Monday, February 18, 2008

Old Chinese curse


"May you live in interesting times"

For the past 10 years, Vern Raburn has followed his own, unique, star. He sought solutions to problems that others had already solved and as direct result burned through more money than any similar startup. By a factor of 10. The E500 he currently offers is still incomplete, with those lucky enough to possess one facing I.O.U's for critical items like F.I.K.I., AvioNG and 'fixtures and fittings' too numerous to mention.

The general economic background to this is also important. In the past few months several aviation companies bringing similar 'new technology' approaches have stumbled or fallen. Colombia and Adam Aircraft are recent casualties. The small glimmers of good news, like that from Diamond, have relied on public money. In this case, the Canadian's have offered funding to support production of The Jet in London, Ontario.

Talking of public money, the British have just had to nationlize Northern Rock, as they were unable to find any banker to take on the liability. Soc Gen in France seems to be heading for a nasty period over its own rogue trader. The Dollar continues to slide against other major trading currencies and the Fed is running out of points to cut off the prime lending rate.

So, will Vern be able to ramp production to the point where Eclipse can make enough money on current spending to stay afloat. More important, will enough REAL orders come along to support another visit to the equity markets? Based on patterens over the past year or so, that must be coming in the next 90 days.

Interesting times, for sure.

92 comments:

Turn-and-Burn said...

"Canadian's have offered funding to support production of The Jet in London, Ontario."

Shane, you are already demonstrating that you are no Stan. The Jet is a Cirrus, the D-Jet is a Diamond.

Turn-and-Burn said...

"For the past 10 years, Vern Raburn has followed his own, unique, star. He sought solutions to problems that others had already solved and as direct result burned through more money than any similar startup. By a factor of 10."

If you are going to run and moderate this blog, you should also be accurate. Eclipse had originally estimated that program costs would be in the $400 million range. The amount spent is now 3 times that amount - not the 10 times that you state. State the facts, not your biased exaggerations.

ColdWetMackarelofReality said...

Turn-and-burn,

In the inetest of 'accuracy' Shane was clearly comparing the reported cost of development of the preemie-jet to the reported cost of the D-Jet from the article, anyone could see that.

Well, almost anyone.

Do you have anything substantive to add to the discussion?

Like for example which version of Avio the simulators simulate for example?

Or perhaps the status of the first Avio NfG conversion down in FL, now going on 2 weeks late?

Maybe FIKI?

FMS?

Moving Map GPS?

Maybe discuss the TOTAL lack of numbers to support the fabricated 'very high European interest'?

There is always the heavy-handed attempts at censorship and intimidation from the Eclipski Organizatsiya as well.

Many things to talk about of substance rather than try and bleed old Shane to death with a thousand nitnoid paper cuts.

Also, the original estimates for program cost were actually in the $300M range, not the $400M you suggest - in the interest of accuracy. That makes the amount spent 4 times the projection, not 3 as you incorrectly assert.

ColdWetMackarelofReality said...

Cleared for the Option.

Those of us who actually fly are familiar with the term ‘cleared for the option’, it is a sort of controller shorthand that says the tower is OK with any of several choices for how to proceed when close-in to the airport.

I was thinking about this while doing some planespotting at a local GA field recently and it brings up what I am sure is a sore subject over at the E5C and which makes the sales and support staff at Eclipski Organizatsiya pucker-up at the mere mention – Options.

Yes Options, like leather seating, a flushing potty or maybe functional avionics.

From a review of the Eclipse website ‘Build your plane’ function, I have identified the following options:

Entertainment package $14,995
Adjustable Sun Visors $1,395
Blue-Backlit Instrument Panel $1,499
Refreshment Center $5,995
Lavatory Package $9,995
Forward Facing Sixth Seat $9,995
Part 135 Package $29,995
Copilot Package $9,995
Stormscope $9,995
Skywatch HP $29,995
Class B TAWS $19,995
Radar Altimeter $13,995
Taxi/Recognition Lights $2,195
Lower Fuselage Skid Pads $1,995
DME $24,995
ADF $4,995
Mode S Transponder $5,995
Avio Flight Bag $4,295

Selecting all options (which the configurator allows whether it is possible to have them all installed at the same time or not), results in a $1.962M price tag for Q1 2010 delivery, and an empty weight of 3,813 lbs.

Problem is, there is no way to tell which options are currently complete, certified and available for installation and which are to the Eclipski standard of IOU.

A quick review at Controller finds 54 listings, the first three of four boasting ‘Price Reduced’ (S/N 490), ‘No Premium’ (S/N 957) and ‘Make Reasonable Offer’ (S/N 522). S/N 957 is called a 2009 delivery. NONE of these listings make mention of the fact that nearly all the ‘options’ have yet to be certified.

Beyond the Part 135 and Copilot package, it is not clear ANY of the options have been certified. The 6th seat? Refreshment Center? Entertainment Package?

The problem is that Eclipski’s pathetic performance, penchant fopr tossing vendors under the bus, and their predatory pricing and contracting methods have created a disincentive for suppliers to complete and certify the optional equipment. Add in the incomplete nature of a little thing called Avio NfG and you have a recipe for snatching defeat from the jaws of victory.

Eclipse has met about 10% of the volume it was projecting when most of the supplier contracts were created. In that timeframe while Eclipse has been able to go back to the well three times and raise an additional $500M, the vendors have had to either postpone other projects, re-finance their existing capital equipment, dip into cash reserves, layoff workers hired for the ‘Eclipse surge’, store unneeded materials, etc.

Now, Eclipski wants them to throw good money after bad, and complete the various options that the Eclipski Sales Force committed would be available nigh on 2 years ago now - only they are not available.

Who in their right mind would do such a thing? How many of these companies are even in a position to do so if they wanted? They are already carrying additional capacity, additional tooling, additional engineering staff, additional labor, raw materials, etc., all based on the pie-in-the-sky projections from the amateurs in Albuquerque.

Throw in the ridiculously low price point for most of these options, again based on whimsical fairy-tale volumes, and there is simply no profit motive for suppliers to put any more of their precious resources into this project.

I mean really, who wants to be the bandleader on Titanic?

To all current and potential Eclipse 'owners', you guys had better get your act together and start working Eclipski to meet their obligations to you - were it me I would refuse delivery until the options were ready, but then, I would not accept a $2M jet without moving map GPS, FMS, truly functioning autopilot, FIKI and all the other things the Mustang owners take for granted each and every day.

Turn-and-Burn said...

Mackeral: "In the interest of 'accuracy' Shane was clearly comparing the reported cost of development of the preemie-jet to the reported cost of the D-Jet from the article, anyone could see that."

Not quite. There is no mention of any article. The post states off with the offending and overly exaggerated statement. I see the tone has been set for this blog as well. Business as usual.

As for the rest of your nonsense, I'll get to it later when I have the time to read it.

ColdWetMackarelofReality said...

Must have touched a nerve - lol.

Here is the relevant quote from Shane's original post that CLEARLZY states he was comparing the 10X figure to other startups.

"...than any similar startup. By a factor of 10."

Let's see you weasle your way out of that. Business as usual indeed.

As big as you Faithful Followers of the Church of Flyantology seem to be about the big-picture when it suits you, I laugh whenever you guys wriggle and writhe when caught so blatantly in a mistake.

Just admit you were wrong about what Shane said, and that he was CLEARLY comparing the 10X figure to other startups not to the 4X blown Eclipse budget.

Turn-and-Burn said...

Oh this should be good...

Mackeral, pray tell, why don'y you tell us all about "There is always the heavy-handed attempts at censorship and intimidation from the Eclipski Organizatsiya as well."

Turn-and-Burn said...
This comment has been removed by the author.
ColdWetMackarelofReality said...

One only needs look at the reason given publicly for Stan's desire to end his ownership of the blog

" have mixed reactions to closing this thing down. It brought together a very impressive group of participants whose collective knowledge and wisdom really made the blog a fountain of aviation information. There is no reason this information can't continue to flow, I just don't want to be in the spotlight."

Couple that with the gleeful suggestions from Alexa and Mirage that this was the reason, Black Tulip, Fred, and other Europeans duscission about Roel Pieper's role in stock scandals and the like.

Does not take much imagination - I mean, if you imagine you will receive a fully functioning and complete jet from Eclipse it should not take any effort at all.

So, with that behind us perhaps you would care to address the other 7 or 8 issues I brought up?

Here they are for your assistance:

Which version of Avio the simulators simulate for example?

What is the status of the first Avio NfG conversion down in FL, now going on 2 weeks late?

Maybe FIKI?

FMS?

Moving Map GPS?

Maybe discuss the TOTAL lack of numbers to support the fabricated 'very high European interest'?

Also, the original estimates for program cost were actually in the $300M range, not the $400M you suggest - in the interest of accuracy. That makes the amount spent 4 times the projection, not 3 as you incorrectly assert.

Which of the 18 options are currently certified and available for installation?

Oh, and man up and admit you were wrong about what Shane said, you can do it.

Gunner said...

CW-
Get the feeling you're having a Deja Vu exchange (all over again)? Internet handles are easy to change; writing and debate styles are not.

Just a suspicion.
Gunner

ColdWetMackarelofReality said...

Feelin' is mutual Gunner.

Death by a thousand paper cuts, hmmmm, last I knew that was a South AfriKen tactic.

I wonder if Shari knows what he does with his spare time.

She could have had her Mustang by now - they could make jet noise together.

Vvvvvvvvvvrooooooooooooooom swooooooooooooooshhhhhhhhhhhhh!

Shane Price said...

Turn and burn,

Sorry about that. Still getting used to posting on the 'other side'. For the record, I was referring to the D-Jet.

Can you confirm that Eclipse have spent $1.2 billion dollars so far?

Thanks

Shane

Gunner said...

turn-and-burns said:
"I see the tone has been set for this blog as well."

Ummmm, it's clearly called a Critics' Blog, tab. If we wanted the Eclipse Fan Club, we'd pay the Owners Site admission fee to watch Dan take Ken out back of the woodshed for posting "proprietary" quotes on public Blogs.

Like you said, "Business as usual". ;-)
Gunner

Niner Zulu said...

Don't look for AvioNG or FIKI to be completed any time soon.

In a meeting with E500 Club members a few days ago, Eclipse admitted that this issue is "most vexing from a completion point of view." Evidently there is a LOT of coordination and cooperation required between the vendors, and everyone underestimated the time it would take to get this complete.

So you can toss out all previous forecasts and expect a new one "...soon".

Until AvioNG is complete, there will be no FIKI.

Turn-and-Burn said...

Mackeral: "One only needs look at the reason given publicly for Stan's desire to end his ownership of the blog"

In other words you have no idea, only your own presumptions. Thought so. I think your imagination has gone hog wild.

Turn-and-Burn said...

Shane: "Can you confirm that Eclipse have spent $1.2 billion dollars so far?"

No, I was giving you the benefit of doubt, but stil nowhere near the 10 times you state.

Turn-and-Burn said...

For Mackeral, and his apparent lack of knowledge...

Blue-Backlit Instrument Panel - delivered
Forward Facing Sixth Seat - delivered
Part 135 Package - delivered
Copilot Package - delivered
Class B TAWS - delivered
Taxi/Recognition Lights - delivered
Lower Fuselage Skid Pads - delivered
DME - delivered
Mode S Transponder - delivered
Avio Flight Bag - delivered

Gunner said...

"Avio Flight Bag - delivered"

What on earth would you put in it? The promised specs?

This is too funny.
Gunner

Black Tulip said...

Near Boston, Linear Air operates an Eclipse 500. Word is circulating it had an unscheduled landing at Bradley International Airport this morning. Check out the last flight of Linear Air Flight 217 on FlightAware.

Harpoon 217

Note that the crew filed for 24,000 feet on a day with heavy precipitation moving through the area. Did known ice approval arrive while we weren’t looking?

ColdWetMackarelofReality said...

Ken-and-Burn,

Please provide serial numbers for the deliveries you speak of and the certification basis for the option i.e., Type Design under Manufacturers Authority, STC or against TSO.

Thanks, I know you can do it, shouldn't take you too long and I know how much you wood up when you get to try and prove you actually KNOW something - otherwise I'll chalk it up to your imagination - since the owners are still openly complaining about lack of those same issues.

Remember, I said certified - suppose I should add functioning since that only should be assumed to be the case with the REAL OEMs.

Sorry Ken, it is simply not enough that you say it is so - extraordinary claims demand extraordinary proof.

FlightCenter said...

It looks like Linear Air HPN217 was attempting to make it down to Gainesville this morning with a fuel stop in Richmond.


Harpoon 217 Flight History

Gunner said...

Lot's of strange happenings on FlightAware today. Looks like Ken's Enroute to ABQ

While FlightAware shows him as having landed at time of this posting, he's obviously progressing in his journey. bet the folks at the factory are simply overjoyed. ;-)

What do you think of that TurnAndBurn?

TurnAndBurn?

Hello?
Gunner

ColdWetMackarelofReality said...

How was the flight Vern-and-Ken?

Picking up your partially functional incomplete preemie jet?

Checking on how the new Organizatsiya is doing looking after your unsecured investment?

Getting trained?

Or sitting in the marketing mockup making jet noises?

Vvvvvvvvvvrooooooooooooooom swooooooooooooooshhhhhhhhhhhhh!

Gunner said...

Not nice, CW.

I recall Ken's jet is in the #150 range. I don't think the New, Improved, Revised and Revamped Schedule has gotten up that high yet. So Delivery is unlikely.

Training? Well, the squeaky wheel gets the grease, so I doubt that'd be the reason for the trip. Ken's clearly a Team Player, just looking out for the other Depositors.

Perhaps a scheduled payment is due?

Could it be that his plane has semi-entered semi-production and photos are in order.

Remedial Flyantology Audit?

All possible explanations of the trip.
Gunner

ColdWetMackarelofReality said...

Bet you're right Gunner, Operational Thetan Audit 3, and the last deposit for position #2.

All hail Xenu, err, Vern-u!

gadfly said...

That’s got me stumped right there:

It’s not the “Avio Flight Bag for $4,295" . . . but that someone would actually buy the thing. And, evidently, it meets all the FAA requirements! (Whether “zipper” or “Velcro”, leather or “ballistic” Nylon . . . they didn’t say.)

Maybe it’s a “fashion statement” . . . but what kind of statement?

And what would one carry in such a device . . . a “decoder ring”? . . . a Garmin GPS? . . . a package of “Depends” (for those who can’t afford the $9,995 Lavatory Package or the Forward Facing Sixth Seat for the same “low” price)?

It’s all so confusing . . . decisions, decisions, decisions! Maybe a “rear facing lavatory sixth seat” might be a better choice . . . somehow the wording on that one didn’t come out quite right.

gadfly

(This has got to be more fun than an Irish Wake!)

airtaximan said...

well, well, well...
back to the nit picking BS...

Anyone who is interested should look back at Stand's intial posts during the first week of this blog, about a $billion and 2 years ago. You will marvel at the fact that all is still relevant.

Its truly remarkable.

BTW, no one cares if its 1x, 3x, 10x... its still NOT FINISHED, and 10x might be the right number, given the relaities. But who cares, really? Its just what THEY/HE initially thought, and he's proven to be a imbicil when it comes to these things. He even admits it himself.

All the self serving misguided stupd BS... for what, to get Ken to place more hard deposit money? To get more press? An award?

C'mon.

Stan was dead nuts on, and I'm ashamed to admit that when someone told me of his blog, I didn;t bother going back to his initial posts.. I just posted away and continued the debate.

Stan was dead nuts on. I have posted many concerns, observations and tidbits regarding the plane, the company and the business plan -none of which were omitted by Stan on DAY ONE.

This should alert you all to one basic fact. Those in the know can see what you all have apparently missed.

I provided some minor details and predictions, but the meat was served up on day one.

- the plane has limited utility
- the order book is a sham
- the business plan is BS
- the FSW argument is stupid

Wake up... what else do you need to know?

flightguy said...

ATM, AKA Money in the bank.

Well Said!!!The story and the situation has never changed. The front page distractions and the slight of hand are the only tricks that change.

Turboprop_pilot said...

GREAT

The real blog is back, with crticNfG returning with a new name.

Shane-thanks for picking up the harness. The slips will continue and it is good to know about them here.

I wonder when the class action lawyers will realize that there is a sizable class of really disappointed E500 owners and depositors?

My family is skiing in Aspen this week and, Shane, there are as many Europeans here as in the Alps, enjoying our 250" of powder and weak dollar.

Turboprop_pilot

Gunner said...

A bit off topic. But in celebration of the Critic's Blog, Part Deux:

Does anyone remember Animal House? Of course you do. News is, it's being recast. Credits follow:

Executive Producer: Stan Blankenship
Producer: Shane Price
Director: Fate
Screenplay: Faith
Casting: Gunner

Cast:
ColdWetMackerelofReality ... Eric 'Otter' Stratton

Vern Raburn ... Dean Vernon Wormer

WhyTech ... Donald 'Boon' Schoenstein

NinerZulu ... Daniel Simpson 'D-Day' Day

Frank Castle ... Kent 'Flounder' Dorfman

Gadfly ... Prof. Dave Jennings

FlightCenter ... Robert Hoover

Bill E. Goat ... Larry 'Pinto' Kroger

Mouse ... Otis Day

Ken Meyer ... Doug Neidermeyer

Mirage ... Greg Marmalard

Redtail ... Chip Diller

Alexa ... Charming guy with guitar

EO387 ... Mandy Pepperidge (Sorry, EO. But she was kind of cool and, in the end, joins the right side)

Roel Pieper ... Mayor Carmine DePasto

The Depositors ... Clorette DePasto

Wondering about John 'Bluto' Blutarsky aren't y'all?

We haven't cast him yet, though I'm lobbying Stan and Shane for the part myself. Why me? Because I'm doing the casting, that's why.

Gonna be a blockbuster, I tell ya!

Gunner

Shane Price said...

News from Singapore....

www.flightglobal.com

Basics are a 10 plane order from an existing Indian charter company, that also might take up distribution in the area.

As a side note, Mike McConnell is still saying that they have 2,700 orders.

Shane

ColdWetMackarelofReality said...

Hi, CWMoR, Rush chairman, damn glad to meet you.

Great idea Gunner, good thing I wasn't drinking anything when I read that, I would need a new flatscreen monitor.

But I am not rubbing EO's thighs while he eats.

BricklinNG said...

Dayjet's Ed I. noted in an AIN article that the Dayjet fleet has flown over 4000 hours. Moiraty, who has been keeping track of Dayjet flights from Flightaware (previously posted on Stan's site and now posted on vljplanet.com)gets to a total of about 1500 non-training hours. Can anyone explain this discrepency?

ColdWetMackarelofReality said...

TOG/A has a whole different meaning with autothrottle.

Well, it would, if the authothrottle was working.

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

Ah, "turn-and-burn" now is it? This doubtless refers to his dentist drill and the friction and pain he inflicts on his hapless patients!

Black Tulip said...

Gunner,

I have a good solid extension ladder. Can I bring it along as a movie extra?

Separate matter, I presume you will supply the Winchester Model 1894 lever action rifles to be used by security at the Collier Trophy awards dinner?

Gunner said...

BT-
I CANNOT believe I missed your portfolio during the casting call. Kindly crush this beer can on your forehead. Yep, just as I thought. Gents, the role of Bluto is now filled.

As to the lever gun: In honor of the gestation period of Le Petite, I have just taken into inventory a gorgeous Uberti Winchester 1876 lever gun in original 50-95 caliber. I think that would be more dressy for the awards.
Gunner

Black Tulip said...

Gunner,

I'm honored, see you on the set. I'll learn to like green jello slurped right off the plate. Too bad Bluto isn't still serving in the Senate.

Gunner said...

ATM and I will be making cameo appearances as two of the guys at Otis Day's dance club gig. But I get the line, "Do you mind if we dance wif your dates?"

Now, back to our regularly scheduled Soap, "As the Worm Turns".
Gunner

Niner Zulu said...

Looks like Eclipse is running out of money....again.

A depositor with a serial # in the high 370's is complaining that he has been asked to put up his 60% deposit. "Am I the only one objecting to putting up a deposit when the likelihood of a 6 month delivery is extremely slim?".

Sure, Eclipse will revise the schedule, AFTER they obtain money from the additional position holders. Same as last time.

HELLO! WHERE HAVE YOU BEEN, OH, THE LAST 2 YEARS OR SO! WHY ARE YOU SO SURPRISED? DID YOU NEVER DO YOU HOMEWORK, PERHAPS READ THE ECLIPSE AVIATION CRITIC WHERE YOU COULD HAVE LEARNED YOU'RE BEING SCAMMED!

Gunner said...

The math actually makes sense to me, this time, NZ.

In Jan 2007 they hit up the first 300 depositors for their six month final payment. They've now "delivered" about 100 planes, so it only makes "sense" that the next hundred are due to fall on their swords for Vern.

Fantasy requires only that we accept the initial absurd premise. After that, the story line makes perfect sense.

What's not to like?
Gunner

BricklinNG said...

Nervous Customer

Niner zulu's report is interesting. The high 370s is about 250 more than today's delivery number. Remember that the number at position one on the line a month ago (according to Vern) was 141. So with 75 days to build (the right number of days, I think but I stand to be corrected), this will be delivered April 1. To deliver number 370 on October 1 would then require delivering almost 40 per month when the average for the last few months has been about 15. This really seems far fectched.

These 6 month deposits are a critical source of cash for Eclipse. If they are calling 30 a month now on the theory that they will soon be delivering 30 airplanes a month then that is probably around $25 million a month. How long could they survive if they had to take another hiatus in calling deposits?

The 6 month advance payment of 60% of the cost is not unusual in the purchase of big ticket items. Machinery and equipment suppliers frequently require this. If you buy a $100 million boiler, let's say, then the payments might be 10% down 50% upon certification that all materials have been secured, 30% upon shipment and 10% on startup. In this respect, the 60% deposit is simply a method of obtaining working capital or leveling out cash flow for the manufacturer. There would be nothing wrong with Eclipse calling payment for these reasons.

If, however, you are making 100 or 200 airplanes a year at a cost of $2 million and selling them for $1.6 million or less then it is another proposition. In this case you are bound to be shorter and shorter of cash as you proceed. If you go to a bunch of future customers and ask for their deposits a bit early, then you can temporarily close the gap but the underlying problem will not be solved until you are making them for less than their selling price. If this were a permanent m.o. then it becomes like a Ponzi scheme, doesn't it?

Maybe you can hypothesize that at a rate of 500 per year the cost will be less than the selling price. Then the losses will disappear when the volume is reached. The only way to survive in the meantime, however, will be to go further and further out with the deposits or to go for more capital support.

One day, I would think, the questions of the capital supporter and the questions of the depositor would converge. Namely, "show me the 500 per year being sold and the capability to make 500 per year, or I will not be comfortable to contribute more deposit money/capital money" Accepting a cost of $2 million and raising the price might be another option for many companies, but in Eclipse's case they would have to refund the deposits of any dropouts if they did this and that could be a cash demand for $100 million that they don't have.

So it's little wonder that number 370 is squeamish about sending in something close to $1 million.

Gunner said...

Brickling-
I say "Shame on him, the whiner". He had the opportunity to send his money in early December. He would be "earning" 50% on those dollars right now.

You DO remember the offer, don't you? The one that CLAIMS to have raised $30 Mill just before Roel stepped up and announced the new Eclipse plant in Russia?

This guy had only to ask Ken's advice and he'd be sitting pretty right now.
Gunner

gadfly said...

The announcement this morning (over KKOB radio in ABQ) about the sale of ten Eclipse jets to the group in India makes perfect sense. Following the lead of Microsoft, Dell, and HP, how better to deal with screens going black than to get close to the phone-in support people!?

gadfly

(‘You like some curry with your "stir fry"?)

airtaximan said...

funny, a while back, someone said a major announcement was forthcoming... regarding Inida. Ao planes? What ajoke. My concern is, how come they are getting them THIS year...

move along faithful depositors...get to the back of the bus!

Gunner, felt a little left out - I LOVE Animal House... I am fold of the "dance with yur dates" guys - thanks.

Its a supporting role...

eclipso said...

http://kob.com/article/stories/S349645.shtml?cat=500

Perhaps Vern can get into the movie making business....500 feature films a year...and a remake of Animal House...All actor will require only a 50% down payment and 30% when the film is bought (from Fuji?)

airtaximan said...

Just re-read the Flight Internation article on 1-18-08

lining the ERTICK guy with EDand Vern frm way back.

My imagination, or was the FI reporter basically treating the whole "deal" as a joke?

Finally, back to shafting the position-holders... 4 planes this year and 6 planes next year to the new Indian air taxi customer... man, had I slept at the airport in 2000, or placed a deposit since, or ponied up $1M in non-reefundable deposit money based on delivery promises over the last 2 years... and still waiting, and waiting.... I'd be pissed.

Jump tothe front of the line with a "bulk" order, and BAM... you are in!

I wonder if someone showed up with some cash today, what the volume price would be for say, 20 eclipse planes? Maybe 50? (BIG risk...I know) But at $1.25M or so (the last midnight special) you could probably resell these to guys being shafted today with the new progress payment demand. Works like this:

- Position-holder says "no" to the progress payment demand
- Position-holder buys your plane for delivery THIS year at say $1.5M
- you make $250k in a few months, per plane
- I bet you only have to place a few hundred K deposit for the whole shebang.

What a joke.

Shadow said...

Adam Aircraft files ch. 7 -- from AIN today:

Adam Aircraft Files Bankruptcy
On Friday, Adam Aircraft voluntarily filed Chapter 7 bankruptcy in the U.S. Bankruptcy Court for the District of Colorado, bringing an official end to the Englewood, Colo.-based start-up aircraft manufacturer after it ceased operations on Monday last week. In the filing, Adam Aircraft lists more than 200 creditors, $50 million to $100 million in liabilities and between $1 million and $10 million in assets. The court has appointed a trustee to liquidate the company’s assets, which include the type certificate for the A500 piston twin, several A500s in various stages of production and three flying A700 very light jets that Adam was using for certification trials. A hearing date had not been set at press time. Meanwhile, the major business aircraft manufacturers are holding job fairs in Denver, seeking to hire the more than 500 skilled employees Adam Aircraft laid off last week.

Ringtail said...

Gunner, it appears the blog has slowed waaaaaay down lately. Why is that? The discussions seem make-busyat best.

Ringtail said...

test

Ringtail said...

How do you change your handle in this system?

FlightCenter said...

"Robert Hoover (James Widdoes), the affable, reasonably clean-cut president of the fraternity, who desperately struggles to maintain a façade of normalcy to placate the Dean."

From wikipedia

Ok, but isn't it the folks in ABQ who are attempting to maintain the facade normalcy?

Shane Price said...

Ringtail,

Was that an IQ 'test'?

Goat,

Just picked up on your post back 'home'. Anytime you want to pick up the part of the (very light) load, let me know. Several of the crew have my direct email, and I will be setting up a secure one for this blog in the next few days.

Gunner,

I think the 1894 would still get my vote....

Turbo_Prop,

Lucky sod. I hear the powder has been great this year. With the dollar heading the way it is, I'll be able to afford to BUY Aspen next year.

Joke.

NZ,

You know the one about a fool and his money?

It's clear that 60% of his money is even EASIER to get your hands on.

Shane

Ringtail said...

No Shane - I would like to change my freakin handle. I thought I went through the motions but it did not change.

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

“. . . it appears the blog has slowed waaaaaay down lately. Why is that?”

Funny thing about the evening of April 14, 1912 . . . ‘Lot’s of activity, much discussion, etc., etc., and then . . . there wasn’t much to talk about, except something that went “crunch” in the night. It wasn’t that there weren’t any problems, but that the single overwhelming problem was focused on a single subject: “Survival”.

Ninety six years later, coming up fast on April 14, approximately 1,500 people face their own future . . . not in the icy waters of the North Atlantic, but certainly at the front of their thinking.

There are so many similarities . . . I feign to even explore the many paths of “new technology”, of “ego” by those in charge, and the attempts to “show the world” that certain people know more than all those “dinosaurs”.

The bottom line should scare the socks off any serious student of history and human behavior. But what do I know?

gadfly

(Prof. Dave Jennings, indeed! . . . Give me a break! I’m much better looking than Sutherland . . . but on second thought, I have been considering, of late, the possibility of writing a book! . . . Gunner, just send me a check, and I’ll begin writing the thing sometime, real soon . . . you’ll see! . . . and it won’t take me ten years, or my name isn’t gadfly.)

Shane Price said...

Sorry, Ringtail,

I thought you were being what we Irish would call 'smart'

Go to www.blogger.com

Log on (typically using your email address and password)

You should see a section on the top right of that page with 'Edit Profile' as a clickable field.

In 'Edit Profile', about halfway down the listing is 'Display Name'

That should currently say ringtail, which you can then edit.

Again, sorry for being 'smart'

Shane

Shane Price said...

Ooops...

After you have changed to your new 'Display Name' don't foget to click 'Save Profile' at the very bottom.

Shane

mirage00 said...

Yep Ringtail, not much going on at all...

zzzZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ

Someone wake us up when this gets interesting.

I remain amused!

double 00

Tailwind said...

Why thank you Shane, I think it worked this time.

Mirage - agreed

Tailwind - (formerly Ringtail)

Tailwind said...

Someone wake us up when this gets interesting

As soon as Gunner gets back from Happy Hour it may get interesting.

gadfly said...

Yes, double zero, sleep on . . .

A Century ago, another man, Jack London, wrote a classic called “To Build a Fire”. The setting is the dead of winter in the “far north”. Here’s the final paragraph, for your evening entertainment:

“Then the man drowsed off into what seemed to him the most comfortable and satisfying sleep he had ever known. The dog sat facing him and waiting. The brief day drew to a close in a long, slow twilight. There were no signs of a fire to be made, and, besides, never in the dog's experience had it known a man to sit like that in the snow and make no fire. As the twilight drew on, its eager yearning for the fire mastered it, and with a great lifting and shifting of forefeet, it whined softly, then flattened its ears down in anticipation of being chidden by the man. But the man remained silent. Later, the dog whined loudly. And still later it crept close to the man and caught the scent of death. This made the animal bristle and back away. A little longer it delayed, howling under the stars that leaped and danced and shone brightly in the cold sky. Then it turned and trotted up the trail in the direction of the camp it knew, where were the other food-providers and fire-providers. – End”
gadfly

Tailwind said...

On another more serious note, I have heard from a reliable source, that a corporate pilot he knows, is going through the Eclipse training now and has stated that it is without doubt the best training he has ever received. This is coming from someone who goes to Flightsafety every year.

gadfly said...

Tailwind

For most of us, it is not the little jet itself that presents a problem . . . out in “fly-land” there is probably every flavor of experience possible . . . and all that may be “good”. As a neurosurgeon used to tell me, “Some dogs like Alpo, and some don’t”.

The problem in most of our minds is the honesty, and the overall integrity of those who are behind the “little jet”. We have yet to see evidence of an honest company (out at ABQ), that is competent, and will stand behind their promised performance. And can, indeed, actually produce that final “wonder jet”. So far . . . nothing!

To date, not a single aircraft has been produced and delivered that meets their own promises. No, not one! No-one forced them to make these promises . . . it was of their own volition. And we wait to see and experience the revolution in aircraft design and manufacturing that “Eclipse” claimed to have as their own.

Honesty/integrity are monotonous concepts . . . and for many of us, they have been a way of life for decades . . . yet we sleep well at night. And like the dogs that don’t like “Alpo”, I guess there are those that do not find fulfillment in . . . honesty/integrity. And I think that that is the underlying “drawing card” of this blog site.

gadfly

(As that same neurosurgeon used to tell me, when we came up with a new method of surgical procedure, . . . tapping his forehead, “Now that’s using the old kidney!”)

Black Tulip said...

Tailwind,

"A corporate pilot... is going through the Eclipse training now and has stated that it is without doubt the best training he has ever received."

This is good to hear as it may be a much more demanding aircraft than he or she has flown before. The competitors can depart with clouds separating them from the flight levels and depend on basic functions of the avionics and autopilot.

airtaximan said...

My guess is, it better be.... and it has to be.... and even pro pilots have had high check ride failure rates...

Indicative, not definative... not surprised... curious for THIS company... unless you know the facts.

FlightCenter said...

The FAA updated their registry database and their "in process" website data today.

The executive summary for Eclipse 500 aircraft deliveries is that Eclipse made only one (1) E500 aircraft delivery in the past week. (Serial #121)

Eclipse delivered 100 aircraft through the end of 2007.

They have now delivered 13 aircraft in the first 50 days of the new year. 9 aircraft were delivered in January and 4 in the first half of February.

That makes for a total of 113 aircraft delivered since production began.

13 deliveries so far this year works out to 26% of their one a day production target. At this rate they will deliver 95 aircraft in 2008 or 5 less than last year.

The details are available in the Eclipse 500 Delivery Data spreadsheet.

Eclipse deposit holder serial #370 has a right to be concerned. At the current 2008 production rate, serial #370 will be delivered in Oct of 2010.

If Eclipse is able to resume the peak production rate achieved in Q4, (50 per quarter) then serial #370 will be delivered 15 months from now. (May 2009)

In order for Eclipse to deliver 250 aircraft in the next 6 months, they will need to ramp production to 2 per day by August.

According to Mike Press, after his most recent visit to ABQ, Eclipse production will not reach 2 per day until December 2008.

Niner Zulu said...

Mirage,

Actually, there is a lot going on, at least in the E500 Club.

Are you a member? If not, you should join because there are a lot of issues being discussed including: unreliability of the autopilot and various a/p glitches, pressurization "bumps" after takeoff, aircraft tugs don't fit the non-standard size of the E500's front wheel, elevator trim not effective after takeoff, engine start cycle won't engage, problems with cold weather starts, slow progress on FIKI and AvioNG.

Then there are the retrofits - s/n 28 has been getting retrofitted for....how long? So long, I've forgotten. 1 not down, about 120+ to go just to get to the present.

You're at the wrong website - try amusing yourself at the E500 Club website.

bill e. goat said...

Ringtail (glad you made it),
"it appears the blog has slowed waaaaaay down lately".

Goat: I think not- looks like the blog is off to a smashing start- 70 posts (and counting) in 36 hours!!

Congrats to Shane! Thanks for giving us a place to hang out!!

ColdWetMackarelofReality said...

Ol' Turn-N-Vern AfriKen Meyer has been home for an hour, only in ABQ for a day.

Hope the re-education takes, I'd be gettin a bit ansy were I having to defend that investment to my wife every day.

I hope you were not dropping off a 60% payment on either of your positions, I wouldn't wish that on anybody.

There are no 'splanations, no excuses, no amount of roses, chocolate or new cars that would sell that to the ColdWifeMackeralofReality.

Better you than me Ken, better you than me.

airtaximan said...

FC,

in your opinion, would THIS be considered "grinding to a halt?"

also, how many times can someone over promise, be off by a long shot, or simply misstate (at SOMEONE ELSES COST) before it is considered bad faith, fraud or grounds for dismissal?

Your data and reports are wonderful - thanks

airtaximan said...

9z,

OH SHIT

Gunner said...

RingTailWind-
I wish I was at Happy Hour. Instead, I was at a casting call for the AH remake. It went terrible, but I'm glad you showed up.

You're perfectly typecast for the part of Hardbar. ;-)
Gunner

Metal Guy said...

And don’t forget there is still rumor about another big failure related to the Garmin discussion several weeks back. After all, Eclipse has to keep mirage00 entertained somehow - apparently the reduction in production is just not amusing enough.

ColdWetMackarelofReality said...

Eclipse a Bit Player in a Game of Large Numbers

So Eclipse rushed out their press release the other day about a 10 plane 'fleet' order from Singapore. Wow, $15M, that should keep the company afloat for about negative 30 days, since the planes still appear to cost more to make than they are selling for.

In the meantime, Hawker-Beechcraft sold 21 planes, for $450M.

Even the dinosaur Cessna sold 26 of its' smallest and least expensive planes, in just two orders, for over $17M, each of which will actually produce not just cashflow, but a little thing called PROFIT - what a concept.

Boeing reported one sale worth over $4B for 56 Seven-Three's - ONE SALE.

Again, Eclipse says it needs 500-600 a year for breakeven - they have announced less than 200 new sales in the last 12-18 months, some announcments being made more than once (the Arab deal and ETIRC come to mind).

I see Vern transposed with Officer Barbrady from South Park - 'Nothing to see here move along.'

Yeah, they may be losing $200-500K a piece but they will make it up on volume. I know the logic in play, if they can keep calling progress payments and keep the line flowing (along with the precious cashflow) they will 'improve' production and 'streamline' flow and 'optimize' parts cost - problem is that buzzowrds don't pay the bill and when the Piper comes calling he will be taking more than the kids.

Vern's inability to admit he has totally screwed the pooch continues to be the single largest risk for Eclipse, seconded only now by the growing discontent among the 'owner' ranks. When that tsunami reaches its' zenith no force on Earth will stop it and there will be nothing left standing in ABQ.

airtaximan said...

bottom line with the E-500..

anything it can do, another plane can do better, except for a private pilot who cannot afford a plane that costs around $100k per year more to own and operate, BEFORE you account for depreciation which will hurt eclipse owners more.

$100k is a lot of money, BUT, in the grand scheme of things in the jet world, it better not be your decision point.

For a private pilot with a small family and not very far to go... AND, not more than $1.5M plus $100K/year the e-500 is the low entry cost solution. How many of these guys are there? NOT MANY.

For taxi - forget it. unless you have a plan to operate the plane 300 hrs a year the more expensive plane that can carry more passengers and be less of a headache wins. More payload range provides more routes and more passengers... more missions = more revenue. No question about it.

So? there's no large market for these planes... no large market = no low price. No low price means no business case, no private pilot cheap VLJ either...

FlightCenter said...

I'm told that you will be able to see a total Eclipse in ABQ this evening sometime around 7PM.

Reports say that the next chance to see a total Eclipse in ABQ will be December 2010.

The question is, will you be able to see a total E500 by December 2010?

Total Eclipse

Turboprop_pilot said...

Speculation on the production slow down? To fall back to these low numbers seems very bad so soon after receiving some kind of investment from Pieper (and with him as Chairman of the Board).

Is it:
AvioNfG
Vendor delivery problems
Cash flow already
????

Turboprop_pilot

ColdWetMackarelofReality said...

turboprop_pilot asked:

"Is it:
AvioNfG
Vendor delivery problems
Cash flow already
????
"


Ummm, yes.

IOW, All of the Above plus a newly discovered and significant problem (my suspicion, no data yet) probably systems or structure related, but not tied to Avio NfG.

Don't forget the potential diversion of resources and cash to 'productize' the e-CON-Jet - probably announced as early as SNF.

BricklinNG said...

I have now flown the airplane and as mentioned by airtaximan, for a small family with range requirements of 1000 miles (or with desire to stop every 2 or 3 hours anyway), or a business owner with trips of this length, the airplane would be great. The number to be sold into this narrow segment might be 100 to 200 per year IMHO. Eclipse has banked on 500 or more per year into a broader application, with part of its attraction being a relatively low cost. If the market will take only 200 per year, that could still be a viable business, although the price would have to rise and maybe the price rise would knock it down to 150 but there is still space for the little jet if it works right.

Any normal business can easily change the price of its product. Just put out a price change notice and reprint your brochures. Eclipse has put itself into a box on this one, however.

Eclipse has, but its own description, 2700 orders (meaning 2600 to fill). If they all have followed the typical procedure then they have placed deposits of $150,000 which are refundable in the case of a refund event and a price rise is such an event. Now many of these probably don't have any real money down, but suppose 1000 do. How many of these 1000 would balk at a price increase or be only too happy to see a refund event so that they could just get their money back? If it were all 1000 then the cash cost to Eclipse of raising the price would be an immediate refund bill of $150,000,000. They don't have it and how easy would it be to find an investor to put up $150,000,000 to pay refunds? So if the price increase is out and the contracts stay in effect and Eclipse gets the rate up to 500 per year then they could conceivably break even while racing through the order file and THEN raise the price and settle back to 200 per year. That is a lot of ifs, however. Per the reported convesation on the owners' site yesterday, there is already some unease about making 6 month deposits. If these don't just keep flowing in then they will be needing more money before you can say Raol Pieper NG.

FreedomsJamtarts said...

A few things of note from the Adams Bankruptcy

- Straight to Chapter 7, no chapter 11

- Liabilities $50-100 Million

- Assets $1-10 million.

This lines right up with my prediction for Eclipse. Once the plug is finally pulled, the assets will be worth maybe 5% of what has been poured in.

The upside is that Stan will be able to pick up some low time stir fry machines for his shop for a song!

I can still hear the fat lady warming up her voice in NM.

airtaximan said...

bricklinng

nice summary... I conclude the following:

If enough position-holders balk at more non-refundable progress payments ... you'll see a special offer:

"pony up $650k more and I'll guarantee the price at $1.25M"

OH WAIT- this already happend

;0

ColdWetMackarelofReality said...

Hmmm,

Assets of 1 TC, 2 aircraft programs, all associated tooling, half a dozen flying company owned planes - high valuation of $10M. Install base under 2 or 3 dozen IIRC. Liabilities of between $50M and $100M (quite a spread there).

Columbia's actual assets for essentially 2 aircraft programs (tooling, 2 TC's and related PC's) sold for around $4M as I recall (after warranty and other holdbacks and assumed liabilities, etc.). This with an install base of some 500 or 600 aircraft. Cessna assumed about $16-18M in liabilities IIRC.

Anyone seeing a pattern here?

What do you suppose liabilities of $1.3B, assets of $20-30M (I am being generous - the vaporware order book, being unverifiable and predominantly at a loss does NOT count) looks like? Even if you exclude the investors and only deal with unfunded warranty liabilities for the first 120 planes (easily $15M, probably more like $20-25M), deposits (likely in the $150M range as freedom suggests), plus the Hampson order which called for something like no less than $60M IIRC - pretty soon you're talking real money.

You
With your masquerading
And you
Always contemplating
What to do
In case heaven has found you
Can't you see
That it's all around you
So follow me

Hey come on, babe
Follow me
I'm the Pied Pieper
Follow me
I'm the Pied Pieper
And I'll show you where it's at
Come on, babe
Can't you see
I'm the Pied Pieper
Trust in me
I'm the Pied Pieper
And I'll show you where it's at

Girl
Don't be scared to move
Hey, babe
What are you tryin' to prove
It ain't true
That your life has kicked you
It's your mind
And that's all that's trickin' you
So step in line

Come on, babe
Follow me
Come on, babe
Trust in me
Come on, babe
Can't you see
Come on, babe
Follow me
I'm the Pied Pieper

With apologies to Crispian St. Peters.

flightguy said...

http://www.eclipseaviation.com/index.php?option=com_newsroom&task=viewpr&id=1365&Itemid=52

Black Tulip said...

Eclipse Aviation and ETIRC Announce Russian Reciprocal Trade Agreement

ULYANOVSK, RUSSIA – February 20, 2008 – Eclipse Aviation, European Technology and Investment Center (ETIRC) held a joint press conference with the Russian Ministry of Trade providing additional details on their plans to manufacture the Eclipse 500 Jet here. Vern Raburn, Eclipse president, described the process, “The Russian plant will be receiving components and sub-assemblies for this aircraft – engines, wings, fuselage sections and tail feathers. It dawned on us that these large rugged shipping containers could be recycled rather than being destroyed.”

“The Russians were quick to seize this opportunity and approve export one of the country’s most famous products. Today I am pleased to announce that Espilce™ Vodka will be distributed in the United States by Eclipse Aviation. We’re going to fill up them big containers with carefully packed glass bottles of this wonderful branded elixir and speed them on their way back home.”

Raburn continued, “The first shipments will be dedicated to the cash-paying members of the Eclipse 500 Club where we know demand will be high. As these members are satisfied, we will extend distribution to other depositors, position holders, investors, current and former employees. This is excellent vodka and I personally recommend it be consumed with a few cubes of known ice. I’d like to close with a personal message to all our new Russian associates, ‘Мы находимся в полном затмении.”

gadfly said...
This comment has been removed by the author.
easybakeplane said...

Niner Zulu said...

...Are you a member? If not, you should join because there are a lot of issues being discussed including: unreliability of the autopilot and various a/p glitches, pressurization "bumps" after takeoff, aircraft tugs don't fit the non-standard size of the E500's front wheel, elevator trim not effective after takeoff, engine start cycle won't engage, problems with cold weather starts, slow progress on FIKI and AvioNG...

Stop the presses! Most of these sound like your typical 'entry into service' issues, but I'm very curious to know more about the elevator trim problems. Is this a systems issue or an Aero/Stability and Control issue? If it's the latter than FIKI may not get certified anytime soon!

FlightCenter said...

Vern is on the record as saying that they have had instances of actuator problems.

ExEAC said...

EAC has always had actuator issues with Electromech. They have been working behind the scenes with Tomagawa (sp)

ispace said...

I'm new to the blog, so hi to @ll of you! A lot of interesting info around! Congratulations for carrying on after Stan's blog!!

Anyway, I'd like to ask if FIKI is the only problem preventing Eclipse from achieving European certification?

And by the way, does someone know if the European regulations are likely to change in the future to allow operation of these jets with only one pilot?

Many thanks!