Monday, February 25, 2008

The Future for Eclipse?

Thanks to Bricklinng for this masterful business plan. It should give the long suffering shareholders in Eclipse some hope for the future.

You had an interesting idea to sell Eclipse reality clothing at Oshkosh, but it's not as simple as T shirts. The following is more apt. First we must rent two separate booths.

At the first booth, have pictures, samples and an associated web site showing the Eclipse Jacket with all kinds of novel pockets, zipin/zipout insulation, floatation feature, etc. The article must be attractive and something that most everyone would think is novel. There will not be any actually on hand, but you can order one at the show for $150.00 as follows:

1. Put down a $15 non refundable deposit and get a position number and we will advise you when your jacket is 6 months away from being produced.

2. At the 6 month advisory point (we will unilaterally declare this), you will send in another $75.

3. On delivery, after the 6 months, you pay the remaining $60.

Note that after the show, our price will go up to $200.

Will will disclose that about 100 people have gone through the 3 step process above and that the time following 6 month notice was actually a year and a half and that when the jackets were delivered they had no insulation, zippers or sleeves, but you can wear them as vests (sort of). We are committed to adding the missing pieces as soon as we get them in ourselves, at no further cost. You have our full faith and credit on this promise.

At the second booth, we will have some of the partially-completed jackets available for sale on consignment from their owners. We will also have some contracts with position numbers attached available for sale. So if you want to have a jacket and just be waiting for the promised improvements or if you want a low position number like 200 or 300 instead of number 2700 (the highest number sold to date) then you can buy one of these. The partially-done jackets will go for $170 and the position numbers will go for $20 or $105 depending on whether or not the 60% has been paid.

Disclosure at this booth will be that 1700 of the 2700 jacket orders are from Jacket by Day Ltd., a Canadian company that hopes to put them at various points around the arctic to be used by anyone going outdoors in the winter. The users will reserve and pay by credit card over the internet and pick them up and leave them off at designated locations. Since only 10% of people in the arctic go outdoors at any one time, this sort of arrangement will be great and save everyone a lot of money and will be an improvement in outdoor protection. HOWEVER, be advised that our cost on the jackets is really volume sensitive so that if the arctic jacket company does not succeed and the 1700 orders evaporate then our cost will go from $140 per jacket to $210 and we will never make any money and may not then be able to deliver on any of our promises to anyone.

Thanks again, Bricklinng, you have something there for the good people at Eclipse.

On another note, are the FAA onto something with quality control down ABQ way? Rumblings reach this side of the pond, and I would be interested to learn more. You can reach me on the 'official' blog email,


fred said...

hilarious ...!

but so true !

you may add the jacket is to be made in some sort of holographic-tissue , so the color of the jacket changes depending on your well -being , this is to be controlled by some new sci-techs remaining to be invented , even if we had already 1 , no ! 2 ? no! 3 firms trying to make it ...!!

but since we don't have any cash to waste on such "details" the holographic-tectile is , at the moment , completely translucide : so you better have view-proof underwear ....!!! ;-))

airtaximan said...

also, "updates" are available via the web or similar interface, making the clothing truly "future proof".

carlos said...

hi all

well the ice season is coming to an end and i was wondering if eclipse has to make more real test they will have to wait until next winter or take a plane to alaska or something, and with no fiki no easa. So to me, fiki is the next big obstacle to jump.
I'm not familiar with the amount of testing requiered for fiki. May be some of you could enlighten us on the subject.


Black Tulip said...


As you point out there is always ice, you just have to pursue it much further North or South in the summer. As we enter the last month of the first quarter of 2008, I've been wondering what milestone passages we can expect from Eclipse.

FlightCenter has been excellent at tracking the company's prognostications. When are known ice and new avionics supposed to be 'finished'?

airtaximan said...

fret not... there's plenty of ice... Russia.

mountainhigh said...

First, a "thank you" to Shane for continuing the blog!

Following is a quote from the "January 2008 Letter" (monthly newsletter) from Richard Aboulafia.

" .... While Eclipse and Cessna delivered fewer than 150 VLJs, Cessna, Hawker Beechcraft, Pilatus, Piaggio, and Socata almost three times as many turboprops—a record for the last 25 years. VLJ production is headed up, but so is prop production. And if you assume, as I do, that Eclipse implodes like a hollowed out termite hill in 2008, the Prop:VLJ production ratio will be similar to this year’s. ..."

Definitely a colorful prediction.

FreedomsJamtarts said...

Don't forget to dis all of the idiot jacket companies, who are dinosaurs and have no clue.

The First zipper vender change will be announce two weeks after calling up the first 2000 "Six month to go" payments.

As schedules slip, employ a bunch of experience garment industries experts, then don't listen to them, and then rag on them in the media for the being the root of all evil.

Finally sign a vapourware contract for production in Bangledesh.

Gunner said...

Let's not forget to bring in an executive from a famous tennis shoe manufacturer to ramp up production as VP of Manufacturing.

fred said...

tarte à la confiture de liberté (sounds rather less glam this way ...!)

bangladesh ?

are you nuts ? ;-))

bangadlesh is MUCH to easy to track down and check ....

a remote settlment close to baîkal , closest town irkukst 2.500 Kms is much better ...

or a good old brothel in Ho-chi-min , that would do ...!

a it would be a very good way to explain why 6 months advance paiement become so easillly 10 years .... ;-)

fred said...

carlos , you didn't get it ....
you wait untill the ice-season is gone , then you do all the tests ...

and allelulia ... a miracle , you pass all the tests ...!! ;-))

what ??? you want to go north to find some icing ?? what for ??

BricklinNG said...

Making the call on Dayjet

In this election season, it is common for the news media to predict election outcomes when only a few percent of the votes have been counted. Sometimes outcomes are "too close to call", but many times not.

Dayjet has been going now for almost 6 months. Nobody would have expected them to be in the black at this point, but maybe we have enough results to make a call.

Businesses or products that are destined for great success usually foretell their own futures right away, don't they? Think of the New Beetle or New Mini or other cars that developed waiting lists and started selling over sticker. Dayjet hours have been about static from the outset; 20 weeks ago they started with 5 airplanes and now have about 30 but are flying enough hours to keep maybe 4 busy. Is there still a chance that Dayjet will "catch on", that their hours will go up from 100 per week to 500 and that they will become a success, or can we make the call at this point that it's a dud? And if Dayjet is a dud, will Pogo or anyone else aspiring to create an enormous fleet flying multi thousands of hours in Eclipse Jets be any different?

Bonanza Pilot said...

Unfortunately the jackets won't make it to this years show because of the lazy and greedy zipper supplier. He ruined the entire product...but luckily we have found a new zipper vendor who will be making an even better zipper (zipper NG) for the same price!

Seriously though, I am still expecting bankruptcy by Oshkosh...and if you need any ice just park the plane on my driveway!!

Niner Zulu said...


My guess is Dayjet will quietly close their doors in a few months, turn out the lights, and that will be that. The only way we'll know it over is when we see a lot of used Eclipse jets in Controller.

Even when this happens, though, I doubt we'll see any change from the 2700 order in Eclipse's order book.

gadfly said...

There was no shortage of "ice" over the last couple weeks in the ABQ area. Even this morning, there was a sudden snow storm just east of ABQ, after "sun-up". Of course, during the flurry it wasn't VFR, so maybe that's the problem . . . getting ice at altitude in VFR weather . . . and temperatures above 40F, to get the spools up to RPM for take-off.

Change the expression from "Catch 22" to "Catch FIKI".


('Heavy advertising over the local radio for a 12 week course to be an Eclipse technician.)

David Wihl said...

Pogo is planning an IPO and have now set their price.

"Pogo expects the IPO to total 7 million shares and price between $12.50 and $16.50 apiece.

Based on the expected price range and about 10.6 million shares outstanding after the IPO, Pogo will have a market capitalization of $132.9 million to $175.4 million. The company expects net proceeds of about $94.6 million, based on an IPO price of $14.50."

"We currently plan to inaugurate service in the second quarter of 2009, operate 15 VLJs [Eclipses] by the end of 2009 and operate up to 115 VLJs [all Eclipses] by the second quarter of 2012."

It's amazing to me that they would get sufficient investor interest.

FlightCenter said...

There wasn’t a lot of good news for Eclipse in the FAA data that was released today.

The latest data from the FAA today indicates that Eclipse delivered 2 Eclipse 500 aircraft last week for a total of 18 aircraft so far this year. That works out to a delivery rate of a little less than one third of an airplane per day so far this year. If they continue at this rate, they will only deliver 120 aircraft this year.

Offsetting those transactions was the fact that on 2/7/2008 the registration for serial #87 (N50EJ) was transferred from its original owner back to Eclipse Aviation. The bill of sale for the original transaction took place on December 7th. It looks like the original owner had the aircraft for 60 days.

Another item of note, the FAA online data for serial # 85, 102, 111, and 124 (N778TC, N277G, N175JE, and N227G respectively) now provides the following warning.

This aircraft's registration status may not be suitable for operation.

The FAA website then lists (in red) the aircraft’s registration status as “In Question”. The FAA data shows that all four of these aircraft have been delivered to their original owners.

Serial #102’s last flight was to ABQ and Serial #111 was recently flown to Gainesville. Serial #85 was recently at Double Eagle. Flightaware shows no records of any flights for serial #124 as of today, so it is likely still in ABQ. Has anyone heard what may be the reason? Perhaps some sort of service bulletin?

Another item of note is that on 2/15/2008 the Type registration status for serial numbers 128 through 133 was changed from Corporation to Foreign Corporation.

On the same day, the Type registration status for all of Eclipse Aviation’s flight test aircraft fleet (N502EA through N506EA), its ECon Jet, and the Eclipse owned L39 was also changed from Corporation to Foreign Corporation.

FlightCenter said...

Black Tulip,

The latest dates from Vern's lips to our ears at the ETIRC announcement press conference was that FIKI and EASA certifications would "certainly" be complete by the end of Q2.

They've been pretty silent on Avio NG 1.5 for a while, but the last public statement I've heard regarding 1.5 was for that to be released in March (of 2008).

There was a post on VLJplanet from someone who talked to an Eclipse salesperson that left the impression that Avio NG 1.5 could well be pushed out to Q2 as well.

But I haven't heard anything "official" on that topic in a while.


Anyt updates posted on the Eclipse Club site?

Shane Price said...


I hope that you will continue the good work on the delivery data. Please note that I have 'borrowed' that link from our original home, so that you can keep it updated.

That is, if you are minded to do it!

Thanks in advance.


Shane Price said...


Any idea how many trainees they are looking for?


gadfly said...


'Seems like they are looking for "600 to 700" in addition to their present staff . . . but please don't quote me.


Niner Zulu said...


No updates on AvioNG, just speculation from E500 Club Members.

Gunner said...

All this specualation on when FIKI will be finished; when NG will be finished.

This Company learned its lessons a couple years ago: When it comes to The Faithful, simply stop talking about "features" when they become unfinished IOU's and change the subject to new "features, challenges and opportunities". Talk about those until they're passe and then move on to the next item of excitement.

It's worked pretty well; except for those who would actually hope to profit from or fly these planes.

What's not to like?

airtaximan said...

foreign ownership...


This would be a nasty turn of events... given the FAA's recent penchant for shaftig foreign owners of even charter/aircraft management companies... let alone manufacturers.

Think TAG... some other fire sales now going on to avoid the wrath of the FAA.

Of course, these foreign owners had stellar safety records.

Perhaps a problem with DHS?

Yup, it WAS a private jet the wisked away Bin Laden's faimily after 9-11... but the reservations were made by Bush... ;)

Seriously, IF eclipse is now "foreign owned" this will be a big mess.

Heck, it can't get much WORSE, can it?

Black Tulip said...


Your reporting raises an interesting question. If the flight test fleet and several production aircraft have been registered to a foreign corporation, is Eclipse a U.S. company or a foreign operation.

Black Tulip said...

Eclipse as a foreign owned enterprise... perhaps the L-39 flight test aircraft can go back to its original Czech tail number. That'll save some much needed cash.

EclipseOwner387 said...

FlightCenter said,

This aircraft's registration status may not be suitable for operation."

In the past in my transactions it has only meant that the registration paperwork is lacking something for completion. I have never had it mean anything associated with physical airworthiness. For example, I sold an airplane and the old registration was misplaced and not returned to the FAA promptly. That resulted in that message. The same message was on one of my airplanes that I purchased due to a typo on the registration application.

That is my experience.

airtaximan said...


that was the OLD definition of

This aircraft's registration status may not be suitable for operation"


Seriously, I want an EOpinion on the state of the disunion at eclipse:

are you in or out of the market for eclipse 500's these days?

EclipseOwner387 said...

no position at this time.

airtaximan said...

your intuition on the situation?
(something tells me you'll be right)


EclipseOwner387 said...


I am not a buyer until fiki cert and hestitant without fms and moving map. There are some bargain priced E500's but I am not willing to take the risk right now. Especially with the volatile financial markets.

The old saying of bulls and bears make money but pigs get slaughtered means something in my case. I don't need to be a pig.

Shane said...


Wise words.

To be fair, no one here would ever think of you as anything other than an astute 'player' who timed your buy/sell decisions to perfection.

It is therefore very interesting that you expess your concerns so clearly.


fred said...


yes !

this post of your , i must appreciate ! your timing is perfect !
i must say , i had lots of difficulties explaining to lots of "clever" guys this kind of situation ..
anyone can make money out of any situation ...
you only NEED to know what is the situation , minute by minute ..
to accept it's a game you may end-up as a looser ...
Nothing is written in marble , whatever is true today , might be wrong tomorrow ...

and most important : never take your dreams or fears for reality !

you seems to know the "lesson" , i congratulate you !!

ColdWetMackarelofReality said...

Beating Vern at his own game

Jetpool LLC makes substantial fleet order, with start-up OEM Spectrum

Here is the money line:

Ryan Stone, CEO of Jetpool, notes that the Spectrum family of aircraft has been chosen after an extensive evaluation of alternative light jet aircraft. "We looked at every VLJ coming into the market, and Spectrum was an easy choice. Spectrum's products will give our shared ownership clients high performing `regular' sized aircraft at a VLJ weight and price - the value proposition is truly disruptive."

I laughed out loud.

airsafetyman said...

The foreign ownership angle is very interesting. Could it be an arcane tax avoidance deal cooked up by Vern the Volga Boatman and the Flying(low) Dutchman so some of the wealthy ETIRC investors can avoid paying taxes on their somewhat shady fortunes? Doesn't seem very ethical, but as Tina Turner (almost) said: "What's ethics go to do, got to do with it? What's ethics but a second-hand emotion..."

fred said...

airsafety ...

etirc investors are supposed to be from Luxembourg (whatever they say , etirc IS from Luxembourg , not , i repeat NOT from holland !)

believe me tax system is already Very cool in Luxembourg , so why should they used some extra-avoidance thing ?

airsafetyman said...


This is the first time I have heard that the investors in ETRIC are FROM Luxembourg. Odd, considering the Flying(low) Dutchman who is the head of ETRIC from the Netherlands himself? I, too, have been to Luxembourg several times, and know about its tax laws. Doesn't mean that a Russian investor could necessarliy take advantage of Luxembourg tax laws to shield his income without additional "assistance".

Gunner said...

I think we're going a bit far afield with the speculation about the foreign ownership. Other than the fact it appears that several EA-500 have gone to foreign owners, we'd be hard pressed to draw any further conclusions.

ETIRC's deal with Eclipse and the Russian government looks, smells and sounds like a last ditch bottom-feeder attempt to stave off the inevitable. Simple desperation. No conspiracy needed.

Anonymous said...

Gunner said...

I think we're going a bit far afield with the speculation about the foreign ownership. Other than the fact it appears that several EA-500 have gone to foreign owners, we'd be hard pressed to draw any further conclusions.

The fact that the test fleet (N502EA to N506EA) are now declared "foreign" says the corporation changed to being foreign owned. Those airplanes don't get "sold" to "customers", ever.

This implies something legally changed at Eclipse with regards to its status as a domestic versus foreign company. Perhaps now ETIRC has not only the largest but now the majority stake in the company?

If so, with ETIRC having control of the board, you know what is next.

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

I can only imagine Bill Gates and Al Mann, as well as Sam Williams (rumored to be a sizable initial investor in Eclipse) feel about foreign ownership/control of their company.

Then again, maybe wresting control from Pluto back to anywhere on planet Earth is perceived as a good thing!

...even if it is Luxembourg or eventually Russia...

fred said...

the flying dutch is from Holland ...

but Etirc is a firm from Luxembourg !

so what ever you do or say , Etirc is to be taken as a firm from Luxembourg , thu no needs to care about taxs from anywhere exept from Luxembourg (if not making profits outside of this country) !

the fact that investors are from Russia , pluto or my garden is of no importance ...

think for a few seconds about all the firms in USA that are controlled by foreigners ...

still if they are in USA and not included into holding , or declared to be a sub. of bigger one , they are american ...!

Gunner , i think the russian Govt behind is a fantasy ...!

last time i asked a quite high rank official for Govt , i know , he just laughed at me and asked me "do you believe anything you read " with a big smile ...!

that some russian have lots of cash out of Russia (mainly in luxembourg for clean cash , and mostly in Monaco and swiss for what is "less" clean cash ) = OK !

but that the Russian Govt would need a "third party" firm in Luxembourg to finance such a thing = total fantasy ...

the "smoke" around the Russian Govt is only a rumor spread by some (?) to push believers and almost believers into thinking the shift could be made without problems ...

just to imagine this can be achieved without problems , delays and all sorts of things , in Russia , already state it is a rumor spread by somes who have no idea of reality here !!!

airsafetyman said...


My point is that the one thing Eclipse is very good at is generating losses. Some investors in the proposed Russian version of the airplane might need some losses to offset the taxes they would otherwise be forced to pay on other income generated within Russia.

Shane said...

Read carefully what Fred is telling us.

He was first out of the blocks with details of the 'new' factory in Russia and has strong links to many business/government types there.

Sometimes, people are prepared to believe the spin that Vern et al put about.

But remember, a lot of what Eclipse has said turns out, in the cold light of day, to have been just that.


It suits (for the moment) to have people believe that ETIRC has some sort of 'inside track' and that this provides security.

Be clear folks. Vern needs those deposits and progress payments, and he needs them NOW....

Especially with production down to one third of an aircraft per day in 2008.


Gunner said...

All my life I've heard it suggested that you might seek losses to reduce your tax burden. I guess I've never quite figured out the trick.

Unless Luxembourg (or Russia) has a 100% Tax Rate or specific tax incentives that grant you an incentive to lose money the math simply doesn't work. Every dollar your business loses is some percentage of that dollar out of your pocket.

I guess some people have gotten rich that way. I just never met one.

airsafetyman said...


I am open for suggestions. Why else would you transfer the developmental aircraft to a "foreign corporation"? If not a tax loss how about accelerated depreciation for the investors? No sane person would put money into the venture without an angle of some kind.

Gunner said...

How about "collateral", little as it might be? ETIRC isn't handing out money for free.

Point is, I don't know the answer. But I do know that the last problem of a company that's been hemorrhaging for years is a tax bill. Eclipse is not profitable, has never been profitable and will probably never be profitable. If it were legal, this company would be a major "seller" of losses; they hardly need to look for more.


JetProp Jockey said...

There is a reason for the aircraft to be sold to the new foreign partners.

It is a way for the guys across the pond to provide additional cash without it being an investment in the business. They are receiving an asset for cash that Eclipse needs to pay bills.

Another few million with little or no risk.

JetProp Jockey said...

Gunner, I agree with your comments relative to loosing money for a "tax write off".

The only time that folks make this claim is when they have enough assets or income to be able to own something for show that does not make money.


Race Horses
Sports Teams (althogh they seem to be able to fine a sucker willing to pay even more then they did when they get out)
Charter Aircraft (sorry ATM, but you know the owners don't make money, only reduce their losses)
and many more.

They get a tax loss, less money in their pocket and bragging rights with their friends and enemies.

JetProp Jockey said...

just got this e-mail from Day-Jet

Now you can enjoy our lowest available Per–Seat, On–Demand™ fares
when you travel from our newest DayPort cities of
Montgomery, Macon and Miami/Opa-Locka
to more than 45 other regional destinations.

Black Tulip said...


I don't think this has anything to do with taxes. It's gotten tougher to use net operating losses (NOLs) domestically, let alone mixing different country's tax codes. For instance, in this country, the losses would have to offset profits in a closely related business - not likely in very light jets.

I'll bet it is a simple regulatory requirement. Who owns or controls Eclipse Aviation, a domestic or overseas group? Depending on the answer, the company's assets including aircraft might require different registration. Note that many aircraft owned by overseas companies or individuals retain their 'N' number.

As a footnote, I'd like to bring up the word 'foreign'. I've worked with Europeans who dislike the word in business. They point out that 'foreign objects' or 'foreign bodies' might be best removed from your eye or, if more serious... surgically.

Bonanza Pilot said...

I am not an expert on bankruptcy...but if you make Eclipse a foreign owned company with assets all held by overseas companies, then where would the bankruptcy filing take place. Whose laws would apply? I think it is obvious to anyone who has not sipped the Kool-Aid that Eclipse is on an inevitable path to bankruptcy. The only real argument is when, and how many more wasted dollars before it happens. So how would being a foreign owned company change that filing?

Gunner said...

This is a bit silly, guys.

When the company implodes, what does it matter whether it's titled in the US or Bangladesh? The assets are still in the company and subordinate to the debt; No matter how you cut it, the assets still disappear into a sea of red ink. Not even Vern is dumb enough to try to expatriate ownership of the entire company just to steal a couple of orphaned aircraft out the back door. That WOULD fall into the US Courts; and not the bankruptcy section.

Nor does a foreign investor automatically force a move of ownership of a US company. As Fred point out, it happens all the time.

All we have here is some planes that have been titled to a foreign owner. It may well be this was part of ETIRC's requirement in the deal. That's embarrassing enough for the Company. I see no reason to jump to the conclusion that Eclipse Aviation is suddenly a European (or Russian) entity.

Shane said...


It's only 'silly' for us.

No one here has money down as a deposit or progress payment.

None of us Critics currently own an E500.

Eclipse is not a customer, to whom anyone has extended credit.

We own no shares.

Lenders, we are not.

Hell, other than Gadfly, we don't even pay taxes in New Mexico.

For anyone in the above catagories, these changes of control over the company assets outside of the US must, at the very least, be unsettling.

At worst, downright scary...


Gunner said...

Unsettling? Agreed.
Downright scary? It should be, in light of the fact that ETIRC picked up Chairmanship of the board for "about" a hundred mil.

But a Master Plan to hide assets from creditors? I highly doubt it. This company has no assets valuable enough TO hide, Shane. Taking those kind of actions in the post-Enron USofA is about as bright as selling cocaine on the Court steps in the post-Drug War USofA.

All I'm saying is that the news, on its face, is bad enough. There's little need to read more into it than the apparent fact that the company has been relegated to pledging near-worthless test aircraft against obligations.

gadfly said...

“. . . other than Gadfly, we don't even pay taxes in New Mexico.”

Float a bond issue past the governor, and somehow tie it to the public school system, and Vern could raise another twenty million clams.

You guys scare me. ‘Leave you alone for day, and you put all sorts of ideas into Vern’s mind.

The good part is that the local manufacturing companies are getting wise. The bad part is that the local politicians and media still view Eclipse as an asset.

‘A funny thought occurs to me from time to time . . . sort of someone getting their “just desserts”, as it were, . . . pass a law or resolution that the “governor”, who helped bring the Eclipse to New Mexico, with our tax dollars, must use an “Eclipse” for all his travels . . . in and out of state. Yes, I know that “his” jet would be limited in “gross takeoff weight”, and he wouldn’t be able to travel much beyond the state borders . . . and would be forced to stay home and “govern”.

On second thought, cancel that last suggestion . . . give him unlimited travel expense to go to China or somewhere . . . anywhere!


(Shane, you’re OK . . . for an Irishman!)

airsafetyman said...

No one knows just what is the structure of the "entity" that is supposedly fronting money to the Ruskie deal. Is it a corporation? Special Purpose Vehicle? Special Investment Vehicle? Is it the Enron scam all over again in Cyrlic this time?

Gunner said...

Pretty tough to squeeze blood from a stone. The Enron execs, at least, had something to steal. What does one steal from Eclipse?

airtaximan said...


built in Russia....

only darn thing that makes any sense to me.

Gunner said...

Could have simply reassigned the plans, drawings and engineering specs to a Foreign Entity. Would have been completely legal and defensible, in context of the "investment", and nobody on this Blog or anywhere else would have even caught wind of it.

Next case?

airtaximan said...


but of course, that's NOT what happend.

The nonesense continues.

airsafetyman said...

Well, Enron was a giant Ponzi scheme. It's true that Eclipse USA doesn't have two dimes to rub together, but the question is whose money is going to be put into the Russian venture, and who will manage that money and how will they invest and spend it? The potential for graft and greed, especially in today's Russia is off the charts.

Gunner said...

That simply doesn't square with the facts, though it's a common sound byte. Enron was a viable business; a significant player. It was taken down by the simple greed, ego and hubris of its execs.

Graft and greed? That kind of stuff might have played at the 2005 Eclipse. What's left today is pocket change to guys like those that took Enron down. This is no Enron. It's a Bottom Feeder's game...and the players prove it.

Bonanza Pilot said...

I guess the question would be what assets would eclipse have in a bankruptcy case. I think it would mainly be parts and tooling...and not sure what they would really be worth. The type certificate has value (would have more if it were fully certified with known ice etc.) but it does have value. Not sure why the Russians would want are correct Gunner there is not a lot of meat on the bone. You mention the planes as collateral, well if they really gave anywhere near 100 million then that level of collateral is not meaningful.

The bigger question that I think we are all struggling with is why would anyone have thrown new money into this dying dog. It is one thing if you are already in deep and trying to save your investment...but new money for this venture is surprising to put it mildly.

expilot said...

P. T. Barnum said it best. Maybe there are investors naive enough that they still believe VLJ's will darken the sky's of somewhere. Fortunes have been lost on worse ideas, remember Segway, more "disruptive" technology. Darken the sidewalks instead of the sky.

FlightCenter said...

On the topic of the foreign corporation vs. US corporation status in the FAA records.

There are still plenty of Eclipse 500 aircraft not yet delivered to customers that are registered to Eclipse and show a registration status of - Corporation (as opposed to Foreign Corporation)

Serial number 134 and higher and aircraft with serial numbers below 128 still waiting for delivery show as registered to Eclipse and the status shows - Corporation.

The records show serial numbers 128 through 133 as registered to Eclipse but the status shows Foreign Corporation.

Perhaps Eclipse has created a wholly owned foreign subsidiary as part of the ETIRC deal and these 6 aircraft are intended for delivery to ETIRC's territory and will be delivered through the foreign subsidiary.

The demo aircraft might have been transferred to the foreign subsidiary as part of the EASA certification effort.

I'm not coming up with a reason for the L39 to move, but perhaps BT has it right.

FlightCenter said...

The real issue is that they aren't delivering aircraft at anywhere near the production rate they need to stay in business.

The fact is that the deliveries made this February were originally promised for delivery a year ago.

Eclipse has been holding deposit money for a year longer than promised.

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

hi guys ...
well ok , i jump into boiling water ...
what is the point to LOOSE money ?

as pointed very correctly by gunner : NO one can become rich or succesful by loosing money ...
(i would almost point out "no one become rich by having many credits as well")

look at facts : it is the same than with stock-shares , peoples buy shares primarly because they bring "dividendes" (earnings per share) the price of a share is (or shoulb be) MAINLY MADE by the amount of earnings one can get ...

the whole deal got corrupted WHEN some clever-a*** (happy ? shane , i am not using this word ! ;-) ) succeeded in making most believing that share price is MADE by future value or hypotetical value (pure speculation) and not by what is the money you get from "earnings per share" (in the case of no profits like in the "internet bubble time")the only one thing they forgot (conveniently) to explain = if you play that game : never keep anything with a risk ! '(a "spot" practise against a "keep" practise)

why do i say that ?

because things have to be straight ! either you know all the story or nothing about the story ... anyone presenting you a fraction of the story is going to rob you !!
the point to loose money is most of times = laundering money ! (i am NOT saying it is the case actually for Etirc , it is a general constat!)

if you have 1 million but cannot use it because it's too hot = you have nothing !

if you put this million into some crazy scam scheme , you are going to loose XX per cent ( here for commodity , let say 40 %)
so you have :
1.000.000 of unusable money
- 40% of scam duty =
600.000 of perfectly legal and usable cash with a prooven origin the margin you made on the product!

(this is where it stop making sens with Eclipse , in order to have this cash , you've got to make some profit !! any 1rst year student accountant would proove in 5 minutes EAC cannot make any profits !EAC and the way i is managed now is a giant hole some tried to fill with banknotes ....)

apart this example , gunner you're absolutely RIGHT = no point to loose money ...!

but there is a few things on the road ...:

a luxembourg firm = well ... in Lyxembourg they are extremely relax with money ... fiscal fraud does not even exist in Luxembourg , you can be suied in Luxembourg ONLY (read ONLY) if you fall into 3 different categories =

drugs traffic

human traffic (prostitution , slavery , etc...)

weapons traffic

IN ANY OTHER case , it is simple , they declare that the secret of banking prevent ANY publication of ANY DATA ! (they may only accept to say they know you , but this is already the most !)

if you ever fall into one of thoses , you will discover the bad side of luxembourg (basically talking =they won't give a shit about you , they Lux. Authorities , will report you to anyone looking for you for one simple basic reason = getting rid of you = if you are extradite (they never refuse) they (Lux.) won't have to pay for your time in jail ...)

so as for investing laundered money , i doubt it ! even to launder EAC wouldn't be a good choice ... chineese real-estate or forclusion-real-estate in USA would be much better ....! (and much less control on anything in this needy times ...)

as i said before , i don't think the Russian Govt is behind , what for ? Russia , nowaday , is mainly looking to be thought as a determinant player in the world game .... (the place they deserve 1rst exporter for gaz and 1rst or 2nd for oil )
the simple fact of "stealing away" an american firm and project from america itself would give them so much satisfaction to show-off with ..., i really doubt they would do anything to hide it ...!!!

i am not saying NO russian behind ; in fact the only possibility i can think of :
a russian X has lots of money abroad , he wants to bring it back into Russia mainland ...
he make a deal : " i create a bizz in rodina (motherland) , offer that many jobs and that many prospects ... in exchange , i get a free-to-go from Russian justice for having played with tax evasion ..."

that would be about the only thing i could think off ...

but there is a major flake : if you are russian and have important sum abroad , want to bring it back to Russia , you are welcomed to do so , peoples doing such things DO NOT GET into troubles with Justice ...

few reasons :

what would be the point to "push" peoples Never to bring back the cash ?

what is better ? to have someone in jail or fled abroad and no money or money inside with the owner of that cash able to freely spend , eventually inside the country ?

the tax system in Russia is something VERY new (in soviet times taxs just DIDN'T exist !)
still the tax rates is very low compared to most develloped countries and very simple to understand ....!

Russian having money abroad are of 2 types =
the ones who fled the country because they didn't steal enough in the federal till .... ;-) ex: borizovsky in London , why do you think UK gave him assylium ? huge amount of (dirty) cash and embarrassing for russia !! nothing else ! and absolutely NO democratic BS...

peoples having cash abroad because of political and economic unstability (in the last crisis , the russian rubble lost 97% of its value overnight ... now this time is finished , in fact now everybody wonders why the rubble is still so low in value compared to major currencies = it is only because 50+% of commercial exchange are made with Euroland , if rubble is raising , european product would be cheaper = internal russian production would suffer even more ! )

the first one need to play LOW-profile and will never go back ...

the second type are already going back , so why take an "EAC short-cut" ?

all this lead to a simple conclusion :

teh russian part of plot is fictious ...

it only serve the interest of the one who claim "there is still some hopes" ...

at the same time , it play very well on some antagonism americans may have towards russians...

in the way :

1°)we have to keep OUR product in OUR land , so we need to sudside it or to buy their products ...

2°) when EAC will definitely fail , it will be so much better for anyone involved into the scam to pretend " it is because those "bloody reds" tried to steal it that is WHY it failled ..."

and even if no one say such thing ; the court decision taken (eventually) in USA for or agianst depositors WON'T have any effects on etirs or the russian part ...

there is precedent = the Youkos case , the US court decided of something , the russian answered by " you whatever you want IN your country , but remember HERE (russia) is NOT your country ! your arguments are ,therefor ,of no legal basis "

airsafetyman said...


Enron was a low-grade utility that got glamorous by booking the imaginary income of future projects as current income to keep the fictious earnings per share growing. If that's not a Ponzi scheme its close enough for me. I didn't say Eclipse USA would be a scam, too much examination there (I hope); its Eclipse USSR that may be the problem.

BricklinNG said...

Making planes in Russia

Maybe the whole Russian idea is just a chance to do it right the second time, at least in the eyes of those proposing it.

Suppose you could start the Czarist Corporation for Construction of Planes, CCCP, a Russian corporation. Take $100 million, build a factory and then go get the rights to an airplane design, preferably one already in production.

If you are CCCP and you look at Eclipse, you say, "by the time I get my factory running, AvioNG, FIKI and EASA certification will be figured out by EAC or by ourselves and the vendors so I will have a great little jet to sell in Europe." You send life-extending cash to EAC in NM and get exclusive selling rights in Europe, all the design, supplier and other info you need to go into business. Then you set a conservative schedule of manufacturing and sales volume, get adequate financing, start making airplanes for around $1.8 million and selling them for $2.2 million. You DO NOT sell 1000 airplanes at a sub cost price, DO NOT build a plan around a volume in the thousands, DO NOT throw millions at lavish show appearances, etc. DO NOT make a bunch of promises that can not be kept and DO NOT create a multi-million dollar liability to fix 100 airplanes that were built wrong in the first place. In short, you just get in business at a reasonable cost and start making and selling airplanes in a normal manner. The vendors, seeing a chance to finally sell their products, will be very happy with CCCP, although they will require letters of credit with orders before they will start making their products.

In the meantime, EAC in NM falls victim to the financial burden of the DO NOT items above, but EAC and CCCP are completely separate entities. So all the billion dollars, the obligation to provide airplanes to the current depositors (or to refund their money if the price rises), the obligation to fix the first 100 airplanes--all of this becomes another, though much more spectacular, Adam Aircraft. CCCP benefits from the good work that was done by EAC and becomes a small, successful producer of small jets in Russia with the jets first being sold in Europe and later in the rest of the world.

Maybe this is the idea,

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


yes that could be the idea ....

but to take it this way , you've got to assume first the bizz-plan from EAC is right ...

i mean = it is a valid point ONLY if the fantasy made by Vern about an European Market DOES exist ... !

up to now , nothing proove it right or wrong ...!

i personally believe , It DOESN'T and it seems Easa is on the same line ...!

for lots of reasons :

public transportation is SO much better in European Union than it is in USA ...
(i do believe that when Vern dreamt about the european market , he has just shown his very little knowledge of the european way of life ... what s valid in USA might not be valid in E.U. )

environemental concerns ; much stronger in european countries than anywhere in USA , planes are regarded as "poluting" not as "recreative" and apart from UK , to have a private jet is regarded as "something suspicious" .... !

energy taxs system ; so much more taxs on energy in europ , make it almost worthless to have your own mean of transportation ...

as for Russia = lack of infrastructures ,lack of range for E500 , lack of recogition of paperwork between Russia and USA (imagine ... E500 is finally build in Russia are you sure the FAA is going to accept all aircraft without delays , costs , inspections , etc...etc...), lack of readilly interested customers ...
(since there are more billionaires in the Moscow region than in USA , do you really believe they would be interested by a toy ? when they are widly known for their extravageant way of life ? (in extravageant = i know a guy who has just bought a house in the most expensive part of Moscow area , the house is 3000+ M² the garden look like a country on its own , there is a pool, in the basement, where my flat would fit at least 3 times and a gymn room where you could host an army .... they have been only 2 times in the house but decided after all they are NOT going to live in it = the wife doesn't like the pavement of entrance ... ;-)) complete nut case !!)
lack of middle-class with enough buying-power already , the middle-class in Russia is only emerging ...they have houses a better life style , but still very far from buying jets ...

so your idea leave you with :

a company that cannot produce ,cannot finish , cannot make profits , cannot fully certify , cannot deliver as promised , cannot ..., cannot... !
if i would be the one to have such an idea , i would probably VERY strongly think about the real question = is this whole story worth any pennies ?? probably not !

especially IF the biggest amount of customers i already have is in a country (USA) where the company / product won't be really welcomed due to some past "not so good" actions ?
(you seems to fail to understand a simple thing = book orders , not enough to be extremely shadowy ... on top of that , it is almost ONLY concerning US buyers ... so if it is to be a scam , project-life in USA is as well "shadowy"...!

and transfering production from one place to an other is NOT going to make any difference since instead of trying to make some kind of a margin , Etirc/EAC declared they LOWER the price back to 1.5 M.US$ , which is EXACTLY the opposite of what they need ...!

airsafety ...

YES , EAC/Etirc /C.C.C.P. IS the problem ...

but i fail to see if it is because CCCP doesn't exist anymore (since 15 years !)

or just because it is a fantasy ...!

airsafetyman said...


I realize the USSR doesn't really exist. "Eclipse USSR" is shorthand for "Eclipse Russia/Ukraine/ETIRC/Whatever-it-is-today". I'm not sure that exists either!

BricklinNG said...


You make some good points, re: GA in Europe. I once spent some time in a medium size city in England, population about 50,000. There was a WWII airport nearby with good runways. There was a flying club with 2 C-150s and one A-36 Bonanza. So 1 private airplane for a city of 50,000. In the USA a similar size city would surely 20 or so airplanes, so my informal sample says that GA flying in Europe should be about 5% of that in the USA on a per capita basis. (England is less anti-GA than other countries so my sample may have a positive bias). So if this is right and carries over to small jets, taking an area of Europe with double the USA population, you should be able to sell 10% as many jets as in the USA. If the ongoing market in the USA for an Eclipse at a profitable price of around $2 million is, say, 200 per year, then 20 per year would be sold in Europe. You can not run a factory on 20 per year. BUT, if you set up your factory anticipating that EAC in ABQ will go CH7, then maybe in the end you wind up selling to the whole world.
I am not saying I believe this will be the outcome, but I am trying to understand why a rational person would think about setting up a manufacturing facility in Country B when there is already one in Country A and where there are enormous diseconomies in splitting production between two facilities and where the product can deliver itself anywhere it needs to go.

Shane said...


where the product can deliver itself anywhere it needs to go

Only where its warm and dry, outside of Europe.

Until they get FIKI and ESEA sorted, that is.

Oh, and oil is steady above $100/barrel and the Euro hit $1.50 today.

And while I'm at it, the Federal Reserve says it will keep cutting US interest rates and the election in November looks like a shoo in for Mr. Obamaha.

Thats the chap who has promised to get out of Iraq in 60 days and spend like a druken sailor on everything to make everybody happy.

How many TRILLION dollars was the US national debt the last time anyone bothered to calculate?

Pretty soon the cost of the PARTS for an Eclipse 500 will exceed what people want to pay for the entire thing....


fred said...

brick ...

you wrote it yourself :

There is NOTHING rational into the whole story ...!

as for europ and G.A. , once again , you wrote it : your thing is biased from the perception you against the reality against watheevr scheme anyone can make up on a piece of paper ...

french have a saying for your calculation = " with some good IF and IF only , we could fit a whole city (Paris) into a bottle "

plane vs train (to explain the most obvious) when i go from Paris to London , i don't even bother anymore to check on planes , trains beat flight-schedule for at least 20 minutes in the worst conditions ... (with train i arrive in London City Center at least 20 minutes before with any plane can take me there...) for only a fraction of the price ...!

when i do a Paris/frankfurt , train take me one way or the others , in about the same time , still for a fraction of price for plane ticket ... and i go from city center to city center ... why should i bother about flight security , taxis and delays , because one other good aspect of train = they tend to be ON time more often !

i have no doubt that with a correct bizz-plan and NOT a schyzo as boss , EAC would probably have made it in USA ...

But USA is NOT the rest of the world , i can guarantee you , here (with a special case : i am french/german citizen but working /living mainly in Russia , so here is as generaly in europ ) peoples just don't care about private jet ...!

few reasons for that :

*)tax system = to have a private jet IS a luxury , where there is luxury the fiscal system make very good income ...!

*) Distances = travelling distances are much shorter ...! my parents live close to french/german/belgian/luxembourg border , when i go there , i do shopping very easilly in 4 different countries in a single morning ...!

*) time = most european have 2 or3 times more vacation than average americans (except UK) so basically talking when Joe Doe from N-Y is in a hurry to get from home to beach not to loose a single day out of his week , most european won't care too much as they have at least a month or a month and half of vacation ... so taking one hour more or less doesn't make differences !!

in fact the only way i take a flight is when i go too far in russia ( have you ever spent a week in a train ?) or when i go to Paris or to Frankfurt , and it is mainly not to go trhu Belarus ( a pain in the a*** [ok ?? shane ! ;-) ] to cross ) or thru Ukrain which is not much better ...!

fred said...

shane , my friend ...

since you bothered about ...

i have a good friend who just came back form baghdad where he was working in european embassy as security officer ...

5 years after "we won the war , it is over "

that guy described the actual life in Baghdad :

Electricity = at the most 2 hours in any day

Water supply = inexistant !

Sewage = still 95% destroyed

Security = secu what ?

American troops = no one see them anymore , when US soldiers get wounded or die it is ONLY on the way of the airport ...
Arabs talk about US soldiers as cowards... as they never go out anymore of their secured camp which is surrounded by a no-man-land of about 10 Kms deep ...

Unrest = one the "funny" thing :US intel . decided to pay former saddam supporter to prevent them to get enroled into Al-quaeda ... which is very good buisness for them = they see US = they get XXX $ , they go to Al-quaeda and say US gave that much , how much do you give ? ;-)) (pure madness)

about Euro , yes i am starting to be a bit worried ...
if it jkeep up this way , Euro will become the Next Reserve-currency ...

No one NEED a reserve-currency ... a stable system would be much better ...!!!

about the debts (some shouldn't read this as nightmare are guaranteed after ...) last time i talked on subject with a good expert of the matter , he said around 40 to 60 .... but this kind of amount has no meanning anymore as no one have experienced it before in human history ...!

Gunner said...

I sure as heck would like to have your friend get together with a few of mine. I have a number of close contacts in The Sandbox and recently returned from deployment, some known to me for more than a decade. They paint a VERY different picture from your friend.

Not looking to defend this conflict; just providing juxtaposition to what you've reported here. Perhaps, having been attached to the French Embassy, your guy didn't get out much. Mine do....a LOT.

fred said...

shane ...

i forgot ...!!!

obama ?? well , i am not sure the w.a.s.p. are ready for a guy which is not exactly white , not exactly a good christian (like it could change the bread pice ?)

i have not too much doubts about clinton vs obama ...
but i wouldn't be so sure about Mc cain VS obama ...

the only one thing i am sure of , whomever ever is the next , i wish him good luck , he'll need it , a lot !

fred said...

gunner , the guy in question is from swiss ...!

i haven't been myself there , so i cannot argue withh you ...

but the "thing" was definitely a big fiasco ... and is still !

what do you think will happen when kurds of mossoul will join kurds of turkish PKK ?

i suppose US Intel is going to find VERY uncomfortable to be with vital interests on both sides ....!!

Gunner said...

What do I think will happen? I don't know. But I DO know it's a lot easier (in the short run) to criticize from the sidelines and mollify from within (as the French have so famously done with the Muslim issue) than to deal with the problem at hand.

Inaction is, after all, an action in and of itself. N'est ce pas?

You asked the question. I suspect you have the answer. What would you do?

fred said...

Gunner ...

you are right (but do not let it become an habit ! :-) )

it is very easy to critize from a distance ....!

what would have done ? i wouldn't have gone there , in the first place !

Black Tulip said...


Do you know why the boulevards of Paris are lined with trees?

Shane said...

Apologies for using a bad word myself...


What I was getting at was the likely instablity during the run in period prior to November elections. One of the likely candidates is, after all, committed to withdrawing from an area where a lot of oil comes from.

That can only have one outcome. Oil will get more expensive.

So, in future only really, REALLY rich people will own and operate private jets.

And the really rich won't want a small private jet, they will want an A380...

OK, maybe not an A380, but you know what I mean.


Something to do with the 'shade' and 'armies marching'? It's an old one, but still a favourite.


mirage00 said...

Ugggg, why do they continue to make progress????? It's so fustrating....


I remain amused

double 00

Black Tulip said...

To be so easily amused... It must make life very simple.

Shane said...


Did you note that Captain Zoom is the only one carrying that 'non' story?

Did you note that there is no mention of the progress on the promised upgrade for all those E500's that DON'T have a completed avionics suite?

Did you wonder why its such a small snippet, when Captain Zoom normally fills pages and pages of his site with Vern's every word.

And finally, why did Vern not mention that this was the very FIRST airborne radar that JRC had produced on the Eclipse press release?

(Who is very easily amused, and still laughing as he writes this)

Gunner said...

That's fair enough, Fred (suggesting we shouldn't have gone in to Iraq). I think most Americans (myself included) would agree with you, given the luxury of hindsight.

Of course, at the time, we were wrong; as was the CIA, British MI6 (in addition to several other Non-US intelligence communities), the Clinton Administration, Scott Ritter and a number of others.

In juxtaposition, we have (for instance) Jacques René Chirac, who supported UN Resolution 1441, while providing intel to Saddaam on the US/British plans; and whose administration was implicated in taking bribes from Tehran that would make the Eclipse fiasco look like a local Heart Fund drive. (Let's not even start on the Russian or German connections, shall we?)

But this has been the nature of the French government attitude to the US, ever since we sacrificed twice the number of American boys as France itself lost back in the 40's; many of them to free your own nation from Fascism. In fact, if my memory serves me correctly, we buried about 65,000 of our neighbors and children on the soil of your Mother Country.

Perhaps we shouldn't have gone in there either, you know?

Gunner said...

Yep. So the German Army can march in the shade.

Bad joke, I agree. But kind of tit-for-tat in current context.

gadfly said...

Gunner and Dark Blossom,

'Can't resist. The New Italian Navy now has "glass bottom ships" so they can see the Old Italian Navy.


Now, maybe we can get back to technical issues on our amusing little bird!

Gunner said...

Agreed, the diversion's been unnecessary. I can handle a fair amount of Ameriphobia. But when others reference US Servicemen as "cowards"?

Off-topic as it may be, it deserves a response. And when it comes from a source of French, German, Russian and Swiss cultures, it deserves an apology I think.

ColdWetMackarelofReality said...

Recently on e-bay:

"For Sale - WWII French Assault Rifle, never fired, dropped once."

To be fair though, Fred only repeated what his friend said - I did not take it as him making the accusation. And for the record, family members returning from the sandbox (brother-in-law and several cousins) report something far more in line with what Gunner is hearing. The good news goes predominantly unreported here in the States (not part of the Bush-bashing action line) so one can only imagine what is reported outside the good ol' US of A (or look at BBC, SKYNews etc., to see it).

On the Eclipski Organizatsiya front, I have heard through the grapevine of several key departures in Quality, Configuration Management and Manufacturing Engineering.

More 'non-performing non-teamplayers' who just can't hack it? I doubt it based on the names I am hearing - I know some of these folks. Just more of those 'experienced' aerospace professionals who were mistakenly hired to help build an aerospace company.

Gunner said...

I realize Fred was "only" relaying the slander and not originating it.
I don't take personal offense from him or from his Swiss friend, providing "security" within the walls of a secure Embassy, the environs of which are secured by American Men and Women.

Last time I checked, however, the major Swiss contribution to end World Strife was their collaboration with the Third Reich in stealing the wealth of millions of Jews sent to death camps, in return for "neutrality". That collaboration (and profit) continued for some 60 years.

The again, Fred's friend might deserve a pass, since he "only repeated what his own Arab friends had told him.

And on it goes until somebody mans up, apologizes and admits certain statements are not excusable by claiming "Well, my friend said it first".

As always, YMMV.

gadfly said...

Gunner & ColdFish

'Long time ago, I spent plenty of time listening on "passive sonar" to our illustrious "friends", directly overhead on their patrols and war games. They wouldn't have played games with us then . . . and I still have no trust in their intentions. 'Maybe we were cowards since we hid "inside" their harbors , and a few hundred feet below them.

Sometimes I have wondered how history would have been written had we been six months faster on the "Manhattan Project", and used certain targets on the other side of the world.

And had Patton lived!

Thanks for your loyalty to the country that even allows "Eclipse" to exist.


(As you may suspect, there is more than a little anger boiling just below the surface when ignorant people degrade our military.

On another subject, those patrol reports have recently been "declassified".)

Tailwind said...

Gunner said "I don't take personal offense from him or from his Swiss friend, providing "security" within the walls of a secure Embassy, the environs of which are secured by American Men and Women."

I have to agree with you Gunner...I may subscribe to your magazine yet!

Metal Guy said...

mirage00 said: Ugggg, why do they continue to make progress????? It's so fustrating....

Call it “progress” if you want, but look at the numbers:

It probably cost around $10M to design, build and certify that radar – it did take 5 years after all. Per unit is probably half of the OEM cost of the RDR2000 (RF head only), so figure about $5,000 saved per unit.

So after they ship their 2,000th aircraft, they will have broken even on the investment.

This is the Eclipse fallacy of designing everything from scratch – it just costs a fortune in time and money. More time and money than Vern ever predicted, which makes the foundation of those business decisions completely wrong.

Since it clearly will be a long long time before they ever ship anywhere near 2,000 aircraft (to everyone’s great surprise), they should have just stuck with the Honeywell radar and focused that time and energy on actually finishing the airplane rather than trying to “outsmart” the industry. An industry that might not be quite as stupid as Vern chalked them up to be after all.

How’s that home-brew FMS going? All set for another exceedingly costly failure (oh, sorry, I mean “progress”) are we?

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

gunner ...

if you want , i apologize gladly ...!
i didn't mean any offense !
i was just pointing out that US army has been there for 5 years and basic life for irakis become more difficult than under saddam rules ...! (which was the core of the talk i had with that swiss guy , the start of talking was "sometime it is better to have something not good , but thing you know well , than expectations you don't have any ideas if it's gonna be better or worse ...)

coward = personnaly i don't see any offense into this , after i've been involved in some bloody mess abroad , i took a good lesson = sometime it is much better to live your life "cowardly" in peace than to fight endlessly for nothing !

i didn't mean ANY offense for the ones "on the fields" ...

i feel sorry for them , they have been cheated , lied to , they put theirs life at danger for what ? to defend theirs country ? where is theirs country ? saddam was a danger , but ONLY to his own peoples! peoples now who won't see any better in theirs life ...
which is exactly the madness of the situation ...!

if not speaking about the financial aspect of the thing ...!
how much was spent for the iraki's amdness ? probably a few trillions ...

fred said...

cwmor ..

this morning i called the guy who came back totell "somes" said "BS" on his comments ...

his answer :

"i never said it is true or not ! i said THIS is what the vast majority of Irakis are saying among themselves ! this is where americans soldiers have already lost this war ..."

sorry for disgressing once more ...!

JetProp Jockey said...

I enjoy having this web site as a place to keep up to date on the antics, successes and failures of Eclipse.

If the discussion diverts to similar business situations that mirror Eclipse, this is understandable.

BUT, I for one would prefer to keep all of the discussions of the war in Iraq, US economy vs. Europe, etc off of this board. If you guys want to start a separate thread for world view discussions, I will just not read it, but since this site has never learned to use topical threads, just ongoing open discussions, I doubt this will ever happen.

Shane, if you must, use your delete key to keep this site on topic.

On Topic – Does anyone know if all of the delivered aircraft pre-aeromods have been upgraded?

BricklinNG said...

Today's Eclipse News according to a reader of the Eclipse and Owners' web sites:

Service Center in Albany, NY now officially open with 25 employees presently, 8 service bays. Expected employment by year end 2008 is 50;

According to a visitor to Gainsville FL facility, the first retrofit airplane is done except for paint and a flight test. So if these get done it may go to its owner next week. THEN, the FAA must give approval to the retrofit process protocol and THEN EAC is free to start on the 100 or so retrofits and work through them on its schedule.

FlightCenter said...

Metal Guy,

You are so right about the economics of designing a radar, but there are a number of costs you didn't mention that should be included in your breakeven analysis.

First, Eclipse had to redesign Avio NG to interface with both the JRC radar as well as the Honeywell Radar. Supporting two radars instead of one radar almost certainly delayed the introduction of Avio NG. If Avio NG was delayed by a month (very possible) then the program cost of supporting a JRC radar must include the cost of retrofitting all the aircraft shipped in December up to Avio NG status.

There were 30 aircraft delivered in December. If you assume an upgrade cost of $120,000 for new avionics and retrofit labor (probably conservative) then they incurred an additional cost of $3.6M as a result of developing their own radar. Even if the radar only delayed the introduction of NG by one week, that cost was close to $1M in retrofit expense alone. This doesn't mention the loss of good will of the customers who took delivery of their aircraft in December, who wouldn't have had to have their airplane go through the NG retrofit process.

Second, Eclipse had to certify both radars on the aircraft. More paperwork, flight tests, time and money.

Third, the Eclipse service centers have to support both radars. The complexity of supporting two radars costs considerably more than double the cost of supporting one radar.

Fourth, Eclipse will have to provide ongoing engineering resources as long as Eclipse 500s are flying to support the new radar. This includes delivering the radar NG and radar NG 1.x releases required to fix the inevitable problems which will be found in the field resulting from a company fielding its first aviation radar.

It is hard to imagine how you could support a radar product with less than 2 - 3 Full Time Equivalent people on staff among engineering, flight test, certification, quality assurance, product support, training, supply chain management, etc... 4 or 5 FTEs is probably more likely.

But let's be conservative and say the support cost is $200,000 to $300,000 a year. There is another $2M to $3M in costs over 10 years that have to be recouped.

If the cost savings of a JRC radar is $5,000 per radar, then Eclipse will need to deliver between 400 and 600 aircraft a year with the JRC radar just to breakeven on the support costs alone, not to mention the initial investment in designing and certifying the radar or the costs of retrofits resulting from delaying Avio NG.

We're not over yet, this means that Eclipse will need to deliver more than 400 to 600 aircraft a year to deliver 400 to 600 JRC radars a year, because the Honeywell radar is still an option and some percentage of the Eclipse owners will feel more comfortable selecting the proven Honeywell radar for their aircraft.

Your fundamental conclusion is right on the money. The management team that made the decision to make this investment, made a very poor decision on how to best allocate their limited financial and engineering resources.

It was a poor decision for Eclipse, its customers, and its investors.

Gunner said...

On topic, then.

As much as I'm not a fan of Eclipse Aviation, I attempt to be balanced toward the company. eg then and now: I was the first to give Vern a pass on the Pitot AD; I was the first to downplay the foreign registration of some of their aircraft.

That said, Fred, I gotta tell you. Your input as to aviation and business issues in Eastern and Western Europe is of great value. However, your message is too often lost in your unmistakable distaste, dislike and, perhaps, envy of all things American, from corporate culture to economic policy to public markets to political processes. It drips off my screen like tubercular phlegm.

You are unable to pass on the most minor opportunity to use the Eclipse fiasco to attack nearly everything American in the most patronizing, condescending and superficially misguided manner imaginable. Even your "apologies" are so caustic as to cause me to break out the Lysol.

I'm reminded of those caricature American tourists; flowered shirts, straw hats and loud mouths. You know. The ones that can't help but proclaim that everything is "bigger, better and cheaper back home". They embarrass us greatly.

I personally think your insight into Eclipse Aviation would be far better received, were it not a subtitle for your Ameriphobia. I really expect better of a man with your education, language skills and travel experience.

I mean no personal insult here, Fred. I've defended you on this board for your strengths and will continue to do so. But I can't, in good conscience, do that without distancing myself from your rampant bigotry.

As to your explanation that political "order" is preferred to individual freedom, I must send a prayer of apology to those 60,000 Americans buried on French soil. They apparently died needlessly. After all, Hitler at least had the trains running on time.

Best regards-

FlightCenter said...

In June 2006, Eclipse sent a letter to depositors telling them that they would be delivering aircraft with radar in November 2006.

In June 2007, Eclipse revised the radar plan to say that the radar would ship on aircraft starting with serial #100.

In Oct 2007, Eclipse revised the radar plan to say that the radar would ship starting with serial #105.

Jan 11, 2008, Eclipse delivered serial #105.

February 26, 2008, Eclipse announces certification of the radar.

This adds yet another group of aircraft (~18 to 20 post NG aircraft) to the growing list of aircraft that need some form of retrofit.

eclipso said...

The Quality Team is going through another "diruptive" re-alighnment. Reliable sources say they have lost four more full-time inspectors and are now being pushed to six-day mandatory shifts and told they need to be "high-volume" inspectors. With an FAA audit coming up, this will be ineresting to see the results. More to quit in March...I wait and ponder

FlightCenter said...


I second your motion to move this forum back toward discussing Eclipse, VLJs, and other general aviation topics related to the ultimate success or failure of Eclipse.

There are many, many forums available for folks who desire to discuss the politics and economics of the Iraq war, WWII, international policy, etc..

Many of us have lost relatives while in the service, many of us currently have relatives stationed in Iraq right now, and many of us have relatives who have returned from tours of duty in Iraq.

airsafetyman said...

"...and are now being pushed to six-day mandatory shifts and told they need to be "high-volume" inspectors."

And "high volume" is code for...?

How long is the FAA going to embarrass themselves by tolerating this nonsense?

FlightCenter said...

In October 2005, Eclipse announced that the Albany Service Center would be open in 2006.

In July 2006, Eclipse announced that the Albany Service Center would be open in Q3 2007.

In July 2006, Eclipse announced that they would open the Van Nuys, Boca Raton, Chicago, and Bay area service centers in 2007.

In Nov 2007, Eclipse announced that the Albany (and Van Nuys) Service Centers would be open in early 2008. There was no mention of the Chicago, Bay Area or Boca Raton service centers at that time.

Congratulations to Eclipse on getting the Albany service center open, even though it is more than 2 years after their original commitment.

They've got 103 airplanes to retrofit in the next 10 months.

It seems unlikely that even with Albany and Van Nuys service center capacity online they will have enough capacity to accomplish that goal.

Especially since the first NG retrofit took 4 weeks longer than originally estimated.

Gunner said...

To my thinking, the quote of the day goes to MetalGuy. He pretty much sums of the root of Eclipse's falure in this statement:

"they should have just stuck with the Honeywell radar and focused that time and energy on actually finishing the airplane rather than trying to “outsmart” the industry. An industry that might not be quite as stupid as Vern chalked them up to be after all."


ColdWetMackarelofReality said...

If I had to guess, I would suggest that there are probably 'remarkable similarities' between the 'new' JRC Eclipse Aviation Weather Radar System (TM) and the Honeywell RDR2000.

IOW, the inputs, controls and outputs are very likely the same as the RDR2000, exactly the same.

This decision was surely made because Honeywell pissed Vern off by demanding higher prices due to the vaporware volume not being present - imagine the nerve, pointing to the low volume pricing in a contract.

Shortly after that happened, JRC probably received a 'new' specification control drawing from Eclipse, that probably looked strikingly similar to the Honeywell RDR2000 system. May have even gone so far as to have the Eclipse logo covering up the Honeywell logo. Stranger things have reportedly happened.

Eclipse may have convinced JRC to absorb much of the development costs at-risk with talk of the same vaporware volume that Honeywell was presented with, ten years ago, as well as the opportunity to take the Eclipse Aviation Weather Radar System (TM) and offer derivatives to the broader market, for a small licensing fee.

Again, if I had to guess.

Another example of what passes as 'disruptive' decision making.

The other commentors are spot on, supporting two separate but equal radar systems would be hard enough (read that stupid), if they are truly different as the 'next generation' comment would suggest, then there should be separate software loads based on which system is installed as the FAA detests what it calls dead code (code that is loaded but not intended for use).

What exactly is a 'next generation' weather radar?

As with all things, just consider the source.

fred said...
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Gunner said...
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fred said...

ok , so just a last one , with apologies ...

gunner , the saddest thing = i am not even filled with ameriphobia ...!
i have been living there for some times , understood it wasn't for me ...!
that said , thanks for the hitler part , my grand-parents died in Nazi's camp ... ( but you coudln't know..)

i wrote it before , i like the idea of guy s here , because since they are in G.A. i think they have seen more and been in more places than avreage joe ...

i apolologize humbly for being sarcastic very often ...
but in my country , we have a saying "the one who love the most are the one to correct the most as well !"

i must say since i am working in Russia , i've got a prejudice idea , only because of the "type" of guys i've met there ... i won't give explanation , i suppose you know what i mean ...!

ok so to come back to eclipse :

one of the thing making either laughing or furious , is the ability of some to have a point of view in only 2 dimensions ...

i am sorry if you think there is bad toward your nation , but for some to believe what could be a good bizz-plan in USA , has to work anywhere ...

i wrote many times before :

air-taxi in European-Union (with private jets the size of E500) = just FORGET about ...

there is nothing good or bad into this fact : it is only that our developpment is totally different for few reasons most US citizens have no ideas about (size of land , broder controls , free time , etc..)

why do i write that ? = because when i see some pointing out that E500 might be succesful build in a cheaper working place , for the european and asian (turkey , asian part of russia , africa ...) IS A COMPLETE NON-SENS !

that is the reason why i use the term "2 Dimension View"

because if the ones saying such things would know the reality of things of those places , they would know it is as stinky as the "3 aircraft delivery a day " can be ...

there just absolutely NOTHING which is designed in USA , that cannot be made anywhere in E.U. or Russia !

so to speculate (mainly for depositors ) that the Russian Govt is looking to get involved in such a thing is pure rubbish !
if they would like , they would either buy it out for a handfull of cash (which is probably what EAC is worth at the moment ) or plainly spy or hire one of the (many) personn who've been fired ...

the patent rights wouldn't be a problem :

1° first Russian care ONLY about what is going on IN Russia ...

2° by the time they would produce the same thing ( E500 or RU500) EAC would have stooped to exist , leaving very probably a fool taste in the mouth of the believers and fiurnishers , so who would be there to claim any patent rights in russia ? with what money ? and with what arguments ? and in which language ? and with what court juridiction ?

so do not see any anti-american thing into that , but to believe E500 can be a great sale in geographic europ is EXACTLY what Vern want you to believe (ONLY americans customers ! anyway they are about the only ones to care about as almost no one from any other land is customers ...!!!

i doubt very much about this !

so the simple conclusion is =
the fantasy about the russian-production-plan is not something aimed at saving EAC , not aimed at producing E500 , not aimed for success .... but only a sneaky way to use the americanized way of thinking " if you can make it here , you'll make it anywhere !"

which has been true , but not anymore ...! it is called progress ...

in doing so , Vern and the Flying dutch are only playing on one other american myth , that most american who has the money to buy is having no time to spare to go in russia or E.U. for a few weeks or months to check by himself for himself of the reality of such arguments ...

Gunner said...
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Gunner said...

"only a sneaky way to use the Americanized way of thinking 'if you can make it here, you'll make it anywhere!' " [sic]

Unfortunately, Fred, you can't help yourself but to make my point regarding your bias and your steroptyping. I doubt many educated Americans believe that a product which works in our domestic market is destined for success in other markets. And I doubt ANY believe that a product which fails here is bound to be successful there.

Vern can say what Vern wants to say. However, the market (American AND International) has obviously discounted his claims, as evidenced by his inability to obtain additional US financing and the stagnation of his Order Book. Not even The Faithful are touting the ETIRC "financing" as a good deal.

So there really is no need to lecture us on what is imminently obvious. We agree with your point; we agreed with your point before you penned your first word on the subject.

It's your pathologic need to link everything absurd about this company to "the Americanized way of thinking" that I object to.

anonymous avionics engineer said...

Most of the Weather Radar was outsourced. JRC did the hardware, and an Indian company did the software in Albuquerque and in Hyderabad. The only drain to Eclipse was in managing the program and financing it.

airsafetyman said...

"there just absolutely NOTHING which is designed in USA , that cannot be made anywhere in E.U. or Russia !"

Oops, not quite true. The Airbus 340 doesn't even match the 30-year old Boeing 747. The Airbus 330 is no match for the Boeing 777. The Airbus 380 might be a good airplane if you can figure out how to eliminate the graft and greed at Airbus and develop the airplane. Then we have the avionics suites designed by Honeywell and Collins. EU and Ruskie equivalents? Or Garmin equivalents for the general aviation market?

fred said...

gunner ...

don't take it badly !

what is EAC and Etirc ?

An american firm , making an american item , designed for amrican market , with american money , for american customers n stealing american money from its american customers etc...etc...etc...

as for the money from Etirc , i am not even sure it exist !

i cannot help it , it is the way it is ...

believe i am 100 times harder on french tax policies or german way of doudle-dealing politics ...!

you know what i mean since my first word , perfect !

but this story (EAC) has been on for some times , it never came to your mind , each time they are in troubles , they seems to rely on something coming from the other side of planet ? for peoples who may not even know where it is ...

that is what i pointed out !

airsafetyman said...

And the last time I looked the tail hadn't falled off a Boeing because some pilot stepped on the rudder at maneuvering speed.

Shane said...


High volume = low price.

That's been the core premise behind Eclipse.

All Fred is saying (if I can intepose) is that the 'standard' American business model is very much volume based, and that the idea that Europeans are calmouring for E500's is, as you have correctly identified, not true.

And the trains do run on time in France.

As well as Germany, Italy, Belgium, Holland, Denmark.....

Europe is different. We work to live, take our holidays often and (by law) have at LEAST one month off per annum. Personally, I am obliged to leave my employment for 7 weeks every year and I own the company!

The fact that I 'sneak in' on weekends is not for publication....

I'm also three eights American by birth, but Irish by upbringing. So I find it hard to take some things as seriously as (probably) I should.

Lets drop this thread now and move on.

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