Thursday, December 4, 2008

Time to reflect

UPDATED SUNDAY 7th December 00.23 GMT

Eclipse Refunds: For The Ten-Percent Deposit Holders

To anyone who placed a 10 percent deposit on an Eclipse 500, and timely elected to receive a refund in response to Eclipse Aviation Corp.’s June 6, 2008 letter, yet never received a refund before the company declared bankruptcy on Nov. 25, 2008: On Tuesday, Dec. 9, 2008, the court overseeing Eclipse’s bankruptcy will consider motions to appoint an “Official Committee of Refund Deposit Holders.” Deposit holders Bill Hewitt, Bradley Investments Inc. and Don Buttrum, all of whom timely elected but never received refunds, with assistance from the law firm Gordon & Rees LLP, will seek the appointment of a committee to represent those individuals/entities that placed a 10 percent deposit.

It’s the ad hoc committee's opinion: individuals or entities that placed a 10 percent deposit on an Eclipse 500 have different legal rights and remedies, separately from the other creditors and deposit holders. An independent committee made up of representatives from those who placed a 10 percent deposit should be created to ensure that those interests are protected. If you're an individual or an entity that placed a 10 percent deposit but didn’t receive the requested refund, e-mail Timothy McCulloch
tmcculloch@gordonrees.com for additional information.


December 2008
will be a pivotal month in the history of Eclipse Aviation. The recent past has seen a radical decline in deliveries, with only two FPJ's finding victims, sorry, customers in November. Clearly the Chapter 11 declaration at the end of last month was a long predicted outcome and is clearly designed by the BoD to shed the onerous parts of the business at the lowest possible cost. Another Airworthiness Directive comes into effect on the fourth of this month and a string of suppliers are in serious trouble having relied on now worthless promises of payment. The good people of New Mexico are down $19 million, and the rest of the original investors have been fleeced for in excess of (self confessed) one BILLION dollars. Owners are on record as having paid almost $300 million for product that can only be worth a third of that. Depositors are in the hole for sums between $150,000 and $1,000,000 each and former employees have been cut off with no recourse. The list goes on, but life is too short....

So let's tally the 'good vibes'
It's possible that Roel Peipers' plan might work, leading to a  restart of production in ABQ in the early part of 2009. But only IF his plans get past the bankruptcy judge AND the key suppliers stay on board. He also needs to prove there are enough orders at what will clearly need to be an even higher list price and finally, he has to avoid someone else putting in a spoiler bid. It's possible that one of the existing vendors might do a 'Beech Starship' and simply close the whole show down in an effort to avoid future liabilities. And don't forget, Wedge is lurking. If he won the bidding auction in January this would surely destroy whatever remains of the 'goodwill' stakeholders still have in the project.

There are still a group of depositors who are 'pot committed' and will hang in for anything that they can get. Remember, some of these guys have been waiting for up to 8 years, so what's another couple of months? Likewise the owners who've already got one (or more) and know that the possibility of selling on is negligible until the situation is clearer. These two groups have slightly different agenda's but are likely to continue passive support, as long as it's not costing them more money.

Speaking of money, those of you owners who've not paid your CPI or Jet Complete yet are in for a rude shock. While Chapter 11's principle purpose is to protect a company from it's creditors, those who owe it money are in for the cattle prod treatment until they stump up what's been invoiced. Better hire good lawyers, boys and girls. OK, so this is not 'good news' for those owners affected, but it's positive for the company.

First, an appeal
It appears that there is a willingness to support the depositor/owner group from within the blog. While I laud this sentiment, I would remind ALL of you that one man stood up for this blog when we were threatened by EAC in April of this year. I should also remind you that an EAC employee who's only failing was to speak the truth was also picked on by Wedge at the same time. I speak of course of Brian Skupa. If anyone wishes to make a contribution to any of the above causes, please route it though Gunner
a.k.a.
Rich Lucibella
Publisher
SWAT Magazine
5011 N. Ocean Blvd
Suite 5
Ocean Ridge, FL 33435
Tel: 800.665.7928 Ext 704
Tel/Fax: 561.337.1551

This gentleman has demonstrated with his own hard earned cash, an excellent lawyer (thanks again, Norman) and the belief in doing the right thing, that he can be trusted to distribute any monies in an appropriate manner.

Update for creditors
Second is the unsecured creditors meeting but you better get a move on. It's on Monday next, December 8, 2008 @ 11:00 a.m. in Room 5209 of the J. Caleb Boggs Federal Building on 844 King Street, Wilmington, Delaware 19801. Remember, if you're not in, you can't win, so get yourself represented if you can't make it in person. I'm quite sure that comments posted will keep us up to date with 'progress'.

The latest AD
We know the AD for the 'carbon build up' issue (effective 4th December 2008) limits the FPJ to FL370, even with both engines running. What people should really be aware of is the limits imposed by the AFM for 'One Engine Inoperative - Service Ceiling'. Since the problem which the AD is addressing is exactly that situation, I thought it valid to share with you the relevant data from the FPJ's AFM. At ISA -20C, with 5, 760lbs on board, the service ceiling is 23,250' on one engine. Better be carful in warmer spots, as at ISA +20C you're only good to 7,750'. At those sort of FL's you're in traffic and lots of weather. Where's the fun in that?

Ex employees of the company
There are a number of ex employees who've been left as unsecured creditors, a few of whom have contacted the blog email seeking like minded people. If you are in this position and want to make contact with others, one of those affected has set up the following email address, execlipser@gmail.com as a 'rally point'. Please use it to get together, as we know from our experiences here that acting in unison works better than individual responses. Ask the Wedge, who must still be regretting suing the blog.

An eBay auction
FPJ owners are trying anything to raise a few dollars on the back of their purchase. How about bidding for a ride in a FPJ.? Be careful about this, you might win...

The 'mythical' s/n 266
On the 26th of July 2008, an 'Experimental CoA' was issued to EAC for this aircraft. This was well out of sequence. For example, the 'last' FPJ (delivered on the 21st of November) was s/n 259 and that only appeared on the FAA database for the first time on the 18th of August. The importance attached to '266' is twofold. First, it's been used by EAC to show off the 'final' configuration to customers and suppliers in a effort to drum up support. Second, as the self declared first 'completed' aircraft it was going to be the benchmark for all upgrades as well as the reference configuration for all future production. What will happen to this orphan now? Will it be dumbed down to lower people's expectations, or simply vanish in the fog of war created by Chapter 11? I suspect we will be 'surprised' by it's departure to 'Russia' in the near future...

A personal observation
Clearly, I could go on. And on, and on. But I won't. Last week we saw reaction from suppliers, customers, staff and the owner/depositor to the main event, and the subsequent debate on the blog. As predicted, once cash ran out, the merry go round came to a screeching halt. Smaller suppliers are in a bad way, staff are in a no win position, depositors have been formally notified of their losses and owners have a aircraft worth a lot less than they thought, with an uncertain future looming for all. Events this month will determine if the proposed bail out stands up to scrutiny. I hope that everyone 'escapes' from this mess with the best outcome possible.

And finally (for this post)
On Tuesday 11th April 2006, Stan Blankenship started this off with a comprehensive post detailing the obvious flaws in the 'story' being sold by EAC. You can review it here, but for me, one key line stands out:-

"The obvious conclusion is that this program can only pay off with delivery rates unprecedented in the industry."

How true that statement turned out to be. Indeed it will still apply to EAC V 2.0, if that gets going next year. One thing is pretty certain though. Whatever happens, this blog will continue to keep a close eye on things, and will probably be accurate in predicting the final outcome.

Shane

431 comments:

1 – 200 of 431   Newer›   Newest»
julius said...

Shane,

good vibes

are there any?
What are Roel Pieper's intentions?
His customers are becoming victims - not in quotation marks!

As long as there are some 28$M cash and only "notes" (for 160M$)for the bid and no secured cash for the time after the auction, the future of EAC is obscured.

The EASA cert might be a good sign for potential non-FAA based sales
but put a question mark for the employees at ABQ: What is our advantage?

Julius

Shane Price said...

Julius,

I was trying to find something good to say.

And it's always possible that Roel or another investor could turn this around.

However you and I would agree that this is the least likely outcome.

Sadly.

Shane

Shane Price said...

The owners of s/n 259 must be feeling pretty annoyed right now, not having enjoyed very much warranty before Chapter 11.

I wonder what the people who were due to get the next few aircraft are thinking?

eclipsecriticng@gmail.com

.... if anyone would like to 'talk'.

Shane

airtaximan said...

Shane,

Great post.

There are some new stories that will have to be told, in order to get everyone to line up and take their beats... if you get my drift, and pave the way for Roel to execute on his exit. These are the BS stories...
- order book
- lower cost production
- "special offers"
- promises to the fleet
- promises to the position holders
- new financing

Without these "stories" RP can forget his exit.

REMEMBER, this guy is no industrialist, he an exit strategist. Think short timer. One think he will never discuss is his exit strategy, and this is really the "last thing on his mind" except he ONLY has ONE thing on his mind, really.

Remember Vern's famous almost last words: The last company I am worried about is Dayjet... r-e-a-l-l-y?

Anyhow, watch out for the BS when "looking for good vibes"

I would personally like to see someone with real aviation experience at the helm - THIS WOULD BE A GOOD SIGN. And I mean, at the HELM.

Perhaps we could revisit EAC, and propose what we think is required for a successful business continutity plan?

Step-1
- a very experienced aviation person, at the helm.

fred said...

Julius ...

about "Notes" ...

you have to bear in mind that the only "Quality" of a note is the quality of who's emitting it ...

to be simple : if i write you , on a piece of paper "hereby i promise to pay the sum of XXX Zillions the bearer at the date of ..."

(Zillions ?? am i in Wedge-mode ? ;-) )

what would be the value of such ?

3 cases :

1°) I am (really or supposed) very rich , so no problem , peoples will hight one an other to just touch this paper ...
(in some way , the US FED is doing the same when they emit their Notes , in this case it is called " US Treasury Bonds" ...)

2°) I have a very good potential for a nearly certain income , i write you this "note" against an advance of XXX

3°) I am penniless , but one of the way out is to write such "notes" in the hope it will have some value in "THE EYES" of the bearer ...

all the three are equally (some kind of) "worthless" ...
as it is only based on a kind of trust that could exist between us , if we would be doing business together ...

the only having some "technical" value is the first example as in the case of Govt. since it is a promise to the bearer that the Govt. in place at the time of payment will be squeezing enough its tax-payers to honor the "Note" ...

so basically speaking it is something based on TRUST ...with their history = any volunteer ???

once again we are in WEDGE-MODE :
trying to buy something having not a real value with a fiduciary-instrument having a value that remain a mystery ...!! ;-))

PS: it seems that the Russian Royalties Money is definitely NEVER going to arrive ...
otherwise what is the point of stating alternative measure as "Phony" as this ???

Dave Ivedorne said...

The "final configuration" FPJ was granted an Experimental CoA.

On that note, I would like to welcome the Faithful to the future of their ownership experience.

Would you like the combo?
IANAL

julius said...

Fred,

about Africa and development...

I know, first bosses, the plate at the wall,.PC's...,the house...maintenace?...

Often disappointing...

Julius

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

About Africa ...

for our readers who may believes anybody working on such "loopholes" are only good for psychiatric asylum :

this system of "Note" is the system working in some cases where ONLY a very (read extremely) Few Financial Institutions are willing to accept such fiducial ...
(typically the World-Bank or this kind...)
NOT a single Person approaching such mechanism is (or can be ) fooled by it ...

it is only a way of presenting the matter , to give it some "diplomatic" looks and to make the loan a little more complicated than a simple phone call ...!

ex: in the case of the "red-beans" ,money is only paper , not a single African would be too much concern if some is stolen or spent where it shouldn't ...

in the case of "red-beans" we are talking about possible starvation of population : something that cannot be forgiven ... so better use the money for what it is meant !!

fred said...

BTW , i have been re-reading the stop from Monsieur Stan ...

PURE GENIUS !

i would call it :

"the way to save 3 billions and 12 years !"

i tell you : PURE GENIUS !!

Zed said...

Unsecured Creditor Committee

Our folks will be participating in the formative meeting of the Unsecured Creditors Committee on Monday, 08 December.

I was in town and surveyed the ground on Monday of this week.

The Courthouse is an easy ¼ mile walk from the Amtrak station for those taking the Acela from the NYC, Boston, or DC areas.

Those flying in obviously have the standard rental car options. Street parking is limited to 2 hours, but garage parking is plentiful.

Plan to arrive at the Boggs Building at least 30 minutes early to clear security. Laptops are allowed but will require screening.

If folks want to meet in advance of arriving at the Courthouse, there is a Doubletree Hotel maybe 100 yards south on King Street.

Our rep will be in the Doubletree Lobby at 1000.

Given the pace at which PieperMann want to procede, we must have LOTS of participation to get the US Trustee to take a firm stand. If you cannot attend, please call/fax/email the Trustee with your intention to support the effort!!

If anyone wishes to contact me directly … zed.lastletter@gmail.com

Zed ... pro se

Dave said...

Roel acting like the 363 sale is a done deal. He's already saying Eclipse will continue to sponsor his Dutch basketball team. Also construction will start on the Russian plant.

julius said...

D. I.,

The "final configuration" FPJ was granted an Experimental CoA.


did EAC already test the autothrottle wich is "Standard"
according to the "Performance comparison chart"?
The current announcement do not allow this assumption.

Julius

fred said...

it "starts"
(i feel bad to use this word ... it would be better to say "The Muppet's show goes on !") to be hilarious ...

some peoples cannot learn from mistake ...

ULWW = supposed to be ready by 2010 !

well , ABQ is burning 12M$ for producing nothing ...
if they need to stay in this near-death-coma : how much will it cost ? (144M$ ? )

ULWW= the plant will produce 800 units per year ...

what for ? after having victims (sorry customers) waiting almost for ever their planes ...

now it is going to be the planes going to wait for ever their owners ???

The show must go on ...!

Deep Blue said...

Dave's links to press statements from RP are quite telling.

Etirc/RP obviously have no intention (and no financial capability/backing/partners) to actually re-structure EAC through a full C11 (a real C11 is a real workout: lots of hard work, time, negotiating and money)nor to work through a creditor commitee, including especially, the depositors who arguably have the highest fraud claims.

All signs indicate that Etirc is here only as long as it may take to carve out whatever "assets" they deem usable, and then its a midnight one-way flight back to the EU and some potential new manufacturing plant (not likely).

In my experience, real C11s or a bonified restructuring, always involve a rather large team of credible parties (key suppliers, banks, risk capital institution, a well-respected industry management team, etc).

RP is showing his hand and it's real simple: stuff some plans, a TC (of some sort)into a suitcase after a brief appearance in Delaware (remember the FAA hearing?) and then blow out town, leaving MM in ABQ as a kind of Joseph Goebbels, last man in the bunker.

Shane Price said...

I've been doing some (long overdue) 'filing' of the emails I get, and trust me on this, some of them are really, really interesting.

Here's an example, which I reached me on the 14th of November. The chap who sent it to me had worked at EAC in the very early days. I could have made this into a headline post, but events overtook us. It's a cracking insight into the mindset of Mr. Wedge....

Their plan, at that time, was to drive the cost of airframe manufacturing down by using automotive interchangeable part assembly techniques (a Burt Rutan concept sold with the V-Jet to Vern). This would require that all the airframe parts be completely finished prior to assembly, including all the fastener holes.

I asked the senior manufacturing engineer (during an all-hands meeting) how much larger than the fastener do the holes have to be to facilitate this assembly technique. His reply was: "Oh .030 or .040 larger." I then showed him the standards for the fasteners engineering has selected showing that they were all press fit or near press fit, and informed him that there were thousands of them on this aircraft. To which he exclaimed: "Oh, we can't do that! That will cost a fortune to manufacture!"

Within days, there was a meeting to reconsider the $815K sale price of the E500. They never gave up on trying to apply automotive manufacturing techniques. I found out years later that they continued to pursue that manufacturing model. They had applied micro-tolerances to mating airframe sections, complete with fastener holes. That generated an enormous scrap rate, and huge fights with the vendors. I remember the vendor for the aft fuselage releasing a statement calling Eclipse manufacturing engineers "...grossly naive." In the end, it took 2 billion dollars to prove that automotive manufacturing techniques do not apply to aircraft.


It makes me feel good to share this. A well written, concise explanation, in layman's terms, of the monumental engineering screw-up at the heart of the EAC 'story'. I should state that I have independent back up for this version from other sources, including internal EAC spreadsheet detailing the ruinous waste and reject rates.

The same correspondent also has a wicked sense of humor:-

Daddy, daddy, what is an Eclipse?
Oh, it is Black Hole in the sky investors tried to fill with money.


Now, maybe, some of you can understand why I keep doing this!

Shane

stockey said...

Who will buy another jet from them again ? i think they are doomed.

Deep Blue said...

SP: interesting post. One has to wonder why, for example, the entire E500 and any "automotive" methods were not simply simulated on software first. Indeed, the Falcon 7X is effectively a clean sheet new design "built" on software. EAC surely cut alot of metal trying to learn.

CATIA, for example, might have worked just fine. Given EAC founder's software background this is perplexing.

"CATIA (Computer Aided Three Dimensional Interactive Application) is a multi-platform CAD/CAM/CAE commercial software suite developed by the French company Dassault Systemes and marketed worldwide by IBM. Written in the C++ programming language, CATIA is the cornerstone of the Dassault Systemes product lifecycle management software suite.

The software was created in the late 1970s and early 1980s to develop Dassault's Mirage fighter jet, then was adopted in the aerospace, automotive, shipbuilding, and other industries."

Tail.Dragger said...

Eclipse used UGS's NX CAD package which is as powerful if not more powerful than CATIA.

airtaximan said...

Shane, how true is THAT!

"In the end, it took 2 billion dollars to prove that automotive manufacturing techniques do not apply to aircraft"

well, they might if properly applied, you are asuming all automotiv e techniques are the same... they are not. So, how do we justify this mess up - easy - there's no market for a higher rate production ea50 anyways.

How much did it cost to learn this?

Not a lot.

How much did it cost to admit it?


$3 plus Billion of OPM...

Sad.

Zed said...

Irrespective of the CAD tools, when vendors cannot produce components with the proper precision, and contain the variability, what does it matter?

Several have asserted that high level of non-conformity in tail assemblies, windows, etc. During the summer of 2007, Ecorpse had to deal with non-conforming wing sets.

That is with Ecorpse’s pedestrian ability to evaluate components coming in the door. Imagine the true level of non-conformity had they actually been able to detect it before accepting the parts.

The rework and hand fitting on each aircraft drove production man-hours through the roof.

Ecorpse needed an all-pro supplier management organization, but never came close.

One would think that if the plan from Day 1 requires certain skills, they would have risen above a level of mediocrity.

Dave said...

Ecorpse needed an all-pro supplier management organization, but never came close.

The Eclipse supplier management strategy:
1) Get Supplier to sign up based on unrealistic demand
2) Publicly throw Supplier under the bus
3) Repeat Step 1 and Step 2 with new Supplier

Dave said...

Roel has already earmarked funds to keep his basketball team going and he doesn't even have to change the name! Roel of course did everything above board and arms-length...he was shocked SHOCKED that ETIRC placed a bid on Eclipse.

Zed said...

Dave,

Tru dat!

I was at the Grumman factory when they stopped making detailed parts in house, and farmed them out to 2500+/- vendors.

It took years to get adequate conformity to where tolerance stacks didn't leave huge gaps in the structure.

If was funny (the sad kind of funny) that the E-2C assembly process often resulted in a long gap directly over the cockpit.

Every fuselage was hand-finished from that point.

With 73 days on-center for the E-2C, it was possible to deal with those issues.

With just a few hours on-center for the Ecripple 500 ... no way.

Zed

Black Tulip said...

Shane quoted,

"Oh .030 or .040 larger."

That could be pretty scary unless they used the highest quality pop rivets available at the local hardware store.

Zed said...

BT,

And perfectly circular at +0.40 ...

gadfly said...

Deep Blue and Tail.Dragger,

If I were “Stan Laurel” (Did you know that Stan was the “brains” of the two? . . . Ollie only wanted to play golf, and Ollie’s “disgusted look at the camera” was always filmed at “quitting time”, when Ollie was about to go play golf at the end of a day of filming . . . near where I “grew up” in Burbank), . . . you two would be my straight men . . . Oliver Hardy as “twins” . . . and that, my dear friends is a complement to both of you. For you have just given me a platform to go on to the next point. (Stan and Ollie were two brilliant men, who knew how to come across as the opposites of their true character and skills.)

We could argue over the various high-end CAD systems . . . and really get no-where. A “soft lead pencil” can get much further than Eclipse ever got, “IF” connected to someone, who understood the many factors of aerodynamics, manufacturing (including machining), mechanical design, electronic and electrical design (both theory and practice), metallurgy, fabrication methods, human behavior (how people assemble things, and how they will use them), etc., etc., . . . the list is long, but must not be treated lightly. Unigraphics, Catia, Solid Works, . . . and the system that we use, CoCreate . . . can all be wonderful tools . . . but unless there is a thorough understanding of all the elements that go from “dream” to “concept” . . . etc., . . . to actual hardware, it doesn’t much matter how fine the tools. It still comes down to that bottom line of a “human” making a device, that will perform as close as possible to the original vision of the human creator. And, hopefully, that “human creator” must have a keen sense of responsibility, for all of the human elements involved . . .each element in the chain is of equal importance . . . the one the “fabricates the unit”, the one that “sells the unit”, and the one that “purchases and uses” the unit.

The “tooling part”, and a system that brings parts together in a near-flawless manner is actually not new . . . we have been using our system for over twenty years . . . GE Jet Engine Division loves it (they will not talk about it, unless you know the right person). Honeywell Energy Management Systems uses it (although they don’t know it . . . they sent it to China . . . “that’s a story” I’ll write in my “memoirs”). Even a simple (comparitively) device I designed and was “hung” under the chin of a C-135, the “Airborne Laser Lab”, has an interesting story to tell.

The bottom line is that it is possible, practical, and “nothing new” to bring together many components, from many sources, “providing” everyone is on the same page, and the “right person”, like the conductor of a great orchestra, is in charge. Modern tools and CNC machines are wonderful . . . and the great high-end CAD systems play significant part in the “whole”, but unless the correct human element is in charge, all the wonderful tools and machines in the world won’t fix a simple problem.

gadfly

(With “Eclipse”, there were too many assumptions . . . little understanding, and far too little appreciation for the “human factor” . . . believing that if the “computer can do it”, the rest is easy. What foolishness!)

(And, believe it or not, there is a rather simple way to provide "press fit accuracy" between components, regardless of "where produced" . . . been there, done that.)

Deep Blue said...
This comment has been removed by the author.
Joe Patroni said...

The unibodies of automobiles are spot-welded. I guess the Wedge decided automotive engineers has a better skill set for manufacturing the FPJ than airplane engineers.

FSW = Spot welding = what's the difference??

I've been thinking......was there anything done RIGHT in the E500 program?

Auto manufacturers have built aircraft and aircraft components before, but, not knowing how it was done, I'm betting that:

-The OEM had QC people on site, until they were absolutely sure that the sub assembly met specs.

and

-They kept critical/low tolerance for mistakes procedures "in house".

Nation-wide, I don't think anyone appreciates the need for precision in design and assembly of modern aircraft. Part of the reason that the computers can predict airplane performance so accurately before the metal for the first prototype is cut, is that they know the airplane can be built to the tolerance specified. Allowances for damage to the structure while keeping weight to a minimum are designed in, but the days of "pop rivet a patch on it" to fix things are pretty much over.

I was recently reading a book where a Grumman Field Service Engineer discussed working in the field on TBF/TBM Avengers. After the Avenger tooling was sent to General Motors, the first TBMs started having a rash of wing-departure in flight incidents, while pulling out of dives, usually with the loss of the crew. According to his account, it was eventually traced to a change in the rivet pattern on a wing panel, which was changed by the GM guys to facilitate production......when the pattern was changed, it changed the stresses on the wing panel.

Deep Blue said...

Gadfly said:

"A “soft lead pencil” can get much further than Eclipse ever got, “IF” connected to someone, who understood the many factors of aerodynamics, manufacturing (including machining), mechanical design, electronic and electrical design (both theory and practice), metallurgy, fabrication methods, human behavior (how people assemble things, and how they will use them)"

Brilliant.

But one might still wonder, why not a "software" version first, rather than bending and cutting metal? Esp. given the preponderance of softare execs that backed this thing, it is perplexing.

OK, so the point?

EAC could have been a pure "simulation."

All the software "Geeks" that backed this, it is a pure irony that so much money, metal and materials got spent (M3).

gadfly said...

Ah, Deep Blue . . . you were fast, but not fast enough for the "gadfly", and the following is, in part (but not the whole . . . I had written this earlier . . . not all applies) in answer to your comments:

The “gadfly” does not believe in abortion by choice . . . the gadfly is pro-life. But in the business world, abortions often happen. Such is Eclipse! And in that sense, the sooner the better . . . it’s been an abortion from the “get-go”.

But after all this has settled into the state of memory, what then? Is there something in all this? . . . of value? Well, we certainly have a long list of things “not-to-do”, nor to repeat. But on the positive side, cannot those involved come away with something of value?

Sure, we can say we’ve all “learned a lesson” . . . some lessons costing many thousands of dollars . . . but we could have all learned the same lesson from a book . . . if we had trusted the Author.

It’s time to give all these things some deep thought . . . and maybe get back from time to time as to what we have learned from this rather expensive experience, with the little bird with great claims, from ABQ, the airport by the “Grand River”.

gadfly

(Deep Blue . . . in answer to your comments, there is so much metal, and so few places to begin cutting . . . it’s important, even with the “best” of computer programs, to know approximately where to start taking that first bite (or “byte”, if you prefer). Metal and machine time is expensive, and until there is infinite time and infinite possibilities to try this and that, you will come to the conclusion of “Fred Hoyle”, the famous atheist, who called the beginning of intelligent design, “The Big Bang”, and walked into eternity in a “huff”. The bottom line, to quote what “Mason” told “Dixon”, “We’ve got to draw the line, somewhere!”)

Deep Blue said...

Mr. Gadfly:

You are way too existential for me, at times. But always first class.

Your comment:

"It’s time to give all these things some deep thought"

Yes. Deep. Deep Blue.

Regards.

airtaximan said...

anyone with more turbine expereince than me...


Seems VERY strange that the engine is prdoucing carbon on the vanes... even stranger that this causes surging... even stranger the cause is stated to be related to high altitude bleed air requirements.

Couple of observations - this is really a combustor issue... not easily resolved

The issue of surging is probably a reaction to choking/starving/mismatchin the turbine and compressor

Carbon build up would be more likely in the turbine not compressor... upstream, not downstream...

So?

I simply do not believe the PR on this so far. I think they stretched the engine via the FADEC/tolerance spec in order to achieve the performance guarantees.. and now the chickens are coming home to roost... quite early I might add.

Just a unch - anyone with more knowledge, pls advise...

Joe Patroni said...

".....why not a software version first?"

One of the bazillion questions about this program, which I would love to hear the answer to....here's hoping that someone familiar with the market and the industry (Richard Aboulafia, maybe?) can get around the NDAs eventually, and write a book about this fiasco.

Just some of the questions I'd like answered:

-Did anyone start raising red flags about the airplane being too heavy for the Williams (and later the P&W) engines? If so, who made the decision to proceed with the program as is?

-Did anyone actually research the size of the market (and of the airplane), and who did they talk to? Salesmen, or people actually operating airplanes? Did they come up with a profile of the target Eclipse owner, and then figure out how many people could afford to buy the airplane?

-On what basis did they think they could build a fully functional/certified twinjet, for the same price as an unpressurized piston twin from the "dinosaurs"

-Why start production, before you have all the problems found in the prototype addressed (or in their case, even identified?)?.

-Who felt it neccesary to start from scratch and design an airplane around an avionics package that integrated too many functions (IMO), instead of partnering with Garmin/Honeywell/Collins to work up something certifiable?

I could go on and on.....

Shane Price said...

ATman,

Seems VERY strange that the engine is prdoucing carbon on the vanes... even stranger that this causes surging... even stranger the cause is stated to be related to high altitude bleed air requirements.

Ha!

I'm no expert either, but I'm hearing that there are real concerns about the underlying cause of the carbon build up issue.

The FAA and EAC/P&W have been able to replicate the conditions and observe the outcome.

But...

There is still no clarity as to the SOLUTION. This is scary for anyone who's in the market for an FPJ. Which can't fly into known ice, without an upgrade which is not for sale. Or get sold in Europe, without an upgrade, which is not for sale. Or fly commercial in Europe, period.

Meanwhile, the Mustang has just been certified in it's 51st country.

How can this be? Cessna started later, finished first and no one questions it's abilities at all the FL's it promised.

Using a 1" larger diameter fan on the front end of essentially the same engine.

?

Shane

airtaximan said...

JOe:

can of beans...

enough said...

sorry

Joe Patroni said...

Airtaximan:

According to the AD, the carbon is building up on the combustion liners, which can break loose and jam in the vanes to the HP Turbine, disrupting airflow thru the HPT, thus the "surges"

They have evidently identified the buildup as being caused by the conditions listed in the AD, thus the "It hurts when I do this.....then don't due that!" method of compliance. Also note that they call this an "interim action".

Looks to me like a redesign of the combustion liner will be coming down the pike....unless they increase the airflow/RPM thru the core at altitude (assuming they have the RPM margin to do so)

My opinion, for what it worth.

baron95 said...

Lets play the pick on Shane game...

Shane said ... please route it though Gunner

Shane, is Gunner really that "tough"?

Shane said ... an EAC employee who's only failing was to speak the truth was also picked on...

I thought he was picked on for allegedly violating the EAC NDA agreement, which I hope you know, companies have a right to do.

Shane said... and former employees have been cut off with no recourse.

And that is different than the 300,000 Americans that have been losing their jobs every month, how?

baron95 said...

DB said... In my experience, real C11s or a bonified restructuring, always involve a rather large team of credible parties (key suppliers, banks, risk capital institution, a well-respected industry management team, etc).

Actually DB, the opposite is true. The type of CH11 restructuring you talk about is the absolute exception (e.g. Airlines, etc) and are becoming rarer by the day. The vast majority of CH 11 are quick 363 sales, or quickly convert to Ch 7 or are pre-packaged restructuring.

The Eclipse filing is a very, very, very vanilla and typical way to go.

baron95 said...

Shane said ... I found out years later that they continued to pursue that manufacturing model. They had applied micro-tolerances to mating airframe sections, complete with fastener holes. That generated an enormous scrap rate, and huge fights with the vendors.

Shane is this in reference to Eclipse and the EA500 or Boeing and the 787?

P.S. That type of factual info, is exactly what has been missing from the NG version of the blog - thanks for posting, and pls (despite my remarks above) post more like that.

Dave said...

Eclipse Owners Comments To The FAA On The Recent AD

Dave said...

The Eclipse filing is a very, very, very vanilla and typical way to go.

I'm intentionally straying away from your point in regards to 363s being common (which I'm on not disputing), however, I would like to add that the combination of:
1) Insider Buyer and Seller the Same
2) Sale arranged before BK filing
3) 363 sale
Is rather uncommon. Any one of the three are common by themselves, but not all at once. The case itself is not plain vanilla due to Roel being both the buyer and the seller.

eclipse_deep_throat said...

Funny when it comes to tools. All the best tools of the world don't mean shit if people don't know how to use them. Well, since I was at SP10, the FSW building, I can certainly comment on Receiving / Inspection. We had a FARO Arm that no one was trained to use (not to be confused with a Faro Laser Tracker). A contractor was hired who **claimed** to know how to use it (he didn't). This kid, a guy who didn't look a day over 25, was laid off in October 2007. And he promptly ratted EAC out to the FAA regarding the Faro Arm. So it went back into its box and collected dust under the granite surface plate in R/I for months...

The whole metrology deal was plopped into my lap on 10-13-2006. No shit. Friday the 13th; I should have known better. I had to move my crap from my nice cube at HQ to the dregs of SP10 ...with our gal Kelly Flanagan running the show. Kelly was the Team Lead of Receiving/Inspection. We clashed on many times and it is a damn miracle I didn't strangle her. Lord knows the feelings were mutual, I'm sure...

The short version of the story is that R/I was NEVER set up to do 100% inspection on all incoming parts: IT WAS SUPPOSED TO OPERATE ON RANDOM AUDITS ONLY. The theory was that our suppliers were supposed to be of such high caliber that we wouldn't need to inspect each and every part. Kelly simply didn't have the staff. One example: there was a lot of shit hitting the fan in Jan 2008 once we all came back from Xmas and New Yrs break. But my desk was in that zone too, so I got sucked into this mess cuz I was there. In a panic -- Kelly was forced to have ALL of us inspecting the Mexican heating blankets/insulation with 6" scales!!!! Can you all picture that??? NO SHIT, I kid you not. Now, I can't remember the OEM. But I think the issue boiled down to the vendor moving production to their Mexico facility and naturally EAC had not vetted the Quality system at that specific factory. So we had to get every friggin' ODAR -- EVERY ODAR at Eclipse -- at SP10 inspecting these $2 pieces of shit. You put 5 or 10 ODARs all in the same room together and ...how much does it cost PER PART for their time and energy to inspect something??? Stupid yes? Stupid when the cost of inspecting something is GREATER THAN the cost of scrapping the damn part. And the highest form of stupidity: allowing a QA RECORDS CLERKs to inspect parts!!! Kelly was so short on staff that my clerk and her clerk were often drafted to inspect AND BUY OFF PARTS! It is truly amazing that no one has been killed yet because of this plane.

And, ha!! The real funny part is the FAA had a hissy fit with our QA inspectors using UNcalibrated 6" scales. So I am later told by the VP of Quality to look for calibrated 6" scales. A FUCKING 6" RULER!!!! Forgive my language. But never in my life did I think I would be given the **permission** to spend $4,000 on 100 'certified' 6" scales from Starrett. Yep, $40 for each one; money flushed down the commode. Bet Starrett loved us for that order. And since I haven't been at my desk since 8-22, I'd wager that all 97 scales I had not yet issued are LONG GONE, suckers!!!

So class, what is the moral of the story? Yes, not to spend so much damn money. And not to throw QA under the bus every day. If X was better then we wouldn't need to over-compensate with Y and Z. If engineering was better, we wouldn't need to have 100% inspections. If our suppliers were better, we wouldn't need to do X, Y, and Z. NO. On many times we (the QA grunts) would generically say to each other that IF WE HAD REAL LEADERSHIP AT THE TOP we would not have had so many problems. Do the root cause analysis. I don't know if this is true or not, but one of the QA **Managers** told me that Vern was quoted in a trade publication where he said said that "Cessna did a much better job of picking their suppliers..." Gee, ya think!? So fix the problem Mr. Genius. Instead... we have a Leadership (ha!) decision to sole sorce key components from only one company. And then when that company is thrown under the bus every day, they get fed up and start sending us crap. This is Industrial Psychology 101: if I can fuck up every day, then maybe they will fire me and I can get out of a lousy contract. But did Vern understand that???? NO. So then the supplier ships crap for the 100th time. The crap lands in R/I and the QA inspectors get thrown under the bus for each and every Quality "escape" that didn't get stopped at SP10. Then the QA Managers QUIT en masse cuz they were thrown under the bus by Vern in Dec 2006/Jan 2007. Then the crap gets its CofA and is delivered to unsuspecting victims because QA has been emasculated by someone who only wants to be surrounded by yes-men/women.

No, we don't need a Harvard Biz Review to understand all the failures. The lowest common denominator is just one word: VERN. Or Wedge, if you prefer. As I said to my bud at the Abq Journal, Eclipse CREATED waste. Maybe that was Vern's plan. But not really a 'disruptive' plan, just plain stupid.

e.d.t.

airtaximan said...

... and he arranged the financing while at the helm of EAC and/or while being a licensee...

make of it what you will - attorneys could have a field day.

baron95 said...

DB said ... One has to wonder why, for example, the entire E500 and any "automotive" methods were not simply simulated on software first.

You mean like Boeing did on the 787? Did you see the beautiful final assembly simulation on Boeing's web site (I wonder if it is still there)?

Then something called "reality" strikes. Face it, manufacturing something with thousands of parts for hundreds of vendors is a tough thing to do. Even Boeing who has been doing for almost a century can't get it right. Airbus after spending $12B on the A380 found out that the wiring didn't work with the actual airframe bands and pass through holes and had to spend another 2 years and $4B to fix it. And yes, it was all computer designed and simulated - well, except for the fact that the Germans and the French were using two different and incompatible versions of Catia.

baron95 said...

JP said... but the days of "pop rivet a patch on it" to fix things are pretty much over.

You clearly haven't seen B787 LN0001-LN0004, have you?

eclipso said...

. . . it’s been an abortion from the “get-go”.


And a miscarraige of ethics ever since!

baron95 said...

airtaximan said...
Seems VERY strange that the engine is prdoucing carbon on the vanes... even stranger that this causes surging... even stranger the cause is stated to be related to high altitude bleed air requirements.


Hi AT, (I haven't read the AD) but I think I was the one that mention carbon build up and vanes in the same sentence in the blog - relating a Conquest problem. I just want to make sure I didn't inadvertently set of the blog on a wrong left turn.

The Carbon build up would NOT form on the vanes, but it would REACH the vanes and disrupt steady airflow to the engines. Whenever that happens for ANY reason (high angle of attack, ice, carbon chunks, etc) surges often follow.

So, I'd expect two symptoms (again drawing on my Conquest experience). 1 - a slow reduction in performance over several hours, because of combustor carbon build up (reduced efficiency). 2 - Surging if chunks of carbon break-off and messes up the vanes and airflow.

As for the cause of the carbon build up, it is ALWAYS the same - incomplete/improper burn of the fuel air mixture. It could be a combustor design (unlikely), or (more likely) at high altitude (less air density) and high bleed (less air volume) there is simply too much fuel being scheduled for the air available to the engine.

The ONLY solution for this without engine redesign is likely to be reduction of the fuel being scheduled with a resulting power loss. The PROBLEM with that, is that it is a race to the bottom situation. The less power you have, the greater percentage of bleed air becomes over total air, so on and so forth.

I think a SW change to lock-out high-bleed when flying above a certain altitude/temp combination is a more elegant and chaper fix.

ColdWetMackarelofReality said...

As a would-be airplane manufacturer and integrator, EAC should have known:

A- the amount of bleed air needed for all pressurization, ECS, anti-ice and other uses,

B- the total or gross amount of bleed air available from the engines,

C- installation and cooling/handling losses,

D- the 'net' bleed air available,

E- the safety and hazard analysis/failure modes and effects analysis of loss of engine thrust/bleed at altitude,

Simply put, with all the high-fallutin telemetry for instrumented test planes, as well as the info from HAL spying on everybody, they should have known this problem existed almost right away.

In other words, they should have seen that temperatures, fuel flows and bleed air requirements were not matching their predictions.

As with so many other normally simple issues however, somewhere along the line they missed a decimal point, forgot an intercooler loss, etc.

Just like the tires.

Just like the brakes.

Just like the transparencies.

Just like the pitot-system the first time.

Just like the pitot-system the second time.

Just like the pitot-system the third time.

Just like the throttle design.

Just like Avio OfG.

Just like Avio NfG 1.0.

Just like Avio NfG 1.5.

Just like FMS.

Just like GPS.

Just like the original MTOW.

Just like the amended MTOW.

Just like the range (1st, 2nd or 3rd versions).

Just like the speeds (1st, 2nd, you get the point).

Just like being able to shut the engines down with loss of electrical power.

So EAC, paragon of reliable and predictable competence and performance that it is - reindexes the FADEC fuel flows, requires more bleed air flow than they or P&WC had accounted for, and now the result is carbon build-up, surging, and potentially loss of power inflight.

Add to that, Ken filled us in on a nice little tidbit earlier that in the event you lose one engine due to this issue (high bleed at high altitude/power settings), HAL will automagically set the bleed, ON YOUR ONLY REMAINIG ENGINE, to high - the cause of the failure of the other engine only moments before.

Amateur hour is over, let RP buy-up the pieces for pennies on the dollar and take his ball and go home.

The best thing that could happen at this point is for this abomination to crawl back under a rock, and for parts costs to rise to the point that the owners (who came here hat-in-hand asking for handouts for their participation in the BK like some GM exec begging in DC) can not or will not pay, and the planes are relegated to their appropriate place on the ash heap of history along with Happy Miles' Adventure Air amphibian, the Mini 500 kit helicopter, and the Yugo.

Dave said...

In other words, they should have seen that temperatures, fuel flows and bleed air requirements were not matching their predictions.

Who says that they didn't? Perhaps they did see all that, but they wanted to hit their contractual performance targets regardless of the impact on customers.

bill e. goat said...

Great post Shane!
You took the words right out of my mouth! (I'm sure most fellow bloggers wish that were only true... :)

BricklinNG's post yesterday hit a hot button, that has been on my mind for a LONG time- since April...

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
KNOCK KNOCK !
WHO'S THERE ??
REALITY !!!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

BricklinNG,
While I appreciate your sentiments for a community chest for the owners/depositors, I would like to point out something that might have occurred a bit before you joined the blog.

From April 18, 2008 "We Really Should Be Flattered":

Google has received a civil subpoena that demands information regarding
the source of anonymous comments posted on your blog
eclipsecriticng.blogspot.com. The case, entitled Eclipse Aviation
Corporation v. John Doe; Jane Doe; et al. has been filed the Superior
Court of California, County of Santa Clara, case number 108CV110380. A
copy of the subpoena is attached to this message.


To comply with the law, Google intends to provide IP address information
for the postings and comments at issue, unless you or the anonymous
comm enters send us a copy of a motion to quash (or other formal objection
filed in court) via email to legal-support@google.com by May 9, 2008 at
5pm Pacific Time.


I was proud of all our fellow bloggers who condemned Wedge for his (mis-)intepretation of the First Amendment- NG, particularly so our owner/depositors friends, who solidly rebuffed Wedge and his legal lackeys for their crass, craven, and ugly attempt to intimidate employees and harass the public. One such supporter, Ringtail, even lent his name to the motion to quash.

And it was our own Rich Lucibella ("Gunner"), who paid for the legal defense, ENTIRELY ON HIS OWN!

We've properly given him hearty thanks here, but if there is any legal fund being set up- it most surely ought to first go to Rich.

Consider what was at stake, with Wedge seeking to silence the critics. The fact is: concerning EAC, this blog is about all the real journalism that exists. With a few notable exceptions, most media have merely reguritated EAC press releases and fawned over “the new emporor of technology, aviation, and business”.

I don't know how many potential customers hesitated to make the 10% down payment (at say $150K each).

I don't know how many depositors were saved being scammed out of their 60% progress payments (at say $750K each).

I don't know how many owners have benefited from the public presence here, resulting in pressure on Eclipse to provide you with a better quality product, with upgrades being delivered sooner.
--------------------------------

So, I'd say it is up to the blog to give the owners/depositors the same solid moral support they gave the blog while Wedge was trying to abuse the constitution.

And, I'd say it is up to the owners/depositors to consider their degree of gratitude to the blog, and realize the blog would not be here in it's present form without the selfless acts of Rich.

Rich Lucibella
Publisher
SWAT Magazine
5011 N. Ocean Blvd
Suite 5
Ocean Ridge, FL 33435
-------------------------------

Thanks again from all of us Rich!
-Goat

Jim Howard said...

"-Did anyone start raising red flags about the airplane being too heavy for the Williams (and later the P&W) engines? If so, who made the decision to proceed with the program as is?"



At the AirVenture when the Eclipse was announced (2000 or 2001?) John Roncz,the autodidact airfoil expert, told the Rutan tent talk audience that the Eclipse would have the climb performance of an Cessna 150 on one engine because it would be seriously underpowered.

Two or three years latter I ran into Mr Roncz and asked him how he knew that the Williams engines wouldn't work on the Eclipse. He became somewhat agitated and told me that he knew because he'd run the numbers, and that he had told Eclipse that the Williams motors wouldn't work, but they wouldn't listen to him.

If someone ever really does write a book about EAC they ought to talk to Mr Roncz.

(I know I've mentioned this before, but its been a while.)

gadfly said...

'Might as well throw in some more speculation. With an oxy-acetylene torch, a "carburizing flame" is produced by cutting back on oxygen. So, it would appear that the problem is directly related to "too little" oxygen (air) . . . which goes along with Shane's comment about the larger diameter intake (compressor section) not having the problem.

Or, maybe there is some other thing that is causing a starvation of air, into the engine . . . higher angle of attack, at altitude? Any number of things could contribute. This plane operates, for the most part, on the ragged edge of it's specs, which is never a good thing for long term endurance/reliability.

Comments worth exactly what they cost . . . nothing!

gadfly

bill e. goat said...

And in additon to Rich's legal expenses, there is another victim of Wedge's pettiness that I've been wanting to mention for quite a while:

Brian Skupa.

First, let's consider what a couple of customers had to say about Brian:

“Also a conversation with Brian Skupa and a nice email from Ken Wolfe helped to keep me from freaking out”.

Another customer mentions:

“My wife and I were greeted by Susan Harness and Brian Skupa. Brian was not only fantastic in showing us the entire operation but was straight forward with his responses ...”.

Now let's take a look at what Wedge had to say about this trecherous back stabbing malcontent:

“Unfortunately Mr. Skupa did not apparently care about hurting not only you but also our partner, DayJet”. So, Wedge, what was “REALLY”-NG (tm) going on here?

"So what are the results of Mr. Skupa's actions?" (Brian Skupa was a worker bee, who is purported to have told the truth to coworkers, rather than lie).

”First today he was fired and escorted from the building. Second we are filing a lawsuit against Mr. Skupa for his violation of the INDA and the potential damages that have been done. And third, we may be pressing criminal charges against Mr. Skupa. The price of ignoring and violating INDAs is very high and permanent, as Mr. Skupa is now discovering”.

"And as with Mr. Skupa, we will use every means available to us to remedy the situation and recover damages done to the Company. And the price you and your families pay for the violation will be very high".

"I wanted to get this information to all of you so that you may have the facts instead of the rumors before you decide you own view of this most unfortunate situation."

(Ah, thanks Wedge...I think we have indeed decided).
----------------------------

I want to show moral support to Brian, and am ashamed of myself for not having done this more publically, sooner.

And while we're discussing legal defense funds, I'd suggest the following order of presidence:

1) Rich Lucibella

2) Brian Skupa

3) Owners/Depositors.
---------------------------------

Rich stood up for the blog, as a matter of principle. And he deserves to be reimbursed, as a matter of principle.

Brian Skupa told the truth, for the benefit of customers. He did it as a matter of principle.
And paid a price for it. We owe him a debt too, as a matter of principle.

Think about it. And then do something about it.
------------------------------

Rich's address:

Rich Lucibella
Publisher
SWAT Magazine
5011 N. Ocean Blvd
Suite 5
Ocean Ridge, FL 33435

baron95 said...

Jim Howard said...
At the AirVenture when the Eclipse was announced (2000 or 2001?) John Roncz,the autodidact airfoil expert, told the Rutan tent talk audience that the Eclipse would have the climb performance of an Cessna 150 on one engine


And that would be very bad why?

A C150M has standard conditions rate of climb of close to 700 ft/min. A King Air E-90 for example has a SE rate of climb of 470 ft/min. The C510 Mustang has a SE rate of climb of 870 ft/min, barely higher than the C150.

So the above, with all due respect was a ridiculous comment. It is like saying the Ford Expedition is so underpowered that it will have the acceleration of a Mustang 5.0. (both suck by the way)

baron95 said...

Oh, and if by "climb performance" he was talking about climb gradient, then having the C150 performance would likely beat any civil passenger transport jet in existence.

baron95 said...

single-engine, of course.

just zis guy, ya know? said...
This comment has been removed by the author.
Dave said...

In summary, I think Brian deserved to be fired, and while I think EAC was within their rights to sue him, it was rather mean-spirited to do so.

I don't have any details other than what has been published, but Eclipse really screwed up by mentioning him by name in a companywide email talking about his firing. That is something you simply don't do because it opens you up to liability (such as Defamation). Eclipse could have just as well spoken generically about the situation or done so after they had a civil/criminal judgment, but doing that the way did was very destructive for them and needless. Even if they had a strong case otherwise, it wouldn't surprise if they settled just because of that post-firing companywide email.

baron95 said...

If you want to know how the pros handle assembly to avoid fuselage join problems, fastener problems and avoid patches, look at page 8 of this presentation.

Eclipse, clearly, should have followed the same path and just eliminated 4 passenger windows to make assembly less costly.

baron95 said...

Oh, I should warn the hard core critics. "Reading the above document, may be detrimental to your belief that only Eclipse has engineering/build problems. You are strongly cautioned to read past page 20".

Luckily, most of you will be bored to tears by page 12.

baron95 said...

Oh, but if you are interested, you better read it fast. Word on the stret is that the OEM in question may be contemplating legal action to quash the document and to SEEK CRIMINAL CHARGES against any employees, vendor employees, AND read this, customers involved.

Which again shows how weak Mr. Rapburn was. After all he only went after civil charges. Lame, isn't it.

baron95 said...

So look out B.E.G. It looks like your employer may be considering criminal charges against your fellow union brothers.

(P.S. My apologies if I got you confused with another blogger - but I think it is, in fact you that works for the OEM in question.

Now watch as the brilliant Wall Street Analysts pick up on the info tomorrow.

Shane Price said...

Baron,

Now THAT'S what I call a hand grenade...

You better be careful around Seattle, there might be a few Boeing types looking for you!

I'm pleased you appreciated the email from 'early days EAC'.

That's the sort of information a blog is perfect for.

Shane

baron95 said...

Shane,

The question is if there is still anyone in Seattle that really cares. There are bright people there for sure, but where are the likes of Joe Sutter that could really drive a program with total grasp of the issues?

Bair was like Vern - good at the vision early selling thingy - but when execution time came, it all fell apart. Then they recycle Shanahan from missile defense and expect a different result.

Maybe Gad is right. Give Joe S. and Kelly J. and even Clyde C. pencil, paper and a slide ruler and they'll beat 1,000 designers with a room full of Catia systems every time.

Really sad, if you ask me.

Deep Blue said...

Joe P. asked:

"Did anyone actually research the size of the market (and of the airplane), and who did they talk to? Salesmen, or people actually operating airplanes? Did they come up with a profile of the target Eclipse owner, and then figure out how many people could afford to buy the airplane?"

My understanding is, believe it or not, no, EAC conducted no such research, until 2007, with a small third party study that basically concluded that EAC's volume assumptions could not be verified. The sales premise was strictly based on an assumption that price would stimulate demand and that the purported aircraft system simplicity and jet performance step-up would make many traditional GA aircraft (piston twins; t-props) absolete.

Between JP's excellent questions, and various other posts concerning the relative effectiveness of Cad/Cam etc, along with Gad's convincing reminder of the need for expert human intervention, one has to wonder if, in answer to JP's questions, the entire EAC project (build a breakthrough-priced twin jet) would have fared better if, say it were conducted as an industry (versus venture) project, one where an industry research team went to the proverbial Googleplex for a brainstorm around how to build a business jet more efficiently, at lower cost. Even a public private partnership with NASA, etc.

Also, after reading here (and being reminded of) many manufacturing challenges in the aerospace/aviation sector, one might start to question whether the US aviation industry is suffering from decades of under-investment; is this sector as "sick" as Detroit? Have we 'outsourced" our capabilities and lost a generation of skill building?

I wonder if the Canadians and Brazilians share the same challenges (and what of the Chinese/Japanese?)

Tail.Dragger said...

one interesting point that I believe is true is the existing NDAs should have become null and void with the C11 filing since they are nothing more than a civil contract which became null and void with the C11 filing. They certainly became null and void when the assets are sold at the 363 auction

Jim Howard said...

"And that would be very bad why?"

My recollection is that Mr Roncz said it was an overloaded C-150 on a 100 degree day, or words to that effect.

I don't want to provide exact quotes from my fallible memory, but Mr Roncz made it clear in his public talk that his opinion was that the EA-500 was seriously underpowered with the Williams motors.

He certainly reinforced that impression with me when I asked him about in person.

baron95 said...

Tail.Dragger said...
one interesting point that I believe is true is the existing NDAs should have become null and void with the C11 filing since they are nothing more than a civil contract which became null and void with the C11 filing.


That is incorrect TD and is one of the public's misconceptions about Ch11. In a Ch11 petition the company lists what contracts it wants to continue and which ones it wants to void. You can read the comments I made to/with Dave on the last headline post for details if you want.

Specifically, contracts that do not cost a thing and only bennefit the company (e.g. employment NDAs, non-compete, etc) are always kept.

Dave said...

That is incorrect TD and is one of the public's misconceptions about Ch11. In a Ch11 petition the company lists what contracts it wants to continue and which ones it wants to void. You can read the comments I made to/with Dave on the last headline post for details if you want.

Specifically, contracts that do not cost a thing and only bennefit the company (e.g. employment NDAs, non-compete, etc) are always kept.


However, with Eclipse in particular I believe the NDAs would be nullilfied due to the construction of the employment contract as well as the construction of the APA. If memory serves me the NDA was a part of the employment contract rather than a separate contract (I believe at the time I commented on how poorly constructed the contract was). Per the APA all employment contracts get voided so that would also void the NDA because that was part of the employment contract.

Dave said...

Following up on my last post here is Eclipse's Invention & Non-Disclosure Agreement. It lumps together the invention policy, the at-will agreement, non-compete and mediation.

Shane Price said...

Tail Dragger,

I've been remiss in welcoming people to the blog recently. My only, rather sad defense, is that there are far more of 'you' than there is of 'me'....

So, a belated 'welcome'. Enjoy this place, and learn lots...

Shane

gadfly said...

‘Just for fun, like Sherlock Holmes, let’s examine some possibilities, that might affect the intake air to the engines at high altitude, which might relate to the “carbon buildup” in the engines.

What do we know as distant observers? For starters, we know the following:

The aircraft was designed for the small Williams engines.
The MTOW was to be about 4,800 pounds.
Early wind tunnel testing was conducted with a model of the original design, at a maximum velocity of about 170 knots*, and data was extrapolated by computer, to verify conditions “at altitude” and maximum velocity. (No empirical data was obtained prior to “first flight”, at actual velocity/altitude/temperature/angle of attack/etc.)

*(170 knots, as I recall, was the maximum capacity of the University of Washington wind tunnel . . . 5-200 mph . . . the testing, I believe, was well under the max.)

Wings (on the little jet) have slight effective forward sweep . . . although they appear to be straight.
Original design had no wing-tip tanks.
The engines are set low, in line with the fuselage (as opposed to mounting on vertical fin). And they are “just above” wing shadow.

What else? Well, we know that virtually all aircraft produce a “wake turbulence” . . . a horizontal vortex, directly related to the weight/velocity/angle of attack, etc. And looking down on this vortex, we discover that air flows in towards the fuselage/empennage, at an ever increasing angle, depending on other variables. So, the flow of air is no longer “in line” with the axis of the engines. And given that the little jet is far heavier than first designed, we see a combination of events that would contribute to a slight “starvation” of air into the engine intakes.

How do other aircraft with rear mounted engines differ, to avoid these problems? Some mount the engines higher, out of the wake turbulence. Some are mounted farther forward. The “Honda Jet” has put the engines high above the wings, avoiding altogether, this potential problem. Most have swept wings, moving the wake turbulence farther back, “at” or “behind” the engines.

What about straight wings . . . consider the “Lockheed U-2" . . . the intakes for the engine are near the nose.

What is happening “at altitude”? The little jet is near the limit of both speed and altitude, with high angle of attack/high weight/low air density . . . all coming together at once.

No harm done with our little exercise . . . but demonstrating how the human brain can “reason out” a multitude of possibilities, that a computer would miss . . . unless a “human brain” had first programmed all these possibilities into the mindless algorithm. And we have the ability to consider all these possibilities in a few seconds . . . far less time than it takes to write it out or explain it to another person. In fact, a “hot morning shower” can do more than even pencil/paper/ . . . and slide rule (or an HP RPN calculator).

Maybe in time, the problem will be solved . . . and maybe we’ll find some of these thoughts taken into consideration . . . who knows?! But it’s fun to do the exercise.

gadfly

(It has been my practice over the years to consider even the most ridiculous possibilties, when attempting to diagnose problems with my own designs . . . and often enough, the “dumb” questions lead to the best solutions.)

baron95 said...

Dave said... However, with Eclipse in particular I believe the NDAs would be nullilfied due to the construction of the employment contract as well as the construction of the APA

Are you sure any of the employees other than Vern and one or two other officers actually had employment contracts? I really doubt that.

That NDAs should survive if newCo wanted them. I think it is a moot point anyway, what is left to protect?

Krupal said...

On a tangent: The Airbus document is producing quite a stir, especially considering they've photocopied Boeing proprietary slides, including apparent design information for an unannounced aircraft.

Let's just say Legal is *not* happy.

http://www.flightglobal.com/articles/2008/12/03/319711/flightblogger-airbus-787-intel-brief-exposed.html

baron95 said...

Or Gad, in other words, the engine was not getting enough air for the amount of fuel being metered in. Why over complicate?

Cheap Fix? Either get more air, less fuel or a combination of both to the engine.

Expensive fix? Redesign engine combustor, etc to be more tollerant of the conditions.

If it were me, I'd ask an intern to change the Avio code to add in the appropriate places:

If (PressureAltitude > AMAX) then {
set MaxBleed to LOW;
If (CabinTempControl > 68){
EnnunciateCAS(LOWPRIORITYINFORMATION, "Cabin Temperature Above 68F May Not Be Attainable Above FL370")
}}

But of course, you may choose to design an aeromechanical valve with tripple redundancy to do the same ;)

It is a matter of preference, really. ;)

baron95 said...

Krupal said ... Let's just say Legal is *not* happy.

But, but, but Krupal, the employees were just trying to get the truth out in for the benefits of the customers and investors and in the interest of safety!!!!

Really, Boeing is being a bad, naughty company. They should not hide the "truth".

Boeing is being paranoid and a control freak. They are bad, bad, bad for enforcing their NDAs. NDAs only quash the "truth".

Gunner, Shane, please, quickly. Lets set up a legal defense fund for the little poor souls that want the "truth" to come out and are being intimidated by Boeing.

We can never allow that to happen on our watch, can we?

Turboprop_pilot said...

ref the Boeing documents:

1. Stan has a 100% record for blogs- he called the Eclipse and the 787.
2. Remember Boeing's fastener shortage that delayed the first model assembly- it looks like a Boeing redesign of the fastener may be more to blame than those lousy fastener suppliers.

Is Boeing the new Eclipse?

Turboprop_pilot

Krupal said...

I'm hesitant to call Stan's predictions on the 787 "correct". There hasn't been a large class transport aircraft done on time and without significant problems as far as I can remember. Also, Airbus was pretty smart to buy up a lot of extra fasteners to put us in a bind (and that may have been part of the redesign of the fastener). Regardless, everyone knew the 787 would have headaches, the question is how big they would end up being. Ironically, the scariest part, maintenance, ended up working out fine.

Also, the suppliers definitely screwed the pooch on the 787, enough that Boeing flat out bought one of them and proceeded to put all their own people in.

Heh @ Baron. Not quite apples to apples in this case. NDAs aren't quite the same as proprietary. I don't know if legal will push with this, but if boeing gets mad enough, this is something that could have huge impacts.

baron95 said...

Or, TP, the other explanation is that these things happen in every complex project, are nothing new.

The only thing that is new, is that, now, there is a venue for the Stans, Barons, Gads, TPs, ATs, Daves, Freds of the world to endlessly talk about mundane issues as if they were extraordinary events.

Add the colorful language of fraud, greed, poor little guys, and it is an easy story to acquire escape speed.

Only thing really missing on this story is a bit more sex allegations (god knows they've tried here with Peg and others) and rumors of someone being murdered with the body buried in the desert.

baron95 said...

Krupal said...
There hasn't been a large class transport aircraft done on time and without significant problems as far as I can remember.


Huh? Are we forgetting the 777 (on time, out of the bat with a little thingy called ETOPS180), 747-100 (though the engines did have 2 months worth of problems), 707.

Boeing itself, up until the 77W had a good track record. So did Airbus up until the A345/346/A380.

Where did all the good engineers, program managers and production czars go?

baron95 said...

Just to be clear up to and including the 77W/77L the record was good, with a few gray spots (e.g. 764).

gadfly said...

b95

Whether you choose a cheap or expensive fix . . . it’s a good thing to understand the problem(s), first. The little exercise was simply to demonstrate how to discover possibilities, by using our God given brains . . . no solution was given, nor implied.

gadfly

(A person can identify a problem, and a simplistic solution, yet do so without “understanding”. Frankly, it would appear many of the little jet’s problems have been “solved”, without understanding, and integration. And these solutions seem to weigh-in at about 1,200 pounds. But that’s just my own take on the matter.)

baron95 said...

Krupal said ...I don't know if legal will push with this, but if boeing gets mad enough, this is something that could have huge impacts.

And if they do, the results will be EXACTLY the same as what Eclipse got. There will be a *LOT* more attention brought to it, the violators will be portrayed as the poor little guy on the side of the "truth" vs the greedy and paranoid corporation wanting to perpetrate fraud.

Correct action is always the same. go to the press and say: "None of this is news, we have been reporting to customer and analysts on a regular basis on issues and resolution, blah, blah, blah..."

Quietly though, behind the scenes, you lean on the employers of the leakers to make sure they are toast and never work in the industry again.

baron95 said...

No disagreements there, Gad.

Except that I think it is unfair to call the EA500 "fat". I think they did quite a remarkable job in keeping weight down. A twin-turbofan, pressurized, 5-6 pax, FL410 plane, with 1,000 nm+ range, 800lbs payload, at under 6,000 lbs?

W O W

For comparison, Beech's lightest pressurized design, a piston twin with a much smaller cabin, limited to FL200 (if you wanted to keep the cabin below 10K ft), half the practical speed, 2/3 of the range, came in a MTOW of 6,300 lbs. That being the P58 Baron.

I'd accuse the EA500 of many things. Being "fat", "slow" or "poor-handling", it is not.

Deep Blue said...

B95 asked:

"Where did all the good engineers, program managers and production czars go?"

Where indeed. And management leaders?

Turbopilot asked if Boeing is the next Eclipse. Not likely, but a provocative question vis-a-vis the evolution of this company. Boeing has really, over the years been torn apart and patched back together numerous times. And the CEO suite has been an odd mix of individuals, skills and agendas (shareholder returns versus capex; outsource versus vertical).

I consider "outsourcing" to be a central weakness and causality in Boeing's troubles (and alot of expertise may have been "outsourced" as well). This may indeed be a commonality with EAC.

Cessna, in contrast, is very much vertically integrated; they get some rib poking as being "old fashioned" and doing an enormous amount of craft jobs in house, but that may be a superior model for an aircraft OEM, including growing your own experts and sustaining a craft, expert labor and management culture.

Krupal said...

@ Baron: 777's issues were not production based, it was more legally/politically based. In WA, it caused the mother of all storms regarding Boeing threatening to leave (this actually is why HQ moved to Chicago).

Also, this isn't "leaking" to Airbus. This is corporate espionage. It isn't that Boeing proprietary info was leaked to the public. It was that design info was leaked to Airbus, who then used it. Airbus is the one with someone who leaked it to the media.

@ Gadfly: agree with you as well. VLJs are a pain the design, especially with regards to stability and control characteristics. Sometimes the simplest solutions are the best.

Also, the FAA requirements are getting, um, nutso for a VLJ. Until the FAA and the industry sit down and do a thorough mathematical analysis on the safety characteristics of a VLJ-class aircraft, the entire industry will be stunted, IMO.

@ Deep Blue: Outsourcing isn't a boeing or eclipse issue; it's a capitalism issue. Hopefully the debacle that Boeing is going through will teach companies that outsourcing is not the cure to all woes. (I doubt it, but I digress) Cessna does the same thing itself (Skycatcher, anyone, being fully outsourced to Shenyang Aircraft Corp), as much as it gets upheld as a paragon of everything holy and right with the aircraft industry, i can say from first hand experience it is the exact same as every other aircraft company. (seriously, I get the feeling there are people with vested interests in Cessna here sometimes)

http://www.avweb.com/avwebflash/news/Cessna_Skycatcher_MadeInChina_196672-1.html

I think that much of the focus of many companies, Boeing included, has been too focused on short term monetary gains. GE is notorious for this, GE Capital actually makes the majority of profit and money for GE. But they've routinely done the same thing.

K

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

b95

You said “fat” . . . I said “1,200 pounds of solutions” . . . and it was Eclipse that promised a ‘svelte figure’ of 4,800 pounds. Go figure!

gadfly

(What are those things on the wings? . . . “Love handles?”)

Deep Blue said...

Krupal:

Very good post. The Skycatcher is indeed a "kit" brought in from China, although asmall part of the product mix; the new Columbus is not exactly "made in the US" either. The core Citation line is the meat of Cessna and is largely a "craft" line in Wichita, however (although that may change). Whether you're a fan of Cessna products is another question.

I think your sentimenmt about "political issues" at Boeing is really just shorthand for "management" issues, and sr. management there has been and remains, weak, including as you rightly point out, a shameful commitment to 90 day financial cycles, with really no apparent regard for the inherent integrity of the core enterprise.

As for EAC/Etirc, one might say the same: EAC was really too much of a venture/financial play rather than an engineering/operations/management one. Way too much emphasis on a big story for an IPO. And Etirc is merely a financial player as well (unfortunately not a terribly talented one).

airjet said...

Hello,

In an effort to assist any bidder in their due diligence to purchase the assets of Eclipse Aviation, we are facilitating a phone call between EclipseJet Aviation International, the stalking horse bidder, and the Eclipse customer base next Wednesday, December 10, 2008 from 10am to 11am MST.

Roel Pieper, the principal in EclipseJet, will host the call and be able to outline his vision of EclipseJet if it is the winning bidder. He will also answer questions from the customer base regarding your concerns on service, support, deposit, etc.

We will provide this same opportunity in the future to other qualified bidders who request it, as determined by Eclipse and its advisors.

A reminder with the dial information will be sent early next week.

Michael McConnell
President & General Manager
Customer Division
Eclipse Aviation


Eclipse Aviation Proprietary Information All information and data contained herein are the property of Eclipse Aviation Corporation and are not to be duplicated or disclosed to others for any purpose without the consent of Eclipse Aviation Corporation, Albuquerque, NM. If you are not the intended recipient, please delete this email immediately.

Zed said...

Roel Pieper, the principal in EclipseJet, will host the call and be able to outline his vision of EclipseJet if it is the winning bidder.

So Roel is maintaining an "arms length" relationship only if he is Verne Troyer (aka Mini-Me of Austin Powers fame).

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

Hi B95,
You seem unusually excited today.
What's up?

Turboprop_pilot said...

Piper Jet:

A little off topic. The new Flying had a couple of PiperJet pictures, one of which showed the gigantic horizontal stabilizer. I guess with the aft mounted engine and very short coupling between wing and stabilizer, they needed a big one.

It made me think of the Piagio solution- far aft mounted engines, a short coupled tail but a forward lifting surface that adds much to the craft's efficiency. I'll bet the Piper's efficiency would be enhanced with the same solution.

Turboprop_pilot

WhyTech said...

"Hi B95,
You seem unusually excited today.
What's up?"

Off his medication, no doubt.

bill e. goat said...

B95,

I think I'll try to get a cell near Wedge and Ed- would that constitute cruel and unusual punishment? (They are both pretty unusual, cruel though? Yes and No, so to speak? .)

Thanks for passing along the info- it is an interesting read indeed.

Note the briefing was prepared by "the "Head of Engineering Intellegence". Sounds rather, espionage-ish. Not sure if it has the same connotation in Euro-speak though.

Also note on page 7, "Solution infringes a BAE patent owned by Airbus".

I figure The Lazy B will sue Airbus for copyright, Airbus will sue Boeing for patent infringement, Boeing will sue employees for leaking, Airbus will sue employees for leaking the leak.

I think it's all part of the Attorney Economic Stimulus Plan :)

Krupal said...

@ Deep Blue

In the 777 case, political is referring to the fight between the state of WA and Boeing. Every time a new major model is introduced, Boeing routinely states that the business environment is too bad in WA, and they need more tax breaks, etc etc. WA gets mad and says, no you don't, etc etc. In the 777's case, it finally came to a head, as WA didn't immediately capitulate as it usually does.

As for Cessna, I don't know much about them, nor have I flown in one of their products, so I don't have an opinion.

bill e. goat said...

Hi JZguy,
Thanks for your post regarding B.S. (no- NOT Wedge !! .)

I appreciate the way you put it too- well said, on a difficult topic.

I have something to say about the issue (okay- as always. Something to add?, well maybe not:) sorry I haven't had time to do so yet-

Will try to catch up later today,
Thanks,
Goat

Deep Blue said...
This comment has been removed by the author.
Deep Blue said...

Krupal:

Yes. Understood.

But the Chicago "HQ" seems, still to most observers, a shell operation; evidently it was done as a negotiation act against WA. However, it surely doesn't have any economic impact on Boeing's operations and seems just another misplaced management act.

At any rate, states are always fighting/competing for business (auto, steel, aerospace, defense, IT, light manufacturing, etc)and Illinois clearely can't afford to incent Boeing to make a wholesale move; WA only hosts Boeing out of a historical accident and at the rate Boeing is going, they might as well move to Japan (better/cheaper health care; more engineers; currency advantage; tier 1 suppliers; closer to major growth markets etc).

Who needs IL and WA? Unions, taxes, busted infrastructure; broke airlines, aging population; BK pensions; broke Government; thin technical management.

The only Boeing play left here is defense, which the USG will spend on until its last Treasury dime is gone.

But Japan may still be a better location even for defense manufacturing and support; closer to our declared enemies Russia, China, Pakistan, Iran, Korea.

As for EAC/Etirc, a new cold-war OEM for drones and ab initio pilot training (here's where the Russian connection comes into play: an army of VLJs used for light attack, deception and UAV-guided missions on covert ops).

Expendable aircraft have a market somewhere.

baron95 said...

DB said ... Cessna, in contrast, is very much vertically integrated;

I know I've been a pain in the a$$ lately, but the above is simply not true.

Look at Cessna's two newest designs at both ends of the spectrum. Smallest and cheapest (Skycatcher) outsourced to China. Largest and most expensive (Columbus), outsourced to Vaught (wings), Spirit (fuselage), etc, etc.

eclipse_deep_throat said...

DEEP BLUE SAID:
As for EAC/Etirc, a new cold-war OEM for drones and ab initio pilot training (here's where the Russian connection comes into play: an army of VLJs used for light attack, deception and UAV-guided missions on covert ops).

Expendable aircraft have a market somewhere.

***
Nope!! While at EAC, I kept bugging my step-father at Lockheed to use the Eclipse. He's in their ISR division (intelligence, surveillence, recon). After the Jan 2008 All Hands Meeting, the one group Vern left off his presentation was Govt sales. So what the heck, I emailed Vern and Peg some of my silly ideas.

One day I was walking by Peg's office and I had the nerve to ask her about using the EA500 as a replacement for the Predator drones. Well, my step-dad @ LMCO blew off the idea first. Saying something like "we have our own drones."

Peg did take the time to explain to me that 'no one from the military was banging down her door' to use the EA500. I figure it would require an insane amount of $$$$. And the only other applications I mentioned was for DEA, Border Patrol, Coast Guard, etc. Stuff where it could fly with one pilot and rip out all passenger seats for ISR infrared goodies. You couldn't really use it to replace the Predator. So AvioNG would be there ....and then separate systems for ISR.

I doubt it would be practical considering MTOW and all that. Even if configured with just one 200# pilot. How much is then left for ISR systems?

CH11 makesthe whole exercise moot. I would crap kittens if Roel is foolish enough to sell the jet to the Russians to use as a drones **against us**

e.d.t.

baron95 said...

Krupal said... Outsourcing isn't a boeing or eclipse issue; it's a capitalism issue.

Nope. It is a behind the times union issue. Just like the insane UAW wage, work rules and benefits make it impossible for GM, Chrysler, Ford to build profitable cars in the US, Boeing finds itself forced to outsource as much as it can to compete.

On the other hand, Toyota, BMW, Honda, Mercedes, Airbus, Embraer, etc are rushing to set up shop in the US (typically the South) and do quite well, building and designing cars here - yes designing as well.

So long as the unions in certain industries cling to uncompetitive packages from another age, you will see companies sending as much work as humanly possible overseas.

gadfly said...

goat . . . Did I miss something? It's been more than twelve hours! And this Boeing/Chicago thing . . . 'seems "The Loop" might have a new meaning . . . what with the "Ell", and "Subway" et al. Nobody actually took "Flight Simulator" seriously, did they? . . . Meig's Field and all that!

gadfly

(Good Grief, Charlie Brown . . . leave you guys alone for ten minutes and aviation goes nuts! Ain't anything sacred? I'm a thinkin' I might have to delete this thing. There was a time when Cessna was the most sane thing a person could fly . . . or work on, for that matter, if you happen to have an "A&P" ticket . . . no surprises . . . everything was honest and by the book.)

Dave said...

In an effort to assist any bidder in their due diligence to purchase the assets of Eclipse Aviation, we are facilitating a phone call between EclipseJet Aviation International, the stalking horse bidder, and the Eclipse customer base next Wednesday, December 10, 2008 from 10am to 11am MST.

Roel Pieper, the principal in EclipseJet, will host the call and be able to outline his vision of EclipseJet if it is the winning bidder. He will also answer questions from the customer base regarding your concerns on service, support, deposit, etc.


That's funny. I thought he was supposed be CEO of Eclipse Aviation. Silly me! Note that the date is after the December 8th deadline to file objections.

Dave said...

So long as the unions in certain industries cling to uncompetitive packages from another age, you will see companies sending as much work as humanly possible overseas.

Both unions negotiating wage contracts as well as companies outsourcing overseas are all part of capitalism.

baron95 said...

By the way, if you want to get a taste of how out of touch with reality the IAM and other unions are, take a look at their web site.

Notables: "2008 is our time", "Breakthrough raises, lump sum payments, health care reimbursed for the strikers, restrictions to outsourcing, etc..."

That is just what Boeing and the economy of WA and the US need.

baron95 said...

http://www.iam751.org/contract08.htm

Now I shall lay off our union friends or they will picket in front of my house.

baron95 said...

Dave said... Both unions negotiating wage contracts as well as companies outsourcing overseas are all part of capitalism.

You are, of course, correct. And for the record, I am absolutely in favor of unions having the right to form and vigorously push for what they want.

But it is obvious what is going on. The IAM/IBEW/UAW-type unions are putting the interest of the very few (only 7% of private sector workers now belong to a union - and many have no choice due to communist mandatory representation in many states), the ones that are "in", ahead of the long term viability of entire industries and future workers. They will bleed industries and companies and see the number of represented employees dwindle down to zero as company after company, industry after industry with jihadist unions die off.

Of course, there is always the chance the the US gvmt will intervene and keep some of those on life support a little longer.

Deep Blue said...

EDT:

One figures RP turned EAC against trade suppliers, employees, lenders, equity holders, owners, the State of NM, so why would he hesitate to treat US national security any differently? To Russia with Love (he's Dutch; the Dutch are merchants with no allegances but bank trade accounts).

B95:

Yes; but both of those products are at relatively low states of representation in their product mix and profits (both actually nothing but expenses so far, and now, with no certain future, out-source or no).

Mr. Gad: you know Japan has us beat on engineering, education, finance, infrastructure, technology (auto, IT, aerospace, manufacturing generally). The US is in sad decline; your generation had the cat bird seat. Your comments appreciated.

Joe Patroni said...

Various comments about various comments.......

E500 vs. B787 = Apples and oranges

Which program has the better chance of success?

-A fairly conventional small twinjet, designed and built by an aviation startup with no track record, or....

- a new transport designed by a decades old company, but using new materials and construction techniques previously never used to the extent they are on this specific airplane.

My personal experience with composite sub-assemblies on various bizjets is that the weight saving vs. the aluminum component is never as much as advertised. And I'm personally curious to see how a composite pressure vessel is going to work out over hundreds/thousands of cycles.

And who has the balls to fix it and sign it off, if it ever needs repaired?

E500 vs. Pressurized Baron.....the Baron was designed a long time ago, back in the days of slide rules and educated guesses

What would be interesting would be a comparison of load carrying between the E500, C510 and C525

Dave said...

Motion for Appointment of Official Committee of Refund Deposit Holders filed today. This would seem to conflict with the earlier motion to form a Customers Committee. Clearly these groups do have different interests, so it will be interesting to see how this is resolved between the various sets of customers.

gadfly said...

Bottom line here folks, Eclipse has been a rather expensive experiment in the general aviation market. It has hurt many people, that could not afford the experiment. It has made a fool of many . . . folks that rushed in, to be owners of small jet aircraft, without understanding the full meaning of what it is to own and fly a reliable aircraft . . . probably (just a guess here) some Nuevo-rich types, that have no business “flying at this altitude” . . . patience is required, along with a long list of “do’s” and “don’ts”. (If you can’t afford a “Mustang”, don’t try to buy in with a “Pinto” . . . it just doesn’t cut it.)

And what was that “air taxi” thing all about?!”

Then there are the politicians . . . volumes could be written . . . but soon, not soon enough, but soon . . . at least “one” will go to Washington DC, and we’ll bid him “Bye, bye, hasta luego, y’all”.

And that leaves us with many of those that have been miss-treated . . . left on the rolls of the unemployed. ‘Little is known as to what they will do . . . our shop is starting to get a call, now and then . . . looking for work, and we have nothing to offer. How does one answer such a call, “Sorry, folks, but you have been ‘had’ . . . and there are few opportunities in Albuquerque, at the moment, to keep you employed.” I’ll continue to remember the young man, and his family . . . that day in a McDonald’s restaurant . . . he had a shirt with the Eclipse label . . . expecting a great and wonderful future, based on promises made. I could not . . . did not tell him that his future was over before it began . . . and read a few days later of the big lay-off.

Some will say (and have said on this very blog-site), “that’s life”, or something to that effect. And I say, that attitude is downright criminal and/or immoral.

And that is my take on the situation.

gadfly

(A quick comment to "Deep Blue": Back in about 1963-64, I was forced to join the IAM union, to work for United Airlines at ORD. I was once threatened . . . harm to my wife, car, home . . . to comply with their illegal "wildcat" strike. Believe me, in Chicago, you do not argue with a union . . . if you wish to live to tell about it. It is not a humorous experience . . . my days aboard a submarine had less stress . . . I was "single" then . . . and in Japan "off and on", come to think of it. Catbird? . . . we had some challenges, but you're right, we watched Japan move ahead, doing the "right thing".)

Deep Blue said...

Dave:

It is not likely either Committee will fare well; there is no money.

Sadly, the deposit makers will probably be treated like real estate depositors in high end condo projects in Miami, LA, London or New York: "you are rich and SEC Reg D qualified as exemptions for disclosure" and otherwise will be left with no claims but for the imagination of various lawyers (tough argument to advance and prevail on with high net worth clients that are supposed to "know better" and are "sophisticated").

The depositors will be treated as sophisticated risk takers that lost. Period.

A smart litigant could make several strong arguments, but against whom? Not EAC. Only at this point against RP, the Board and VR; possibly the FAA even and/or the State of NM.

Lots of fun here for adventurous claims.

Dave said...

Others making a "notice of appearance" today:
Park Electrochemical Corp
Tevenin SA

Dave said...

A smart litigant could make several strong arguments, but against whom? Not EAC. Only at this point against RP, the Board and VR; possibly the FAA even and/or the State of NM.
Lots of fun here for adventurous claims.


Claims could be made (but the odds probably would be high of actually collecting even if you did win) regarding Roel/ETIRC's actions. Roel said Eclipse needed $200M-$300M and Roel got that...just he left everyone else holding the bag while he as CEO of ETIRC seeks to profit from withholding the funds from Eclipse and using them for himself. I'm not saying such claims would win in court and even if such a claim was successful that it wouldn't then cost another big pot of money to attempt to collect outside the US, but it could be done. I think the main thing the Customers can do is throw a monkeywrench in Roel's plans (whether he is successful in his APA bid or not) rather than having good odds in getting financial compensation from Roel. With the current owners they might actually have better odds than the depositors given how much of an insider deal this is and that this isn't a full Chapter 11 but would be an abbreviated 363...Roel will probably owe them some responsibility (particularly successor liability) post-BK. Hardball could be played, just it is a matter of there are those who are willing and able to play hardball.

Dave said...

Let me explain my logic further (again I'm not saying this would work in court, but perhaps it could work in court). Eclipse because a "foreign corporation" a number of months ago. ETIRC because the parent (but not sole owner) of Eclipse then. There have been numerous press releases that made ETIRC and Eclipse virtually indistinguishable and involved a number of Eclipse personnel working on the behalf of ETIRC. Now ETIRC got hundreds of millions - notably the $150M from the Russian deal, which was treated as a deal indistinguishable between ETIRC and Eclipse. The parent company ETIRC has now intentionally let the daughter company Eclipse go bankrupty and is now using the withheld money to buy up the remaining assets of Eclipse while wiping out the liabilities. I think this could best be used by the owners to extract concessions from Eclipse 2.0 and the court and to otherwise gum up the works, but it could be used by others...this also applies to vendors who weren't paid and others.

Zed said...

dave said ...

Motion for Appointment of Official Committee of Refund Deposit Holders filed today. This would seem to conflict with the earlier motion to form a Customers Committee. Clearly these groups do have different interests, so it will be interesting to see how this is resolved between the various sets of customers.


Dave -

Remember back a few weeks there was a discussion of this very issue.

Position Holders (nee Depositors) were increasingly being viewed by Assembled Parts Holders (nee Owners) as a separate and very much non-equal contingent.

Our friend Ken was very vocal that the owners club should not represent the depositors, and most especially those that requested a refund.

Seems that a bunch of groups are forming:

Owner Committee
Depositor Committee
Vendor Committee
Former Employee Committee
Current Employee Committee

I have heard that immediatly after the discussion opens on Monday, that these folks will request that the Trustee file an omnibus objection to the proposed sale.

Then, with the Trustee aware of the itelecon on Tuesday, hopefully the bullet train to oblivion will be slowed a few knots.

If the DIPs feel that there is sufficient potential to fund 2 months and immediately resume operations, then there is certainly potential to fund for 4 months.

Shane Price said...

Gad,

(What are those things on the wings? . . . “Love handles?”)

I do wish you would refrain from pointing out the excess 'waistband' carried around by the FPJ.

It might deter a potential purchaser.

On the other hand, it was the best LAUGH I had all week.

Keep up the good work.

Shane

jet_fumes said...

Dave, interesting to see Park Electrochemical in the picture. They are the ones who bid against Cessna to purchase the assets of Columbia.

baron95 said...

Gad said... Some will say (and have said on this very blog-site), “that’s life”, or something to that effect. And I say, that attitude is downright criminal and/or immoral.

Gad, could you explain why you think that creating 2,000 jobs and employing a few thousand workers (directly and indirectly) in multiple estates and countries is immoral and/or criminal?

Are you referring to the fact that some of the jobs were not eternal, and in "happily ever after"? Is that the immoral/criminal part? That the some of the jobs created were "un-created"?

baron95 said...

Deep Blue said...

Dave:

It is not likely either Committee will fare well; there is no money.


Why, I generally agree with that comment, I do believe that RP will throw them a bone, like:

To Depositors: We will give you credit for your deposits, if you agree to take delivery of an EA500 at the new list price of $2.3M (or whatever).

To Owners: We will agree to upgrade your planes for a flat fee of $50K/$100K/$150K (depending on version) IF you pre-pay that fee and pre-pay for 3 years of NewJetComplete.

baron95 said...

jet_fumes said...

Dave, interesting to see Park Electrochemical in the picture. They are the ones who bid against Cessna to purchase the assets of Columbia.


Yes, jet_fumes, but Columbia did not (IIRC) have a well constructed stalking horse bid/dip as Eclipse does. There will be SUBSTANTIAL barriers for anyone else to bid. Again, I haven't read the filings, but you can bet that there are all kinds of provisions. RP/Mann/EclipseJet will have to be paid some $20-30M (DIP + break-up fees) and any other bid would have to top their bid by (typically) $5-$10M.

So it would cost another bidder $25-$40M MORE than RP/Mann have to bid to walk away with the assets.

It will not be easy.

Dave said...

Yes, jet_fumes, but Columbia did not (IIRC) have a well constructed stalking horse bid/dip as Eclipse does. There will be SUBSTANTIAL barriers for anyone else to bid. Again, I haven't read the filings, but you can bet that there are all kinds of provisions. RP/Mann/EclipseJet will have to be paid some $20-30M (DIP + break-up fees) and any other bid would have to top their bid by (typically) $5-$10M.
So it would cost another bidder $25-$40M MORE than RP/Mann have to bid to walk away with the assets.
It will not be easy.


What you say is most likely true, but not necessarilly true. Any and all those matters (the DIP, the APA terms, etc) could be challenged. It doesn't mean they will be challenged, but if someone so desired, they could fight this in court and not necessarilly have all those terms remain as they are now.

baron95 said...
This comment has been removed by the author.
baron95 said...

Joe Patroni said...
E500 vs. B787 = Apples and oranges


Yep. Two fruits that were improperly farmed. One by a first time little farmer with few resources, one by a big experience farmer.

Take a guess: What company/aircraft do these comments refer to?

1 - "hired "low-wage trained-on-the-job workers that had no previous aerospace experience"

2 - "...significant engineering changes were needed because oversight (was) not adequate for the high level of outsourcing."

3 - "The fasteners were installed incorrectly, ..., largely due to poorly written planning documents

4 - "The plane's complex systems software is also causing delay.The engineer said the software systems are not defective, but that integrating all of the software from different sources is taking much longer than expected"

5 - "2-year delay of jet reported"

6 - "About 170 workers and about 20 contract workers laid off Thursday. Only 30 to 40 production workers will remain at the plant"... "and let go hundreds of temporary contractors"

7 - "claims [Japanese] partner is wrangling over money before committing the investment needed to ramp up production"

Answers can be found here.

airtaximan said...

not if they make a better deal with some of the creditors... and in this case, there are some doozies... like the owners and position holders.

They would be wise to team up with some potential buyer, and "help" them with an agreement - easy since RP&Co already told them they are shafted.

baron95 said...

Dave said... What you say is most likely true, but not necessarilly true.

The truth which you speak of, of it being likely true, but not necessarily true, is, of course, it self truthfully true, even necessarily true. ;)

If I were a spoiler that would be my first motion. your honor, please void the APA agreement as one party sign both sides of that contract. One Roel Pieper and one R. Pieper, your honor, may indeed be the same person. We hired some experts that will show that it would be a statistical anomaly if two people so similarly named, by sheer coincidence happened to be interested in the same transaction. The birth records obtained by our PI show that....

baron95 said...

AT said ... RP&Co already told them they are shafted

There is that word again ;)

Brings vision of an EA500 with Ken, Shari, Zis inside impaled atop the lighting rod atop the ABQ control tower.

gadfly said...

baron

If/when a company makes great promises, and draws people of limited means into a commitment, promising stock and wages in exchange for loyalty . . . there is a moral obligation to help those people fulfill the future that was either promised or implied. If/when that goal cannot be reached, through no fault of the new employees, there is also the obligation to help those people move on to other employment, and placement . . . including their families.

Yes, there is no “legal” requirement, but a promise, whether stated or implied, carries with it certain moral obligations by the person in charge.

The media failed from the first to fully inform the local populous as to the direction being taken by Eclipse. The politicians were also part of the cloud over the events. When that first flight was a failure, it was, instead, declared a success . . . and presented by knowledgeable parties as such. “Honest” men, would have pointed out the deception, as it was becoming apparent . . . but the deception continued. Some of us did what we could, to bring the truth into the light. It was insufficient.

You speak of thousands of jobs being provided? . . . you have faulty vision. Any job of this type requires commitment on the part of both the employee, and even more on the part of the employer. Families are not easily uprooted, placed in a position of working long hours in exchange for promised “stock”, without sacrifice. These folks live from paycheck to paycheck.

Why am I wasting my time stating the obvious? Anyone who has employed people, especially in high-tech industry, which by nature, requires a long term commitment in training, etc., knows the efforts required by those who rise to the challenge of a new opportunity. These folks need all the help they can get . . . not a sudden “pink slip”, after being told the day before, that all is well, and the future is bright.

A book could be written about the bad behavior of Eclipse, on all fronts. But this is enough to answer the question.

gadfly

(And the collateral damage done to other companies, who provided services without getting paid . . . that also has caused grief to countless other "employees" of the supporting entitees. This is a strange way to create "new jobs".)

baron95 said...

I'm sorry Gad, but you are infantilizing the American workers. This type of patronizing and paternalistic tone is very demeaning.

You may have a good heart and the best of intentions, but what you are really saying is that the people that went to work for Eclipse are naive, childish, poor souls that believed that employment would last forever and can't take care of themselves if it doesn't.

Please!!!! People used the same logic in the past to justify slavery, to keep women out of the workforce, to have mandatory union representation laws, etc.

I can guarantee you that not a single Eclipse had expectations of it being a lifetime job. They, as responsible adults, knew that there are no guarantees.

They don't need to be led by the hand like school children.

Just my opinion. I understand your point of view. I simply respectfully think it is misplaced.

We need to encourage and empower people to take risks and take responsibility for their actions and outcomes, do due diligence on employers, just as employers do to employees.

PS - The recently laid off employees, that didn't manage to find another job yet are receiving unemployment benefits courtesy of the unemployment premiums paid by Eclipse for a decade.

baron95 said...

Hi faithful, Very interesting stuff, really. Thanks for posting. You may want to edit to remove people's names (change to initials if you like) and email addresses.

I was surprised that this dialog was going on 18 months ago before most deliveries took place.

What I would like to see is the purchase/depositors agreement or the terms in it.

Somehow the buyers appear to have been naked with no rights to force Eclipse's hand.

fred said...

no baron ...

it is not really working the way you present it ...

you wrote " ...are receiving unemployment benefits courtesy of the unemployment premiums paid by Eclipse for a decade "

sorry , but the money paid as this premium WAS ALREADY something "kind of" stolen from investors ...

IF i would be a drug-dealer in USA , collecting money from this illegal trade and making a legal business with those profits ... :

would it be legal ?

i don't think so !

so in the same way , EAC paid premium (which is normal) but with the money they screwed out of their investors , victims , etc...
running a project that has every appearance of lousy low profile whatever you want to call it ...

taking into consideration that "playing" with others peoples money is always damn easy ... and that apart making theirs clients pay for all Dev. and expenses of something which at the end has nothing as "disruptive" or simply new as they presented it , what did they achieved ? sorry but apart wasting some Billions $ and a lot of dreams and hopes ... nothing really to be put to their credit !!! if it was only a way to provide jobs = why not do like it was in USSR and in DDR ? since the amount wasted is huge and result :close to non-existent , it amount to the same than communism ...

as for the Employees of EAC not wishing or thinking about a life-time job ....

YES , since it was quite presented to them that they would get shares of the firms with a underlined suggestion that it would be "worth lots..."

in a good'old Microsoft way ...

obviously The wedge was not a B.Gates type ...

an other promise that didn't materialize , like so many others ... !
running on expectations , other people's money and credit will always lead you to your own ruin ...!

airtaximan said...

...Somehow the buyers appear to have been naked with no rights to force Eclipse's hand....

I think it was more a product of if yu pushed them, you would get nothing... they did not have refund money and did not finish the plane.

Empty promises of refunds is basically what it was.

A more sober approach would have been escrow until the money is used for YOUR plane. At least this would have insulated the position holders from just losing their money.

Think about it: If EAC needed the deposit money for anything BUT your plane, you were probably never going to get your plane anyways.

Herein lays the ponzi. I take your money as a "deposit" on a plane, but I use it for advertising and development, or to build someone elses plane hundreds in line before you, and I use it to subsidize my losses on his plane.

It looks to me like a ponzi, pure and simple. In fact, they admitted loss per plane was equal to around 20 initial deposits or 2-3 60%-ers...

That's how I would see it anyways.

Next time, do not let your "deposit" be used for anything except your plane - or, just wait to place a deposit until there's a nice year or two history on deliveries. There's no risk in this, really when you think about it. A lot of risk is mitigated by this approach, and chances are...

WhyTech said...

"They don't need to be led by the hand like school children.

We need to encourage and empower people to take risks and take responsibility for their actions and outcomes, do due diligence on employers, just as employers do to employees."

What a crock. As a President/CEO of two companies employing more tha 2000 each, I'd have to say that Gad is close to right on. I do agree with Baron that we need to encourage and empower, exactly because employees in general do not behave in this way.

airtaximan said...

sn 151 and 755...

hmm...

Dave said...

I have heard that immediatly after the discussion opens on Monday, that these folks will request that the Trustee file an omnibus objection to the proposed sale.

Then, with the Trustee aware of the itelecon on Tuesday, hopefully the bullet train to oblivion will be slowed a few knots.


Isn't Monday the deadline to file objections?

FreedomsJamtarts said...

Form the leaked Faithful transcripts:

"...customer revolt..."

Boy that sure turned out to be a storm in a teacup!

Concerned committee speaker "Vern, pleease, it just isn't fair, we asked you nicely so pleease, can we have upgrades"

Wedge "Ken, you customers are revolting. It is really getting on my nerves to have to put up with your constant pathetic whining. Adopt the position"

Concerned committee speaker "Thank you for understanding my position Vern"

airtaximan said...

didn't these guys realize Ken WAS the mole?

kidding.

Well, I guess its nice to know they were at least thinking many of the same thoughts as us, even while posturing on this blog...

I guess, no matter what, they all knew more position-holders WERE NEEDED if they were to get their planes.

All part of the ponzi.

Deep Blue said...

ATM said:


"Herein lays the ponzi. I take your money as a "deposit" on a plane, but I use it for advertising and development, or to build someone elses plane hundreds in line before you, and I use it to subsidize my losses on his plane.

It looks to me like a ponzi, pure and simple. In fact, they admitted loss per plane was equal to around 20 initial deposits or 2-3 60%-ers..."

That was my thought as well. Classic Ponzi. This may be identical to real estate Ponzi schemes.

It is odd that the deposits were not obviously escrowed; what lawyers were representing the despositors?

The deposits, like the "order book" may also have been used to attract debt and equity; at any rate, EAC appears to have had a capital structure where any and everything was "thrown into the pot." And then spent that way as well. Remember: EAC's core operating mantra was continued high sales; period (low working capital structured through supplier credit terms, desposits and final sales within the credit/desposit cycles). EAC's sole purpose was volume.

This strikes me as a very easy Ponzi test and potential SEC action, unless the depsoit agreement very clearly asserted the risk natures of the deposit, and/or if there were any considerations for that risk (equity for example or cash-based returns).

Black Tulip said...

I am concerned about frequent comparisons between Eclipse Aviation and the Ponzi scheme. Charles Ponzi (1882-1949) would never have been connected with an operation as shabby as Eclipse.

Near the end of his life, referring to Bostonians, he said, "Even if they never got anything for it, it was cheap at that price. Without malice aforethought I had given them the best show that was ever staged in their territory since the landing of the Pilgrims! It was easily worth fifteen million bucks to watch me put the thing over."

Early participants in the Ponzi scheme received a healthy cash return on their ‘investment’. Early adopters of the Eclipse aircraft have received a marginal partially-finished product with little chance of completion. Shall we call this a Raburn reaming?

airtaximan said...

DB,

IF in fact there was such demand for the plane... WHY offer a discounted price incentive to early position holders? I can tell you why....

While there IS risk associated with a deposit (if it is not escrowed, and why not? it should have been) for an early stage company and program, which is this case - the discount/no interest/guarantee was rediculous.

OK, there really was not the demand for this little plane...no way... but, if there WAS demand...

THE DELIVERY POSITION WAS VALUABLE IN AND OF ITSELF.

So, why provide the discount and guarantee pricing?

Becasue it was a ponzi... and the only way to get these folks involved was to provide the rediculous incentives... and DID THEY REALLY CARE why they would ultimately cost the company?

Of course not - it was a ponzi. Delivering profits was not a real concern.

fred said...

Whytech :


YES ,exactly , employers and risks takers are to be encouraged !

not a single doubt about !

but are we talking about EAC ? or to put it under some other words :

A entrepreneur who despise all rules , scam customers , lead the whole industry into a dead-end (For sure after this mess ,any same project even perfectly valid is going to suffer 10 times more problems BECAUSE of this) ask that common good-sens rules of business apply where not long ago they pretended to do "their way" and did not respect in any way furnishers , staff and customers ...

sorry , the one living by the sword will die of the sword !

99% of the EAC story is about binding rules and maintain confusion about real aims ...!

nothing to be respected in that !

fred said...

ATM

yes , plain old ponzi !

in Euroland , we call this Pyramid-scheme , which off-course is one of the way to appear rather earlier than later in front of a judge ...

this is probably one of the biggest mistake of the Merry Band ...

Pyramid can last (at least a little longer) if there is "some" profit made in between two levels ... (New customers putting their deposits in order to have Old order made )

in the case of EAC , at each level they were making more and more deficits ...

so the need for new deposit money was growing exponentially ...

so no way , they could succeed as to do it they were in need of a customer for each plane delivered + a few new customers to compensate the losses of this very delivery ...

needless to say that at some point ... i am not sure the world population would have been enough , if they had some success ...! ;-))

when i see now ,RP trying and presenting the 363 deal as something ok and done ....

sorry , but i see only one who has tried to bind rules in his favor asking now that the same very rules he tried to abuse to serve him ...

don't they have any shame ???

bill e. goat said...

FJT,
YOU are a BAD boy!
.)
---------------------------------
Ken,
speaking of positions (ahem);

What is your position regarding Wedge: when he has assumed his "new position" with (perhaps, "within" is more apt) the federal government (er, system);

Will it be allowable to poke him with a sharp stick, or must one use the blunt end?
----------------------------------

"This way, please...

"Why, yes, Mr. Wedge. This REALLY IS the office of the FAA Administration...

"Small?, er, yes, it is a little smaller than most people realize...

"Windows?, ah, it's an energy efficient building, you see...

"Uniforms?, ah, that's a new, er, regulation: all the staff wears them...

"THAT guy, in the other, ah, "office"? ...Hannibal somebody- I think it starts with L- you will find you have a lot of things in common; he had an insatiable appetite too (but not for cash)..."

Wedge's New BFF

bill e. goat said...

Dear Faithful,

I'm a sleazy, amoral, slimeball, who enjoy's reading other's people mail, as much as any other sleazy, amoral, slimeball.

But even I DO have some rules:

While I enjoy reading the messages, please remove the identifying material (names, email addresses, phone numbers).

Otherwise, I have to hold a hand over one eye while I read them.

Thanks!
:)

x said...
This comment has been removed by the author.
Niner Zulu said...
This comment has been removed by the author.
airtaximan said...

9Z,

any clue how this is calculated?
Is the 60%ers calculated as a full plane at some value, or a refund?

Also, the vanilla depositors are owed a plane a piece - thats $600M if you believe there are 300 of them and they should get a plane at $2M or so. If they put up $150K deposits, that's $45M...

just zis guy, ya know? said...
This comment has been removed by the author.
Dave said...

That way you could at least pretend that you didn't commit a tort in posting it.

I don't think it is. If I send you an email and I tell you it is proprietary, I can't unilaterally impose that on you because I sent you something. People can put whatever they want in their email or snail mail, but just because something says X, Y or Z, it doesn't mean it is true.

Deep Blue said...

Short comment that is probably painfully obvious:

The Detroit saga and all its very embarrasing particulars, is certainly just a much bigger version of EAC; as B95 reminds us, and others on the Blog commenting about outsourcing/capitalism, so too is Boeing.

Yes, the details vary but they all appear to have one thing in common: a singular focus on financials, at nearly any cost, with very little focus on longer-term requirements like talent, design, assets, innovation.

And leadership. Where is it?

gadfly said...

Deep Blue

You have nailed it. The "quick fix" in the US of A has far more implications than just in the drug culture. Nothing teaches success like failure . . . but that is too painful for folks, today. The only thing of interest is showing a profit in the next quarter, rather than what is being prepared for generations that are just being born.

gadfly

(Oh that's right, I forgot about "pro choice". Problem solved. Strike my comments.)

Turboprop_pilot said...

Just read Business Week: Jet market is glutted with 1,300 for sale, up 63%. Lehman recently sold a Falcon 50 for $6.2 million, a hefty drop from the $9 million it could have brought last spring.

Great time to buy Eclipse in bankruptcy- go Roel.

My Meridian is flying to N. Carolina Monday for a demo- praying the sale happens, even at a hefty discount.

Turboprop_pilot

former owner depositor said...


X

Pete S: Apple IT>Cisco CIO>Sigma Venture Capital

Glad to say I don't hold a position or a plane anymore, got out some time ago, but don't appreciate these emails being posted nevertheless.

airtaximan said...

fod,

why did you sell?

Joe Patroni said...

There is one BIG difference between the E500 and 787....

The last I heard, Boeing wasn't beating up their position holders for 'deposits", "progress payments", or the multitude of other ways the Wedge squeezed blood out of their turnips/customers.

"Boeing finds itself forced to outsource as much as it can to compete"

Compete with who? The only competitor out there right now is Airbus, and their labor costs are arguably higher.

The only competition Boeing is in, is the one with Airbus, to see who can sell the rope to China, that they will use to hang us.

What came first? Unions or crappy managers?

The Eclipse employees have learned the first lesson of employment in the Aerospace industry....be prepared to be thrown under the bus at management's first opportunity.

I always loved how the management at the OEM I used to work at calculated the cost of screw-ups.....if it was an individual that screwed up, they calculated the cost at the shop flat-hour rate. If it was a management screw-up, it was calculated at what they were actually paying the guy.

The same company prided themselves on "rewarding outstanding performance", but their rewards were downright insulting. One instance was when a warranty SB was released that covered 160 aircraft. A couple of the guys on my crew figured out a way to do the SB in 1/4th the time called out in the Bulletin....if you calculated it at the shop flat rate, their discovery saved the company $750,000 plus. (1995 dollars)

The company, fully appreciating their contribution, rewarded them with a $5 coffee cup.

Fortunately, the aviation industry for the most part doesn't attract idiots. We have all seen the "new paradigm", and know that the powers tha be plan to turn the good old USA into a Third World country, so we too are operating under a "new paradigm":

-If you are smart enough to work on airplanes, what the hell are you doing actually working on airplanes?

-Take more than your fair share of objectives, and you will be given more than your fair share of objectives to take.
-
-Talk is cheap. If someone really values what you do, they will pay you for it.

-If you figure out a way to do things better/faster, DON"T WRITE IT DOWN, and resist the urge to tell anyone else about it.

-Never participate in setting up an "Expert System"

-If you are smart, never marry a "local girl" (it will only complicate the next rule)....if you are really smart, you won't get married at all
(unless you like being constantly nagged with "You could be doing so much better working in another field......")

-If you feel that you are not being compensated fairly, or have learned all that is useful to your career down the road, it is time to go do something else.

-Loyalty is, for the most part, unrewarded. It is better to move on a little too early, than too late.

-ALWAYS take the better opportunity.

-If at all possible, develop a part time job/skill that has nothing to do with aviation.

-As Bill Munny said, "Deserve's got nothin' to do with it...."

It seems a bit cynical, but I've seen too many people get thrown on the street, for reasons that had NOTHING TO DO with how well, or how poorly, they did their job, to think otherwise. When the going gets tough, the first guys given their walking papers are the Flight Department guys.

About all you can do to protect yourself is to vary your skill set as much as you can, and be prepared to move where the work is.

And for the not too distant future, when all you guys are asking "Who is going to fix my airplane????", might I suggest that there is something fundamentally wrong with a country's economic priorities when a know-nothing 22 year old at a Mortgage Brokerage can make more in 5 years, than a guy working on airplanes can in 25.

"When the autopilot is on, your mechanic is flying the airplane"

(cynical, old-guy rant OFF....)

baron95 said...

TP, good luck to you - I know the feeling of trying to sell a plane when the market is not "liquid".

Gad moment follows...

Last plane I sold was a few days after 9/11. I flew the plane to a nearby airport based on a small deposit for the inspection. Flew the owner back to my airport. We close the deal but it is contingent on me flying him and the plane to Alabama. He shows me the cashier's check for the balance, I go home grab my bags and we launch. I was prob one the first private IFR flights flying through NYC airspace after 9/11. There were confusing NOTAMs/TFRs - I wasn't sure which way I was going to be routed. In the end, it all worked out, the guy was extremely nice, confessed he had just won the lottery, we land his wife is there with another couple, they invite me for lunch, it was really cool. He gives me a Southwest voucher for my flight back, I get all my flying stuff from the plane (flashlights, headsets, GPS wiring, life vests, etc and stuff it in my carry on. Now I'm sure they will give me a hard time to fly back (remember just a few days after 9/11). I did get secondary screening, but my bag was so stuffed and the lady doing it was having a hard time getting her hands in there, plus she was shy to touch my stuff, so she just closed the bag and I was on my way with a bag full of suspicious stuff.

baron95 said...

I surely hope people would stop making panicky decisions. It is bound to make things even worse.

Look at AA. After years of not hedging for fuel, they finally decided they needed to do it. Only, they hedged at $109 or something like that. Now, they just faced $0.5B in hedge margin calls because theirs hedges are basically worthless.

Or the people (and I talked two out of it, but know 3 that did it), that owned an SUV or high-performance car (because they needed it or enjoyed it), and then sold it in a panicky mode for a loss of $10K-$20K then bought a Prius or similar at a premium over sticker.

They loss space, performance, money, satisfaction, and now they know that with gas at $1.75/gallon and heading lower they have no chance of breaking even if they drove 100 times around the world.

Things always seem better than they are at the top (Eclipse VLJ, 787 Dreamliner launches). But they also always seem worse than they are at the bottom (787 delays and technical problems, EAC Ch 11).

In the end, things always swing to somewhere near the equilibrium point. If you can have a long term view, things look more reasonable, than if you react to the run-ups and over-corrections.

Deep Blue said...

Joe Patroni said:

"Boeing finds itself forced to outsource as much as it can to compete" Compete with who? The only competitor out there right now is Airbus, and their labor costs are arguably higher.

The only competition Boeing is in, is the one with Airbus, to see who can sell the rope to China, that they will use to hang us."

Joe:

Perceptive comments. Arguably Boeing and Airbus also compete with Canadair and Embraer on the regional fleet/narrow body side: the A320; the B737; the E170/190 and then the new Canadair C-Series.

At any rate, Boeing is in the same league as GM, in my view. Dying.

China indeed. Russia next. Brazil keeps on truckin; Canada as usual; Japan coming back on line in a major way; India next?

Shane Price said...

Just updated the headline post with this:-

Eclipse Refunds: For The Ten-Percent Deposit Holders

To anyone who placed a 10 percent deposit on an Eclipse 500, and timely elected to receive a refund in response to Eclipse Aviation Corp.’s June 6, 2008 letter, yet never received a refund before the company declared bankruptcy on Nov. 25, 2008: On Tuesday, Dec. 9, 2008, the court overseeing Eclipse’s bankruptcy will consider motions to appoint an “Official Committee of Refund Deposit Holders.” Deposit holders Bill Hewitt, Bradley Investments Inc. and Don Buttrum, all of whom timely elected but never received refunds, with assistance from the law firm Gordon & Rees LLP, will seek the appointment of a committee to represent those individuals/entities that placed a 10 percent deposit.

It’s the ad hoc committee's opinion: individuals or entities that placed a 10 percent deposit on an Eclipse 500 have different legal rights and remedies, separately from the other creditors and deposit holders. An independent committee made up of representatives from those who placed a 10 percent deposit should be created to ensure that those interests are protected. If you're an individual or an entity that placed a 10 percent deposit but didn’t receive the requested refund, e-mail Timothy McCulloch tmcculloch@gordonrees.com for additional information.


It came to me from a 'friend of the blog', so I've no hesitation in recommending it to those affected.

Shane

Shane Price said...

Where I live, the clock ticked over to another day, a few short minutes ago. It got me thinking about

Sunday, 7th of December, 1941

In a few hours, the annual ritual will take place over the remains of the Arizona.

Let's all take a moment to remember, with dignity, those who died on that 'day that shall live in infamy', so many years ago.

Shane

gadfly said...

On that fateful morning, the Japanese missed at least three key targets . . . the oil tanks, “Ten-ten” dock (the shipyards), and the submarine base . . . just 1,400 yards due south of the USS Arizona. These three elements allowed the US to return the favor in a minimum of time . . . that, and a determination to get things done, regardless of the cost.

gadfly

(Fifteen years later, and for the better part of two years, I called the Submarine Base my home . . . whenever our boat was not on patrol.)

WhyTech said...

"If you can have a long term view, things look more reasonable"

Lets face it - in the long term, none of this really matters.

Dave Ivedorne said...

Gad moment follows...

Good story, Baron - thanks for sharing it.

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

Sunday, 7th of December, 1941

Heh. I got married on December 7th - in two more hours, it's my anniversary. "A day that shall live in infamy", indeed.

Would you like any dipping sauces with that?
DI

airsafetyman said...

"At any rate, Boeing is in the same league as GM, in my view. Dying."

Ever notice how successful companies promote from within loyal employees with decades of experience in the company they are heading up? Boeing, like so many others, goes outside for an unqualified candidate who thinks it is no big deal to design a carbon-fiber airliner right out of the box. Wonder if he has a Harvard MBA hanging on his office wall? If the toilet paper in the executive mens room runs out he's all set.

FreedomsJamtarts said...

ASM,

That is a pretty brutal summary of McNearny. It is not as though he is an outsider to aviation manufacturing, having been GE AE's president.

Niner Zulu said...
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Niner Zulu said...
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Gunner said...

Don't pay the ransom...I'm back!

Hey guys-
I've been up to my ears in work and travel since summer and haven't kept up as I should. But I continue to lurk and can't help but be "amused".

Of all the comments here CWMoR offers, as usual, the most pointed, pithy and politically incorrect observation imaginable:
"The best thing that could happen at this point is for this abomination to crawl back under a rock..." [and it gets better from there!]

As to the owners, investors and suppliers...screw 'em. Every one on 'em. Not one of them was going to be writing any of you checks if they ended up on the green side of the formula.

First it was the banks, then the auto industry and now aviation looking to SOMEBODY ELSE to pay them for their own POOR BETS AND JUDGMENT. Cry me a river, people...then revisit your grade school primer on capitalism, free markets and FREEDOM. There is no freedom to succeed, people, without the freedom to FAIL. [Rant ode off]

If you want to help somebody in this mess, help the employees...and I don't mean with a handout; I mean with a job. Each of us should try to create just one more job in any industry and any geographic area within the next 30 day.....that's how you can assist the people that really deserved better from Eclipse.
Gunner

Black Tulip said...

Welcome back Gunner,

Hope all went well in Tucson. I plan to visit Epic in Bend again next May. How's your machine coming along?

I see that you have been deeply touched, as many of us have, by Ken's appeal for holiday charity.

Gunner said...

Tales from the Bright Side:

Just completed a visit out to Epic on the continuing build saga of our LT. I had the opportunity to have breakfast with Mike Hooper (VP) and Rick Schrameck (CEO), The day I left I flew right seat in an LT with both to drop Rick off in Nevada and then out to Northern CA with Mike.

Good Lord, what an aircraft and what a company!!!! I recognize that a $1.6MM experimental is not for everyone and I've no vested interest in seeing anyone buy an Epic product. But I see things going on in Bend that make me truly proud to be an owner:

- There are a dozen planes (of various model) on the line behind mine. By my calculations, each is being produced at a net profit, so the incentive is a desire to DELIVER (imagine that?!)

- Despite the dismal economic outlook, Epic continues to forge ahead with various designs, upgrades and certifications...quietly and without fanfare.

- Without exception, this company has bent over backward to work with us whenever there was a concern and has worked really hard to make certain those on the assembly line get the full benefit of design improvements as they're developed.

- There's no bad-mouthing of other manufacturers from Epic (Eclipse war stories do, however, evoke an occasional chuckle or head scratch). In fact, Schrameck was quite supportive of Diamond when I asked him if our three D-Jet deposits were in trouble.

These guys keep their heads down and just keep forging ahead; working in areas and on projects that will not possibly result in a cash return anytime in the near future.

How boringly non-disruptive is that?

For those wondering, N5Z was expected end of '08 or beginning of '09. As it stands, we expect engine delivery (one of the last items) in February and hope for first flight as early as March or April.

It is noteworthy that our serial (hull) number has remained the same since the contract was penned and is being built in sequence without any "priority" leap-frogging of later orders.

While we have naturally been concerned about the viability of an experimental start-up in the current environment, this visit has all but ended those concerns. There is simply too much (profitable?) cash flow on the line behind us to expect anything like the Goat Screw in Albuquerque. (No offense, Bill E!)
Gunner

Gunner said...

BT-
We were x-posting. My last post should answer your second question. As to this past Summer of Family Discovery, it really can't have turned out better, thanks. All is well on that end.

Hopefully you WON'T see our aircraft in Bend come May. But, with factory training and the like, this remains a possibility, for sure.

Training...there's another story. Epic has recently hired a husband/wife team straight out of the Air Force to help with the training program. Experienced in a combination of planes, including everything from fighters to C-130's, both are combat vets; at least one was a commercial pilot and CFI before going into the Air Force.

I had the pleasure of meeting both of these individuals during lunch and was more than a little impressed with their backgrounds and experience. Look forward to training with them.
Gunner

eclipso said...

Welcome back Gunner

Dave I,
Happy Anniversary!

airtaximan said...

pretty good article...

http://www.ainonline.com/news/
single-news-page/article/the-vlj
-era/

welcome back Gunner...

Dave said...

Whether the rule applies or not, the fact remains that EAC has no money, and they can't refund money that they no longer have. Whatever assets EAC does have will likely sold to pay the lawyers. The secured creditors will likely receive pennies on the dollar, if that, and the unsecured creditors i.e. deposit holders will likely receive nothing.

Actually that is not necessarilly true on all counts (however, it is most likely true on all counts). Money can be pulled back if it is ruled a preference payment. Also depositors could get a constructive trust where whatever money Eclipse does have either directly or through clawbacks goes to them before anyone else.

I had mentioned that I'm involved with the LandAmerica 1031 BK and all the customers are trying to take adversarial actions to get constructive trusts. All the customers are unsecured creditors, but they can - and most likely will - go to the top of the list. With LandAmerica what caused the BK was due entirely to the freezing up the securities markets and there's enough to pay back all the customers and have their 1031 exchanges go through (as long as time hasn't expired) once there is liquidity in the securities market. It is a roughly similar case in regards to trying to turn customers from the bottom of the ladder to the top of the ladder.

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

Hi Gunner,

Welcome Back !!

I'm glad your airplane is progressing well- a while back (maybe six weeks ago or so) there was a "value index" discussion- the Epic came out WAY ahead of anything else- I hope our academic exercise has real-world tangibility- please keep us posted!

(Color pictures are my favorite! :)

Shane Price said...

Just a 'historical' note.

The 'Fly an FPJ' eBay auction ended on Friday. Sadly, there was only one bidder, who met the asking price of $850.

Call me paranoid (and I know many of you will...) but it looks awfully like the owner 'bought' it, just to take the bad look off things.

Shane

Adam Hunt said...

This may be of interest to readers here on the subject of the Eclipse 400:

Do You Buy a Position or Assume It? By Paul Bertorelli, AvWeb

Dave said...

Do You Buy a Position or Assume It? By Paul Bertorelli, AvWeb

The Eclipse 400 position holders may - may - have a better shot given the public statements that the funds were being put into an escrow account unless and until there was $30 million in Eclipse 400 deposits. Those public statements would be admissible in court, just it would be a matter of how much weight a judge gave them and what the actual contract said. Eclipse would have to be careful how they argued it so that they don't come across of having engaged in fraud if said funds weren't put in escrow.

baron95 said...

PB's piece in AvWeb, again, presents a false choice for the press. He believes there is a choice between enthusiastic coverage of new aviation ideas/products and pointing out the problems.

Well, HELLO!!!! Don't they teach balanced reporting in Journalism 101? That is all I have been trying to do on this blog. Eclipse and the EA500 was never all bad or all good. It had some merits and many challenges. The aviation press SUCKS. With the exception of Aviation Consumer, ALL the mainstream publications are just a press release and arranged flight regurgitators.

Deposits that ARE AT RISK are fundamental for a start-up to get financing and to fund operations. Deposits in escrow (not at risk) are meaningless and useless. Investors want to know that there is enthusiastic support from consumers for the product/idea. That can ONLY be measured by the amount of deposits at risk.

So long as there is ballanced coverage and information it all works out. Some depositors in Eclipse made money (selling their positions), some lost money. What is new? Nothing. That how it is supposed to work. It is a bet that a new product will be desirable in the future.

In Eclipse's case more lost money than won. But it could have turned out differently.

The Flying and AOPA Pilot's of the world should have been journalists and found out info. They should try to make an independent determination as to the actual number and condition of the orders. They should say: "Eclipse is a cool new concept, but we can't independently verify more than xxx orders, and the fact that Eclipse has not been forthcoming with the info is troublesome". They should have printed in early 07, "The fact that Eclipse is railroading customers into accepting incomplete jets at full payment with no firm guarantees for an upgrade is deeply troublesome".

Shame on the press. And PB may be less at fault, but he is presenting a false choice. The answer PB is do BOTH. Praise the entrepreneurs that are trying to advance aviation, but hold them accountable for how they go about it.

Ken Meyer said...

Dave, a couple of minor nits with your post--

1. The $30 million threshold related to a special offer on the 500 a year ago; it had nothing to do with the 400.

2. The 400 funds were never supposed to be escrowed; they were supposed to be held "separately" and used only for development of the 400.

Nonetheless, there are some reasons to believe that the 400 deposits are indeed a special case involving the consequences you mentioned.

Ken

Dave said...

Roel throws Eclipse customers under the bus. Eclipse responded to the various customer committee motions by objecting to them all.

Shane Price said...

Dave,

ConJet refunds

Sadly there are very few people in the 'requested refund, but not had one' club.

My understanding is that it's low single figures, possibly less than 5 at the end.

There were a number of FPJ depositors who chose to move to the ConJet, but they knew they were whistling in the wind. Remember, once the FPJ 'first flight' milestone was passed their money was locked in, and they understood they could not claim a refund. Their only 'out' would have been back into the FPJ queue, and/or a refund due to the price increase.

A number (something around 25) people got ConJet refunds before the end. This was out of a total of less than 100 (total) orders, before Roel Pieper 'suspended' the ConJet program in August.

Or so I'm told.

I would also like to address the 'fraud' issue. I've been rereading some of the 'Aircraft Deposit Agreements' you (and others) were kind enough to share with me. Clearly the victims (sorry, depositors) who've signed up to these now worthless contracts are mugs.

You and I know of one who paid their money in May of THIS year. What part of a Google search (we rank no. 2, just below EAC itself) did these people not understand?

'Mugs' is being kind. Some are clearly idiots.

If I was the judge in Delaware, I'd be asking myself the same sorts of questions. If I was the EAC/ETRIC lawyer I'd be tempted to use that as a defense.

And remember, you could spend a fortune chasing the company through the courts, but EAC are in Chapter 11, and will probably end up bankrupt.

What's the point?

Maybe the State of New Mexico is a better bet, as their $19 millions dollars are gone. I would hope that someone there would look at how that money managed to 'vanish' with such ease, from right under their noses.

Regards

Shane

Dave said...

1. The $30 million threshold related to a special offer on the 500 a year ago; it had nothing to do with the 400.

Yes, that's right. This is what I was thinking of:
Through the new lower fixed price, they could save more than $ 500,000. Those placing new orders can also qualify, but their aircraft price is $ 1.4 million and they must pay the $ 625,000 up front instead of the usual 10 percent deposit or $ 140,000. The offer will be limited to about the first 50 customers who take advantage of it, according to Raburn. He said the future cash flows will not be significantly impacted by the early infusion of deposits because the 50 orders is a relatively small percentage of the number of airplanes they plan to build over the next three years. Eclipse will place the additional deposits into an escrow account until $ 30 million is raised, at which point the funds will be used by Eclipse in its operations.
Eclipse offers payment plan to raise capital

2. The 400 funds were never supposed to be escrowed; they were supposed to be held "separately" and used only for development of the 400.

Yes, I see this now:
Your Eclipse 400 deposit will be fully refundable and transferable until November 30, 2009. All deposits will be placed in a non-escrow account segregated from the general funds of Eclipse Aviation.
From a previous shane blog posting
You might want to follow the LandAmerica 1031 bankruptcy as it is moving much faster given the nature of the customers (all the customers were engaged in time-sensitive transactions) and the majority of those taking adverse actions against the BK debtor have non-escrow segregated accounts.

Nonetheless, there are some reasons to believe that the 400 deposits are indeed a special case involving the consequences you mentioned.

Depending on what is said in the contract as well as what Eclipse has said publicly to the press as well as in email a constructive trust might be able to be established. Eclipse is really trying to undermine the standing of the customers, but depending on the contracts, communications and public statements compiled, those could be used to establish top priority above the secured creditors.

Niner Zulu said...
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Dave said...

And remember, you could spend a fortune chasing the company through the courts, but EAC are in Chapter 11, and will probably end up bankrupt.
What's the point?


It all depends on the evidence. If customers have substantial solid evidence of civil/criminal fraud, that can be used to pursue deep pockets of Roel personally and ETIRC. If the evidence was solid enough, I believe theoretically the customers could end up owning Eclipse (or other such settlement) to settle a fraud claim. Roel is trying to treat this as much as customers being at the bottom rung and there not being much they can do, but they could do a lot depending on their evidence and how hard they wish to pursue it. If ETIRC and Roel personally can be pursued in addition to establishing constructive trusts in the BK case, it can change the playing field dramatically.

Dave said...

I can't believe that former EAC cheerleaders still believe there is some hope that Roel (or whoever buys EAC) will actually make good on any of their former promises.

They don't, which is why they are filing motions in court.

Shadow said...

Guys (and Dave in particular), please don't use www.jets.ru as a source. This website is nothing more than that of a copyright infringer, as they reprint entire stories from other publications without permission from the original source. The story that Dave mentions, "Eclipse offers payment plan to raise capital," was originally published on AOPA's site.

Rant over.

x said...

I am mystified by what the remaining Albuquerque line workers have been doing since August. I believe production has been 7 craft fininshed.

Are they building kits to ship to Russia? Boxing up equipment? Just sitting around?

Others have said that Pieper needed to keep the Production Cert current in order to ease the EASA process. It seems a huge sunk cost to keep 100's doing make-work just to keep up appearances. That seems out of character with how Pieper opperates.

Anyone want to describe what has been happening in Albuquerque factory these past months??

baron95 said...

X said ... That seems out of character with how Pieper opperates

That is because you, I, we don't know what he knows.

I said this before, and I'll say it again. RP/Mann are:

1 - Continuing to fund salaries for hundreds of people.

2 - Putting up $12M-$20M in hard cash DIP (somewhat overlaps with 1 above)

3 - Putting forward an offer to acquire the whole business in an asset sale for $28M hard cash + debt/equity in newCo.

You have to ASSUME that RP has a plan, AND has more other people's money lined up. Otherwise it makes no sense.

I think is this Blog that refuses to accept the fact that there are things we don't know, and won't know.

Real deal happen outside the public eye.

Just look at how Citigroup and AIG got tens of billions, with no one knowing about it until it was announced.

Now contrast that with the public, embarrassing and disgraceful spectacle of the Detroit-3 trying to get a nickle in public.

I'll bet you that RP is closer to the former.

baron95 said...

Niner Zulu said...
I can't believe that former EAC cheerleaders still believe there is some hope that Roel (or whoever buys EAC) will actually make good on any of their former promises.


Who do you think believes that? I haven't heard anyone saying anything remotely approaching that.

I think the current owners are positioning themselves to try to drive the best deal they can with RP.

In the end, I think they may end-up with a committed price for NewCo to do the upgrades. Say $50K each for ETT, Avio NG (with 1.5) and FIKI.

I think that is a balanced outcome. NewCo gets rid of the liability to upgrade all 250+ planes for free, and the owners get some contractual schedule and price with NewCo.

That, of course, would last until NewCo goes Ch 11.

eclipse_deep_throat said...

Shane,

Yeah, this is semantics, LOL. But this should be easily available on the web somewhere. Last I read, it was something like $5.6 million in **secured** money the State Investment Council invested in Eclipse. I think this has been reported in the Journal too. So in theory, that amount should come back to the State of NM but I don't know what mechanism(s) make that happen. Does anyone else know? Do State of NM attorneys have to 'officially' ask the BK Court for that $$$ or is it set aside automatically?

This means that NM is out about $13 million net. But then one has to add the $$$ the city is losing out on the leases to EAC for the plant, etc. And the Industrial Rev bonds. Govt tax revenue lost on employee salaries, etc. One would think the unemployment insurance tax charged to EAC or EclipseJet is now at the max. I wonder how Mayor Marty will renegotiate the leases with Roel if/once CH11 is done...

e.d.t.

eclipse_deep_throat said...

Baron said:
Now contrast that with the public, embarrassing and disgraceful spectacle of the Detroit-3 trying to get a nickle in public.

***
How ironic, eh? One company (EAC) went into CH11 as a necessary means to reorganize and eliminate the Kool-Aid its founder provided the masses for the last 10 years. And another **Industry** has been able to beg Congress for $$$ to AVIOD bankruptcy, and thus, will avoid making the much needed changes. UAW labor should be capped at $20/hour no matter what (some astute economist can do the compare and contrast study). It violates all the laws of physics - and common sense - for grunts making cars to be paid more than grunts making planes.

Bailout is the 2008 'word of the year' after all. The dictionary companies also need to have a picture of Congress next to the definition of Enabler.

e.d.t.

Dave said...

3 - Putting forward an offer to acquire the whole business in an asset sale for $28M hard cash + debt/equity in newCo.
You have to ASSUME that RP has a plan, AND has more other people's money lined up. Otherwise it makes no sense.


As far as the financing, you don't have to assume anything. Roel cites that it is mainly coming from the Russian deal.

Just look at how Citigroup and AIG got tens of billions, with no one knowing about it until it was announced.
Now contrast that with the public, embarrassing and disgraceful spectacle of the Detroit-3 trying to get a nickle in public.
I'll bet you that RP is closer to the former.


Per the APA, the financing is coming from the much-publicized Russian deal, so that would make it closer to the latter.

Gunner said...

Baron-
You're right, of course, in that we really DON'T know what Roel knows.

Oft times, educated deduction is closer to the mark than blind faith though, you know?

And sometimes, we CAN make forward looking statements based on the past actions of the parties involved.

Thus far this Blog has been LOTS more accurate as to Eclipse's problems and future than people like Vern and Roel...even more accurate than you. So maybe there really IS something to this educated deduction stuff.

In the end I don't need to "know" that the corpse in Roel's car trunk is ripening in order to recognize the smell. Nor doe I need to be an A&P to deduce that this fleet is a tragedy in search of a crash site.

YMMV.
Gunner

airtaximan said...

If the money is coming from the Russian deal, and RP was running EAC when it was arranged, and my impression is, it was financng for some rights... this money in fact belongs to EAC.

I would love to see this issue in front of a judge:

EAC lawyer: "your honor, this money is Russian money, paid to ETRICK for the right to manufacture EAC planes in Russia."

Judge: "how much money did EAC receive from this deal?"

EAC lawyer: "nothing"

Judge: "when was this deal struck?"

EAC lawyer: "about 8 weeks before the BK"

Judge: "who was running EAC at the time?"

EAC lawyer: "Pieper, your honor"

Judge: "who was running ETRICK?"

EAC lawyer: "Pieper"

Judge: "OK, now I know why its called ETRICK"

Dave said...

If the money is coming from the Russian deal, and RP was running EAC when it was arranged, and my impression is, it was financng for some rights... this money in fact belongs to EAC.
I would love to see this issue in front of a judge:
EAC lawyer: "your honor, this money is Russian money, paid to ETRICK for the right to manufacture EAC planes in Russia."


You bring up a very good point. That might be where the DIP is coming from as Eclipse had previously said that they'd be getting a pot of money from the Russian deal to finance their operations:
An undisclosed portion of VEB's will be paid directly to ETIRC essentially as a production rights fee, potentially providing a much needed cash infusion to the struggling Albuquerque firm, in which it hold a sizable interest. ETIRC will use another part of the funding to build the physical facility at Ulyanovsk. ETIRC will pay the remainder of the money to Eclipse to provide tooling, engineering services, training and quality assurance.

However, the timing of the funding has not been announced.

Pieper, who is also Eclipse president, is working with UBS to secure underwriting of a new $200- to $300-million investment in Eclipse to resume normal operations in 2009. Eclipse expects to receive either the VEB funding or a substantial cash infusion underwritten by UBS by Oct. 31st.

"The good news is that either source will come in, in time," Mike McConnell, president and GM of Eclipse's customer division, said confidently.
"When it comes in, our priorities will be to settle our relationships with our suppliers, take care of our customers and resume normal operations in 2009." Sources close to Eclipse estimated that the UBS investment to be as much as $200-300 million.

Russian Bank Okays $205 Million for Eclipse
Now isn't it odd that Roel has the initial funding to take Eclipse into 2009 as well as between $200M and $300M, but only has it when it benefits him personally while hurting sending Eclipse into BK...

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