Thursday, February 21, 2008

What is it with all these 'plans'?

While the rest of the world is focused on Singapore, Eclipse Aviation choose today to announce (again) 'plans' to build another factory.

There are still some hurdles to cross, as it appears that 'final agreement is expected within the next few months'. Vern and an E500 were dispatched to deepest Russia to host the press conference which provided us with this gem.

A few questions cross my mind.

Before he builds another factory, would Eclipse resources not be better spent of finishing the plane he has?

Part of the press release mentions a 'special free trade zone', which will be established for Eclipse. Why?

The stated purpose of this plant is to supply the growing market in Europe for the E500, without any reference to the number of orders they have in the area. '2,700' continues (as it has for years now) to be the magic number for total sales. Where are the extra sales?

Just asking....





67 comments:

Shane Price said...

Just in case anyone missed this:

New York's main oil futures contract, light sweet crude for delivery in March, touched an all-time peak of $101.32

Source is our national broadcaster, RTE.

Shane

airtaximan said...

What happened to PhosterX? Atone point was it not supposed to be widely and profitably sold in quantities such that IT could finance the eclipse jet debacle(s)?

ColdWetMackarelofReality said...

PhostrEx ans the Russian Eclipse plant are both perfect examples of the total lack of management at the Eclipski Organizatsiya.

Plane 1 is not completely designed, is not completely certifed, and is being delivered in a partially functional incomplete state in fits and spurts from a factory that reportedly employs 1500 people. This creates the additional challenge of an unfunded exposure for I believe $20-25M for parts and labor.

Contrary to what was told to the press, resources and people were diverted to the e-CON-Jet, to such an extent that when the THEN BoD found out about the new project, WITH THE REST OF US when it taxied up at OSH, they instituted weekly reporting requirements on Vern and Peg to report the checkbook to the penny.

Then after what I bet was an easy $20M and all the hoopla at OSH, the backlash was such from the BoD and presumably the 'owner-position holder' community, the new savior of Eclipse was 'shelved', it was after all 'just a market test'. Riiiiiight, lots of OEM's just design and build $20M prototypes, largely through outsourcing (cuz your own people are those stupid experienced aerospace types).

PhostrEx has been around for 5 years now, and there is not ONE commercial application outside the Eclipski. The EPA mandate was that Halon could only be used until a suitable alternative was found. Well, either Eclipski did NOT actually find a suitable alternative (my theory), or they lack even the most basic of resources to productize PhostrEx and have missed the boat (hint - if they can't make a great fire extinguisher work how can they make a whole plane work?).

Of course, there was the pesky matter of being sued by the guy who invented the whole concept - hard to sell something that may not actually be yours to sell.

Now we come to the Russian plant and I think it becomes clear that Eclipski is doing whatever it can to APPEAR to be successful and 'in demand' in order to facilitate the exit strategy that has existed since day one - IPO.

I believe this marks the third time that Eclipski has tried to start working in earnest towards an IPO. Each time of course something 'beyond their control' like Williams, or BAe or Avidyne - the vendors THEY selected, THEY sourced, THEY spec'd to, THEY managed somehow managed to fail THEM.

It is ALL smoke and mirrors at this point. Why push bad tin out the door as fast as you can if not to try and establish, then report and re-report 'unprecedented' production numbers to match your 'unprecedented' order book?

What is unprecedented is the concept of delivering a Technically Advanced Aircraft where nearly all the Technical and Advanced equipment is either NOT INSTALLED or NOT FUNCTIONAL, waiting on IOU's for software updates, options certification, or V1.X code.

The core competency IMO remains incompetence, backed up with large doses of bragadocio and a desire to reach the exit strategy at any cost and by any means necessary.

Caveat Emptor indeed!

carlos said...

hi all

i must be missing something, why buiding a new factory in the town of aviastar, the largest aircraft factory in the world? Specially when the aviastar people are starving for some work to do?
In the past there has been several report from the russian media, including aviastar boss, saying that aviastar was going to produce the e500.

airsafetyman said...

From the press release:

"....Eclipse Aviation and ETIRC Aviation revealed that its pilots flew an ETIRC Eclipse 500 to Ulyanovsk on February 18, 2008 in advance of the press conference..."

So now it's an "ETIRC Eclipse 500"?
PR spin gone mad.

vova_k said...

The following is from Russian newspaper (translated word-by-word)

------------------

Dimitri Shikov, the press secretary for the governor of the Ulianovsk region of Russia, has announced that representatives from the US company Eclipse Aviation, along with a key shareholder, the Dutch Investment fund ETIRC and Sergei Morozov, the regional governor, laid the first stone on Wednesday in the foundation of the factory that will produce the superlight Eclipse 500.

According to the press secretary, the business will be based in the newly renewed “Zavolshye economic zone” and construction will begin this spring.
As has been previously reported, the construction of the factory will be carried out by Eclipse Aviation and its Russian partners. Investment in the factory will total 5 billion rubles (202 million USD). The majority of the investment will be made by the financial and techno-finance partners of Eclipse. ETIRC will have a minority stake in the project.

It is hoped that the factory will be completed by the end of 2009. In the first stage of production the planes will be manufactured from kits, but eventually production in the Russian Federation will expand to include major components and systems, with the exception of the engine and avionics.

The factory will be designed to have an output capability of 800 airplanes anually. Within the first twelve months, Eclipse hopes to produce no less than 100 airplanes.

At present the Eclipse 500 is manufactured at the company’s factory in New Mexico with an output capability of approximately 1000 planes per year.

airsafetyman said...

There is already an huge unused aircraft factory at the Ulyanovsk Vostochny airport. Why would you build another one? On the bright side, there is a 16,000 foot runway there, so if Vern wants to go back to the Williams engine.....

BricklinNG said...

Manufacturing in Russia

Eclipse has always made a point of volume and economies of scale. It has said that labor makes up less than 10% of costs. So how does a second manufacturing plant make any sense at all? Cessna supplies the world from Kansas. Is there even one aircraft manufacturer that produces in two locations? Maybe for very small airplanes that can't be easily flown trans oceanic it makes sense to avoid crating and shipping on a boat and then reassembly. For Eclipse, think of the setup capital costs, the extra inventories, the extra supervision, etc. Think of the 1500 people in Albuquerque who supposedly will soon be cranking out two a day. For a bit of jet fuel and a few days of pilot time, these jets can be flown anywhere.

Maybe Pieper perceived an opportunity to make and sell jets and have a nice little business. So he tied his life saving money to such a plan of his. You can be pretty sure that Vern did not insist that Raol manufacture in Russia as condition of Vern accepting Raol's cash. So it was probably the other way around. If money had been available from a conventional source with no strings attached, I doubt that we would be hearing about splitting the production in two and building a factory in Russia.

What's new with EASA certification? How long will this take? Who wants to finance a second factory before product from the first one is certified and able to be sold?

ColdWetMackarelofReality said...

If that is not jumping the shark I am afraid I don't know what is.

800 per year for the Euro-Russian market, plus 1000 from ABQ. 100 in the first 12 months.

By comparison, total biz-jet deliveries last year were a little over 1,100, a record.

How can anyone take this seriously? The order book has been stagnant for almost 2 years, and although facing a erported backlog of 2700 planes, Eclipse has found ways to slip several dozen deliveries in the next 6 to 18 months for brand new customers.

They need 500-600 per year for breakeven by their own admission and have failed to meet that by any measure, by a large margin, each and every year of operation.

After nine years they should have literally twice the order book they claim - JUST TO MEET THEIR BREAKEVEN PROJECTION. Breakeven does not equal profit - it equals neutral cashflow, and profit is required to payback the $1.X Beeeeellion dollllars spent so far.

This is not even the 'new' math, this is sheer lunacy.

I think they need to update the DSM-IV to include some kind of Eclipse Logic Disorder - this literally defies all conventional logic in terms of finance or performance (in a business sense).

flightguy said...

http://jets.ru/monitoring/2008/01/21/etric

Plumer said...

You smart guys out there tell me one thing: If Eclipse is struggling to finish a jet, after working for 10 years, and with such an enormous amount of financing, how are other fellows like Cirrus, Piper, D – Jet, Epic etc, with much modest financing witch does not come even close to finances available at Eclipse. Do they have any real perspective out there?

airtaximan said...

I have answers:

CW: "This is not even the 'new' math, this is sheer lunacy."

answer: divide by rubles

Plumer: embraer spent total $300M for the design and cert of BOTH the Phenom 100 AND 300.

-agreed, its not the "first VLJ", and its not "revolutionary" and its not "using advanced manufacturing systems, new technology and business practices" and they do not have "2700 orders", nor do they plan "two factories"...

Capiche?

PS. Cirrus builds 700 planes a year, and they started in a barn... not much before Vern, BTW... oh, whats a few years (began R+D in 1994, Vern started in what 1998?)...
- BTW, one could argue that composites were a bigger challenge than a very small tin jet... together with advanced aerosynamics, a parachute, flat panel integrated displays... not too shabby...in 4 years.

flightguy said...

Отрицайте, Отрицайте, Отрицайте, в России нет никаких затмений.

Turboprop_pilot said...

If a company wanted to pull off an impossible event(for example, an IPO of this wreck) in the transparent internet age, with a blog like this available to anyone who cared to look, what can they do?

Answer: Move to an obscure Russian province, get Russian government funding and announce all sorts of disruptive events. Do you think this blog would last a millisec there? Then use the great, unverifiable happenings to launch an IPO is some far off exchange- like Uzbekistan.

With another $200 million to be invested in a Russian factory and the other costs associated with a second plant(plus Vern's legendary accuracy in forecasts), this Enron of a company is going to piss through $2 billion and still not have a completed jet! Vern the world's greatest fund raiser is still pulling rabbits out of his hat.

Turboprop_pilot

flightguy said...

TP,

It's not his hat that he is pulling rabbits.

airsafetyman said...

I don't think Eclipse's Production Certificate is transferable to a foreign location (or even any other US location, for that matter) without FAA approval. I am also not sure "kits" could be assembled overseas and the resulting airplane awarded a US Certificate of Airworthiness. Is there any demand for Eclipse airplanes with Ruskie Airworthiness Certificates (if they could even get that)?

Turboprop_pilot said...

Russian Airworthiness Certificate

def: oxymoron

Shane Price said...

TP,

I like the way your mind works...

Stan,

Could check your 'critic' mailbox?

Thanks.

Shane

gadfly said...

flightguy said: "Deny, deny, deny, in Russia there are no eclipses whatever".

. . . Last night, because of the overcast, there was no (total)eclipse visible here in ABQ either.

Which kind? . . . take your pick!

gadfly

airtaximan said...

from AIN today:

"The IPO prospectus states that Pogo plans to start service in the second quarter of next year, and the fleet should reach 15 Eclipse 500s by the end of 2009 and 115 jets by the second quarter of 2012. Pogo executive vice president of corporate development Cameron Burr told AIN that he could not comment on whether Pogo has placed an order with Eclipse Aviation, citing regulatory constraints."

More folks jumping the line of "position-holdes" at eclipse?

Amazing.

BricklinNG said...

Following Pogo's fundraising should be instructive. Nobody would fund Pogo, relying on Eclipse, unless he believed that Eclipse would be around for the long term in a reliable way. So in this fundraising, Pogo should be an Eclipse analog. Will anyone fund Pogo, and if so, who?

airsafetyman said...

Ooops, The ETIRC website says they are the exclusive distributor of the Eclipse 500 for "Eastern Europe". Whereas Vern "The Volga Boatman" Raeburn has given them all of Western Europe, including the UK, as well. What gives?

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

CWMOR,
Your posting earlier this string
(February 21, 2008 5:17 AM)
sums it up pretty darn well.
I have to admit, the Eclipse drama is:

a) incredible
b) unbelievable
c) shocking
d) stunning
e) offensive
f) suspenseful

All at the same time.

(Sort of like Howard Stern used to be...back when he was witty and funny...guess that was a long time back).

fred said...

hi shane ..

back home as NGform ? ;-))

oil = only the beginning ...!
have you seen the credit-crunch effect for NothernRock ? i am laughing my bottomm off ... ;-))

in the land of ArchiCapitalism ...
a bank has to be "temporarly" nationalized to be saved ... just too fun !!! just a shame capt11 does not exist in UK ...!

Voka : in what newspaper did you find the press article ? i have read the ulyanovsk paper , they do not talk about such a (big?) event ...

it wouldn't be the first time such smoke-screen is used , a reporter is meant to report , after all...

flightguy : on your post in russian : only one answer = KANIECHNA !

carlos : yes it doesn't make any point ...
the old factory , even if it is completely run-down , is absolutely HUGE ..., beside the fact , if a new factory is to be build : how about construct permit ? how about who's paying ? who gave or sold the land ?

just too many questions without answers ...

smoke-screen !!!

Shane said...

Fred,

Welcome home!

Northern Rock is a real stunner. 'Temporary' public ownership is like being a 'little bit pregnant'. Did you note the Soc Gen numbers yesterday?

These are pointers (oil price, banks in trouble etc) that illuminate the difficulties both Eclipse and its '2,700' customers face, in the near term.

Shane

fred said...

yep , shane ....!

in france , there is a saying " nothing last longer than temporary items ...!"

well , about eco. , sometimes it is really frustating to see you were right ...!

sometime , i would prefer to be able to say "sorry , i've been wrong on topic..."

you're ABSOLUTELY right e500 is going to have a tremendous difficult time to find new cash ...!

and if no new cash , bye bye the dream ...!!

fred said...

beside this , one of the most funny thing for me :

for the last 10/15 years , humble scmuck like me was told "anglo-saxon" economy was great because :

it was creative

we were old left-over not able to understand the beauty of this new era

it was so new and so promising , it did not have to rely on old tricks (keynes theorics)

it did seems there was only 2 kind of persons in the world 1° the one in the market , promised to become ever richer with time as market itself would provide ... 2 tenants of downearthed way thinking , who were the ones to remain not so clever, not so rich ,not so glam , not so etc ...etc...

well , when the farce is ending , the good old tricks are re-surfacing said by the same ones who proclamed the "why" of being so great before ....

the good old trick being to ask the tax-payers to be gladly forced to pay to preserve the standarts of living of the ones who made the money before ...

isn't it hilarious ??!!

i see nothing new into that , a bit like the same old aviation rules = never make a new plane , with a new design , and a new engine , and a new ...

it all end-up to the same :

when you hear someone inventing new maths to explain something that cannot be explained ...

the only one thing you can be sure of :

it will end-up into a mess !

airtaximan said...

Billie:

add

8)pornographic

RAD3 said...

Hello all. I'm new to the blog as a poster but I have been reading at Stan's page for a couple of months. I'm not a pilot or aircraft owner...just an enthusiast. I have found the Blog to be most informative. I am amazed by how Vern & co. manage to keep the smoke so thick and the mirrors adjusted

On another topic (if I'm allowed a tangent) Does anyone know what is going on with Epic lately? There isn't much "news" on their News page lately. IIRC from reading Stan's page the someone who posts here (Gunner?) holds an LT position.

Thanks to Shane for reviving the discussion.

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

Rad3,

Welcome. Hope you enjoy it as much as I have over the past couple of years...

Epic are a good example of a young company with an interesting range of aircraft and some serious backing. Recent news about them can be found on any of the aviation web sites. Latest I saw was this week, when they picked Honeywell as the engine supplier for the Escape turboprop.

No need to boast, no flashy stands at airshows, no disgruntled customers waiting years for incomplete deliveries.

Just, in the main, good news.

Unlike the subject of this blog....

Shane

Niner Zulu said...

Re: EPIC. My thoughts are that Epic will succeed with their VLJ, whereas there is a very good chance Eclipse will fail. Reason: Epic isn't trying to show off and they aren't burning through cash like there is no tomorrow. They run a nice but low-key and low-overhead operation in Bend, OR (a beautiful location, by the way). I've never met Rick Schrameck personally but I've heard he is a breakfast regular at Cafe 3456 (located at the Bend FBO) and is very accessible.

With Vijay Mallya supplying the capital and good people behind the product, it is hard to see how they can fail. Their prototype jets are visually stunning- if they can get them to fly as good as they look they will have a winner.

Tailwind said...

Will Epic's planes have FIKI?

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

AT

Nope - Eclipse will have FIKI...better late than never...Now Epic, on the other hand...what are their plan?

Like Mirage - I remain Amused

airtaximan said...

tailwind,

who cares???
It's become obvious nowadays in the GA jet industry that FIKI is NOT required to obtain deposits, orders or even deliveries.

Also, companies nowadays "claiming" to provide "safe" and "reliable" air taxi service for on-demand hire, no longer regard icing protection as a safety requirement... or even a service reliability requirement for that matter.

Even a properly functioning autopilot or avionics suite is a "requirement of the past" nowadays for private pilot customers, as well as providers of public air taxi service.

It is a total mockery of aviation.
A farce on the FAA and DOT...
How utterly pathetic.

I would imagine there IS a trophy for THIS?

airtaximan said...

OH, I forgot who you are... sorry.. it was an attempt at sarcasm...

sorry it failed... your lovely weejet still has no FIKI... after how many years and billions?

Yes, eventually, years and years after promised, perhaps they will achieve FIKI.

Epic, on the other hand will never get FIKI... this IS your point, right?

What a stupid ass...

Tailwind said...

AT

I am not saying that Epic will not have it, I am just a little confused/amused by it all.

airtaximan said...

perhaps there is a trophy for this, too...

Look, for almost no money in comparison, Epic is moving along compared to Vern.

Will they ever certify a plane?
I am not sure... do they have some deep pckets now, probably...is Schrameck different than Vern - I think he is... a few Billion dollars and a few thousand promises and predictions, better than VErn...BUT,

this is a tough business. The Calgary cert center is closed, and Schrameck needs another solution. Is Socata or EADS a solution? Is Malliayah a solution?

Who knows.

I expect Epic WILL not screw the pooch on avionics 3 times, engines twice and their customers again and again in the works anal porno ever produced in aviation history..

Also, it seems like the missionary position that was Dayjet has recently become the menage a trois including Euro Ed better know as Pieper (translation Poker in Russian) no matter what this has become the highest grossing film in aviation histroy (gross being the operative) and also, the most expensive porno evenr produced. Attendance is pretty low, awards are high, and the rating is certainly X... there are more folks getting porked from behind in this film than ever in the history of porn.

NOw, FIKFI is just a matter of time and money, right? VErn's over promised, taken deposits based on the over promises, and under performed. Perhaps he needs a few fluff girls at the next press conference or NBAA convention.

Schrameck deserves the benefit of the doubt. He's done some great things at Epic.

If you defend Vern at all, you can wait 5-10 years and $1.xyz billion before your even begin to ask questions about Epic and FIKI.

ColdWetMackarelofReality said...

The Experimental Amateur-Built Epic's have anti-ice equipment as standard equipment, it can be operated from day-one.

Their certified projects all aim to have FIKI.

The kit LT will likely have group-RVSM by the time Gunner's plane is complete.

Simple fact of the matter is that Adam had nearly developed 2 planes for less than $250M and reportedly needed another $100M to finish - total $350M for 2 planes.

Diamond will have less than $200M in the D-Jet development when it certifies, probably late this year or very early next.

Epic will have a series of experimental and certified aircraft that are industry leaders in terms of performance and utility, literally 5 different turbine aircraft all developed for about 1/3 of the money wasted on one design at Eclipse. The Escape turboprop is within 10 kts of the Eclipse in cruise but has a range of 1800 miles with a similar sized cabin and greater lifting capacity.

None of these other companies, the ones that failed or the ones still making a go of it have ever had half the presence at shows that Eclipse has, none sponsored Beach Boys concerts or movies underthe stars, none were more concerned with appearances than technical competency or schedule.

When the books are written, the case studies prepared, the lessons learned recorded, there is a wealth of info from all the players - the subtitle for the Eclipse story will be 'How NOT to design, certify and 'deliver' jet aircraft'.

fred said...

hi all

i found a link talking about E500 in russia .. :

http://www.russiatoday.ru/business/news/21197

read thru , after some fuzzy declarations , a few ones seems not to be so accurate :

1.5 Million US$ = 1 E500 = did they lower the price ? i thought most problems of viability of eclipse where there , actually ...

1.5 M US$ , for a flat in the center of Moscow ???? it is a small one , or a medium sized one , but run down ...!!

a 100 m² in the first ring , in a nice area is rented anywhere in between 3000 € to 15000 $ a month (depending on conditions and location ) some crazy crazy ass-hole already offered me 20.000$/month for my flat , just imagine how much is real estate prices ...

and then even if you find a 1.5M$ flat , you can use it ... what about E500 , apart from throwing the sum into the bin , youare left then with one question = what is next ...

after asking RussiaToday about the source of information = they declared "we report what is said to us " so vern did it already to Ria-novosti and to many others = one simple conclusion = just one other smoke-screen !!

not to mention the 100 M US$ thrown into the construction of the "new plant" in russia , 100 M$ for a firm on the verge of bankruptcy ??? dream on ...!!! ;-))

airtaximan said...

CW,

In your opinion, why does eclipse still not have FIKI?

Still looking for ice? hahahah

ColdWetMackarelofReality said...

ATM,

If I had to geuss it is probably a compound issue.

1 - they are probably changing vendors or at least design, due to the reports of the boots not sucking down completely.

2 - the extended tip tank changed the aero definition of the plane making any prior work irrelevant

3 - Eclipse seems to have significant difficulty preparing and submitting paperwork and probably had a hard time showing conformity to get TIA (Type Inspection Authorization) which is required before the FAA pilots will even board the plane

4 - Avio NfG, 'nuff said

5 - There has been ample ice available if you are willing to go chase it, which is what the REAL OEM's do

6 - I am not sure Eclipse has the skillsets present to write the correct test plans, etc., and if they jobbed it out they would be in line with their contractor and will get things when they get things - vendor management is definitely NOT a core competency at EAC from my observations

7 - did I mention Avio NfG?

8 - Certification is hard

fred said...

coldwet ...

i would suggest an other under-title :

"how to waste billion(s) on re-inventing boilling water " ;-))

as you wrote , lots of smoke , lots of (broken) promises , lots of declarations to journalists ...

results = "what ?? are we supposed to have results ?"

fred said...

on top of what you wrote (about core compentency)

after all things you wrote , it doesn't seems to be enough ...:

so EAC charged the boat a little more

they "build" a new plant !( higly suspicious)

they will have to train a new set of workers with this time a new language barrier (+/-7 % of russians speak some kind of english )

when they are money starved , they launch the construction of the new plan for an estimed cost of 100 Millions ...

still not enough ??

ok , they LOWER the price to 1.5 , when they couldn't sustain it at 1.8 ...!!


definitely EAC has left G.A. ...

now it is a stunt-show ...!!

stan said...

FIKI

In a late January update to the employees, they were told:

"Icing tunnel testing of the wing and horizontal have been satisfactorily conducted per the FAA."

No word on the progress with natural icing.

No word on de-icing the vertical.

No word on de-icing the windshield.

No word on de-icing the radome.

No word on de-icing the nacelle.

N503EA appears to chase ice on a regular basis.

DayJet flights continue to fly very low to avoid the stuff.

airtaximan said...

hi Stan..

CW,

perhaps actuator issues are involved?

Black Tulip said...

As noted on the blog on the morning of February 18th, an Eclipse 500 operated by Linear Air reportedly made an unscheduled landing at Bradley (BDL). It flew on a day of heavy precipitation and forecast icing. Word has it that it landed due to water in the pitot/static system. FlightAware has shown no movement of this aircraft (HPN217) since.

RAD3 said...

Thanks to everyone who supplied some Epic info. I didn't know that the Calgary cert center is closed. That's a blow to Epic. As for all the models that Epic are working on I have to confess that I would be more optimistic about Epic certifying an aircraft If they had just put their heads down and concentrated on the LT/Dynasty before starting other projects although their ability to design and prototype very quickly may have been what attracted Malliayah to the company.

I see the failure of Adam in great part due to not abandoning the piston plane that not very many people wanted and concentrate all effort on the A700 that seemed to have been well recieved in the market.

So. I'm rooting for Epic but as ColdWet said "Certifying is hard".

airtaximan said...

BT,

did this prompt the second AD regarding the pitot?

Black Tulip said...

Airtaximan,

Unaware of the second AD; when was it issued? I thought the pitot/static problem was solved and filed under 'old news'.

ColdWetMackarelofReality said...

BT/ATM,

The 2nd Pitot AD was to clarify special operating procedures which the FAA does NOT like to utilize.

I am pretty sure it was issued prior to the Linear flight and was, in actuality just a cleaner AD compared to the 1st.

Rad,

Epic is not overly concerned about the closure of the Calgary center from what I gather but I do believe it will result in a slide to the right for the certified projects.

On the surface, I agree with the concern about too many irons in the fire for Epic but they have positive cashflow from the LT, soon to have more from the other Experimentals - I doubt they are sweating meeting payroll, utilities or leases.

Their facility in Bend is top notch, the tooling is good, the people seem dedicated. Mallya does not strike me as a guy who is just gonna give somebody $400M and hope it turns out OK, he reportedly was bringing some certification advice/guidance from his airline connections to Airbus as well as P&W as I recall.

There ARE certain economies of scale to be had by running several cert programs at once IF they are properly managed.

Adam had a lot going against it in my opinion, the planes were not aesthetically pleasing compared to the other offerings, the A-500 program took way longer than it should have, and when they launched the A-700 they should have gone after it full-tilt boogie. Also, I have heard low-key rumors that there were some shenanigans at Adam that were a HUGE distraction a year or two back re: leadership, ownership, and ethics.

Niner Zulu said...

Dayjet - now there is a company you never hear anything about outside of this blog and maybe a few obscure news articles. I'm amazed that they have even been able to make it through the winter - I've never met anyone that has used them and there is almost no commentary about them on the internet from customers that have used them. Unusual.

I don't know how you can run a charter business with planes that can't fly in ice now AND most likely will not be FIKI approved for at least the next year.

I'll say this for Eclipse - their business plan, bad as it is, is better than Dayjet's!

As far as Eclipse's new plant in Russia goes, one just has to wonder...WHY? What possible economic benefit is there to building a plant on yet a third location? The minimal savings, if any, don't justify it. So we have to look elsewhere for a reason and I think that it is pretty clear - more EGO's are involved. Something in plentiful supply amongst Eclipse management and the very reason that they constantly find themselves on the edge of BK. The last thing Eclipse needs is more ego - theirs or their comrades.

ColdWetMackarelofReality said...

NZ,

I am beginning to think turboprop_pilot is on to something - the Eclipski Organizatsiya has come to the conclusion that the well is dry in the States, and the regulations (Sarbanes-Oxley) are too onerous to make it as a publicly traded company in the US.

If I am right, this will be the most clear and accurate decision they have ever made.

I am betting the intent is to get the Russian government, at the Federal and State level, to be invested in the operation to such an extent that when they make some odd Russian IPO things might go well for a while at least.

Difference is, whereas American politico's will toss you under the bus and feign ignorance when you embarass them, you get irradiated tea or simply disappear in the black of night in the arena they are playing in now.

I don't think that Vern has any real idea of the kind of sharks he is swimming with now. Nor does he realize he is now a Tuna, and not a shark himself.

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

Adam had a lot going against it in my opinion, the planes were not aesthetically pleasing compared to the other offerings,

Beauty, as they say, is in the eye of the beholder. The girl sitting at the bar, you either love her or hate her. One thing for sure, if you look up, the A500/A700 silhoette is unmistakable. You aren't going to mistake it for a CJ/Premiere, etc.

the A-500 program took way longer than it should have,

Yes, it did. Adam was hit with several manufacturing issues that really set them back with regards to the A500's already flying. It took several months to get them worked out, and resulted in a lot of broken promises to customers. It also resulted in delays with the final cert of the A500 (can't fly the plane, can't cert the plane).

and when they launched the A-700 they should have gone after it full-tilt boogie.

In 2006, with John Wolf and Dunc Koerbel that was more or less the mantra (MPF - Make Production Fly). The A500's weren't making any money for Adam, but they did allow Adam to try to work out the manufacturing issues hopefully allowing a lot of improvement to take place before the A700 production line started up. There was a tremendous amount of similarity in the manufacturing process - learn one, improve one, and make the other better from the start. Most people were moved to the A700 program. A limited, much smaller, crew was kept on A500. In this case I agree that it was a good plan, just not well executed. They didn't have all the issues worked out before they restarted the new production line flow.

Also, I have heard low-key rumors that there were some shenanigans at Adam that were a HUGE distraction a year or two back re: leadership, ownership, and ethics.

Don't know about this. If it was going on, it was much less a distraction than the "real" issues out there - manufacturing yields, supplier quality issues, basic design inadequacies, lack of trained workforce, lack of DFMA, and poor project management. That's not to slam the guys trying, it was just too little, too late.

In the end, the management team began to unravel and there were enough fundamental design and manufacturing problems to keep things drifting apart.

Eclipse has managed (so far), but I saw a lot of similarities - the management team there has gone from bright, dedicated individuals to an atmosphere of "get it done regardless of cost".

IMHO

P_P

fred said...

coldwet ...

i wrote it before ...
i really doubt the russian Govt will get any part i this mascarade ...!

as much as peoples shouldn't be confused in between russian citizens and former soviet citizens who fled to anywhere ...

i DO believe that the russian part of the farce is nothing more that a desperate attemp to lure some into waiting a little bit more until anything that could be seized in USA to honor the debts , is taken away where it won't be reached ...

why ? simply because of few elements that don't really fit anywhere ...

in the link i posted from RussiaToday , the price is 1.5 M$ why ? i can guarantee you that nowaday in russia ti have the right kind of personn working for you is NO less expensive than in the USA ...

costs of producing are going to be higher (think of all parts that will be shipped , "controlled" by russian customs , re-shipped to Ulyanovsk , then processed etc...etc...

so lowering the price is NOT something really sensible , when at a lower cost 1.8 was already NOT enough ...

an other way to explain this = it is an old press-coverage which has been released WITHOUT correction ...

that already would make more sens ... and would say a lot about the amateurish look the whole thing is having ...

so sharks = very probably !!
verns knows about = probably his ego is already much too self-inflated to just imagine it ...
russian Govt behind = what for ? or more precisely : what good part of E500 can be worth such an extravageant manner : basicaly just NOTHING ! why should they offer a very good excuse to a failled capitalistic venture to have a wonderful "Why " it failled ???

look a bit ahead = it is going to be a good old fashion " it is not because of our greed , we failled ! it is because of THEM !"

Shane Price said...

A few 'housekeeping' issues.

1. I've added a few of the links from our original home. Anyone wants me to add more from the same source, or indeed has an opinon on web sites that would add value, please email me, eclipsecriticng@gmail.com.

2. Some of the posts contain language about fellow bloggers which is borderline. Please avoid terms like 'stupid' and 'ass' when addressing each other. It's clear that the blog benefits from being INCLUSIVE rather than seeking to push people away.

3. While this is the 'Critics' blog, I would welcome positive input from owners, prospective owners, employees and suppliers of Eclipse Aviation. This can be via a standard post, or sent to me on the blog email address above. Be assured that all such communications will be treated with respect.

As a general statement, I would hope that we can all benefit by sharing our experiences and opinions in a humane manner. Being polite cost very little...

Shane

airtaximan said...

shane,

sorry, I was being a stupid ass...

ATMan

ColdWetMackarelofReality said...

Have an idea for some tee-shirts for OSH.

For the would-be 'owners':
"$1.5M dollars for a twin turbofan Eclipse and all I have to show for it is this lousy tee-shirt."

For the investors:
"$1.5 Billion for a startup jet OEM and all I have to show for it is this lousy tee-shirt."

Black text on orange shirts, if course.

We could make a killing.

Black Tulip said...

CWM,

Nice idea. The Eclipse logo could be converted to goofy looking eyes and nose on a creature just below the text.

In case the T-shirt shop needs variety, I'd suggest the ever popular his and hers:

"Your Village Called. Their Idiot Is Missing."

"Objects Under This Shirt Are Larger Than They Appear."

BricklinNG said...

CWMR,

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.

airtaximan said...

keychains and license plates:

"my other plane is a Cessna"

ColdWetMackarelofReality said...

We will also provide an opportunity for folks to lock the price of the jacket in at $130 of they pay $75, while laying off 10% of our workforce and insisting it is not about money.

We will blame delays on the zipper supplier,and the pocket supplier, and our 2nd pocket supplier, and come clean in the end and say the only mistake we made was hiring people who had experience designing and making jackets.

Black Tulip said...

Gentlemen,

This sounds like a good plan for the garment business at Oshkosh. However, I would like to politely scold you for inadequate use of the terms 'disruptive technology' and 'value proposition' as it relates to this line of highly desirable outerwear.

That's just wrong.

airtaximan said...

I hear they are going to present a new product this year...

orange boxer shorts...

prototype produced by outside contractors...

Only to be used for "market research" and not for sale.