I got this from a 'reliable source' during today (Thursday 11th) and pass it on. As always, it's nice to have a first hand account of these events, in a timely manner.
Shane
Thursday 11th 18.15 GMT
Formation of the Unsecured Creditors Committee
A very interesting day, with a few unexpected surprises.
Per procedure, on Monday December 8th the US Trustee sponsored the formation of the "Official Committee of Unsecured Creditors". There were about 50 people in the conference room when I slipped among those standing in the back. The group was probably 25% creditors or proxies, 50% attorneys and accountants looking to get hired by the committee, and 25% interested gawkers.
The Debtors Team (saying Debtor is so much more apt that saying Eclipse) and the Trial Attorney and Analyst from the US Trustee's office took their place at head table. The Trial Attorney provided a brief introduction on process, and then the Debtors were asked to provide a statement.
To set the scene, Mark Borseth (Debtor CEO) and Bruce Castle (Debtor "In"-House Counsel) were flanked by their hired guns from Allen & Overy ("Out"-House counsel from NYC) and Young Conaway (local counsel). Borseth looked like it was an imposition that he had to be there, and slouched in his seat like my 6th grader. Castle had that deer in the headlights look as he surveyed the standing room crowd. Such a struggle to fly first class from Albuquerque and stay at the Four Seasons with your $700 per hour lawyers.
The Debtors' attorneys feigned having a stack of briefs but in reality had nothing prepared. They spoke maybe 75-100 words TOTAL, lasting maybe 30-45 seconds. The only question pertained the Debtors' requested deadline for objections to their proposed Sale Procedures. Trying to appear magnanimous, the Debtors' Council agreed to another day or day and a half. But in reality he came off as even more arrogant.
At that point, the Debtors Team was asked to leave the room, and the Trial Attorney set out to form the committee. Present were a few big creditors (Hampson, Precision Aerostructures, Pratt & Whitney) and maybe one or two smaller ones. Represented by lawyers/proxy were a few more big creditors (DayJet, LeBarge, etc.) and possibly a few owners.
Notably absent were any actual owners or depositors of any denomination. More notably absent was any significant response to the questionnaire sent to the 20 largest creditors, but available to all. The guys who have made noise for years, and are clammoring to get what is owed them couldn't be bothered to make a day trip to Wilmington.
The Trial Attorney spent a little over 2 hours interviewing the creditors that showed up in person, and calling those that responded to the questionnaire. The Trial Attorney and Debtors Team returned around 2:00 pm, Borseth resumed his slump, and the committee members were announced.
The rest of us were kicked out of the room while the committee had a chance to ask questions of the Debtors. Must have been really grueling, as the Debtors were coming out the door after maybe 3 minutes.
At that point, the committee set about interviewing the law firms and accountancy firms that came in search of work. Kind of like ambulance chasers for the bankruptcy crowd. We all waited in the hallway while each of seven or eight firms made their pitch. In the end, and at around 4:30 pm, the committee chose Morrison-Foerester (attorneys) and Chanin Capital (accountants).
The discussion in the hallway was quite spirited and informative. Remember that except for us few lurkers, they were all lawyers, CPAs, etc.
>> Why didn't any owners or depositors show up? Possibly they felt that Tuesday's hearing on forming separate committees for owners, depositors, etc. would be successful. In the end, the Trustee selected three owners and/or depositors, but none of them were present, much less active in the fight for standing and ultimate recovery. The opinion was that the vocal owners and depositors could have had BOTH three seats on the basic committee AND the opportunity for successful motions the next day.
>> Did everyone see that the Debtors' filings completely ignored the Unsecured Creditors Committee? How could they do that? The UCC is standard, especially in this type of case. Arrogance pure and simple! The Debtors spent pages detailing how warrantee claimants, depositors, JetComplete subscribers, and even recent employees were now considered unsecured creditors, but didn't even mention that group in the filings.
>> What is with the Debtors' proposed timeline? They want to close the sale in 26 business days from the filing, a period that includes three federal holidays and two extended religious holidays. They also claim to be aggressively marketing the company. Yeah right. Every lawyer in the hallway had a stack of objections in hand. All vowed to make that farce get a serious shake up.
>> Who really believes that Pieper and Mann are disassociated, arms length, buyers? While most didn't have the depth of knowledge yet, they all knew about Roel and his son at ETIRC, Roel and his partner on the Eclipse BoD, the play of Al Mann over the years, the Russians, the supposed Spaniards, the basketball team, etc. The discussions of his forcing the company into bankruptcy just to get the assets at the firs sale were rampant. They all knew of the recent EASA certification, and its greater value in Europe than in the US.
>> Who devised the financing schemes used over the years? Looks like Al Mann put money in, and then took lots of money out over the years. Looks like Roel Pieper had convertible debt, which converted again, and again. Maybe the secured creditors are not so secure. If there were note conversions for some, should it have applied to all? Plus, the supposed $28M offered by EclipseJet was felt to be funny money. Debtors expect to get the $20M in DIP returned, along with $1M in expenses, a $4M break-up fee, and $3M+ in other shenanigans. Offer $28M in cash and list $28M in refunds in the same filing, now that is arrogant and stupid.
>> Who was the "other bidder" that everyone has heard exists? It supposedly is lead by a former Eclipse executive.
In the end, the opinion among the lawyers and accountants waiting in the hallway was that for anyone to get anything, the company must be sold and reorganized, and not allowed to drift into liquidation. There is money in the mix, likely money to recover from the coffers of Al Mann and other Board members, the Russian money, the ETIRC resources, etc.
The only thing needed to unravel the whole mess is time. The Debtors know that and are trying to ram the process through and get out of town (aka the USA) before the law comes a calling. The creditors know that and are trying to slow down the train so that sunshine may prevail.
Best legal opinion we overheard was to petition the Court for a Post Hoc valuation and settlement. Allow the sale to go through, escrow the cash purchase amount (so it isn't useable to immediately pay RP's moving trucks), value the company after the "substantial outside investment" closes, and pay off all of the creditors and owners.
It just might work.
That was from yet another 'friend of the blog', which I'm sure you all will join me in expressing our thanks.
The (now second) item reached me during the 'night' of Wednesday 10th December. I'm not in a position to recommend any course of action, especially to those of you who've hired a lawyer, but this chap seems to offer hope. He's also had contact from several of you, especially readers of the blog, who may have struggled to find a US based firm to take on your case.
A small note for those of you tempted to rely on email. In this spam filled era, it might be an idea to send a fax or make a phone call, as this process is very time critical and you don't want to get lost in the crowd.
Eclipse 10 Percent Deposit Holders Have the Opportunity to Recoup Funds
We would like to thank Shane Price for posting our prior message and giving the motion to appoint a refund creditor's committee the best chance of success possible. The size of this blog's readership was plainly apparent from the many email responses to that message, a number of which spanned the globe. We hope Shane will post this further message.
As most of you know, the Judge was unwilling to appoint a committee of refund deposit holders at the expense of the bankruptcy estate. However, the Judge appeared receptive to our argument that Eclipse held the refunded deposits in trust for the 10% deposit holders. Simply put, our legal theory is that once the deposit holder timely elected a refund of his or her money in response to the June 2008 letter from Eclipse, that money no longer belonged to Eclipse and Eclipse could not spend it. We argue that those funds should not have been spent on operating expenses and should have been segregated and returned. We believe the theory to be a sound one and therefore, we have decided to proceed and see if there is suitable interest on the part of the 10% deposit holders to collectively pool their resources to file a complaint against Eclipse based upon our constructive trust theory and various other claims. At this juncture, we have indications of interest from about 40 refund deposit holders. Further support would be extremely helpful. If you are an individual that made a timely election for a refund of your deposit in response to the June 6, 2008 letter from Vern Raburn, which provided you with that option, yet you did not receive those funds, we would like to present an avenue for you to recoup those funds. Please email me at tmcculloch@gordonrees.com for further information as soon as possible.
Once again, we thank Shane Price for allowing us a voice on his widely read forum.
Sincerely,
Timothy McCulloch/ Senior Counsel
Gordon & Rees LLP
111 W. Monroe Street, Suite 1111
Phoenix, AZ 85003
email: tmcculloch@gordonrees.com
info: my vCard
Main Phone: (602) 794-2460
Direct Phone: (602) 794-2467
Mobile: (602) 568-5291
Fax: (602) 265-4716
And he says nice things about me!
A small note for those of you tempted to rely on email. In this spam filled era, it might be an idea to send a fax or make a phone call, as this process is very time critical and you don't want to get lost in the crowd.
So, if you are a '10% depositor who requested a refund', give Tim a whirl. After all, you've nothing to lose at this stage....
Now, if there are other groups out there who are representing suppliers, staff or anyone else with an interest in EAC, feel free to contact the blog.
eclipsecriticng@gmail.com
I'll be happy to help, if I can. Just remember I live in Ireland (in the GMT zone), and I travel a fair bit....
Shane
07.45 GMT Thursday 11th December 2008
Eclipse 10 Percent Deposit Holders Have the Opportunity to Recoup Funds
We would like to thank Shane Price for posting our prior message and giving the motion to appoint a refund creditor's committee the best chance of success possible. The size of this blog's readership was plainly apparent from the many email responses to that message, a number of which spanned the globe. We hope Shane will post this further message.
As most of you know, the Judge was unwilling to appoint a committee of refund deposit holders at the expense of the bankruptcy estate. However, the Judge appeared receptive to our argument that Eclipse held the refunded deposits in trust for the 10% deposit holders. Simply put, our legal theory is that once the deposit holder timely elected a refund of his or her money in response to the June 2008 letter from Eclipse, that money no longer belonged to Eclipse and Eclipse could not spend it. We argue that those funds should not have been spent on operating expenses and should have been segregated and returned. We believe the theory to be a sound one and therefore, we have decided to proceed and see if there is suitable interest on the part of the 10% deposit holders to collectively pool their resources to file a complaint against Eclipse based upon our constructive trust theory and various other claims. At this juncture, we have indications of interest from about 40 refund deposit holders. Further support would be extremely helpful. If you are an individual that made a timely election for a refund of your deposit in response to the June 6, 2008 letter from Vern Raburn, which provided you with that option, yet you did not receive those funds, we would like to present an avenue for you to recoup those funds. Please email me at tmcculloch@gordonrees.com for further information as soon as possible.
Once again, we thank Shane Price for allowing us a voice on his widely read forum.
Sincerely,
Timothy McCulloch/ Senior Counsel
Gordon & Rees LLP
111 W. Monroe Street, Suite 1111
Phoenix, AZ 85003
email: tmcculloch@gordonrees.com
info: my vCard
Main Phone: (602) 794-2460
Direct Phone: (602) 794-2467
Mobile: (602) 568-5291
Fax: (602) 265-4716
349 comments:
1 – 200 of 349 Newer› Newest»me thinks this is not going to go the way Pieper thought...
a lot of room in this situation for a time consuming/money consuming legal process...
Baron, its not nearly as cut-and-dry as you imagined or Pieper hoped.
MAKE MORE NOISE...
Either Pieper has a lot of money and you should get yours... OR he doesn't and there's no hope anyway.
You have nothing to lose... make noise
Now we will see what Pieper is made of... my sense is, he'll cut and run, but perhaps he has visions of exit-strategies dancing in his head...
t'is the season, you know.
Hey Gadfly,
Two of your intertial reels (ex 767) are in my friends wooden homebuilt. Thanks.
Has the judge agreed to any more court action till the January decision date?
Good luck 10% refund requesters. Why did you all sue as soon as they didn't pay up?
What happens with those law suites which were started before TU?
Oooookay.
I'm getting a good education about this whole BK thing.
But to me, there are SO many issues, how can this be solved in a few weeks of intermittent hearings, with the holidays intervening?
It would seem like this would take six months to get sorted out. I don't think the DIP team will keep the cash incineration furnaces hot for that long.
Is there some way the judge can just go, "okay whatever, this is what's going to happen- sue the crap out of 'em later if you don't like it"?
I just don't see how, with the investors, suppliers, and customers, this can be wrapped up quickly.
And I don't see any more trainloads of Franklins being dropped off at Double Eagle until it is resolved.
And I don't see the DIP guys dipping any deeper with a quick resolution.
???
...And Furthermore...
I tend to think RP has a viable plan (or at least one he hoped for)
, or else he wouldn't keep the cash incinerators on hot/standby-idle.
BTDT
"the scam by Tony Fox in the early 80s and in fact was at his factory in a suburb of Minneapolis where the windows and doors to the "factory" area were covered with paint and yet there were the sounds of air drills and rivet guns emanating in the distance that would make one think there was actually a factory".
-- BINGO --
THAT is EXACTLY what I thought Wedge was doing.
The insane rush to production, while the airplane was still being developed, and the grossly overstaffed ramp up, I thought were nothing but posturing. To create the illusion of progress. To facilitate a over-hyped IPO. And then dump it on someone, and let the house of cards collapse.
During Wedge's time, that probably peaked at around $4M per week for staff. Now, maybe half that.
Don't get me wrong- I realize the benefits created, for thousands of people. And if I'm wrong, I will apologize in person on visiting day.
But I can't help but think/wonder, especially with the limbo status for the past four months, but yet no furloughs,
Are the employees just window dressing for some BK machinations?
----------------------------------
I have nothing but respect and admiration for Mr. Mann, I think he is the one keeping the doors open, and I think he is doing it for humanitarian reasons.
So, discounting his involvement with either Wedge or RP, I am still left with this puzzling conundrum of ?painted windows and recorded sounds?
And, BTW, I'm NOT advocating furloughs, and I hope there is a good plan being worked,
It's just as BTDT says,
"Got to admit Tony (fill in the blank ____________) was good at the "fluff" part of sales".
---------------------------------
Fox Jet
I rather liked this- didn't know much about it, just research- it's been mentioned on the blog before...
Let me get this straight. In order for the deposit holders to see any of their 10% deposits, the judge has to rule that this money was not Eclipse's to spend, right?
Which means that whoever Eclipse paid with this money, wasn't entitled to receive it, right?
Which mean they have to return it to the court, so that it can be paid to it's rightful owner?
Which means instead of the deposit holder taking the hit, the vendors or whomever else EAC paid with that money will be forced to return it and take a loss.
A make believe aircraft factory, pretending to "complete" (tm eclipse) aeroplanes, made with leftover parts from long gone suppliers for non-existant customers.
Guys, please speak quietly. The Pied piper is playing his magic tune, trying to keep the smoke from disappating and the mirrors reflecting what the diehards have convinced themselves they can see.
The wedge was much better at weaving this spell, but RP - The repo mann, doesn't have to get the masses to believe, he just has to get the judge to believe and then the magical russian "greater fool" to believe long enough to get the cheque cleared.
You guys really aren't helping, blowing holes in the smoke screen, putting truth serum in the koolaid, and shining the cold hard light of truth on the scintillating image in the mirror.
Niner zulu wrote, "Let me get this straight. In order for the deposit holders to see any of their 10% deposits, the judge has to rule that this money was not Eclipse's to spend...the vendors or whomever else EAC paid with that money will be forced to return it and take a loss....right?"
Actually, I think this approach is interesting because it opens up some additional money sources. The filed motion contends that there was a fiduciary responsibility to the refund seekers. If they're right about that, then breach of the fiduciary responsibility could open up additional sources of funding such as Directors & Officers Liability insurance and personal assets of the directors and officers.
Ken
The real question about the depositors I think will be whether or not Eclipse 'represented' that deposit monies were segregated for that purpose or not. Seems to me that after first flight, and a few other key milestones, that is not the case.
So then it comes down to what a 'reasonable' person would believe/expect and given Eclipse's 'persecution' by this blog and a few key analysts and reporters, I think EAC actually stands a good chance to say - 'come on judge, clearly we were struggling for years, even when customer X made their deposit, they had no reasonable expectation that their deposit was not at-risk' - or something similar.
This is playing out almost exactly as expected by we 'haters' - and that is too bad, I was secretly hoping that we were being too hard on EAC and the true believers.
My futures investment in Vaseline however, is about to pay off I fear.
#Actually, I think this approach is interesting because it opens up some additional money sources#
Kenny , actually , in your position , this is short-term position ...
yes , it "may" add some cash for the victims with ten % ...
but let's imagine that RP has a plan (other than throwing the baby with the baby's bath water ...)
it could be assumed that the plan is to try to keep as much as possible the furnishers aboard ( they are about the only one one to be crucial now...)
in order to do so they have to take the minimal losses , so be in the first position in the BK ...
with this move (don't get me wrong , this is the best news about EAC in a while and that would be only fair !) the furnishers are going to feel it ...
how many are going to fold the tent and bye-bye Eclipse ? (assuming there is enough furnishers left who haven't yet lost enough to be willing to keep on playing ...)
even if the Russian Plot could be working and some russian suppliers to join , it would take ages to arrive to the same point due to adjustments , paperworks , re-cert. , etc ..etc...
jeopardizing even more the whole thing !
in the end leaving you a very nice and expensive anchor ...
it is a very difficult choice : get something now and loose all later ; getting nothing now with the risk of loosing all after ...
i am thinking along Billy , the time of the year was probably a trick to avoid a careful examination and a green light from judge ...!
as for personal assets from RP , you can wave good-bye this idea ...
Etrick being from Luxembourg , it would probably cost more in legal fees than it could bring you ...!
freedom:
the magical russian "greater fool" to believe long enough to get the cheque cleared
i wonder if we are talking about seconds here ...
i doubt illusion could last much longer ....
Niner zulu wrote, "Let me get this straight. In order for the deposit holders to see any of their 10% deposits, the judge has to rule that this money was not Eclipse's to spend...the vendors or whomever else EAC paid with that money will be forced to return it and take a loss....right?
and then Ken wrote, “… If they're right about that, then breach of the fiduciary responsibility could open up additional sources of funding such as Directors & Officers Liability insurance and personal assets of the directors and officers.
That path must be followed aggressively.
Eclipse stopped paying many vendors right around the AirVenture takeover time, and then negotiated alternative payment plans just after Labor Day. Each of those vendors had a contractual right to receive that money.
But … every executive who departed with cash along with and after Wedge, and every dollar RP, AM, etc. received for pay, travel, whatever, is money that should go into the pot for the 10% folks, and others.
How about the owners who’s airplanes were disassembled by the service centers after the company knew it was going bankrupt, and then charged prevailing T&M to reassemble them?
There are likely debt superiority arguments that these and other constituencies have.
I should have said ...
Each of those vendors had a contractual right to receive that money that predates the June 2008 refund offers.
here a brief from VEB (the bank supposed to lend for building ULWW) from the latest Board-Committee on date of Today
- Thank you. And one more thing. You said that you would reconsider some of investment projects you had already approved?
Vladimir DMITRIEV: Among other things we may…
- You'll quit some projects?
Vladimir DMITRIEV: I do not rule out the possibility of reconsidering decisions on those projects, which have been approved but not accepted for financing. So, in the most immediate future, actually, in the coming two weeks (our experts have already agreed upon many things with line ministries) we have to examine our loan portfolio in the most serious way for making final decisions and for the Supervisory Board to approve them with regard to projects already approved and, more so, accepted for financing but with regard to which no corporate decisions have made.
the bank is facing more and more difficulties as the situation in Russia is worsening (Russia being heavily dependent on Foreign cash influx and out flux) and the dramatic drop in state and country revenue with Oil price divided by nearly 3 in a few months ...
"If they're right about that, then breach of the fiduciary responsibility could open up additional sources of funding such as Directors & Officers Liability insurance and personal assets of the directors and officers."
KEN, Ken, ken...
NOW YOU ARE WHISTL'N DIXIE, MAN!!!
This is precisely where this needs to go.
BTW, riddle me this:
Q- When is an aircraft deposit, not an aircraft deposit?
A- When its not used to produce an aircraft.
OR-
Q- When is an order book of 2700 orders backed by depsosits, not an order book of 270 orders backed by deposits?
A- When there really are not 2700 orders backed by deposits
OR-
Q- When is first flight milestone of an aircraft NOT first flight of an aircraft?
A- When the aircraft flown as trigger for the release of deposits, NOT the aircraft to be delivered.
How is all this relevant...
I believe you will see... soon, arguments to a judge will include the above, and you will hear words like breach, fraud, detrimental relaiance, misprepresentation, breach of contract... and yes, someone is going to have to hire their own personal lawyer.
Baron asked in the previous thread a question about what do you call it when the debter and creditor are the same?
In this case, I call it the Mad Hatter... because the guy needs to convince the judge he was wearing this hat when doing this, and that hat when he was doing that - AND, he kept it all nice and neat.
Not going to be easy. See, RP raised the financing for the buyout of EAC as financing for a Russian factory for EAC. This is precisely what he said only a few short weeks before BK.
So? This money belongs to EAC already... some might say.
I think this will take a long time to resolve, and RP will cut and run... unless he has a grand plan for an exit, and he is willing to support EAC and his own personal legal team to get there.
We'll know things are getting really interesting when we begin to see Vern's name... I can only imagine the finger-pointing and the size of the wheels on the bus running over RP...
"Each of those vendors had a contractual right to receive that money that predates the June 2008 refund offers."
I do not believe this is relevant - the funds were converted from a trust situation, to a payment, when they knew the funds belonged to the depositor... remember, the depositor made a deposit on an aircraft, which was refundable.
Converting this money was not proper, IMO.
A judge will sort this out, soon - NOT!!!
I'm not a BK expert (thankfully!) but I believe the court can order only those companies who received money from EAC within 90 days prior to the BK filing to return it to the court.
In other words, if a vendor sold components or other services to Eclipse within that 90 day period and received money for them, too bad for that vendor. That is a good reason why you don't sell products to any company you think might go BK - because you just might have to pay it back to the court AND have no recourse to get any payment back except to stand in line with the rest of the creditors.
I make it a point not to sell anything to any company who is even remotely having financial problems, whether they pay in advance or not, because if they declare BK you have to pay it all back and it's a total loss. My question is: what were these vendor's thinking?
This is something all of us should keep in mind, especially now with so many companies failing.
A judge will sort this out, soon - NOT!!!
Airtaximan, I believe you are right. This will drag on an on.
I don't know if "Light at the end of the tunnel?" is appropriate for Shane's post. We don't even know where the train station is, much less which train or track we're supposed to board once we get there and then it's a long way to any tunnel.
Meanwhile, the teams of lawyers will continue to milk the position holders and suck all available cash out of EAC until there is nothing left.
Here are the titles of some of the recent BK filings. I haven't read them:
Response / Objection Of The Official Committee Of Unsecured Creditors To Debtors' Sale Motion Filed by Proposed counsel to the Official Committee of Unsecured Creditors of Eclipse Aviation Corporation
Limited Objection Of TW Metals, Inc. To Debtors': (1) Emergency Motion Pursuant To Sections 105(a), 361, 362, 363 And 552 Of The Bankruptcy Code And Bankruptcy Rule 4001(b) For Entry Of Interim And Final Orders Approving The Stipulation And Agreed Order: (a) Authorizing Use Of Cash Collateral; (b) Granting Adequate Protection; And (c) Scheduling A Final Hearing On The Motion; And (2) Motion (a) For Authorization To (i) Obtain Postpetition Financing Pursuant To 11 U.S.C. sec. 364 And (ii) Grant Priming Liens And Superpriority Claims To The DIP Lenders Pursuant To 11 U.S.C. sec. 364(c) And (d); And (b) To Schedule A Final Hearing Pursuant To Bankruptcy Rule 4001 Filed by TW Metals, Inc
Objection to (I) Emergency Motion of the Debtors Pursuant to Sections 105(a), 361, 362, 363 and 552 of the Bankruptcy Code and Bankruptcy Rule 4001(b) for Entry of Interim and Final Orders Approving the Stipulation and Agreed Order: (A) Authorizing Use of Cash Collateral, (B) Granting Adequate Protection; and (C) Scheduling a Final Hearing on the Motion (the "Cash Collateral Motion"); and (II) Motion of Debtors (A) for Authorization to (I) Obtain Postpetition Financing Pursuant to 11 U.S.C. 364 and (II) Grant Priming Liens and Superpriority Claims to the DIP Lenders Pursuant to 11 U.S.C. §364(c) and (d); and (B) to Schedule A Final Hearing Pursuant to Bankruptcy Rule 4001 (the "DIP Financing Motion") (related document(s) 10 , 11 , 30 , 31 ) Filed by Aircraft Purchasers
Notice of Agenda of Matters Scheduled for Hearing Filed by Eclipse Aviation Corporation. Hearing scheduled for 12/15/2008 at 12:30 PM at US Bankruptcy Court, 824 Market St., 5th Fl., Courtroom #4, Wilmington, Delaware.
Response / Objection Of The Official Committee Of Unsecured Creditors To Motions Of The Debtors For Entry Of Interim And Final Orders (I) Approving Stipulation And Order Authorizing Use Of Cash Collateral And (Ii) Authorizing Debtor In Possession Financing Filed by Proposed counsel to the Official Committee of Unsecured Creditors of Eclipse Aviation Corporation
I don't know if "Light at the end of the tunnel?" is appropriate for Shane's post. We don't even know where the train station is, much less which train or track we're supposed to board once we get there and then it's a long way to any tunnel.
I think it depends on how much someone wants to fight. Roel (as ETIRC) says he didn't force Eclipse to go BK, but if you read the APA from Roel/ETIRC, BK is required. Also clearly Roel/ETIRC has been working on taking over Eclipse ever since Roel/Eclipse has been CEO. Roel made it so slick and so clearly planned out, I think it would be hard for Roel/Eclipse/ETIRC to show that everything was arm's length. Also the bulk of the financing comes from a well-publicized deal that happened pre-BK, so the very nature of the financing calls into question how Roel is fulfilling his Eclipse fiduciary responsibilities as Chairman/CEO. I'd also like to know about the DIP financing if it comes from the Russian "license fees" that Eclipse talked about and if the DIP isn't coming from the "license fees," what happened to all that money that Eclipse talked up.
9Z and ATM,
"Airtaximan, I believe you are right. This will drag on an on...
Meanwhile, the teams of lawyers will continue to milk the position holders and suck all available cash out of EAC until there is nothing left".
?This is where the posturing with an artificially high employee head count come in.
?? I think the court can consider "the larger good", e.g., keep the factory running, regardless of near-term financial refund demands, for the benefit of the workforce and fielded airplane operators. (Both arguments which EAC would support).
NZ,
I think Shane meant smething to the effect that NOW we'll begin seeing what's really going on over there.
There's been a lot of "tunnel vision" and a lot of misinformation, and denial... IMO.
Now we'll finally get some facts... and they ARE coming out.
Just the revelation they blew $3B was something no one wanted to accept.
I have stated for over a year it was north of $2B... and many folks thought I was nuts.
There are many issues which RP never thought would see the light of day, which are now coming to light.
Makes for interesting reading...
bil...
there's nothing to build, no customers... and a huge mess. Do you really think the judge will try to keep the factory open?
anyone have a clue what these folks are doing over there now anyways?
I see a reason to keep max 200 folks to support the fleet at the expense of the owners. That's about it.
ATM,
That's what's puzzling- I think they still have a headcount of 800-900. What the heck is going on-?? crating everything up for shipment to Russia, or shredding and burning documents? (I wonder if the incinerator is a "dual fuel" machine?).
I simply cannot imagine what's going on- unless it is converting the line over to the ConJet...
(It would be nice if the ABQ Journal asked some questions once in a while).
??Waiting for some bailout from Goatee-d Billy (no relation, thanks- the toady ex-govenor, soon to be secretary of pork?)
Bill (ions? :) Richardson
What's that? 4 or 5 $Billion??
Not to rain on anyones parade but as for the 10% deposit holders and the statement from Counsel regarding "legal theory". Wonder where that is defined in a law text.
Good luck to all.
UPDATE ONE IS UP
Interesting report from the actual hearings, from a 'friend of the blog'.
Dave,
Check your inbox please, when you have a chance.
Shane
Zis,
We are in violent agreement, EAC did not, IIRC, ever suggest the deposit monies were being treated specially except for prior to first flight, and perhaps the performance milestones.
If those folks demanded refunds and have not been satisfied I really don't see a difference with anyone else who has not been satisfied.
Folks who did not negotiate their own purchase agreements/deposit agreements or walk away when the ridiculously one-sided EAC documents were presented probably do not have a leg to stand on - it is not the court's business to protect you from yourself.
I'm actually a bit disappointed with you lot.
The 'Light the end of the tunnel?' has a traditional response:-
'No, it's a train coming the other way....'
Come on guys, get with the program!
Actually, when I woke up to this email (in the middle of 'your' night) my immediate reaction was 'I hope nobody withdraws their refund request thinking this might allow EAC to survive'.
Shane
Such a struggle to fly first class from Albuquerque and stay at the Four Seasons with your $700 per hour lawyers.
Yep, the lawyers are going to milk this thing for every penny they can. They will be the ONLY winners here. They get paid by the hour, including sleep time in their hotel, sitting in First Class, ordering coffee at Starbucks, eating dinner at Morton's with a nice bottle of Cab (for which they must be reimbursed, of course...)
I wish there were some hope that could be offered to the owners/creditors/position holders, but we've seen this same type of thing happen time after time and the outcome is always the same - only the lawyers win.
My advice, worth what you pay for it, is to write off the loss on your "business" aircraft and hopefully offset other taxable income, or carry the loss forward in a corporation until such time as you may need it. Any good tax person can set this up and document it accordingly. But don't throw good money after paying greedy lawyers to chase phantom refunds because you'll only prolong the agony. Move forward, and don't even look in the rear view mirrow.
"If those folks demanded refunds and have not been satisfied I really don't see a difference with anyone else who has not been satisfied."
FACT pattern:
1- its called a "deposit"
2- its refundable under certain conditions
3- refunds were "offered" by EAC once certain events occured (price increase)
4- there were funds available at that time
If I am making noise on this, I say that the company had the money and should have refunded my deposit (it was a "deposit" when they agreed to refund it should I request it back) at that point in time. OR, they made a fraudulent offer to refund my deposit, becasue they did not have the money.
Take your pick...
MAKE NOISE. This is how it works.
just-zis said ...
And one more note for the 10% refund requestors: don't expect any support from any one else. Every dollar paid to you is a dollar out of the pockets of the secured creditors, the other unsecured creditors, the depositors who didn't request refunds, and the airplane owners.
Yes ... Santa is only carrying one bag of money. Everybody's presents come from the same assets.
Tim -
So that we can limit our speculation to the truly trivial ... do the depositor contracts specifically enumerate an escrow/trust account?
Did everyone (did anyone) get an executed response from Ecorpse on their refund request?
BTW, I would say that the owners have the same case regarding jetincomplete, the IOUs and the warrantee.
If EAC induced them to take delivery, and they had no reserves for warrantee or IOUs and, we've heard here they DID at one time have $40Million IIRC set aside for this purpose... and they subsequently spent the money... this is a nice path to fraudulently inducing buyers to take incomplete planes.
I think you will see this sort of reasoning emerge.
The only defense is "your honor, we did not have the money in reserve, and we promised the IOUs and warrantee and jetcomplete based on obtaining more ponzi money fom other depositors and investors.
Sorry folks, normal expectation in this industry is that there are reserves for this sort of thing.
One Affidavid stating that a customer was promised there was a reserve, and EAC will probably need to address these creditor more seriously.
Just saying "you are all unsecured creditors behind RP..." will not likely win judges and influence creditors.
9Z's approach is to roll over and play dead, allowing Roel to steamroll everyone in the process and take possession of Ecorpse.
AT's approach is to go down kicking and screaming, potentially unraveling the deal for Roel, or at least making it very difficult for him.
The way I see it, there's not even a choice: keep making noise per AT's suggestion.
Notably absent were any actual owners or depositors of any denomination.
and
>> Why didn't any owners or depositors show up? Possibly they felt that Tuesday's hearing on forming separate committees for owners, depositors, etc. would be successful. In the end, the Trustee selected three owners and/or depositors, but none of them were present, much less active in the fight for standing and ultimate recovery. The opinion was that the vocal owners and depositors could have had BOTH three seats on the basic committee AND the opportunity for successful motions the next day.
Ken, OMSIV, others –
Seems like a glaring omission in the plan. Granted you guys were in a bit of a gambit with the scheduling of the UCC meeting on Monday and your motion hearings on Tuesday, but why weren’t there 250+ owners and 500+ (?) depositors submitting the various claim forms?
The several owners and depositors who made the UCC will likely represent well, but to have several pit bulls on the committee may have been better.
Looks like the agenda for the Omnibus Hearings on the 22nd will address the Gulf Coast TRO.
Comments and evidentiary issues due to the docket on Monday the 15th.
Should be interesting to see the facts of the case (as in the "true facts" versus false facts for those blog oldtimers).
"Folks who did not negotiate their own purchase agreements/deposit agreements or walk away when the ridiculously one-sided EAC documents were presented probably do not have a leg to stand on - it is not the court's business to protect you from yourself."
Exactly correct, IMO.
"we've heard here they DID at one time have $40Million IIRC set aside for this purpose.."
Typically a "reserve" is an accounting entry (marks on a piece of paper) and does not imply a pool of real cash safely tucked away for a specific purpose.
Ho Ho Ho!!! Merry Christmas. In this festive time of year, despite the gloom and doom of bankruptcy, there is a glimmer of hope. Of new horizons, new technology. Perhaps something that may become 'disruptive' tech that forever changes the energy industry!!!
This was just on CNN. Blacklight Power has some fuzzy new 'cold fusion' technology to get energy out of water, hydrogen, and salt. As CNN reported, the only problem is that "this technology violates all the (known) laws of quantum physics." Well, CNN hasn't put up the link yet to this story. But I found this on Wikipedia too...
Here is the kicker: although all respectable mainstream scientists say this appears to be crackpot science, a NEW MEXICO utility company has agreed to license the technology per the press release from BlackLight today. Jesus Christ, you just can't make this stuff up!! BlackLight has announced its first commercial license with Estacado Energy Services. Estacado serves communities in east central NM.
So, is there something with New Mexico that makes business executives lose all common sense? How on earth can one go along with something like this??? I think it's time to prepare for some nutcase in Taos to announce they figured out how to turn lead into gold...
e.d.t.
http://www.blacklightpower.com/Press%20Releases/BlackLightProcessEstacadoPressRelease121108.doc
http://en.wikipedia.org/wiki/Hydrino_theory
Shane,
Disappointed with the lot of us? Over not grasping the proper response to your metaphor?
Maybe, instead, somebody stole your thunder, before the clouds even showed up.
Would you like the combo?
DI
I afraid to even lookup who the execs backing Blacklight Power are... might run into some familiar names.
That's no moon, it's a space station!
el Wedgo (one month ago):
“Where will I end up? Where the capital takes me. Green tech is very hot right now. Am I going to start a nuclear power company? That has it’s own set of regulatory complications. I don’t know. When I do, I’ll let you know.”
Shane,
"There you go. Watch out fellas, he is thinking of going nuclear. Clear out those old bomb shelters and lay in a stock of food. The Wedge wants to go out is a real blaze of glory."
EDT,
" Blacklight Power has some fuzzy new 'cold fusion' technology to get energy out of water, hydrogen, and salt.
"As CNN reported, the only problem is that "this technology violates all the (known) laws of quantum physics." Well, CNN hasn't put up the link yet to this story. But I found this on Wikipedia too...
"Here is the kicker: although all respectable mainstream scientists say this appears to be crackpot science, a NEW MEXICO utility company has agreed to license the technology per the press release from BlackLight today...you just can't make this stuff up!!"
-------------------------------
!?!?!
I was wondering when the constructive trust issue would come up, and in what context. IANAL, so my opinion is worth about 10% of what I'm being paid for it, but won't let that get in the way of expressing it.
It appears that at the time of the most recent price increase, Eclipse acknowledged that some depositors ( 10% depositors ) would be entitled to, as one option, request a refund. That some 10-percenters requested refunds, and that some of them were told by Eclipse that they would get refunds. The legal theory forwarded by Mr. Mccullough, Esq. is that Eclipse was from that point forward holding those people's ( and only those people's ) money in trust - that it wasn't Eclipse's money at all at that point. It's a pretty good theory, and worth pursuing if it can be done economically - but it must be done immediately if it is to have even a hope of affecting the outcome.
Let's pretend that there are 40 10-percenters who requested and were granted ( but not paid ) refunds, and that the average refund was $150K. That's $6M that does not belong to Eclipse, but which shows up somewhere on their balance sheet. In theory, this needs to be properly dispensed before the company's assets can be accurately determined, and creditors dealt with in the BK. In effect, those who were promised refunds are super-superior to any creditors, and would be paid first. There a few bumps to be found when you go down this road.
For starters, there's the issue of traceability of those funds. Of the $6M, how much of it still exists, and how much has been spent already? How much of that had been spent prior to the 90 day period before BK ( which would disqualify it from eligibility for disgorgement, IIRC )?
The other big bump is that the promise of a physical refund was conditional - its timing being conditioned on Eclipse receiving further funding.
My suspicion is that virtually none of the funds that Eclipse held at the time of filing could be traced to receipt of the affected deposits - which occurred a few instances of near-insolvency ago. Further, the BK Judge could decide that the promise of a refund did not represent a Trust, on the grounds that it was conditional.
Just my first thoughts on the subject - now I'll just kick back and eat some french fries, and see how the court filings develop.
Would you like to Super Size it?
DI
9Z's approach is to roll over and play dead.
No, that's not what I said at all.
There are a few people, the owner of s/n 260 who had his plane snatched from him at 9:25am on the day of the bankruptcy, for example, that at least might get their aircraft back. In his case, he knew the BK was coming yet insisted on having a couple of squawks fixed before he accepted the aircraft. Talk about being penny wise and pound foolish - he may lose everything as a result.
But for the hundreds of position holders that put up a deposit - this is really a lost cause. EAC is broke. Unless they can get the management's personal money, they are toast. OK, spend a couple thousand to join the E5C legal battle if you must, but any more than that is just throwing away more good money in my opinion.
But hey, what do I know. I really don't know how to get out of a mess like this, because I don't know how to get in to one in the first place. For that, you'd have to ask Ken.
Ken-
At the risk of insulting, how dare you offer "advice" to the very Deposit holders you helped scam into "staying the course"?????
Good Lord, man have you no shame?
These people got screwed and your scenario of them being treated as a special creditor class are as fanciful as your recitations of the DeadJet's performance.
CW and others are absolutely correct...those Depositors had no more reason than any other creditor to believe that a failing company would be legally bound to satisfy their demand in some sort of "But I'm Speshul" manner.
The Depositors are screwed, Ken. You did everything in your power to help screw them...on this Blog AND on the Owners' site. Now you want them to...what? Take your sage advice?
Where on earth does a grown man find that kind of Chutzpah?
Gunner
9Z,
"EAC is broke. Unless they can get the management's personal money, they are toast."
It appears to me that indeed, Eclipse is flat busted, except for a closet full of cash to keep the payroll incineration unit stoked for a few more weeks.
So- while not only IANAL, IAADA (I Am A Dumb Ass), it seems to me the upcoming legal "judgements" are meaningless if appliead against EAC v1.1 (present incarnation).
--------------------------------
I think there are a lot of viewers, say, half of the 1200 daily visitors, that are probably as utterly ignorant of this process as I am.
Anybody want to give us mo-rons (NOT M00-rons :) a quick tutorial?
re:
a) So, are the legal judgements (say $6M in favor of the 10% depositors) an obligation to be negotiated by whoever buys EAC v1.1?
b) And if so, is it conceivable that this could run up to maybe, say some sizable portion of $200M, against future earnings, to cover PWC, Fuji, IS&S, etc.
c) Why stop there, how about the 60% players?
d) And owners awaiting upgrades?
e) I would assume the investors, up to and including v1.1, have nothing but sore muscles from shoveling money in, with the exception of those participating in the DIP sustaining contributions?, and can only recover the amount of the DIP financing, in the January sale?
I'm just so confused.
Thanks.
That's no moon, it's a space station!
Last February, those of us in North America were treated to a total lunar eclipse. I noticed it beginning as I was driving home, and got there just before the period of totality. After a few minutes of gazing at it from the lawn, I went inside to get my wife. She didn't want to go outside, so I maneuvered to a window where I figured it was visible. 'It' was dimmer than it seemed outside and she couldn't see anything, so I moved my wife's head so 'it' was directly centered in a window ( as I turned off the lights in the adjoining rooms ).
"All I can see is that plastic bag stuck in the tree up there."
And so it was. By the time I relocated the moon, the white crescent was emerging - the eclipse was done.
The more things change, the more they stay the same. The MOON dealt with Eclipse, and an otherwise innocent tree was left holding the bag. The creditors are screwed - some of them would just like to be less screwed.
Would you like some Blue Cheese dressing?
DI
To put my concern a bit more pointedly, it appears:
1) EAC V1.1 is dead- there ain't no money to be had, by anybody. (Al Mann is keeping the payroll checks from bouncing, for a while- God bless him. Maybe RP is helping out here too).
2) ALL legal judgements are meaningless, unless:
a) they are treated as bills to be honored, as part of acquiring EAC v1.1 in January
b) they are treated as outstanding obligations, to be paid AFTER acquiring EAC v1.1 in January, e.g., paid out of future earnings
c) or the debts are settled (most likely, only partial recovery) by liquidating all inventory and facilities- the worst possible solution, it would seem- unless one subscribes to the theory of pertpetual cash incineration- in which case it only gets "more worse", for "more people".
??
DI said,
Further, the BK Judge could decide that the promise of a refund did not represent a Trust, on the grounds that it was conditional.
***
Say what? Is it clearly written in the **Purchase Agreement** that customers are entitled to a refund if/when a Refund Event occurs? And then isn't said refund UNconditional as to EACs actual cash on hand? I'm sure the contract could not have been written to suggest it was optional for EAC to grant the refund 'only if they happen to have sufficient funds.' Even if they only had $1 in the bank, the contractual liability has to be given some kind of preferred or superior status by the Court, IMO.
Now, if I was the Trustee, I'd want to look at their statement of cash flows, their general ledger, and ALL non-salary checks EAC wrote from 6-1-2008 until 11-25-2008. The first question I'd ask is, "why were you able to pay X million to Tom, Dick, and Harry during that time, but not able or willing pay Y million to those contractually entitled to refunds?" EAC Corporate Officers made a conscious decision to cherry pick who'd get paid anything. In my opinion, that should let the suppliers off the hook for that 90-day period before CH11; no logical reason for them to have to give back money EAC paid them. A "resonable person" standard would not expect the SUPPLIER to say, "pardon me Lord Pieper, is this money really for me? Shouldn't you have sent this check to Mr. Smith who is due a refund?" Absurd.
e.d.t.
I wager three quatloo's on the newcomer.
I also wager that other than payroll NO money went out in the 90 days preceeding the BK filing.
On second thought, there may have been some COD/prepayment for needed inventory to complete the last few - no wait, not only are they not complete, the parts for most planes probably came in well in advance of the 90 days pre-BK date.
Nope, no way, no how.
Come on guys, they owe over a Billion dollars to over 5,000 creditors.
Other than the rank and file and probably the Exec's, nobody was getting paid in the last 3 months.
Zed,
Yes ... Santa is only carrying one bag of money. Everybody's presents come from the same assets.
typically Santa's bag is big and contains many, many presents...
Nobody knows how much stuff is really in the bag and if everything is taken out of the bag...
IF the FPJ is DOA even for RP/AM and they have already secured their own interests, then the bag is really empty.
If VEB isn't any more interested in the FPJ and RP fulfilled his obligations - bad luck also for his turkisch victims...
After the auction they can put EAC into a shredder....
Otherwise someone has to open the Pandora's box to find out how much RP/AM will pay for EAC or their involvement in EAC...
Hi, is the someone with good ideas?
Julius
Say what? Is it clearly written in the **Purchase Agreement** that customers are entitled to a refund if/when a Refund Event occurs?
Eclipse has demonstrated only a casual regard for the written meaning of their Purchase Agreements, as we learned in Gunner's Excellent Adventure. And many customers have been entitled to a refund under those conditions, yet ( inexplicably ) declined to exercise that privilege. At issue, for purposes of determining status as either a creditor, or as beneficiary of a constructive trust, is whether or not a trust relationship legally exists.
I think we're in violent agreement that there ought to be a determination of existence of a trust. I just think - legally speaking - that RP has found some wiggle room, and that technically it's a contract issue and not a fiduciary one. Contract issue? Welcome to unsecured creditor status - go to the back of the line.
And then isn't said refund UNconditional as to EACs actual cash on hand?
IF a trust exists, the traceability issue remains; can any of EAC's current funds or assets be traced to receipt of the deposits? That one, I believe, is the killer. There's simply nothing left to recover from a presumed trust for the 10-percenters.
All JMHO, IANAL, & whatnot.
Would you like that lubricated or unlubricated?
DI
a) So, are the legal judgements (say $6M in favor of the 10% depositors) an obligation to be negotiated by whoever buys EAC v1.1?
No. If a Constructive Trust is deemed to exist, whatever funds are traceable to "creation" of that trust aren't Eclipse assets, and are dealt with before Ch.11 can be closed. Personally, I think it's beyond "iffy" that any funds could be found to still exist. And there's a lot more "if"s I'm not even aware of in the way.
b) And if so, is it conceivable that this could run up to maybe, say some sizable portion of $200M, against future earnings, to cover PWC, Fuji, IS&S, etc.
No.
c) Why stop there, how about the 60% players?
The 60% players were promised aircraft, not refunds. So no.
d) And owners awaiting upgrades?
See: c)
e) I would assume the investors, up to and including v1.1, have nothing but sore muscles from shoveling money in, with the exception of those participating in the DIP sustaining contributions?, and can only recover the amount of the DIP financing, in the January sale?
The DIP financing is post-petition, and the DIP financiers have a contractual relationship with the 363 buyers ( ignore, for the moment, that they may be one and the same ) that governs how the DIPsticks might get repaid. The BK court's only "input" on this relationship is whether or not to allow exclusion of competing offers that don't make the DIPsticks whole as a precondition.
Time for me to shut up. I'm out of my element, offering personal opinion where legal knowledge would be preferable. The french fries are gone, so now it's time to munch on onion rings.
Would you like the Zesty Sauce?
DI-am-not-a-lawyer
This morning the wife says, “Something smells moldy in the basement!” I check it out and tell her, “It’s a dead mouse, somewhere!” The three traps have not been “tripped”, but I have enough “Decon” down there to eliminate an entire herd of mouses. The problem is finding the carcass. With night-time temperatures in New Mexico in the “twenties”, the flies aren’t doing their normal job . . . and the fifth case of bubonic plague having been reported for this season . . . I’m in no hurry to make a thorough search. The “smell” will diminish in a day or two . . . and we’ll find the dried out carcass while moving a box of old books or something, maybe next spring.
There is another smell over on the other side of the Sandia Mountains . . . and it’s coming from the west end of ABQ International Airport. There’s little point of looking for the dead rat . . . it will show up soon enough . . . probably sometime next Spring.
For sure, the rodent is long gone . . . or dead. Sometime, when the weather (aka “political climate”) is “friendly”, the flies (aka “news reporters”) will come swarming around . . . making all kinds of claims. Even the big “blow flies” (aka “former governor” and “mayor”, or “Lt. Governor”, et al) will arrive on the scene, making a big show.
Someone mentioned the local paper . . . wondering why they don’t do their job. Well, for reasons that I cannot discuss, they’re running somewhat scared these days . . . newspapers only exist because of advertising . . . barely. And to create the slightest “ripple” could be disastrous to an industry that depends on ink (carbon) and trees. Many years ago, such an event took place . . . and the local paper almost “bought the farm” . . . they “won”, but barely (Can you say, “F. Lee Bailey”, aka “The Flea” . . . the “flea” lost, by the way!). This experience is something “not to be repeated”.
In the mean time, ‘just be patient. There’s nothing to be gained by anyone . . . only the expectation that the little jet will pass into history . . . and the local political corruption will return to a manageable level. New Mexico has never done well with change . . . even the first nuclear experiment at “Trinity Site” failed to change the political climate.
Well, friends, that’s my take on the matter!
gadfly
(There ain’t goin’ to be no winners, no how!)
Dave I,
I stand corrected....
E.D.T.
No, I don't gamble, so it wasn't me who 'raised these stakes'.
However...
You are in breech of this blogs' 'Standing Orders'. We are a Zoom Free Zone.
Please remove the offending article.
Thanks
Shane
done .....but??? i never understood the Captain Zoom hairball. oh well, go figure...
e.d.t.
E.D.T.
Zoom was a 'manic' supporter of Vern and EAC. Anytime an 'article' appeared here from 'there' I would get a nasty email, usually describing me as a 'thief' and announcing doom and destruction.
I put up with it until I got one of his emails' shortly after my father died in September. Needless to say, my mood was not the best at the time.
So I 'banned' Zoom.
And then he found out, as I told him and to his cost, that EAC were not going to pay his bills. He is a sad, small little man, with no concept of business. Or ethics. Or basic human kindness.
So, no Zoom.
Ever.
You will have gathered that it's a little bit more than a 'hairball' issue with me...
Shane
DI wrote ...
I think we're in violent agreement that there ought to be a determination of existence of a trust. I just think - legally speaking - that RP has found some wiggle room, and that technically it's a contract issue and not a fiduciary one. Contract issue? Welcome to unsecured creditor status - go to the back of the line.
Exactly. Depositors had a sales contract and were offered a repayment under that contract. There was soon no money to complete the repayment, so now depositors have a contract that will be voided by the bankruptcy. While the Judge will entertain the existance of a trust, proving same will be a long uphill climb to nowhere.
CWMR wrote ...
I also wager that other than payroll NO money went out in the 90 days preceeding the BK filing.
Hmmm ... a wager !
BK - 90 = 27 August 2008
Going back through the archive you will find reports that vendor payments stopped in August immediately after the takeover (aka the Unwedging), followed by a vendor conference just after Labor Day, and a resumption of partial payments until late October, when the coffers were empty. Two weeks later the missed payday. Less than two weeks after that the bankruptcy filing.
I'll have what Shane is having!
I'm seeing a common theme this round...
In a scam/ponzi/fraud/theft situation, as in any CSI show or "who-dun-it", don't they always follow the money?
Someone, someplace (maybe several)knows HOW to follow the money. If I was a depositor/owner/creditor, instaed of everyone paying lawyers, perhaps some should go to lawers ans SOME to investigators...just a thought
Shane
Refering to the corpulent mass as Zoom must be stopped in our lifetime, before it harms someone.
Reflecting back to my military days, anyone who selected their own callsign was (1) branded as a complete putz, and (2) the recipient of whatever derogatory callsign one could think of at the time.
So, just as we have "The Wedge" for our favorite, simple tool ... we need a common term for our least favorite, complex tool ...
Crossword Clue --> What is an eight letter word for "Bevis' Friend"?
At this point, the most constructive thing that could be done is for the faithful to take the money they are willing to spend in the no doubt vain attempt to get anything from Eclipse and instead donate it to a local soup kitchen, or Catholic Charities, or the Red Cross - at least someone will get a meal and maybe a blanket - otherwise, that money, like the THREE BILLION DOLLARS before it, will just be incinerated.
CW,
how true!
But what would we do for entertainment around here.
I for one would love to see more FACTS emerge... through the courts and then we'll know the story... or more of it.
You emntion $3B...
No one believed this until it came out in court... let's let the thing run its course....
OK...
For me?
Thanks
ATM,
I think the very existence of some 5,000 creditors who are owed that $3B would suggest that there are people out there who do not listen to me, so I think your entertainment is secure. ;^)
Dave I.,
Thanks for your explanation.
While it didn't have any color pictures :(, I still understood what you were saying!
Thanks!
-Goat
Ouch !!
Shane,
Okay. I understand the situation now. My apologies. I meant no disrespect with the 'hairball' term.... I knew he was a common pest, but I could not quite figure out why.
e.d.t.
funny man!
There's a lot I enjoy about this blog... you amoung the most enjoyable.
Too bad about the $3B...
Coulda provided a lot of jobs
;(
Just picture them in front of a judge... an awake judge.
Judge: " so you took these guys "deposit" money and use it to develop a plane, not produce their plane, but develop as in FAA certify it... test it etc.....OK, I get it - BUT years later, you decide to raise the price, and offer "refunds" if anyone did not agree to the price hike...as I understand it... is this correct?
EAC LAWYER: Yes judge
Judge: OK, then, yesars later, you
jack up the price, and offer to refund the deposit money to any depositor who is not happy paying the new higher price... true?
EAC lawyer: YES sir... that is true
Judge: Did you have the money?
EAC Lawyer: well we spent the deposit money certifying the plane and subsidizing losses incurred while delivering 250 planes at the money-losing price we promised...so we jacked the price...
Judge:... and offered refunds - did you have the money when you offered to refund the money?
Folks this is a simple lose/lose situation... either they DID have the money/somemoney to pay refunds... or they did not. If they DID, it should belong to the folks who requested refunds, it was ofered to them as a refund of THEIR deposit money... it was not a break up fee, or such payment - it was offered as a refund of their money.
OR, there was no money, and its fraud.
How can you offer refunds in good faith when there's no refund money?
The sober judge will crusify these a-holes for this... IMO - it is a completely decptive trade practice.
CW, on the wager... keep you hands in your pcokets...
I bet RP spent money raisng money for EAC from the Russians, sent planes there, held talks, etc... spenty a lot of refund money and supplier money on these trips/negotiations. Also, EASA money, doing him more good than EAC and the creditors for sure...
So, time will tell... he rasied money for EAC and used their funds to do so - while now basically placing them in BK and trying to use their pre-arranged financing to his benefit.
It will not fly.
"Ken-
At the risk of insulting, how dare you offer "advice" to the very Deposit holders you helped scam into "staying the course"?????
Good Lord, man have you no shame?"
precisely
While it didn't have any color pictures :(, I still understood what you were saying!
Aw crap! I knew I'd forget some important detail...
Could I make it up by explaining the Big 3 bailout in simple terms ( with color pictures )? Here goes:
A couple of Detroit junior execs discover that they've got balls bigger than Baron dreams about.
Now they go about spreading the word.
Would you like the combo?
DI
It is fascinating how many "legal theories" are being espoused by the lawyers and the bloggers.
Here is a very simple way to put them to the test BEFORE you spend money and time chasing them.
Ask the law firm(s) that are suggesting it to TAKE THE CASE ON CONTINGENCY.
Then come back to the blog and tell us how many of the "legal theories" survived that test.
For ATM and all those thinking this won't go according to RP's plan, I'll repeat what I said before...
Unless there is another bid, this is in fact a train speeding down the tracks. You can't move it (unless you derail it) and you can't stop it before it passes the station.
There is a lot of inertia in BK court to take a bid and close the case.
And for the guys that sent the email to Shane, YES, the $28M was exactly that, the offer that would guarantee full payment back if anyone bids. You make it as high as possible, without going over the amount you'll get from another bidder. (incidentally, I think the other bid needs to be at least $5M higher than the $28M bid from RP)
Well sports fans it looks like the fun and lawyer games are in full stride. Comments seem to flow from both sides and some seem to see the light in the tunnel and others see the moon,Eclipsed and other wise.
Intersting observation by the person in attendance at the hearings on Tuesday. Really liked the observation that 50% of those in attendance were lawyers and accountants sniffing around wanting a last piece of the BK pie so to speak.
Want to make a comment here on the entire scenario of the situation and will also add some insight into something that Shane mentioned about a pimple on the a** of aviation known as zoom. I have found that in this close knit group of aviation types that 90% of the people are some of the finest and most trustworthy people I have ever known. Another 9% are ones that fit the statement of keep your friends close and your enemies closer and then there is that 1% that give aviation and the good guys a bad name.
Here is an interesting comparison between the Wedge and his royal zoomness. Both have sued people on things/the truth that were posted on the internet. The Wedge sued this blog and 10 years ago the moozer sued 15 people over things said and asked about him on a group called rec.aviation.homebuilt.The combined group became known at the RAH15. The common ground between the two is that the TRUTH was in question and people wanted answers. On this blog things were coming to light that made people wonder what was going on and why the lies and deception continued from ABQ. In the RAH15 case it was basically the same. moozer making statements he could not prove and people were just asking for the truth.BTW that suit was finally dismissed due to no action by moozer, To this day moozer, our pet name for him, continues to claim he has over 17,000 hours of flight time and has flown over 1200 different types of aircraft. Now that part could be true if you counted a RED Cessna 150 as a different type from a BLUE 150 or a GREEN one. He also claims to be a graduate of the National Test Pilot School after attending a 1 week course given to the media as a "get an idea of what this is about" type thing with a certificate given. Ok so if that is the case I attended a 1 week couse on aviation safety operations at GWU in Washington DC and so there fore I am a graduate of GWU.
Along the line of that 1% have anyone of you ever heard of a person being BANNED for life from a flyin? Well he is from Sun N Fun and it was backed up in court by a Judge. A month ago it was reported on the blog that he and the Wedge were seen at NBAA paling around, no doubt moozer asking the Wedge if he would pony up the monies owed to him for Eclipse advertising, like maybe out of his own pocket??? So what we have here are two peas from the same pod in a sense that have no business in aviation but yet we have allowed then to misrepresent themselves and their business practices and inturn take the lives of good people down with them.
So lets look at it this way. It will be months before this BK thing lays down and takes its last breath. Big companies as well as good intentioned aviation people have been or are getting the shaft. As mentioned before I have seen the good and the bad and the good numbers and people have been the majority but it takes a few to spoil it for the rest.
For those that will have future dealings in aviation I would like to give this little gem as a piece of advice.
Several years ago the people at Preparation H recieved the following letter.
Dear Preparation H.
I have had a bad case of hemeroidies for several months and my doctur said I should try your stuff. So I went down to da local store and bought sume. I dun been using it for several weeks and my hemeroides ain't got no better and I want my money back! Please send me a refundy ASAP.
Signed Bubba.
PS. You out to make that stuff in different flavors cause it dun tastes terrable bad.
Now you know why Preperation H has the warning on the tube. For external use only.
Maybe that warning should have been on the FPJ purchase agreement. Ya think?
As for those few that did succsefully pass the training and type rating ride in the FPJ keep this in mind for future reference.
Successfully passing a checkride in a simulator is like doing surgery on a cadaver. And after passing around 70 6 month checkrides I have to agree. Course that don't count the same amount of them that I gave as a check airman. But those were fun.
Y'all be carefull now. Ya hear.
I can't believe it. The republican senators actually showed some balls and made the auto bailout contingent on fixing the root cause of the problem - bringing UAW wage and benefits down to workable levels NOW (2009).
Outstanding. UAW said no, now lets do in CH11.
That is, unless Bush chickens out and gives the union a xmas present - free money with no meanigful conditions. This way, the 5M unemployed people in America and the 45 million people without health care will pay the taxes to keep the UAW with $75/hr wages, lifetime health care and ability to retire at age 48.
Lets see.
EDT,
Okay. I understand the situation now. My apologies. I meant no disrespect with the 'hairball' term.... I knew he was a common pest, but I could not quite figure out why.
None taken as you cannot offer an apology for not knowing my history with our 'common pest'.
Zed,
So, just as we have "The Wedge" for our favorite, simple tool ... we need a common term for our least favorite, complex tool ...
Captain Zoom is the 'industry standard' term currently in circulation. I gather he is not fond of it, but if you can come up with another which conveys suitable levels of distain and contempt I'll be happy to give it a whirl.
REALLY happy....
Shane
Baron,
Does the Bush family (or Chaney...) have any direct ties to the Auto Industry..like they do in the Defense Industry?
;O
BTDT,
"Now you know why Preperation H has the warning on the tube. For external use only."
and for the Ken's of the word who need a really specific question.... in order to provide an accurate answer - this dislaimer must be worded more specifically... becasue
they guy sent back a follow up not to Preparation H saying..."OK, I used it outdoors, and it still tastes really bad"...
airtaxi ...
don't be this bad with GWB ...
he only has spent about 3 Trillions of your Tax-payer money in unneeded gears ....
if it linked with his buddies , it is only bad and biased media reports ... ! ;-)
Baron, the UAW workers aren't getting $75/hour. That figure includes hourly wages, benefits for current workers and benefits/pension payments for retired workers. Comparing apples to apples, meaning hourly wages of non-union vs UAW workers, the UAW workers are getting $3 more per hour than their non-union counterparts. Hardly a factor in this mess. The problem is that people aren't buying cars because of the bad economy and lack of credit.
Shane, "Captain Zoom" is his self-given nickname, so I'd venture to say he likes it. BTW, I like Zed's suggestion on what to call him.
Baron,
Alan Mulally, the failed CEO of Ford, is a retread from Boeing. Ford provides a company jet so he can COMMUTE from his home in Seattle, Washington, to Detroit, Michigan. The cost in relation to Ford's business may be small, but the symbolism to workers on the floor is HUGE. Think about it next time when think of buying a Ford product.
Shadow, Zed, EDT...
This whole 'names' thing got me thinking.
Not a good thing, for a simple person like me, but, hey, it's Friday.
Anyway, I think we need a 'blog glossary'. It should appear on the home page, just as soon as I work out how to get it going. When you see where I'm heading with it, let me have your suggestions for a) the words and/or terms in common use on the blog and b) the explanations for same.
It might take me a day or so to get happy with the layout, but feel free to email your thoughts to me in the meantime.
Shane
Shane -
Great idea!
And to simplify the process, we can refer to bloglossary terms simply by referencing their order on the list.
For example: Instead of mooZ, we can just say "Number 2"
Zed,
That reminds me. I need to take a number...ah, you get the idea.
ASM, there are folks on this blog, yours truly included who have or do make a living thanks to the corporate jet market that Congress seems intent on killing solely for the purpose of advancing a class-warfare victim philosophy.
Properly utilized corporate flight departments MAKE money by ensuring the right person is t the right place at the right time - does it suck that the Big 3 Exec's cannot communicate that, yes.
The issues with the Big 3 are not Hawkers or Gulfstreams or Falcons or Lears, the issues are not even executive compensation and perks - the issues are crushing healthcare costs for people who retired 2, 3 or 4 DECADES ago, job banks, and onerous regulations that the foreign competition (even the foreign competition manufactured here in the good ol' USA) do not suffer from.
Chapter 11 is the best hope for Detroit - to reboot and retool, not to make 'green' cars nobody wants with gas at $1.50/gal but to emerge as lean and efficient companies able to respond to actual market demand.
Right now they risk becoming Hammond Motors under the Anti-Dog-Eat-Dog Legislation.
There is absolutely no justification for hauling a failed auto executive from his home in Seattle to his workplace Detroit at company expense. All you are doing is totally destroying what morale may be left at Ford. If Alan Mulally had half a brain he would realize it.
FWIW, Ford is the only of the Big 3 NOT asking for a bailout or a loan.
They put a $20+B LOC in place over a year ago and have been madly retooling - they have also introduced a number of decent new vehicles over the past several years.
Is having the company jet fly you home every weekend egalitarian? No. Is a seven or eight figure compensation package egalitarian? No.
But then, we are talking about Ford Motor Company, not the glorious people's auto factory of Tblisi.
For the Glossary:
Ecorpse - The cadaver of a incomplete A/C non-manufacurer which provides a hearty meal to scores of lawyers.
Jet Incomplete - the status of an EA500 in a MRO until you pay cash for the time and materials.
Floptions - I think ATM had a good definition on this one.
Complete (TM Ecorpse) - The position taken by diehards as the take posesstion of a stack of IOUng's
IOUng - I Owe You NothinG.
Diehards - The Wedges affectionate term for marks rich enough to get fleeced, gullible enough to drink the Koolaid, stupid enough to come back for more, and stubborn enough to sing the praise.
Wedge - a short, thick, inflexible, very simple tool.
The Grim Pieper - A dark stalking horse from a far awy place come to steal whats left of the soul.
"But then, we are talking about Ford Motor Company, not the glorious people's auto factory of Tblisi."
Having rented several Ford products from Hertz recently on business trips, I'm not sure there is a difference anymore.
Anybody here wonder why Nancy Pelosi was uncharacteristically silent while her peers pounded the Execs for the corp jet arrival?
Follow the money, people. In this case the perks. After 9-11 it was determined that the Speaker should no longer fly commercial, being number 3 to the President. Denny Hastert had used a rather small military jet for the purpose.
In Pelosi's case, a much larger jet has been provided to avoid the "security issues" of refueling on the trip from DC to the PRC. Naturally, Pelosi claims she never made this request.
Gunner
"Anybody here wonder why Nancy Pelosi was uncharacteristically silent while her peers pounded the Execs for the corp jet arrival?"
A vast waste of taxpayer money as well. There are corporations and government agencies that use airplanes as business tools, and there are a lot that use them as toys for arrogant, incompetent management.
Who gets to decide which is which ASM? Bawney Fwank?
"Who gets to decide which is which ASM?"
Its like what the Supreme Court justice said about pornography: "I know it when I see it."
Michael Chertoff taking the Coast Guard GIII to New Orleans for a Photo Op whould qualify. Ms. Pelosi should learn that there are airlines that fly (some even nonstop!) from DC to San Francisco.
"Floptions - I think ATM had a good definition on this one."
While my pet issue was the lack of a real order book... CWMR coined this phrase...
I coined
ETRICK
Vernacular
CONjet
"position-holders"
e-clips
;)
CW,
I am in the market for 2 new cars... I tried to buy American.
A few comments:
1- the American dealerships such... the sales people suck... they basically stink
2- the cars suck...
compared to foreign cars (mostly assembled in the US anyways...more US labor than the US automakers in most cases, lets be honest) the US products stink. They are $10k overpriced compared with the competition, and the quality/fit/finish/options, etc... really compare poorly.
I would say the US makers need to discoun their products 20% compared to the competition to even come close to competing, based on quality and vlaue.
IMO
I wish they could get their act in order, and produce some kickass products that are quality built and compelling to buy.
So far, the f'rners have us killed in this marketplace.
airsafetyman said...
Baron,
Alan Mulally, the failed CEO of Ford, is a retread from Boeing. Ford provides a company jet so he can COMMUTE from his home in Seattle, Washington, to Detroit, Michigan.
And thank god for that. Thanks to his actions Ford is the only that is not near death. He has been fast undoing the mess that Nasser created, including selling all the business that never made money for Ford and lining up financing in "good" times. Mullaly should NEVER had been there with the other testicle-less fools.
As I anticipated, testicleless white house will give them "no strings attached" money.
We will lose a historical opportunity to make the US-native auto industry competitive with the US-transplants, but getting labor compensation on par.
Boeing, Cessna, Embraer, better learn too. Embraer and MRJ are coming to take their business. Soon Boeing will found out how disastrous the huge wage increases they just agreed to will be.
airsafety ...
well , on a technical point of view , the last word is for the elector ...
this is where it is important to have in any country , a number of inhabitants who are not having too much illusions ...
some call it "political maturity"
it is a weird thing , reacting like a good reputation for restaurant : an eternity to get it , only very few mistakes to loose it ...
unfortunately , no one is immune !
AT said:
"compared to foreign cars (mostly assembled in the US anyways...more US labor than the US automakers in most cases, lets be honest) the US products stink. They are $10k overpriced compared with the competition, and the quality/fit/finish/options, etc... really compare poorly."
You really need to do more homework on the American brand of automobile. The new Ford fusion hybrid outperforms the Toyota by 30% in every catagory. Ford just garnered 18 first place (5 star) quality rating. The runner up; Honda only received 13.
Your aircraft knowledge is indisputable, and you never seem to talk in umknowledgable generalities. You should apply the same research when talking of automotive.
As for "fit and finish", there is indisputable evidence that the Big 3 compare and surpass the transplant in many ways.
Chickasaw,
I actually like the look of the Ford Flex... and drove one last week.
I wish I could agree, and admit I was wrong. Strictly my opinion, of course, but I drove a Ford last week... not even close.
I have not driven every American made car... but so far, I think they need to come down about 20%-30% in price, IMO to be competitive.
Generalities suck, I agree, so I'll try to be more fair... and say, recently, I drove some American cars, and some others, and the others seem to me to be better designed, better equipped and better made.
JMO
I will say that the 'foreign" cars are for the most part made in the US... and many US cars are assembled in Mexico... so?
The foreign-US made cars seem better to me than the US-foreign made cars... so to speak.
I wonder how the Russian-made US mini-jet is going to fair?
Fit and finish, not even close.
chickasaw said...
The new Ford fusion hybrid outperforms the Toyota by 30% in every catagory.
Really? Which Toyota? The 8-year old Prius that is about to be completely revamped?
And what "catagory". Did you check expected resale/residual value? Did you check brand image? Did you check average dealer satisfaction?
It is amazing that Detroit-3 defender insist on pointing to technical qualities of a few products (Corvette, Fusion, Malibu, CTS) to convince themselves that they are competitive.
It is not about momentary parity with 1 out 50 products. It is about having a consistently wining product line.
Ford midsize cars? It was called Taurus one day, then 500, then taurus, now fusion. Ford starts and kills products left and right. On top of it they launch new cars with huge incentives. That totally devalues the brand and the cars.
There has been a Camry and an Accord at the top of main-stream mid-sized cars for decades. There has been a 5-series and E-class at the top of the luxury mid-size sedan for decades. Ask the average car buyer if they even know what a Fusion or CTS is. Almost every one knows what an Accord or Camry is or BMW 5-series.
See the difference? Until the Fusion is at the top for decades, flanked by an equal to the Civic etc, it is all meaningless.
Brand value and car value is built over decades of consistency. Not one hit wonders that no consumer knows or values.
You drive that Fusion out of the Ford lot and in 3 years you can't give it away. You drive the Accord and Camry and Prius off the lot and in three years you sell it over the weekend for top dollar.
Sorry chicksaw, but it is like saying WOW the Eclipse beats the Mustang in cruise speed and fuel economy and electronic circuit breakers, and FSW-technology, etc, etc, etc.
In the end does any of that matter compared to Cessna's Citation brand, reputation, resale value, etc? NO.
Learn - don't repeat meaningless things like 97 of 100 "catagories"
In order to keep this blog pure, please limit all import auto comparisons (including the domesticly produced imports) to the Mitsubishi ECLIPSE.
Baron,
Ask the average buyer of an F-150, and they will probably go "oh" when you say 5-series, and give you a blank stare when you say E-series.
F-150 sales kicked ass every year, for decades.
They are dinosaurs, updated -somewhat- but sales numbers don't lie.
Neither does the bottom line, at an average PROFIT of $10K per large SUV.
These behemoths don't have a market many other places.
And I would argue they have no place here either. I'm glad you admire their "stand" on refusing to LOAN $14B to support 10% of the manufacturing base of the USA, while GIVING $700B to Wall Street, some of which was used to kill competing healthy banks.
Labor rates are insignificant, what's hurting Detroit now is crappy product, and the general downturn in the economy, I'd say roughly 50-50 causation.
Congress showed no morality when they repeatedly excuses SUV's from the CAFE standard (but then, funded a war for oil). They blame Detroit for being short sighted, but Congress could have upped the CAFE standard, and included SUV's, any year over the past 20, but were focused on their own "quarterly reports", in this case being every two or six years.
Give candy to the babies- don't make any hard choices that might not get you re-elected, under the cowardly guise of "it's what the people want"- the same mantra applies to SUV's, "don't hurt Detroit by enacting fuel efficiency standards". Such short sightedness is crippling our nation now.
If people want 6000 pound trucks to go to the grocery store, fine- just make it get 32 mpg. That will force technical innovation, stabilize sales in the face of fluctuation oil prices, keep us out of a war for oil, and help the environment.
It's all releative- the giveaway to Wall Street was the cake, this is just the crumbs.
---------------------------------
"Between 1992 and 1996, the Taurus was the best-selling car in the United States,[7] eventually losing the title to the Toyota Camry in 1997[8]
"In the late 1990s and early 2000s, sales of the Taurus declined as it lost market share to Japanese midsize sedans, and as Ford shifted resources towards developing SUVs".
(BTW, Ford deliberately de-contented the Taurus in 1998, even went back to drum brakes- POS deserved to die. But fuel efficiency standards would have preserved it, and Camry would have forced it to get better, not worse).
Ford Taurus, R.I.Pieces
Baron,
I was speaking of the Toyota Camry. The complaints of Prius owners will start when they have to replace the batteries at a cost of $2700 each. Plus, as they get older they get less gas mileage.
Customer demand is a factor of residual values. Unfortunately, the Big 3 hurt themselves in the 70s and 80s by producing crap. They allowed the higher quality imports to gain a foot hold. They are now reaping what they sowed back then.
My intention was not and is not to try and change anybody's mind on the quality of American manufacturing. My family has 4 generations associated with American manufacturing.
Will the Eclipse be a better plane when it is not built by an American company? I doubt it.
Shadow said,
The problem is that people aren't buying cars because of the bad economy and lack of credit.
ATM said,
1-the American dealerships suck... the sales people suck... they basically stink
2- the cars suck
My rant to CNBC covered some of these issues:
1. When is it ever a good time for CH11? How else can GM erase their $44 billion of debt? Will suppliers accept 50 cents on the dollar? Only if a gun is to their head.
2. Will the UAW accept an “average” max of $20/hour? Only if a **cocked** gun is at their head.
3. Will the Federal Govt accept pension and health care obligations for the more than 300k GM retirees and surviving widows/spouses? Only if a **cruise missile** is aimed at Washington DC.
Cost-shifting is a given and it will end up in the Feds/States' lap one way or another. GM's only leverage is to make this an embarrassing issue Obama is forced to deal with on January 21st. This kind of 'theory of constraints' mutually assured destruction is the only way for GM to stop over-producing crap no one wants to buy. Will GM executives ever stop running their plants to maximize "utilization?" Yes, only after CH11 ...and only after all suppliers insist on COD or net 30-day terms. "Spec" auto assembly makes about as much sense these days as spec real estate construction. But the geniuses running these companies don’t understand that waste – from a lean production standpoint – CAN include the finished product with zero defects when no one wants to buy it. How many 20yr old women want a Chevy Cobalt? At a certain point it doesn't matter how well it is made when the design itself is crap. So it's a **well made** piece of crap. BFD. No one wants it even if free! And no amount of marketing will change that perception of reality.
Now, CWMOR also touched on the legacy costs of retirees. As I mentioned above, the Govt needs to suck it up and volunteer to take that off GM’s books. National health care would help Boeing compete with Airbus and GM to compete with foreign transplants here. The UAW will need to make some drastic concessions in return for equity, IMO. The entire GM business model has been dysfunctional since the 1970’s. Everything has to GO! If it were my choice only Chevy, Saturn, Pontiac, and Cadillac should survive. Hummer? A big mistake in this new environmentally PC zone. Whether real or imagined, the environmental issues won’t go away; $2 gas just buys us more time. They need to dissolve all the redundant dealerships: no more than 1500 for the entire USA. Chapter 11 is the only way they can shed dead weight – brands and dealers – and not have to worry about dealer franchise contracts which are the purview of the local State courts. CH11 makes it a one-stop-shop transaction. Getting rid of Oldsmobile was a mess that made lawyers rich. Why bother keeping GMC when Chevy makes the same trucks?
Regarding Shadow’s and ATM’s comments, these are dead on: 90% of GM’s problems are self-inflicted but I don’t think ALL their cars are crap. If money was no object, I have a 2009 Corvette ZR1, Pontiac G8 GXP, and a Caddy CTS-V. Just for giggles, I’d add the 1996 ‘Vette with the LT4 engine just cuz that was the last year of the clamshell hood. The best car I have EVER owned was a used 1994 Pontiac Trans Am 6spd for less than $20k. What a blast to drive that car to and from Phoenix. And yeah, it was a chick magnet, but I loved it for the style and the kick ass LT1 Corvette engine.
The problem is that most of GM’s sub $30k cars are crap. And the dirty ‘secret’ of American business is that most companies will do everything they can to AVOID competing on price as if it were the plague. So for 50+ years all the auto companies have been able to get away with this. They moved product based on fuzzy metrics like style, comfort, performance, and big engines etc. “Hang on” features like AC and auto transmissions. Hydra-glide. Today the icing on the cake for most – not all – Fortune 500 companies is that it’s more important HOW you market and distribute your product NOT where you make it. Nike can design great shoes and sub-contract all the labor to China or Korea. America is SERVICE, MARKETING, and DISTRIBUTION. Every time I see the lame $19.99 ads on TV, I remind myself that I can buy the Made-in-China crap at Wal-Mart for $4.98 and thus no need to pay for the clever sales pitch. Manufacturing is an ‘emerging market’ industry: when it gets too expensive to make $10 packs of Hanes underwear in the USA, textiles, furniture, consumer electronics, everything else, all has to move elsewhere to protect factory margins. All except the big expensive industries: Intel chips, computers, airplanes, pharmaceuticals, cars, trucks, construction/earth moving equipment (Caterpillar/John Deere) etc. Hanes is forced to deal with “sticky prices:” consumers won’t spend more $$$ for undies...
The Critical Point: see this as a red herring when GM could solve the ‘labor issue’ by announcing that 100% of all US factories will shut down and move to Mexico in 2009. Would the market go along with that? HELL NO. A 50 or 60yr old white man is not going to pay $100,000 for a Cadillac XLR assembled in Mexico, India, China, etc. NO ONE in their right mind would buy a Corvette – regardless of the price – if it was made in Mexico and not Bowling Green, KY. They don’t want to admit it, but GM needs UAW labor because they know the brands won’t sell in their home turf without it. The marketing of Chevy is as American as apple pie. That, IMO, means the UAW has a right to exist – be paid a fair wage – and be a partner in re-engineering how the biz model works. I suspect if the UAW had more involvement in actual design and engineering decisions, bland cars like the Chevy Cobalt would not be made. I test drove the Chevy HHR SS and that car is one that can kick the Honda Civic’s ass. But as usual, GM stuck the engine in a lousy exterior design. I pray I can get my hands on a 2010 Camaro SS before they go TU. Pelosi can drive the friggin' Volt...
Ok. Rant over.
e.d.t.
Here’s the way I’m told it works:
Buyers from Walmart and/or Target, et al, make deals with manufacturers and/or distributers of American products . . . making deals that cannot be matched by other American store chains, locking up virtually the total output of a manufacturer. Once “locked in”, the purchase price is lowered . . . and the suppliers go to China to meet expectations. By then, competition has been essentially eliminated, except for a token representation, forever in “lock-step” with Walmart and/or Target. We’re now locked in to China . . . and there is no backing out. Behind the scenes, there is a cut-throat scenario that is best left to those with the conscience of psychopaths (yes, I know that this is an “oxymoron”). According to people who have been there during negotiations by the “big boys”, you don’t want to be present with the “good ole’ boys from Arkansas” when they get down to serious business.
All the arguments about the so-called American “Big Three” . . . Ford has for years boasted about how much of their product will be produced in China . . . whatever! You fill in the blanks!
Brands that I have come to trust . . . Toyota, Honda, . . . and in the machine tool area, “Yamazaki” (Mazak) have been moving to the US of A. Sure, once in a while, a single model of so-called “American brand” comes “close” to truly competing with an American/Japanese brand in quality . . . but rarely. But the American brands just happen to be made mostly in China, etc.
(We have a policy, that if it can be found “not made in China”, we will pay the extra price. Many times local distributors have attempted to slip one past us . . . and we refuse to do further business with them. Yes, it costs us something, but we have principles with which we find worthy. Obviously, we’re not always successful, but we’ll do as much as we can.)
Mazak has been in Florence, Kentucky, for well over twenty years . . . producing some of the finest CNC machines, 24/7 . . . with “humans” present less than 2/3rds of that time. Mazak and Mitsubishi Electric have been our very “life blood” for over thirty years. Mitutoyo has come to be our standard of measurement. Our remaining American built machine, a “Tree” vertical milling machine, was built in Racine, Wisconsin, a very long time ago . . . in 1975 . . . and it still has better accuracy than almost any “American” brand available anywhere in the USA. But it is a true rarity. In fact, when it was built, old man “Tree”, himself, probably inspected it, personally, before it was put in the crate, and sent to Albuquerque. (Bridgeport long ago betrayed their loyalty, and went to the orient.)
Americans, when “left alone” without government or union restrictions, do extremely well. But people will believe whatever they wish to believe . . . Sandy Claws, the “Tooth Fairy”, “The Great Pumpkin”, “Big Brother” . . . whatever!
‘Pardon me, while I attempt to make things happen . . . without the help of bureaucrats, etc., etc., etc. We didn’t leave American brands and go to Japan . . . Japan came to us, as the American brands turned tail and headed to China. We’re still here! Where are they?
gadfly
Hmmmm,
Besides crappy cars, and a crappy economy, I would have to add crappy gas prices (~$4/gal), as what caused Detroit to be in their current bind.
Someone mentioned Detroit has lots of 15-year plans. Agreed. But they never implement them*. Just like good 'ole Ross Perot said, when asked what his plan was for X, he said essentially "Plans? Congress has lots of good plans- we just need to pick one and stick with it".
*Why should they abandon a $10K per pop 20 year old technology cash cow.
Since 1986, Detroit management has been acting in their own ever increasing short term interest. It's up to us as a nation to decide if it is prudent to take regulatory action to encourage a more viable and sustainable manufacturing segment. Government "interference", no, feel free to drive cement mixers, or whatever you want, on your own land, unfettered by CAFE standards.
Oh- you want to operate it on federally funded roads? WELL, guess what!
-------------------------------
We have been here since 1985 !!
Congratulations to the Embraer team for FAA Certification of the Phenom 100.
This is a reciprocal cert based on the initial ANAC cert in Brazil but it clears the way for the Phenom 100 to be operated as "N" registered here in the good ol' US of A.
Another nail in the coffin, or perhaps another train.....
Leaving aside the "I think crappy American workers build crappy American products" arguments aside, to me, it is utterly STUPID of our government to throw 2-3 million people under the bus, compared to what the government is going to lose in tax revenue, unemployment claims, pension funds being baled out by the government, etc. vs. the 15 -20 Billion they are talking about. Especially when you consider the $700 Billion (for now) the Wall Street shysters got with basically no strings attached. (Wait until the Alt-A mortgages (aka "Liar Loans") start resetting next year..... the Wall Street boys will be back at the trough again.
What's the point of "saving the Banks", if nobody else in the country has any money to deposit other than unemployment checks?
All the Free Trade cheerleaders say "The US is the most creative country in the world.....don't worry, these dumb old manufacturing jobs will be replaced with better jobs...." They've been saying this crap for thirty years, and everyone is still waiting.
Has it not occurred to anyone that maybe there are no more "great Leaps Forward"? That a lot of other countries in the world have come to that conclusion, and are grabbing manufacturing jobs and market share by stealing technology, currency manipulation, artificial trade barriers, and various subsidies, because they know that in this big game of world "Manufacturing Musical Chairs", they plan on being the winners, if for no other reason, than to preserve domestic tranquility?
Boeing is busting a nut developing the 787, which is bringing a lot of new manufacturing techniques and materials online for the first time, just to get what, a 5% better fuel burn? Hybrid cars are a joke, cars with limited performance, for people who don't mind living with their limited performance. Building a car that can carry four adults and get 60-70mpg will save fuel not only by their fuel burn, but by being so outrageously priced (due to their exotic materials, powerplants, and construction) that most people can't afford them, and will be taking the bus (or worse yet, walking).
Of course none of this matters, since we are well on our way to converting ourselves into a Third World Banana Republic anyway, where the only growth industry is the private police services, guarding the richest 5% from the unemployed, unwashed masses.
I have seen the future, and it mostly sucks......and what little good stuff might come about, I won't be able to afford anyway.
Hope the rest of the world likes how the Arabs, Chinese and Russians are going to run the show.
This “Russian” thing:
A friend, a “true brain”, goes to Russia from time to time, to share laser technology with them. These “scientist types” present “papers” . . . as if it takes a person to “read” a paper in person, that could be sent by “email” or “fax” . . . but that’s the way the system works at Sandia, Los Alamos, and the other national labs. Silly naive scientists with egos beyond measure!
I’m sure that it is an “ego thing” among scientists, but I learned a long time ago to not trust anything initiated by a Russian.
One of these days, this sort of thing is going to bite back . . . and it won’t be a “gentle” bite, but will take flesh with it.
This Russian Eclipse thing . . . do the Russians seriously think anything will be gained in a business relationship with this loser of a company? . . . Hardly! Subtle technology clues are all that’s required . . . and that slight increase of opening a door of cooperation. The “western mind” seems to only think in terms of sudden success . . . a show of profit in the next quarter. The eastern mind thinks in terms of slow, but sure progress . . . sometimes measured at the rate that “paint dries”, but always toward a single goal.
‘Such a small thing . . . part of an overall strategy. Eclipse is just another “dupe” in a long list of “dupes” . . . ‘Just consider what the Russians will actually get for their little effort. Did you ever think for a moment, that they actually wanted this silly little bird, that can barely fly? The Russians can design and build jets, far beyond the wildest dreams of the “dreamers” in ABQ. That’s not their goal! Think again!
gadfly
SNIPPET TIME
1. Peg Billson, it appears, has had no joy finding alternative employment at this time. A pity, as it appeared to me that she did the honorable thing when she resigned.
2. Turns out that EAC have had no luck either in flogging off the only piece of real estate they actually owned i.e. their training facility. Less cash to pay creditors then.
3. Several estimates reach me of the 'revised' cost for the FPJ, if they ever manage to restart. With any sort of a profit on the aircraft, 'new' ones are heading towards $3 million. Remind me how much Cessna are charging for the Mustang?
4. Kens' wife, Shari Meyer, is one of the 'Objectors' to the proposed '363' sale of EAC assets (by Roel Pieper) to 'EclipseNewCo (prop, R. Pieper) at a price determined by, you guessed it, Mr. Roel Pieper. Its a pretty comprehensive forensic breakdown of why the sale is a ready up. Only problem? We've been writing all about it (for years) while Shari was co-ordinator for the gatherings of The Faithful.
How the mighty have fallen. But look on the bright side, Shari. All those Eclipse caps, t-shirts and mugs are collectors items now.
Especially the mugs....
Shane
"since we are well on our way to converting ourselves into a Third World Banana Republic anyway, where the only growth industry is the private police services, guarding the richest 5% from the unemployed, unwashed masses."
Joe,
I can see that you are an optimist. ;-)
This sobering and chilling theme was described at considerable length in a book by Robert Reich titled The Work of Nations. (Same Robert Reich who was Sec of Labor in the Clinton years.) I am not a Reich fan but I consider this book to be one of the more important ones I have read in the last two decades. Highly recommended for those who have at least modest critical thinking skills, but be forwarned, its a bit of a downer.
I love National Health Care ... for Canada, or France.
No employee or retirement plans should be assumed by the public.
Make the BK Court fully fund employee obligations before any management, board, or senior debt payouts.
Why is anyone suprised that no one is buying cars? In two months we will be bailing out major appliance and TV makers, then supporting XBox sales.
If you produce luxury or high ticket optional items, find another line of work for a while.
For those wondering what's up ... I've been trying Baron's meds.
Mood swing in ...
3
2
1
Thanks Zed !
-Goat
What the PTB don't want you to know, is that we essentially have "Nationalized Health Care" already
Let's see....
-Limited choices for doctors, months long waits for anything except emergency treatment.
-Even longer waits to see specialists
-Outrageously costly, and rations (denies) treatment.
Sounds like all the reasons people have been using to argue AGAINST Nationalized Health Care.
The problem is, we are talking about my current group medical plan.
I'm of the opinion that the only thing worse that Nationalized Health Care, is the system we currently have. ......Insurance companies getting rich, doctors getting even richer by gaming the system (about the only new commercial construction going on around here in the past five years has been new doctor's offices)
In the meantime, the poor patient has to put up with copays, supplemental bills for "charges not covered by your plan", and repeated trips to the doctor to get simple things done, as in:
-Take a half day off for a five minute visit to the doc, who decides to refer you
-A month later, take a half day off to see the specialist, who looks you over for five minutes, then....
-a month after that, take a half day off AGAIN, so they can do their 10-15 minute procedure.
-Finally, get the bill, only half of which is covered by your plan because you used an "out of network" doctor.....which you had to use, because all the "in network doctors" aren't accepting any more patients.
This country is screwed up beyond redemption.....at least in the Totalitarian Communist Chinese police state, guys that screw things up as bad as they are here have a tendancy to end up at the wrong end of a firing squad.
(I'm not in a good mood tonight......as usual, rumor control reports that the flight department guys will be the first ones thrown under the bus again. I had just finally recovered financially from the last time that happened. I'm getting too old for this sh#t.....)
Joe P.
I think Detroit builds crap- but think the work force is okay. The guys I know that work there are "car nuts", and hate the junk that rolls out as much as anyone else.
--------------------------------
Baron,
"Soon Boeing will found out how disastrous the huge wage increases they just agreed to will be".
Pray tell, just how "HUGE" was the wage increase? =(1.15**(0.25))
3.5% per year.
Seattle Times
Oh. By the way. What is the CPI?
"The October level of 216.573 (1982-84=100) was 3.7 percent higher than in October 2007".
CPI
...You were saying???
------------------------------
WhyTech,
I think Robert Reich is the best voice around. Unfortunately, he's not making policy anymore, just commenting on it...
Wiki: Robert Reich
Robert Reich's Blog
(Hey! I thought we were the only ones allowed to do that!)
I hear frequent quotes from the book "The World is Flat". I think the thesis is globalization is helping developing nations, but rather glosses over the down side to developed nations. I haven't read it, but it's on my "to do" list.
The World Is Flat
Joe, I know exactly how you feel.BTDT
I'm not in a good mood tonight......as usual, rumor control reports that the flight department guys will be the first ones thrown under the bus again. I had just finally recovered financially from the last time that happened. I'm getting too old for this sh#t.....)
Seems like pilots are worth nothing on the ground but in the air when something goes to S**T ask MR Big how much your worth verses those cute college boys in the $1000 suits that got us into this mess.
At NBAA this year had the pleasure of telling one of those pretty boys that if he didn't know what the term Second Segment Climb meant he better get a different job!
Joe P.
Good luck with the "developing situation".
I got an email today, from "the guy you don't want to get an email from".
(Well, No- it wasn't Wedge :)
I dodged another bullet, barely. Hope you and the guys at your shop do too.
---------------------------------
Regarding "nationalized health care", I don't get it.
As a nation, we have "nationalized road system", and it works pretty damn well.
We have a "nationalized air traffic control system", and it works pretty damn well.
We have a "nationalized defense system", and it works pretty damn well.
So I think a "nationalized health care system" would work pretty damn well too.
--------------------------------
That's what irritates me- Boeing, Detroit, School Districts, Bubba's Widget Factory, all have to pay for their employees health care.
Third world companies don't, and that gives them a competitive edge over US companies. Lift the burden off the US companies. Support a national health care system. That's my put.
---------------------------------
AND I GET SICK AND TIRED OF THE LINE "LIKE CANADA".
OKAY- HERE'S THE CHOICE. IF WE ARE GOING TO CHANGE, WE CAN EITHER BECOME MORE LIKE CANADA, OR MORE LIKE MEXICO.
WHICH ONE WOULD YOU RATHER LIVE IN, AND HAVE YOUR CHILDREN GROW UP IN ???
(Rant mode "off"- TYVM :)
Bill...
"the world if flat" is a great read - tels the story as it is - not as it should be.
There's a lot of explanations that make sense, good insight...
Bottom line - the idea that you ARE competing with some guy in India, for your job... is true unless you cut hair or grass, so to speak.
Aerospace lags the rest of industry in this regard, so its fairly easy to see the writing on the wall.
Tryin to keep your place at the table, based on making more money doing less of the "Work", is going to be tough... my opinion.
Freidman believes that there is mre value in the value chain in certain aspects of the development/production of the product... and the US has a pretty good hold on this apsect, for now...IMO.
All this represents is the golden rule - whoever has the gold rules - for now, its the US... but even today, a few short years after Friedman wrote the book, the situation has changed.
Global resentent towards the US has increased, and the Wall Street financil engineering that led to the global financial meltdown is not going to help.
Perhaps if the incumbant administration pushed for a technology revolution in fuel... and the US becomes a global leader in this regard... we could be back on top.
I certainly do not subscribe to the military led global domination plan, together with outsourcing everything... as a long term model.
Just one dumb air taximan's opinion.
Good book.
Where's flightcenter?
"So I think a "nationalized health care system" would work pretty damn well too."
Canada does this by province... just to be clear.
Anyone with any money comes to the States to get better healthcare... from Canada, India, wherever.
I would love to see a bottom line health plan that covers the population at large, and somehow still maintain the current system that reqards excellence with money.
I know many Canadian Doctors who left to live here, becasue they could not make money in Canada.
The comments here regarding pilots being under-appreciated/under-paid... rings true - pilots are responsible for lives. So are Doctors...
Would you like to see Doctors feeling like Pilots?
Maybe a poor analogy
No one should be without heathcare... and perhaps this should be a perk at some companies - a better plan... to lure better talent?
Tough in practice.
"3. Several estimates reach me of the 'revised' cost for the FPJ, if they ever manage to restart. With any sort of a profit on the aircraft, 'new' ones are heading towards $3 million. Remind me how much Cessna are charging for the Mustang?"
Um, let me be the first to go on record, here:
NO ONE WILL EVER BUY AN EA50 FOR $3,000,000
NO ONE
EVER
...and, in the spirit of blog "transparency":
Joe P, "PTB" = Powers That Be
(I had to look that one up :)
Goat "TYVM" = Thank You Very Much
So, for now: "SLS"
(So Long, Suckers! :)
...although I meant that from a Woodie Allen movie, I think Wedge probably muttered the same thing in late July...
"Bananas" movie clips
(sorry, I couldn't find the clip I was looking for, but with talk of a Banana Republic... and I figured Joe P. could use a pick-me-up :)
Let me try to bring the car discussion back to aviation.
The issue is that the UAW is behaving as if it were 1968 and the US automakers were competing just amongst themselves and had 70% of the worlds auto production. Their labor and work rules and resistance to downsizing , EBG, IS THE PROBLEM.
Let me explain. They made sure that GM, Ford, Chrysler had fixed costs much higher than that market share could support. As a result, the Detroit-3 had to lower prices and give rebates to keep the volumes artificially high (just like Eclipse tried to do). That caused them to lose money on cars or have lower profits, invest less, and start being perceived as the "cheap cars". Cheap in brand, cheap in quality. (just like Eclipse).
In order to further help the UAW, Democrats imposed quotas on the Japanese, etc. As a result, the Japanese moved up-market, increased content (quality, power everything, etc) on their cars, and started being perceived as the value/quality/expensive car.
The Japanese could not increase volume (quotas), so they increased content. Detroit could not lower volume (UAW fixed costs) so they lowered content (quality, value).
Results were predictable. Now, the Detroit-3 are in a race to the bottom, they keep on laying off workers and closing plants, but never fast enough, because the UAW only allows them to lower fixed costs the bare minimum to keep them from failing.
Believe you me - they will go to the bottom, unless things change.
This was a historical opportunity that the Senate Repuplican tried to achieve to move the UAW in one-step to parity. Too bad the UAW prefer a slow death, rather than an amputation of a festering limb.
Back to aviation, it is the same thing. While the Legacy with high fixed costs chase the bottom, stop ordering planes, fly decrepit cabins, the likes on EK (taking delivery this months of their 66th 777) and SQ (taking delivery this month of their 77th 777), and B6 and WN are taking share away with better service newer planes etc.
People have to wake up. There are no more local markets. Sure, Congress can restrict foreign airlines from flying in the US, but with the likes on LH taking 20% of B6 and doing code shares, the results are the same. AA, UA, US etc will always be retrenching and cutting capacity, while global competitor move in. If congress allowed free competition in the US market, the US legacies would disappear in a few months.
Same situation with Boeing. With their unions, high pay and benefits and complex work rules, Boeing, as they did in the 787, will outsource design and manufacturing all over the world. Boeing will continue to lose jobs in the BCA side. Defense is again, artificially protected by the buy american restrictions. But even there cracks are coming. BAE and even EADS are becoming substantial supplier, up to an including supplying Marine One to fly our commander in chief.
People need to wake up. EVERY compensation package for US works MUST be globally competitive. That doesn't mean low wages. It means the labor costs/unit of production must be competitive. If the AA flight attendants want to make the same as WN's they need to be as productive. They need to clean planes, check people in at the gate, push wheel chairs, cater, etc. But no, they want to be prima-donas and ONLY do air work. Guess what? They will go extinct soon.
UAW and IAM workers must take advantage of better education, better infrastructure, american can-do culture, and be productive as hell - that is the only way the can (long term) make more money than the Brazilians or Japanese or Chinese.
Yes, congress and Bush can delay the inevitable. Just like quotas and foreign airline restrictions. But it will become increasingly expensive.
Bush may give the $14B now, come march they will ask Obama for $28B. The EU, Korea and Japan will file a trade action against the US, which they will win and cause sanctions against our products, which will make us even less competitive.
The US consumer will resent that the highest paid some what unskilled workers in the US are continuing to live above everyone else with their tax dollars, they will avoid buying their products, the cycle will continue.
BEG, it is ALL about uncompetitive labor conditions. It started there and will not end till that is fixed.
JP said... it is utterly STUPID of our government to throw 2-3 million people under the bus, compared to what the government is going to lose in tax revenue, unemployment claims, pension funds being baled out by the government, etc. vs
----------
Why do you think that would happen?
If the US government says. We will provide the loans, under the following conditions:
1 - Shareholders get a cram-down of 90% (they already agreed/did)
2 - Bondholders get a cram-down of 70-80% (they agreed)
3 - Labor brings their costs in line with the competition. (they balked)
4 Feel good miscellaneous - no private jets, no bonus etc, etc) (mgment agreed).
If every one agreed, except for the UAW, why aren't you saying. "I can't believe the UAW is sending 2-3 million people under the bus"
I think your frustration is misdirected. Tax payers are willing to put the money. Shareholder, bondholder, mgmt are willing to take the hit. ONLY the UAW doesn't want to do any thing, other than "think about it" after 2011.
COME ONE. They are the ones throwing people under the bus if the government (representing the tax payers stay firm).
Unfortunately, Bush has no balls, and will give them the money, and nothing will change. I hope the EU and Japan send 3x that amount in aid to their automakers and/or file a WTC complaint immediately if the US give these people money with no conditions.
And PLEASE don't compare this to the financial bailout. Yes, Citigroup got bailed-out. But they are laying off 52,000 people in addition to 10K already laid off. And they don't have a Gattelfinger sticking a finger in their eye. They do what is needed BOOM on the spot.
I'll make a deal with you. I'll support sending $28B or even $56B to detroit, if they can do the right think. Kill 7 or 8 if their 15 brands, lay-off 40% of their workforce and close 50% of their dealerships. That is what Citigroup is doing.
UAW wants the money with no "adjustments" to speak off. ridiculous.
ATM,
Thanks for the "book review" of the World is Flat- season read for me.
-------------------------------
Regarding health care, you're right- if you have money, you come to the US to get medical treatment. We have the best- at a price.
What if you DON'T have money, or insurance? You go overseas (or to Mexico) for treatment, Canada for prescriptions.
------------------------------
The US hasn't been investing in infrastructure- or education. We've been raiding other countries for doctors and nurses, as well as engineers and programmers. Doubt if they are too happy about permanently loosing the docs and nurses, (I imagine they make out okay on the technology transfer though).
--------------------------------
Shane,
An Eclipse for $3M, yikes!
That's going to definitely be an "exclusive" offer :)
I'm glad to see that this blog has turned into DetroitCriticNG.
They deserve to go TU just for the harm they did to BizAv. A travesty. They made a business tool and the industry most of us here love into a pariah.
The whole industry Automakers, UAW workers, dealers, their congress allies get no sympathies from anymore. I'm willing to lose another 10% of my net worth due to longer down cycle just to see these people held accountable.
Shane Price said...
4. Kens' wife, Shari Meyer, is one of the 'Objectors' to the proposed '363' sale of EAC assets...
But wait... I thought Ken said this is exactly what he wanted to happen?!?!??
"the buyout of Eclipse Aviation accomplishes what I wanted the most"
Is there marital discord in the Meyer household or is this another example of Ken's dichotomous personality?
Not inconsistent anonymous. The APA and continued operation is desirable for the owners. The issue is the terms. So, by objecting, they are trying to obtain concessions. E.g. that NewCo will upgrade their jets for free (unlikely) or for a defined price schedule (I think it is achievable).
So they want the APA, but are tying to get better and/or more certain terms.
Baron,
I understand the legal ramifications of filing an objection. I was just poking fun at Ken's incessantly nauseating cheerleading for this debacle.
Eclipse dumps another vendor:
Ken says: Great. That vendor sucked anyway.
Eclipse gets sued by a vendor:
Ken says: Great. That vendor was incompetent.
Eclipse gets another AD:
Ken says: Great. It shows how safety-minded they are.
Eclipse files for BK:
Ken says: Great. Blah, blah, blah.
Yes, like Shane I've had an interaction with Captain Zoom. I questioned his ethics on another aviation site and he threatened me. I posted a somewhat nasty comment about him, his past, and his manhood. I was politely told by the forum moderator that I should remove my post because Zoom was.... Well, I won't say what the moderator said for fear of angering Zoom once again but the moderator had nothing nice to say. He took the time to point me a website that pointed out Zoom's history with the FAA and his "medical" issues. Knowing his history with the FAA will explain the "Captain" reference. If you wish to examine his past here is the site the other forum moderator recommended. Of course I make no claim as to the accuracy! Here it is:
www.ousterhout.net/zoom.html
Therefore I submit the following monikers for Captain Zoom:
"Doctor Sun N Fun" (ya gotta know his medical history from Tulsa during the 1970s and his the story of banishment from SnF)
or how about this moniker:
"The Flying Squirrel" Sort of self explanatory don't ya think?
or simply....
"The Great Imposter" (you do remember this movie with Tony Curtis don't you?)
"Jimbo the Rocket Clown" has been used by a LOT of other blogs and sites.
"Dr. Death" could be a possibility. His shill efforts for EAC may very easily lead to someone's death due to their purchase of an inferior plane.
"The Comedian" NOBODY that knows anything about this guy could REALLY take him seriously.
and last but not least....
"Buster" I'm not sure why. It's just a goofy name that seems to match "Wedge" My apologies to anyone actually named Buster!
Gad said: "Americans, when “left alone” without government or union restrictions, do extremely well."
How's that approach working with the banking industry for you right now, Gad??
Bottom line is there must be some restrictions/regulations, but they must be balanced ones. Neither too heavy handed, nor too weak.
Just like Embraer....
http://www.forbes.com/home/2008/12/12/detroit-bailout-labor-oped-cx_sd_1212dalmia.html
"Ford recently built a facility in Brazil where it can produce five different vehicle platforms at the same time, on the same line. What's more, many of its suppliers are housed in the facility as well, something that allows them to move parts to the assembly line at a moment's notice. Not only has this lowered Ford's production costs and boosted productivity, it has also given it flexibility to adjust its product mix to shifting market conditions."
And back in Detroit?
... continuing...
"But union rules, with their featherbedding requirements and crabbed job descriptions, make it much harder for such a factory-of-the-future to operate in the U.S."
Baron,
Labor costs have NOTHING to do with Detroit's current problems.
NOTHING.
NOTHING.
NOTHING.
I don't disagree that Detroit's labor costs are somewhat higher.
But THAT IS NOT THE ISSUE.
Sales are off because:
1) People are not spending money, because they are worried about the economy.
LABOR PRICES HAVE NOTHING TO DO WITH THIS.
---------------------------------
2) Gas Prices are high, and Detroit's porkers are guzzlers so those aren't selling.
LABOR PRICES HAVE NOTHING TO DO WITH GAS PRICES.
LABOR PRICES HAVE NOTHING TO DO WITH DETROIT DESIGNING GAS GUZZLERS.
---------------------------------
3) Detroit does not build (m)any good cars.
LABOR PRICES HAVE NOTHING TO DO WITH THIS.
---------------------------------
Baron, I am aware of your argument that labor costs make the Chevy Cavalier a crappier car than it might be. Detroit isn't in trouble because people aren't buying Cavaliers. They are in trouble because people aren't buying anything.
LABOR PRICES HAVE NOTHING TO DO WITH THIS.
Shadow said...
How's that approach working with the banking industry for you right now, Gad??
Pretty well actually. The ones that took the biggest risks (Lehman) got wiped out fast, the ones that took the next got subsumed (Wachovia, WaMu), the more conservative ones, Chase, Wells Fargo, walked away with the prize.
When credit was plentiful people were complaining that we shouldn't be giving loans to people with no employment history and low credit scores and companies like Eclipse and GM with marginal business prospects.
So now we are NOT.
What are you (not you personally) bitching about now? Didn't like the medicine?
Sorry BEG, I believe you are a union member, and I mean no disrespect or antagonism. I have the highest respect for the American worker. It is their collective alter ego aka UAW, IAM tht is the issue.
But labor costs and reluctance to rightsize the plants and workforce combined with the local franchising laws that make it impossible for Detroit to cut brands are the main issues.
In 2004, 2005, 2006, 2007, before the economic crisis and before the run-up in oil prices:
Toyota, Honda, BMW, VW, etc were all gaining share, posting record earnings, and building a war chest for the INEVITABLE down cycle.
The Detroit-3 (with ford being a bit better), continued to lose share, lose money, underinvest, draw down their lines of credit. I.e. they were struggling in the best of times. A good business makes a killing in good times and holds its own in bad times.
The Detroit-3 stumble along in good times and collapse in bad times. That is not a healthy business.
If GM, Ford and Chrysler could 5 years ago have cut workforce, plants, brands and total labor costs to match the plants in the south do you HONESTLY believe they'd be in this mess today?
Please tell us? would they?
I read somewhere, oh, but the extra labor costs are only $850-1,200 per car. Well, hello. Detroit builds 10M cars in a good year. That is $10B/year in lost profits. And you think that is NOT the ISSUE!!!????!!!
What is? Steel is more expensive for the Japanese? They are more intelligent than Americans? They have bigger balls? What is the issue?
A lot of the executives running the American operations of foreign companies are AMERICAN and used to work for the big-three.
What is the explanation BEG?
Baron,
The banking industry hasn't hit bottom yet. There's plenty of hidden losses, so there's more to come from this show. More banks will be wiped out, and don't be surprised if Wells Fargo or Chase are among them. There's a new, larger round of mortgages that will readjust interest rates in 2009 and 2010. Three times the volume of those home loans that adjusted in 2007-2008, in fact. Many, if not all, of these loan amounts will be for more than the houses are worth. Wells Fargo inherited a lot of those through Wachovia, and it could doom Wells Fargo in the end.
Bottom line: don't count your chickens until they've hatched. And in this case they haven't hatched yet.
OK, can we PLEASE get back to talking about the Ponzi scheme known as Eclipse Aviation now????
Baron,
(or, as Fred would say :)
My Dear Baron :(
It would seem you are arguing some mixture of two positions I elaborate upon below:
"People need to wake up. EVERY compensation package for US works MUST be globally competitive. That doesn't mean low wages. It means the labor costs/unit of production must be competitive. If the AA flight attendants want to make the same as WN's they need to be as productive. They need to clean planes, check people in at the gate, push wheel chairs, cater, etc. But no, they want to be prima-donas and ONLY do air work. Guess what? They will go extinct soon."
--------------------------------
POSITION ONE:
something, I deduce, along the lines of "government intervention is bad"
WRONG.
Government intervention is GOOD.
The US airlines are sucking, because of lack of competition. You saying something about foreign competition.
Well, DC has let airlines engage in predatory pricing and never enforce anti-trust legislation.
Porked-out legacy carriers kill off upstart airlines with predatory pricing, and go in debt to buy out competing low-cost carriers.
NAME ONE CASE WHERE CONGRESS HAS PREVENTED "CONSOLIDATION". OR ENFORCE ANTI-TRUST LEGISLATION. OR PENALIZED PREDATORY PRICING.
NAME JUST ONE???
----------------------------------
POSITION TWO:
"People need to wake up. EVERY compensation package for US works MUST be globally competitive".
AH, WHY ???
(The usual line is, "Because if we don't, manufactueres will go else where for labor", right?
How can a worker in the US,
WHO PAYS TAXES FOR:
1) US public school system.
2) US criminal justice system
3) US health care system
4) US environmental protection policies
5) US OSHA worker protection
6) US social security
7) US democratic government overhead
8) US defense policies
9) US public transportation system
10 US -self interest for the blog- FAA
How can this worker compete with a worker in Mexico ?
Or Brazil ?
Or China ?
He can't. So the 10 benefits to society I mention, are either going to have to be paid through:
1) high US worker salaries, or
2) through import tariffs.
3) higher tax rates
4) OR- NOT AT ALL
Baron, if you see any more attractive option to 1-3, please state what it is.
(Apply US taxes to foreign workers building product to be imported to the US? That is functionally what import tariffs are- I don't have any problem with that option. And I've heard all the arguements about "free trade", thanks.)
--------------------------------
"That doesn't mean low wages".
I appreciate your points about union rules, etc., but I would say the average US worker is as "productive" as any other worker in the world.
OUTSOURCING IS ABOUT LOW WAGES- NOT PRODUCTIVITY.
BTW,
I heard the auto bail out was iced because the UAW would not cut wages to "lower tier" levels.
"The new cost includes laborers' wages of $29.78 per hour...
"GM says it already is starting to see savings from the new contract because it has hired more than 1,000 workers who are paid $14 per hour"
I'm not in favor of converting US autoworkers from $30 to $14 per hour jobs, thanks.
Oh, and about downsizing?
"GM, which has been restructuring for about five years, had about 125,000 U.S. hourly employees in 2003 and expects to have 62,500 by the end of this year(2008)".
Nov 19, 2008, GM and UAW
Therefore I submit the following monikers for Captain Zoom:
Hey bubba
The term PSYCHO BOY as been used by a former VERY CLOSE family member.
BEG said....
NAME ONE CASE WHERE CONGRESS HAS PREVENTED "CONSOLIDATION". OR ENFORCE ANTI-TRUST LEGISLATION. OR PENALIZED PREDATORY PRICING.
NAME JUST ONE???
AA, BA alliance. Do you know that OUR GOVERNMENT forced idiotic rules such as. I as an AA flier am NOT ALLOWED to get miles on a JFK to UK BA flight, even though they are both founding members of one world?
Another one - all the hassle that Virgin America had to put up with and all the restriction to fly in the US.
Another one... our government sends hundreds of millions in subsidies to the legacy carriers to maintain service to uneconomical small markets.
Etc, etc, but I don't think that is the issue.
It is not like AA, UA, DL are in any position to kill off B6 and WN. It is more like the other way around. B6 is giving DL hell right there in ATL. B6 is sticking it to AA and DL at JFK and Orlando.
And they are doing it just like the Japanese transplants. Newer assets (planes, car plants), more productive, lower cots/unit of output workers.
Hi Baron,
"If GM, Ford and Chrysler could 5 years ago have cut workforce, plants, brands and total labor costs to match the plants in the south do you HONESTLY believe they'd be in this mess today?"
YES
"Please tell us? would they?"
YES
BECAUSE:
1) The economy would still be sucking, so people wouldn't be buying
2) They would still be building Suburbans and 1 ton dually pickups and Ford Excursions and Hummers.
3) The would still be building Crown Victorias that get worse mileage now than they did 20 years ago., but are plasticy pieces of crap.
Perhaps it is time that the Critic blog and the E5C blogs should merge. The blogs are sounding more and more alike.
Example: there was a picture of a T-shirt on the E5C blog. It read "Love the airplane. Hate the company. The Eclipse 500. A whole new experience in jet ownership."
It brought tears to my eyes.
Come on, E5C guys...group hug! Drinks are on Shane! ;-)
BEG said ... "GM, which has been restructuring for about five years, had about 125,000 U.S. hourly employees in 2003 and expects to have 62,500 by the end of this year(2008)".
Yep. And they are on track to keep on going right down to ZERO. Why? Because they are behind the downsizing curve. Every time they downsize they spend massive amounts of capital that could go to newer plants and car development. Buyout moneys that the competition never has to pay.
If GM were like Citibank, they'd lay off 52,000 assembly line workers on the spot with 2-weeks severance and a handshake, and they'd have done it years ago.
Face it BEG. There is not a single executive at GM that would not like to have fewer workers, fewer plants, etc. They simply can't do what is needed because the UAW won't let them.
Anyway - let me get off this horse.
The trend in America is clear. Only 7% of private employees are unionized. Some of the heavily unionized ones with restrictive work rules are the ones that are perennially losing money (Airlines, Autoworkers).
Hopefully next week we'll have some more interesting Eclipse developments to discuss.
If no competitive bid materializes by the 22nd, it will prob go RP's way.
Hello again, Baron,
Regarding union membership,
BTDT
Inconsequential union dues, didn't add anything to the cost of the product.
The union rules didn't impede production, either.
They did guarantee me "protection" in the case I backed into the CEO's car, which is why my manager recommend I join.
--------------------------------
I would pose this question:
Why is the US a better place to live, than Mexico?
Is it because stockholders in the US are wealthier than stockholders in Mexico?
No.
It is because there is a stronger middle class (by far) in the US.
Why is there a stronger middle class in the US?
Work ethic? - NO.
Ethnic factors? - NO.
Geographic location? - NO.
More even distribution of wealth? - YES
How do you achieve a more even distribution of wealth?
Taxes.
Or Unions.
TAKE YOUR PICK.
OTHERWISE, THINK WHAT IT IS LIKE TO LIVE IN MEXICO.
--------------------------------
And- I'm not a "love it or leave it" guy- I love it, and if you don't love it, I want you to help fix it, so you will love it too.
--------------------------------
The airlines lose money because anti-trust legislation is NEVER enforced, not because of unions.
I'd LOVE for the more efficient start ups to drive the legacy guys out of business.
The autoworkers are NOT "perennially losing money". In fact, they've done pretty good for the past 20 years. Better some years than others. But it looks like they've always PAID A DIVIDEND. Even when they were laying off workforce. By 50 percent.
GM Dividends
Ford Dividends
Oh, and by the way, back in "college days", I did voluntarily join a union, that was seeking to get a raise for the staff, of 10 cents per hour.
That would make the difference between most of them walking to work, or being able to ride the bus.
So Unions DO make a difference in the basic quality of life for some people. No universal health care- maybe the union can negotiate it for you. Sad, that it comes down to this, because of the federal or state governments failure to provide this.
Have unions abused their power? I'd say, from the 1930's through 1970's, sometimes- sometimes not, sometimes egregiously so.
But NOT in the past 25 years- states have been undercutting each other to bring in jobs, and lots of foreign product pressure on wages.
(Those auto jobs in the southern states? Heard on the radio today it cost the taxpayers $125K for each job created).
Baron-
TRUCE!!
(I will burn my union card, if you will join the UAW!! :)
Baron said,
...they are behind the downsizing curve. Every time they downsize they spend massive amounts of capital that could go to newer plants and car development. Buyout moneys that the competition never has to pay.
****
When married in TN, I drove to the Decherd, TN plant hoping to get a job to escape the misery of working for my father-in-law. This economic mess HAS hit the foreign transplants by surprise but how they choose to respond shows their character. Nissan didn't have to offer buyouts, THEY VOLUNTEERED to offer employees up to $125k when they had to shut down production on several lines at their Decherd, TN plant. Considering my experiences at EAC, I'd do anything to go back in time to 2003 and try again with Nissan.
This summer Toyota had to idle its Tundra line and about 4500 employees were idle. ALL received full pay; some were sent out to do community service, Habitat for Humanity projects, etc. Auto News reported it rather tongue-in-cheek that every speck of dirt was picked up in the plant; lots of training and quality workshops. This cost Toyota at least **$50 MILLION** Is this an investment or a foolish expense on Toyota's part? Japanese companies don't waste much, especially when it comes to their people.
Seeing your employer take an interest in your skills, learning, and well-being has a positive statistical correlation in your warm fuzzy morale. And it tends to help the grunts build better cars. If GM, Ford, and Chrysler understood that ...perhaps they could have set up non-union plants too. Spring Hill, TN (home to Saturn) is only about 95 miles away from Decherd, TN.
And for those that claim all the subsidies Nissan, Toyota, BMW, Mercedes, etc. have a 'net' cost to the State Govts, well, that is just part of the natural competition between states. If I was the Gov of Alabama, I'd be pretty damn happy that Toyota paid its workers $50 million for a 3 month vacation. That's $50 million the Govt got to TAX for state income; that's $50 million those workers had to spend on their mortgages in Alabama, etc. Sure as hell beats going to the AL Dept. of Unemployment, eh??? THIS IS NOT A ZERO SUM GAME.
http://www.usatoday.com/money/economy/2008-07-30-3205814917_x.htm
http://www.autonews.com/apps/pbcs.dll/article?AID=/20080818/ANA03/808180342
e.d.t.
9Z,
The idea of a 'group hug' with the lads and lassies over at E5C is something I've long predicted.
When, not if, the final version of what we now call EAC goes Chapter 7 (or whatever it's called, wherever they are at the time) the owners, suppliers and (sadly by then, ex) staff will need a place to rally.
This blog will be that place. I hope it will be a Bunker Hill rather than a Waterloo
I hope you will note I picked decisive events, both involving the British. They also used to have a 'global empire'....
There are lessons from history, which only the foolish ignore.
Shane
P.S. The Duke of Wellington was Irish....
Monsieur Shane , you're so right !
thanks for the Info that Wellington was Irish ... (didn't have a clue about)
the analogy goes beyond those decisive events ...
Napoléon mainly lost because he was foolish enough to do very mistake he tried to avoid during his military life :
play the other to choose the battlefield himself ...
so RP his back on the wall , tried to choose his own battlefield , but unfortunately , the army of Russian money (VEB) is about to drop the weapons ...
(it should be officially announced on Monday or Tuesday , if the situation occurs ....)
My Dear Billy ;-) (why not your turn ?)
you wrote: american workers have the same productivity than others in the world ...
sorry to raise a painful subject ... but the I.W.B. does not agree with you ...
and before talking about productive work and all this kind of fancy crap ...
there is one thing we must consider :
all the past Empire have in common to have failed because they were TOO good in a thing or another at some point ...
it is something related with human nature that you always learn more in failure or tough times than in times of plentiful ...
so before talking about the items , i described as "fancy crap" the main quality of any group of individuals (as i really DO NOT think that be from a specific place can be any sure probability of being any good ) is firstly to be open to the world and 2nd to be able to adapt and change while refusing the idea "because it is us " ...
world history is full of this form the Chinese emperor , much later the Roman Empire ... more recently the French Colonial Empire , the British Empire and its evil counterpart , the Nazi 3rd Reich ...
all have one common feature : to have believed they could dominate all others ...
so as for "the show" being run by the Arabs (which had there times , long ago ...) the Chinese (they had as well , and now , i am not sure it is not a fake power learned in US university ...) or the Russians ( would have been so much simpler to keep them in the dark-age called Soviet Communism)
i can only foresee one thing :
if one tries to rule all the others , it will lead only to more illusions , more spilled blood , more unrest ...
only a question of time !
Shane,
Glossary entry:
WCSYC – An acronym coined by Vern Raburn, short for "We Couldn't, So You Can't." It was meant as a cynical poke at the ‘Dinosaurs’ of aircraft manufacturing. Ultimately WCSYC stood for “We Collapsed, Savaging Your Cash.”
See Dinosaurs.
Glossary term:
WedgeNG - Slightly famous paper tiger and Dutch basketball magnate. Legal escape artist. See also: Roel The Liquidator; Mr. Peepers.
Condiments available upon request,
DI
Rumor has it the wheels are coming off the wagon at Linear Air.
Whil we are waiting for mateial EAC delopments, thought I might offer a solution to all the world's problems. There is one fundamental problem,and many lesser problems, most of which are derivatives of the fundamental problem.
The fundamental problem: there are too many poor people in the world as a result of reproduction a will. The fundametal solution is prohibiting reproduction at will, not redistribution of wealth.
Most humans have considerable capacity to learn and be productive. They need to be shown how and strongly encouraged (compelled) to so.
Yes, a social hot potato of huge proportions. But, it will come,and perhaps in the lifetime of some blog participants.
(I crawled into my bunker before making this post!)
Whytech,
Not really related to your description of the problem but...
Many are troubled by capital punishment. As a result it has been redefined by the acronym RBC - Retroactive Birth Control.
Interesting. Looks like the Dutch have a UAV program after all. I didn't know that. Could it be in store for the EA500?
e.d.t.
http://www.aviationweek.com/aw/generic/story.jsp?id=news/DUTCH12128.xml&headline=Dutch%20to%20Augment%20UAV%20Force&channel=defense
Fred, my dear Fred :)
(Some how I don't think I'll ever be addressing Wedge as "Wedge, my dear Wedge":)
Last night, I tried to find statistics on global worker productivity, but couldn't find anything on-line. (Please post a link if you are aware of some- but only if you want me to rant on :)
But I still assert that "productivity", a measure of how many widgets per hour a US worker, compared to a country X worker, assembles, is roughly the same. Whether country X is Canada, or Japan, or Mexico. (Why? Because people are basically the same).
Now some will say workers in country X build more widgets per day, but it's because they work more hours per day.
Or will say it's more cost effective, but that's because workers in country X get paid less.
And conversely, some might say workers in the US build more widgets per hour, but that's because the US has perhaps more automation enabling the workers to be more productive.
Workers are about the same everywhere, I think. Because people are about the same everywhere.
---------------------------------
SOooooooo,
I apologize that my references to U.S. workers might be interpreted as "nationalistic". It was an expedient construct, that I was aware of, but for most of the viewers, it would not be interpreted as "nationalistic", and it was not intended to be.
The larger inference is to workers living in a developed country, vis-a-vis workers in a developing country (esp, India, Mexico, Brazil, China).
-----------------------------------
"Developed" nations are considered developed, because they have, well, I was going to enumerate the details, but to put it simply: developed nations have a strong middle class. And developing countries, DON'T. And having a strong middle class does NOT guarantee you will always have it- it must be maintained, NOT exploited and exhausted.
I am totally in favor of helping Mexico become like the US- help them build schools and colleges, hospitals and roadways, support the development of an equivalent of the EPA and OSHA, help them reform their court system.
But US policy isn't to do that: it's to move US jobs to Mexico, for cheap labor. Or China (Cessna Skycatcher). Or Brazil (Embraer). Or Russia (ETIRC). Or India (software).
Gains for the aspiring middle class in developing nations are NOT coming from investment their governments are making- its coming from investments developed countries are making- at the direct expense of their own middle class.
THAT'S my gripe.
---------------------------------
"all have one common feature : to have believed they could dominate all others ..."
If we consider current international affairs as economic competition, rather than militaristic competition (thankfully!, in general...)
I would then substitute the term "exploit" for "dominate".
And I am exactly against this exploitation.
Literally, "to use selfishly for one's own ends: employers who exploit their workers."
exploit
In the case of the U.S., the taxpayer is being exploited, by subsidizing job transfers. In the case of developing nations, their workers are being exploited, by U.S. standards- and if those products are being built for sale in the U.S., with jobs that used to be based in the U.S., those is the standard which should apply
Again- "U.S." is a construct of convenience- substitute the developed country of your choice, and your developing country of choice.
My put: "Globalization" is a race to the bottom.
Dave I,
I missed your earlier post about appendages! :)
But I'm crushed- you missed my earlier TM on Wedge-NG (or was that, Wedge-NM ? :)
Wedge's better side
RP-to-Wedge: "Don't let the door hit you in the ass!"
(I don't see how it could miss... :)
Say, just how wide is an EA-500?
.)
Mr. Goat,
We need to chat one day over beers. Are you local to Albuquerque???
NO, not ALL workers are interchangeable cogs. This is because there is such a thing as division of labor. PEOPLE may be the same but their SKILLS are different. Don't get confused either between "skilled" versus "unskilled" labor. That is what DOL is to take care of. Therefore, some people in China are likely way more productive than me digging ditches and whatnot. However, I would NEVER want to substitute a 50yr old Chinease doctor with my 50yr old American doctor. The capital intensive resources that went into 'manufacturing' an American doctor are much better than their Chinease counterpart, IMO. Also, putting a Chinease doctor into an American hospital doesn't automatically mean she will be more productive than her co-workers. She will have a learning curve when it comes to the technology available.
If you are really into this, check out Proudfoot Consulting's Global Productivity Report. I just downloaded the report so I haven't yet digested any of its conclusions. With regard to the auto industry, I played around with online stats over the last 24hours. Email me at eclipse_deep_throat@hotmail.com if you really, really, really want to see my numbers.
I have to do more digging, but in short, I didn't trust the data I got from the Statistical Abstract of the US. I only did a quick-n-dirty scan from the 1950, 1951, 1955 editions. And the data from Wikipedia on 1901-2000 auto production is not as trustworthy as I'd like since it doesn't include Honda, Toyota production in the US after 1985. WardsAuto.com has lots of good data but I ain't gonna pay for it. So for just the few post-WWII years I looked at, I came up with 1950 production at > 6 million units with about 1,273,000 people in the industry. That works out to a productivity ratio of 5.13 widgets (cars/trucks) per person on the manufacturing side. But as Peg liked to say, "so what?" Eclipse has a cumulative ratio of 0.173333 b***h!!! (260 planes/1500 workers; YES, I am counting contractors). Maybe that was part of Vern's disruptive technology.
These discussions on productivity may help give me something to do when I can't sleep... but they really are pedantic. The United States is, generally speaking, the world leader in **worker** productivity when defined as X number of widets produced divided by Y number of total workers. China may currently be the world leader in low cost (per capita) unskilled labor ...but that DOES NOT automatically mean they are the most productive. It just means they are the cheapest. If you have a factory in China and you want your workers to be the most productive at making $10 toys, well, you'd likely need to invest $100 million in state-of-the-art automation, and thus, only need to staff your plant with 10 people (NOTE: that translates to an investment of $10 million per person, NOT currently practical in China). Assuming the price of the widget is fixed at $10, labor in China allows "the owners of capital" to use labor instead of having to use their capital on plant/equipment/technology. Labor intensive jobs can done PROFITABLY in China. Capital intensive jobs can (generally) be done profitably in the US, "ceteris paribus." Have I put in enough qualifications? LOL.
Anyway, even with my minor in Economics, I did everything I could as an undergrad to avoid econometrics. Didn't like what I heard about differential equations since my math skills weren't all that good back then. Business students like me didn't have to take anything higher than Math 180 (calculus) and Math 245 (statistics).
So, the last sound bite I remember coming across had the US as even more productive than our Japanese or German counterparts, with the 'average' US worker putting in like 60hrs per week. These studies have rather advanced ways to calculate the 'productive' work of doctors, nurses, lawyers, ya know, the service stuff. And to control for age, education, sex, and mebbe even cultural differences. Like how do they factor in the afternoon "siesta" in France, Italy, or Spain when comparing those workers with American's?
To be honest, the GM, Ford, Chrysler stuff is incidental now. How many patients are seen at the local ER over a 12-month period with X amount of staffing? How many burgers are 'manufactured' at the local McDonald's over the same time series with a given amount of labor?
The metric I'd like to get my hands on is: how many 'widgets' does Wal-Mart sell over 12-months with a base amount of labor? I acutally bought the documentary "The High Cost of Low Price." It mentions the average Wal-Mart Supercenter has over $100 million in gross revenue PER MONTH. Again, distribution and selling has become a better indicator of macro productivity since the # of **paying** client-cases closed by an attorney only tells you the micro productivity of that one person.
God, come to think of it, I couldn't stand my labor economics professor. She drove me nuts cuz she was WAY to green to teach our class (she had just been awarded her Ph.D). BUT she was cute as hell. I likely was not very, ah-em, "productive" in her class becase my mind was elsewhere....
;-)
e.d.t.
http://www.proudfootconsulting.com
Good morning from Germany!
Embraer got it's FAA cert for the 100. More interesting:
- Price increase 2009: by 21% to 3.6M$
- Production target 2009: + 200 a/c
Plant in US productive 2009?
(EAC(done) 1 2006; 99 2007; 170-180 2008; objective: productive plant in ULWW 2010 ?)
Keeping in mind wedge's well organized desk, Embraer seems to be aware of the result of wrong calculations. Anyhow they believe in their products... We will see the answer of the market.
A new hope for the fpj - no!
Why should anybody invest +2,5m$ in uncomplete product of an unreliable organisation!
Inspite of a price increase the fpj remains small and with limited value for professional users - it might get heavier (EASA: mtow 6000lbs).
How much time and victims needs MM or his successor to change his organisation from an reliable victims unsupport division to a reliable customer care and help devision?
Julius
The Glossary is up
Check out the new, recession proof Home Page.
OK, I'm not certain about the 'recession proof' but I do know the Home Page is updated...
I've done a 'first pass' list in a form that makes sense to me. The content and the order are easy to change, so let me know what you think.
eclipsecriticng@gmail.com
Shane
Shane
You truly have a “handle” on the situation.
On behalf of all . . . well, at least most of us, we thank you.
gadfly
http://www.abqjournal.com/news/metro/1494489811newsmetro12-14-08.htm
The article is long, but certainly worth reading . . . Richard Metcalf, "Journal Staff Writer", is fair and balanced.
“New Mexico accounts for a quarter of the 403 shareholders listed in Eclipse's bankruptcy filing. In its 10 years of existence, the company attracted shareholders from 30 states and nine foreign countries.”
gadfly
WyTech said ... The fundametal solution is prohibiting reproduction at will, not redistribution of wealth.
Wytech, this is not an academical position. It has been tried and proven. Why do you think China has the highest growth rate and the faster poverty decline rate in the world? Could it be because of their much criticized one-child/family law?
And don't say that people in the West do not put up with gov regulation of private lives. In the US you need a permit to get married, but none to have kids. The gov regulates who can marry and who can't (e.g. you can't marry your cousin, you can't marry more than one person, etc...). They regulate how, when abortions and adoptions can be made. But god forbid we regulate what the basic conditions for people to reproduce are.
While China is totally pragmatic in their approach, we are dogmatic. It is not a good recipe for long term competition.
website... if you want to know what a true a-hole Pieper is... read this:
"from Eclipse Aviation News
Aviation International News
October 7, 2008
Pieper puts focus on Eclipse profitability
by Matt Thurber
Since taking the helm at Eclipse Aviation on July 28, chairman, CEO and investor Roel Pieper has worked to turn the manufacturer from a development company into one that can profitably produce the Eclipse 500 very light jet. "Eclipse has to be a profitable business,"Pieper told NBAA Convention News yesterday.
With a background in turning around high-tech companies, including the hugely profitable rescue of Tandem Computers, Pieper believes the steps to turn Eclipse from a money-hemorrhaging startup into a stable and profitable operating company are clear and achievable. "It's a transition out of this research-and-development mindset to a more regular manufacturing, performance- and yield-oriented company,"he said.
It is also a transition away from the first 10 years of Eclipse Aviation's existence, when promises made by founder and former president and CEO Vern Raburn did not always come to pass. Eclipse has proven that it can manufacture one VLJ per day, Pieper said, but under Raburn's leadership it wasn't clear that Eclipse would be able to transition from a development company into a stable manufacturing company.
One of Eclipse's problems was that it was trying to deliver airplanes that weren't completely finished in terms of full avionics, icing and performance capability.
Essentially, research and development continued as the unfinished product entered service. Now the final step is nearly in place to complete the Eclipse 500's capability list–FAA approval of the Garmin 400w navigator installation–and when that is done, certification by European authority EASA should follow.
Troubles Multiply
Despite the recent shutdown of air-taxi operator DayJet, which had orders for a huge number of Eclipse 500s, Pieper said, "We have a good orderbook."
After slashing costs at Eclipse and finishing the final certification steps, the company will ramp up production of the Model 500 early next year.
Pieper expects that if all goes well, Eclipse will be able to ramp back up during the first half of 2009 to the same rate of production as during the first half of 2008, when it shipped almost one per business day. During the second half of 2009, Pieper expects Eclipse to have enough momentum to grow production to 1.5 airplanes per day.
Because of Eclipse's financial and unfinished-airplane problems, which resulted in Raburn's departure, the company has had to work closely with suppliers to which it owes money to make sure they stick with the program while they wait for their accounts to be brought current.
The company does have enough cash on hand to move forward with the new production plans, according to Pieper, thanks in part to a recent financial infusion from its agreement to build a factory in Russia, but Eclipse is also seeking a final round of equity financing. This round, being arranged by financial firm UBS, should close in the next few weeks.
In addition, a group of depositors has formed and is threatening to try to persuade a judge to force Eclipse Aviation into involuntary bankruptcy, based on the group's claim that the company defrauded its customers by taking deposits that were supposed to be followed by delivery within six months. These deliveries have yet to occur. "I think there will be no judge who will do that,"Pieper said of the group's plan."
Make note of references to Russian financing obtained while at the helm of EAC, not for ETRICK but for EAC... and the "Strong order book" despite the demise of Dayjet.
I for one would love to see some answers to pointed questions on these issues....
BEG - Thanks for sharing your thoughts on the auto industry, the UAW, etc.
I do find your opinions well reasoned and articulate, and I'm sure we'd find much common ground even if we were coming from opposite ends.
Re labor productivity, there are a few factors that you didn't consider.
The productivity of a worker is based on:
1 - Ability to work: including general worker health (am I too sick or malnourished to work?), law and order (can I safely get to work), transportation (can I get to where the jobs are?), permits (do unions lock people out or do I need silly things like teaching certificates).
2 - Education and Training: do I have the basic skills to learn a new job and grow.
3 - Infrastructure and costs: is electricity, water, sanitation readily available and cheap, is the transportation system efficient to move goods and services?
4 - Capital: is financing and risk capital accessible, are computer resources available to workers, are plants and automation optimum?
5 - Motivations and expectations: Is my family going to starve if I lose my job or am I simply going to collect generous unemployment? DO I have upward movement opportunities?
The US is ahead on some and behind on others. It is no longer clear cut that western workers are more productive.
I guess this dilbert is a pretty good summary.
This Dilbert pretty much sums up what Fred has been saying about the acounting fun and games we have been seeing for the last few years.
My "dear" billy-chèvre ...
ok ,I feel need for some clarifications ...
i wrote about "productivity measurements = fancy crap" :
first productivity is part of an overall set of tools which are very difficult to extrapolate when taken alone or separately ...
what it is :(source OECD,which by the way is a good source for this kind of databases , not sure the access is free and for all ... )
Productivity is commonly defined as a ratio between the output volume and the volume of inputs. In other
words, it measures how efficiently production inputs, such as labor and capital, are being used in an economy to produce a given level of output. Productivity is considered a key source of economic growth and competitiveness
and, as such, is basic statistical information for many international comparisons and country performance
assessments. For example, productivity data are used to investigate the impact of product and labor market
regulations on economic performance. Productivity growth constitutes an important element for modeling the
productive capacity of economies. It also allows analysts to determine capacity utilization, which in turn allows one to gauge the position of economies in the business cycle and to forecast economic growth. In addition,production capacity is used to assess demand and inflationary pressures.
so as you read the capital utilization has a role to play in such ...
capital being where the pure numbers are a bit strangely weird to work-out ... (since the capital market in the US has been such a mess in the last few years ...EAC being itself a very proof of it !)
behind this (as i wrote above) there is a lot of aspect of the problem which can be treated in basically in 2 different ways (depending mainly of the type of economist is doing it : the kind of schmuck we can see on EcoTV such as Bloomberg or any kind of channel where they talk endlessly of the angels ways of having sex or the kind who can remember that economy is MEANT for living peoples and absolutely not the opposite) :
1° a very boring analyze of numbers , without trying to look "behind the curtain" mainly done by the ones who think that a comfortable leather armchair in a cosy well heated office of the World-Bank or the kind , is the only place on earth worth living in ...
2° the ones who believe that Economy has to be articuled around Normal peoples life ...
that there is no point to be a "prisoner" of set rules if those rules are not meant for progress of humanity ...
for this i have a good colleague who say that Economy is not a science (as most of the first category would love everybody to believe ...) since it is mainly based on the wildest thing in the face of Earth : Human Nature ...
so as for your feeling about US Worker productivity :
you are mostly NOT wrong !
but the fact that USA has been (for quite a few years until recently) a place that was swallowing 80% of world overall savings does not really give any real value to measurements done with traditional tools ...
i feel that productivity can be reached in any part of the world as it depends on :
Education , Infrastructure , Culture , History , Geographic situation and some other minors aspects ...
if you want to take workers-productivity as a flat comparison : US workers are far behind European ones ... (don't start screaming now , keep on reading !)
Why is that European are not in a much better position ?
=European have an other History , an other culture , an other set of minds about "what is life"
so basically speaking without the "capital input" one working-hour of a french-worker (very close to a German one , and not due to any better skills or whatever , but only to the fact that few years ago a Socialist Govt decided that the maximum Worked hours = 35 hours/week maximum ,but didn't fix any way of reaching this "magic number" so most workers had no choice than to do in 35 what they used to do in 39/40 , meaning a big jump in "pure productivity" ) , but would be worth between 2 and 3 hours of his US counterpart ...
the main reason for not being ahead of USA is simply (as to foolow with the french example ...)
is that workers work only a fraction of what US workers do ...
(comparison : US average Workers = 57 Hours/week and 10 days vacation/year ; French workers = 35 hours/week Maximum and a minimum of 5 to 6 weeks vacation/year )
so what could be actually a minus in USA is largely compensated by a much tighter schedule ...
that makes ALL the difference !
(i am a thousand % sure that if you would ask an American about making more money or to have a better life [in terms of easiness and free times] most would sign for better pay ! a french asked the same question would very probably tell you that as soon as it is enough to have a good life , the extra-work and extra-money is unneeded as it would be a greater loss of freedom due to extra-hours ! there is NOTHING about laziness in this : ONLY a different way of looking at life meant by a different culture and history ...!)
this is why i believe that "Productivity" in itself is a "fancy crap" ...
only a way for some to put in one's brain a fear , a pride or a goal which is totally meaningless on its own ...
that is part of what i call "Illusion" ...
what some have in mind as "being the best of ..." as it is worthless to try to compare different ways of living , in different places with one and only tool ...
As for the US Economy , if you read the definition from OECD , you see that "productivity" can be used to see where a said system is in its cycle of "business" (some calls it "Kondratief's cycles" as in a form of curve , an economy at a start-point start to grow , reach a peak and then decline , in term of predominance ....)
i believe that the US Economy is on the decline ... which is ONLY a very normal way of things ...!
it started (the decline) with the Vietnam War end (remember ? : "productivity" is related with the way the capital input is done ...or wasted !)
with a peak at the time of the internet Fiasco ... (where lies some (most ?) of today problems = Too many to believe in the "New Economy" where it was only an old lie served with lots of new techs ...) and the idea of some that "Work added value" (hands in the dirt , in other term) was an outdated part of a past and Binary Digits the promise of ever sunny tomorrow ...
now we are in the declining part as Too many were convinced that having a democratic way of free enterprise was already the best form of society that could exist and a guarantee of eternal growth as stated by some US journalist (Fukuyama ?) as "the End of History" ... (if only it could have been the end of their own silliness ...!)
facts contradicted by 2 elements :
1°
China having the best growth in decades but being anything EXCEPT a democratic system ... not even talking about free trade and competition , in China , if you want to do business , have a Party-official in your pocket , go to a Bank ask for a loan , you will get it (due to this official) and when time of repaying the loan would arrive , just ask for a new loan covering the old one , loan you will get IF you managed to remain a "GOOD FRIEND" [read $$$] of this official ... so in fact China has the highest "productivity" in the world , but if most wouldn't be blinded by the size of the market , they would see that Banking situation in China is even worst than in the U.K. ! every aspect of this benefiting their system : lots of works for the biggest world population ,lots of exports to have currencies flowing in , stability for Govt and lots of others benefits for "middle men" [read local officials]...
they even went to the extents of LENDING to USA their own cash (with interests , off-course ) to enable USA to keep on BUYING Chinese products , which is in economics terms (let apart sanity) a complete madness and a very good way to explain the US size of illusion ... (where the US Govt should have seen it as what it is : a trap , a mad short-time trap ... but they preferred to have their own population to "swim" in the illusion of "we can do it because we are so great ...")
2° Che Guevara ( i know it is almost an insult to speak about him in the US , i believe he was a complete dumb but with remarkable strikes of lucidity ...)
said that Countries , revolution and bicycles have a very interesting point : as soon as they stop going forward , they fall !
so when some were lured into believing in "the end of history" , they were only lured , a shame that the "Che" is not taught in US universities ...
no one need to be clever to see that one of the best point of US Economy (Capital ;what has always amazed me in USA : if one has a good idea or a good something = no one would talk about it as "too expensive" which is precisely where the europeans are failing = we are always talking about the costs and the expenses , without real understandings that all the costs of NOT deciding won't go to any project ,so making them too expensive and unfunded !)is going to the sewage ...
short-time benefits have ONLY been replaced by Shorter-time benefits ...
EAC is a perfect example of this : An idea in form of a dream , with the expectations of short-time returns (for the Merry Band , this is why i call them this way : i see them as "three stooges" having a good laugh tricking so many in their loophole ...) it turned out as being a sad joke ...!
just an other Madoff ... of smaller size , but the exploitation of trustfulness has been the same !
Freedom :
a big thanks for your dilbert !!
the first one has left me puzzled ...
is that a resume of RP life ? ;-)
the second one is very clear !!!
some says " a lie shouted by a crowd never become a reality because shouted by the crowd !"
Fred,
I know I have a thing about this right now, but....
Ernesto "Che" Guevara, was ALSO Irish.
By our 'rules' (as in, what gets' you an Irish passport) he would have qualified. His grandmother was Anna Lynch from Galway.
You are also correct in pointing out the large measure of common sense he wrote during his life. It is a pity that the CIA got their hands on him when they did. He would probably have come around in later life to a more peaceful process of change.
Like most Irish revolutionaries...
Shane
PS Is this the Eclipse Aviation Critic blog, or did I miss an important announcement?
OT
Shane, I had a shocking discovery. Childhood illusions were shattered...
Turns out the Irish Rovers music my Dad always played in the car when I was a kid comes from....Canadians!!!
The moral is, Don't look up childhood icons in google/Wiki!
What is the relevance to Ecorpse? None, I just had to get this off my chest. :)
Monsieur Shane ...
No , you didn't miss any important changes in the "Eclipse critics blog" ...
none that i know of ...!
was just feeling like explaining to Billy that EAC is only a fruit of the overall situation ...
quite sure that we see it because we look at it , but i am quite sure there is a "lots" of EAC lying around everywhere ...
and so , th reasons leading to such conclusions ...!
Ps: thanks for infos on the "Che" ... didn't have a clue he was some kind of Irish ! amazing ... wherever we look , we find some ...!;-)
Freedom, Fred,
And while it's just us on the blog, I should repeat, for the record, that I'm 3/8 'American' by birth.
FJT, you should also be aware that the chances are VERY high that the music you were hearing was Canadian/Irish. Emigration from 'here' to 'there' continues to this day. Of my wife's 8 brothers and sisters, 5 emigrated to the Toronto area in the 80's and 90's. They followed a previous generation out there, seeking a better standard of living.
As is usual, some 'made it' others, well, maybe not as well as they might have. My suspicions are that those that did will over there would probably have done better here, given the changes to Ireland in the past 10 years.
Which is why I'm still looking for an aircraft, 18 months after I started. Anyone know of a twin turbine 6 place, 1,800nm (with reserves) single pilot, prop/jet that costs less than $3 million?
Shane
Shane,
These guys are putting Williams FJ44's on older Citations, SP included. Here's one for example. That will get you pretty much what you're seeking, assuming you can afford the DOC.
Shane Price said...
Which is why I'm still looking for an aircraft, 18 months after I started. Anyone know of a twin turbine 6 place, 1,800nm (with reserves) single pilot, prop/jet that costs less than $3 million?
Cessna 441 Conquest II. Roughly 300 knots with -10 engines, and will do 1,800nm range, especially if operated above FL280 with RVSM (which is available). Very economical airplane.
Nothing new qualifies and probably never will. You can buy a really good 441 for $2M and have $1M left over. That buys fuel for 3,000+ hours of operation.
Monsieur Shane
please don't take what i wrote as Anti-American in any respect ...
bear in minds that for one to judge all aspects of things , we have to know each others ...
It would be a very good starting point and the "i am from there , so i know better than you do " is pointless ...!
EVERYBODY makes mistakes ...
but one always end-up better if being able , at some point , to say " Hoops , we did poop !"
that said , in the last 10 years Ireland WAS in the 5 best countries for raising of standards ...
bloody Guinness drinkers !! ;-))
Shane asked,
"Anyone know of a twin turbine 6 place, 1,800nm (with reserves) single pilot, prop/jet that costs less than $3 million?"
The Twin Commander 1000 fits the description nicely with a million dollars left over. Perhaps we can show you one at Dublin next spring. We've done more than a dozen North Atlantic crossings.
TBM
seems to be pretty cool your link ...
is it refurbished one ?
how much does it cost ?
now , starts Kenny whines to say "but the EA500 has an overall cost of some 40% lower , climbs twice faster and cost only 870.000 of 1961 US$ !!!"
Only kidding Kenny ... you should know me by now ... ;-))
Fred,
Yes, these are high time Citations (10,000 hours or more) that have been refurbished and have new engines. Cost varies depending on the specifics, but I believe one could get something that fits Shane's specs for around $3M. I don't know the price for the one in the link.
There's an 8,000 hour Conquest II on Controller with brand new -10 engines for $1.75M.
Shane,
You should take BT up on his offer ASAP. The Commander 1000 can do better than what your asking AND I like it 'cause Ted Smith's hands are all over its design. Later models top out at FL35.
http://www.koat.com/news/18277394/detail.html
WTF??? I see a common theme with NM
EDT,
Thanks for your invitation to share a beer- we will do it sometime, somewhere. I hope with many of our fellow bloggers, as well. Dancing on Wedge's grave, or the bulldozed ruins of EAC, while drinking vodka out of Wedge's skull. I want little umbrellas in it too. ("OH- did I say that out loud?" :). Ahem, maybe I should just have an iced tea...
An observation regarding ourselves digging ditches, versus a Chinese ditch digger: In their younger days, circa WW2, my father plowed with horses, and my mother picked cotton. (With the opportunity of public higher education, they were fortunately to have progressed to less labor intensive jobs). So- I must observe, I don't think the Chinese are necessarily any better at manual tasks than we are. (Maybe more practiced of late, though. A situation for which I am thankful !!).
"Don't get confused either between "skilled" versus "unskilled" labor."
Regarding this, I work beside a college intern, fun stuff always. He shared his tuition expenses to the same school I went to, some time back – say split difference between now and "the big one"- WW2. A little research revealed that when I graduated, student-paid tuition covered one-third of the expenses; now it is two-thirds. Thats real-world decline in public infrastructure investment.
(When was the last time an employer sent anyone I know to a short course? About ten years ago, in my circles). But in the same time, I've seen the percentage of foreign staff I work with go from less than 5 percent, to more than 25. Why? Cheaper. NOT better. No insult to them- not inferior either. Just cheaper.
Regarding foreign doctors, I agree with you on interchagability, at least on a short term basis. I was mostly referring to the lack of investment in US medical school infrastructure, and the resulting gap being met (temporarily anyway, with less public infrastructure investment) by subsituting foreign doctors for indigenous US-born doctors. (And, in particular, I was primarily referring to India and Pakistani doctors. Very good one, from my experience- my favorite doc is a Pakistani, in fact. Second choice? A Syrian doctor I was referred to).
USA Today
Same situation, observed in 1980
I looked up Proudfoot Consulting's Global Productivity report, at least the one I found, but I noticed it was based on “executive perception of employee productivity”- I'm not sure, but it sounds like Proudfoot's m.o. Is dealing with pretty fuzzy data.
Proudfoot Consulting
Concerning economics and mathematics, I have a postulate (!) regardin Wedge-o-nomics. For those less familiar with a parabola, I will discribe it simply as a "U-shaped" curve. Let's start with a horizontal axis in terms of "number of airplanes", and a vertical axis in terms of "$B". The starting point is (0,0) zero dollars invested, zero airplanes built. I think the way EAC v1.x was playing out, the "bottom of the curve" would have been around 4-5 $B, and 800-1000 airplanes. Now, to figure where the upswinging zero crossing point would be (the cumulative break even point), figure at best $4B divided by $400K profit, and the answer is "total break even" at 10,000 airplanes. At an optomistic production rate of 500 per year, that is 20 (MORE) years to break even.
You bring up interesting issues regarding worker productivity quantification, which Fred, ("my dear Fred"- he really is! :) elaborates upon as well- I'll try to catch up with you guys later today on that topic. (And shoot you an email too, from my "secret undisclosed location with secure communications capability").
Cheers!
(btw, are you and Gadfly fellow 505 dwellers?)
Thanks for the advice gentlemen, but it think Flyger got the message, which I (foolishly) left out.
Nothing new qualifies and probably never will.
Fred, I did not intend to imply you were critical of 'Americans'. I was pointing out that although I'm (rather fiercely) Irish by attitude I can't avoid the fact that three of my eight great grandparents were American. My grandmother lived here for more than 70 years, and never gave up her passport, or her right to vote.
She died when she was 94. We knew she was sick when she stopped drinking her beloved 'Jim Beam' before dinner....
Back to aircraft. It's not the DOC's that worry me about an older design. It's the avionics. I'm pretty sure that this is what will kill off the (already depressed) market for 'steam gauges' leaving only 'glass cockpit's that can find a buyer.
In a fully fledged recession/depression, who's to say I won't be able to get a 'nearly new' toy that someone else can't make payments on.
Without sounding predatory (which is what my friends say I am...) I live in hope.
Shane
(btw, my -I hope taken in jest- reference to "drinking out of a skull" is Jack Nicholson, from "A Few Good Men", not my own ghoulish invention...I'm not that inventive...or ghoulish. I do like the idea of drink umbrellas though! :).
accesorize your booze
(Concerning the bulldozed ruins, well, allegory. I hope EAC survives to service the airplane fielded, and maybe build new ones, of varying flavors- not quite the same degree of variety per model though!).
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