As most of you will recall, Stan called it a day at the end of January 2008, whilst allowing 'us' time to find an alternative home. After various forays', a large number expressed dissatisfaction and I decided to copy the style, location and name on the 16th of February 2008. Gadfly made the second 'comment', which really set the tone in those early days:-
"Put on the kettle, and this will seem like home in no time."
The record will show that this was one of the very few one line comments from Gadfly, who later had the courage to stand up for the defense of our 'home' in a very practical way. Thanks again, Gadfly, in case you didn't hear me the first time.
During those first 6 weeks, we managed to have a variety of interesting and wide ranging discussions on the price of oil, the first bank collapse, the Russian factory and the possibility of EAC raising funds at Oshkosh by selling T shirt 'positions'. A series of valuable contributions came to the blog via the blog email address (eclipsecriticng@gmail.com) from suppliers, customers, depositors and, in particular, staff. We also got the first signs of trouble with the FAA.
April was a huge month, beginning with the confirmation that Avio NG would be 'completed' by the Garmin G400's and gathered pace with the announcement of yet another 'special offer' to raise funds. But the action of the Wedge that truly raised the stakes was his attempted SLAPP suit against 29 named bloggers. Turns out this was a really serious mistake by Wedge, who suddenly found himself in the media spotlight for all the wrong reasons. If he was right, and the Honor Roll really did work at EAC, then he was attempting to hide wrongdoings by his company. As it happens, he was wrong and had simply been trying to prevent free speech. Or at least the words he didn't like, as his own actions with Brian Skupa at the same time were rather extreme by any standards.
The month of May included the scaling back at DayJet, increased press coverage of the blog, words from suppliers and staff that all was not right at EAC and various legal actions funded by Rich Lucibella (a.k.a Gunner) who had undertaken the formal defense of the Honor Roll. In the background various attempts were made by EAC lawyers to reach a 'settlement' but Rich was having none of it. He knew that Wedge was on the roasting spit and wanted to turn it a few times. The month closed with the formal announcement of the Con Jet and a price increase for the FPJ.
June contained a few real gems, one of which sticks out, from Shadow:-
"Oh, how I love to watch a cash arsonist at work."
The best definition yet of the Wedge, and a reminder of how some of the best comments are the one liners. The month also saw healthy discussion on the 'Stuck Throttles' including an excellent headline post by Karen Di Piazza and a stellar parody from Black Tulip on the little known crew monitoring systems, FOQA. Read it and weep.
July began with my 'Tales of woe' headline, and the first indications that refunds due after the price increase had not been paid. It ended with the Wedge's departure, which he was forced to announce his own firing at one of the early Oshkosh press briefings. What a way to go. Other highlights included the increased participation by suppliers and staff, and a much higher visibility for the blog on Google, in the aviation media and through the mainstream press. It was a busy month all round.
August and September were varied. We started with the end of the EAC action against the Honor Roll, moved through the DoT IG investigation of the TC and PC awards, had the 'operational excellence' program (fire almost half the staff) from Roel Peiper and had that surprise visit from our old friend Ken Meyer. In the background, suppliers in particular were wailing at me about not getting paid, and the usual roll of legal actions against EAC seemed to gather pace. The 'die hards' were also having real issues with how they were being treated and I started to listen to the various conference calls that took place between EAC management, customers and suppliers. Mike McConnell in particular came across as a self serving twerp of the worst sort. My only regret is that he works in aviation and not in my field of activity, for one of my competitors.
October and November began with another AD for the FPJ, continued with the closure of DayJet, saw our 50th headline post and our 10,000th comment and had the 'Nuclear Winter' speech from the Wedge at the VLJ conference in Florida. It continued with more word from depositors issuing proceedings, a flood of negative press comments on the future viability of EAC, saw the staff unpaid for a short period and finished with the Chapter 11 action by the management. Phew, they were busy months....
December was much quieter, where I seem to have been appointed (by customers and depositors) as the official clearing house for the various groups formed after the Chapter 11 proceedings. We finished with Black Tulip, who was kind enough to see the funny side of a group of lawyers inviting the Wedge to speak at an upcoming event on bankruptcy. Who would have thought American lawyers saw the funny side of things?
So, there you have it. 2008 has left us and the New Year opens on a positive note. We are all still (more or less) in one piece, EAC struggles on and the next two weeks will determine what the short to medium term holds for suppliers, customers, staff and depositors. Shareholders know they are last in the queue, unless of course, you name happens to be Roel Peiper. The remaining banks are very reluctant to fund anything, a new and untested American President has enough problems to test Superman and every company in aviation is shedding workers and/or scaling back product development. The auction results from the 'bidding process' for EAC will make interesting reading on the 14th.
Oh, and a Happy New Year to one and all.
Shane
194 comments:
How's this for a start for 2009?
A list of contracts has been prepared for birders and each contract has a dollar amount suggested as future obligation (cure amount) for a successful bidder. The amount for the 60% depositors is zero. So there you have it from the court--the deposits are worth nada. This may have been obvious for a while, but now it is official.
All things digital need at least one “bug” in the system, but Eclipse has turned out to be “lousy” with the critters!
“Resident Bug” . . . aka: gadfly
Baron said,
E.D.T (B.E.G) You are super guys. I had pegged you as "old-thinking" union zealots, but I now see that you are enlighted individuals.
***
[blushing] Aww Baron. I didn't know you could be such a nice guy. I'm touched. Damn. Now I have to buy you a drink...
e.d.t.
BEG said,
As long as someone is doing the job, for lower pay at an equivalent productivity level, by definition, those with lower pay are underpaid.
The amount of labor required to work to buy products, infers a relative degree of productiveness. (e.g., the more productive the workforce, the more product is generated in a specific duration of labor).
Where this falls down is when the products are imported. Our work force hasn't become more productive, or more prosperous- it's just that the imported products are cheaper.
*****
OMG....where do I begin?? And I am again hoping not to incur the wrath of Shane for going off on a deep tangent here....
BEG, I will need to re-read your post about 3x for it to sink in. You obviously put in a lot of time and effort so I want to respond properly, to your personal email, as time permits. But the above items stood out like a signal flare...
'...those with lower pay are underpaid.' No, that is not correct. Again, you are making a normative statement that does not really help advance the topic. Think about it. A "positive statement" is neutral in terms of bias: the worker was paid $3 per hour for her services. Whether or not that is "fair" or "unfair" is inherently subjective and not a conversation professional economists concern themselves with. Again, the exception lies with my undergrad Labor Econ professor who drove me nuts with her spin as to what is fair in this world. It would have been fair, to us students, if a wormhole opened up in class one day and sent her off to never-never land...
Think of it another way, with Einstein's General Theory of Relativity. Wages are always relative to their local arena. If I am making shirts in a textile factory in Calcutta and paying the workers $2 per hour, the only context is to see what other **similarily skilled** workers can make at other factories in Calcutta. It is 100% WRONG to say that Calcutta wages should be the same as Albuquerque, NM wages; such a statement borders on cultural myopia. How the hell are we to dictate what the citizens of Calcutta or China are to tolerate? The citizens of those nations need to get off their butts and petition their govts for the "modern" environmental protections we have. I think China was sufficiently embarrassed on the world stage with the Beijing Olympics to start rethinking their non-existent envirnomental laws.
Anyway, as the factory owner, $2/hr is just one element of my overhead. I still have to ship them somewhere, say Wal-Mart to keep it simple. Then there is advertising, admin overhead, MY salary, electricity, TAXES, bribes, supplies, training costs, equipment costs/repairs, etc. The list can go on and on. Say that Wal-Mart sells the shirts here in the USA for $12.86 each. AS A PERCENTAGE OF THE RETAIL PRICE, how much profit do you really think the factory makes versus what Wal-Mart makes? (**I will bet you $100 that WM makes a higher percentage profit per shirt than the factory**). All of that virtual profit get's sucked up thru the supply chain one way or another, especially if the (INefficient) workers make lots of mistakes. In the Eclipse world, how does scrapping 50 or 100 $8K windows factor into the $2.x million price of the plane? Just because they make a profit selling ONE shirt doesn't mean there is a NET profit after 12 months. And we all know how much net profit EAC has earned after delivering 259 planes, yes?
Point #2 regarding Evil Consumerism: that is a BIG red flag with me. Now, I'm the first one to laugh my ass of watching George Carlin talking about the morons at the mall buying sneakers with lights in them. The Lowest Common Denominator is that your "average" consumer is in their own little universe. He or she doesn't care what went into building a $2 million EA500 anymore than he/she cares about the $200 Nike "23" sneaker that is being sold in limited edition. This archetype of the typical USA consumer is rather selfish in the worst ways: taken to its extreme, it is a way of the human will actually **WILLING** itself. In the abstract, the consumer has an INSATIABLE appetite to consume no matter how small their house (since they can always just buy a bigger damn house). How many cars can Jay Leno really keep at his house?
...'imported products are cheaper.' Again not true. To be of any real use, compare apples to apples: compare the BMW plants in Germany with the Mercedes-Benz plants in Germany. I'd have to dig up more books since the stat I'm looking for is either in The Machine That Changed the World or the other tome "Working Under Different Rules" from 1991. If memory serves, BMW plants have been WAY more efficient than MB plants because those snobbish MB workers ALL WANTED TO TAKE LUNCH AT THE SAME TIME. No shit. Again, forgive me for rushing this post. I can find where I read that ...but BMW has had something like 23 different available shift schedules. And because the BMW workers are more flexible when compared to their similarily skilled MB counterparts, those plants have enjoyed more productivity gains ....which leads to more net profit for BMW, and the **potential** (not a guarantee) for a higher standard of living for BMW workers. I would even take Baron to task regarding unions in general because it was one of the big reasons Wal-Mart pulled out of Germany. They just could not get the unionized workforce to understand that 5,000 people employed in retail making X marks/hour is better than ZERO. But the point here is that BMW profits are earned AT THE PLANT with what they are able to control. They claim their new 2009 760Li is worth an MSRP of $124,100. That value DOES NOT EXIST unless the buyer agrees.
Now if you only want to look at cheap imports, the factors there are different. At that end of the spectrum, deflation is the norm because most consumers actually WANT disposable products. This is not the 1950's for a reason. If my blender in the kitchen breaks, I'm not going to waste time driving somewhere to get an old kodger to FIX the damn thing. Not when I can go to Wal-Mart and buy a new blender for $10. We can easily set up trade barriers and let unions reign supreme but it would be a fool's errand. Who in their right F-ing mind is going to pay $100 for a brand new blender made in the USA??????? Now, please understand my tone BEG, I'm trying to be funny here and not confrontational at all. On the flip side, since I weigh about 275# and I still try to run my fat ass 3-6 miles every other day, I **will** pay $100 for top-of-the-line New Balance running shoes made in the USA. Allow the consumer to decide for him/herself what value they want to attach to domestic production.
Case in point: my dear Aunt Helen worked for AT&T for at least 40 years as an operator. She and her hubby lived in Piscataway, NJ in a modest middle class home. Somehow my grandmother is the one who scored the lottery, since my grandpops worked as the VP of American Export (Isbrandtsen) Lines in NYC. But aunt Helen is the one that made out with a 'safe' job with a pension and all that. But what did consumers get with AT&T over those 40 years? Higher prices with less of that capital used for innovation and technology AND you could only buy or lease the damn phone from AT&T directly. Today people change cell phones like putting on a new shirt. I could care less about leaving Verizon BUT if they piss me off for one reason or another, I can dump them and pay the stupid fee. I tried doing that with Qwest to eliminate my landline by using my DSL line and Vonage. But despite the glossy commercials, turns out that the Vonage equipment SUCKED and burned out in a few months (VoIP is not ready for prime-time) and I was NOT going to pay $89 for a Vonage-only phone. So I was able to keep my same phone number and go back to Qwest. The silly point here is that our current system ALLOWS people to move from company A to B or to C, D, E, and F for whatever reason. The differences between each company may be totally non-existent, especially when you are dealing with commodities. But the net benefit to the consumer is to at least give them SOME marginal negotiating powers.
The next big thing in that arena will be utility companies, so consumers have 2 or 3 electric companies to choose from. These consumer powers are good for societies in general, although I will be the first to admit many of the "externalities" suck (I have worked for T-Mobile and Sprint). Now, think of all the consumers out there pissed off at Cessna for one reason or another, for failing to provide a service (**I would argue that Cessna is the AT&T of the GA industry ...and that EAC is TRYING to be the MCI low-cost enfant terrible**). The only beauty of the EA500 is that it has the **potential** to make GA aircraft disposable in the sense that a disgruntled owner of a Cessna Mustang can trade it in for a new EA500. It has the net positive social benefit of making BOTH companies better by forcing them to fight even harder for a finite share of the market (I'm assuming few real new people/companies enter the GA market).
OK. Rant over...
e.d.t.
Shane,
Excellent post.. thanks! The Chinese have a saying - "may you live in interesting times". We certainly do.
I see our friends at the E5Club are asking their members to pony up an a couple thousand on top of the $2500 already contributed. I'm not sure exactly what they hope to accomplish. It looks like more good money being thrown after bad to me. EAC is, after all, broke.
But I certainly wish them success.
Did anyone hear what happened to the guy that had his plane confiscated by EAC on the day it was delivered to him? I believe it was s/n 260?
NZ, check out nymex to "lock in" fuel prices. Good luck...but if you can hang a margin out for a bit you may do well! Spot market history vs. futures are exciting ;) EDT your "rants" are getting boring. You may notice that nobody really responds to some of them. Didn't you say you were some kind of "officer" in QA when you got laid off from EA?
9Z,
Good to hear from you, and thanks for the kind thoughts.
Your questions I answers (as best I can) as follows:-
1. S/N 260 was fully paid for, but not handed over when the Chapter 11 axe fell. As such the company are claiming that the 'owner' is an unsecured creditor. I understand that the Chapter 11 judge has taken note of the 'special circumstances' and may elect to rule on this as part of that process. Needless to say, the lawyers are having a field day.
2. We had our annual 'family financial conference' over the past few weeks. One of the things we did was purchase oil futures using certificates marketed by one of the big exchanges. I'm pretty sure we bought at $36. Drop me a line if you need me to dig out the exact mechanism.
Shane
BricklinNG –
You wrote …
How's this for a start for 2009?
A list of contracts has been prepared for birders [sic] and each contract has a dollar amount suggested as future obligation (cure amount) for a successful bidder.
What specific document are you referencing? If part of the BK filings could you provide the docket number.
Thanks,
Z
BricklinNG said...
How's this for a start for 2009?
A list of contracts has been prepared for birders and each contract has a dollar amount suggested as future obligation (cure amount) for a successful bidder. The amount for the 60% depositors is zero.
Thanks for the info BricklinNG. do you have any other info on the nominal value assigned for any other ocntracts?
Thanks in advance.
NZ, if you buy an older gas guzzler jet because fuel is cheap, hedging for fuel prices alone may not do the trick. You need to find a way to effectively hedge for the severe depreciation an older jet would suffer if Jet-A prices went and stayed very high.
An oil hedge somewhat compensates, but the loss in market value would likely be disproportional to the increase in oil prices.
For example, AA's A300 fleet became instantly worthless for ops once price hit $100 and higher and are being parked as they came in for heavy-Cs.
"Notice of Auction and Sale, Potential Assumption and Assignment of Designated Contracts, And Cure Amounts Associated Therewith”
That is the document, with exhibits, that sets cure values and the cure value of the 60% deposit contracts is listed as zero, meaning (so it seems to me) that there is not need to spend any money on these contracts.
Gadfly,
Just read the Bill Richardson is pulling out of Obama's cabinet. Maybe he's gonna stay home and 'help' with Eclipse. I suspect you are excited at this prospect.
Baron95,
Excellent point! While you're on a roll, any suggestion on how to hedge against the depreciation?
My thoughts - using a jet in your business helps offset the loss, but the same could be said for any aircraft so that's not really a solution.
Another idea I've had is to buy an "ugly" but mechanically sound aircraft - jet or turboprop - and do the panel and P&I right. Ugly aircraft can usually be purchased cheap. An Eclipse position holder in So Cal is doing something similar with an MU2 he bought for around $350k. He is refurbishing it with a new glass panel (G600's), new P&I, etc. I've had a chance to see the "before" and I hope to see the "after" because I hear that the owner is meticulous. His downside will be limited to $800k or so because that will be the total cost of his 300kt aircraft.
There is part of me that likes to turn a plane from a roach into a showpiece. I've done it before, with good results. One advantage about this is that you don't worry so much about the plane when it sits outside on the ramp on some remote Caribbean island. A new Mustang or Phenom, on the other hand, I would worry about. Plus, the initial cost of these and the ongoing high insurance and training requirements tend to take some of the "fun factor" out of flying.
That was the allure of the E500 - an inexpensive jet that would get you to where you wanted to go fast and reliably. Economical enough so that you'd use it for both the short and long trips. Unfortunately, the dream really never materialized due to the arrogance of the management. They bit off way more than they could chew, and choked in the process.
Anyway, just bouncing around ideas on a Sunday morning.
"Ugly aircraft can usually be purchased cheap. "
The other side of this coin is that when you sell it, it will be sold cheap, and for much less than you have in it if you do extensive updrades. If you are going to go for an older acft, find one that someone else has upgraded and make a low ball offer. In this climate, you will probably get a real bargain.
Re the Richardson withdrawal: not a big surprise after the various posts on this blog. Hopefully this is evidence that there is at least a little justice in this world. :-)
NEWS ALERT
from The Wall Street Journal
Jan. 4, 2009
New Mexico Gov. Bill Richardson has withdrawn his nomination to be Barack Obama's commerce secretary. The move comes as a federal grand jury is investigating how a California company that contributed to Richardson's political activities won a lucrative New Mexico state contract.
I've been away from the blog due to the holidays, LandAmerica and being sick. Seeing how that the latter two are still going on, I'm just dropping by after reading the Richardson news. I wanted to point this out:
The panel reportedly is looking into possible “pay to play” dealings between CDR Financial Products and someone in a position to push the contract through with the state. Asked whether the probe focused only on CDR’s actions, a person with knowledge of the investigation said: “It is more than that.”
Another Governor Scandal?
Eclipse really should be looked into for pay-to-play and I believe if pay-to-play did occur, it happened around the same timeframe as CDR. If nothing else, I think Eclipse handing out money to Richardson caused him to have poor judgment when handling the taxpayers (the same goes for other politicians as well who also were on the receiving end where at a minimum it clouded their judgment and caused them not to perform their due diligence).
Niner Zulu said...
While you're on a roll, any suggestion on how to hedge against the depreciation?
Best way I know off is to lease with a good residual negotiated. The leasing company assumes all the downside risk, while you still have the upside - i.e. if the plane is worth more than the contract residual you can always buy it at lease end.
I lease a gas guzzler MB Crossover that I'm turning in in April at $12K below negotiated residual. MB financial took a blood bath on my lease. Their loss, my gain.
NZ, Wytech is correct. Doing an upgrade on plane r house with few exceptions is a net money loser.
The best planes to buy are the rare ones where the owners have put a ton of money on paint, engine, pannel upgrades - particularly the less desireable ones.
Find yourself a Sierra Citation with new pannel Williams engines extended tank, new paint and interior or a Blackhawk C425 or BE90 and you can't go wrong. Ride someone elses hard work, hard upgrade $$$ and downtime.
Snippet Time
1. Wedge denies he is a bidder. Aw, shucks....
2. 18 "Refund Deposit Holders" have lodged papers with the Bankruptcy Court in Delaware. It would appear that this is one of the 10% groups, with more to come.
3. Gov Bill will indeed return to NW and 'assist' EAC at this difficult time. My reaction? With friends like this, who needs enemies....
4. Karen Di Piazza sends you all her best wishes for the New Year. I'm sure you will join me in returning same.
Now, if only Ken would check in....
Shane
So, the real order book going forward is zero?
This means that totl order for EAc while they clamed 2600 or so is 260or so?
This jives with my 10% rule....
Whatever Vern claims, just deduct 90% because the exaggeration factor is 90% or so.
Regarding the richardson issue - I'm happy he's going to be nowhere found around Obama, makes me ask WTF was Obama thinking, and I sincerely hope he end up in stripes. He's a dick. Obvious from public exposure hes a dick, and his association with Vern... he's a dick.
What a shame to see him at the highest levels.... Obama has a lot ot prove, all he needs is this clown -surprise Bush wasn't his 3rd closest friend, actually.
Dark Blossom
We, here, in the “Land of Enchantment” have mixed feelings about our governor bowing out of the cabinet appointment. In respect to the damage already inflicted on our nation by congress, et al, Mr. Richardson wouldn’t be able to add much to that fiasco. Certainly he’s well qualified . . . having run New Mexico deep into debt.
It seems that the governor’s chickens are coming home to roost . . . we ‘just wish they’d lay their eggs somewhere else.
gadfly
(We’ll have to tell “Bill” the rumors are true . . . he was adopted . . . but they brought him back.)
Governor Richardson's corruption is small change compared to the Bill and Hillary show. How many millions has Bill salted away by cashing in on his Presidency and the fact that his wife is a senator from New York (and soon to be Secretary of State)? Fits right in with the elder Bush making money off his Presidency via the Carlyle Group. Standby for Junior to cash in as well. "Got to top off the coffers" - an actual Bush quote. The federal government is not for sale; it has already been bought and paid for many times over.
Happy New Year!
But bad news from Diamond, AT (05 jan 09
Diamond Aircraft: 100 Mitarbeiter bangen/employees tremble ):
approx. 100 employees got an announcement of a potential lay-off. The exact number of affected persons will be determined at the end of the month.
Julius
Snippet Time
1. EAC did indeed reopen. Everyone has been told to sit tight, answer the phones, but make absolutely NO promises. Little or no work is going on, and they are already bored and restless.
2. At least on journalist had convinced themselves that Virgin are the 'other bidder'. I think this is someone taking the Richard Branson/Burt Rutan tie up one step too far. But that's what my 'snippets' are, a bit of background 'chatter'.
3. I've been told there were more than 350 remaining 'private' orders for the FPJ on the books when the axe fell. What's not clear is how many of these were just '10%' or the full fat 'progress payments'. Fleet 'orders' were below 300 and more than half were from ETRIC or its associates, which I very much doubt were fully backed by deposits.
4. One of the '60%' group has told me they will not put another cent up until an aircraft is on the delivery ramp, ready for sign off. And they won't pay more than they've already agreed to pay, even if that means walking away from more than a million dollars. Sounds like the 'winner' of the auction will have a hard job keeping these depositors on side....
Shane
on Branson,
he allowed a picture of an EA50 to be published in the 2005-2006 timeframe, with Virgin colors.... pretty surprising.
In 2007 he funded an ill conceived start up, eventually renamed Virgin Charter, which I am told despite huge budgets and a lot of money spent on hype, they have little to no business. The concept was to eliminate the brokers and put efficiency into the air charter market.
Big goose egg...
So, I would not doubt Branson could throw money at EAC.
He like aviation, seems to like private aviation and seems to have no manufacturing experience. He has a lot of money, and believes his brand can solve a lot... which in charter, has been a non-starter.
So, I would believe it.
ATM
Seems to me like a reason NOT to believe Branson would bid. Once bitten, twice shy.
“Little or no work is going on, and they are already bored and restless.”
Here’s a remarkable thing . . . a few hundred (?) employees sitting around with nothing to do. Frankly, if I were amongst the “bored and restless”, I would do what I used to do (and still do) is such a situation.
While working at United Airlines, we often had a few minutes, now and then, between flights . . . so I enrolled in five “Home Study” programs offered by United . . . Basic Aviation, Aircraft Instruments, Aircraft Sheet Metal, Aeronautical Meteorology, Aircraft Power Plants . . . and put my spare time to good use. Much of what I learned, I still use almost daily . . . forty-five years later. (I almost “aced” all five courses.)
And sometimes I would find some old grouchy “tool maker”, ask him questions . . . become his friend, learning the things that can only be taught by the older generation. (Now, I’m that older generation . . . and will “find time” to teach what I know to the younger ones that truly wish to learn.)
Another time, I was called to jury duty in Santa Ana, California, . . . waiting to be called for the two cases (one civil, one criminal), I spent the time studying the manual for my “new” 20 inch “K&E” log-log-duplex-decitrig slide rule . . . and learned how to use every function. And while working as a model-maker/tool maker/senior research technician (building and testing the re-entry ablative heat shield material for the Apollo, and other craft), I availed myself of the company library, and studied open and closed channel fluid flow, sub-sonic, trans-sonic, super-sonic, etc., . . . using coffee breaks and lunch time . . . that knowledge I still use.
Years earlier, while in flight and A&P school (40 hours per week), I had to support my family . . . so I also worked as a night supervisor/tool maker, about five hours every night, at a little machine shop in Elk Grove Village, Illinois. They had (like most machine shops) a large collection of current trade magazines (“Iron Age”, etc.), and other manuals. To stay awake at break time, I would pick up and read the technical articles . . . learning my trade . . . as a term found in the Bible, “Buying up the time . . .”.
The “bored and restless” have a golden opportunity, to avail themselves of the reading material . . . even the “manuals” associated with those famous “stir fry welders”. They may never again have so much “financed time” on their hands . . . to enhance their skills. Even the “Cherry” and “Huck” rivet data is a source of knowledge . . . ready for the taking of people that wish to increase their “hire-ability”, when the ceiling of Eclipse finally collapses.
gadfly
(The "bored and restless" can't do anything about the finances, but they can make good use of their time . . . in the years to come, this can become a good memory.)
Who wouldn't want to hire a consulting company founded by Don Burtis, the person who "oversaw the architecture and system design of the avionics and electrical system for the Eclipse 500"? I suggest Don takes Gad's advice about using his "free time" efficiently because his phone certainly won't be ringing off the hook for his services anytime this century.
Wonder when the Wedge will be starting up his consulting company to advise start-up aircraft manufacturers. Next Tuesday?
. . . the person who "oversaw the architecture and system design of the avionics and electrical system for the Eclipse 500"
Shadow, thanks for the “link” . . . it is most informative, if followed through. It illustrates graphically the role of most consultants. In the above statement, I would rather hire the actual architect and system designer . . . rather than the one who “oversaw” the process (assuming the design and system integration was good . . . which in this case, it is not).
For whatever it’s worth, our own little company passed its 33rd birthday, on 1 January 2009. It survives, obviously by the grace of God. But God uses people . . . and the one in charge of a successful company should have a thorough knowledge of the product(s), knowing more about it than those he has hired. He cannot run a company by committee, yet must be willing to listen to others. And there must be a trust in place with his people . . . and a willingness to allow people to make their own mistakes.
Not always, but it has been my impression that those who make a living as “consultants”, are generally far less qualified for giving advice than those who are down working on the factory floor. A good leader doesn’t care who gets the credit, so long as the job gets done. No, I take that back . . . a good leader passes on the credit to those at the lowest level of the corporate ladder.
My Dad had a definition (most corny) of an “Expert”: “X is the unknown factor, and a “spurt” is a drip under pressure.” In the past half-century since his death, I have found little to change his definition.
And, I might add, a consultant is an expert . . . more than ten miles from home, that carries a brief case. (The “high priced” ones, usually have a full beard, smoke a pipe, have a “PhD” after their name, and insist on being called “Dr.”.)
Bottom line: The best consultants are those “bodies” that come in every day . . . work on the factory floor, and pick up a pay check every two weeks. And what a bargain!
gadfly
(A crew of 100 dedicated people, could have supplied far more product, at one tenth the cost, than all the efforts of the little ABQ bird factory . . . provided they had knowledgeable, honest and humble leadership. Did I mention honest? . . . and humble?)
(Deming got it right!)
Gad said: Bottom line: The best consultants are those “bodies” that come in every day . . . work on the factory floor, and pick up a pay check every two weeks. And what a bargain!
It only works if the higher up's actually listen. The FPJ Co. had know it alls in management so they didn't use their most precious resourse. They deserve failure.
There seems to be a lull in the comments . . . maybe the calm before the storm. So, please forgive the gadfly for many words. If nothing, consider it a transition between events . . . an "interlude", as it were!
This entire thing . . . the “critics’ blogsite”, etc., seems to be centered on the financial side, as if it were the primary problem. And I find an attempt to divert our attention to other aircraft manufacturers.
All those other aircraft enterprises are important to some . . . and may have impact on Eclipse. The typical claim of a guilty party is to say, “but I’m no more guilty than ‘so-n-so’”, as if the guilt of another somehow negates the guilt or culpability of the first party. Each stands alone . . . grading on the curve applies to public education, or colleges. In real life, there are no crutches.
At present, the financial side is the primary. But back many months, the discussion was over the more basic . . . things like basic airframe design, avionics integration, fabrication techniques (including the stir fried welding of 7xxx series aluminum, and possible corrosion), life-cycle testing (what ever happened to that? . . . nothing yet, as I recall), and minor things like empiric wind tunnel tests at actual velocities with realistic models of the "finished product" (which is about the time when I was made aware of the fraudulent claims being made) . . . and then the claims of success, the confiscation of funds from escrow . . . and the “admission” that the aircraft, as designed, required major changes in not only “power plants”, but changes in MTOW and wing-tip tanks, etc. And soon, changes in MTOW, power, fuel tank capacity, etc., ad nauseum took place.
One day, we contacted a local company about some major cutting of aluminum . . . and the discussion drifted into relationship with “Eclipse”. We were told of a last minute overnight effort, to provide “counter weights”, the night before a “Dog and Pony Show” . . . it seems that the little bird, without even the weight of two engines, fell down on it’s “fanny”, and needed some major weight up in the nose, to keep the bird on its feet. The visitors, next day, saw what they might have been told was a “nose” was filled with electronics (rather than much counterweight, to keep the aircraft from damaging the hangar floor, with the tail skid). Also, we learned, the issues being discussed since, the problems of getting paid by Eclipse, for even the simplest of quick service by a vendor . . . that saved their bacon, that day.
Folks got caught up in various emotional “spats”, based on ability to argue as if in a high-school or college level debate. (Since when are scientific “facts” ever decided on the ability to debate . . . Al Gore’s ‘Global Warming Scientology’ not withstanding.)
There’s no point in attempting to settle all arguments and primary causes in this list of events, that has caused grief to so many by so few . . . but a few things might be addressed. Eclipse never did have a viable complete design . . . meeting all promises. To date, the total produced product still remains at “zero”. To date, the damage to general aviation totals far more than may be recovered . . . ever. To date, the cloud over the FAA, fades to grey . . . with an ever darkening shadow over trust, for a once respected government agency. We could go on and on . . . but the point is made: “Dead flies putrefy the perfumer’s ointment, And cause it to give off a foul odor; So does a little folly to one respected for wisdom and honor.” (Ecclesiastes, “the Preacher”,10:1 . . . the KJV Bible)
So, we see in real time, how a start-up company can, by their own folly, pollute an entire industry. Continue with all of the financial arguments . . . it really matters little, except for a privileged few (the few that will survive, even losing a few million here and there). The damage to the whole of general aviation is already done . . . and healing will be slow and time consuming, if ever.
gadfly
(‘Ever attempting to keep the focus on “Eclipse”, as it fades to black!)
(uglytruth has the message . . . but so few will listen. "Pride" brought man down in the "garden", and we're still here at "square one'.)
Attention owners/depositors
I have a Dow Jones contact who would like to discuss the bankruptcy situation.
eclipsecriticng@gmail.com
It might be to your advantage to speak with this chap, as time is running out....
Shane
uglytruth
As in many things, few people listen. But some times folks do listen . . . and so, there is an “up side” to the story. Let me tell you about two such people:
Once, an extremely intelligent Dutchman found himself in a dead-end position. I hired him . . . and he was teachable. In short order, I taught him a new method of design . . . and together, we developed that basic concept . . . refining it into a most valuable system. I gave him latitude to go further . . . and with his knowledge of “ladder logic”, we developed some very sophisticated machines . . . using a rather simple approach, using the best of the past, and the best of new technology. Today, he heads up a major division within GE Jet Engine Division . . . pushing those early taught concepts. (Today, I’m sure that GE believes that they were the first to conceive a new method of tooling . . . but no matter, those that count know the history . . . and I feel more than satisfied with the results.)
That same technology, believe it or not, contributed heavily to a new method of a series of patents and products used throughout the world, from our little shop . . . vascular surgery, just about as far from aircraft as imaginable . . . but that’s another story for another time.
The second story concerns a “Polack”, fresh off the boat. At first we had nothing to offer him. He persisted . . . came back, even offering to work for “free”. But I turned to the Dutchman, asked if we could use this emigrant from Warsaw . . . who knew nothing about machinery. We decided (notice I said “we”) that we would give it a try, for a part time job. Well, shortly, this Polack, with a better appreciation of Polish jokes than we had, was quickly learning how to operate machines, and do his own layouts, etc. He had a background in chemistry . . . and “ground to air” missiles in the Polish military (“ground to air” . . . digging dirt with a shovel, and pitching it into the air). Soon, because of his desire to learn, he became a major asset to our little company, machining parts to a much closer accuracy than any other employee (other than the Dutchman and myself).
In short order, he was earning . . . notice I say “Earning” . . . about double the rate of any other machinist in Albuquerque . . . or even Southern California. And he was worth every penney that I paid.
You see, a good employer wants his employee to be worth so much, that he must pay that employee ever more . . . to keep him in “golden hand-cuffs” . . . so satisfied that he will not even “think” of going somewhere else.
In time, I couldn’t keep the Dutchman from accepting a better position with GE . . . that I could not match. But I support his decision . . . and we benefit from the technology that he learned in our little shop, and is at this moment continuing to introduce and develop within the biggest company in the world.
The manufacturing world is in flux (change, to those in Rio Linda), so we have had to cut back to “no crew” for a time, but the Polack would probably return in a heart beat, should conditions change. And we would welcome him back . . . that’s a great relationship. (Fortunately, CNC machines can operate 24/7 . . . without humans.)
gadfly
(‘Just some food for thought . . . in case any of you wish to join the “insane”, and attempt to go into business for yourselves.)
It may be helpful to remind ourselves of ETIRC's/Roel Pieper's commitments in 2008, none of which have been realized. None.
Roel and Etirc are an utter sham. Why Al Mann and other investors in EAC even gave this individual any consideration is a question, but one with, apparently, no answer.
There will be no re-start of ABQ.
There will be no Russia factory.
Etirc's "orders" were all fraud. They do not exist.
Etirc will not but anything out of the current EAC BK. There is nothing to buy.
The current fleet will die a slow, perhaps, fast, death (which would be in the interest of safety).
EAC is dead. Etirc is dead. Roel Pieper and Vern Raburn, are, sadly, merely Bernie Madoff, Mini-Me's.
Deep Blue
No matter the facts, there will still be a long line of folks listening ever so intently . . . for the slightest “ring” of the little bell on the coffin . . . that the corpse is not really dead. Among them will be our governor . . . and even the mayor of Albuquerque . . . their own future may, in part, depend on it.
gadfly
(It's rather pathetic . . . they also believe in Santa Claus, the Easter Bunny, and the Tooth Fairy . . . and a government bailout.)
I'm not sure if this has been reported here or not...
The Court overseeing the Eclipse Ch11 proceedings has established Jan 14 as the Eclipse public auction date (in case there is more than one bidder) with Jan 13 as the deadline to submit initial bids. The delay was caused by court delays over the holidays.
And now it is official . All three VLJ types now currently in customer's hands [EA500, C510, Phenom 100] have had runway excursion accidents.
Baron,
These pesky VLJ's are so 'light' they want to keep flying.
Or something like that...
Did you note the UBS numbers? Looks like the 'light' end of business jets are the ones suffering the biggest drop in usage, year on year.
We don't hear from Roel about UBS's involvement with the fundraising for EAC anymore.
I wonder if they are linked?
Shane
JZGYK,
UBS never 'worked' for EAC. At various times the principle shareholders (including Roel) have used them to market equity in the company.
There is another connection, or so I'm told. Roel is a customer of UBS, and (it's alleged) they are the ones who got him into this mess in the first place.
All of this has nothing to do with the reported drop in light jet usage.
Which impacts the possibility of selling more FPJ's.
And that can't be good news for anyone.
Shane
Rudeness on my part...
I made reference to the AIN story by Chad Trautvetter about the UBS survey, without providing a link.
Here it is now.
Sorry about that....
Shane
Gadfly:
BTW, wanted to mention, really liked your posts on "work ethic" and your hustle to use your time wisely, 'sharpening your saw." A rare, often long-lost instinct anmong the "younger generation." I sent your story along to my nearly good-for-nothing brother in law (seems we all have one) who has a Ph.D in wasting time.
Concerning your comment about the nose weights for the E500: it is amazing that that kind of basic engineering snafu could go on uncorrected; I doubt if EAC were an airline or military supplier that they would have ever gotten away with that, and other engineering "patches." Only in GA?
It's SNIPPET TIME
Again.
However, it's backed up by the Bankruptcy Court of Delaware, so it's a little more than 'background chatter' this time.
1. Seems some of the Faithful (specifically owners) are slow in paying their bills. Either that, or EAC have issued fictional invoices to boost the books. Ken is listed as owning them $52,150. But then DayJet owe nearly $2.2 MILLION, and we all know how secure that debt is.....
2. Ken is an interesting example, in that he also claims a ConJet deposit ($100k) as well as his other FPJ deposit ($100k, again) and the balance of his JetComplete (€35k). Means his 'faith' in EAC has cost him, big time. Several other owners seem to be in a similar position. Wonder what the hourly cost of dealing with EAC is now? I'm sure it's a lot more than the 'pounds per nm' or the 'gallons per hour' that Ken was so keen to regale us all with this time last year. Or the year before.
3. EAC have listed huge assets (north of a billion) on the topline schedule, but when you go digging, there is little or nothing there. Liabilities are also in excess of one billion dollars, EXCLUDING the depositors who's 'cure value' is listed as zero. Yes, that's correct, they now are, well, toast.
These guys really did burn close to $3 BILLION, in 8 years. That is just plain staggering. Can someone, anyone, explain why this company is for sale? You'd think a sane businessman would pay to stay away from a screw up of these proportions.
Shane
Shane,
Your summary of assets and liabilities brings to mind a phrase most feared in aviation:
Terrain! Terrain! Pull Up! Pull Up!
Shane said:
"These guys really did burn close to $3 BILLION, in 8 years. That is just plain staggering."
Yes, but a Billion isn't what it used to be...And if you look at what hundreds of other ventures burned, along with the airlne industry, it's perhaps not so out of line; I do agree, seriously, that, that kind of investment in GA could have had enormous positive impacts; this is indeed a huge black eye for GA/bizav, not so much because of the burn amount, but because of the poor execution and frankly, fraudulent marketing/order book. An honest effort would have been forgiven and the suppliers would have pitched in, in some cases, in some manner.
SP said:
"Can someone, anyone, explain why this company is for sale?"
I don't think it really is. It's bankrupt; that is for sure. The "sale" component of the BK is just a formality that the court has to follow, given the filing. If it were bonafide "for sale" there would be intermediaries involved, like a substantial investment bank acting as an agent. Even bankrupt entities that are seeking fresh capital or an outright sale, often have representatives that market a "book" based on enormous due diligence, with full financials and disclosures. I do not believe there is a "EAC" book on the streets. Has anyone seen one? I think you can imagine what a roar of laughter the Wall Street capital market would have if such a book hit the streets.
SP said:
"You'd think a sane businessman would pay to stay away from a screw up of these proportions."
Good one.
"Ken is an interesting example, in that he also claims a ConJet deposit ($100k) as well as his other FPJ deposit ($100k, again) and the balance of his JetComplete (€35k)."
Ken is owed over $200,000 plus he owns an airplane that is essentially worthless? He was played like a piano three times? The Vernster must be laughing his ass off!
SP said:
"Can someone, anyone, explain why this company is for sale?"
Can someone, anyone, explain why anyone would want to buy this POS ----- ooops, I mean company.
Post script to last post:
In all due respect to the investors and employees of EAC, I would add that, even if EAC were otherwise stable but for its financials; even if an investment pitch book were being run by a blue chip investment bank and EAC had every markee aviation exec on its side, the current market environment would still make a financial placement effectively an impossibility.
Not so much because the capital markets are "upside down" but for very specific reasons intrinsic to the aviation market:
--GA order books are shrinking everywhere
--The ratio of used aircraft for sale to total fleet is at near record levels and esp. in the LJ category
--The primary buyers--high net worth individuals--are not so high and not so net, as they used to be
--And perhaps most fundamentally, even if this were a frothy market, the VLJ may be just a plain market failure. EAC may never have atttracted the kind of capital it did but for a true "bubble market" in risk capital.
--Which is why, lastly, I'm a proponent of GA manufacturers being owned by large, diversified industrial holding companies, for at least two reasons:
1. You have to compete for capital under NPV criteria against other company projects, all of which are highly organized, carefully thought through and usually vetted by third parties (I realize this isn't foolproof; lot's of big companies make lots of big mistakes)
2. You have a built in resource partner for money and credit, people/talent, engineering, brand and distribution, supplier and supply chain management, liability management and global expansion.
I dare say even Cessna would have a very tough time raising third-party money (outside of Textron) in this environment, for the "wrong airplane" (the LJ/VLJ class).
EMB funded the Phenom project with internal funds (no third party discipline); Honda financed the Honda jet internally as well, from Honda Inc's massive internal checking account
Cessna funded its newest products internally as well.
The point? Very little actual arms-length, third-party risk capital has gone into GA recently. For that matter, into airline product projects either.
Aerospace in general has been living high on the hog from defense spending (your tax dollars) so again, another distortion in finance.
One last point about EAC's $3B burn: in its defense (or at least from the investor's perpsective) EAC was not just building an airplane (love it or hate it) but trying to build a complete company (design, production, sales, after-market); if the E500 were a project within a current manufacturer, the burn may have been as "low" as $250-300MM; perhaps even much lower. One might say that EAC's hubris was in building not an airplane, but a corporation.
That may be something to ponder.
Deep Blue,
"even if...an investment pitch book were being run by a blue chip investment bank..."
Like Lehman Brothers, for instance. Oops, now Eclipse Aviation and Lehman Brothers will compete for shelf space as business school cases.
Your point about building a company is interesting. What kind of 'corporate culture' will be left behind?
Re: Lead ballast
Everybody does it. There are a lot of tail heavy airplanes out there, especially when the airplane has been defueled, and the interior pulled out. It takes a few hundred pounds of lead ballast to keep a C-650's nose strut collaped, when the airplane is defueled and the interior out. Bags full of lead shot usually fill the bill.
If you tow a C-650 with the nose strut fully extended, you WILL bend the centering link, which is impossible to detect without removing it, and laying it alongside an un-bent one, or by checking the engagement of the centering switch when the nose is jacked up/fully extended.
The other means of detection is on the first flight after it has been bent, when the landing gear fails to retract.
The C-650 has several engineered installations for the installation of custom machined lead bars in the nose wheel well, or nose avionics bays. They are used to tailor the C.G. closer to the optimum range for an owner's specific operation.
I have personally seen every Citation in the product line (except the 525) dropped on the tail at one time or another (the nose of a C-750 is WAAY up there.....).
I've seen "green" Global Express's and Challenger 604s-605s at Midcoast-CHK with a fixture secured to the nose, holding several hundred pounds of lead bars, so I assume they have a similar issue.
Joe,
We had a case of this locally:
A Citation I in the shop for Phase Five inspection... interior removed, flaps extended, thrust reversers deployed... therefore center-of-gravity well aft.
A mechanic crawled in the hell hole - and up came the nose, down came the tail, and crunch went the ventral fin.
BT:
Yes, good point. What kind of culture? Well, probably a mix.
On the one hand, there should be some pride for the effort made by everyone; on the other, many lessons learned about leadership (and I find EAC as essentially a "leadership" case).
Many of the "rules" of leadership were broken. How it all stayed together was I think a matter of hiring; many of the managers were especially sensitive to the particular ego driven, mission driven environment.
Moreover, the Board, many blue chip people indeed, lended alot of credibility, as did the suppliers that "bought in" from the industry.
And in addition to EAC being a "corporate" versus aircraft engineering exercise, I would add that it was especially, more than anything else (and this is where the investment thesis came from), a mission project; a mission to "change" the market; "change" aircraft production methods; "change" pricing and after-market.
It was an industry "attack" plan that so many investors fall prey to (WhyTech may have a commment here); one where investors think that someone has found a way to "exploit" the staus quo and make a lot of money "disrupting" it, while creating huge new demand in the process.
Sometimes it works.
Black Tulip:
On a C-500, use of a tailstand is just about mandatory. Haven't seen the Maintenance Manual in a while, but I'm betting there are repeated cautions about it in there somewhere. The good news is that the ventral fin was probably corroding from the inside out anyway, especially if it had the foam dampening sprayed in.
As far as refurbing old airplanes, my vote is for finding an airplane in need of paint, re-rag, etc. and doing it the way you want it done. Too many problems can be hidden by new paint.......and major damage can be done to airplanes during the paint stripping/removal process.
(I'd tell you all about all the ways you can screw up your Citation or Falcon during the paint-stripping process, but then I'd be screwing up my consulting gig........:)
Concerning ballast:
In the earlier comments, the aircraft should have been "nose heavy", since the engines and fuel load were missing. Everything else was in place.
A decent computer program (3D CAD system) would have shown the problem. Remember, this was an aircraft, designed in "virtual reality" by computer geniuses, not in need of empirical testing.
As an "A&P", I fully understand the need to support the tail feathers of an aircraft during certain maintenance. And as a pilot, I understand Weight and Ballance, and CG limits.
This was a major error, that revealed much more than would appear on the surface. But, at this point in time, it doesn't much matter.
gadfly
(And when, as a kid, I would design and build a glider, and need to add "ballast" to an already overweight model, I knew I had "goofed". Of course, at age eight or nine, what did I know! I weren't smart enough to know that it's OK to just keep adding "lead", until the thing didn't fall on it's rump!)
http://www.ainonline.com/news/single-news-page/article/on-the-heels-of-easa-certification-eclipse-files-for-bankruptcy-protection/
One Eclipse expert estimated the costs [to upgrade EA500s in the field], if parts were available, at roughly $325,000 per airplane for flight-into-known-icing and the full Avio NG 1.5 package (IS&S panel and dual Garmin 400w navigators).
Gadfly:
When the C-650 was designed, everyone was still using mechanical gyros, ADIs, HSIs etc.
The newer stuff is a lot lighter, taking a lot of weight off the nose of the airplane (I know of a Falcon that lost 400 lbs off it's empty weight when they did a ProLine 21 retrofit).
At the same time, all kinds of equipment that nobody had ever even heard of (Airshow systems, Entertainment systems, Data links, Iridium phones/airborne internet, etc.) started going in, most of it mounted on racks in the tailcone. Hence the need to add lead to the nose of the airplane, usually to compensate for some unique operations profile (like filling certain cabin seats on partial or max fuel loads)
Problem for the future: Finding enough room on the top of the fuselage for all the antennas that people want to mount up there. Especially if they are 'radiators" (TCAS, Transponders, Iridium phones). All these guys have "recommended seperation" distances from other antennas, usually something like two feet. A lot of them also have "recommended maximums" for the length of their respective coaxes. Most are mounted on top of the pressure vessel, to eliminate the need for a bulkhead connectors for the coax and wiring harness.
You can see where this could be a problem on a CitationJet or Mustang. I wonder how the Eclipse boys handled it (or did they even get that far?).
Word to the wise: IMO, any shop that bids an avionics mod WITHOUT LOOKING AT YOUR AIRPLANE AND IT'S CURRENT CONFIGURATION, is either low-balling you, or doesn't know enough to ask the questions to keep you out of trouble.
Joe
Your comments demonstrate the point. This was a fresh, spanking new bird . . . no upgrades, no "mods" . . . and all done in "state-of-the-art" virtual design. So, a gyro or two, removed from the nose, wouldn't have made the difference (remember, the engines were not then mounted . . . so I was told). Everything present, should have added many pounds to the nose gear . . . yet (so I was told) the bird sat down like a "tail dragger" of old.
Anyway, what happened . . . happened. And by now, the 1,200 pound overweight bird is about to pass into history.
gadfly
(This recalls a death certificate that gave the cause of death as "the flu, but it wasn't anything serious".)
JoeP/GAD:
Your discussion may make one wonder if there isn't a fundamental "fatal error" in trying to make jet aircraft too small. Perhaps there are just too many engineering contraints, let alone a mismatch at the marketing level (cabin too small/cramped). This whole "microjet" concept may just be a plain failure, at least for an aircraft that is supposed to have utility: carry a payload; IFR/FIKI; FAR 135; advanced comm/nav/collision/entertainment systems, etc.
Deep Blue,
Good topic and one that has come up several times on the ‘old’ and ‘new’ blog. One of the myths associated with the Eclipse 500 is that it should cost less because it is smaller. While there are fewer pounds of aluminum and steel, some of the components should cost the same as in a bigger jet – avionics for example.
In some cases, it costs more to make aircraft systems smaller and lighter. For a full treatment of this see “Augustine’s Laws”, an excellent and timeless book by Norman Augustine. One observer here wrote that the PW610F engine costs less than its bigger brothers. Hard to say that deal is working out well for Pratt & Whitney though.
The aviation cemetery is littered with designs by people who thought a tiny aircraft would be desirable and succeed. The Wing Derringer and Paris Jet come to mind.
I've said it before, but it repeats mentioning.......any excess payload, range, cabin room, performance you design into an airplane WILL be used. If you can design the airplane so that the design has some available "stretch" to it, so much the better.
IMO, among the many problems that EAC had, it is not just that they were a startup airframe manufacturer.....they were (essentially) a startup AVIONICS OEM as well, designing and certifying a system that could be used on ONE AIRPLANE. If either one stumbled, the whole stack of cards falls down.
BassMaster said,
EDT your "rants" are getting boring. You may notice that nobody really responds to some of them. Didn't you say you were some kind of "officer" in QA when you got laid off from EA?
***
And who are you? What do you add to this conversation? Were you employed by EAC? Are you a customer? What special insight do you have and why should anyone here consider it relevant and worth reading? I don't remember seeing any posts from you in the past. LOL, I'd rather be annoying than forgettable but that's the Machiavellian side of me.
Also, I've never suggested my "rants" should mean that EVERONE drop what they are doing and respond to them; nor have I implied that everyone must read them. I skip or skim over many subject/posts that I don't care for. And even if I skip a post, I don't need to insult the people who took the time and effort to contribute *something* to this blog, especially those who write opinions I don't agree with. The people who decide to respond to my posts (Baron, BEG, Fred, etc) have proven to be inteligent and witty people I enjoy chatting with, even when I don't agree with them. If you don't have anything to say about my little missives, then don't post that you are bored and have nothing to say. Why even read them at all if you find them boring? Anyway, my next chapter starts on Monday at CNM. At least these classes will be free, and as time winds on, I will lose all interest in EAC. Chapter 7 is on the horizon, or as Deep Blue so elequently put it, "EAC is dead." Kinda nihilistic like Nietzche's "God is dead" rant, but it get's the point across...
SHANE,
In my humble opinion, this may be a 'trivial' item, but I think it still deserves broad mention to any other former EAC employees reading the blog: I have not yet had any response from Tina Rulo (VP, HR) or Laureen David (payroll manager) regarding 2008 W-2s. One of my contacts at EAC just emailed me they have "absolutely no news" on the subject. I mention this because there were a lot of angry contractors at that first info session in August. For any 'direct' contractor that worked for EAC (not Butler or another 3rd party), they should be as anal as necessary to ensure they get their 2008 W-2s if they expect one to come directly from Eclipse. Especially for anyone now out-of-state, I highly recommend that you send a Priority Mail one-page letter from the regular post office directly to Tina's attention AND mail it with Delivery Confirmation. Make sure they have your current address and make sure you have proof that you updated your address with EAC before 1-31-2009. Delivery confirm works best because you can print out the confirm from the USPS web site without waiting for a signature confirming delivery. At least that way you have CYA in case you have to get an automatic extension from the IRS.
Anal I know, but it might be necessary considering the Keystone Kops at EAC...
Thank you,
e.d.t.
Deep Blue
Small isn’t necessarily bad, but think of the Eclipse as an undersized “Swiss Army” type knife, with about seventeen features . . . made in China. Yes, you could conceivably use the thing for neurosurgery, or any number of other things. But my little “Al Mar” Japanese pocket knife, with a single blade, would be far more appropriate . . . and continues to do much more over the past twenty or more years . . . and remains a high-quality tool. You fill in the details . . . but I’m sure you understand my point.
gadfly
E.D.T,
In addition to what you said about the W2s, if you do not have them by Jan 31, call the IRS (get a name) and report it. I had to do that in the past and got mine Express mail two days later. But don't wait on Tina Rullo to do ANYTHING!
BT said ...Hard to say that deal [PWC610] is working out well for Pratt & Whitney though.
Well, they sold and fielded 520 PW610Fs with Eclipse and about 300 615s with Cessna. I'd say it is probably working OK for a minor derivative.
How many new civil turbine designs do you know off that have sold 500+ in the first two years after certification in the past decade?
errr ---- none, right?
No matter which you way you look at, Eclipse and the $3B you guys claim they spent, were a boom for GA suppliers. Just look at Avidyne, finally introducing an integrated GA glass panel because of their Eclipse work - they even said so to the press at introduction.
Baron,
No matter which you way you look at, Eclipse and the $3B you guys claim they spent, were a boom for GA suppliers.
just the old joke
"every hurricane is good for the economy: New houses must be built etc."?
And it's a reference you like to hear: "We built the parts of the avionic that was finally thrown under the bus?"
I am astonished that you don't call that a bad example of private/state-sponsored job creation scheme!
Julius
b95 . . . et al,
". . . were a boom for GA suppliers"
A couple hours ago, I met with someone (about a project to do with a pharmaceutical control system, un-related to Eclipse . . . things that come under control of C-2 to C-5 drugs . . . that sort of thing, to those who may understand the system) who is associated with someone who did work for our famous little bird factory. The other supplier, mentioned by my visitor, has almost been destroyed by doing business with Eclipse.
It’s easy to gloss over the damage left behind, but in the present economy even the slightest deception by someone like “Eclipse” can destroy a business, believing promises . . . thinking that people can be trusted to do what they say.
From where I sit, I’m closer to the “bottom” of the financial ladder than to those at the top. Our earnings have gone on to better things . . . and that remains out of the argument in this life. But there are many who live from hand-to-mouth . . . and for people of “means” and power, to take unfair advantage of them . . . well . . . there is no excuse. And no sympathy from me in their final demise.
In the final closing of the books, “Eclipse” has not been a boom to anyone . . . all totals are in the “red”, financially and ethically. ‘Only a few might count a temporary financial profit . . . yet, the other side of the ledger is firmly in the “red”.
Didn’t you notice . . . the “books” include more than just the “physical” totals? . . . dollars, euros, yen, etc.? . . . “Quick Books” fails to show the other columns . . . but they are there . . . and all books will be balanced at quitting time, without question.
gadfly
(You do, indeed, get the point!)
(A question was asked on the local radio station, KKOB, as to where we could reach our governor for comments, in the months to come . . . Santa Fe? . . . DC? . . . Prison? Eclipse owes much to our governor. Get the salsa and chips . . . pull up a chair, and enjoy the show!)
In the final analysis, it’s easy to go in any direction. Sarcasm? . . . “Piece of cake!” . . . Accusations of dishonesty? . . . a fertile field of evidence!
Go in any direction . . . give the argument any slant, you’re guaranteed a level of success.
But at the end of the day (which may be soon, but none too soon), many people, families, businesses will applaud the end of this sick experience . . . an experience which has covered each and every aspect of political, corporate, and employer corruption known to man.
To give them credit . . . Eclipse has left little . . . a near complete example of everything to avoid in business relationships.
What’s left? . . . Not much!
Light at the end of the tunnel? It’s been claimed that the Russians want this sack of manure . . . let us do everything we can to expedite that final event.
gadfly
(And don’t talk about “re-cycling” . . . some things are best left in the cess-pool.)
EDT,
Please keep your rant's and/or non-rants coming! (I'm in work crisis mode for another few days, but have been keeping up with my reading, if not my blogging). Good luck with classes at CNM (how come three are free?). And while you may in time lose interest in EAC, I hope you don't lose interest in the blog!
--------------------------------
Much catching up to do- later- but for now, I note Baron's observation that P&W has sold a lot of -61x engines. I'm not sure what the price and margin is on them, relative to lareger, lower volume engines though. Still, I suppose they are doing okay on the deal- especially if the Canadian government underwrote some of the development expense.
--------------------------------
Theoretical observation: what is the (next) smallest practical fanjet thrust range? Considering the "next big thing" might be SEJ's, with somewhat MORE thrust per engine, is the -610 perhaps the smallest jet engine there will ever be a market for?
BEG, the PWC 600 series was designed for low production costs, with lower parts count, etc. They are not the most efficient engines around (in SFC), but they are "low" cost. PWC should have good margins on it.
Assuming Eclipse miraculously revives at their previously achieved 250/year rate, with Cessna and Embraer pumping out 150/year each, that is 1,100 new turbofans/year being shipped by PWC.
That is awesome volume for an engine family, particularly one designed from the outset for low manufacturing costs.
You guys just need to accept that failures and crisis (even this economical one) are good in the long run.
Look at the benefits...
Home prices are lower, oil is cheaper, the US govmt can finance its debt at virtually ZERO or even negative real interest rates, crooks like Madoff are being exposed, even the UAW may get somewhat closer to saner contracts.
Used aircraft prices are in check.
All courtesy of the financial crisis.
In the long run these will all be good.
Incidentally, this is the ceiling for a twin turbofan light jet price.
2008 CESSNA CITATION MUSTANG $2,700,000 CA
Aircraft For Sale CESSNACITATION MUSTANG S/N: 510-0055, N551WH, 100 TT, Beautiful! Delivered in May 2008 , 6 Seats
There you have it, listed on Controller for $2.7M, likely to sell for $2.5M. Virtually new, under warranty.
Baron,
I feel that the present "blessings in disguise" are sort of like deliberately hitting your thumb with a hammer, just so it feels better when it stops hurting :)
The biggest plus, is that the housing bubble has collapsed. Still needs to go down another 40-50% in some areas to get back to "normal". The talking heads on TV never mention the "housing affordability index", I haven't even heard that term for three years. Just not a fashionable concept, I suppose...
I fear last year's "candy for babies/aka "taxpayer stimulus", and Wall Street bailout, and the up coming "stimulus" are just the opposite of the big hammer- it feels good now, but boy, it's going to be hurt-time later on...
The blog email is, strangely, humming. So, its yet another
Snippet Time
1. From one of the DayJet pilots.
Empty, the FPJ doesn't need any nose weight. When you add passengers and crew, the CG limit moves forwards. With two pilots sitting up front, and two passengers, it was a challenge. When we were flying Ed (DayJet founder, Mr. Iacobucci) around at 310lbs, along with another passenger. Ed had to sit in the back seat. He knew that was where he belonged. EAC should have mounted the wing 1 or 2 inches further forward. Idiots.
Seems like one of Stan's original concerns was valid after all, in the real world.
2. For those people concerned with their W-2 forms, (whatever they are...) I've been given a contact who I'm told is a reliable person at EAC. Email me at the usual address and I'll try and put you together.
3. My review of the Bankruptcy Court documents continues. One thing that stands out is the Training Simulators, which are NOT the property of EAC. Seems they never paid for them.... What a surprise. Anyway, it does beg the question of how (and from whom) training will be offered.
Shane
How’s this for an unsubstantiated rumor:
Shane Price knows a bargain when he sees one. This is his chance to diversify into a new business area. He will be at the Eclipse bankruptcy auction next week with a large check in his trembling hand. Shane planned this all along, since he took over the blog. Investors, creditors, depositors and owners can expect special treatment since Shane is a SNAG (Sensitive New Age Guy).
Shane said... from DayJet Pilot... When you add passengers and crew, the CG limit moves forwards.
Shane, I continue to be "unimpressed" to say the least, with the aeronautical knowledge of the "prefossional pilots" you like to quote.
The "CG LIMIT moves forward"!!!! I'm pretty sure, he is trying to say that the CG moves forward towards the forward CG limit.
No wonder these guys blew so many tires. For crying out loud.
Really, Shane, please prevent these guys from further embarrassing themselves and spare us from their "great wisdom".
9Z,
To be fair, you have been predicting a decline in VLJ pricing for some time. A straw in the wind from here, but under one year old BMW's and Merc's are selling at less than half their original price.
Baron,
I don't originate the material, I only edit it. Ask Ed yourself if he had to sit in the back seat. However, the discussion on CG does illuminate one of the real concerns from the original blog on how a jet as 'small' as the FPJ would perform in the real world. Just over two years after the 'official' first delivery, I think it's safe to say that these concerns were indeed justified.
Black Tulip,
Me? Buy EAC?.
No chance. I'm waiting until the IMF declares The United States bankrupt.
THEN I'll call the bank manager....
Shane
Baron,
I must apologize. In the course of editing the comments from the DayJet pilot, I moved the CG the 'wrong' way.
Just too many emails, with the distraction of running a business on top.
Plus I'm still ploughing my way through the Bankruptcy Court documents. There's hundreds of pages and little nuggets on each and every one.
It will make (I hope) a really interesting headline post, if I ever get the time to finish it!
Shane
Joe P:
Excellent point about EAC also being a start-up "avionics" venture. This added alot of cost, risk and complexity, although certain of Avio's features were compelling.
I suppose one could argue that EAC took on several "mini or sub-start-ups" including 1. FSW; 2.thrust (huge risk from Williams failure, then big time/management investment in the PWC 610F ab initio program; 3. regulatory (always looking for "exceptions" or ways to change the rule book: another big management distraction); 4. painting methods and then after-market. Lastly, while doing these and others, they were also running an "investment banking" function, constantly raising capital (not unique to them, of course). They were also running an unusal level of media PR which can really be distracting to a start-up.
No worries, Shane. I just couldn't resist it.
For a modern biz jet to have the CG move forward as passengers are loaded is par for the course and nothing surprising.
The issue that I see with the EA500 is that they don't have the typical external fore/aft bagage compartments that can be used very effectively to keep the CG where you want it.
Even on the Baron, a plane with virtually the same weights and cabin space as the EA500, I can move the CG quite a bit by moving a 50lbs bag from the nose compartment to the aft bagage compartment and vice versa. But that is rarelly needed in planes that have a mid fuselage wing and engines. On planes with aft wings and engines like most modern light jets, having that external aft bagage compartment behind the wing can be very valuable.
DB, it is even more/worse than that:
EAC was trying to:
1 - Create a new class of planes - sub 6,000lbs twin GA fanjets.
2 - Create a new class of service - short haul, per seat, air taxi, with DayJet.
3 - Create a new class of engine, tiny 700-lbs class turbofans with Williams.
4 - Create a new class of Avionics (remember they started in 1998) - fully integrated (up to autothrottle/FMS) avionics - with Avidyne et al.
5 - Create a very high volume civilian jet mannufacturing process, FSW being just an example of processes that needed to be invented.
6 - Create a new class of pilot - the low time, lowish means, jet owner/pilot, and the training/insurance programs that came with it.
7 - Create a new GA funding (Venture/Risk) paradigm with hundreds of millions invest upfront years before any profit could be realized.
8 - Create a new relationship basis with the FAA where political air cover is used to force the FAA hand.
9 - Create a new relationship basis with customers, vendors, press, Blogs, where ONLY EAC's controlled information release can make it out in public.
10 - Create an un-American surbservient corporate culture that drove away sanity checking questions and replaced it with "yes, your highness".
11 - Build a full fledged company in the process.
Needless to say, it did not end well.
Baron, Shane, et al -
I was convinced that the DayJet pilot was wrong, and jumped into my EA50 weight & balance tool to prove it.
Not so fast.
Assuming an Avio Non-ETT aircraft, 6 seat standard, with Basic Empty Weight and Basic Empty Moment Arm in the middle of the typical range … and 2 x 190 pound pilots … and the big guy’s escort is 190 pounds …
If you place ~75 pounds in the baggage compartment, and tweak the fuel, you can make it work with Ed in Seat 3/4 and the escort in 5/6.
Without ballast and any reasonable amount of fuel, the heavy guy has to ride in the back row … which is nearly impossible to get into if you are that large.
The ETT aircraft have a different envelope shape, so there are ways the load can be tweaked as well, but many scenarios run the Zero Fuel Moment Arm forward of the limit.
Folks may recall that in many EA50 aircraft, with full fuel and a single moderately sized pilot, the Moment Arm is near the aft limit. Adding anything brings it forward.
So, appears that the DJ source is accurate.
Zed
Zed,
The plane must be operated with 4 seats only if you have two pilots every time.
What is the issue? Why insist on carrying a useless fifth seat, that only gets in the way of comfort?
Baron -
I agree, however, DJ airplanes were delivered with 6 seats so that is what I used.
Removing a ~40# seat from both rows would almost have the same impact as the 75# rock in the baggage bin.
Zed
Who in here used NetJets as an example of how successful on-demand charter could be and how they'd continue to grow, blah, blah, blah?
Cessna just announced that the number one reason they are cutting staff is because of significant order CANCELLATIONS from NetJets.
Zed said...
Removing a ~40# seat from both rows would almost have the same impact as the 75# rock in the baggage bin.
And making the cabin incredibly spacious with an extra 40 inches of leg room.
Meanwhile, oil is back below $40.
Shane,
a simple point, but a very good one I believe.
We do not need to be 100% right on every point, to be right in saking. ALso, sometimes, our concerns based on intuition or a hunch from expereince, takes literally years to be proven a valid concern.
So, caveat emptor, ask questions and check answers. Sometimes it takes 10 years to find the smoking hole, CG problem, bogus order or other nagging issue.
well, cavaet "former" emptors... I do not think there ARE any buyers...
Further clarification on the DayJet experiences
Tell the boys that all DJ planes were configured with 5 seats. One seat in the third row.
Astro did one hell of a job pairing the crews, picking the plane to be used, and making sure that the fuel loads were legal for our use. But like any other dog, Astro can lead you into oblivion.
It was our responsibility to make sure that our W&B was within limits. On many occasions we had to change things around.
And here's one for Black Tulip.
Patriarch Partners are being mentioned as the 'mysterious' second Eclipse bidder. Patriarch as in the investor that owns MD Helicopters.
Hmmm, that would be interesting, don't 'ya think?
And, for the record, I don't own them. Before you ask....
Shane
"Tell the boys that all DJ planes were configured with 5 seats. One seat in the third row."
Why not one rear-facing seat behind the copilot and two forward-facing seats in row three, especially if the forward CG is a concern?
asman
emergency egress issues in the config you suggest
Why not one rear-facing seat behind the copilot and two forward-facing seats in row three, especially if the forward CG is a concern?
ISTR that the cabin is narrower in row 3 than row 2. Were that not the case, your idea makes a ton of sense.
emergency egress issues in the config you suggest
Emergencies? In an FPJ?
Surely you jest.
Would you like the Big Ass combo?
DI
Patriarch Partners are being mentioned as the 'mysterious' second Eclipse bidder. Patriarch as in the investor that owns MD Helicopters.
I've heard plenty of rumors over past couple of years that Patriarch has been shopping for a VLJ business to add to their aviation portfolio.
Well, we'll know by next Tuesday the 13th if they'll bid and how much and by Wednesday the 14th who will walk away with the "prize".
That is, unless the court postpones the whole thing by a month, in which case it will be the known as the Valentine's day massacre.
The problem with the FPJ and weight and balance: It has always been more effective to increase/ decrease the "arm" than it is to increase the "weight" when fixing CG problems.
The FPJs problem is that there ain't much "arm" on it.
Re: DB's comment "fatal error in making a jet aircraft too small..."
Aircraft Carrier's have the same "problem", in that there is so much "overhead" needed (in the way of armor, radar, defensive systems, defensive aircraft like E-2s, S-2s, F-18s, etc., etc.) to protect the asset, plus the cost of the nuclear powerplant (if used), that you HAVE to make it big to justify the expense. Flat plate steel is relatively cheap, in the bigger scheme of things.
Compare a Nimitz class carrier to the French carrier Charles DeGaulle....Nimitz is a four shaft, 34 knot plus, 85 aircraft ship displacing 100K tons, vs a two shaft, 27 knot, 40,000 ton ship that carries 40 aircraft.
Subtract the "overhead", and the Nimitz operates 60 plus "strike" aircraft, vs. 25-30 (at best) for the French carrier (my guesstimate.....someone with more knowledge about how many helos, E-2s and CAP fighters each carrier typically operates can clarify this)
Same with bizjets.....there is a certain amount of "overhead" in equipment you need to carry to operate in the jet environment. Last I heard, the engines, avionics package, interior components, etc of the FPJ aren't significantly lighter, or take up significantly less space, than the equipment installed in any other Bizjet.
To (sorta) illustrate this, I used this formula:
Ramp weight/zero fuel weight-(max certified seats X 200 pounds)
You can see the trend.....
FPJ- 1.58 (assuming you can fill all six seats)
C510- 1.58 (six seats)
C-680 (Citation Sovereign)- 1.69
Challenger 604- 1.71
And, just for grins.....
Airbus A-380- 2.95
Joe P.,
Unfortunately, you also have to account for the task force escorting and feeding the carrier. If you were to add the cost, fuel, food, etc you will see that the US Carrier task force carries a lot more weight, fuel and overhead per strike aircraft than the CDG.
Of course it is more survivable, etc, etc, etc.
You can also say a Reaper is more efficient than an F15E to put a missile on target over the battlefield, but so what?
It is a silly discussion. We know that 6,000 lbs is plenty of weight for a personal aircraft platform. in fact, Diamond and Cirrus are trying to show us that even 5,000 lbs may be enough.
The Eclipse failure was simply to have tried to invent avionics with no competency and wrong vendors, having selected the wrong engine, having taken too long to get planes out because of the above and other factors. It has nothing to do with the size of the plane.
"It has nothing to do with the size of the plane."
Wrong answer.
caveat "former" emptor. I do not think there ARE any buyers
Airtaximan, that is funny!
Shane, thanks for the compliment. But this is YOUR blog. I'm just a lowly messenger putting 2 and 2 together. This is not rocket science. Being right has it's cost - or not, thanks to Gunner.
But enough about the past - what does the future hold? I've shaken my magic eight ball and this is what is says...
- E500's selling for sub-$1 million within a year
- late model Mustangs will be in the "low 2's" before this recession is over
- position holders and 60% depositors won't see a dime from their legal action
- IF the E500 ever goes back into production, a big IF, the new ones won't roll off the assembly line until 2012 earliest
-no E500's will be built in Russia. Ever.
My 2 cents worth, worth every penny ;-)
"It has nothing to do with the size of the plane."
In trying to justify, "6,000 lbs is plenty of weight for a personal aircraft platform", consider these three numbers... four, one, zero. As in, the Eclipse was certified to flight level four-one-oh. Where do Cirrus and Diamond propose taking the crew and passengers in terms of time-of-useful consciousness in case of loss of pressurization? This is just one of a myriad of factors.
I am working on multiple thoughts here …
DayJet Source via Shane … Tell the boys that all DJ planes were configured with 5 seats.
Concur. Mea culpa. I looked at the spec instead of the pictures … that clearly show the “5 Seat Standard” config … (leaving room for that future potty option).
We would enjoy your first person commentary. Grab an anonymous gmail account and join in the fun.
It would be great to know a representative BEW and MA for the DayJet airplanes. The data used in the spec was 3550 lbs and 207.20 inches … which I suspect was significantly too light and too far aft. If the MA was set at a realistic 206.75 then I fully agree ol’ 310 must always ride next to the blue water.
Baron95 … The Eclipse failure was simply to have tried to invent avionics with no competency and wrong vendors, having selected the wrong engine, having taken too long to get planes out because of the above and other factors.
Too true.
Recall that when Wedge signed up his fellow EAA board buddy Dan to design and build Avio, the only Avidyne product on the market was the FlightMax x50 line … the ARNAV and Avrotec boxes were the most sophisticated big MFDs available (Avrotec running Avidyne s/w).
The following were the rough feature intro dates on the SR-22:
MFD – March 2002
PFD – March 2003
XM Weather – September 2004
PFD Flight Director – January 2005
Engine Instruments – July 2005
FMS – Announced July 2008 … certified ??
Interesting development time line considering that Avio was to be certified in late 2003. Then in December 2005 came the “get it our way or not at all” from Avidyne … so Avio gets tossed for AvioNG.
Then IS&S gets EAC over a barrel and wants YGBSM amounts of money to incorporate the Eclipse FMS (code that was already developed and on the shelf) into AvioNG … so they toss that and go with the Garmin 400’s
Sad tale of bad decisions built upon bad decisions. Then when they needed a miracle they were negotiating from a position of weakness and desperation.
Baron95 … Unfortunately, you also have to account for the task force escorting and feeding the carrier. If you were to add the cost, fuel, food, etc you will see that the US Carrier task force carries a lot more weight, fuel and overhead per strike aircraft than the CDG.
LOL dude … that is a joke, right?
The CDG is nothing more than a floating Maginot Line.
While the Rafale M is a nice, potent airplane … an adversary wouldn’t even sink the CDG … as the danger posed is less than the cost of the torpedo or cruise missile needed to sink it.
Have they finished the flight deck extension to actually make it long enough to support the aircraft they bought for it? Oooops! Must be the metric conversion responsible for that goof.
Question for the EAC Insiders …
Was the wing moved forward during the Williams to PWC redesign?
If not, in the original design with those little engines back there you would have to fly from the second row, put your girlfriend in the rumble seat, and tie your bags on the tail Jed Clampett style to remain in the envelope.
Drag would not have been a problem because those engines had 700 huge pounds of thrust …each!
Back to the checklist:
Sarcasm Switch … OFF and Verified
Zed
Was the wing moved forward during the Williams to PWC redesign?
Don't you mean: was the wing moved to the rear?
Seems a bit of "CG lysdexia" is breaking out on the blog of late...
Back up to the first window,
DI
I can't speak for the pre-NG aircraft that the DayJet guy was referring to, but in my NG plane, there are very few load combinations that present an issue. Putting a heavy guy in the front is not one of them:
EA-500 W&B with big guy in front
Ken
Or put him all the way in the back if you prefer; it doesn't matter:
EA-500 W&B with big guy in back
Ken
Funny thing seeing how the wedge came from a computer background that creates things from 0's
and 1's.
3B div. by 270 AC = $11,111,111.11each. The best part is they are worth closer to 0.
A few comments:
Patriarch Partners and Lynn Tilton looking to bid EAC: not unsuprising. Lynn has ego in abundance. What other assets are unclear. Most believe MD to be a stalemate platform at present; her understanding of the GA/Bizjet market is limited.
JoeP: nice analysis on overhead.
B95: I agree; the inherent company failures at EAC certainly overwhelmed the aircraft engineering ones; but I believe the cabin size among VLJ's to be a "failure" if:
--a user expects to extract commercial-like utility from the aircraft or attempts to extract a jet utility that really belongs to the LJ class (range, s/e performance; service ceiling; cabin comfort.
--If the E500 is viewed as a "sport jet" or a "personal plane" then its dimensions/performance may be acceptable to some users.
DB:
low price requires large market - very large.
Limited size plane that does not compete well in any material aspect on short range trips with props makes zero sense.
OK, so its a nice plane for some private pilots. Problem is, at that volume the price is completely whacky compared to whats out there. So is the risk profile given waht has been analysed as "risk" on this blog for 3 years.
The VLJ promise was silly... $3B silly.
"Lynn has ego in abundance. What other assets are unclear."
Check out these links - she has "assets" all right!
http://www.observer.com/node/39590
and
http://www.pprune.org/rotorheads/313704-problems-md-merged-threads-3.html
I have seen Ms. Tilton in action and its quite sight! Doesnt exactly inspire confidence in her ability to lead a failing helicopter or VLJ company.
Regarding DI's comment ... Seems a bit of "CG lysdexia" is breaking out on the blog of late...
Dave -
A clear indication that I should not blog at 0300.
The question that I should have asked is "other than the ETTs, was any element of the wing structure or aero package adjusted during the redesign?"
Zed
Say what you will about Lynn Tilton, but I personally feel she would bring the kind of class and reputation to Eclipse that the company so richly deserves.
In other words, I've seen classier women strolling down Central Blvd...
What a farce.
Zis -
Thanks for not pulling a Ken and adding that I once again asked an open ended question.
I need someone to answer the question that I should be asking ...
Talking about EA500 CG issues at the margins or cabin size given the magnitude of the other screw-ups is like GM worrying about how much they are spending on color copies. Even if there was something to it, no one should care.
Zed said ... LOL dude … that is a joke, right?
Nope. A Nimitz carrier task force carries A LOT more overhead per strike aircraft, than a CDG task force. As I said, effectiveness/survivability is another thing. DB was making a "strike efficiency" point.
Fortunately, I'm on record on the appropriate forums as to the foolishness of France or Russia or even the UK trying to field small carriers without the other task force assets to project it. It is good to show the flag an not much else against a front line adversary.
EDT your response to my post was quite eloquent and I apologize since it was offensive to one undeserved of such words. Please accept my apology although I can't blame you if you don't. I recall you as being one of...if not the first...to come in and talk about the layoff. It was the worst treatment of employees in the manner in which it was done. You claimed to have been talking to various agencies for months until you were laid off 8-22-08. Most would leave BEFORE doing that. Unfortunately, in addition to the total integration of a new and unproven electrical/avionics package it's said that the QA staff had just as much of a role in screwing things up. Yes there are/were arrogant, inexperienced engineers that refused to change simple things on the line that are reported to now be SB's. Pass the shit to the customer and let EA warranty deal with it. There were other engineers that knew that certain vendor items such as actuators of different species were shit and when they weren't allowed a budget to fix or change vendors they left. There are allegedly MANY SB's, although most not flight critical. Some seem to affect simple lubrication of moving parts that were assembled dry. It's said that the floor QA staff were/are the absolute laziest employees at the company. We'd assume there's a paper/computer procedure for sign offs which will take time. Unfortunately EA QA not only doubled...or tripled...but...420% increase in time of production from lazy QA! Did QA find bad stuff?...ABSOLUTELY, THAT'S WHAT QA DOES. But were they efficient in timeliness...ABSOLUTELY NOT! You asked what I contributed to this blog...there is so much BS on this blog...what IS a contribution? A good one is from Shane...regarding BK of America! Watch your mouth.
The watch your mouth isn't directed to EDT BTW...It's to Shane. Maybe your being sarcastic with the BK USA...hopefully you are. If not then "smarten up" or "wise up" as it's said in certain American "business circles". You already fired the CEO a bit before she actually "resigned" along with some other BS you claimed from your sources. Don't mess with the country itself.
Well, Thanks to the Kenster we can calculate an empty weight of 3,736 pounds for his airplane (6026 less pilot, less pax, less baggage, and less total usable fuel onboard). Then caclulating a more normal profile a FLL-ATL leg with two 170 pound pilots, three 170 pound passengers + 50 pounds of baggage, the a/c could be fueled with 1393 pounds of fuel (203 gallons)to bring it to the max ramp weight of 6,029 pounds. If the fuel burn was close to the earlier leg of 760 pounds (113 gal) the a/c would have 633 pounds (94 gal) left at Atlanta.
Oops,
For what it's worth 1393 pounds is 207 gallons in the above example, not 203 gallons. I didn't copy correctly from the spreadsheet.
Bassmaster,
It's to Shane. Maybe your being sarcastic with the BK USA...hopefully you are. If not then "smarten up" or "wise up" as it's said in certain American "business circles".
Not sarcastic.
Ironic.
But, sadly, also a little prophetic.
Until your incoming administration does something serious about your TRILLION dollar deficit, the current worldwide recession can only get deeper.
However, enough local politics. Its...
SNIPPET TIME
1. It looks like Roel has 'won'.
2. Very simple reason. Nobody else will bid.
3. The only 'dark horse' at the end is a Chinese group, who will probably look at the money lost by Taiwan on the SJ-30 and run a mile.
4. The 'owners group' have the wherewithal to make a bid, but not to actually run the company going forward. They've kinda worked out what 'we' have been saying for years. And, despite previous evidence, these guys are not stupid.
So, what of the future? A lot of pointers are buried in the historical numbers. My head is spinning with them all weekend. Hopefully a nights sleep will clarify things for a new headline....
Shane
Shane: while off topic, most readers might agree that your comments about the US economy, while likely true, are a bit of "throwing stones in a glass house." It seems Ireland is deep in a profound recession, if you believe the NYT's story: "The Irish Economy’s Rise Was Steep, and the Fall Was Fast."
Just Google "Ireland economy" and it will come up: a Mr. Dunne is the profile. Seems my mother's Irish clan have been as single minded about real estate development as the US. But all will be well, eventually. Entrepreneurs always win in the end. They have to.
Regards.
Baron,
Concur. My son drives one of those gas guzzlers. According to him, the Nimitz is assigned to protect -them-. Sounds like it's time for a throwdown.
Zed
Shane, et al,
Reports from the owners telecons is that RP is, or will be, offering credit coupons to the owners and depositors to compensate them for their lost warranties, upgrades, JetCorrupt, million dollar deposits, etc.
Wonder if they will need to clip them from the next edition of the Eclipse Flyer rag, and then scan the coupon at checkout.
You break it you buy it. Paper or plastic? All sales final on scratch and dent items. One per customer. Offer excludes tires, windscreens, pitot probes, and training. Quantities limited, additional deposit may be required.
Mr Price has presented a fantastic response to the suggestion that he made a "low blow" to the US economy. Enjoy your O'Hara's Mr Price...I certainly do on occasion. The blog has shifted OBVIOUSLY TO A HEAP OF BULLSHIT lately. W&B, W&B, on and on.
Mr Meyer seems to continue flying the plane without incident or issue.
Mustang Premiums are gone, now here come the discounts.
A jet reseller has an ad in Controller as follows: "2.395m Base Price. ZERO Premium, $275k Deposits Paid, Will Sacrifice For $175k Deposits Giving You $100k Equity!"
With all due respect to the seller, the part about "giving you $100k equity" isn't entirely accurate. You really only have $100k equity until the next seller comes along and offers his Mustang at an even greater discount in order to dump his position before he is forced to take delivery or put up even more nonrefundable deposits. So your bragging rights about the "great deal" you found are likely to be short-lived.
Many of us have seen our homes, stocks, cars, boats, commercial property etc. drop 20-30-50 percent in value. We need homes and a place to work - we don't need jets. I can't help but believe the jet market still has a long, long way to fall.
The hard part is waiting.....
But if you really want a laugh, there is an ad in Controller for a 3rd quarter 2009 Eclipse E500, serial number in the 700's placed just a few days ago by a well known jet broker.
Are they kidding?
They win the "WTF" award for the most outlandish advertisement I've seen for an Eclipse.
Mr. Bass Master,
Were you looking for the "IrishCriticNG" blog and land here by mistake?
Don't throw stones and run to momma complaining that the other boys and girls are being mean.
You appear to be a disgruntled believer, aka Wedgophile, who is lashing out at the only forum you can find.
Great that you are a team player. Your team and coaches sucked and you lost. Your team's record is 0 and 258.
That is reality.
Come Friday you will have a new owner with a proven track record of success ...
Oh wait, that was a dream.
Go outdide and get the venting over with, then come back in for some on-point dialog.
"Mustang Premiums are gone, now here come the discounts."
Seeing similar situation in the helicopter market with the Bell 407 ( a "hot" acft at about the same price as the Mustang), and perhaps others. During the summer months there were typically 3-5 407's listed for sale, with the asking price for a 2009 position at a premium of near $1mm over the factory price. Today, there are 47 407's listed, with positions at about factory price, or with a slight premium. My guess is that buyers with cash in hand will be able to buy some of these positions at below factory price before prices begin to firm up again.
"The blog has shifted OBVIOUSLY TO A HEAP OF BULLSHIT lately. W&B, W&B, on and on."
What is your problem? I was trying to calculate how far off the airplane is from being a useful two pilot, four-passenger airplane for a reasonable length leg, and trying to stimulate discussion as what could be done to get it there. It's actually not far off and not much would have to be done (at least in reference to the past development money). Ken's numbers are quite favorable to the airplane; they indicate you could take five 170 pound occupants and 50 pounds of baggage from FLL to ATL and burn only 113 gallons of jet fuel. Perhaps you should read the postings before you comment?
for the record,
this blog was about "a heap of bullshit" from day one.
That's why it was created.
PS. when flightcenter returns, we'll know we're back tracking more concrete BS... quantifiable broken promises... until then, the BS continues on a less concrete level - the business model, pricing model, etc...
Bassmaster wrote,
"Mr Meyer seems to continue flying the plane without incident or issue."
Indeed I do.
And just for you (the others don't want to hear anything good about the plane) here are some words on my most recent international flight with this great, fuel-efficient little jet...
After the big Christmas snowfall, we pulled the plane out and departed from our mountain location:
Eclipse in snow country
...and flew to Sacramento and the Bay Area to pick up our passengers. Here's a neat shot of Alameda and the Hornet Aircraft Carrier Museum:
Eclipse departing Bay Area
At altitude, we got 416 MPH (362 knots) airspeed and 480 MPH groundspeed, better than 6.5 air miles per gallon (amazing for a jet):
Eclipse panel enroute to Mexico
...which made the trip down to this isolated stretch of deserted beach south of Mazatlan a snap:
Eclipse over beach south of Mazatlan
...and put us sipping margaritas overlooking the beach before sunset:
"On the Beach"
Nice plane!
Ken
"we pulled the plane out and departed from our mountain location:
Eclipse in snow country"
So Ken, how's that FIKI working out for you?
Why Tech--the plane is working out real well, thanks! Maybe I'm lucky, but I just haven't had to alter any of my plans due to icing. Most of the time, we're well above the weather of course.
You do know FIKI is approved for the Eclipse, right? Maybe you're not aware that the changes in the FIKI package from what earlier planes were actually delivered with are fairly minimal.
Ken
I think the airplane is an outstanding prototype and development aircraft. I do not think it should have been certified in its present form and I do not think people should be flying around their families in it. Having said that the basic airframe and engines seem OK, which is more than you can say about a lot of airplanes in the past that have recieved Type Certificates from well-known manufacturers.
Ken Meyer said...
You do know FIKI is approved for the Eclipse, right? Maybe you're not aware that the changes in the FIKI package from what earlier planes were actually delivered with are fairly minimal.
Is your airplane FIKI? Why not?
Are there *ANY* FIKI EA500s out there? It doesn't matter how minimal the changes are if you can't do them. It must be frustrating to be so tantalizing close to a real airplane but have no way to get there. It also helps you fly in the desert Southwest. People living elsewhere are much more impacted by lack of FIKI than you are.
I am new to posting here but have been an avid follower of this blog as a long suffering depositor with EAC who is "seeking" a refund of the 10% deposit made 7 years ago. Let me start by saying that there is no way in heck that I would ever pilot or accept a ride in any EAC FPJ. I am just thankful that I did not pony up 60%. I could not resist posting after reading Ken's most recent comments. I of course follow the owners' club blog as well and Ken is indeed a prolific poster there. Just my opinion, but I feel that Ken is not a safe pilot. He often makes reference to "a friend" who uses most or all of the systems of the airplane that are not FAA approved for use at this time. That friend of course is "first person". Simple to uncollar those CBs and use the placarded system. Busting and breaking regs is one of the first steps in the accident chain and exposes a willful disregard for safety of flight. Most all of the individuals that I have been lucky enough to meet in the Eclipse owner/depositor/employee/enthusiast
ranks have been first class. IMHO, though, Ken is a world class "blowhard/braggart" and I would certainly not choose to share the same proximate airspace with him. Being a test pilot at FL370 is for highly trained professionals not weekend warriors.
At least he has Sheri who appears to be the voice of sanity in that family. Again, just my opinion and I genuinely wish him and his family safe flying.
"You do know FIKI is approved for the Eclipse, right? "
Of course I know. That's why I'm asking how its working out for you. You have had it installed/approved by now haven't you? If not, the reason you are "lucky" as you state is because you avoid flying in about 85% of the U.S. during the winter months. Conveient, yes?
Shane said ... Until your incoming administration does something serious about your TRILLION dollar deficit,
You can't be serious, right? The US is now borrowing at real interest rates that are between ZERO and negative. It is now time to borrow up the wazoo and have the whole world subsidize us.
Let me tell you how it works. We (Americans) buy homes, cars and stuff with credit cards that we can't afford, using money lent to us from all over the world, primarily from the Chinese and Middle East and Asian folks that sell the most stuff to us. When we can't pay the bill, we default, and the world get left holding the empty bag. The US gvmt issues more debt to make sure the US economy recovers from the "shock", and again you hold the debt, relod, repeat, etc.
Why the heck would we change such a marvelous system?!!!??? It is truly wonderful. For us (Americans) anyway.
Zed said...
Baron,
Concur. My son drives one of those gas guzzlers.
Is he a DDG driver?
B95
Was. Now drives the family model.
airsafetyman said...
I do not think it should have been certified in its present form and I do not think people should be flying around their families in it.
So you are basically saying that the FAA, the FAA Special Certification Review Team, the EASA, 260 planes in the field, including several that flew substantial Part 135 passenger ops, with only a single non-fatal accident, are meaningless, and you judge the plane unsafe.
In the meantime, you/others here, assume that Ken and the other EA500 drivers would be safer in their previous airplanes, the likes of the C340, Dukes, MUs, Malibus, that are real safety nightmares.
Go figure.
Ken, nice pictures, and nice anecdote on the plane's utility. I hope Eclipse Jet gets going in some form after the 14th and you get your 400Ws and slight FIKI modifications done at a reasonable cost. But even if you had to cough up $100K-$200K it would still be a good deal.
Screwee, thanks for sharing your opinions on Ken. If you are suggesting that Ken has, on occasion, uncollared the breakers to have "emergency" use of the boots for inadvertent icing encounters, could you share why you think that practice would have an adverse safety impact or would be an actual FAR violation?
"So you are basically saying that the FAA, the FAA Special Certification Review Team, the EASA, 260 planes in the field, including several that flew substantial Part 135 passenger ops, with only a single non-fatal accident, are meaningless, and you judge the plane unsafe."
Yes.
"In the meantime, you/others here, assume that Ken and the other EA500 drivers would be safer in their previous airplanes, the likes of the C340, Dukes, MUs, Malibus, that are real safety nightmares."
Well, having flown Cessna 340s, Dukes, MU-2s and PA-46-500s, with a lot of time in the MU-2, yes again.
A*S Man--That says something. You think the EA-500 is unsafe, but you like the MU2 flying casket.
Lucky for you that you survived your hours in the MU2. According to the FAA, the MU2 suffers from:
** Accident rate twice as high as similar turboprops
** Fatal accident rate 2.5 times similar turboprops
** Fatal accidents in icing 4 times higher than similar planes
** Fatal accidents involving loss of control in emergencies a whopping 7 times higher than similar planes
** 29 ADs against the airframe
The EA-500 is an obviously safer choice than the MU2 flying casket :).
Ken
Baron,
I like your positive attitude regarding EAC... what do you imagine the successful outomce of the sale and re-start of EclipseJet will look like?
I would love to hear a business model that makes any sense for this plane.
I just think its a house of cards, and you can keep rebuilding a house of cards, but you know what - you always end up with a house of cards. Just my opinion.
Anyone?
That is too bad ASM. You are sounding like Fred, who tried to argue that the 2CV is a safe and reliable car.
I'm pretty sure that Ken and his family are much safer in the EA500 than on any MU2 flying.
Ken, he agrees those planes are unsafe... and appears to think the EA50 is, as well.
So?
To his point, all of them were certified, ladida by the FAA... and to your point they are unsafe. So, relying on the FAA cert/investigation (questionable at best) to prove the EA50 is safe, uh... doesn't really work.
Fly safe.
Baron--
Everyone is entitled to an opinion (though I noticed that the blog tolerates only name-calling against Eclipse supporters and never against its detractors; such is the inherent bias on a blog intended to criticize the plane and its manufacturer).
Of course, if Screwee wanted to have any impact, he'd be man enough to make his attack under his own name. If the best he can offer us is an unsubstantiated attack made from the safety of his chosen "screen name," then indeed his name--SCREWEE--is applicable both to him and his opinions.
FWIW--I don't have any problem with my friend's uncollaring of the icing ECBs. I suppose Screwee's idea is that a pilot who stumbles into icing would be better served by crashing than activating the icing equipment. Yep, that sure makes sense.
Imagine it now--you're just about to auger in with ice on the tailplane, and your very last conscious thought is, "I sure as heck wish I'd uncollared those circuit breakers!"
Makes sense...in SCREWEE's world!
Ken
ATM said... I just think its a house of cards, and you can keep rebuilding a house of cards, but you know what - you always end up with a house of cards. Just my opinion.
Well, that is true of Mooney and Piper and Diamond and Cirrus and pretty much all independent GA manufacturers. They are always on the brink, marginally profitable on good years, filing CH11 on bad years.
What is new?
In think Roel will do what Vern was doing, only with a clean slate after CH11. Raise money from investors, build more planes, try to find a strategic buyer, etc.
IMHO, over the next 3 years, Eclipse Jet will be upgrading 260 planes at $100K-$300K per plane based on SN, and will be building 50-150 planes per year for 2009-2011. Hopefully they will have money to invest in the EA400, but I'm not too sure.
It does not take a great deal of imagination to come up with the above scenario. Why do you guys think it is so complicated is beyond me.
Screwee, welcome to the blog.
Sorry to hear about the loss of your deposit. I hope that you can justify an intended business use of the aircraft, i.e. you "planned" to put it on charter, so that you can at least take a tax writeoff on the loss.
At this point, I think all Eclipse pilots should be in "damage control" mode. Sending another $4500 to the E5C "Ad Hoc Committee" so they will represent you is just throwing more good money after bad. If I owned an E500, and I thank God I didn't buy one, I would put it on the market tomorrow and sell it for whatever I could get within 30 days, take the tax loss, and move on.
No airplane is worth that amount of aggravation. Talk about removing the fun factor! Ken, he's another story. He is so far gone, even the bankruptcy of the only company that can support his plane is not an "issue" for him. As long HIS plane takes off and lands today, without incident, everything must be OK. OK, in the same way taking prescription pain killers make everything OK.
As far as de-collaring the CB's to operate the boots goes - it's really the only way to gain any utility from the aircraft. Sure, it's stupid, but not as stupid as buying an E500 in the first place, so it's all relative.
Baron, hope you're having fun in your little fantasy world. :)
It is hard to see how the EA-500 is any more that a day VFR airplane at this point. If anyone wants to put their family on an EA-500 on a night IFR flight, an airplane which has frequently had multiple and varied avionics and instrument failures right after take-off as well as a whole catalog of other deficiencies, that is their responsibility. The airplane, as is, is a good development aircraft from which a usable airplane might be developed. I don't know why that statement is so disturbing to so many people.
baron95
So you are basically saying that the FAA, the FAA Special Certification Review Team, the EASA, 260 planes in the field, including several that flew substantial Part 135 passenger ops, with only a single non-fatal accident, are meaningless, and you judge the plane unsafe.
nice mixture of facts and wishes!
So Ken's fpj is EASA certified?
Is there any a/c EASA certified in U.S. - apart from the demo a/c?
According to you the AVIO-fpj are save and there is no real need for better avionic. Weather radar, AVIO-NG, FIKI etc. are superfluous gimmicks!
But Ken is quite lucky with his FPJ and nevertheless he wants to get FIKI, AVIONG 1.5 - just because of the wedge's promises or because of needed improved safety?
Why didn't you write: Ken, you really need no FIKI, AVIONG 1.5
- do not spend any money for these gimmicks.
Seems that you are in doubt about save operations of current FPJs...
Julius
B95:
It is clear from your posts that you are a smart, savvy and experienced businessman (and pilot) but your statement:
"I think Roel will do what Vern was doing, only with a clean slate after CH11. Raise money from investors, build more planes, try to find a strategic buyer, etc. IMHO, over the next 3 years, Eclipse Jet will be upgrading 260 planes at $100K-$300K per plane based on SN, and will be building 50-150 planes per year for 2009-2011"
is just not plausible. This scenario may occur, true enough, but let's say at a probability of p=<50% (that may be generous).
The EAC order book (and any actual customers left) is still (past and present), as Churchill said about Russia, ..."a riddle clothed in a puzzle, wrapped in an enigma inside a mystery."
NZ--
The Ad Hoc Customer Committee has hundreds of members. It represents the best opportunity for owners, position holders and refund-seekers to steer the reorganization process toward the best possible outcome for customers through a combination of legal efforts and negotiation.
Those who want information on it, can write me at Eclipseowner@gmail.com.
A*S Man--I think perhaps you have been misinformed. Your comment about frequent failures of the Eclipse avionics system is just incorrect. There have been some failures reported--you can get them with any electronic display system--but I haven't had any at all in the 64,000 miles I've flown the plane.
Ken
"They are always on the brink, marginally profitable on good years, filing CH11 on bad years.
What is new?"
One basic "new" issue: these companies sometimes make money, EAC just burned $3B with no dream of profitability anwhere in sight.
The companies you refer to have products that at one time WERE profitable... they have business models that can work. They adjust, sometimes too slowly, but they have made money. EAC, NO WAY.
So, your scenario IS hard to imagine, and yes, you need to IMAGINE it, because it never worked, really.
My question stands - what practical outcome do you see for EAC, given that the plane cannot be built in the numbers required by EAC to make any money, and they cannot price them so that they compete with any real company's jets.
In order for anyone to consider this plane, it probably needs to be at least $1M-$1.5 less than the competition. For them to have a low price, they need high volume - this was the premise. Is there another, revolutionary concept they will pitch? Made in Russia? china?
The air taxi market provided huge (fantom) orders... where's the order stream going to come from?
Simle questions that beg an answer... in order for anyone to IMAGINE EAC coming back to life.
Yes, companies come and go, and go chapter 11, etc... but the ones you cited are poor examples because they are like saying my 4 year old will one day play in the NBA... when aked how do I know? I can reply, you'll see, he'll retire just like Michael Jordan, Dr. J, etc... Problem is, my son has never demonstrated the ability to play in the NBA... but, he loves basketball... he can shoot the ball at the hoop all day long - it just never goes in.
Maybe a bad example, but you get my drift.
DB, I'm puzzled. What part of the scenario I outlined you think is not plausible?
You don't think Eclipse Jet will be updating the planes at $100K-$300K a pop?
You don't think they'll be building at least 1+ plane per week?
These guys have put up $20M in DIP post filing and have a bid that requires them to put $28M on the 14th. Surely you must assume these guys are serious and have access to money, right? After all, how many people are coming up with tens of millions of venture money these days.
And yet, you assume they will do absolutely nothing with these tens of millions they are putting up.
If you forgive me saying, that is what is not plausible. For someone with access to all the info and all the history, to put up tens of millions with no idea of what they will do.
ATM, I think I already answered it by comparison. EclipseJet will linger around for a bit, on the brink, always needing more cash from the next "greater fool", it will make subsequent trips to BK court and/or be sold/bought a few times, just like every other independent GA company. Nothing new here.
Did Columbia ever turn a profit? No. When was the last time Mooney turned a profit? Or Piper? Or Cirrus for that matter - Cirrus has yet to return any profits to investors.
It is all par for the course. They'll limp along with a troubled existence. If only financially sound companies were allowed into GA, there would be no GA. Cessna, HB, TBM, all those guys are perennially losing money.
Ken, the question is, what can you realistically negotiate between now and Jan 14th with legal action, that you would not otherwise get?
I don't expect you to answer and give away any legal/negotiating advantage, but I think it is fair to assume, that Roel will ONLY do what he thinks would benefit Eclipse Jet the most (by not alienating owners and depositors further) and nothing more.
OK, BAron:
I am more imaginative... just like VR came up with a load of BS to sell investors and grabbed $3B... I figure, since the jig is up on his whole line of BS, there had better be another new line of BS for greater fools to buy into before parting with their cash.
OK, assume someone will write checks. Do you think the old line of high volume low cost will hold water?
If not, how will RP overcome the vaccum that is the eclipsejet business plan? Same for the customers - with no real air taxi company... or even a friendly-phantom one, who is going to make an excuse for orders?
See how this works?
Your companies had orders, commenurrate (or thereabouts) with their pricing policy and market size/share. They also had products that made money or came close.
All EAC has is $3B a smoking hole, and a pack of lies regarding their business case.
What is RP really going to do?
I think I know... but I am interested in opinions.
Saying the same old tune will continue to be music to the ears of the tone deaf investment community that lost $3B with EAC, doesn't really amke for a realistic plan, IMO.
Perhaps you think Dayjet will re-start too - ant farmers and all?
To gain perspective . . . When Ken talks about flying 64,000 miles in his little bird, think in terms of about 200 hours at an average of 320 knots . . . or 270 hours at an average of 267 knots.
Now think of buying a new car and driving it about 10,000 miles . . . about the same thing in terms of “break-in” and “time” . . . as in, “The Engine Needs Maintenance” light just came on, meaning “It’s time for the Second Oil Change” . . . and they’ll vacuum out the interior and run it through the car wash . . . while you wait”. All this gives the “benefit-of-the-doubt” to the little bird. More accurately, the average speed of a car is about 37 mph, and would relate to about 7,500 total miles. There are very few cars that would fail such a test. ‘Give it double that . . . still hardly a problem.
When Ken gives a report at 500 hours and beyond . . . then it’s time to pay attention. Until then . . . “Ho Hum!” . . . and even then, pay close attention to how the numbers are presented.
“Hasta luego!”
gadfly
(At 500 hours . . . it’s like “time to get rid of the Good Year tires and put on a decent set of Michelin’s” . . . with another winter coming on. But then, the “Lexus” is going to make it through a winter of ice and snow . . . while the little bird is parked somewhere in a warm hangar . . . or enjoying “Margarita’s”, somewhere south of Tijuana . . . as in “Tee-Wana”.)
folks,
we need to celebrate Ken's plane, and acknowledge its amazing in- service record for what it is -
A miracle.
That's the sad part.
- the 260 plane fleet is incomplete and has very very few hours on it, so we know very little about reliability, except for the known issues, SBs and reported problems.
We do know the business model is DOA and the plane for air taxi is DOA.
What will the next BOS-holder do with this monster? this is interesting, to me.
I want to go on record that I think RP has an exit strategy - this means short term thinking. Also, I think the nearest path to revenue involves renegging on all the freebies. Coupons? Yeah, maybe the 10% off kind.
So, I anticipate an "offer" a la Vern (read, stiff the customer) for you to pay for the upgrades/FIKI through the nose.
The entire enterprise except for support will be sold off to the Russians, and RP already knows what they are paying HIM for this. So this is his exit.
They may try to offload support in the US, and keep a royalty..
The the Russians are holding the whole BOS.
“jzg,yk”
If I only considered the “mechanics” of your logic, I would get out the chalk and begin to fill the blackboard with white dust. But as a businessman, and a firm believer in a higher viewpoint of assets, I cannot fall in line with your logic.
From cradle to grave, God only gave me “so much time” and energy . . . and a mind to use those assets in a wise manner. As a businessman, I found that “flying” was far more economical than driving . . . whether on business or vacation.
You drive, if you wish . . . and I’ll fly, when I find it a better use of my time and money.
There’s no “one-size-fits-all”, but my crude illustration was an attempt to put Ken’s picture into terms best understood by those that look in on this blogsite, without being overwhelmed with meaningless numbers, that have a tendency to cloud the truth.
By now, you know that I am a licensed “A&P”, have a private pilot’s ticket, and have spent a lifetime as a designer/inventor/machinist/business owner . . . and have a good “feel” for engines, etc., and mechanical/electronic/electromechanical/etc., contraptions. So, you get the point. And we’ll let it go at that.
gadfly
(And I’ll understand that your comment was “tongue-in-cheek”. Fair ‘nough!)
JZ, every craft has its mission, so please explain how a car can compare wit a Boeing for NY-Paris.
Thanks
PS. this illustrates the perverted thinking of the mini-jet as a ubiquitous transportation, BTW. Shoprter trips are for cars and props, longer trips are for real jets. The sweet spot for the EA50 is really, really, really small.
airtaximan
This, of course, does not take away from your argument, but there was a time when the “props” were quicker than the car . . . and far more economical than a “boat”. (The world had not yet heard of a Boeing 707, or a Douglas DC-8.) Once, I spent about 27 hours, between four “props” chewing through the atmosphere, between Travis, California, and Tokyo . . . by way of Territory of Hawaii and Wake Island to refuel. Now, speaking of “economy”, had I gone the same distance aboard my “boat” (USS Tiru SS416), we could have made the same trip at “economy cruise” at about 8 gallons per nautical mile . . . or done it in a hurry, at about 15 gpm . . . at about 16 knots . . . with tanks topped off at 120,000 gallons.
gadfly
(For some reason, “car travel” didn’t seem to be an option. And the trip was pleasant enough . . . I woke up while taxiing up to the gate in Tokyo . . . even though I had earlier planned to see post-war Tokyo from the air.)
ATM said ... What is RP really going to do?
I think I know... but I am interested in opinions.
Get Eclipse Jet going retrofitting 1 plane/week/service center and building one plane per week. Get the Russians to buy/invest-in Eclipse Jet to cover some of the money he had to put in $150M or so. Start ETIRC air-taxi. Perhaps develop the EA400 as the "real high-volume, low cost-plane story".
As I said, it does not take great imagination. As to why the Russians would invest, there can me a myriad of reasons from legitimizing "questionable" money, to cracking the biz jet market at with a loss-leader to personal desires to be involved in a cool field, who knows. Some people with a lot of money just need to have something new to tell their girlfriends, and ex-SW dudes seam to lead that list.
baron95,
I think , you like the fpj very much .... - keep cool man!
You know RP must simple make the basics of very bussiness.
But there is still this incident with s/n 260 and there are no public comments why this happened etc.
Perhaps an investor will also look for soft indicators - the qualification and skills of the team...
Etc...
Why Get Eclipse Jet going retrofitting 1 plane/week/service center and building one plane ...?????
Why As to why the Russians would invest, there can me a myriad of reasons from legitimizing "questionable" ...???
A dreamer might like this type of investors - a professional operator not at all!!!!
Julius
P.S.: Is there a need to own an affordable jet (with an EASA-like cert)???
B95:
You make a fair and reasonable argument for an EAC re-start. However, my view is that while a C11/7 may unload this venture of enornmous liabilities, a re-start under the conditions you describe, especially the production level, forces the retail fly-away price to such a level that it can't compete, not only within the VLJ class (Cessna, EMB, Honda) but even with the LJ class, given the huge inventory of used aircraft, and at diminished prices. Moreover, I would be concerned about after-market; that does not seem plausible; either does training, technical support, parts (from whom?). EAC may very well pull together enough resources to "stand back up" for a while, but I thnk the market forces on the demand side (very difficult) and the market forces on the supply side (enormous competition in an oversupplied market that has not consolidated yet, plus a challenging supplier community) puts this poor venture in a vice grip. But we'll see.
"Every craft does have its mission, and some of the criticism of the EA500 on this very blog is that it compares poorly to other craft designed for different missions."
Uh, I am pretty sure it was not this blog which contended the EA50 has a huge revolutionary market... so, we look at the market trying to find such an opportunity. That's how come we compare it to other planes/vehicles EAC Claims the EA50 will compete with.
Car, props, other jets... all fair game comparisons on this blog, becasue according to EAC the eA50 ws designed to compete against these.
The fact that the EA50 competes poorly for missions better suited for cars and pros is not an invention of this blog - its a reality check on theeEA50 claims as an air taxi, and value compared with other planes.
Sorry you don't feel we should be comparing it to other craft, because it compares poorly - but that's the point. It compares poorly squarly against crafts it was supposed to compete with.
Or the market for teh ea50 is really, really small.... another point, related to this one.
baron95 said...
Get Eclipse Jet going retrofitting 1 plane/week/service center
Maybe, but not much revenue in this even though it will be expensive for the owners.
and building one plane per week.
Where did the parts come from? The suppliers have just lost many $millions, so they will either be priced very high or reluctant to start up without prepayment. Hampsons (tails), Fuji (wings), IS&S (displays), and PWC (engines) have shut down their Eclipse work, that doesn't restart without some serious commitments from Eclipse that can't be made at 1/week rates.
Building an EA500 at 1/week is extremely expensive, huge overhead on Eclipse and the suppliers. That, coupled with the suppliers recovering their debts wiped away in BK, means the planes have to cost $3M to turn any profit.
Who is buying these planes? Depositors have no better claim to them than anyone else. Who would put down a deposit? Will it have to be COD on everyone? That requires capital, something Eclipse doesn't have.
I think you are smoking crack to suggest production resumes in ABQ. The only chance is a massive Russian based restart. Cheaper labor, cheaper materials, and volume to lower costs. But that is iffy, too. I expect to hear that the entire ABQ plant is being shipped to Russia, or that the ABQ plant is being liquidated (which amounts to the same thing ultimately).
just zis . . .
You are correct. I made the mistake of taking your comments seriously, and was attempting an answer. I'll try not to make the same mistake again.
gadfly
Flyger:
You've nailed it.
Chill out guys. I was answering the question of what RP was trying to do.
I made no comments as to its prospects of working. As I said before, the ENTIRE GA (exclude BizAv) industry is a perennial money looser and has been for 20+years.
So if RP is losing money in every plane, he is not that much different than par for the industry and seems to have much better access to capital than ANY of the established independent players that I know off (Cirrus, Diamond, Mooney, Piper, etc).
As to pricing the EA500, if Socata at less than 50/year and Cessna at 100/year can price the TBM850 and C510 at under $3M, then so can Eclipse with the EA500. The only question is how long can they endure a loss of a few hundred thousand per ship. And the answer to that is dependent on investor appetite. I think both Vern and Roel demonstrated time and time again that there is investor appetite for such losses despite all the past hear burn.
The deal with moving the plant to Russia, doesn't make much sense. I don't think costs will be that much lower (if any) in Russia, and the upfront investment (plant, equip and human capital) will be massive. Incidentally, Flyger, somehow you assume that by moving the plant to Russia all the supplier problems you mentioned disappear. Some consistency in analysis, please.
Any way, it is all speculation any way, for sheer entertainment value. We shall see what the next chapter brings.
All this talk about "stumbling into icing" and "resetting breakers on an uncertified system is better than nothing at all..." deserves some commentary.
Might I suggest that (IMO) no one "stumbles" into icing? Our operation has never run into icing that wasn't forecast and/or predictable by looking at a weather map.
I might also suggest that, IMO, by utilizing an uncertified system on an airplane, you have added "test pilot" to your list of skills? Not to mention that by making this decision, you have essentially said you know more about it than the guys that built the airplane, and the certification authority?
Maybe I'm just a dinosaur, but when Gulfstream, Cessna, Falcon, etc. release an Alert Service Bulletin, or the Feds release an AD, I comply with the requirements of said AD or Service Bulletin; I don't look for ways to circumvent the intent of the document. 99.5% of the time, these guy know what they are talking about, and I'm not going to assert that I know more than they do.
There is a way you can fly an airplane, while assuming all authority and liability for operating the airplane safely, no matter what condition it is in. It's called a "Special Flight Permit" (aka a "Ferry Permit").
In my opinion, the Eclipse boosters are going to believe what they believe, and do what they are going to do. They have too much invested (both money, and emotional involvement), and will sink or swim with whatever the program does.
The only "investment" I have in the program is being proved mostly correct about my misgivings concerning the program that I had 5-6 years ago. At this point, there is enough information out there where the market can make an educated decision.
I'm more interested at this point in discussing the implications for the US aerospace industry, in having privately owned, for profit companies having to compete in a world market against government subsidized companies (either directly, like Embraer, or indirectly via bankruptcy, like Eclipse).
Look for the Boeing "we don't build anything, we just integrate the subassemblies" model to take hold. That worked for a while, but howz it working on the 787??
A moment of silence for those about to take it in the shorts.
It IS a Tuesday after all.
The bid deadline has now passed.
Any insights?
Ken ... did the owners group bid?
Flyger, Baron, Joe, et al -
From my post back on 28 December ... and assuming that they can get a 10% net on every full price delivery ...
"Recall that to achieve an annual profit, EclipseJet must deliver 15-20 aircraft per MONTH at $2.5M, or 20-25 per month at $2.0M
There are roughly 22 production days per month ..."
We are talking one-per-day for corporate profitability, not one-per-week.
Joe P said ... having privately owned, for profit companies having to compete in a world market against government subsidized companies (either directly, like Embraer, or indirectly via bankruptcy, like Eclipse).
You can't be serious with this comment? Have you forgotten that the ENTIRE air transport industry in the US, including the airlines and airframe builders, were subsidized with ridiculous (to the tax payers) air mail contracts? Airlines/Airframer/EngineMaker conglomerates like Boeing/United/Pratt propped by the airmail contracts and side military contracts - that is how it all started.
Which is the chicken and which is the egg the 707 or the KC135?
And how is CH11 a subsidy by the government? No govmt money other than court costs is involved in CH11 proceedings. A company has failed and can't pay creditors, vendors, customers, employee pension plans. Choice A: shut it down completely, and everybody loses. Choice B: erased some of the debt, most of the equity, dump some of the pension liability into funds funded by insurance contribution, let the company continue to operate with everyone having a chance to recover a bit of money over time.
What you should be worried about is how companies like GM and Boeing with outrageous Union employee/legacy costs will compete against hungry entrepreneurial companies like Hyundai and Embraer.
It has little to do with subsidies and a lot to with market competitive cost basis.
Do you know that GM kicks-ass in Brazil and does well in Europe? The difference? It is not a German or Brazilian subsidy. It is NO UAW.
Ask yourself why it is that locally designed GM cars win car of the year in Europe and Brazil and go toe to toe with Mercedes, BMW, VW, Fiat in Europe and Brazil, have top mind share, make money, yet in their home turf they get their ass kicked in every segment, except some US-only idiosyncratic body-on frame segment.
What is the answer Joe P. ?
New Post up.
There is a huge amount of detail in the BK Court filings, so I'm sure I've missed something.
Shane
Zed, I'm sorry, but you (and many) on this Blog are incurring in the Vern fallacy.
You are working things backwards. "We need volume X, to achieve price Y", without bothering to see if there is demand for volume X and/or if volume X is achievable.
Start from the right end.
A - There is no sustainable demand for more than about 50 EA500s/year, perhaps reaching 100/year if the economy starts to recover and oil prices stay low. At ANY REASONABLE PRICE.
B - Eclipse, with all the FSW, the thousands of employees, the hundreds of millions of dollars of investment has NEVER, EVER demonstrated the ability to produce
more than a sustainable 100 or so planes/year.
So.....
The question is....
What can be done with a volume of 50-100 planes/year. That is ALL that you can produce and ALL that the market can absorb on a sustainable basis.
Why waste anytime, like Dave loved to do, talking about 1 a day, 2 a day, high volume, multiple plants, blah, blah, blah. It is 50-100 a year and that is it.
I think the pecking order in late 2009-2010, with each vendor producing 50-100 year is roughly: Phenom 100 @ $3M, C510 @ $2.75M, EA500 @ $2.5M, D-Jet @ $1.75M.
All of those planes will be marginally profitable or slightly unprofitable at those levels with the profit margin coming from service and support.
Post a Comment