when to fold 'em!"

I was getting ready to address Evel Knievel's recent death (Nov. 30), Gad's comment seems to be go along well here. We will all "fold 'em" soon enough, so let's not snear or make ugly faces at the other players at the table :)
-------------------

Gunner had a great Thanksgiving wish for us all:

"Give thanks for what is and even what might have been. Dream big. Execute well. And, if you can only do one, choose the latter. It's what determines how you'll be remembered".

Seems like Evel was one of those guys that made the world a more interesting place, and the absense of his stride amonst us makes me a bit saddened. For us older bloggers, I suspect he will be remembered for both attributes that Gunner mentions.
-------------------------

Regarding Evel, I also remember his X-2 Skycycle, which indirectly brings us to other flying (well, sort of) oddities (besides Eclipse :), the Moller Flying Car.

I see Gunner's comparison of Eclipse to Moller was further confirmed by Popular Science featuring the Con-Jet on this month's cover.

:)

bill e. goat said...

One MORE (more 'n one = ?moron?) thing:

Regarding the Verntastic offer to buy a twinjet for $1.25M

I suspect that $1.25M does indeed represent some sort of actual production cost of builing the airplane, so Eclipse is not really loosing money by selling them at that price, just not making money either.

Seems pretty darn low to me, but seems like the collective wisdom (ahem :) of the critics puts the required profit margin at 25%, so considering if the typical sales price were $1.66M, then knock off 25% for lost profit opportunity, and you're left with $1.25M

Like I said, an actual production cost of 1.25 $M seems low, but maybe ???

Gunner said...

Billy suggests the "cost" of the EA50X at about $1.25 Mill with a profit margin of 25% at normal retail. I'll buy that...when pigs fly. Based on what, Bill? An assumption that this company would not make a world class dumb decision in marketing, pricing, and announcing a product? An assumption that Cessna must have a 100% markup on the Mustang?

Good to know Ken remains consistent...publicly hawking others to step up ("I'm considering it myself") to a "great deal". All the while he's questioning Eclipse's very viability in the Clubhowze. Riding for the brand is admirable...until you start demanding that others carry you on their back to get the job done.
Gunner

Black Tulip said...

We haven't gotten very far with

101 USES FOR AN ECLIPSE

1. Gate guard at the municipal airport. Concrete pylon to be purchased separately. Windows and windshield should be painted as panel is incomplete.

2. Cruise missile or disposable unmanned aerial vehicle.

3. A novel and distinctive jet ski.

4. Replacement for the BD-5 that was finally pulled out of back of the hangar and sold for scrap.

Flightguy made the last contribution:

5. A wheel chock for my GV.

Pressing on...

6. Wind triangle at the local airport. Remove wings, mount on pylon with bearings. Add lighting.

7. Chassis for homebuilt equivalent of the Moller SkyCar.

8. A playhouse in the woods.

9. A small solarium for growing plants in the winter.

10. A sign suspended in front of the Army/Navy store.

Next…

Gunner said...

BTW. If my comments above, regarding Ken, were what RC and Bill E were referring to as "name calling" an apology is not likely to be forthcoming.

I believe people should be held peronally responsible for their actions. Encouaraging others to send money on this "offer" under cover of statements that you're considering it, while simultaneously sharing your view that the current company plan is not visibly viable is hallmark "insulting". In fact, it's downright reprehensible behavior...and I'm being as generous as possible in my choice of terns.

Ken gains nothing by increasing his comraderie of losers in this game.
Gunner

Gunner said...

BT-
11) A 50 cent kid's ride inside the WalMart entrance

12) A new unmanned military drone (Rumor has it NG can operate the plane without a pilot). Full fuel payload: two cameras, 3 rolls of film, one box of of homemade fireworks for armament.

13) Stationary simulator at local FBO pilot shops for those wishing to brush up on 1990's era instruments and avionics....with a zoomy joy-stick control.

Gunner

airtaximan said...

14) gaming device for microsoft flight simulator

JetProp Jockey said...

Relative to RC's seeing the audited financial statements . . .

If he saw statements that actually reflected an outside audit having been done, they had to be at least 3 months old. Considering the complexity of Elipse's finances, it could take 6 months to complete an audit.

Depending on how the Balance sheet is presented, it might not look too bad as most of the investement and debt to date, (at least thru 1Q07) whould have been capitalized and be scheduled for write off over 7 to 15 years.

The statments of Cash Flow are alot more important than anything else at this stage of the companies life.

Dave said...

The statments of Cash Flow are alot more important than anything else at this stage of the companies life.

Vern's statement that $30 million dollars is a drop in the bucket compared to the total amount of cash that Eclipse is seeking says everything that needs to be said about how Eclipse's cash position or alternatively that Vern is completely insane going for tens/hundreds of millions of dollars that aren't needed and is throwing away tens of millions of dollars to do so.

AeroObserver said...
This comment has been removed by the author.
Niner Zulu said...
This comment has been removed by the author.
airtaximan said...

cash required, now... right now?
yes.
How do I know?

Simple... last tme Vern was seeking capital, and was almost put in BK was over the summmer. He received an paid out money, except enough to keep him going for a few months. Sept or October at best... see Mike Press' statements on this.

EAC is continuing to pay late... according to suppliers, today.

They are in a court case, about non-payment.

Finally, Vern is not stupid, and his recent statements regarding "orderly raising capital" in a few months, after this $30,000,000 is received, is telling.

My sense is he's been out there, trying to "raise money in an orderly fashion" since his last raise - he is not waiting for the requirement to popp up out of nowhere.

Speaking of nowhere... I just think he's SOL, and has nowhere else to go. His last ditch effort is to tap the "die-hards"...

If this does not work... G-R-I-N-D to a halt will put everything on hold... including rasiing money in an "orderly fashion"

It will get disorderly, before anyone looks at the pieces...

Just my two cents.

Dave said...

Since suppliers are continuing to be an issue, why did Eclipse take customers' progress payments for the August 2002 flight:
http://www.eclipseaviation.com/index.php?option=com_newsroom&task=viewpr&Itemid=348&id=363
Then a few weeks later scrapped the engine? Given what happened with Eclipse then with their public statements of progress, why should Eclipse be believed now about their progress? Even assuming they're completely honest, they've shown themselves completely inept at vendor management and bipolar going in a matter of weeks of telling the world how great everything is going to then dumping a supplier because things are so horrible. Customers should really consider that either Eclipse has been dishonest to them or lacks the ability to manage vendors.

Gunner said...

Dave-
The answer, I think, is in the psychological relationship between the Con Man and the Mark. This is well documented in criminal investigation. (Again, my disclaimer: Eclipse did not start as a Con...but it is one now.)

The longer the Con goes on the more the Mark is "invested" in the promise of something for nothing. Friends and family have questioned the deal and the Mark's judgment. In many cases the Con man is publicly "outed". But the Mark has, for too long, visualized enjoyment of his "free" winnings in as very personal manner.

In then end, it's almost a Stockholm syndrome, where the Mark is internally pressured to believe that the likelihood of failure is from EXTERNAL forces; and he actually binds CLOSER to the Con Man.

It's an incredible dynamic to watch and you've actually seen it played out here. Some Depositors continue to publicly shill for Vern, while privately expressing grave doubts about the company. There is simply no way they can drag others in and still shave in the morning unless:

a) theirs is a Malignant Narcissist personality, where EVERYTHING is about protecting "Number 1", no matter the cost to others.

b) they border on Sociopathy, in which case the cost to others is not even considered.

or

c) their Cognitive Dissonance level is so off the chart they are able to identify with the Con publicly, while wringing their hands privately. They then believe that they can save their "free value" if only enough others will join them...this is the dynamic which all Ponzi schemes depended upon.

Laws of the on 101, really.
Gunner

hummer said...

Gunner
In your description of the Con Scheme, you should give recognition to "crimminal intent".
The Sting, as most all of us has seen, depicited a Con that was setup
in advance with great detail to bring about a desired result. The is the Professional Con and is typical of crimminal activity and profit schemes.
The Enron scenario is a program that while starting off legitimate erodes into a Con game
for so-called worthwhile statements as in "overall good",
"temporary fix" etc. This is seen in some highly publicized TV
ministries.
The final Con is the one that is most highly used and not easily
detectable: the program that vasilates between legal and criminal with fore knowledge and intent. While the outcome is the same as the above two examples, profit. . it is rarely prosecuted
because it is so difficult to prove. Overall it yields much more profit than the other two and persists for a much longer life. Examples: business opportunities, ministries, loan and mortgage frauds & investment
scams.
I frankly don't believe Eclipse fits into any of the above three
examples YET . . . .
however, they need to be very
careful on how they solicit and
account for money.

airtaximan said...

Hummer,

do you think eclipse did not know the Ej22 didn't work properly at first flight and they would be scrappig it, while demanding non-refundable deposits?

do you believe eclipse did not know they were scrapping avidyne when they demanded 300 progress payments?

How does this play into your rendition of Eclipse's conduct?

Once again, if they were dangerously stupid regarding the brain and heart of the aircraft, all the while funding and guiding both system development programs, should they be YOUR aircraft OEM?

Gunner said...

Hummer-
REAL well done, sir.

For my money, Eclipse clearly falls into the Enron category; though without, I suspect, the personal greed of the officers. I believe Vern rules Eclipse with an Iron Fist; he is motivated more by hubris than greed.

Still, I believe it will come out that the company repeatedly duped Depositors "for the common good". I'm not saying this rises to the level of criminal or even civil action, and personally that's not a distinction that interests me.

Honorable men know there's a difference between what's lawful and what's RIGHT. They strive to do what's RIGHT, regardless of short term personal consequence. The dishonorable man will do "whatever it takes" and actually convince himself that he did nothing wrong.

Too many of the latter type exist on this wildly spinning rock. I call them for what they are: Oxygen Thieves.
Gunner

hummer said...

Third example
Final Con
Political fundraising and contributions
Legal representations, gaming &
tobacco settlements
Medical prescriptions & equipment
Auctions for public domains,
such as the upcoming band width
Global warming related activities
etc.

hummer said...

Gunner
Thank you. As you and I both know in business, decisions are made that are black, white and grey. The black and white are simple; the grey is what at times keeps us up at nights and sometimes makes us uncomfortable while doing our morning shave.
ATM
While you can cite example after example of Eclipse's history, there is a difference between crimminal activity and being
"foreward looking and making foreward looking actions and statements". I agree though, that it should be identified as such, rather than "the gospel truth", don't you?

Dave said...

I frankly don't believe Eclipse fits into any of the above three
examples YET . . . .
however, they need to be very
careful on how they solicit and
account for money.


If Eclipse goes into BK we'll find out a lot more both because so many things have to be made public and also because then the company operates on the creditor's behalf. I suspect that this turned into a scam and that there is evidence of it...it's possible there already has been document shredding or there would be in the future, but with Sarbanes-Oxley, I think it's unlikely. I would expect there is evidence going back to 2002 where Eclipse staged the flight just to get progress payments. There's probably plenty of other docs as well that would most likely counter what has been said publicly.

Ken Meyer said...

gunner wrote,

"Good to know Ken remains consistent...publicly hawking others to step up ("I'm considering it myself") to a "great deal". All the while he's questioning Eclipse's very viability in the Clubhowze"

Good to know you remain consistent.

You're a shameless liar.

I did not question Eclipse's viability. Here is the entire message from the E5C website:

"Karen Di Piazza of CharterX has written a scalding anti-Eclipse attack piece that was published yesterday. She’s had bad blood with Eclipse before (according to Eclipse personnel) and has published incorrect information about the company in the past. That said, however, this is the kind of stuff that is beginning to appear in print. And, whether right or wrong, this kind of published material could make it tough for the company to get money from anyone---customers, investors, lenders--anyone.

"I think it's time for the company to come clean with a viable financial plan and share it with the world in order to defuse the growing chorus against their viability. It's a chorus singing a sour song based on incorrect information, but it is there nonetheless. Here is the article..." (quoted article follows)

I said the company would DEFUSE the chorus of people incorrectly claiming they are not viable if they shared their plans. I DID NOT question their viability.

You gotta stop lying, Rich.

I'm reminded of your sorry story that you shamelessly pitched to the folks on this blog all about how Eclipse tried to change your contract, but you were the white knight and refused. That was very theatrical, but pure baloney. The truth is that YOU demanded a contract concession from Eclipse that no other customer had, and they said no way. They ejected you. Summarily. Sayonara buddy. Hit the road, Jack.

And so you packed up your little hatchet and brought it here. Where you continue to prevaricate, exaggerate, and fabricate trying to get even with them.

What will you do with your life when they do not go bankrupt on December 15 like you've been suggesting?

Ken

hummer said...

Final Con
The war on Drugs

airtaximan said...

hummer,

I'm struggling with your comment, but that could just be me.

If they knew they were scrapping the engine and the avionics, and failed to tell anyone, instead asking them, based on rosey pretty pictures of the state of afffairs, to put up money, that's a big fraud, no?

Ommissions of material facts regarding the transaction and mischaracterizing the situation in order to obtain money.

what does this have to do with "foreward looking"?

PS. if they did not know they were scrapping the systems, they are incompetant.

airtaximan said...

Ken:

FWIW,

I did not read the quote included in Gunner's comment as your questioning eclipse's viability.

Why do you care if some folks are questioning it, though? Isn't it normal, all things considered?

You bring up a good point, though: why don;t they just come clean and show everyone what their financial position is? It would stop a lot of "false" speculation that they are almost Kaput?

PS... I keep thinking about Mike Press "investing blindly" in a prior round, only to be surprised when he finally saw the financial picture, under strict NDA.

My take: if they had something to show, they probably would. So, your plea for same is well taken. Have they answered?

PPS. did you pony up another $650k for the second Meyer plane so you can receive the $1.25 million guarantee?

Niner Zulu said...
This comment has been removed by the author.
Jim Howard said...

Ken, is the article by Ms Di Piazza to which you refer?

http://tinyurl.com/363bbj

I have no idea what the background is between Eclipse and this writer, but the first article hit I got when I Googled 'Karen Di Piazza of CharterX' was highly favorable to Eclipse:

http://tinyurl.com/226gde

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