Friday, March 28, 2008

INCOMING!

The blog email, eclipsecriticng@gmail.com, has been humming. For those of you following the blog closely I've hinted in the past couple of days at some of the key points, without going into details. I wanted to cross check and verify what was being said, in a sincere effort to make sure that we get as clear a picture as we can of what is really going on.

While there are good things being said about the company, it's been hard not to notice the overall tone of what I am seeing. Below please find extracts from some of the emails over the past couple of weeks. My input is in plain old black, there others are in colour to make it clearer which is which. Anyway, herewith the views being expressed.

From a customers standpoint
"You guys think Eclipse will never make any money, you just don't understand. Here's how:
(1) Build a (somewhat) attractive plane
(2) Design in unreliable systems
(3) Sell a "covers all" maintenance program at $325/hour
(4) When (2) works as planned, tell the customer to bring the plane to ABQ. At $325/hour income to Eclipse
(5) Kinda-sorta fix the problem at ABQ
(6) Rinse and repeat
For higher profits, get the plane to fail so that it can't be flown to ABQ. Tell the customer that if a non-Eclipse trained A&P touches the plane the warranty is void. Then send a fast response team to f*** up the plane, at a mere $5,000 charge. Count your money.
Let's see the critics refute that plan. And yes, sadly, I am a customer!"
The man has clearly been keeping up with our blog! Remind me to buy him a Guinness...

Customer report again, with a listing of 'gremlins'
"There are quite a few little gremlins. Stick pusher warnings, avionics bus warnings, fuel gauge faults, etc. This distilled from multiple customer reports, not all on my plane. The incompleteness of JetComplete is surprising customers, since Eclipse told everyone that AOG coverage was part of the deal, not a $5,000 charge."

A final customer input
"I know the Avio NG upgrade does not contain much of the promised functionality (i.e. no GPS, no Skywatch, no approach charts)."

From the suppliers standpoint
"... a senior (Eclipse) manager told us that "unofficially" they are going to be putting Garmin 400's in every aircraft. Two weeks ago, in a teleconference with Eclipse, we were told that we were going to interface with the Garmin 400 until a future certification.
This may give you some idea of Eclipse's relationship with Garmin. Eclipse is also going with COTS technology. No special or extra work on the part of Garmin."

And another one
"I believe that IS&S has made it prohibitively expensive to make changes. In the meantime, Eclipse is allowed force the hand of their "old" suppliers until all original contractual obligations are met. We want to get those contract guys after our next certification for Eclipse which will fulfill all our original comtractual obligations.

I asked one of them about the current status of older E500's and got this reply
"I do not know what the plans are for the Avidyne-fitted aircraft. Because we have been "forced" to make changes that will make our systems no longer (backward) compatible with Avidyne, I suspect all aircraft will have to be updated. I should add that the Gamin GPS "is the permanent temporary fix" (Eclipse's words) until they get the moving map and other navigation/FMS issues ironed out. By "permanent temporary" we suspect they hope for it to be temporary, but it has the potential to be permanent."

Finally, from a staff standpoint, where I've x'd out anything that (clearly) identifies the person. My heart goes out to the workers on the ground in ABQ, and this is only one of a number of these mails that have reached me.
"We (my wife and I) had been relocated here from xxxx this past Summer.
I'm looking for a way out. I (all xxxx crews) were recently transfered into the xxxx hangar under new management. I'm not at all happy about this. ....I really enjoyed working in xxxx, where I was originally assigned. I had the opportunity to at least cross-train with other people during any down time. This had been part of my job description. I miss it. ....I now get to prep for xxxx during any down time. Transfering's apparently not an option, it's been refused repeatedly. ....I just wanted to hear what you think. I feel so strongly about getting out."


Its not hard to notice some common elements here. Eclipse bullies everyone, over promises, under delivers and then issue threats when asked simple questions. This leads to several, undesirable outcomes for all parties. Customers feel hard done by and tell their peers, which reduces the pool of prospects for the E500. Suppliers stick to the letter of their contracts and quietly seek work from other companies. Some of them will 'no bid' future contracts and this will lead to increased costs. Staff look elsewhere for work and Eclipse have trouble filling postions, which delays deliveries.

So, that's my lot for this week. You all have an amusing weekend.

31 comments:

BricklinNG said...

Sean,

You have done a great job gathering the true beliefs and knowledge of parties who are connected with Eclipse. Your posting speaks to the value of the Eclipse assets, if EAC as a company runs out of money and closes down or if a potential capital source takes a look at putting money into Eclipse AS IS.

If a money run out occurs, then the assets would be sold. Your posting suggests that a new owner of the TC, tooling, etc. will find himself with an okay basic airframe and engines but a need to design, install and certify navigation, electrical control and FIKI systems. This would diminish the value of the assets because of the expense of redesign and recertification. Given this task, maybe Cessna, Beech, EADS or another logical bidder would just prefer to start from scratch and so would not bid at all?

As for the vendors and employees, if EAC shuts down for lack of money, they can stand by to work for a new owner, if anyone bids on the assets. Employees will likely be paid for all work done as a high priority; vendors less so.

It is hard to imagine anyone wanting EAC AS IS, with all of its liabilities for redesign, recertification, and retrofits (numbers increasing daily), never mind the financial burden of supply contracts and the billion dollars accepted from people with an expectation of repayment. With the January $100 million on the decline, Eclipse management will doubtlessly be looking for more support for the company AS IS, but can they find it this time?

Gunner said...

Brick-
I'll add two words to your message:
"Product Liability".

Gunner

BricklinNG said...

Product Liability

I still don't understand how a company can market a product which is known to be defective. Earlier comments here have suggested that if the FAA certifies an airplane then you can market it and hide behind the official FAA stamp of approval. I disagree.

If an Eclipse ices up or if an Eclipse pilot becomes disoriented during a hand-flown approach and a crash ensues, I think the plaintiffs would have some valid points. Is not Eclipse about the ONLY, certainly ONLY IN PRODUCTION jet or turboprop airplane that does not have an autopilot that can fly a perfect approach? How could Eclipse defend its position if a plaintiff's lawyer could show how a Cirrus, a "lowly" $500,000 piston single, has an autopilot that can fly flawless approaches, even procedure turns? You be a layman on the jury. How could you not find Eclipse at fault when Cirrus has not only full navigation and autopilot capability but a parachute in case all else fails? Eclipse, meantime, has the capability of a DC-4, circa 1950.

PubGrubber said...

Bricklinng

I still don't understand how a company can market a product which is known to be defective.

But this is the point, the product is not "defective", the product has limited functionality in its present form, and in being so can not be operated in certain situations. Big difference between the two.
Look at the Airbus A300 that lost it's empennage over New York. Although ruled pilot error (too much erratic rudder movement) if you look at the design (this is from memory) it takes approx. 26 lbs of force to engage the rudder and 35 lbs of force to hit the primary stops. The FAA also stated the design should be improved (they never did). Would you call this product defective, or it just needs to be operated within the current specs and conditions?

Just a thought....

Gunner said...
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ColdWetMackarelofReality said...

If, God forbid, there are incidents/accidents with the WeeJet in its' current state, you can bet a dollar to a doughnut that the plaintiffs will include the FAA as defendants, and I think rightly so. Any written IOU will be subject to discovery, recoevery plans, and other promises - all will be center stage.

Mix in the conversation being had here for a year or two, the FAA staff complaint, the forced removal of MIDO ASI's, customer complaints over on the E500C site, Service Difficulty Reports, higher-than-expected failure rates for various systems equipment, etc., and somebody will have some 'splaining to do Lucy.

Gunner said...

Pubgrubber-
Yep, manufacturer disclaimers are all that's necessary to protect from product liability awards. Just ask the Tobacco industry. Better yet, ask any juror who's sat on a malpractice (or aviation accident) panel. They don't tend to tell the widows and orphans to pound sand.

Besides, I'm not speaking of liability from picking up the design. I'm speaking of liability for providing post-collapse STC or other certification of ANY major component. Is the new Avionics supplier "responsible" for a misread from a frozen AO that sends the avionics data? Ask a jury. Is the post-BK FIKI supplier "responsible" for the failed computer actuator? Same question.

I'm not talking about providing systems to a failed Columbia or Piper here. The companies that step in on these 100+ planes take responsibility for EVERYTHING Eclipse has done to that airplane. They have to defend, to a jury, their CHOICE to work on, advertise and promote the benefits of purchasing an aircraft that they've "improved".

Juries are notoriously sympathetic to Joe Common In A Box....and notoriously in favor of seeing all manufaturers as "Fat Cats". This is the way of the world. Suppliers know it, too.
Gunner

flyger said...

I was amused recently to see that Diamond got FIKI for the DA-42. I suspect they did that for under $1B :-).

http://www.diamondair.com/news/2008_03_26.php

So, if an underpowered plastic piston twin can get FIKI that easily, what is taking Eclipse so long? One beings to wonder if there isn't some major problem that can't be easily dealt with.

flyger said...

Oh, forgot to mention, Diamond is covering the costs of bringing TKS equipped airplanes up to FIKI standards. Apparently, it is an AFM supplement, some placards, and a TKS system test. That's it! Guess they got their system right on the first pass unlike some...

baron95 said...

Bringing the post liquidation takeover discussion forward...

ColdWetMackarelofReality said...
B95,

We will have to agree to disagree then...

Also, those other airframes did not have the burden of a truly integrated central avionics system that the WeeJet has.


Actually, no disagreements here. You are, of course, correct. The EA500 presents unique challenges to upgrade avionics. I actually think it will be a bitch to do it. On the other hand it is a much more valuable airframe. perhaps the two will ballance out.

FreedomsJamtarts said...

I think the bad mistakes made by Eclipse in the name of "disruptive technologies" will at least be a significant extra hindrance to someone easily doing anything useful with the TC.

FIKI - The cert basis for the Eclipse 500 is FAR23 amm 55

You can do an avionics upgrade without recertifying: the engine control system, the electrical system, the pressurisation system, the stall warning system, The landing gear warning system, and parts of any other system which has a CB. Have you read TCDS Note 5? Have you ever seen an equivelent note in another TCDS?


Again. fully agree. Except for FIKI. There is nothing that troublesome about the new FIKI standards. The changes are simply that you have to demonstrate airplane controlability with actuall ice to a greater degree. It has been done by Diamond, Cessna and others under the same regs. There is no mystery.

Re avionics, adding a non-integrated WAAS GPS unit and is not a big deal and will make the plane instantly usable to same level of a 2005 BE200 or BE350.

Completing Avio NG will be a bitch. But, if IS&S signed up to it, I have to accept it is a do-able job. If I buy the Eclipse assets, I have to assume that IS&S or another firm would do the job. It may cost $5M or it may cost $15M - that I don't know - but it can be done. Again, the fact that there will be captive market of 200+ EA500s eager for a solution will insure it happens.

The other thing you probably fail to consider is this. Eclipse HAS TO, by contract, provide the full function Avio NG to existing customers FOR FREE.

Post Ch 7 New Eclipse does not. They can charge $100K, $200K for it and all owners will pay.

That is why Eclipse sooner or later has to go through Ch11 or Ch7. They can only successd by having a lot of the liability discharged.
Actua

baron95 said...

Brickling said... It is hard to imagine anyone wanting EAC AS IS, with all of its liabilities for redesign, recertification, and retrofits (numbers increasing daily),

Why would the New Co have any of these liabilities? Quite the contrary, every unfinished piece of the EA500 is a captive revenue opportunity for the company that acuires the EA500 assets.

In Ch7, New co would just buy assets (TC, PC, tooling, parts, etc). NONE of that comes with any attached liability (contracts) to do anything.

In Ch11, most/all the liabilities will get dischaged.

New Co would go to the 200-odd EA500 owners and say:

List price for FIKI is $100K.

List price for Avidyne to Avio NG HW upgrade is $200K.

List price for Avio NG 1.0 to Full Avio NG upgrade is $100K.

List price for aeromods is $100K.

How many of the owners that paid $1.5M or so for the EA500 are going to not do some or all of these upgrades?

It is a great market.

The IOUs are a problem for urrent Eclipse. But they are a bonnus for New Co.

I hope that is clear.

bill e. goat said...
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bill e. goat said...

Flyger,
"So, if an underpowered plastic piston twin can get FIKI that easily, what is taking Eclipse so long? One beings to wonder if there isn't some major problem that can't be easily dealt with".

Well put, but I think it "bites the hook".

There is NO mystery to getting a deice system. None. It's been done for decades. Exactly the way the Eclipse is doing it. To not have it completed by now does indeed indicate something:

TOTAL lack of commitment.

Or, absolute, blithering incompetence.

(Which, I don't think is the case).

With something so flight critical at times, getting so little attention, it REALLY does make one wonder just how much effort Eclipse is putting into avionics development.

The step back to built-in Garmins is flabergasting- it's a total retrenchment; they're giving up.

IMHO. I don't see how it can be interpretted as anything else. The Garmin trick could have been pulled years ago- to do it now, tells me they're pulling the plug.

There has been an insane, idiotic push for production numbers at Eclipse. What for? The early interpretation was a rush for "profitability".

Others would contend it was a rush for "the appearance of profitability".

Why? My assertion is: to support a hyped-up IPO, with big production numbers bringing in decent revenue before and through the IPO process. Then, the early investors would cash out, shortly before the order book was burned through, and the stock tanked because of the double-whanny of big overhead (wildly excessive manufacturing capacity and staffing), and minimal new orders dribbling in.

That's the ONLY rationale for such an insane emphasis on production, and equally insane dismisal of remaining design issues.

(Dupes for the IPO don't care how good the product is, they just want to see volume).

421Jockey said...

Goat,

I agree with a lot of what you say, but let's take FIKI off the table for now. The testing is done, it is in the hands of the Feds, there is one minor (rudder spring) airframe mod to do on eisting NG aircraft to have full approval.
The problem is with pre-NG aircraft (like mine). The cert for FIKI will not be valid for me until I get NG. There are several reasons for this, more than I care to get into at this time. I have all the risks you mentioned until I get the NG mod. When (if) that happens, I am confident that I will own a gerat aircraft that somebody, somewhere, will be willing to support. If one of teh "big Boys" were to acquire ECA today with the understanding that they would support the original owners and finish the modifications as promised, I would welcome the change today.

In over thirty years in the business world, I have never before witnessed such brazen arrogence and disregard for customers and suppliers to a company.
That being said, my aircraft is the most effecient, fast and fun to fly aircraft that I could possibly imagine. It exceeds all of my expectations in all but the obvious (fixable) issues.

Ex-421

ColdWetMackarelofReality said...

EX421, thanks for your continued participation - you remain a good-humored and stand-up member of our community and I for one wish to thank you for it.

I am curious just how limited you find the airplane currently?

Also curious what your experience has been in terms of warranty and customer support?

Thanks

ColdWetMackarelofReality said...

Off-Topic (sort of)

Aspen Avionics received AML-STC approval yesterday for their EFIS product. With the AML-STC, the EFD1000 can be installed in 400 different makes and models.

For perspective, Aspen has designed and certified a full function EFIS and got it approved for instllation in over 400 different makes and models in the same time Eclipse has wasted $250M and pushed 150 incomplete aircraft out the door.

421Jockey said...

CWR,

Yeah, but don't forget that the people from Aspen used to be from Eclipse. That sort of makes it like it is all in the family!

Goat,

Clearly the FIKI issue to date is the biggest issue. The other avionics issues are big inconveniences, but not safety issues (I know I'll hear about that) as far as I am concerned. It is just like flying like we all did a few years ago, but real fast and high.
Regarding service, the folks at Gainsville and now Albany are great! As long as you stay out of the ABQ attitude zone, these people are a pleasure to work with. I don't have a lot of hours yet (FIKI) but the dependabliity has been very good so far. The only potential aog issue that I had turned out to be from a fuel sensor that thought I had a fuel imbalance so it tried to cross feed on the ground. It turned out to just be because the FBO did not balance the load, and then I was on my way. The response on the phone is great, and things are definitely improving as the fleet hours increase.

Now..... about those IOUs.

Ex-421

baron95 said...

421 - Of all the reported issues, the one that troubles me the most are the autopilot issues.

Can you please comment on the autopiilots ability to be used on all phases of flight (climb, cruise, descent, approach) and in turbulance without issues? Have you experienced any autopilot issues in any mode?

Thanks for the update and I hope you get upgraded to NG1.0 and FIKI soon. Did they give you a prospective slot timeframe for that?

Gunner said...

CWMoR said:
"EX421, thanks for your continued participation - you remain a good-humored and stand-up member of our community and I for one wish to thank you for it."

Shine it in this direction. Class Act.
Gunner

bill e. goat said...
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bill e. goat said...
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bill e. goat said...

421,
Well, ...rats.
You ruined a good rant.

Congratulations on your airplane. I think it is very capable in many areas- and I'm glad you're having a good experience with ownership.

But but but...

I still think Eclipse is trying to pull a fast one, and dedicating minimal effort to finishing the airplane. It's good enough to get by the FAA (ahem, with a little help), and in many regards is quite outstanding.

But to just---not---finish it, is a shame, figuratively, and literally.

I'm afraid I stand by my severe analysis of the modus operandi* : scalp those suckers!

The suckers of interest being big investors; to a lesser degree, customers.

Indeed, the opposite seems to be true, instead of overcharging, they've been undercharging- which makes it even more suspicious. Why undercharge? To ge the volume up. Why get the volume up? To create the illusion of profitability.

Wait a minute you say?, the volume's there- they MUST be profitable? N-O W-A-Y. THAT's what make me think it's being run as a con.
------------------------------
When the IPO thing didn't happen (probably, because of fear of scrutiny of the order book, and operating margins), it was time for plan B. Plan B was to "go long" (typical, for Eclipse- fantastic features, fantastic price, fantastic schedule, fantastic volume) with the Russians.

"Hope is not a strategy"- but if you don't have any alternative- don't be luke warm about it. (Um, thinking of the origins there- that's probably Luke warm). Go big or go home. The Russians are going to save the day!

Uh, yeah. (I think the ETIRC badgers must be licking their chops on this one).

But, it beats waiting for Elvis, or Al Mann, to show up with another suitcase of cash. (If I had to pick, I'd go with Elvis there).
------------------------------
(*rather appropriately, from Wikipedia:
M.O.-It is used in law enforcement to describe a criminal's characteristic patterns and style of committing crimes.[2] It is also applied in fraud investigation when speaking of behavior patterns that indicate specific types of fraud
------------------------------
I don't know where these odd thoughts came from, but...maybe one of our fellow bloggers knows the answer:

Will a badger attack a skunk?

Thanks.

bill e. goat said...

(Just kidding about the skunk thing. Although, inquiring minds do wonder...or is that wander :)

By dot.com standards, Eclipse is run pretty ethically. Maybe because there is so much inertia built into the certification process and required infrastructure, they can't be as "nimble" (some might say, slippery) as a Silicon Valley enterprise would be.

But, I still think the early investors want to drop it like it's hot, and the company's priorities (re: where they ARE investing- production, not development- reflect that.

Black Tulip said...
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BricklinNG said...

Why just Delorean? The Bricklin and Malcom Bricklin deserve at least equal treatment. In any case, it seems like everyone who is anyone will be in Gettysburg June 11-15 so the Eclipse owners might well consider a fly in during those days for a glimpse of their possible future:

www.bricklin.org

Check it out

Niner Zulu said...
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BricklinNG said...

9Z

I think your statement re: just getting out whole is true for depositors who have a price of $1.595 m +CPI, who have deposited $150K and have a delivery time months or years away. Those with a price of $995K and no CPI are still getting a premium on their price, however. The majority are in the situation of just wanting to get their $150 K back, I think.

Niner Zulu said...
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Shadow said...

No postings over the past day? Am I one of the few that the Russian mob didn't get to yet?

Shane Price said...

Tzar Nicholas got as far as Paris, in 1815.

Stalin made it into Berlin in 1945.

But....

Since then, the Russians have been in retreat.

Don't worry Shadow, we're all still around. It's just that everyone is waiting for the next big posting.

Which will, as promised, be delivered tomorrow.

Shane

bill e. goat said...

Shane,
Do I hear a drum roll for the latest "Stunt of the Quarter" presentation?

I'm all tingly with excitement !!

(...or is that the covert Russian microwave energy weapon :)