From: Vern Raburn
Sent: Monday, July 28, 2008 6:57 AM
To: _All Employees
Subject: Farewell
Dear Fellow Eclipsers:
It is with a very heavy heart and disappointment that I must send you this letter today. Effective immediately I will be stepping down as President and CEO and our Chairman, Roel Pieper, will become Acting CEO. As you can imagine, this development came as quite a surprise to me and it saddens me more then I can tell you to have to leave Eclipse. I think you know that I am no quitter. But I have not had any choice but to accept the terms of an agreement that provides Eclipse the first funds in a new round of financing that will take the company to a cash flow positive position. My departure was required under the terms of the agreement that was made with the debt investors to clear the way to secure the new funds.
I still very much believe in the dream that is Eclipse Aviation. I founded this company with a very big vision--to create a whole new category of aircraft with new technology. The idea is to create new markets and ultimately a new form of air transportation. This company and the people who built it with me are doing just that. Time and again, we overcame the many challenges that confronted us. Today we have delivered more than 230 Eclipse 500s and our next aircraft, the Eclipse 400 has been launched and is in development. This company did what the industry thought was impossible. I am extremely proud of what we have accomplished and created.
To be successful going forward, we have to focus on operational excellence. We must achieve the product development, production and operations goals that we have committed to.
Today marks the beginning of a new phase of growth for the company and new leadership to go with it. Roel is a veteran executive and an extremely competent leader. He has been committed to this vision since 2003 when his company, ETIRC Aviation became our Eastern European partner. Today, after investing in the company and becoming our Western European partner as well, Roel is deeply involved with Eclipse and I am confident he will help grow the company and provide it with the operational excellence required to move forward. I will assume the Vice Chairmanship of ETIRC Aviation and provide counsel to Roel in the global expansion of this effort.
Thank you all for your commitment, dedication and enthusiasm in building this company. It is something we can all be very proud of. And I’ll be with you in spirit as you continue to prove that we can change the world of aviation.
Sincerely,
Vern
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572 comments:
1 – 200 of 572 Newer› Newest»1. I hope this means the depositors get their money back soon....
2. I hope this means EAC stop chasing people through the courts for expressing their opinions.
3. I hope Vern finds something he is good at, in his next job.
But these are hopes, not expectations.
Shane
I will assume the Vice Chairmanship of ETIRC Aviation and provide counsel to Roel in the global expansion of this effort.
Looks like musical chairs to me. That music is the fat lady singing.
Do you thnk the headquarter will now be the health spa in Holland, or the residencial house in Luxembourg.
I think is funny to compare the hoops Richard branson had to jump through to prove that he, as an evil foreigner, had no operational control of the Virgin non-subsidary in the USA, but then it is okay for russian dough of unknown providence to be piped though a Spa in Holland and residential house in Luxembourg to rescue a manufacturer.
Weird.
As you can imagine, this development came as quite a surprise to me...
He obviously took his eye of the blog. This surprises none of us right :)
To be successful going forward, we have to focus on operational excellence. We must achieve the product development, production and operations goals that we have committed to.
12 years and $1.x Billion to achieve the level of management insight required to run a Kebab stand!
The new CEO will have his work cut out for him. He must completely revamp the EA500 electronics to provide a Cirrus Perspective G-1000 type system. Other readers of this blog will know what that entails, but I would think it would mean a basic recertification that will will be lengthy and expensive. This must be done while dragging the anchors of deposit refunds, the existing fleet requiring retrofits, delivering more airplanes against minuscule final payments (or refunding these deposits also)and other anchors as well. Then, if all this can be overcome, the reward will be the privilege of selling the EA500 in a market that will have the Mustang and Phenom 100 above and the Cirrus and Diamond SEJs below. For a bit more money, one can get a much more capable jet OR for a lot less money one can get a SEJ which will be almost as good. EA500 will have the selling point of efficiency for flights where it can realistically get to FL 370 or above.
Can enough units be sold annually in the mid $2 million price range to justify the capital required starting from today's position at EAC? What do others think? I would guess its unlikely; whatever the likelihood is, it would be greater if the starting point were EAC today, but wiped clean of the anchors by a bankruptcy court.
I think Roel is throwing good money after bad, but it looks like it wasn't even Roel who required Vern to leave, but rather it was the debt investors:
I have not had any choice but to accept the terms of an agreement that provides Eclipse the first funds in a new round of financing that will take the company to a cash flow positive position. My departure was required under the terms of the agreement that was made with the debt investors to clear the way to secure the new funds...Today, after investing in the company and becoming our Western European partner as well, Roel is deeply involved with Eclipse and I am confident he will help grow the company and provide it with the operational excellence required to move forward.
As I've stated before this news that I don't exactly see that Roel has the right skillset, but Roel might recognize that since a distinction was made in the announcement:
Effective immediately I will be stepping down as President and CEO and our Chairman, Roel Pieper, will become Acting CEO.
Hopefully what that means is that Roel is just temping it until someone with the right skillset can be found who would take the job. I wonder if it is the debt investors - rather than the equity investors like Roel - who are leading the executive search.
As you can imagine, this development came as quite a surprise to me
Vern should have stepped down years ago. By his own admission he doesn't have the skillset for this.
Anyway as I said before this announcement, I think it might be too little too late. If Eclipse got the best CEO in the world, that CEO is still stuck with the design of the FPJ and all the other accumulated problems. I think the only way Eclipse can get itself righted is post-BK.
How long did it take from Frank Thielert's DCM* till the new CEO filed for receivership?
*DCM - Don't come monday
"I will assume the Vice Chairmanship of ETIRC Aviation and provide counsel to Roel in the global expansion of this effort."
step 1 in moving the business away from the US...
I believe Etrick has the license for manufacturing for overseas, and Etrick has a lien on the IP of EAC.
While I respect Fred's and the other's statements regarding Russia and Lux and netherlands, etc... I sincerely think these clown are just setting the stage for EAC to mov overseas and try, try, try again.
I imagine a statement (eventually) regarding how much less expensive it will be to produce the e500 and conjet in Russia... and more deposit programs for added capital... a whole new ball game of shennanigans.
- the tes: will anyone actually get a refund? If so... I would hope the position-holders see the writing on the wall... the only way to make this work is to offer a plane that is way less expensive, and sell a lot of them. As long as the price is high... ask for a refund.
You can buy a mustang, or SE jet. Or maybe one day, buy a cheaper eclipse product. At these prices, there's no reason to mess with them any longer.
PS. I guess this mean we will be hearing more from Vern... too bad.
This must be done while dragging the anchors of deposit refunds, the existing fleet requiring retrofits, delivering more airplanes against minuscule final payments (or refunding these deposits also)and other anchors as well.
Don't forget about the Frankenjet development anchor.
Can enough units be sold annually in the mid $2 million price range to justify the capital required starting from today's position at EAC? What do others think?
I don't think the FPJ has a price/market demand point that results in Eclipse at least breaking even. The demand isn't big enough when the FPJ is priced cheap and the market is too small when it is priced more expensive. I don't see a price point where Eclipse isn't losing money.
I would guess its unlikely; whatever the likelihood is, it would be greater if the starting point were EAC today, but wiped clean of the anchors by a bankruptcy court.
I think a post-BK servicing business (rather than manufacturing new FPJs) would do OK. It would be a much smaller busisiness than it is now, but it would be self-sustaining and profitable.
English language dissertation from a Dutch University on the ETRIC model
I believe Etrick has the license for manufacturing for overseas, and Etrick has a lien on the IP of EAC.
ETIRC has always been portrayed as an equity investor rather than a debt investor. If Eclipse has been misrepresenting things with ETIRC, that could make things interesting...particularly with Vern being employed by ETIRC.
While I respect Fred's and the other's statements regarding Russia and Lux and netherlands, etc... I sincerely think these clown are just setting the stage for EAC to mov overseas and try, try, try again.
Or at least give the impression that they are, whether that actually happens is something else. I'm not sure that Roel knows what is actually required. He doesn't come across as that astute an investor.
Also here's another article on DayJet where they again trot out a customer:
http://www.orlandosentinel.com/business/orl-cover2808jul28,0,6411026.story
It too doesn't just listen to DayJet with rose colored glasses, but instead the reporter goes to Richard Aboulafia to get his take, where Aboulafia basically says that DayJet is staying afloat because of corporate welfare.
airtaxi
get me well : for me i sound exactly like all has been planed ...!
vern is out , so creditors are going to run after someone not even in USA ...
soon the plant in ABQ will close down ...
then goodbye depositors ...
goodbye creditors , you just have to cross half the world to TRY to get something which is in Luxembourg ...No today it is in Russia ...no NO, today it is in Nederlands ... no again no , to day it is in Turkey ... ;-))
if you read carefully , Vern state that Etirc was Eastern-European partner BEFORE becoming Western-European partner ...
sound crazy to me ...
last time i had a look at it , Luxembourg was West european ...
this is smelly ... really bad ...!
john ...
how would you consider an University who have student who make reports on a talented businessman who has failed EVERY plan he has undertake ?
waste of time ?
how to avoid things which are to be avoided ?
This is a joke, right?
This is a joke, right?
The joke is on someone.
Vern was a baby that Roel tossed off the sleigh to distract the attacking wolves (i.e.investors) while he made for the safety of the dacha. Bought him a little time, maybe, but I wouldn't bet on it.
Dave,
you are correct, I have never seen where Etrick is lender, here... unless of course Vern is referring to them in his note:
" My departure was required under the terms of the agreement that was made with the debt investors to clear the way to secure the new funds.”
Also, reading between the lines, Vern says this is "the first fundes" in financing required to bring the company to cah positive...(I'm paraphrasing)
So? there will be more funds required...and more... and more... I guess everyone knows this already.
coldfish ...
not even ...!
as freedomjam wrote a kebab-trolley owner would have done better ...
now the kebab is to be called shachlicks , that is the difference ...! ;-))
"The show is ending for me,” Raburn told the stunned audience.
gadfly
CW,
welcome back.. missed you, buddy.
Joke? whatever do you mean?
BTYAM, I'm a little concerned that EAC has lost Vern, sorta. I know he's not really gone.
Here's why: he was their only real competency... raising money.
The funny thing is the idea here is to take the cash arsonist out of the picture (sorta)... but he brought in the cash. So? How are they going to stop the bleeding?
Stop making planes, I suppose?
you are correct, I have never seen where Etrick is lender, here... unless of course Vern is referring to them in his note
I took the whole paragraph to mean that the equity investor (ETIRC) had to satisfy the existing debt investors (the ones who ETIRC negotiated with). I've tried to search Eclipse's UCC filings, but I keep getting error messages:
http://secure.sos.state.nm.us/ucc/UCCSRCH.HTM
If anyone wanted to, they could contact the NM Secretary of State's office and order Eclipse's UCC filings to see what liens Eclipse has and by whom.
Also, reading between the lines, Vern says this is "the first fundes" in financing required to bring the company to cah positive...(I'm paraphrasing)
So? there will be more funds required...and more... and more... I guess everyone knows this already.
Eclipse = Money pit
airtaxi :
roel speaking : stop making planes to stop the cash bleeding ???
could someone be kind enough to explain me what kind of animal is a plane ???
Now the news is hitting the presses...
Vern blames his termination on Eclipse's suppliers:
"My biggest mistake was believing that all the vendors could ramp up to meet our production schedule. But we're only as good as our weakest vendor. All it takes is one to hold up production," Raburn said.He also disclosed that difficulties with a few key vendors caused Eclipse Aviation's management to fixate on solving those problems while allowing supplies of other components to mushroom. Bloated parts inventories also taxed Eclipse's lean resources.
http://www.aviationweek.com/aw/generic/story_channel.jsp?channel=busav&id=news/FIRED07288.xml&headline=Eclipse%20Board%20Ousts%20Raburn
The AP's take:
http://www.lcsun-news.com/ci_10021153
could someone be kind enough to explain me what kind of animal is a plane ???
Roadkill, if its something coming out of Eclipse.
Adult supervision, at last.
If any of the debt investors who orchestrated this coup-d-etat are listening -
- $hitcan Avio NfG and go G1000 pronto ASAP
- Stop all development on EA-400 until EA-500 design is complete, certified, and rolling off the asssembly line offering ALL promised functionality
- Set pricing for EA-400 and EA-500 to net 7-10% on unit sales of 200-300 per year combined
- Right size production staffing for 200-300 per year combined
- Stop wasting millions each year pretending to be a major player at OSH and SNF and the like, save that money for operations
- Pay special attention to JetIncomplete and all open warranty claims, you are very likely bleeding to death in service and may be unaware
- Drop or settle all currently pending litigation and arbitrations, including the ridiculous blogger subpeona - employee morale and loyalty will be at new high this week, MAKE SURE YOU LISTEN
- Issue any/all outstanding refund requests ASAP and be very public about it - maybe announcement at OSH
- Look to experienced aerospace managers and directors to LEAD this company to success, be prepared to pay a lot for the skillsets needed - you have a bad image to overcome
- Work publicly with the FAA to address the issues raised in the NATCA complaint from AFS guys and be prepared for some heavy criticism in the press
- Chapter 11 will be ugly but may be the only mechanism to right the ship, it is time to use nominal projections not best-case
- Stop claiming 2700 orders, everyone knows it is BS, more realistic order numbers, a reality based price, and real-world production numbers will ADD to the order book by not scaring people off
- If you want help, you can usually find me here, I am expensive but I am worth it
Any update on employees'checks bouncing?
They are the ones that will suffer most.
Goodbye E400!
If the money people want the company to get to cash flow positive, then there is no way they are going to finance the development of yet another aircraft, when the first one isn't yet turning cash. Forecasts for sales 3 years from now are meaningless when you're looking at cash flow projections.
Which leaves the question, just how does one get EAC to cash flow positive? It doesn't seem that you can get there from here.
Which leaves the question, just how does one get EAC to cash flow positive? It doesn't seem that you can get there from here.
Post-BK
Relative to the article on DayJet:
Ever notice that the people who praise the service are the one's who send out an invoice for their services and add "Out of Pocket" expenses to the bill. The lawyers don't care about cost efficiency - only how can they bill the most for their services.
fred,
apparently is a "vendor"...
PS. everyone should remember Vern claimed he needed was it 600 shipsets in 2006... they delivered zero planes...
Looks like the Eclipse House PR Office ANN was left out of the loop re: the Vernperor's 'reassignment'.
And to think, that is the reward for all the softglove coverage, the glowing reports and support offered by Darth Campbell - last to know.
And to think, this group of bloggers was aware before the Eclipse House Blog (ANN) in sunny Florida - sorry Jim, guess the new Sherrif has other plans.
Wonder if Ed Iacobucci's shirt collar is getting a little tight about now?
CW,
I can't believe you fell for the joke..
Not us on them, but them on everyone, again.
PS. does anyone really think NEW money came to the table? If this isn't ETRICK or some related party, I'll be extremely surprised.
How do I know?
- Would anyone in their right mind put money into EAC?
--the plane is DOA... no market for a plane at the pricing required for 200-300 units per year...no way.
--the plane is a mess form a reliability standpoint
--the plane is not finished
--there are very few orders left
--they owe a ton of money
shall I continue?
Raburn will remain an employee of the company as Vice Chairman of Internationalization of Eclipse.
Eclipse wasted no time in changing their website...
Post-BK
The problem with that is, just which cash obligations are they going to shed in BK? Vendor payments due? Not if they need the vendors going forward. Deposit holders' deposits? Not if they want customers going forward. Bank debt? Who's going to fund a turn-around? New equity?
If the latter, no need for BK, just dilute all existing holders to zip.
Wonder if Ed Iacobucci's shirt collar is getting a little tight about now?
Ed has received debt financing too:
http://www.dayjet.com/News/PressReleases/AircraftDebtFinancing_08072007.pdf
yep , vern will remain a "worker" of EAC/Etrick ..
like this no problem to get long-term visa for Russia ...
difficult to run after peoples in Russia when from Iowa ... ;-))
and yes (again ) a new stunt to buy time , protect asses , fly away the kids ....
ATM,
Post BK with a new baseline there could be a market, albeit a small (read that realistic) one (150-200 yr) for a fuel-efficient little twinjet.
I figure one more price increase, to about $2.4, and I would include all the most common options at that price (assuming the options have been designed and certified).
They will have to take a 12-14 month delay for G1000, and they can use that time to optimize tooling and production flow for a realistic volume as well as complete any non-Avio related IOU's.
I figure they have maybe 300 or so customers left for the EA-500. They will wait if there is proof of real adult-supervision, a workable plan, and regular updates on progress.
Those who want the EA-400 will also wait unless the price point exceeds the Diamond - with a slow down in EA-400 development, the Diamond and Cirrus lines will fill up, so folks who can't get a position until much later for them will possibly select the Eclipse design.
But a Chapter 11 restructuring is I think mandatory, they NEED a financial Ctrl-Alt-Del or it will never make sense, or money.
They will also need an influx of experienced manager/director level leaders who will be empowered and entrusted with making things right. Maybe even some of the leaders they lost or drove away over the years if they could convince those players to return.
They have excised the tumor so-to-speak, now it is time for chemo/radiation and whatever heroic means are required.
dave :
#Eclipse wasted no time in changing their website... #
does "planed long time ago " mean something to you ? ;-))
The problem with that is, just which cash obligations are they going to shed in BK? Vendor payments due? Not if they need the vendors going forward. Deposit holders' deposits? Not if they want customers going forward. Bank debt? Who's going to fund a turn-around? New equity?
Don't think of Eclipse as a manufacturer. Think of Eclipse as a servicer to upgrade and service the existing fleet. I see this post-BK. It would completely change the dynamics.
Post BK with a new baseline there could be a market, albeit a small (read that realistic) one (150-200 yr) for a fuel-efficient little twinjet.
I figure one more price increase, to about $2.4, and I would include all the most common options at that price (assuming the options have been designed and certified).
Unless the manufacturing is taken over by someone else, I don't see that as an option and even then I don't see it. With that price, why buy an FPJ for that price when you could buy a Mustang?
I think to get the FPJ flying again, it would take a redesign and recertification going beyond the G1000 addition. I'm not seeing that as an economically viable option, but it is a possibility.
"PS. I guess this mean we will be hearing more from Vern... too bad."
I'm not so sure. As one who has both given and received such token titles (this is a case where it is truly much better to give than to receive!) it would be my opinion that the position Vern will assume is equivalent to Vice President of Tuesday - in other words, this is likely a step to provide a semi graceful exit, at least compared to simply throwing him under the bus. If so, he will likely fade from sight fairly quickly.
tpt
Am I missing something? As far as I can tell we don't know anything about Eclipse's level of debt following this cash injection. Unless we do know that, surely we can't make any judgement about the necessity for Chapt 11 or 7. It could be that the latest capital injection & realistic income projections don't require any BK.
If I were making an investment in Eclipse today, I would only be doing it on the basis that I believed they would become profitable (duh), and for a huge chunk of the company. The only way to assure that is to invest enough to clear all current debt and meet cashflow/debt requirements until the company becomes profitable. That's going to be at least $100+ million (complete guess, based on how long the previous capital injection lasted), for which I'd want 70-80% or more of the company. If I already owned a huge chunk of the company, I'd want to end up with pretty much all of it.
Am I missing something? As far as I can tell we don't know anything about Eclipse's level of debt following this cash injection. Unless we do know that, surely we can't make any judgement about the necessity for Chapt 11 or 7.
That's not exactly true as far as needing to know.
It could be that the latest capital injection & realistic income projections don't require any BK.
That's the rub. We don't have to know Eclipse's debt level to know that operationally Eclipse is losing money - it even says so in this announcement. It's a matter of estimating the costs of production versus the price charged. There might be an equillibrium price out that that will result in Eclipse making enough planes for the right price where Eclipse at least breaks even, but that isn't readilly transparent. If an company is configured where it can't be profitable without significant changes - such as getting out of contracts or being able to renegotiate them - that is what BK would do to allow a company to reorganize itself.
Dave,
I have always maintained that the basic airframe is good, and that has been backed up time and again by the few pilot reports we have - it flies well.
The issue has been the bombastic CEO and his ability to work like King Midas in reverse, the poorly defined and poorly executed 'total aircraft integration', and the poor vendor management.
It is my belief that all of those things flowed down from the corner office through direct and indirect influence supported by the cult of personality that Vern surrounded himself with.
All programs suffer from issues with management, with vision, with vendor performance, or with execution. The reason that Cessna, or Hawker-Beech, or Gulfstream do not implode like Eclipse is in the process of doing is that unlike Eclipse they have adequate, experienced and mature leadership as well as stable and established processes and mechanisms.
Eclipse should have been able to synthesize those mechanisms and processes by taking the best and brightest from many OEM's as they did when they started, but it appears that whatever lessons could have been learned, and whatever benefits could have been gleaned from the collective experience originally assembled was squandered if not outright ignored.
This is the true cost of being different for differences' sake and THAT is Vern's ultimate legacy IMO, as with so many of his other endeavors, it was a neat idea but he was unable to execute it and could not rein in his ego and pride to allow others to help.
I almost feel kinda sad for the guy.
Almost.
"The only way to assure that is to invest enough to clear all current debt and meet cashflow/debt requirements until the company becomes profitable."
previous debt agrees to subordinate... some smart-ass shoes up thinking he can do more with the company than Vern et als.. (say, in Russia) and lends the company money, takes a first lien, and blows everyone out of the water, later.
If its Etrick lending the money... its insider dealing to the nth degree... but sometimes, its the only path - say if the board does not want checks to bounce...
As for Eclipse avionics, maybe it's time for them to go back begging to Avidyne, which just announced a synthetic vision system today. Garmin G1000 would require a complete re-do of not only avionics but all aircraft systems. Avidyne would be a plug and play system. Avio PNG? (That stands for pre-NG)
I have always maintained that the basic airframe is good, and that has been backed up time and again by the few pilot reports we have - it flies well.
I don't know one way or the other, but I was more referring to completely getting rid of Avio NG, changing the landing gear, having more safety features, etc...more redesigning the insides that totally completely starting from scratch.
CW,
How many folks who can afford a Mustang buy the e500?
At what price does this eliminate most people?
When there's a $500,000 difference in the cost, I would say... its a REALLY small number.
The admission that they cannot make omoney on the E500 unless its priced north of $2.1M... and at this, they still apparently require a lot of planes per year -DOA.
Look for a switcheroo to the conjet, or something... maybe they will use your strategy and SAY they are going to complete the plane over a year or so, and stop production...who knows.
I content the e500 is DOA...it will NEVER make money.
Dave: " If an company is configured where it can't be profitable without significant changes - such as getting out of contracts or being able to renegotiate them - that is what BK would do to allow a company to reorganize itself."
Yes, I guess I should have said 'liabilities' rather than just 'debt'.
Still, the same point applies - we don't know much about the Eclipse's liabilities versus the potential profitability of the company following the (obviously necessary) reorganization.
I don't know anything about Chapt 11 - is it even feasible to invest, then immediately declare Chapt 11 & stiff the creditors (e.g. customers/position holders/suppliers)? Surely your due diligence is supposed to prevent you investing in an unprofitable concern?
The new website says Eclipse Aviation was formed with the humble intention of transforming the aviation industry into something better than it was before.
Wrong - anyone who has followed this knows all about the arrogance and condescension that this company held towards the aviation industry from it's inception until now.
My take - expect more of the same, then BK. Investors are skittish enough as it is - any money in the coffers will soon be drained and it is unlikely that it will be replenished.
Speaking of money, it would be interesting to see just how clean the money being invested into Eclipse really is.
EAC you need to listen to Cold Wet. You have one chance to do it right. If you get the airplane to meet spec and treat customers and suppliers correctly all will be forgiven.
My feel is that you will have a market for 200 + airplanes when the dust settles. you have lost the chance to dominate the market totally.
I think the mature market in 7 years or so will be for about 1000 per year and there will be about 5 major players. Typically in most mature markets of any size 5 major players will dominate 80 % of the market.
avid,
funny comment...
Money - "Vern, ahh, we thinks you shud step aside"
Vern - "OK"
Baron95 disagrees with me, but I still forecast a pretty quick trip to Chapter 7, an attempted resuscitation's as New Eclipse(or something like that)which lasts about a year and produces not a single EA500.
In a couple of years you have a rapidly declining population of partial eclipses keep on life support by the last of the die Hards who have bought the TC and are managing the things on a similar system to warbirds.
the question that will really tell if the new management is going to do the right thing. is:
has EAC refunded the money to the depositors?
does anyone know the answer?
From the inbox. Please note the constant use of the imperial "I", as in 'I have asked Vern to...'
You can read this type of message in a number of ways, but I choose to do so as follows:-
Roel is the boss, he calls the shots and, in effect, owns EAC for better or worse.
I wish him the best of Irish luck. He will need it all, to get the company out of its' current manifold problems and back onto some sort of an even keel.
Shane
From: The Fairy Godmother
To: _All Employees
Sent: Mon Jul 28 2008
Subject: Message from Roel Pieper and Press Release
Dear Eclipsers
Our company is one that literally created an industry and enjoyed a hyper-growth trajectory for many years. The results of this steep curve have at times been greatness and at other times, disappointment. As they mature, all companies go through strategic changes and today I am announcing several shifts that signal a new era at Eclipse.
First, Eclipse has secured additional financing that will take us to a cash flow positive position. This new investment would never have happened if it were not for two key things: the tireless dedication and commitment of Eclipse employees and the superiority of our flagship product, the Eclipse
500. As ETIRC is now the largest shareholder in Eclipse, I can say that I personally believe in your efforts and the impressive results you have generated for this company or I would not have continued to increase ETIRC's investments in Eclipse.
The second major shift is that under the terms of the financing agreement, Vern Raburn will step down as President and CEO of Eclipse Aviation effective immediately. I have assumed responsibilities as acting CEO. In addition, I have asked Vern to assume a role as Vice Chairman at ETIRC Aviation, assisting the global expansion of the Eclipse 500. If you look at the history of American business, most of today's great companies have experienced this type of leadership change at critical growth junctures and now it is Eclipse's turn.
This type of change is difficult, and often emotional, but for most companies it has proven necessary for continued growth. Vern demonstrated and taught this company the incredible power of vision, tenacity and never giving up. I hope that each of you continue to stay the course, building and delivering the global standard VLJ, the Eclipse 500 and making our customers proud to be members of the Eclipse team.
Sincerely,
Roel
Still, the same point applies - we don't know much about the Eclipse's liabilities versus the potential profitability of the company following the (obviously necessary) reorganization.
If a reorg things are really bad, it would be determined by court. If the reorg can be done without going BK, good luck to them, just I don't see it.
I don't know anything about Chapt 11 - is it even feasible to invest, then immediately declare Chapt 11 & stiff the creditors (e.g. customers/position holders/suppliers)? Surely your due diligence is supposed to prevent you investing in an unprofitable concern?
It depends. Sometimes companies come back better than before, while others completely die. It is very risky, but can be very profitable.
"I would not have continued to increase ETIRC's investments in Eclipse."
So, this is ETRICK's money, right?
ATM,
There is a certain amount of logic to your argument but don't forget, we are talking airplanes here, logic is not always involved.
There will be folks for whom the $700K difference in the price of entry is significant, and for others whom the 'projected' cost of operations will be important.
Think of the guy who buys an Audi instead of a BMW (not comparing the Eclipse to German cars by the way or impugning Audi, FWIW I happen to like Audi's more than BMW's). He has certain desires and picks from several choices he believes will meet his needs and provide the style he is after.
Also, the missions these planes are good at are different - I don't think it is an apples-to-apples comparison, and neither does Cessna.
I believe the EA-500 could occupy a potentially nice little niche if the price can be held below $2.5M, AND if it is fully functional and reliable.
I think with stable and mature leadership, a change to COTS avionics, and a short track record of delivering what they promise they will find additional customers, enough to support a modestly successful sales rate of maybe 200 per year.
The $64,000 question, really the $2B question, is will the the world wait and give them the time necessary to fix what we have all known to be wrong, for years now?
One of the better known contract employment houses in aerospace is going through some incredibly tough times, in part due to certain large accounts not paying on time (possibly including the subject of this little ol' blog among others). However, it is the management challenge of not meeting issues long-known that is the real culprit. This house has lost multi-million dollar contracts and many highly-paid contractors due to these issues coming to a head recently. Like Eclipse, it has a younger CEO who surrounded himself with a cult of personality, and like Eclipse that has resulted in a lack of reality intruding into the CEO's world - that is until a recent bail-out.
As with Eclipse, is it too-little too late or is a recovery possible?
In both cases, only time will tell - but I am actually an optimist.
Roel saying that the Frankenjet might be DOA:
http://www.flightglobal.com/articles/2008/07/28/226135/oshkosh-2008-eclipse-400-is-no-certainty-pieper.html
In reading Roel's email, I'm wondering if the transaction was legal...I see no approval of this deal. Do all the waivers from the past apply to this deal as well?:
http://www.regulations.gov/search/search_results.jsp?css=0&N=0&Ntk=All&Ntx=mode+matchall&Ne=2+8+11+8053+8054+8098+8074+8066+8084+8055&Ntt=etirc&sid=11B6A83F65D3
Now FlightGlobal is portraying ETIRC as the one who fired Vern:
http://www.flightglobal.com/articles/2008/07/28/226125/oshkosh-eclipse-founder-raburn-steps-down.html
I guess its not clear yet whether ETIRC is more than just an equity investor.
CW..
can you estimate the systems, structure and assembly costs for the e500? Big buckets, it does not matter. SUe some "insanity" checks like Vern's pricing based on stated volume. Draw a line to the Mustang selling price minus a margin... for 200 units per year (which is their stated volume goal, right?)
I'd love to see this. Every time I do it, the cost/price/volume numbers for the e500 amkes no sense.
IOW, at 200 units a year, they are at the same price (essentially) as Mustang.
CWMoR Predictions:
Massive layoffs in Albuquerque shortly AFTER OSH is over - likely measured in the hundreds.
EA-400 will get go-ahead in November but on a 'realistic' schedule putting deliveries way out to try and rescue the EA-500.
Eclipse will hire an experienced Engineering VP type person to be new CEO, from another OEM.
Looks like ETIRC and long suffering Al Mann are the sources for this latest 'last' Cram round - good luck guys, you have tough days ahead. There will be much wailing and gnashing of teeth but you may be able to save it.
A more detailed AP article. Vern is now being muzzled:
"I am proud to have led the team that succeeded in creating the very light jet category and shipping the safest ... aircraft in decades," Raburn said in the release. The company said he would not be available for an interview.
http://www.forbes.com/feeds/ap/2008/07/28/ap5260566.html
There's also some mention of refunds. Eclipse seems to be doing more of the same by still blaming suppliers. Pretty soon Eclipse will find itself with nobody willing to supply them.
CW,
did you see the B/E numbers at 1.7 planes per day delivered? from the same article..
INSANITY, once again.
Pieper is going to announce some major order for his air taxi scheme to replace Dayjet's by-gone order...
1.7 planes per day, 7 days a week... thats 620 planes per year to B/E... at $2.15M...
CW, start cypher'n my friend...
What's the price at 200 units per year? 150? Its a big number. No way... DOA.
ATM,
I have no direct insight into Eclipse's pricing structure but I suspect that costs should run about 85% of the Mustang.
With a properly scoped and priced product support program, profitably priced spares, and a true LEAN manufacturing approach, I would think they could be profitable (7-10%) at about $2.4M on maybe 200 per year - all of which is achievable with their current infrastructure and likely less staff.
Eclipski in Russia is DOA in my book - I doubt there are any real economies of scale to be had because the worldwide volume is maybe 200 per year TOTAL.
Adding the EA-400, in 2012 or 2013, as a completely developed and fully functioning aircraft would be a good strategy - it will put some EA-400 adopters back into EAA-500's due to timing, or give Eclipse an out for truly unprofitable deposit contracts.
I bet they lose north of 100 depositors this go around, maybe $50M net costs as this will include some folks who have made progress payments - leaving 3-400 real customers - still $700-900M.
I am convinced though that they need a blank slate financially. They will make concessions to key vendors to keep them on the program, and will see the most issues with the vaporware portion of the orderbook.
CH-11 before the end of the year, and a stronger, leaner, smarter Eclipse emerges with a product they can deliver by this time next year.
Or TU by end of Q2 next year - my Magic 8 Ball says the answer is hazy.
I'll get off this subject, becasue you know more than me...
but,
Cessna building the e500 might get to the 85% number at the same volume... I comprehend your weight/cost thumbnail..
But, that's Cessna.
Also, an imputed recouped development cost (clean this off the slate...I see) would be around $1M/plane at 200 planes times 10 years... OK, even $500k per plane... was all this for not?
Yup..
Development costs and all investments prior to Roel and Al's last stand are gone - fini.
All risk-sharing investments are just that, at-risk. Partners will likely never fully recoup increased capacity or staffing.
I suspect that this is why the endgame has to be BK.
Isn't there a conflict of interest with an Eclipse customer also being the Eclipse CEO? In the article Roel mentions the 180 ETIRC order:
In his new position as Vice Chairman of ETIRC Aviation, Raburn will work to enhance infrastructure for ETIRC's air taxi service, which Pieper says will launch with 180 Eclipse 500s in Turkey, followed by service in Russia. "I would expect March-ish, 2009," he says. "We hope to have some announcements in the next month or so."
http://www.flightglobal.com/articles/2008/07/28/226135/oshkosh-2008-eclipse-400-is-no-certainty-pieper.html
That could just be vapor, but if it isn't, it would seem like everyone else would have to wait for ETIRC - the customer - to get their order over those who put down deposits first.
Also here's Vern previously ranting and raving about price elasticity:
Vern Raburn: Absolutely. It's called price elasticity.
Aero-News: And it becomes a spiral. It feeds itself. Because the unit price got so high that people can't justify buying so many. And that reduction in unit deliveries drives [unit] costs higher, as the fixed costs are imposed on a smaller base....
Vern Raburn: You ultimately reach a point of sort of minimal stability. Meaning, you can build thirty or forty airplanes a year, year in and year out, and you can keep raising the price. It doesn't matter how inefficient you become, there's always thirty or forty idiots that'll go out and buy one.
Now here is Eclipse still sticking to their guns on the order book that the demand for Eclipse is inelastic:
Mike McConnell, vice president of marketing and sales, said the throttle troubles and a 30 percent price jump to $2.15 million per aircraft announced in May have not affected orders for the Eclipse 500.
Eclipse has received "some" requests for refunds, he said, adding the company has produced 230 jets to date and has 2,300 outstanding orders.
http://www.iht.com/articles/ap/2008/07/28/business/NA-US-Eclipse-CEO-Ousted.php
Eclipse still seems to want to continue on its ways of being silly. Does Eclipse really expect the world to believe the order book is relatively unchanged despite price changes as well as the tanking of DayJet?
This would be a time to switch to the G1000. Afterall the FAA still hasn't certified Avio NG:
The highly integrated Avio NG system will bring numerous features online once its approved by the FAA. "I expect clarification within the next 60 days,” he says. Final format to the auto throttle and other systems will ease concerns. “These are things that are built into the aircraft but we don't have certification yet,” Raburn says.
http://www.flightglobal.com/articles/2008/07/14/225363/farnborough-2008-eclipse-boss-confident-of-easa-go-ahead-for-vlj.html
That would probably also help with EASA too.
I can almost smell Pieper making an investment in Dayjet... to keep their order alive...
the shennanigans are going to quickly outweigh the problems with the actual airplane... no small feat, I might add.
I imagine this is going to get very weird, very fast.
pls explain..
“These are things that are built into the aircraft but we don't have certification yet,” Raburn says."
A question comes to mind: Why not?
A question comes to mind: Why not?
If you worked for the FAA, wouldn't you want to affix your name on approving Avio NG? This special condition apparently only covers part of Avio:
http://www.airweb.faa.gov/Regulatory_and_Guidance_Library/rgSC.nsf/0/2180A66852AF5A7186256BD10067DB3A?OpenDocument
"Don't think of Eclipse as a manufacturer. Think of Eclipse as a servicer to upgrade and service the existing fleet. I see this post-BK. It would completely change the dynamics."
We have a winner. Post-BK there will be a spare parts company. Think Twin Commander.
there's some good comedy on the INNOVATIONS page of the new eclipse website.
of note: avio is gone. FSW, and "high performance manufacturing" are hyped.
Somehow, they still "believe" they have a large market.
Curious
ATTENTION EAC CURRENT EMPLOYEES
An honorable member of the fourth estate is anxious to have a background chat with one or two of you, especially after Roel addresses you later today.
If you are interested, contact me at the usual address:-
eclipsecriticng@gmail.com
The purpose of the interview, which could not possibly identify anyone after the treatment meted out to Brian Skupa, is to see how employee's have reacted to today's events.
Shane
I don't know how long this has been on the website, but it does seem to show how chaotic things are:
Prices are subject to change based on market conditions, costs and varying other assumptions underlying projections relied upon by Eclipse Aviation Corporation in setting prices.
http://www.eclipseaviation.com/privacy-policy/
Eclipse's projections and actuals have been totally crazy. Keep in mind that Eclipse's new CEO seems even crazier than Vern with Phostrex. Aside from the frauds that Roel has been associated with, he's also been taking in by scammers and doesn't exactly show good judgment:
http://www.cs.unimaas.nl/p.spronck/Sloot.htm
http://crackpottheoryoftheweek.blogspot.com/2007/04/jan-sloots-data-compression.html
http://www.liveartists.com/index.php?name=News&file=article&sid=8
This is an bio article on Roel:
http://www.redherring.com/Home/9347
Roel has a history of not being transparent:
In an article entitled, "CA Director’s Non-Disclosure; His Role on Board of Troubled European Firm Not in SEC Filing," Roel Pieper, a former vice-chairman and chairman of Lernout & Hauspie, was never accused of wrong doing in the scandal that landed top L&H executives in jail earlier this year. Instead, he was praised for helping L&H secure bankruptcy protection last year after the speech recognition software company was toppled by reports that it overstated it revenues. Pieper, who was named to CA’s board of directors, in 1999, has never had to include information about his L&H positions in SEC filings for his CA directorship. Prof. Coffee said the Pieper "may be skirting the boundaries of an SEC rule that requires disclosure of all material information to investors." Newsday, July 25, 2001.
http://www.law.columbia.edu/faculty/faculty_news/2001/summer2001
What's really funny about this is that nothing has changed, other than the joker being ousted.
The E500 is still not complete. The finances of the company have to be a disaster. There are still all of the IOUs on the existing fleet to pay for, all of the deposit refunds to pay, all of the aircraft on order with progress payments made at the old price that must still be delivered each at a loss, plus, to pull a rabbit out of a hat, a new aircraft to develop and certify. That isn't even to mention the likely TC review by the FAA.
Further adding to the humor is that Roel thinks he's pulled a fast one. He essentially bought the company for $100M plus however much he put in this time around. Eclipse obviously hit a wall on the cash side, had to raise funds, found no other takers, which handed Roel the whole enchilada on a platter for as little as an additional $20M or $30M, if that. Only problem is that what he bought may well not be worth what he paid for it.
Baron says it's worth $300M. Don't know how he came up with that number, but if he's right then Roel should be grinning like he is. Only question is, where is Roel going to get the rest of the cash needed to make EAC a going concern that is profitable??? The man has a software / computer background. This is not either, as so accurately pointed out here.
Mike McConnell, vice president of marketing and sales, said the throttle troubles and a 30 percent price jump to $2.15 million per aircraft announced in May have not affected orders for the Eclipse 500.
Eclipse has received "some" requests for refunds, he said, adding the company has produced 230 jets to date and has 2,300 outstanding orders.
http://www.iht.com/articles/ap/2008/07/28/business/NA-US-E
Great line that - have not affected orders. The truth is there are no new orders coming in to affect.
Lets take a stab at the order book:
2700 announced orders, options and Floptions.
Minus 230 delivered (TM eclipse),
Minus 1400 not really cancelled Dayjet floptions,
Plus zero real orders in the last year,
Minus 15 cancellations we are pretty sure about,
Minus the other 85 cancellations we suspect,
Minus the 400 other floptions (lets be real - if Dayjet was allowed to have 30 fix and 1370 options with $30 mio in total capital, don't you think Eclipse had similar vapourware deals with other Fantasy airline startups in Spain and Turkey etc),
Minus 130 orders they sold to themselves (which are based in the Spa in Holland.
That leaves me with a grand total of 440 real outstanding orders, which I am going to cut in half on principle.
My guess is 220 outstanding orders.
I bet if everyone takes a guess, the average will be spot on!
Not like it matters, because as someone further up the thread pointed out, they have now canned their greatest asset (and greatest liability.) Vern made the cool aid. He was the visionary who got all sorts of people to suspend belief. He was the guy who could get a billion bucks for a idea that any sane aircraft engineer could show on the back of a napkin was a express ride to Chapter 7.
The last thing this personality cult needs is sober decision making.
Once the spell breaks and "Die Hards "work out they have waited 12 years to pay as much for a Mustang, for half the plane, half finished, and that will try to kill them, the end is nay!
Hasn't Roel seen Peter Pan? Hasn't he been to born again church, an Amway seminar, or a democratic/republican national convention lately?
Baron says it's worth $300M. Don't know how he came up with that number, but if he's right then Roel should be grinning like he is. Only question is, where is Roel going to get the rest of the cash needed to make EAC a going concern that is profitable??? The man has a software / computer background. This is not either, as so accurately pointed out here.
I believe Baron was discussing the value of a post-BK Eclipse with the liabilities wiped clean when he arrived at that figure.
He said suppliers have failed to ship parts in the quantities promised.
Maybe this is related to Eclipse failing to deliver money in the quantities promised?
For some reason I thought this was relevant:
http://adventure.howstuffworks.com/sinking-ship.htm
Behold:
"What it means to rearrange the deck furniture."
gadfly
('Over 96 years late and a dollar short!)
dave
Great minds, eh what!
gadfly
Interview with Roel as new CEO of Eclipse:
http://www.brightcove.tv/title.jsp?title=1691159143
Still claiming lots of orders. Claims this is getting ready for an IPO. Says Eclipse will reach 1-1.2 units per day in the next five months.
To quote from The Who:
"Meet the new boss
Same as the old boss"
I have a question about this statement attributed to the new CEO:
"First, Eclipse has secured additional financing that will take us to a cash flow positive position."
To me 'cash flow positive' means your sales are at least enough to cover your payroll and essential direct operating expenses.
Just because an investor gives you enough cash to keep the doors does not mean to me that the company is suddenly 'cash flow positive'.
Is he saying that they are 'cash flow positive' as of today?
Or is he saying that 'we can keep the doors open until some future date, when our sales will at least equal our payroll and operating expenses'?
Is he saying that they are 'cash flow positive' as of today?
Or is he saying that 'we can keep the doors open until some future date, when our sales will at least equal our payroll and operating expenses'?
He's just repeating the same things Vern already said. Eclipse isn't cash flow positive now and it might never be. Roel is just like Vern except for the accent.
1Billion x 5% = 50M
1.5 Billion x 5% = 75M
Looks like they could have done better in CD's.......but that's not disruptive is it?
If Eclipse does get up to 1-1.2 units per day, who is going to buy them on a sustainable basis?
DayJet? I don't think so. They only can use 12, not 1200.
ETIRC? See DayJet. Plus there's the regulatory issues. That will also take things being strange if the CEO keeps Eclipse afloat by selling aircraft to himself (more accurately putting numbers in the order book rather than actually buying anything)...the same thing happened of course with DayJet, just with ETIRC that would be way too obvious.
I believe Vern had it right when he talked about the 30 to 40 idiots who would buy:
You ultimately reach a point of sort of minimal stability. Meaning, you can build thirty or forty airplanes a year, year in and year out, and you can keep raising the price. It doesn't matter how inefficient you become, there's always thirty or forty idiots that'll go out and buy one.
http://www.aero-news.net/index.cfm?ContentBlockID=1782fa3a-9205-4bd6-aca3-e0b458aafa57&Dynamic=1&Range=MONTH&FromDate=08%2F30%2F2005&ToDate=09%2F30%2F2005&Category=%2Findex.cfm
Unfortunately I'm not seeing that Eclipse has a point of minimal stability since Eclipse is inherently unstable. If Roel does get Eclipse to 1.7 units (or 1.2 units), there's no sustainable market for them at the price (or even if the units were half as expensive as the breakeven point) and if Eclipse makes less than 1 per day, the market is too small as well. Maybe it could be done if Eclipse sold the product line and a more efficient factory made the Eclipse, but with the configuration in ABQ now, it seems like a no go.
A parting ramble on this notable day.
When Stan started the original Critics blog, less than 28 months ago, EAC were the brash new(ish) company telling everyone else how to build an aircraft, Vern was riding high on his Collier Trophy win (how do that committee feel today?) and DayJet was raising money like there was no tomorrow.
What is most important though, is the number of well placed people who now reference this place, and how these connections reinforce the vital pillar of free speech.
Without that, my friends, we are all lost.
Tomorrow will be a different day, with new challanges and fresh opportunities. Let's all keep that in mind, and try to look forward rather than backward. I for one will be happy not to have to type the words 'Vern Raburn' again.
Regards, and good night.
Shane
PS Coldwet, I forgot to welcome you 'back' which was rather rude of me.
"[Roel]Claims this is getting ready for an IPO."
All you need to know.
One thing this blog has proved beyond a shadow of a doubt is there is NO aviation press, at least in the US. Flying, Business and Commercial Aviation, and Aviation Week might as well staple the ads together sans comment and be done with it.
One thing this blog has proved beyond a shadow of a doubt is there is NO aviation press, at least in the US. Flying, Business and Commercial Aviation, and Aviation Week might as well staple the ads together sans comment and be done with it.
With my experience with following The SCO Group (which is connected to Eclipse Aviation), I've seen that blogs can run circles around the press as far as being more crtical and more thorough as well as being the first to break stories. I've also been on other blogs (though not for long) that are totally immature and spam filled. Irrespective of industry I see amateur and semi-professional journalists along with people who become professional journalists without traditional journalism training taking over more and more of the media mindshare. Blogs can have significant weaknesses, but they can also have significant strengths. A blogger might not even know what the AP Stylebook is, but if the blogger digs up better information or does a more thorough analysis than other media sources, the readership can easily overlook stylistic/grammar/spelling shortcomings.
Baron says it's worth $300M.
I believe Baron was discussing the value of a post-BK Eclipse with the liabilities wiped clean when he arrived at that figure.
Now this is truly weird. Is the company worth more after a Chapter 7 liquidation (a la Adam), or now?
Given that it's EAC, I suppose that's possible.
As for an IPO, not in Roel's wildest dreams could this company be taken public in the U.S. Maybe he's thinking of a flotation in another country. Or another dimension.....
Everyone seems pretty content to follow the Pied Pieper now that Vern's been shown to the door. Diehards & critics both seem to be relieved.
Even with the change, though, it's hard to take Eclipse seriously. Even Roel still insists that Eclipse has 2,700 orders and that they have to keep expanding to meet global demand, primarily the air-taxi market.
Eclipse has neither orders nor the demand for their products that they keep touting. They can't seem to get past "stuck on stupid".
Now this is truly weird. Is the company worth more after a Chapter 7 liquidation (a la Adam), or now?
Given that it's EAC, I suppose that's possible.
Actually its not that weird. BK allows business to wipe/renegotiate liabilities, so its just simple math that if you elminate or reduce numbers from the minus column, the overall total will be worth more. Companies can only file for BK in certain circumstances and I think Eclipse would fit. Depending on the type of BK, BK is meant to allow a company to stay afloat and become profitable (BK reorganization) or alternatively to maximize the value of assets if the company is sold off (BK liquidation). There is a risk in going for BK that a company could be liquidated (rather than reorganized) against the will of company's management and a great deal of information has to be made public and there's a loss of control of the company to the courts. Eclipse could be a nightmare BK case with Roel as CEO since there's multiple conflicts there with him being a customer via ETIRC (who is a de facto unsecured creditor by virtue of their 200 plane order) as well as a creditor by being an equity investor and possibly a secured creditor if ETIRC is also a debt investor. The BK court might just have a trustee take over management to cut through the gordiam knot.
As for an IPO, not in Roel's wildest dreams could this company be taken public in the U.S. Maybe he's thinking of a flotation in another country. Or another dimension.....
Roel it seems will be producing just as much comedy rhodium - if not more - than Vern.
Dave, Thanks for you comments. You have to wonder why an Aviation Week reporter can't pick up the phone and have one of their European contacts go by the ETIRC Aviation "office" in Luxembourg and see what it is and then blow the whistle on this farce. Fred is doing the same for us on the Moscow "office".
"I for one will be happy not to have to type the words 'Vern Raburn' again"
Shane, I love you man... but you are dreaming!
OOOH OOOO! Time to run, We had a meeting today and it looks like the employee herd here at ECLIPSE is about to be thinned out. The word is that some contractors (THAT’S ME) will be given the option to go DIRECT or be LET GO. This will start as soon as next week! They stopped bringing in NEW CONTRACTORS in 3 weeks ago and many already left after hearing the rumor. We heard the VERN rumor last week but NOBODY BELIEVED IT! We all thought his royal highness would never give up the throne. I guess the other rumor may come true as well. This one involves TODD FIERRO, production manager at Eclipse. Looks like Roel doesn’t like the automotive industry way of production like Vern did and it sounds like he will be ousted by the end of the month. We are all getting ready for the big FAA audit that will take place Aug 18th. There is no way we will pass if the FAA looks close at most of the drawings because we have been making the plane for so long with tribal knowledge, that the prints are and have become irrelevant. They would have to be reverse engineered in order to make the grade. Well got to run now and look for a new contract to go to on jsfirm.com WISH ME LUCK!
20 YM
let's get one thing straight.
Vern went from being an employee of EAC to being Co-chairman of its biggest shareholder, lender, and distributor.
What's so surprising? He got fired and regired, basically by the same guy.
I call that a golden parachute. He went from an insolvent company to its future biggest creditor and or distributor... and he probably will get paid in euros, and not be taxed due to his new address.
Stay tuned. You'll be hearing a lot about VErn Raburn, and the shennaigan air taxi business that will floor EAC with orders... I bet you anything.
Stay tuned. You'll be hearing a lot about VErn Raburn, and the shennaigan air taxi business that will floor EAC with orders... I bet you anything.
Anybody who is still talking about an Eclipse IPO *HAS TO* talk about the air taxi market. If there's a public acknowledgement from Eclipse higher ups that the huge Eclipse 500 air taxi market didn't pan out, that would sink an IPO. The Eclipse silliness is going to continue until the company runs out of suckers who have money.
Do you want to know how to make a small fortune with Eclipse Aviation? Start out with a very large fortune!
What is Roel doing for the Frankenjet position holders now that he's said a decision to proceed on the Frankenjet wont even be made until November? Is all that money set aside in a separate account or is this money being used as interest free loan to fund Eclipse's operations? Were these position holders told that they were actually providing zero interest high risk loans until further notice?
I hate to say it, but I called that on the last thread as the best scenario, if a C-level exec was to leave as rummored.
Again, the adult supervision imposition on Eclipse continues. This is good news all around.
More money coming in. Vern moved to advisory role. Peg staying on.
Right in time for a big announcement at Oshkosh of the new financing. I'd say the value of Eclipse planes and positions just went up by some 20%.
Next, they should just publish audited financial and production results, including order book and delivery serial number assignments.
All around good development, assuming the financing does come in and it is substantive.
Interesting numbers to consider:
Pieper returning to ABQ to speak to 2,060 employees.
Pieper indicates they need to produce 1,600 aircraft. If that is so, why do they now claim 2,300 on order?
gadfly
Im wondering what the big cheerleading for Peg is all about? Does anyone know anything personal about her? You do know that anyone can have an impressive resume, right? Rumor has had it in some circles that she will do "whatever it takes" sometimes. After what I've heard, Im just not that impressed AT ALL!
Im wondering what the big cheerleading for Peg is all about? Does anyone know anything personal about her? You do know that anyone can have an impressive resume, right? Rumor has had it in some circles that she will do "whatever it takes" sometimes. After what I've heard, Im just not that impressed AT ALL!
I don't think she matters as to whether Eclipse will ever be profitable or not. The problems that Eclipse has are beyond her scope as COO.
From the Oshkosh Site:
Eclipse CEO Vern Raburn steps downEclipse Aviation Founder and CEO Vern Raburn announced he was resigning from the company effective immediately at a press conference at EAA AirVenture Oshkosh 2008 Monday morning.
"Every time I come to Oshkosh I'm reminded of the lyrics to the Emerson, Lake & Palmer song: 'Welcome, my friends, to the show that never ends.' The show is ending for me," Raburn told the stunned audience. "The good news is, we've received the first funds in a new round of financing."
Albuquerque, New Mexico-based Eclipse Aviation has been beset by production and certification problems and delays in deliveries for the six-place, all-metal, twin-engine Eclipse 500 very light jet (VLJ), and Raburn's resignation was sought by investors under the terms for the new investment in the company.
"I'm not a quitter, and I'm not quitting now," Raburn said. "Do not infer my parting is any indication that Eclipse's future is in jeopardy. In the world of high finance, these things happen."
Eclipse Aviation gained the attention of the general aircraft marketplace when the company announced plans to build a jet priced at less than $1 million. The Eclipse 500 received its provisional type certificate from the FAA at AirVenture 2006. The aircraft has been widely credited with bringing innovation to the industry.
"I started this 11 years ago," Raburn said of his efforts to build a low-cost jet. "Eclipse was founded on a vision: to use technology to change the value proposition of how planes were built and supported. To change fundamentally the way people travel. I'm very proud of what we've accomplished."
Raburn pointed to orders in excess of 2,000 aircraft and deliveries of more than 230 Eclipse 500 VLJs as highlights of the company's accomplishments. The company also introduced production innovations such as friction stir welding that replaced rivets used in conventional metal aircraft and reduced build time.
Eclipse Aviation Chairman Roel Pieper, who has extensive experience managing international high-tech companies and is also the founder and current chairman of European Technology and Investment Research Center Aviation, Eclipse's largest shareholder, has been named acting CEO.
"I've known Roel Pieper for more than 20 years," Raburn said, in introducing the new CEO at the press conference, describing Pieper as a veteran executive and leader capable of taking the company to the next level of success.
"I respect Vern enormously and commend him for all he has done," Pieper told the audience. "Changes are tough, but they need to happen."
Pieper expressed confidence in the future of the company and its VLJ, calling the Eclipse 500 "what the market needs today," and he assured the audience the company is financially sound and is moving forward. "This is a company that has an order book that is stellar. We need to focus on the delivery of 1,600 aircraft."
As for the Eclipse 400, Pieper said a decision on whether to proceed with production will be made in November.
BLAH BLAH BLAH BLAH BLAH.........
"Financially sound" ???? Why are customer and vendors not being paid?
My clear plastic bag with all my liquids at TSA Security screening is looking better and better.
Good luck in your new job 20yearMech. Hope you land in a company you can be proud of.
Shane,
Here is an instant candidate for the top ten list (thanks 20year):
We are all getting ready for the big FAA audit that will take place Aug 18th. There is no way we will pass if the FAA looks close at most of the drawings because we have been making the plane for so long with tribal knowledge, that the prints are and have become irrelevant. They would have to be reverse engineered in order to make the grade.
1/ Aircraft does not conform to it's type certificate!
the story is weirder and weirder ...!
yesterday , i went back to the office building of E-trick/Russia with the aim of taking a photo of the entrance to share with shane for the blog...
the problem is there is nothing to be taken ...
it could be anywhere ,it could be grand-central in N-Y ,any building offices in paris or wherever , there isn't even a sign to say anything and the building is just PLAINLY average...
does it sound to you like a firm who CAN invest between 1 and 2 Billion $ ? (planes + hydrogen)
in a town where the fashion is to spend like tomorrow is Armageddon ?
i have been invited to a club , when i had a look on the pricemenu , i pretexted a important phone call to escape , the glass of champagne = 250 $ !! (i am not crazy enough to buy a glass for the price of a whole crate just for the sake of feeling important!)
a town where one of the latest top-notch fashion is to breath canned air (??) a can is 20€ (30+$) for a deep breath , may be 2 ...
they become "stupidly rich" ...!
so how come Etirc can manage it in Russia ?
it sound to me like if in Beverly hills , top stars would buy at local groceries ...
i tend to be of the same opinion of airtaximan ...
Vern isn't gone , he is behind the curtain ...
he managed to become such a joke ...
that basically he had to have roel steeping in for the role of his life : scapegoat of some failed business ... (L&H ,Philipps , etc..., now EAC)
as for being cash positive ???
how can they manage to become profitable ???
different person = same shit , all over and again ...
Fred,
have a look at Etrirc- or ETIRC Aviation-homepages!
Nothing new - no changes!
In times of e-business etc.?
Roel Pieper will know and tell!
Ok his VP is off for fishing.
After a 10 years rest the "challenge cup" moves on!
julius
julius
(by the way : are you german ?)
what is amazing :
lots of internet noise about a spanish co which (probably) doesn't exist ...
lots of noise about the "thesis" made in dutch University ( title of the thesis : "how i became a looser" )
lots of noise about the value of the bird in european travels (on a road where absolutely nothing to gain in taking a plane !)
lots of noise about a danish who bought (sorry bet) a E500 because he was bored at breakfast ...
always lots of "noise" going one direction ...
but as of a major change of WHAT is the purpose of E-trick .....
nothing
strange isn't it ?? ;-)))
"Im wondering what the big cheerleading for Peg is all about?"
Me too! There are many women in aviation with impressive resumes that do outstanding work; there are many women in aviation with impressive resumes that wouldn't know an airplane if you dropped one on their head. I don't know "Peg" from Adam's housecat, but anyone at a high level delivering business jets without weather radar, a reliable means of braking, the Micky Mouse throttle design, or any of the other discrepancies the E500 has, should find another line of work.
airsafety ...
you're making my day .... so much fun !
you're as well wondering about all the "strange in a strange land" happening about anything surrounding the matter ?
you're not the only one !!
what was the story , again " if someone call you horse's ass ...."
just too many burps to make it really credible ...isn't it ?
I communicated with a refund-requesting depositor who has been told that money being received currently by EAC will be used for operations only and not for deposit refunds. Refunds, reportedly, will come from EAC's cash flow, when it has one; or, most optimistically, when its cash flow seems sufficiently likely that someone will provide cash financing against such cash flow even if it has not yet been achieved. IOW, the depositors are subordinate lenders and within the ranks of subordination they are about as subordinate as you can get.
The journey down the path suggested here yesterday by several commenter has begun. EAC must first stay in business, next get enough cash to arrive at its point of market potential, which is sale of 200 or so properly-functioning airplanes per year and finally be able to run a successful business making those 200 airplanes. Everything, including deposit returns, not utterly essential to achieve this will need to be foresworn on the trip. The path may well go through bankruptcy court but, I suppose, if all claimants would just sit patiently and do nothing then bankruptcy could be avoided. The result would be the same: you can't get blood from a turnip so anyone wanting a non essential payment will be waiting a long time and even then might get less than 100%. No investor is going to invest money just to repay deposits.
From AvWeb this morning:
Acting Eclipse CEO Roel Pieper says the company is working out the details of honoring an unknown number of $150,000 deposits made by an unknown number of position holders who balked at the latest ($500,000) price increase of the Eclipse 500. Pieper said he expects announcements to be made in "a few days" concerning alleged delays in the processing of refunds. The deposit refund issue has dominated discussion on blog and forum sites recently. Two position holders AVweb spoke with say there is real concern among those who have requested refunds and they're hopeful a resolution is coming as quickly as Pieper said there will be. "I have to admit that I am a little nervous," said Doug Cayne, who requested his refund about two weeks ago. Eclipse has said the requests will be processed within 30 days. Others have been waiting longer, he said.
http://www.avweb.com/eletter/archives/avflash/1172-full.html#198427
I don't suppose anybody really knows when the money is coming back. In the end, I hope everyone gets what they are asking for before it becomes awarded by the courts.
Ask for Peg, if she remains, she has her work cut out for her. There is a large body of employees that are looking for leadership that just hasn't been there. Vern's no longer in the way. It's time to listen to the subject matter experts and make some changes. Personally, I don't think she's the one, but it's not my decision.
P_P
Refunds, reportedly, will come from EAC's cash flow, when it has one; or, most optimistically, when its cash flow seems sufficiently likely that someone will provide cash financing against such cash flow even if it has not yet been achieved. IOW, the depositors are subordinate lenders and within the ranks of subordination they are about as subordinate as you can get.
It's that customer last way of thinking that is one of the reasons that Eclipse is where it is now. Who is going to put a deposit down when they see how low on the totem pole the company views them?
Ask for Peg, if she remains, she has her work cut out for her. There is a large body of employees that are looking for leadership that just hasn't been there. Vern's no longer in the way. It's time to listen to the subject matter experts and make some changes. Personally, I don't think she's the one, but it's not my decision.
I think the problems go way beyond the COO level. The problems were created at the CEO and Board level and the problems have been going on for so long, that Eclipse might be like Humpty Dumpty.
brickling ..
what you wrote is a new definition of Customers Service ....
or an iteration of :
don't put your finger in it , or you'll loose your arm if not worse!
PP
#before it becomes awarded by the courts. #
have you ever tried to shave an egg ?
it isn't very productive !!
"I don't suppose anybody really knows when the money is coming back."
I think the position holders and debtors need to find a mean lawyer (I can't IMAGINE where they might find one!) and get a seat on the board and put an end to the happy BS about factories on the Volga, ETIRC, ETIRC Aviation, Flovonius Ventures, Rolex Maxi yacht racing, Roel himself, and the rest of it.
Dave: "It's that customer last way of thinking that is one of the reasons that Eclipse is where it is now. Who is going to put a deposit down when they see how low on the totem pole the company views them?"
Or this might be the first step in aligning the company's operations with the real-world requirements for long-term survival. People who've asked for refunds aren't your customers any more, and the duty of the CEO is to work for the shareholders. I'd be doing something similar - lowering expectations about refund timescales whilst trying to avoid anyone pushing the BK button. Realistically, anyone who put down a deposit that wasn't put in an escrow account has always been a (very) subordinate creditor.
I'd also be lowering expectations of current owners about what they can 'realistically' expect in terms of IOUs. One (unattractive) aspect of the very public change in CEO is that promises associated with the 'last guy' can be quietly ditched.
The new CEO might take the view that existing owners have got a pretty good deal (given the price they've paid versus the current price tag on the jet), and that they should probably have to pay for what might now be thought of as 'upgrades'. Obviously, all this has to take place within the context of any legally binding performance agreements between the company and its customers.
Of course, the CEO would have to look at the ramifications of this approach on future sales, and reach an appropriate tradeoff (current cashflow v. long term drop in sales due to deposits being seen to be risk capital).
It stinks, but as the CEO you'd have to find a way to stop the bleeding (copyright CWMR 2008).
So there you have it Ex-"Die Hards" now wannabe refund recipients.
If Bricklings information is correct (given that it was posted here, it has about 1000% better pedigree than Eclipse press releases) Eclipse is going to pay your deposits out of the cash flow (which is for me a synonym for the profits they make from each plane they sell at a loss).
If I asked "can I have my $150000 back", and got the answer in bricklings post, I would interpret that answer as "No!"
So now it's a game of chicken. Do you get with two other wannabe ex "Die hards" and send this outfit into BK in the hope that you are then nearer the front of the queue to get your three cents on the dollar, or do you wait for three even richer people than you to write off their $150000 and just send Eclipse into BK out of spite, leaving you further back down the queue with out anything but your original contract.
I posted a couple of days ago that there is no way in hell Eclipse is going to fork out at least $2.25 mil (likely 10x more) cash to ex customers now or ever again.
Who else gets paid out of cashflow:
Suppliers (Without them there is no cash flow)
Staff (Ditto)
Facilities (These can be abused some more)
Retrofit programs (Prime candidates for abuse)
Interest payments (Since Eclipse now has enough cash to fund them through to positive cash flow these bankers can go to hell)
EASA (not wasting any more money on them)
Marketing (Need sales otherwise the world will notice that we have no customers)
Lawyers (Essential to our core business of distracting the world from the facts)
Lobbiests (Another core competance)
Colour copies and free cokes (Already made huge savings here)
Other direct operating costs (We'll stop paying all bills, and then see which things were really necessary - Hey why did my phone go dead? Good move, stops the ex-"Die Hards" whinging about their deposits)
Fred,
yes, I am a german!
I think Vern Raburn will now confirm the general experience that a cow which was born in a horse stable still us a cow.
He is still better in collecting money than in investing money...
Acting as general manager with Etirc, part-time professor (business administration, U of Twente), (non-acting) CEO with EAC Roel Pieper should have heard something about "deposits" and "refunds". But perhaps he only wants to get rid of the Frankenstein project... then refunding the rest of "die hards" and finally rien ne va plus - that's at least semifair!
julius
Between the lines I am getting hints of Roel's very sophisticated strategy; one that has never, ever, been done before:
1. Put lipstick on the corpse
2. Sell it (IPO)
3. Bail out
"This is a company that has an order book that is stellar. We need to focus on the delivery of 1,600 aircraft."
what an ass...
I bet anything, Dayjet receives new money... soon... from Etrick.
Riddle me this:
- How many delvery positions can you secure from yourself?
- How much real money needs to be put down?
- How many planes can you buy from yourself?
- How much equity do you need if you've given yourself a big discount?
... see how this scheme works?
Expect a way for the order book to resemble a large number again... this is the only way the scheme can continue to sound OK to the outside world.
Its complete BS... the e500 is DOA, and I suspect the conjet has not has the "CONversion effect" Vern/Roel were looking for... too many refunds, not enough demand for that plane either.
Plan B... ressurect the e500, buy them from yourself.. find a bank to finace the purchasers, and you provide phantom equity... in the form of discounts from an inflated price.
I expect 6 months of some of the whackiest moments yet - stay tuned... like Stan said a long time ago... just when you think you are out of material, Vern will provide something really juicy.
PS. this is Nimbus all over again... same story...really...
ASman,
thanks, I needed that...
"dress up the pig..."
julius :
Grüß Gott ! let's talk englander before they get upset ... ;-))
yes , a horse born in a stable won't give you any milk ...!
still , i see the latest development as a kind of joke ..!
(in our common history , at some point we had someone who said " if you want the people to believe you , don't be afraid to make the lie as big as possible !")
that roel is either someone who never sleep or found out a way to deal with (too) many things at the same time ...
the L&H story is a bit nasty , but the "Tandy computer stores" is as well a very good proof of "enlightened management " ... ! ;-))
when i read about having to wait for refunds that the cash flow become positive , i cannot refrain a ah ah ah ha ha ha ...!
sorry , it isn't kind for the trapped ones ...
but at the same time , it is a very good demonstration for potential investors :
if you get in , you won't get out alive .... !
"Realistically, anyone who put down a deposit that wasn't put in an escrow account has always been a (very) subordinate creditor."
A few weeks ago, they were given the special offer on the conjet, and if they did not take it, and they refused the e500 at $2.15M (new price) they would get a refund.
I think this offer was made in bad faith. I think they knew there was no cash to provide refunds...
Just like they know they have a few hundred orders left...
DOA
Or this might be the first step in aligning the company's operations with the real-world requirements for long-term survival. People who've asked for refunds aren't your customers any more, and the duty of the CEO is to work for the shareholders. I'd be doing something similar - lowering expectations about refund timescales whilst trying to avoid anyone pushing the BK button. Realistically, anyone who put down a deposit that wasn't put in an escrow account has always been a (very) subordinate creditor.
Customers asking for refunds are still customers and customers are the lifeblood of any business. If potential customers are too scared to buy from you knowing that you'll treat them worse than any other group, they'll find someone else to buy from. How a business treats customers who ask for refunds affects how potential customers who are considering doing business that company.
I'd also be lowering expectations of current owners about what they can 'realistically' expect in terms of IOUs. One (unattractive) aspect of the very public change in CEO is that promises associated with the 'last guy' can be quietly ditched.
The problem is that there are promises within contracts, not just within speeches. The way of course that those can be gotten out of is via BK, not just changing the CEO.
The new CEO might take the view that existing owners have got a pretty good deal (given the price they've paid versus the current price tag on the jet), and that they should probably have to pay for what might now be thought of as 'upgrades'. Obviously, all this has to take place within the context of any legally binding performance agreements between the company and its customers.
The customers would have to agree to a contract modification and if they see other customers aren't getting refunds that would make them lose trust in doing any sort of new deal because they might think that then they'll be given the short end of the stick like the ones who aren't getting their refunds.
airtaxi
a FEW HUNDREDS orders left ???
baaaaw , optimist !! ;-))
yes , dave !
in other term , the saying Never buy a BMW in an Audi garage (change names to suit you) is confirmed !
the way potential EX-customers are treated is of utterly importance ...
a bit like the saying about restaurant :
"10 years to have a good reputation and 10 seconds to loose it "
i am not a guru of marketing , but it seems obvious ...
A few weeks ago, they were given the special offer on the conjet, and if they did not take it, and they refused the e500 at $2.15M (new price) they would get a refund.
I think this offer was made in bad faith. I think they knew there was no cash to provide refunds...
That is actually good news if that could be established in court. That was part of a binding contract where Eclipse made the offer and those who took the offer created (or more specifically re-affirmed) the contract. That Eclipse made people fill out new paperwork could actually help depositors seeking Eclipse to have to pay since depositors could argue that this was a new contract rather than just the old one they signed X number of years ago. Debts incurred via fraud are not dischargeable via BK:
http://www.orb.uscourts.gov/orb/documents.nsf/0/7dff0b2bf39eda9a882567b0005e6899?OpenDocument#c2
You don't have to have someone convicted of fraud to make a debt non-dischargeable. All it takes is for the BK court to believe it was a debt fraudulently acquired. This would make those depositors in a somewhat better position than simply being unsecured creditors. Again, I would urge consulting with a lawyer before signing any new paperwork from Eclipse and in general I'd recommend any depositor to speak to a lawyer to see what their options are.
Baron,
"All around good development, assuming the financing does come in and it is substantive."
give this man a cigar!
Dave,
see how this works?
Nice one!
dave :
# I'd recommend any depositor to speak to a lawyer to see what their options are. #
i would just add :
Fast , real fast !
Vern interview:
http://www.aero-tv.net/index.cfm?videoid=ed055dee-190e-429a-872a-51642bb7b738
Fred,
I think CW is correctly describing the situation (as VR e.a. or a. e. VR anticipated in 2006?).
But the dress of the pig are the 2,15$-customers. Great challenge!
And there are other risks (no risk - no fun).
About cows and horses:
A kid whose parents came from Augsburg born in München - is it a Münchener? No - see above! That's the Münchener's view of life.
Julius
julius ...
i don't know how munich and münchener ...
i grew-up in Freïburg , scharzwald ! ;-)
yes i agree that is a real challenge !
but what is scary , Vern is still on the boat ...
and the "we need planes ...why not building them instead of buying them " sound a little too strange to me ...!!
i hope the best for the ones who are inboard(customers and staff of lower rank)
but at same time , when EAC has fulfill , at least , one promise they made ???
i forgot :
Augsburg is a beautiful town ...
and the birth town of dollar ...;-))
fred
Is Raburn’s new assignment anywhere close to Leningrad? . . . er, Sakt-Peterburg?
Somehow, being sent to the eastern front has a certain ring to it from out of the past . . . as in, sixty-five years ago.
gadfly
(‘Just wondering!)
Vern still isn't listed on the ETIRC website:
http://aviation.etirc.com/page/3
Eclipse can't refund deposits because it is spending the depositors money on advertising, sponsoring events at Oshkosh, lawyers to subpoena bloggers, more advertising, a new website, a fancy tent at Oshkosh to lure in more suckers and a new job for the ex-CEO.
If I were a position holder I'd file a lawsuit TODAY to get my money back before it is gone. I'm sure that is exactly was is going on as we speak.
I'm surprised Eclipse has the cajones to even put their name up at Oshkosh. They had better put guards around their tent - there are a lot of people out there who aren't real happy with Eclipse right now - not just Vern.
Here's some recently filings by ETIRC:
http://www.etat.lu/memorial/memorial/2008/C/Pdf/c1734157.pdf
Also here's some more info on Eclipse Aviation Europe, which became ETIRC Aviation. It turns out that Eclipse Aviation Europe was founded by Roel Pieper way back in 2003:
http://www.etat.lu/memorial/memorial/2003/C/Pdf/c104408A.pdf
This is the founding of Eclipse Southwestern Europe, which is a wholly owned subsidiary of Eclipse Aviation Europe (all ETIRC companies):
http://www.etat.lu/memorial/memorial/2006/C/Pdf/c0696054.pdf
This appears to be a change of address filing:
http://www.etat.lu/memorial/memorial/2005/C/Pdf/c0545076.pdf
This is the filing changing the name Eclipse Aviation Europe to ETIRC Aviation:
http://www.etat.lu/memorial/memorial/2006/C/Pdf/c0998225.pdf
Another filing:
http://www.etat.lu/memorial/memorial/2005/C/Pdf/c0063221.pdf
It makes you wonder how much of what has gone on was pre-planned by Roel and Vern given their very long association. I still think Roel is going to lose [other people's] money, but it doesn't mean that he's not a schemer.
Fellow followers of Roel,
Makes a change, Roel instead of 'you know who'.
I think the depositors know they are toast, and should be taking joint action to protect their positions as soon as possible.
There are much more serious problems looming for EAC than a few dozen angry (ex) customers who want million of dollars back from the company.
1. Staff are leaving, some in shock at the abrupt departure of you-know-who. A number are key people, who actually know what they are doing, in both senses of that phrase. Expect a dip in deliveries, big time, as a result.
2. Suppliers are up in arms over non payment or very late payment or just because they are being messed around. Expect supplies to EAC to slow up, further reducing deliveries.
3. There are men (and women) coming from the FAA, who are on a mission. This mission is to cover their asses prior to another, much more serious investigation which is in the offing. If the next FAA audit discovers they are using the wrong shade of paint in the bathrooms at EAC, expect delivery delays.
Are we all getting the point about deliveries? Good, because if 'deliveries' slow down, so does incoming cash, as well the time at which they manage to get to the latest, greatest, $2.15 million sticker price.
I'm also hearing, from several sources, about weird activities in the 'broker' markets. Possibly the regime change at EAC might bring an end to these matters, but I doubt it.
Finally, whatever happened to the promised upgrades? Everyone has gone really, REALLY quiet on that front. No word of anyone even talking about the possibility of getting the AvioNG/Garmin G400W or FIKI updates onto a 'delivered' aircraft. Have they shut up shop in the service centers, or are they too busy doing sorting out customer complaints on the few aircraft trickling out the door?
Lets' get back to these, the real issues facing EAC.
Shane
gad ...
the "russian plant " is completely opposite way of leningradskaya oblast ...
in fact , it is much closer to stalingrad , if it is what you meant .../-))
(now it is volgograd , you need a degree to follow the changing names ...! ;-)) )
I'm also hearing, from several sources, about weird activities in the 'broker' markets. Possibly the regime change at EAC might bring an end to these matters, but I doubt it.
You mean like Mike Press?
Finally, whatever happened to the promised upgrades? Everyone has gone really, REALLY quiet on that front. No word of anyone even talking about the possibility of getting the AvioNG/Garmin G400W or FIKI updates onto a 'delivered' aircraft. Have they shut up shop in the service centers, or are they too busy doing sorting out customer complaints on the few aircraft trickling out the door?
Isn't Eclipse claiming that with S/N 266?:
Somewhat ironically... Raburn's departure comes as the company displayed what some would call the first "fully conforming" Eclipse 500, outside its booth. Serial number 266 is the first production bird mounted with Avio NG avionics including twin Garmin GPS 400Ws, in addition to recently-certified modifications to comply with flight into known icing (FIKI) approval.
http://www.aero-news.net/index.cfm?ContentBlockID=2b897c12-8a4f-4fd7-ae5c-44956eed4862
fred
In either case, it's just about as far from ABQ as you can get, without coming back around, unless you go south, until you can't go south anymore.
gadfly
So in the next couple years this is what is on ETIRC's plate:
* Build a hydrogen plant Irkutsk Russia to ship hydrogen to Japan:
http://www.fuelcellsworks.com/Supppage7174.html
* Coverting Sochi Russia's public transportation to hydrogen:
http://www.fuelcellsworks.com/Supppage7381.html
* Convert coal-to-fuel in Irkutsk:
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=AP&Date=20071019&ID=7660813
* Have Eclipse ABQ manufacture 620 planes per year (1.7 per day):
http://www.flightglobal.com/articles/2008/07/28/226135/oshkosh-2008-eclipse-400-is-no-certainty-pieper.html
* Have Eclipse Russia produce 800 planes per year:
http://jets.ru/interview/2008/07/07/nikiforov
Who here thinks ETIRC is going to accomplish all this? If not, that means somebody is going to get shortchanged...
So Eclipse complains of spotty deliveries by suppliers. Might that have a little itsy bitsy amount to do with Eclipse being spotty in paying suppliers? No, that would be too logical for Eclipse to understand.
Turning Eclipse around will, IMHO, require a sustained 24/7 commitment by the CEO for at least a year or two. I doubt that Pieper, at this point in is life, is going to move to ABQ and give this the personal attention necessary. This points to recruiting a full time CEO to take over for Pieper as Acting CEO. Unless they have been working on recruiting a CEO for awhile, this is likey to take some time. Perhaps not too difficult to find someone who might be able to do the job, much more difficult to get him/her to say "yes." Having been involved in many of these searches, it wouldnt surprise me to see this take 6-12 months or more to find and sign Mr./Ms. Right. Then,the new guy has to start at the beginning to get everyone's head in a suitable place. All of this to say: more delays, more cash burn.
tpt
Roel flying back to ABQ to address the worker bees was also a good way to avoid meeting the deposit holders at Oshkosh who want their money back. But I am sure that never crossed his mind!
Turning Eclipse around will, IMHO, require a sustained 24/7 commitment by the CEO for at least a year or two. I doubt that Pieper, at this point in is life, is going to move to ABQ and give this the personal attention necessary.
He's got many other projects going on with ETIRC. ETIRC Aviation is merely a division of ETIRC.
Having been involved in many of these searches, it wouldnt surprise me to see this take 6-12 months or more to find and sign Mr./Ms. Right.
Isn't that how long the hiring process to find a competent CEO in a business that is relatively normal...not problem-filled like Eclipse?
Then,the new guy has to start at the beginning to get everyone's head in a suitable place. All of this to say: more delays, more cash burn.
Even with the best CEO in the world, it might not be enough short of BK. That being said, the CEO still has to take direction from the Board and Eclipse might be permanently damaged with the required Board members. I guess a possible way out would be to hire a really competent CEO (if possible) as well as expand the board from 4 to 12+. The Eclipse Board is way to small to be effective...all it can really do is merely re-enforce a limited viewpoint.
Roel flying back to ABQ to address the worker bees was also a good way to avoid meeting the deposit holders at Oshkosh who want their money back. But I am sure that never crossed his mind!
Brave CEO Roel ran away.
Bravely ran away, away!
When depositors reared their ugly heads,
He bravely turned his tail and fled.
Yes, brave CEO Roel turned about
And gallantly he chickened out.
Bravely taking to his feet
He beat a very brave retreat,
Bravest of the brave, CEO Roel!
tpt,
during the interview RV said,
he would not know what to do next;
there are lots of new themes...
in one hour he will go fishing.
EAC writes (current press release):
"Raburn will continue to provide counsel to Pieper and will assume the Vice Chairman role at ETIRC Aviation, assisting in the global expansion of the Eclipse 500."
(What means "VC role at ETIRC"?)
Perhaps even VR does not know the meaning of these words!
As CW explained EAC first needs someone for the immediate turnaround (RP?). When there is some light in the tunnel, then the chance will increase that someone will come! Just come, see and say bk - (and it was not RP - maybe..) - No!
julius
"as well as expand the board from 4 to 12+. The Eclipse Board is way to small to be effective...all it can really do is merely re-enforce a limited viewpoint."
I strongly disagree. A board of 12 would seriously compound the crisis, IMO. The issue with the curent board is relevant experience, not size. A board of 4 plus the CEO is ideal if appropriely constituted. Every startup is a special case of a turnround - little history but a limited time to get to a self sustaining mode of operation. (Eclipse has more history than most startups, but I still consider it a startup as it has never reached a self sustaining mode of operation.)
The Ford and Northrop guys on the board are there for window dressing/credibility. Hard to believe that they have the skills or appetite for what lies ahead. Mann, as an investor/entrepreneur, might add some value as he has likely had to deal with disaster in other investments.
From the outside, it seem to me that Eclipse needs a ruthless turnaround CEO to survive, and a small, action orinted board with relevant experience to help him, not provide him with "direction." Once the smoke clears, then the finer tuning can begin.
tpt
I strongly disagree. A board of 12 would seriously compound the crisis, IMO. The issue with the curent board is relevant experience, not size.
Relevant experience and size is one and the same. Ideal boards are 12+ and they take people with a wide variety of experience...finance, legal, relevant operations, etc. A board of 4 lacks the relevant experience just beause there's only so much experience 4 people can have.
The Ford and Northrop guys on the board are there for window dressing/credibility. Hard to believe that they have the skills or appetite for what lies ahead. Mann, as an investor/entrepreneur, might add some value as he has likely had to deal with disaster in other investments.
I hardly see how you can say Eclipse has a suitable board when two of the board members you call window dressing while leaving Eclipse with possibly two good board members. A board with two effective members is sorely lacking.
From the outside, it seem to me that Eclipse needs a ruthless turnaround CEO to survive, and a small, action orinted board with relevant experience to help him, not provide him with "direction." Once the smoke clears, then the finer tuning can begin.
Whether or not a board or action oriented is determined by its size. Up to a certain point a larger board lets you take more action because you've got more hands available in which to contribute.
The Ford and Northrop guys on the board are there for window dressing/credibility. Hard to believe that they have the skills or appetite for what lies ahead. Mann, as an investor/entrepreneur, might add some value as he has likely had to deal with disaster in other investments.
Don't be surprised to see some board changes in the immediate future. These were Vern's guys. With Vern gone, the question of personal liability of a director begins to raise its ugly head and becomes a personal consideration.
"I hardly see how you can say Eclipse has a suitable board when two of the board members you call window dressing while leaving Eclipse with possibly two good board members."
Where did I say that? My whole point was that the current board does not have relevant experience (and have largely presided over the meltdown at Eclipse).
As to board size, I guess we will have to agree to disagree. I have served on about 40 public and private corporate boards, and the boards with more than six members were a distraction for management at best.
When Eclipse is stable, profitable, and growing is the time for a larger board.
As for board changes, it looks like that is already underway as I see some new names/faces on the website.
tpt
As to board size, I guess we will have to agree to disagree. I have served on about 40 public and private corporate boards, and the boards with more than six members were a distraction for management at best.
I've served on less boards, but I've served on boards. My experience is that unless an organization is ultra ultra tiny, you need more board members who can offer more variety of experience as well as more hands on help. If a board is being counterproductive then it is up to the board to balance itself property. This really isn't related to board size though. A board of any size can either be too uninvolved not doing enough or be too involved to the point where it interferes with management. A board is responsible for setting up bylaws eastablishing the relationship between the management and the various committees and that's something that has to continually be looked at. I think many boards fail by not being active enough in having their bylaws and hence their interrelationships within the organization change.
When Eclipse is stable, profitable, and growing is the time for a larger board.
I would put the board at the forefront of being responsible for profitability. Just as a matter of law it is the board who bears the primary fiduciary responsibility. I believe having a poor board is much of what got itself to where it is now and having a good board is much of what will get Eclipse out.
As for board changes, it looks like that is already underway as I see some new names/faces on the website.
You're right. Now I see a board of six instead of a board of four:
http://www.eclipseaviation.com/company/about/leadership-team.php
"A board is responsible for setting up bylaws eastablishing the relationship between the management and the various committees and that's something that has to continually be looked at."
Dave, I respect your experience, especially where it comes to legal themes (not a strength of mine either by experience or interest). The central part of challenge at Eclipse is for management and the board to internalize the concept that the co. is in a do or die situation which appears to call for extreme measures, not business as usual. By the time the board contemplates the usual board agenda, Eclipse will be a smoking hole. The board needs to set aside (temporarily) the usual board agenda and focus on doing whatever it takes to survive long enough for aggressive turnaround measures to take hold (IMHO).
If Roel could convince 5 or 6 of we named Critics to sit on the Board or take leadership roles I bet there could be light at the end of the tunnel that is NOT a train.
It would NOT be pretty, but I think it may be possible to save the patient.
I am not seeing the kind of honest statements from Roel that would indicate that adequate adult supervision is in place - YET.
Refunds should be 1st priority - finishing the EA-500 design should be 2nd, delivering complete and compliant aircraft should be 3rd, upgrades for delivered aircraft should be 4th - what is that - it is called CUSTOMER FOCUS - try it.
Dave, I respect your experience, especially where it comes to legal themes (not a strength of mine either by experience or interest). The central part of challenge at Eclipse is for management and the board to internalize the concept that the co. is in a do or die situation which appears to call for extreme measures, not business as usual. By the time the board contemplates the usual board agenda, Eclipse will be a smoking hole. The board needs to set aside (temporarily) the usual board agenda and focus on doing whatever it takes to survive long enough for aggressive turnaround measures to take hold (IMHO).
I'm not talking about the usual board agenda. There's a wide variety of options that a board can have. There can be special sessions of the Executive Board, the Board as a whole, etc. The problem that I see is that (with four board members) the Eclipse Board, Exec Board, etc are all in one and as such they are limited in being able to be active or to really dig into things...there's not enough division of labor to go around. My point in bring up such things as bylaws is not to advocate business as usual, but to be sure Eclipse has a proper framework in order to address the issues. You bring up board interference with management and that is one of the things that can both define and limits the board role so as to not interfere as well as clearly express what contributions are expected. If there isn't a clear framework, then you have chaos and board/management clashing on giving unclear direction. Many of these matters can be taken care of quickly in a special session and if the bylaws permit, this can further be expedited if a smaller group within the board (the Exec Committee) can make decisions on behalf of the whole board. Anyway, my point in all this is you have to know exactly who does what in a do or die situation or else you will die from the chaos and confusion.
If Roel could convince 5 or 6 of we named Critics to sit on the Board or take leadership roles I bet there could be light at the end of the tunnel that is NOT a train.
I agree. Even just an advisory board.
Refunds should be 1st priority - finishing the EA-500 design should be 2nd, delivering complete and compliant aircraft should be 3rd, upgrades for delivered aircraft should be 4th - what is that - it is called CUSTOMER FOCUS - try it.
I agree. If newer customers as well as potential customers see how a company takes care of its oldest customers (the refund seekers), Eclipse wont get any new depositors and existing depositors will try and bail.
Does anyone know why Alan Young of Vought Aircraft became a board member? Was it due to Kent Kresa and Northrop Grumman's former ties to Vought or was Carlyle Group (who also owns Vought) one of the financiers that ousted Vern?
The fact is that there are no, as in zero, takers for an E500 at $2.1M. If there were, why is Eclipse offering brand new E500's for sale on Controller for $1.85M? In fact, there don't appear to be any takers at that price either.
Vern's interview on Aero-News is revealing in so far as his admission that for the past two years most of their funding has come in the form of secured debt, and that the debt holders forced him out as a condition of the "new round of investment". There has been no announcement as to this so-called new round in terms of players and amounts.
One can be fairly certain that the trigger for Vern's ouster was the failure of the company to maintain the loan covenants with the secured lenders. When you bust loan covenants (e.g., working capital amounts), the lenders start looking for the exits, and become increasingly inflexible. (BTW, this is what brought Adam down in the end, broken loan covenants.) This whole thing with firing Vern and putting Roel in could well be a charade in a vain attempt to cover up what is really going on ---- namely, busted loan covenants. Are there really new investment dollars? Certainly not from lenders! From Roel?? All it would take is a token investment. The fact that the company continues to lie about its order book is the smoking pistol. Stay tuned. This is not a company about to turn the corner to profitability "early next year", as Roel claims. In fact, there is no path from the present circumstances to profitability that does not entail BK.
As Vern Raburn cleans out his office, will he keep the Collier Trophy and Cabot Award? Reputations are enhanced by martyrdom. Surely the National Aeronautic Association and Aero Club of New England made a wise choice in these coveted awards.
Vern's interview on Aero-News is revealing in so far as his admission that for the past two years most of their funding has come in the form of secured debt, and that the debt holders forced him out as a condition of the "new round of investment". There has been no announcement as to this so-called new round in terms of players and amounts.
I've got wonder what the debt holders in DayJet think as well. Their debt was secured on the value of the FPJ and the FPJ seems to be falling in value. I think right now Eclipse debt holders aren't underwater on value, but they've got to be very worried right now how secure their secured debt is.
This whole thing with firing Vern and putting Roel in could well be a charade in a vain attempt to cover up what is really going on ---- namely, busted loan covenants.
I wonder if/when the City of ABQ is going to speak up about this since ABQ has a $45 million industrial revenue bond with Eclipse.
The fact that the company continues to lie about its order book is the smoking pistol.
No kidding. Its the same old thing.
This is not a company about to turn the corner to profitability "early next year", as Roel claims. In fact, there is no path from the present circumstances to profitability that does not entail BK.
If Eclipse did ramp up to 620 units per year, who would buy them?
More on loan covenants.
An inside source at Adam told me that one of the covenants that was broken was a manufacturing rate. I don't recall the specifics, but for Adam it was something like 1 plane a month for x months, which they failed to do.
These banks that lend secured debt are not stupid. They know what to ask for to be protected. They carefully value the assets used as collateral, and they carefully look at management's projections. Then they say, ok, we'll lend you x dollars provided that you meet these projections.
Does anyone think that EAC met any projections made to bankers in the last two years? Of course not! Obviously the banks would prefer that the company get back in compliance with the covenants than to take possession of the assets. So, usually there will be some negotiating and some lenience given to see if management can make the necessary changes. Do you think that maybe Roel is telling the banks that EAC has 1600 orders? You can go to the well empty handed only so many times before the jig is up.
Cold Fish
You is a nice denizen of the deep, but “If Roel could convince 5 or 6 of we named Critics to sit on the Board . . .”, etc., etc.
Dream on, Oh “finned one”! Offering a totally new design for a hundred million, complete with new facilities, would be a ‘piece of cake’, compared to fixing the problems of Eclipse . . . no matter how cute and novel the present design.
‘Even you would lose all your scales within six months. A hundred years ago (give or take), as a teenager, we would talk about some car as being a great thing . . . just jack up the horn, and replace everything else . . . !
Do you go by “Mac” or “Fin”? . . . (My latest grandson is named “Finley” . . . a good Scottish name for a little lad). Mac! . . . we best stand back and watch from a safe distance. Sooner or later (probably sooner than later) things are going to fly . . . and I’m not referring to the little bird from ABQ.
Our great governor is now lamenting the dropping price of oil (by the barrel), as he has already (“in his dreams”) spent the windfall from earnings on ‘$150 per barrel’ of oil. (For those who may not know . . . New Mexico earns a lot of money from oil and gas . . . a politician’s dream come true.) So Mr. Bill Richardson may not be too ready to offer Eclipse any more tax money to keep them in town, so to speak! I have it from an extremely reliable source that the governor is going to be “sued” for spending that money on anything but education . . . but that’s a whole ‘nother story. (And, so far, we haven’t heard from the Mayor of Albuquerque . . . another who spends tax money like water, on the little bird.)
Well, enough of my comments . . . or I’m going to have to start charging royalties for my wit and wisdom . . . or seek employment as a writer for Jay Leno . . . or somethin’.
gadfly
(As I said, in “my” dreams!)
"Do you think that maybe Roel is telling the banks that EAC has 1600 orders?"
An experienced lender or investor wil not rely on what management says the orders are. He will diligently scrub the order book and verify to some degree that the orders are real.
What I'm wating for is for Ed to say he's not losing any sleep over Eclipse. That would be funny!:
"The last company I'm losing any sleep over is DayJet," Raburn said.
http://www.av8r.net/index.cfm?ContentBlockID=2ad08c0a-fce9-4a13-9c4f-d0efa41b17e1&
An experienced lender or investor wil not rely on what management says the orders are. He will diligently scrub the order book and verify to some degree that the orders are real.
Yes, back when the loans were made it was before DayJet had proven their business case was false, and most of those orders were from them. Since some banks had lent money to DayJet, the orders looked real.
Irrespective of that, it wouldn't do to have the Acting CEO publicly claiming 1600 (or more) orders at the same time as the banks figuring out that the order book is vaporware. That's my point, we don't know just what scam these people are up to, fooling the lenders, fooling the customers, fooling the vendors, fooling the City of Albuquerque or the State of New Mexico, or, just themselves.
Irrespective of that, it wouldn't do to have the Acting CEO publicly claiming 1600 (or more) orders at the same time as the banks figuring out that the order book is vaporware. That's my point, we don't know just what scam these people are up to, fooling the lenders, fooling the customers, fooling the vendors, fooling the City of Albuquerque or the State of New Mexico, or, just themselves.
I've got it! Roel will declare that the Eclipse is the perfect vehicle to transport hydrogen and will create Eclipse transport models with only seats for a pilot and co-pilot and the ability to carry things (mostly hot air). This will simultaneously take care of his billion dollar Russia/Japan plan as well as Eclipse's order book.
Dark Blossom of the Nederlands:
As they say, “So sad to be all alone in the world” . . . and the rest of us thought that maybe you had left us “all alone”. Where is “the Goat” . . . he was here not long ago!
Oh well, a few have made their presence known: “The Cold Fish” and the “Dark Blossom” . . . maybe a few more will show up . . . maybe even the one that remained “entertained” . . . “amused” . . . “insane” . . . something like that . . . and wasn’t there some medical type, always “down in the mouth” (so to speak) that found every criticism an affront to his mother . . . Oh yeh! . . . he fills “teeth”, and hails from Arizona or South Africa . . . one of those foreign countries.
There are those who work behind the scenes on our behalf, folks of “high caliber” . . . of which we owe much in gratitude, who put their money where their mouth is. And we can only say, “Thank you, for whatever you are doing on our behalf.” ‘Come August, we’ll get an update.
Well, the “old gadfly” will call it a day, if you don’t interrupt my long awaited nap.
gadfly
(Watch it there, kid . . . I know what you’re thinkin’)
(A footnote: When the man talked about the need to produce “1,600" aircraft, I personally think it was a “Barrack Hussein Obama” slip of the tongue . . . ‘Don’t say something not written in the script!)
I've got it! Roel will declare that the Eclipse is the perfect vehicle to transport hydrogen and will create Eclipse transport models with only seats for a pilot and co-pilot and the ability to carry things (mostly hot air). This will simultaneously take care of his billion dollar Russia/Japan plan as well as Eclipse's order book.
Dave is hereby officially nominated to be the new permanent CEO of Eclipse Aviation Corporation. He has successfully solved the puzzle that has eluded the best business minds in aviation for the past decade. Given how light hydrogen gas is, it is now an obvious and completely satisfactory solution to reveal that the Eclicpse 500 Very Light Jet is the ultimate transport mechanism for Very Light Gas!!
A footnote: When the man talked about the need to produce “1,600" aircraft, I personally think it was a “Barrack Hussein Obama” slip of the tongue . . . ‘Don’t say something not written in the script!
Maybe if was something offscript where he was thinking about the crazy combined numbers of the Eclipske and the ABQ plant. Something is going to fall big time and Roel is in on it. I think the Frankenjet was a Vern scam on the board that he did to try and keep his job so that he could have more years of excuses as to why Eclipse was generating red ink. Then again for the reason that Vern ran that scam, Roel might do it as well.
TBMs_R_Us . . . this is to you . . . and Dave . . . and the others that will read over your shoulder:
A very long time ago, I actually was the “star” in a play called, “Cheaters are Cheated” . . . I was in the fourth or fifth grade (I forget), but I still remember my lines, which are irrelevant at the moment. The bottom line is absolutely “2008". In the play, with a Chinese setting and costume, at Emerson Elementary Grammar School, Burbank, California, the story line involved some dealers in silver . . . that bought a certain amount of silver, finding that the amount was much more than claimed . . . and so the deal was “made” (thinking that they had gotten far more than the claimed value). When the buyers, thinking they had made a “killing” on stupid peasants, cut into the blocks of “silver” found they had bought lead, complained to the Chinese police, declared the weight that they had purchased . . . the original weight was not the same and the fraud was exposed, and the cheaters (buyers) paid the price.
Unfortunately, we have a “flock” of buyers who have innocently purchased the ‘silver’ . . . it looked too good to be true . . . and guess what? . . . It is!
Well, little did I know back then . . . what? . . . six decades? (Time flies when you’re having fun) . . . I would be learning how to identify something happening in a land (New Mexico . . . ‘never heard of it before) and time (which I never dreamed I would see . . . having already decided on a life that is not conducive to a long life . . . submarines, flying, etc.).
Well, there’s an anecdote . . . ‘nothing much, but the experience that allows one to evaluate and “see” or “smell” a fraud coming headlong right down the freeway, many miles before it reaches town. (In this case, “town” is “Albuquerque, New Mexico”)
gadfly
(The down side is that many innocent or gullible people get caught in the mayhem . . . and ultimately pay a price. For them, the many who depend on a monthly or bi-weekly check . . . for them, we grieve.)
I think the only realistic hope is for a sale to a large manufacturing firm with a history of aviation in at least part of the company and deep pockets. Mitsubishi, Fiat, and BMW come to mind. I am sure there are many others. BMW did an amazing turn-around of the Cooper automobile plant. Nothing less is needed here. This business of ETIRC, ETIRC Aviation, and factories on the Volga are just nonsense. There would be temporary layoffs while the airplane is substantailly re-engineered, but maybe it is salvageable and would lead to better follow-ons. For the sake of the worker bees at ABQ I hope it happens.
I think the only realistic hope is for a sale to a large manufacturing firm with a history of aviation in at least part of the company and deep pockets. Mitsubishi, Fiat, and BMW come to mind.
What about the Carlyle Group through Vought Aircraft?
Over the years of aviation history, there have been many aircraft that were easy to fly . . . and performed a wonderful service. Some, like the Luscombe “Silvaire” seemed to float forever . . . but they didn’t make it. Stinson was another . . . the “Reliant”, “Voyager”. . . and the list goes on and on. ‘Just because a single model, or a few, is a delight to fly, does not make it a lasting success. To some, even the “little bird from ABQ” is at times, a “fun” thing to fly.
But it takes far more than a few events to prove success. And far beyond that, it takes an organization of honest people to support the flying machine in question . . . what a question to propose, concerning Eclipse! (“Honesty” . . . ‘almost sorry I mentioned it, as “honesty” and “Eclipse” in the same document is what is called an “oxymoron”.)
It is my opinion that Eclipse has never, as in “not once”, had a reliable organization supporting the ‘bird’, nor a competent design staff, nor a competent manufacturing organization, nor a full understanding of metallurgy, machining, testing (Do Not Forget the Value of Complete Testing), and manufacturing/assembly . . . undergirding the organization. It was really all over before it began.
A new staff? . . . new names? . . . new organization? Sorry, folks, but “It’s the product, stupid!” . . . You do not have a product! . . . nor a completely different organization to support that product. The "old" will infect the "new", no matter how much disinfectant you use.
Others have said it clearly . . . and I’ll echo their remark: The Eclipse E500 is Dead On Arrival . . . “DOA”. It’s 1,200 pounds overweight, lacks redundant controls, lacks a design for heavy industrial use . . . the list is far too long to begin, let alone, “finish”.
gadfly
nCW,
"it is called CUSTOMER FOCUS - try it."
they did their bramd of this - its called "sell'em a bill of goods, and deliver whatever you want"...
Pray no one shows with anything close.
They were wrong... and they screwed their die-hards... I would venture to say, they knew it all along... the price was the advantage, and the price was complete BS.
They fleeced their customers, and the focused on exactly this.
"Do you think that maybe Roel is telling the banks that EAC has 1600 orders? You can go to the well empty handed only so many times before the jig is up."
Roel IS the BANK
"This whole thing with firing Vern and putting Roel in could well be a charade:
Who would put Roel in... except Roel..
wake up
Its a circle jerk
"the debt holders forced him out"
AND
gave him a job in Europe...
circle jerk
look...
really soon, someone is going to ask a few simple wquestions, and the Vern-Roel story will be out... and it will look like a beefy Vern-Nimbus story...
PAy for X with Y paper... the debt-holder is solidifying the participation of Raburn in the surviving company through liens and licenses...
The board had no choice, and Pieper is playing maestro... and Vern is playing puppeteer... soon, Ed will magically be "saved"...
"in one hour he will go fishing"
for money for ertick... thats what he did for 11 years at EAC, and he's damn good at it.
PS. if this business made any sense, today, Gates would pony up another $100M...
But, I sense it does not qualify for his personal investment criteria nor the Bill and Melinda Gates Foundation either.
The fact is that there are no, as in zero, takers for an E500 at $2.1M. If there were, why is Eclipse offering brand new E500's for sale on Controller for $1.85M? In fact, there don't appear to be any takers at that price either.
Eclipse has already picked the "low hanging fruit" i.e. Mike Press, Ken, Alexa, ex421jockey and the rest. These were the guys that got in early, and were so focused on getting a "deal" on a brand new jet that they were willing to except anything that Eclipse delivered just to be able to own one.
Given the choice, I imagine a lot of the 200+ owners would now gladly give back their Eclipse's for less than what they paid for them. One owner has had his Eclipse in the shop for 2-1/2 months out of the last 10 - to say it is tethered to Albuquerque would be an understatement.
New buyers, if they have half a brain, will do a little due-diligence before they purchase. It won't take much before they find out just how much risk they are taking on. It's one thing to take a risk at $1 million, quite another at $1.9 million. You're paying double what your buddy who got in early did, and for the same product with an even more uncertain future.
No matter how much you send to Eclipse, it had better be "mad money" that you aren't going to need later on. There is a good chance that you could suffer a 100% loss if the FAA ends up grounding the fleet after their upcoming investigation.
From a Wall Street Journal article today (7/29) on the ouster of Vern. Quote from Vern "a fair and equitable settlement was made with the board" regarding his departure. Does anyone know if Vern had a parachute and did this trigger it? Could the board have agreed to buy him off? Or is this more Vern BS?
Usual fluff (BS) was in the article...what innovative technology...3.4 billion in orders, etc.
Given today's level of media research one can see how the Enron's just keep rolling on! Don't they have any shame!
Ya'll are forgetting a big detail: the next FAA audit is set to begin on August 19th. Getting rid of Vern may be like window dressing or redoing all the deck chairs on the Titanic... But, this could have political motives too in terms of how EAC deals with the FAA. Anyone remember that pesky throttle quad issue?
Truth be told, there are several pending Letters of Investigation coming from the FAA or already delivered to EAC. AS a current **employee** with EAC, they have been moving some key people around, in theory, to remove the problem people from the problem areas.
The Eclipse production system is a joke especially for those of us that have (gasp!) a college-level understanding of Lean Production. Every day I see them scrapping $8,000 windows yet they don't have the $$$ to develop proper glass versions. Hopefully, Peg will be the next executive to get fired since I know she is full of shit when she claimed, this week, another $4.1 million in excess inventory had been eliminated. But then I remind myself that the Board can't fire all the inept executives at once since no one would be left to run the company...
E.D.T.
From a Wall Street Journal article today (7/29) on the ouster of Vern. Quote from Vern "a fair and equitable settlement was made with the board" regarding his departure. Does anyone know if Vern had a parachute and did this trigger it? Could the board have agreed to buy him off? Or is this more Vern BS?
Actually if you read the Eclipse NDA in the blogger lawsuit, it says that Vern and the CFO are the only ones who aren't "at will" employees. Vern couldn't be fired without paying him off.
Roel IS the BANK
Roel is a middleman. It would be HUGE news if ETIRC Aviation/Ecdlipse was funded with the majority of Roel's personal fortune rather than Roel acting as a middleman for european investors. If this is Roel's personal fortune at stake, things could get extremely interesting and it could call into question either how much of a schemer Roel is and/or how much of a koolaid drinker Roel is with this.
Dvae,
he agreed to it in a previous round... and he likes it..
Why stay with a failed business, when you can move onto bigger and better scams.... as Co chair of the Peep-show
EDT,
thanks.
Someone really smart here clamed EAC could produce the E500 for 85% of the cost of the Mustang... I said if they were Cessna.
They clearly are not.
I suspect the B/E price all things considered on the e500, on a good day is closer to $3M than $2M... and probably NORTH of $3M.
You just do not get there by avoiding the basics... and EAC is a very immature company with a ton of problems. They are no Cessna.
I am not joking.
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