Friday, February 6, 2009

Eclipse is dead, long live Eclipski


According to the Governor of Ulyanovsk, Vladimir Putin has interceded on behalf of Eclipse Aviation. The Russian government has increased capitalization of the Vnesheconcom Bank by one hundred billion rubles, almost three billion dollars. Some of this is earmarked for ETIRC.

Asked for comment, a longtime Eclipse supporter said, “I’m just hoping they spend all of it on Eclipse… it would be a wise investment. Heck, for three billion dollars the Russians could annex the whole state of New Mexico. It would offset the bad deal they got on Alaska. I’m going to introduce the Governor of Ulyanovsk to Bill Richardson.”

Asked about the plane being built in Russia he added, “You know the Russians build great farm implements and heavy equipment. Right now the Eclipse 500 could use the robustness of a reliable farm tractor. I’m starting to study the Cyrillic alphabet so I can read the instrument panel. I can’t wait to take Putin for a ride in my jet.”

So we turn to another chapter in the Eclipse saga. Three billion down and three billion to go.

The company as we knew it will recede in the rearview mirror and we have unfinished business. Having had minor supporting roles in the investigations of PanAm 103 and TWA 800, I know survivors of aviation disasters need ‘closure’. Perhaps the blog can assist with this.

I propose an Eclipse Requiem Mass be held at Our Lady of Guadalupe Catholic Church in Albuquerque, New Mexico. We need a mournful but uplifting piece of music, composed for the occasion. I suggest something along the lines of
Adagio for Strings by Samuel Barber, or perhaps Requiem by Giuseppe Verdi. With the broad array of talents represented here, there must be a composer in the house.

Several have written here on integrity and ethics but none more eloquently than Gadfly. He is a professed man of faith and is best suited among us to deliver the eulogy. We can expect a thought provoking speech on the mortal temptations of the flesh, tempered with hope for better days. He may wish to call on the members of congregation for their recollections of the departed so start mentally rehearsing your piece. The program will be printed in English, Dutch and Russian with tasteful Eclipse colors.

We need to consider the Eclipse Survivors Memorial. This should be located near the rim of the Meteor Crater in Winslow, Arizona. The soaring aluminum sculpture will of course be fashioned of friction stir welded aluminum. On the front will be the engraved names of all 260 initial owners. An epitaph at the bottom will read, “A small smoking crater beside a giant formerly-smoking crater.”

Smaller text on the back of the monument will list 10% depositors, 60% depositors, investors, employees, politicians, parts suppliers, motel operators and
taqueria owners. Affixed to the top of the memorial will be a life-size stature of Vern Raburn, reaching plaintively for the sky. He will be flanked by bronze replicas of the Collier Trophy and Cabot Award. The DayJet monument, complete with a working ant farm, will be located discretely nearby. We need a design competition for these memorials, to be judged by a team selected by Shane.

The dedication ceremony will draw cognoscenti from around the world. Sam Williams will be in back wearing dark glasses and a baseball cap. Bill Richardson will break into inconsolable tears. The service will end by spectators throwing rose petals, Eclipse apparel and memorabilia into the Meteor Crater (with the approval of the National Park Service, of course.) The crowd will retire for refreshments to a large Eclipse tent, preserved and replicating the vast presence and former glory at Oshkosh in year 2000.

Finally the Eclipse Fly-in at Sunriver, Oregon in September needs to be carefully orchestrated. It should be modeled after last year’s Legends aviation meet - billed as the last great roundup of P-51 Mustangs and the men who flew them during World War Two. It should culminate in an Eclipse flyby in the missing man formation. There won’t be a dry eye in the crowd.

We need volunteers. Can we count on the blog to assist Eclipse survivors in their one great hour of need?

As always, our very own Black Tulip blends truth (yes, Roel IS getting VEB support) with fiction in a delightful way. The remaining details have to be worked out, and I think it's very significant that the signing event is due to take place in Moscow on TUESDAY next week. Who says the Russians don't read the blog, or have a sense of humor?

Thanks again BT, and long may you continue to provide a 'sideways view' of our favorite American, sorry, Russian "Very Costly (sorry again, Delayed) Jet".

The tulip mania peaked in the Netherlands during the 1630s. The black tulip was the most sought after, until found to be biologically impossible.

456 comments:

1 – 200 of 456   Newer›   Newest»
Shane Price said...

So, it's official. VEB have permission to inject funds into various projects in Russia and the new ETIRC factory qualifies.

We should be hearing something official from EAI in the next week, at which point I hope to be back to 'my' group of depositors.

Good news also for the staff, who were paid today. There could be life in this thing yet, even if it's only in Russia....

Shane

Ken Meyer said...

So once again, having held the wake before the death, Shane sheepishly has to wipe the egg off his face :)

And meanwhile, the Eclipse 500 soldiers on, a very good plane. Case in point--yesterday's flight from the Bay Area over the Sierras. The flight entailed getting past the weather system that doused San Francisco a few hours earlier, now hovering over the Sierras. As a piston pilot, I'd have looked at the weather picture and worried:

WxWorx shot of weather system

But it was no issue. Though the Eclpse burns about what my 340 did on any given trip, it flies a whole lot faster and higher. Instead of ice, clouds, and turbulence to contend with, we flew over the top of the whole thing without a worry:

Flying "through weather" in the Sierras

Anyway, it's nice to see you're still at it, Shane. Right, wrong--it doesn't matter; what counts is you're still at it. I gotta run, but I'll check back sometime.

Ken

fred said...

Kenny ...

sorry to remind you this ...

do you know WHEN a movie is finished ?

"THE END"

appears on the screen !

then peoples can throw eggs or wipe their face ...

fred said...

as a technical point of view :


the re-capitalization of the Russian banks by GOVT. Funds is NOT intended for any projects ...
Most are put on Hold at the time being ...

but simply to assure the cash available to commercial Banks following the DownGrade of Russia by "Fitch Rating"

in clear , in case some wonder what it means :

the notation of Russia as a "safe place of investments" has been downgraded (mainly due to the fall of Oil price ) so commercial banks in Russia are experiencing difficulties to find cash on international money market ...

so , no (even if it is going to make our Kenny sleepless ...) the money isn't meant for the cash-incinerator ... NOT even the one in Ulyanovsk ...!!!

as they say : Wait and See !

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

Shane, BT,
I wasn't quite sure where parody and reality start and end. (Much like reading an Eclipse press release!!)

But, yup, Ruskies plunk down $2.78B in their bank. (Odd- about what we figure EAC burned, but I think the VB has some other plans besides Eclipse...)

Russian Bank gets $$$

bill e. goat said...

Ken,
Congrats on continued safe operation.
Hope you'll update us on EAI's plans for the avionics upgrade.
Cheers

fred said...

YES , Zed ...

even if this reveal itself later as being true ...
(which is a bit like saying Obama got elected , so USA is saved ! a big shortcut that i wouldn't risk !)

it only means that US employees are going to be sacked soon ...!

i doubt it is a good news !!

fred said...

Billy ...

don't get confused between VEB : bank supposed to do the loan for E-trick plant building in Ulyanovsk ...

and VTB : which is a completely different bank and received the said funds to BE SPREAD as loan to private and regional banks on the Russian territory ...

so nothing really about direct finances for any Projects ... sorry !

airtaximan said...

forgive me... but where are we seeing this injection?

Anyhow, I love this saga... if in fact Roel got the Russian money earmarked for EAC while he was chairman, and he's using it to buy EAC... and stiff everyone... and this is the saving grace for the company... this is a great story, folks.

I just hope we continue to get PR and company statements in English, and in a timely manner, so we can continue to follow.

fred said...

airtaxi ...

yes ... ;-)

let's the story unfold ...

who has already wrote scenarios for TV-shows ??? ;-))

fred said...

and do not worry , if not in english anymore , i will translate ...

free for all critics , victims should expect to be squeezed further of an other 1/4 million $ ;-))

(i am such a bastard ! ;-) )

Niner Zulu said...

Sorry, but Putin hasn't got any more power to change the economy than our own treasury. Look at what happened to Russia under his watch.

I wouldn't be holding my breath waiting for a factory to be built in Russia. Not in the pre-recession market, and certainly not in this one.

The whole idea is beyond silly - which means the diehards will be jumping all over it.

Madoff, I have some more customers for you.

fred said...

9Z

yes , just no one can do anything at this point ...!

the bubble has to burst till its end !

and Russians (let apart Mr Putin) do not have "Helicopter-Ben" ...

on a second thought , it may be better for them ... ;-)

some experts says that using the stabilization fund ( the 3B$ are coming from this cash reserve...) is going to increase the inflation in Russia ... up to 30%per year ...!

so it seems that Russkys have decided that hyper-inflation is finally better than deflation ...

but just imagine the size of the interests on Fpf-loan ...

interests supposed to be taken out of profits ...

only one major flake : where are the profits to date ? ;-)

airsafetyman said...

"According to the Governor of Ulyanovsk, Vladimir Putin has interceded on behalf of Eclipse Aviation. The Russian government has increased capitalization of the Vnesheconcom Bank by one hundred billion rubles, almost three billion dollars. Some of this is earmarked for ETIRC."

Sure it is. Wasn't this the bank that was going to spend 2 billion dollars on a ski resort in the Urals also?

fred said...

well ... airsafety ... yes !

in fact the name of the place is "Krasnya polyana" ...
(down the mountain , there is the Black-Sea and Sochi , the Russian Riviera where all Russians having too much money like to spend like frenzied ...)

it is where the 2014 Olympic Winter Games are going to take place ...

but the amount to be spent is much higher ... too high not to be indecent here , where our Poor-Bird is facing cash-shortages ....!

fred said...

BTW ...

i want to applause our BT for his brilliant piece of work ... again !

ok , i would have put a link to Mozart's Requiem ... specially the "Confutatis" ... (not to be mistakenly understood for "Confused" )
but no one and nothing is perfect in this world ... ;-)

Shane Price said...

Ken,

It's satire not a statement of fact.

What is clear, so far, is that any promised funds are constrained. One of these conditions is bound to be that any funds drawn down by ETIRC can only be used to build the Russian factory.

Not to resolve the outstanding claims of depositors like you and your wife.

That money has to come from somewhere else Ken. Any idea as to who's not living up to their promises, on that one?

I do....

Shane

Shane Price said...

I'm not sure everyone has gotten the message yet.

This 'promised' Russian money will NOT keep the factory gates open in ABQ.

It will NOT pay suppliers.

It will NOT compensate depositors.

It will NOT release aircraft currently unfinished or held hostage.

Funds to meet these obligations, made under the Chapter 11 process, are still not 'visible'.

I remain deeply skeptical that Roel can pull this off. Other sources of funding are mentioned to me, but all seem (at best) vague.

At worst they are straight from central casting, Disneyland...

Shane

airsafetyman said...

"it is where the 2014 Olympic Winter Games are going to take place ..."

Well, with a few modifications with a can opener maybe they can convert an Eclipse fuselage to a four man bob-sled. Gotta think positively!

TBMs_R_Us said...

For those (like Ken) who own a non-FIKI FPJ, I guess the new FAA interpretation of the meaning of Flight Into Known Ice makes things a lot easier for them. Now the standard is what a "reasonable and prudent" pilot would do in those circumstances. If the population of pilots against which one judges "reasonable and prudent" includes only FPJ owners, it sets the bar pretty low. Seeing as how Ken likes to brag about how his aircraft can climb over the weather, he just better hope he doesn't have to descend down through it. Of course, since Ken seems to be both reasonable (to some) and prudent (by some definition), descending through a layer of clouds in his FPJ would be just dandy, and forge the way for the next guy.

Zed said...
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Niner Zulu said...

I've seen a lot of successful businessmen go over to Russia with pie-in-the-sky plans, only to come back a lot less rich and a lot wiser.

Russia is not a good place to start up a business. Not before, and certainly not now. The whole idea is lunacy. Anyone who would get excited over the prospect does not understand business, logistics, Russia, or the current state of our global economy.

You don't see Cessna, Hawker Beechcraft, Piper or anyone else building plants in Russia. Might there be a reason?

Besides, building Eclipse jets has never been profitable and likely never will be unless the line is taken over by a larger company and added to their product mix.

It should be clear to anyone who has watched this saga unfold that the ONLY reason any E500's were delivered, at any price, is because for every plane delivered there were 5 poor suckers who ponied up the difference in non-refundable deposits to pay the difference between what Eclipse charged for the plane and what it cost to build it. It was a ponzi scheme, pure and simple.

Even in a ponzi scheme, someone has to profit. Otherwise the scheme fails. There were a few investors who did make money investing with Maddoff, for example. So does that make them good investors? Does it mean the investment was sound? No. In fact, hell no. It just means they were lucky.

In "musical chairs" there are, after all, a few chairs to sit in.

So our friend Ken is one of the lucky ones - his investment paid off, sort of, but only because there were a lot of other investors who came after him and kept the ponzi scheme going. Ken profited at the expense of all the other position holders who received nothing for their money, and for that he loves to congratulate himself at his brilliance and rub it in Shane's face every time someone somewhere says something to keep the Eclipse illusion alive.

The reality is, the only difference between Ken and one of the chumps who lost their deposit whas a few serial numbers. Nothing Ken had control over. Simple dumb luck.

Another reality is that the resale value of an Eclipse is somewhere South of $1 million. So a lot of owners have taken a $400,000 bath so they could save - what - maybe $20,000 per year on fuel over a used Citation? Does that make any economic sense? It will take them 20 years to make up the difference in fuel savings.

Just keeping it real, as Mirage used to say.

fred said...

am i only one to have classical culture , here ? ;-)

ok , no one picked it up , i mentioned the Mozart's confutatis ...
only because the next movement is called :

Lacrimosa (tears )

sorry , kenny ...

fred said...

9Z

you're right ...

Russia is absolutely NO place to succeed with a half-backed product ...

if you are producing only this "thing" and not russian , yourself ...

your chances are next to non-existent ... !

421Jockey said...

Not Bad! 7 Eclipses in the air right now in spite of everything.

It really is a great aircraft.

Ex-421Jock

Jackrabbit said...

The downshifting economic climate has taken the "Russian gambit" from the sublime to the ridiculous. This is even more clear now that Shane has clarified that the Russian commitment extends only to factories/production within Russia so it provides no short-term help. (Though I'm sure that its nice to be able to tell potential investors that *someone (anyone!)* has committed XXX millions to the business).

Some on this blog have speculated that depositors, especially "true believers", might pony up more money. That seems unlikely at best if there is no clear path to delivery. Even the most ardent "true believer" is unlikely to through good money after bad by "buying into" the risks inherent in a years-long wait for a Russian factory to become operational and to produce a quality product.

Those "true believers"/"current order book" are especially important, given that Eclipse's history, the new price verses competing products, and the current worldwide economy make it difficult to otherwise make a good case that Eclipse can succeed.

So it seems that Eclipse MUST find additional sources of financing that makes production viable ASAP (and in NM) or they will loose whatever opportunity that they have/had to sell to those "true believers." Or, put another way, the longer they take to close the purchase and re-start production, the more uncertain is their order book, and the more uncertain their order book, the more unlikely that they find financing.

It is troubling at best that they did not close last Friday. Four months after filing Ch11, they don't have the financing? Someone wrote that they asked for another week. So did they close today? How long do they have to close? How much money do they have on hand --> how long can they extend their "free option" on the company? When does this get forced into Ch7? (I imagine that the bankruptcy judge will not force Ch7 - a creditor has to make a demand.)

FYI: I only started reading the blog in January, but I am hooked on the Eclipse story.

====

Ponzi scheme? I'm not sure that Eclipse qualifies. Ponzi schemes are generally cash-in/cash-out without any good faith attempt to provide a product or service. It seems to me that Eclipse simply had a flawed pricing model that was based on high volume production.

Pre-selling production is a standard business practice. If they knew at the time they took deposits that there was no chance that they could deliver then that might be fraud, but overall (given that they produced and delivered a fair number of planes, and the complexity of doing so) it seems very unlikely that what they did could be termed a Ponzi scheme.

Zed said...
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TBMs_R_Us said...

Those "true believers"/"current order book" are especially important, given that Eclipse's history, the new price verses competing products, and the current worldwide economy make it difficult to otherwise make a good case that Eclipse can succeed.

Jackrabbit,

Welcome to the blog!

The order book would be important, except that at this point it's total make believe. Those guys signed up for a $1.5M jet, not a $2.5M+ jet. And they signed up before the economic melt down and the corresponding collapse of used aircraft prices.

Eclipse, both the previous incarnation and the current non-incarnation make for pretty good entertainment, bordering on comedic. Unless, of course, you own one or put money down towards one, in which case it's more like a tragicomedy. In either case, we all stay tuned for the next act.

airtaximan said...

jackrabbit is very smart

Dave said...

RP clearly knew that the Russian money neded to be reauthorized, but in reading the record it is apparent that he not only failed to disclose that, but affirmatively stated that there were no issues with the financing.

Yes, I've been wondering about that as well as what that means for anyone being employed by Eclipse in the US or if this means upon close of the sale everyone will get fired (as was already stated in the docs), just most everyone else re-hired will be in Russia.

ea500s said...

Ken Meyer, you might want to use caution posting pictures that cleary show you operating your eclipse in violation of FAR's. Someone ( not me ) might report you to the FEDS.

gadfly said...

ea500s gave excellent admonition to our fine feathered friend, who enjoys certain pleasures in his little aeroplane . . . flying high above the Sierra Nevada’s . . . above “known icing”, etc..

It reminds me of that oft repeated story of the little bird, flying across the prairie, during a winter blizzard.

As conditions would dictate, the little bird could no longer continue in flight . . . and came to rest on the prairie . . . life itself rapidly waning . . . the wind, snow, and bitter cold had done its damage . . . and the tiny feathered creature was about to end its brief existence.

Along came one of those immense creatures, known as the American bison . . . and dumped a large warm load on the tiny shivering form.

Within a few moments, our little critter had “warmed”, and recovered life, itself. And not only that, it was as warm as if it had been a summer day . . . life was good . . . and our little feathered friend began to sing above the gale of the storm.

Within moments, a “dog of the plains”, known as a coyote, heard the sweet melody . . . found the source, and ended the song with a single bite.

So here we have a story, with deep meaning, and great lessons:

When in dire straights . . . and someone “dumps on you”, they are not necessarily your enemy.

And if someone should remove you from the condition in which you find yourself, they are not necessarily your friend.

And, above all, if you should find yourself in such a situation, “Please don’t sing about it!”

gadfly

(Someone, please explain these things to Ken.)

airtaximan said...

from previous postings Ken doesn't give a rats ass about the regs.

He went as far as to suggest decoupling e-circuit brakers for inop equipment to circumvent the regs.

Vern was right about this one specific target market - calling the "die-hards".

need we say more?

Thankfully, there are not many, many, many people with this attitude toward and tollerance for RISK as U-kno-who...

Best I can tell, the universe is around a few hundred

AvidPilot said...

I think if you ran a check of the weather for the E500's in the air on any given day, you'd find a number of them flying in weather that is reported as having "known icing".

Another thing - I'd be willing to bet that many of these same pilots are using their non-certified Garmin 496 handheld GPS as their primary navigation device. I wonder how many are filing direct, rather than VOR to VOR?

Even so, while it may be illegal it doesn't necessarily put them at risk of an accident as long as they don't stay in the ice.

It's the Avio NG that would give me the willies. Flying along in solid IFR, turbulent, and all of a sudden you get CAS messages for multiple system failures. Or worse, the screens go dark. Just the thought of that gives me the heebie jeebies.

I can't imagine owning one of those turkey's, and I don't care what they cost.

Ken Meyer said...
This comment has been removed by the author.
AvidPilot said...
This comment has been removed by the author.
fred said...

avid :

using their non-certified Garmin 496 handheld GPS

is that what is called "disruptive techs ? ;-)

fred said...

jack-lapin .... sorry rabbit ...!

you're right ...

EAC was probably NOT a ponzi in first go !

i suspect that when they found out that it was unrealistic expectations , they decided to go bigger and bigger ... instead of handing the cash back with apologies ...!

the sad part of the story :

the ones who are in for nearly a million bucks ...

do they have any choice ?

or to put it in an another way , would they prefer to stop the cash hemorrhagic , now and loose all spent before ...

or

would they like to believe that this last event is a "good" event (not being asked to fill a pit without end with "funny pictures of B.Franklin" all the time ...)

tough choice ...

i wouldn't like to have to make it ...

fred said...

in any case :

fasten your seat-belt ...
the fun is only starting !! ;-)

fred said...

Mr GadFly ...

thanks for spreading your wisdom onto us , poor sinner ...!

i knew this story , but mine was in the more scatological way ...

thanks again , may your tax NEVER serve such foolishness as the Fpj ...

ExperiencedAviationProfessional said...

Someone asked about employee numbers, so I did another drive by...

Headquarters - 81 cars
Stir Fry/Machine Shop - 34
Main Assembly/Painting - 13
Service Center - 10
Flight Sim - 0

Somebody please tell me where the other 750 employees work. I’m really curious. Is someone collecting a few (hundred) extra paychecks for phantom employees? Or is Eclipski counting people who have left, but are considered, by some obscure technicality, still on the payroll. Their employee numbers seem as bogus as their order book numbers.


And, the mushrooms are back. Well, six of them anyway. Parked outside the Service Center, which is again open for business after a long hiatus. After the bankruptcy filing and the theft of aircraft 260, everyone took their FPJ and split. I’ll bet the six are Eclipski-owned. What owner would be foolish enough to let a cash-strapped, parts-desperate, bunch of con artists mess with their personal aircraft. I’d bet a steak dinner, if Eclipski had a worn/defective part, and the only possible source for a newer one was a customers airplane, the parts would get swapped.


A while ago it was mentioned that Mooney did not have a Production Certificate, and had the FAA sign off on each aircraft individually. This may be financially beneficial to the company, but it sure didn’t seem to have any beneficial effect on build quality. When I took the extended factory tour, I was appalled at the poor quality of workmanship. Just horrible. BUT, they did put a heavy primer coat over all those “oops” , then put a really nice, but equally heavy finish coat of paint on, to hide the scars. The Production Manager told me, the FAA only required them to inspect every 15th part/install on the assembly line, because the aircraft design was so well established and had remained mostly unchanged for decades. I think this allowed a lot of substandard work to slip by.

fred said...

experiencedAP

thanks for counting ...

the question remain , considering 1 person per car , what 138 pax can do since a while to justify a pay-check ?
nothing wrong with those getting it , just weird that a bankrupt firm cash starved is in the need of so many for producing nothing ...

ColdWetMackarelofReality said...

Only Cardinal Ken of the Church of Flyantology would drop a drive-by post after Roel and his cohorts failed to pony up the promised purchase money, and then post pix bragging about flying VFR on top in his million dollar preemie jet.

I can do that too, in a C-172.

As for comments about the ADM skills, or lack thereof, of the parishoners of the Church of Flyantology - SPOT ON. The regs' exist to protect the rest of us, as well as the poor folks on terra firma from clowns like this.

Face it Ken, Eclipse is dead, as predicted, and the future for EclipseNG is cloudy - too bad for you and the other victims that the business is no more equipped for the coming hard IMC than the plane is.

Shadow said...

I'm curious to know how many of the FPJ owners/depositors are also on the list of those ripped off my Madoff. Seems to me that the FPJ crowd would've been easy pickings for Madoff's scheme.

Jackrabbit said...

Maybe the other employees are on leave (probably unpaid, half pay or some other arrangement). This is not unusual, automobile manufacturers do it, and the State of California just asked 200,000 of their employees to not show up for sometime (I forgot how long, maybe for a day or one day a week) while they try to close their massive budget deficit.

So I'm not sure that you can read much into the numbers of employees and the numbers that show up. The uncertainty of bankruptcy means that they can't sell planes and it makes no sense to manufacture them. If I recall correctly, once the sale closes all previous orders are canceled and depositors get a coupon. So its not like they have to maintain production during the bankruptcy period to fill orders.

Of course we also know that upon closing the employees are essentially fired and coupon holders (former depositors) have only a short time to put in an order. If there is only Russian money in the pot, then I suppose once this order period has expired (30 days?) then closing of the NM plant will be announced and those orders will be filled from the new Russian plant (years later).

Clearly, any coupon holder should that is considering making an order should understand as much as possible the future direction of the company and be as clear as possible on when the plane would be delivered and where it will be manufactured.

ea500s said...

Ken Meyer and others are missing my point about posting pictures of violation of the regs. I was not referring to icing. The whole eclipse group had to be educated about flying in known icing conditions, and that includes eclipse itself. The regs are very specific about this. According to 91.527 aircraft not certified for flight into icing are prohibited from flying into known or forecast icing of moderate or greater intensity. Light to trace is not considered icing when it comes to these regs, so many times it is quite legal to operate the eclipse when icing is in the forecast.

What I was warning Ken about was when several months back he posted pictures of his aircraft True Air Speed at FL 370. In the picture can be seen his CAS status message that windshield heat is off. The only way one can get that message is to uncollar the windshield heat. The aircraft manual in the limitations sections specifically calls for those breakers to be collared if the known icing SB has not been complied with, which would have been the case for his aircraft at the time the picture was taken. Therefore Ken was operating his eclipse outside of the limitations set on the aircraft at the time of the flight, a clear violation of the FAR's

flyboymark said...

Ken,
In all sincerity, AND I REALLY MEAN IT, what is your view on your rectum being greased for a 1/4 mill. overall? I'm not trying to take a cheap shot. Seriously, how has this struck/affected you?

fred said...

Flyboy ...

Do not forget that our kenny is one of the most lucky ...

even if he has lost 1/4M$ with extremely little chance to see any back ...

he got something for what he paid , some have paid for worthless papers and empty-only promises ...!

so Kenny is NOT the one suffering the greater loss !

Niner Zulu said...

Ken must have deleted his post a few back where he called several people "clueless". It was there last night.

Ken, my friend, you're a pot calling the kettle black. You had the opportunity to sell your aircraft when they were fetching $1.5 million plus. You could have flipped your 2nd position at the same time. Many here, including myself, practically begged you to.

But no. Since you took delivery of your jet its value has gone down at least $1,000 per day. That's not even counting the total loss of of your deposit on a 2nd aircraft.

Here's the market now: S/N: 29, N55BX, 275 TT, 275 SNEW listed at $999,000 on Controller since 1/30/09. Bet it goes for $900,000 or less.

Do the math, Ken, and then tell us how the Eclipse saves you money on fuel.

BTW, I'm not above eating humble pie myself. I wish I would have dumped a lot more real estate when I had the chance. Too bad for me. But be careful throwing around the word "clueless" because no one is immune from being clueless once in awhile.

flyboymark said...

Fred,
I guess what I'm driving at is how he views this financial.....escapade?
Example:
My brother threw out a $6,000.00 plasma tv because it was outdated, literaly in the garbage. When I found out about it an asked hem why he did'nt give it to me and he said it was garbage!(even though it still worked). He makes WELL into the 6 figures and it means nothing to him.
For me it seemed a total waste, but then again my source of income is about 1/10th of his.
What I'm trying to get out of Ken is if this amount is "toilet paper" to him or is it an amount that has put a "hurt" on him.

bill e. goat said...

Okay.
Cessna Mustangs were going for $3-3.2M 12-18 months ago, right?
Now, they are $2.5-2.7M, and I don't see anyone saying those guys were fools, even though they "lost" $0.5-0.7M because of market conditions. So if Ken paid around $1.5M, and his airplane is worth around, $1.0-1.5M, I don't see the difference.

Regarding the $250K he lost on deposits, I don't see him crying here about it, so why should anybody else. And by the way, he absorbed that loss himself. (With the current rational, otherwise, he'd be getting blamed for sticking someone else for it.

(Sure he intended to sell it to somebody else, and make a profit, and maybe the other's investment would go up or down. But that's the same thing everyone does when they trade in stocks, real estate, and other airplanes, including Eclipses and Mustangs, to 747's and 380's).

airtaximan said...

"clueless", from the guy who needs to tinker with the electrical system of his plane, to be able to fly where he wants, illegally -and BRAG about it online with photos.

I would call that "priceless".

BEG is correct on the economics, though - Ken made a bet, and he got what he deserved. We all (including him) agree on this.

He got a huge pack of up front financial risk, safety risk every time he gets in his plane, reliability risk and ongoing and increasing support risk, coupled with financial risk... which according to him, he is delighted with becasue he knows how to decouple e-circuit breakers and make inop systems operable, and fly illegally where he wants to go.

Everyone's happy.

Dave said...

BTW, I'm not above eating humble pie myself. I wish I would have dumped a lot more real estate when I had the chance. Too bad for me.

Unless you've got an immediate need for cash, I wouldn't "dump" real estate as it will be going back up. It will probably be another ten years or so (that's about what the trend seems to be with) before the market is at its peak again, but the prices will improve. Now is a great buying opportunity, if you have the means.

Ken Meyer said...

ea500s wrote, "What I was warning Ken about was when several months back he posted pictures of his aircraft True Air Speed at FL 370. In the picture can be seen his CAS status message that windshield heat is off. The only way one can get that message is to uncollar the windshield heat. The aircraft manual in the limitations sections specifically calls for those breakers to be collared if the known icing SB has not been complied with, which would have been the case for his aircraft at the time the picture was taken. Therefore Ken was operating his eclipse outside of the limitations set on the aircraft at the time of the flight, a clear violation of the FAR's"

Well now, here we have a perfect example of what this blog is all about.

A guy doesn't go around accusing people of violating FARs without being G*ddamn sure he's right. You'd have to be an incorrigible moron and morally bankrupt to do that. But that's exactly what ea500s just did.

You get the "Windshield Heat off" message whenever either windshield heater is turned off regardless of whether the ECBs are collared or not; getting that message doesn't tell you a thing about whether the pilot uncollared any ECBs:

Windshield Heat Off with ECBs collared

You need to go back to school, ea500s. You falsely accused a guy of busting an FAR when you didn't have a clue what you were talking about! In my book, that makes you a blue-ribbon maroon.

And speaking of maroons--I suppose it shouldn't surprise anybody to see that there are guys on this blog who somehow think flying OVER clouds is against FARs. A brilliant bunch. That's why you guys don't have the jet, and I do :)

I'm getting a pretty good laugh out of all of you! Thanks for that, and pleasant landings, fellas.

Ken

Black Tulip said...
This comment has been removed by the author.
Black Tulip said...

“A waste is a terrible thing to mind.”

I wonder if Eclipse Aviation Critic NG is displayed on his Avio MFD panel as Ken flies. He has a time consuming job. He’s flying so much and having so much fun that he only occasionally drops in to post a comment on the blog. On the other hand he must be poised and ready to immediately respond to any criticism of his aircraft or himself. I suggest an annunciator blinking “EACNG ACTIVE”, “EACNG ACTIVE” would make life easier. The work load must be pretty easy anyway… hardly ever in the clouds and never if there is ice around.

bill e. goat said...

Hi Ken,
Thanks for the note on flying OVER ice being legal- I thought it was, but hadn't been able to pin it down.

If I'm right, the EA-500 has a single engine service ceiling of 25K or so, still above most weather. So, I reckon the odds of it inadvertently descending into weather is considerably lower than it (or any other plane) encountering unexpected icing conditions.

Don't try this at home: About the only way an ERcoupe is going to fly OVER weather is if it is air dropped from a B-52, ala X-15.

(Hmmm, you won't hear those two mentioned in the same sentence by a sane man very often. Uh, enough said. However, for detractors and naysayers -and the rest of the sane people- I WOULD like to point out, that the ERcoupes are still flying, while X-15 is not. So there! .)
---------------------------------

For those with aircraft of sufficient performance that let them actually explore the hypothesis that air really DOES get cooler when you go up in altitude, I dug up some icing links for general reading- in no particular order, and for general reading:

AVweb, Feb 26, 2001
The Naked Truth About Known Icing conditions

Probably old news to high fliers
AC 20.147 Turbine Engine Icing

From New Zealand,
Aircraft Icing Handbook

FAA report AR074:
Supercooled Droplets

From Flying Magazine, April 2007, nice article by Peter Garrison (one of my favorite writers- much more than the idiot editor McClellan):
Unknown Icing Conditions

Egghead stuff, with big words, from NASA
Satellite Icing Detection

Icing for simpletons
Icing Basics

Flying Magazine, February 2009, by the idiot editor, Mac McClellan.
Good timing, Poor writer (although this article is surprising good for Mac to have written it):
What's New in Icing

In case you, like I, wondered what the heck an Electro-Expulsive Ice Separation System is...
Ice Zapper

Flying above 25K looks pretty safe (the menu is in 2K ft increments, and only goes up to 29K):
NOAA ADDS, Icing page, FL250

airtaximan said...

Ken, you did post that you screw with the ECBs to activate INOP systems, did you not? Just making sure IRC.

flyboymark said...

WOW!
Ken,
Getting a little testy aren't we? I guess you really are "hurting" from that 1/4 mill loss? I know I sure as hell would be too. I guess you answered my question......

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

ATM,
I was driven to the internet, and came up blank. But thought in the future, others might find this useful:

Acronyms for Text Messaging

(IRC, I Read Correctly? or am I AGoofedU? .)

Flyboy,
I think Ken is annoyed at the airborne situation being misrepresented, not the fiscal one- although I suspect he is comfortable enough with the financial arrangements; as anyone would be, he would be more comfortable if Wedge hadn't screwed him out of $250K, and if the economy hadn't dumped. But there are several hundred other victims of EAC-oldco as well. (I like to think that the blog kept there from being several hundred more).

Anyone who's been around the business knows the financial angle on bizjets is all about writeoffs- in this case, perhaps more so than usual :(

airtaximan said...

bill,

If I Remember Correctly

IIRC

or thereabouts...

I hate typing

airtaximan said...

Ken amde an assessment of the deal way back when... he did not get what he bargained for, by a long shot... but he seems happy - so, be happy for him.

Just pray he is safe, and flies in a manner that does not put others at undue risk... and does not "promote" in a manner that put's others at undue risk...

Then again, it is now obvious to most what the risks are... so, it does not matter much how he promotes.

He loves the plane, and I am truly happy for him. He seems like an expert at the EA50 as well, which is nice, too. Just a little risk-prone for my liking... but I guess Vern knew his customer.

Imagine Dayjet's blind eye to risk? $300M? OUCH! Between these tow, you have more than 50% of EAC's clients. The add Roel Pieper (Etrick) - who lost what $150M...OUCH! and his 300 orders (any deposit money? If there was, that's at least another $10M... OUCH...

Risk, Risk...

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

Hi ATM,
Thanks.
(I tried one of those funky curved, raised keyboards this week- it was wretched- I felt like I was learning to (mis)type all over again. OGS perhaps (Old Geezer Syndrome).

(I found the link to acronyms useful though- "unintended consequences" has an upside sometimes :)
---------------------------------

EPx,
I appreciate what Ken brings to the party. And you?

BTW, I think the blog mostly speculates about the company. And the blog is mostly right.

flyboymark said...

B.E.G.,
Ken's response to the F.A.R. issue jus' seems a bit over the top with a greater degree of irritation than normal for him. I surmised that the "attitude" was exacerbated by the financial issue in the back of his mind also...God, it would be for me! AND, then if the aircraft breaks, what then? But unlike Ken, I admit to myself and others when I get shafted and express my REAL feelings and do my best to avoid the "denial" syndrome.

Ken Meyer said...

Goat--

You're exactly right. Nobody likes losing money, but OTOH I never invest in a deal I can't shrug my shoulders at and walk away from if it turns sour.

Not that this one did. I'm pretty happy with the overall expense/benefit ratio so far. Everybody knows the company sucks, but the plane's real nice. And the people I've met, the places I've been, and the things I've done since getting involved in Eclipse have been priceless.

What about AT's "IRC?" I think he meant "if I recall correctly," but I think he didn't. I don't believe I ever wrote what he said. It seems to me that AT sometimes just makes things up.

And that's okay. It all adds to the flavor and keeps me smiling :)

Ken

ea500s said...

Ken Meyer, since your serial number is 151, you most likely got your training thru HPA and did your training in the SIM using an Avidyne configured aircraft. Since the aircraft is not approvied for flight into known icing, I highly doubt you received any system training or simulator training pertaining to deice equipment other then the use of engine anti ice, so even if i did decide to go to school, I doubt I would learn anything about windshield heat system and such. I am not here to blast you, I just think you post on this blog to stir things up. There are going to be two types of owners that possess Eclipses. Those that have never flown a jet before, and will self pilot their eclipse and fly maybe 50 to 75 hours a year, and will pick the days they fly. For those that payed 1.0 mil for the plane, and fit into the above category I would agree with you that for the money you got a good deal. On the plus side the aircraft does deliver performance wise. At ISA or below you will get 360 kts or so at FL 350 to 370. At ISA plus 10 thigs drop off considerably and you will see 330 to 345 kts. Heck I have seen 329 kts true air speed at FL400 burning a mere 280lbs total. That translates into 42 gallons an hour. Not bad, not bad at all. Then there is the other type of owner that bought the jet as business tool and who plans to fly it 300 to 500 hours per year. Now is where the problems start to arise. Unless you are one of the lucky few, your going to find a lot of things breaking. And with no warranty, you are going to find that a lot of these things breaking are going to cost a lot of money. Ken do you have your own mechanic or do you go to the service center. If you do go to the service center how long does it take you to get there? Ken do you have a nose bonnet that requires it to be sealed with RTV to cover the 1/4 seam? If so every 6 months you are required to remove that to do a battery test. Eclipse charges approx 450.00 to do each battery, and then you have 4 more hours labor to R and R the bonnet if it requires sealant. How many cycles do you have on your jet Ken? Have you had to fly the aircraft to a service center to get new tires yet because they only last 70 to 100 cycles. How many trips have you had to cancel because moderate icing existed somewhere in your flight path? How many times have you flown at 9 thousand feet sucking 800lbs an hour because the freezing level is 1 thousand feet above you. How many times have you had to do a battery start because the Ground Power Unit at the FBO is not compatible with the eclipse jet. Have you flown your jet to the service center yet to get your spectolux GPS's updated. Do you own TAWS? How many times do you fly internationaly. Ken the eclipse isn't all that bad of a jet, it is Eclipse that is bad. They lied, they deceived, and they cheated. And most of all they delivered a plane that was incomplete That sir does not make friends in my book. And the first time your plane goes AOG at some godforsaken airport way out in the boonies and you write a 50 thousand dollar check to get it fixed, maybe you won't like your jet so much. But for a weekend warrior like you , I agree you can't find a cheaper jet hamburger anywhere in the world. You just got to pick the days you eat. But in my book I like to eat any time I please. P.S. wait until the real expensive stuff in your jet starts breaking, like ADC's or AHARS, or other parts of the abortion they call AVIO. Ken its fun jet to fly when things are going right, but without a warranty, you are never going to know exactly how much an hour it is going to cost you to own and operate that jet. I hope you are lucky and end up with one of the few birds that is not a money pit.
I don't know why but everytime I read one of your posts it makes me think of that character in the cartoon called Southpark. I hope to god no one ever has a fatal accident in an Eclipse, but if it did ever happened to you I can just see the headlines now.
"Oh my god, they killed Kenny, You Bastards"

ea500s said...
This comment has been removed by the author.
bill e. goat said...

Hi Ken,
I'm glad your airplane is working out well, and I appreciate you telling us how things are going with it and the company. I suspect there are many workers at Eclipse that also enjoy your updates. I think they come here to know the inside scoop on the company, but have considerable and justifiable satisfaction knowing the fruit of their labor is bringing happiness to the owners, despite the company as a whole not doing it's part to fully enhance the ownership experience.
--------------------------------

ea500s,
I think you are in "violent agreement" with Ken:)
Looks like your posts were about simultaneous.
In case you missed it (which I doubt), Ken is properly suing Eclipse to get a refund on the EA400, so he's certainly not defending the old company. Now anyway- I think in the past, like almost a thousand other depositors, he was pumped on the airplane, and hoped the company would deliver on promises. It's not his fault they didn't.

For those living in the desert SW, and not flying internationally, except to other desert-y, southwest-ish Mexican destinations, the weather just isn't going to be a factor most of the time. I would suspect most owners have both their own mechanic and access to a service center (in ABQ, probably less than an hour flight for Ken).

You seem to be pretty familiar with the airplane, so I look forward to your continued inputs.

The airplane does have some warts (most are resolved, but not incorporated yet), and potential warts (spares and support).

But for some people, the airplane is working out great- I think Ken is one of them, and everyone ought to be happy for him and the Eclipse workers that put it together. Part perhaps by good fortune with reliability, and part with good planning on his part regarding the locale for weather and geological proximity to the factory.

Ken Meyer said...

EA500S--

I didn't see any apology there for falsing accusing me of breaking an FAR.

Let's hear your apology first, and then maybe I'll respond to your latest diatribe with its many questions.

Are you an owner? My guess is you're a fired pilot. I don't blame you for feeling pretty low right now--you're in a rough spot--but honestly you're neither garnering sympathy nor gaining ground by firing off false attacks at me.

Ken

Niner Zulu said...

B.Goat - great post about icing. Also, you're right about the Mustang - those owners have also taken a hit -though not as much - and those who paid a premium have really taken a bath. A stupid move on their part IMHO. But I am a big fan of the Mustang, so I must have conveniently forgotten that fact.

EA500s - another great post. After that, no way am I going to own an Eclipse! Oh wait, I don't. Good for me!

EclipsepilotOMSIV - bad language, bad form. Did you type in this URL by accident when you were trying to get to the club? This is the Eclipse Aviation CRITIC. That means, simply, we don't agree with you about your aircraft or the company who built it, or the new company who is trying to buy it. And don't worry about Ken - he is a big boy and he's been here awhile. I, for one, am glad because he keeps things interesting. At the end of the day, we are all pilots. Please try to post in that spirit. Polite name calling is allowed, of course, and even encouraged on occasion.

9z

ea500s said...

Ken Meyer, you still are not going to get an apology from me. I will have to confirm that the windshield heat status message appears when breakers are collared and the windshield heat is turned off. My question to you is why in the world would you take the extra step and increased workload of turning off a system that is already off. That makes me very suspicious. No I am not a fired pilot, but I do fly a lot more then you do, and I have considerabley more experience then you from an operational standpoint. I like my eclipse, but I also am very upset about the fact that Eclipse the manufacture screwed and lied to so many people. I payed 500k more for my jet then you did for yours. And I have also had over 100K worth of warranty work done to the plane prior to the bankruptcy and voiding of our warranty. And based on past reliability my guess is that the jet is going to become very expensive to fly. Wait until you get grounded for 4 weeks because Eclipse can't ge you the part.
P.S. you still didn't answer any of my questions.

airtaximan said...

Ken:
"I don't believe I ever wrote what he said." I don't believe... hmm... think harder Ken...

Also, provide something I made up (not Satire) and offered it as fact on this blog... I mean stuff that wasn't true - unlike the true stuff that rebuffed your inaccurate puffery... where you chickened out of a bet for $10K...

You are a rather defensive angry person for someone who could "afford to lose" $700k in EA500 deposits on one plane, plus another $100k on Plane-2 plus $100 or so on the E400...

Puff Puff... seems like you coulda bought a less-risky Mustang or two and made out better, BUT I am glad you now bad-mouth EAC and you are happy with your plane, and you are OK with losing the other deposit money and your are fine with no warrantee and OK with having to spend a lot on lost free upgrades.

You should be a lot less unhappy sounding and less defensive, for such a happy guy!

I can't wait until you are expressing your LOVE for the new company, and then you are bad mouthing them, too.

I am afraid its only a matter of time.

airtaximan said...

ea500s,

I almost posted something earlier, like:

"Ken, if I were you, I would shut up - this EA500 guy seems really knowldgeable, and you might be pissing up the wrong tree"

Sorry you are having problems - most people are... and Ken has NEVER admitted to any problems or issues... so I guess he got the perfect EA50.

I wish you well, and thank you for your level post.

Sorry for the wrath of Ken - he's a very angry and defensive happy customer.

Anythng else we should know about the plane...

Ken Meyer said...

EA500S--Whatsamatter, you think I doctored the picture for you? Good grief. I hate a guy that doesn't know when the party is over. OK, go out to your plane tomorrow--if you have one--and then let us all know what you discover, ok?

AT--you said that I "screw with the ECBs to activate INOP systems." I told you I don't. You're making your usual amount of worthless noise, but I didn't see an apology from you either.

Hit and run. That's the specialty here. Only both of you got caught this time.

The more I read, the more I'm laughing!

Ken

ea500s said...

Ken,
I would be willing to bet an eclipse if we both by chance happened to be sitting next to each other at some watering hole we would both walk out with a beer buzz as self proclaimed new best friends.
But it's kind of fun to spar a little with you on the blog. I have followed the blog way before I ever took delivery and I saw that it evoked a lot of emotion. I had my own opinions but always kept them to myself, because even though my brain was telling me eclipse would fail, my heart was always hoping they would deliver and succeed. That is why I never bought into jetcomplete. I loved the idea of having a fixed cost to operate the jet, but I had serious doubts eclipse would be around long enough to make good on the 300hours of jetcomplete I had to buy.
I think with Vern and all, eclipse followed the microsoft mentality,
in that they were going to build a jet for the masses and make it simple to fly. remember DOS for dummies, The concept was flawed from the start. Do I like the jet? yes, if I could sell it without taking a bath would I? Yes again. Do I love the jet? No. Is it possible for me to give my opinion as objectively as possible based on my operational experience? I think yes.
Would I recommend the jet to an owner/pilot who flys on a limited bases and under conservative flight conditions that will put less then 75 hours a year and can be had for under 1.1 Mil, absolutely. In the long run the blog has been right. They essentially said it was not possible to produce a jet that was fully operational for 1.0 Mil. And of course history has proved that to be the case. My opinion of the new eclipsejet? I will go on record and only say time will tell, but so far what I see is a different leopard with the same spots.
P.S. I am going to see for myself what my jet does when I turn off the windshield heat because I have seen some differences between AVIO NG aircraft, even though logically we should both be the same. are you running EFIS 1.3 already? But the question still perplexes me in that why would you go thru the extra step to turn off the windshield heat if it has already been disabled? The way I fly an uncessary cas message is not something i want to see, even if it is just a status message.

baron95 said...

CW said... I can do that too, in a C-172.

Maybe one modified with JATO rockets. Did you check the charts for the cloud tops? And blasting through a 2,000 ft thick potentially icing layer at 3,000 ft/min is one thing, at 500 ft/min quite another.

From my experience, icing is only an issue if a) you can't climb through it fast enough, and/or b) ATC keeps you in it. Where I fly, NYC area, you are kept low and on the soup at 5,000 and 6000 ft all the time and for a long time. There are only a couple of altitudes available in each direction.

Out west, where Ken was flying, my experience has been lots of unrestricted climbs, easy to get on top (either IFR or VFR on top), lots of altitude choices if you pick up ice.

I do not see why people insist on making a big deal out of Eclipse and ice. As far as climbing through ice, I'd take an Eclipse any day over a FIKI Baron or 340.

It sucks to climb through icing in the Baron, you have to keep the speed way above Vy to avoid getting ice in the unprotected parts of the lower wing, so climb rates suck. And every time the prop slings a chunk of ice into the fuselage, the Baroness has a bout of tachycardia and the kids stop talking for 5 minutes (not always a bad thing).

I bet the heart rate of Ken's family are much steadier in the Eclipse.

baron95 said...

Shadow said...
I'm curious to know how many of the FPJ owners/depositors are also on the list of those ripped off my Madoff. Seems to me that the FPJ crowd would've been easy pickings for Madoff's scheme.

I'm curious to know how many of the EA500 owners withdrew money from Madoff's funds or sold shares of solid companies like Citigroup or Lehman to pay for their jets. They must have taken the money from some investment, right. And since most investments other than short-selling lost 50-100%, they prob did better by parking their money on a EA500.

fred said...

FlyBoy ...

yeah ... i know what you mean ... i reminded me of a talk i had in commuter's train in London a while ago ...

the chap sitting next to me saw me reading an Israeli newspaper and asked me from where i was coming from ...

to make a quite long story short , after a while , the guy started to complain about cost of life in London but was horrified when i tried to explain him the relation between throwing-out 70+% of all foods prepared in any one day and cost of life ... that if to make more money , he had to rely on more ready-to-eat stuff , costing him more , so trapping him into having to work more to afford to buy what was supposed to give more opportunity to to have more time to make more money ...

the guy was absolutely petrified when i told him " when are you going to stop the stupidity where you put yourself into ..."

after a while (the first shock being passed ...) he admitted that it was completely mad to live and act this way ...

the most funny about it : Londoners have a word for this , they call it the "Rat-Race" ... but don't seems to understand implications , that they are part of it and ways out ...!!!

So , i hope you won't be pissed-off if i tell you : " i think your brother needs to have his brain checked !"

It is exactly like the Fpj ...

ANYONE has the right to waste his money the way he wants ...

but to accept this condition , they have to accept that some others can be laughing at their foolishness ...

when i see some saying Fpj is a good plane = I am quite sure they like it !!!
the problem = 3 Billions US$ !
with that much , i bet any amateur in his kitchen would have had the result ...! ;-)

IF the plane would be what it is , developed with 1/10 or 1/20 of this sum , i would probably be among the one to applause ....

it isn't !

so anyone has the right to waste whatever ...
but when comes bragging about the qualities ( real or fictional ones) THEN there is responsibility engaged ...

this is the reason WHY i have much more respect for the ones who got the hit , but don't brag about the beauty of their buying ...

as well when i read Baron stating that all in all , the ones who took money out of Maddof to put in Fpj , didn't get so much of a bad deal ...

sorry , but may be i am too much of a Cartesian , but my mind isn't able to think about this :

would you like to be killed by 1°) a bullet 2°) poison ?

i see this as some arguing about that + and - and both methods ... i would answer = WTF does it change anything ? you'll be dead in both cases !

bill e. goat said...

ea500s,
Sounds like you are p.o.'d at Eclipse, rather than Ken.

It was interesting to note three owners (Ken, ea500s, EPx) stopped by in one day- I hope more stop by, more often.

bill e. goat said...

B95,
"Maybe one modified with JATO rockets".
!!
the FIRST jato takeoff
(sorry, I couldn't help myself:)

bill e. goat said...

B95,
"I do not see why people insist on making a big deal out of Eclipse and ice".

Operationally, I figure the owners keep themselves out of trouble, and as you point out, the climb performance helps a lot too.

For me, the FIKI issue was more of a litmus test for the old-EAC B.S.-o-meter. Taking two years to get pneumatic boots certified was pretty lame, and showed they were either:

1) pretty screwed up, and/or
2) weren't dedicating much resources to it, in which case
3) they probably weren't dedicating much resources to any other development issues either.

I think "all of the above" fits the situation, in retrospect.
--------------------------------
You are right about "parking resources" in an Eclipse- at least one of the delivered Eclipses...a guy could do far worse.

(Such as, those unlucky enough to have parked deposits in an Eclipse s/n 290+)

And I agree with your sentiments about the Eclipse being safer than a Baron or 340- both are very nice planes, but down a tier in capability (but on the other hand, also down a tier in cost of ownership. BTW, EPIC seems to hit a "sweet spot" in the market- near-VLJ capability, and near-Baron price. It will be interesting to see how that company evolves. (Hopefully we will be getting an update from Rich (aka Gunner) shortly on his new LT?).
Epic LT
1200 HP; wo-hoo!!, Another 1200: payload with full fuel (and 1400-1600nm range)!

I had whined about society needing a scaled down Caravan, this is more than I imagined- it substantially exceeds the parameters I had contemplated for personal transportation. It's somewhat lower (but at 28K, still above our icing discussion!) and slower (but not much) than a twin VLJ (will be interesting to see how the SE VLJs do), but looks roomier and has more payload (in fact, it looks like it at least matches the Mustang in these two regards).

bill e. goat said...

AND SPEAKING OF...
Oh, I love it when a plan comes together!

a) ea500s and Ken having a beer together somewhere.

b) Shane mentions the upcoming "Eclipse Fly-in at Sunriver, Oregon in September"

c) Goat does some research on where the heck Sunriver ORE (S21) is, and guess what: about 17 miles from the EPIC (and Cessna/Columbia- about 2000 feet apart, in fact) factory at Bend, ORE (KBDN)!!

Neat!

BTW, it sure looks like a pretty place- I think I've driven through there before, some time ago...

Wikipedia-Sunriver Airport
Sunriver Resort
Airnav S21

Coincidentally, or not, maybe poor Mr. Billy Gates got a bit confused about with the fast talk about airplanes: lots of aircraft manufacturing (EPIC and Columbia) near Redmond- OREGON (10 nm from Bend) rather than the "other" Redmond (WA- Microsoft HQ).

And, if one ventures a bit north of Redmond OR (say, 17 nm NW), they might come across scenic "Lake Billy" airport (5S5); no doubt a place of charm and sophistication.

Factory tours, with beers afterward?
Critics invited?
To attend?
To not attend?
:)
---------------------------------
While searching around for the airport code of Bend OR, I came across the airport code of North Bend Or (thought it might be a suburb of Bend, but no-it looks like North bend of a river, on the coast, near Coos Bay, OR- looks like a very scenic place as well.
Airnav KOTH

I don't quite know how I come to these situations, maybe the voices tell me to do it, but somehow OTH got plugged into the acronym hunter, and some interesting results emerged:
Acronyms INC

Over The Horizon (Avio 2.0 ?)
Other Than Honorable (Wedge, EAC ?)
Off The Hook (EAI?)
Over The Hill ??

(There went my invitation !! :)

Black Tulip said...

Bill E. Goat,

You’re right about Sunriver. It is a nice resort with many activities – golf, hiking, biking, and the river. I’ve been there annually for eight years at a board meeting. A few tips about the airport: There is almost always a crosswind. Observe noise abatement procedures. Ask Unicom about coyotes. I almost hit one on landing rollout as it zipped across the runway.

I saw Gunner’s Epic in pieces at Bend last year and hope it will be out the door and flying when I return in early May.

Shane Price said...

EclipsePilotOMSIV,

Your remarks yesterday were perfectly ok, except of the last few words.

Please re post, without the 'anglo saxon' terminology.

Thanks

Shane

Shane Price said...

SNIPPET TIME

1. ABQ is completing, slowly, the 'production line group' aircraft. Parts are in short supply (for obvious reasons) but still arrive, so someone is getting paid.

2. The money from VEB is LIMITED to building the Russian factory. Once this is up and running it's possible that EAI will generate some profits. That's a long time in the future, and won't pay the outgoings in ABQ. Unless, that is, the FPJ 'darkens the skies'.

3. Seems some lawyers have discovered evidence of illegal actions by EAC. Someone is going to carry the can for this. I wonder who it will be? Personally, I'm going for Mike McConnell, as he's the one with most to hide, but Wedge has a lot to answer for as well. Even Roel was a bit 'fast and loose' with the truth during the BK hearings. He did, after all, insist that there was plenty of cash available to back his bid....

Shane

bill e. goat said...

Shane,
I'd add "the first few words" to that request, as well.
---------------------------------

"They will continue to speculate about Eclipse, and we will still be flying our planes"

"We" doesn't include me, but it doesn't include about 500 depositors either. Sounds like ea500s has been left out of the fun from time to time as well.
---------------------------------

"You __________(?Gentlemen:) post all of these inflammatory questions directed at Ken. And he comes around and drops you a line and everybody starts trying to attack him again. He defends himself to you and then you attack some more".

I agree. EPx, please post more, and take some of the workload off Ken!
:)

airtaximan said...

"Seems some lawyers have discovered evidence of illegal actions by EAC. Someone is going to carry the can for this."

hmm...

1- language barrier -"carry the can" pls explain

2- what area of illegal - fraud, FAA, SEC...

waiting a long time for this....

bill e. goat said...

Hi Shane,
"Seems some lawyers have discovered evidence of illegal actions by EAC. Someone is going to carry the can for this".

I suggest the lawyers go after the corporation, instead of directors. Might as well go for the "deep pockets", right?

HA HA HA. (It would be more productive to sue future depositors, as they are the ones with the cash*).

A cruel irony would be if Mr. Mann were sued. Still, as a memeber of the board of "directors", it makes one contemplate overall responsibilities: to the investors, as well as "the public"- I imagine this is well worked legal ground- but I am unfamiliar with the typical "fruit of the field".

Still, I figure there were a LOT of people- esp. customers and suppliers- waiting to see how things shake out- to find out the exact details of the EAI takeover, before deciding what steps to take. And in this regard, it is actually in EAI's best interest to go with absolutely minimum infustion to keep it alive- otherwise, they are just "fattening up the target" for lawsuits. Disruptive approach, eh?

But the real legal action I'm waiting for isn't suits, it's criminal prosecution. Maybe I'll have a long wait, but I doubt it will be as long as the s/n 290 depositor...
---------------------------------

*Hmmm...The irony of that dawned on me though- makes me wonder how seriously Wedge was contemplating suing depositors for more progress payments- anyone care to make a guess?

airtaximan said...

Bill,

EAC is gone - the newco has no liability. The old co, is broke.

So?

the ONLY course of action is against the newco, which is only responsible for its actions, not EAC. OR, and I suspect this is the case, personal suits agains responsible officers and directors of EAC (oldco).

We'll see.

I suspect a pattern of deception (to get deposits) is at the heart of a suit.

Given even Ken's obvious change of heart towards EAC (I wonder how he feels about his buddy Verm Peg, Mike...etc... nowadays?) I am sure there are some angry (except Ken is happy) people who got stiffed and want retribution.

I can smell a courthouse filled with Vern et als, and 200 folks stiffed out of their deposit money...

Heck, RP (chairman and previously a board member) might even be in the line of fire.

So, whoever said this would get boring... stay tuned. If a fight breaks out, a lot of history is going to come back to haunt some folks, and I suspect, some of the "theories and suspicions" offerd for years on this blog, will probably floating on top of the pile...

baron95 said...

Sunday morning drive by...

BEG - you are a super guy. Nice job trying to make peace between Ken and EA500. You would make a great marriage counselor. Nice to have you on the blog.

BEG said... Taking two years to get pneumatic boots certified was pretty lame,

BEG, my reading on the situation is that Eclipse unnecessarily tied the FIKI to the EASA/AvioNG 1.x development and certification. That is why they all happened at the same time. You can argue with that decision, but I think it was probably the best decision. The delay was in the northern summer, and I think most owners want to arrive at final config in one shot, not come in for multiple upgrades.

As I said before, the Eclipse aerodynamics must be just right on. They got FIKI with none of the kluges that Cessna had to retrofit to get FIKI on the Mustang (VGs on the boot, boots on the vert stab, ventral stakes). Given that the Eclipse grew in weight (causing the wing to fly at higher angles of attack than originally designed) and sprouted tip tanks, to get FIKI with no aerodynamic modifications is just amazing.

You have to give it to Eclipse. They designed one nice (aerodynamically) airframe.

Shane, interesting news that slow, but steady progress is being made on completing the planes on the line.

If Eclipse Jet actually comes into being and pumps out planes in this current climate, I'd say it is just astounding.

On another note, if you can spare 5 minutes of your time, please send a note to your senators/congressperson/local paper asking "Whe are you so intent on demonizing and destroying jobs in the Business Aviation industry? That is one of the few industries where the US is number one, and you are making it and the hundreds of thousands of Americans employed in it into pariahs."

Have a great Sunday/Monday depending on where you are.

airtaximan said...

wake up...
shake out the cobwebs

remember the aero mods?

this was after $2B and 10 years of development work...

BEG is right, the delay was a lack of focus on the customer, and amateur hour. It ws a race for "we're the first FAA cert VLJ"... blah, blah...

it ws not finished because they screwed the pooch for 10 years.

Just making we all do some remembering...

They did not meet spec, made promises, and spent a year doing aero mods... THEN they worked FIKI.

airtaximan said...

Baron,

writing the politicos is a good idea - the idiotic attitude regarding business aircraft is astounding... as he boards AF1

eclipse_deep_throat said...

ea500s said,
I don't know why but everytime I read one of your posts it makes me think of that character in the cartoon called Southpark. I hope to god no one ever has a fatal accident in an Eclipse, but if it did ever happened to you I can just see the headlines now.
"Oh my god, they killed Kenny, You Bastards"


OMFG!!!! LMFAO!!!! WTF???! How many more silly acronyms can I add here??? EA500s - that was truly a great post!

Now, I have tremendous respect for Ken. And as a former EAC grunt, I wondered at many times what on earth would happen to our customers when the plane died in a place far far away. I spent a lot of time at SP10/FSW... walking all around our warehouse looking at all the crap, oops, spare parts not yet needed. And I can speak to my FIRST HAND knowledge of the tiffs that occured between Kelly Flanagan, the QA Receiving / Inspection lead in charge of that area and Elise Wheeler, the "Plant 4000" lead tasked with getting parts released from r/i because of AOG issues. LOL, seeing the ladies squabble was funny at times cuz Kelly was a retired E7 grunt from the Navy. And Elise was a retired Colonel with the USAF. So, draw your own conclusions. Although I wasn't in a position to be involved with the parts directly, since I sat in the area, I can attest to the fact that the AOG issues affected the QA inspectors above and beyond the 'normal' level of stress in that work area since I got to talk with the rank-n-file inspectors as soon as the pissing contests were done with. In general, it seemed to be SOP that all manner of exceptions were justified in order to get the parts released for AOG issues. I can do more digging if you would like specifics...

Also, you (ea500s) may not know that my area was calibration of company tools. So, on many times, my clerk/assistant was 'retasked' to work on buying off parts for R/I. I think that violated (or **should have** violated) a ton of FAA rules, or just plain common sense. No one in their right mind would allow a 26yr old girl, a SECRETARY(!!), to have responsibility for approving the release of aircraft parts in a $2m plane. This goes to a host of management issues ...but that is par for the course in a non-union shop when managers are pressured to get X, Y, and Z done no matter what, they will draft any available warm body to push the buttons necessary to get it done. I have already put my neck on the line with what I know, in chatting with the FAA and NTSB, even AFTER I lost my job with EAC on 8-22-2008. So, it is funny on one level, but make no mistake, I don't want to see Ken OR ANY EAC CUSTOMER turn up as the expendable Star Trek crew member. We all have a right and, IMHO, an **obligation** to be really pissed off when business leaders turn customers into guniea pigs/crash test dummies. We just CAN'T cut eac slack on this subject and must hold EjAI to a higher standard if Roel really wants to earn our respect and repair the damage Wedge did to the Eclipse brand. Can I get an 'Amen' from the congregation? Ken, your thoughts?? If Roel screws this up 12 months from now, then we need to tar and feather him as well, just like Vern!!!

I think we could easily turn this into a rant against American business in general, since it appears to be more common with companies like MicroSoft, GM, etc., releasing the beta version of their product before it is truly ready. No surprise that Wedge came from MicroSoft where that kind of corporate culure could blow off issues ...but this just isn't acceptable when your product can fall from 41k feet and kill people. I'm eagerly awating the new Camaro and Volt, but I suspect that GM will make the same mistakes. I don't think Roel is a saint, but I'm still cautiously optimistic that he has a better chance of fixing things with the EAC production system and supply chain. I still think Ken, and ALL EA500 owners like yourself deserve to get the product you paid for with the necessary after-sales service and support infrastructure. And I for one will continue to demand that from the new EjAI/Eclipse 2.0 until the fat lady sings, or Chapter 7, whichever comes first...

e.d.t.

airtaximan said...

"In general, it seemed to be SOP that all manner of exceptions were justified in order to get the parts released for AOG issues."

Ken: "So? Sounds like good customer service, to me"

Dave said...

1. ABQ is completing, slowly, the 'production line group' aircraft. Parts are in short supply (for obvious reasons) but still arrive, so someone is getting paid.

So it is Eclipse 1.0 that is completing the aircraft, not not RoelJet? I just want to be clear on that. If that is the case, presumably that would mean those aircraft would be built to spec as they'd be built under the PC.

2. The money from VEB is LIMITED to building the Russian factory. Once this is up and running it's possible that EAI will generate some profits. That's a long time in the future, and won't pay the outgoings in ABQ. Unless, that is, the FPJ 'darkens the skies'.

It should be fun to see what happens with the Chavez and Richardson Show after Roel fires everyone and takes the entire business to Russia. I'd also presume RoelJet will have a market that mostly sells to Russia and Eastern Europe and doesn't get much traction outside of that...and also parts suppliers will change and be Russian and Eastern European. Eventually I expect the governor of the Russian region to have the same results as Governor Richardson with Eclipse - a money-loser based on hype that the company itself never believed.

allen said...

F.Y.I. A lot Eclipse employees and their famlies read the blog are scared to death for their jobs.

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

Hello Allen,
I don't remember you posting before- if this is your first time, welcome!

Zed, I tend to believe RP was been frank, to the point of harshness, but don't read anything more into than that. (Not to dismiss your inputs though- but see item 1 below).
--------------------------------

I think all of us are concerned for the workers in ABQ, and understand how stressful the past few months, and the next few weeks, might be.

There are four things I have to say, which are genuinely intended to lessen the anxiety, and I hope everyone thinks about them before (over)reacting:

1) The best indicator of future actions, are past actions. (I think it is a sign of RP's commitment to keeping Eclipse open, that he didn't lay off any more than he did over the past few months. Surely, it doesn't take hundreds of people to deliver 0 airplanes (well, at least not now that Wedge is gone .) In other words, it appears that a) RP could have laid everyone off a long time ago, and b) he didn't, so I assume he expects to have a near-term need for most folks.

2) I wouldn't get wigged out about the transition from EAC to EAI, for the reasons outlined above, despite some other predictions. If anything, there ought to be somewhat more money available under EAI, than has been the case with the interim DIP financing. (At least I hope this is the case- it is a bit worrysome it is taking an extra week or two to get it, but it does seem to be coming. I would not dismiss the cautions from others in this regard, but there's not much a person can do except wait and see).

3) It is undoubtedly stressful to be at EAC/EAI right now, but if it's of any comfort- it's stressful to be anywhere else in aviation, as well. So you're probably statistically just as safe to be riding things out in ABQ as elsewhere, so don't "beat yourself up" over what you ought to be doing. Over the past four months, Hawker-Beechcraft has announced it is trimming headcount by 33%, Cessna 33%, Bombardier 10% (the least so far, but they hadn't ramped up after 9/11 as much), and Boeing 10-25%, depending on the facility.

4) RP really is a global businessman, not a turnip truck groupie, so I'd have some faith in his intentions and capability.

(This view runs counter to the majority of my greatly respected fellow bloggers, but it really is what I believe. He knew what he was getting into, and he got into it anyway, and he did so with a reason, and it wasn't to liquidate EAC, or he would have already done that. IMHO...YMMV...WAG-meter is pegged. But I really do hope I'm correct for the sake of everyone involved).
----------------------------------

For longer-term planning, I would suggest taking a look at:
Honda in Greensboro, NC
Hondajet
Piper, in Vero Beach, FL
Piper Aircraft
Spirit Aerosystems in Wichita, KS
Spirit AeroSystems
and Sikorski in Stratford, CT
Sikorski Helo

Plus, there's a lot of military stuff out there too...

Goat's prediction: the 28 items in partial completion will be delivered, over the course of several months, so hopefully there will indeed be some time. After that, I'm less sure, so it won't hurt to do some looking around. And I wouldn't give up on EAI being viable, at some level of activity- personally, I think it WILL stay open, but I'm not sure at what size.

Good luck to all our Eclipse friends during the weeks to come.

Jackrabbit said...

F.Y.I. A lot Eclipse employees and their famlies read the blog are scared to death for their jobs.

According to Shane, Russian money will be of no help to ABQ. But the company probably would very much like to continue manufacturing in ABQ and will probably make every attempt to make that happen. The question is one of who will put up the $$ to keep ABQ going? To me, this hinges on how many of the "coupon holders" choose to place an order.

To the extent that ABQ can arrange for non-Russian financing, eclipse maybe be able to keep ABQ going. What seems most likely (given the many difficulties Eclipse now has in raising money) is some kind of contingent investment and financing such that if XX planes are ordered with a certain time frame, then $YY millions of financing (equity + preferred + etc.) would be provided.

It seems to me that the only way that potential investors and financing source have of determining if Eclipse can recover and if they can sell planes is how many of the coupon holders (former depositors) turn into customers. But the coupon holders have to be very careful because if they, as a group, don't put in enough orders, then they may find that their orders are filled by a Russian factory (whenever that factory gets around to producing planes).

PS There's an earlier post that talks about the number of coupon holders (former depositors) and speculates on how many of those might turn into customers. I think coupon holders have to decide whether to use the coupon within 30 days (please check that). That would mean ABQs fate would be decided 1 month or so after closing.

Shane Price said...

ATman,

In prisons 'over here' the weakest man got to empty out the overnight bucket. So, when a man was left 'carrying the can' he was the one in prison while his mates on the outside spent the proceeds of their crime(s).

Clear enough?

Sadly, I can't be more specific about the area involved at this time. Don't want to give the guilty party time to cover their tracks...

Allen,

Don't lose all hope. The 'Russian' money, which Roel should be able to get access to after Tuesday (no, not an EAC "Tuesday" but the real thing) will probably act to persuade other investors. Once Roel can PROVE the Russians are serious about the new factory, it's quite possible he can get the cash required.

On a side note, I think Ken misses the big picture. Right now, his plane is airworthy and certified, if a bit limited (no FIKI, and 'patchy' avionics) and with carbon build up in the engines, flaky tires and limited service outlets, especially outside the U.S.

Ken seems to WANT Roel to win, but I'm not so sure that's a good idea. I would expect a man with Roel's track record to take the maximum he can from people like Ken, for the minimum input and then leave for Russia as soon as practical.

But I could be wrong...

Shane

Zed said...
This comment has been removed by the author.
Dave said...

In other words, it appears that a) RP could have laid everyone off a long time ago, and b) he didn't, so I assume he expects to have a near-term need for most folks.

It is free money for Roel to spend. If he gets just a little out of it, it is just fine since he gets reimbursed for everything he's spending now via the DIP.

Also it is in the sale documents themselves that *everyone* gets fired upon the close of Eclipse to RoelJet. I'm not familiar with the terms of the Russia docs, but if anyone is concerned about their job, they should get the info straight from the horse's mouth and read the relevant court docs and see what they can find out on the Russian financing and then they can draw their own conclusions as to what they think will happen.

If anything, there ought to be somewhat more money available under EAI, than has been the case with the interim DIP financing.

I'd say the opposite is the case since the DIP gets reimbursed while anything spent post-DIP only gets paid back via successfully completed sales transactions or further funding infusions.

3) It is undoubtedly stressful to be at EAC/EAI right now, but if it's of any comfort- it's stressful to be anywhere else in aviation, as well. So you're probably statistically just as safe to be riding things out in ABQ as elsewhere, so don't "beat yourself up" over what you ought to be doing.

I don't think so. If you work elsewhere in aviation, you may lose your job, but at Eclipse you are guaranteed to lose your job with no guarantee of being re-hired. Also if you lose your job elsewhere, you still retain your legal rights related to your employment, but after the close of the Eclipse sale, employees lose the right to take legal action on employment matters. Again, I say employees should check out the terms of the sale to know for sure.

4) RP really is a global businessman, not a turnip truck groupie, so I'd have some faith in his intentions and capability.

Actually pointing out that Roel is global (and a foreigner living overseas as well) doesn't speak well for ABQ. Roel has zero loyalty to ABQ or the US for that matter (not that it is wrong to be that way, just I'm speaking as a matter of if you're an ABQ employee).

He knew what he was getting into, and he got into it anyway, and he did so with a reason, and it wasn't to liquidate EAC, or he would have already done that.

Roel did liquidate EAC - that was the 363 asset sale. Given the manner of the BK filing and the sale, it was quite clear that Roel planned for months to liquidate Eclipse. Anyway, saying Roel is smart just doesn't cut it...it was all these supposedly smart people who got us into this multitrillion dollar problem in the first place. Also you speak of past actions, Roel doesn't exactly have a good track record and I'd say looking at Roel's past track record would tell you Roel's investments frequently go BK/insolvent (a lot of VCs are this way in that they make money in aggregate by having 1 out of 10 companies pan out, but that doesn't tell you that one specific VC-funded company will succeed but rather than opposite statistically speaking).

Jackrabbit said...

Dave: Good points, especially about the liquidation value.

One possible scenario is to liquidate immediately after closing on the sale (or after the coupon holders have been given a chance to put in orders) and use that money as a cushion until the Russian factory is producing and the market has improved. (Another is to liquidate and simply pocket the money.)

I really think it still comes down to the number of orders they can get to produce planes NOW, and the best source for that is the coupon holders/former depositors. I think that if they are too hasty to liquidate (i.e. don't have a business reason for doing so) some parties will seek to void the sale.

Shane: I'd have to think that potential investors and financing sources are much more interested in how many coupon holders turn into real orders than whether Russia was willing to finance a new factory -- unless those potential investors are Russian too?!?

EclipsePilotOMSIV said...

You know Shane I think a great deal of us "want Roel to win." I mean honestly he is our hope for the future of this company, our upgrades, etc etc. He is the one holding the cards. He has made some "unethical" decisions in the past, however I think he did not arrive at them lightly. From a business perspective I think some of these decisions were necessary to continue "the company." If any of you are business owners, which I am sure some of you are, I am sure you have had to make some decisions that did not necessarily benefit the little guy at all times. So Roel has to play our "Obi Wan Kenobi," I just hope he does it well and doesn't get lightsabered in the first movie. Time will tell.

To the same effect, not everyone may have voted for President Obama, but now he is the President of the United States and people have to get behind him. I understand that is a very loose association, so please don't freak out about it. I get it.

Anyways you guys have a good night, or day depending on where you are located. I apologize for the previous foul language, I will try to be more civil from now on. I still like my airplane.

V2 said...

" I still like my airplane."

Why?

Faithful were stupid lemmings said...
This comment has been removed by the author.
bill e. goat said...

Zed,
Thanks for your comments, especially
"After the sale the Notes are left with 15% of EAI and $160M in new notes secured by ETIRC".
I'm fuzzy on what this means:
It would seem that RP ETIRC bought EAC for
1) $28M, plus
2) 15% stake in the future value of EAI, plus
3) $160M in new notes secured by ETIRC...SAY WHAT??

I know Shane, Fred and others have mentioned item 3, but I don't know exactly what that means. (In fact, I have NO idea what it means).

Anyone care to explain this please?

Are the previous note holders getting $28M cash now, plus another "guaranteed" (secured) $160M in ETIRC notes they could cash in next week? If so, that is stunningly better than I realized, $188M instead of only $28M. This would also explain why nobody else bid on EAC "for only $28M"- I had figured their physical plant was worth around $200M (pretty close to $188M).
---------------------------------

Hi Dave,
You are correct about the "liquidation", my post perhaps should more correctly been called "atomization"/"breaking up"- the dispersal of EAC assets, rather than keeping them as one entity, which is what RP did.

And you (and Zed) are correct about everyone getting "terminated" when EAC becomes EAI. But if RP didn't want them there, now, they simply would not be there, now. I don't see why RP would suddenly see a different business case on Tuesday versus Monday.

For those who follow Boeing, they would have watched the tranformation of Boeing Commercial Airplanes-Wichita into Spirit Aerosystems. Yes, everyone was "terminated" on a Friday. There were lots of rumors about what would happen: in effect, a few percent of people were not rehired, but I'd say 97% were, and immediately (notices on Saturday), and many with modest raises to boot. So I hope the transition from EAC to EAI is equally UN-disruptive !:)

Regarding goings on at present, I would expect RP to be "sending a signal" to investors- either that
1) He's going to cut costs,
2) He's serious about getting EAI going.

Since he hasn't laid off a lot of workers to save costs, I assume he is serious about 2). This is an important period for image projection, and RP is projecting the image of stability, so I expect things to remain...stable.

For those worried about salary cuts, I just don't expect it to happen. In the big scheme of things, labor costs of the 900 employees is not that significant (say $1.5M per week or so), cutting salaries 10 or 20% doesn't save all that much, but it wrecks moral and productivity.

(I hope RP agrees !!)

As for global business, I intended that to reflect RP's experience in putting global resources (such as ABQ facilities, and Russian capital) together.

I don't consider this a typical VC startup- after all, the "enterprise" (infrastructure, process, staff, supply chain, product, customers, etc) has been together to some degree for the past 10 years- a huge difference over a true "start up".

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

ARGHHHH!!!

Just as EPx gets settled down, what happens?

V2 pipes up, and "Faithful" goes ballistic.

Is there no rest for the weary???

!!!

.)

Jackrabbit said...

There is another possibility: that RP doesn't get the financing and fails to close this week. That could lead to a Ch7 in short order.

We are not considering this because Shane's info is that RP WILL get the financing. Given the state of the worldwide economy, and Eclipse history, plus the fact that he has already missed a closing date, I don't think this scenario can be completely ruled out.

Jack

Faithful were stupid lemmings said...
This comment has been removed by the author.
Ken Meyer said...

Pete Solvik ("stupid lemming" aka Eclipse #87)--long time no hear.

As you know, that's a pre-NG bird you found on Controller. I think they're (understandably) selling depressed right now with the combined uncertainty of the Chapter 11 and the upgrades it will require to join the ranks of the ETT and Avio-NG planes with the range, performance, reliability and avionics to be really first-rate.

But heck, regardless, I'm delighted you found aviation happiness with your Mustang. Aviation is a big tent; there's room enough for everyone. Heaven knows you were not happy with your Eclipse purchase. I never quite understood why you were taking such a hard line against the other Eclipse customers, but heck that's water under the bridge.

On another note--congratulations! I see you got your Student Pilot Certificate. That's a great first step. How is the training coming along? I hope one day you'll be able to fly your Mustang and truly enjoy it rather than just sitting in the back. Trust me, it is ever so much more fun to be the pilot than the passenger of a VLJ. And Mustang is a great plane--maybe not as fast or efficient as the Eclipse but almost as fun to fly.

Despite your comments, I believe Eclipse owners wish you only the best in your future aviation endeavors.

Ken

gadfly said...

‘Funny thing about all this name calling, and “put-downs”, etc. Every pilot begins as a “student”.

But the bottom line remains at this point in aviation history: No aircraft should ever be sold to anyone, until it is complete . . . including a thorough test program, encompassing all systems in “life cycle” conditions. (‘Been there, done that . . . for anyone wishing to question my credentials.)

Maybe, the “owner” will knowingly accept delivery of an incomplete aircraft . . . maybe even the pilot will understand the limitations of “in-opt” systems.

But innocent passengers, and those on the ground, who may know nothing of the aircraft, yet may live under the flight-path deserve better than that.

And saying that the “so-‘n-so-X-Y-Z” aircraft company is also guilty of the same thing is never an excuse.

The records still show that Eclipse has not delivered a single complete aircraft . . . and it is highly doubtful that empirical testing has ever been completed . . . probably never even begun.

gadfly

(Oh wait . . . I stand corrected about the “empirical testing program” . . . those now flying the little bird will report back of any problems they may encounter . . . if they survive.)

gadfly said...

The motivations of those both reading and contributing to this blog-site vary more than the weather. And I’m not about to take on those many issues.

There is, however, a few of us that want this little bird, and all other aircraft, to be safe when delivered to the customer, the pilot, and the many passengers who climb aboard, expecting no more, nor less, than a wonderful form of transportation.

And when we observe a miss-use of the system, to promote profit, or (in this case), “Ego”, we cannot stand by, and merely allow things to continue . . . without making our suspicions known.

‘Had this project been conducted in full honesty and disclosure, using proper methods throughout the design and testing, we might today have a successful aircraft company . . . fulfilling the dreams of many people. But, as we know (whether or not openly admitted by many), we have a disaster of a company . . . suspect of many violations of ethics and down-right incompetence.

Not any amount of justification can correct these basic flaws . . . regardless of certain pleasant flying experiences by a hand-ful of pilots/owners.

If the aircraft is as great as some claim, there should be no reservations about putting the “bird” through the needed tests, to prove it. And if not, the “owners” and managers have much to fear.

As a pilot, I haven’t flown for longer than most of you have been alive. As a potential owner? . . . on Social Security? . . . not hardly. But as a life-long lover of aircraft, and flying . . . I want nothing but the highest of standards for aviation, and all included. But this “Eclipse” thing is a travesty . . . even the “faithful” know that to be fact. And I don’t even wish the thing on the Russians.

‘Even the “Yugo” had its fifteen minutes of fame . . . but who would wish it to return.

gadfly

(And it shut down right about the time they were about to introduce their “Van” . . . the “Y’All Go”.)

fred said...
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fred said...

Billy ...

about the notes guaranteed by Etirc :

just ask yourself how credit you would give in any other situation to a firm with a "capital" of 50.000€ (64,521.93 USD in today exchange rate ) can guarantee a draft (the notes) of 160.000.000US$ (123968706€ still today exchange )

so a ratio of 2479,37€ for each € of social capital ...

i don't know about you , but to me that seems a "little" over-indebted ...

as the Luxembourg legislation permit it , we are sure of ONE thing with a certainty of 100% :

on those 50.000€ , at least 1/4 has been on Etirc account on Day1 of the said entity ( i used "at least" because normal common sens would require that one does the "legal minimum" and not much more , but we aren't in RP pants or mind , so ...!)

in that case it would be 9917.48€ for each € ...

better than any hedge-funds , no ?

julius said...

Dave,

keep in mind RP got that partial EASA-cert!Just for fun?
I think he needs the full EASA-cert! That is his only card to motivate some investors (and not his own pockets which may be empty or full).
If he fails to get that cert he will have lots of new friends on the eastern side of the pond...

Do we know the complete decision of the judge (how much must be paid for the liquidations of EAC and Pronto...)?


Julius

fred said...

Mr GadFly :

i totally agree with you !

whatever the testimony of Fpj lovers can be and whatever can be be their appreciation of the bird ...

everyone has to keep in mind :

1°What it has cost ...

2°the way it has been handled ...

3°what next ...

i totally agree with you that what anyone needs (Aviation or whatever ) is to have the highest standards by being "pulled up" by safety , professionalism ,ethics , etc ...etc...

never to feel happy on "oh, it could have been worse ..."

or

"between plague and cholera , we decided to take ______ !"

Shane Price said...

ea500s,

Could you drop me a line to

eclipsecriticng@gmail.com

I've a question (or three!) for you.

Shane

julius said...

fred,

what happens if RP starts recognizing that the fpj is "only made for the wedge"?
Once and a while it takes some time to find out that the fpj is just a tiny bird... and not a cash cow!
Is there any chance that ABQ will be profitable in terms of operation or even ROI?

Is RP willing to pay this financial burden until the Russia plant is productive?

I think RP will look for an "exit"!

Julius

fred said...

Julius , Gutten tag und Genau !

i don't think he will recognize the Fpj to have been made for Wedge , only ...

but i think you grossly misunderstood one point :

It is NOT the bird which is a cash-cow ... but the depositors that are milked over and over ... !

Will ABQ be ever profitable in term of ROI ?

how about me becoming young , clever, rich , handsome and less skeptical ??? ;-))

one of the thing i've learned (too often in a painful way): "Never say Never!"

but i would say very highly improbable !

facts are facts , if they want to have anything like a R.O.I they have to start by profitability on each sale !

to be profitable = they have to raise price : it will send away some more customers ( let's say the ones kind enough to believe that what did happen was due to the immature nature of the firm ...)
making it even more painful to reach R.O.I. , when working out the numbers !

or

reduce costs : can be made by "closing" a plant (we still are with a quite crucial question : one plant= +/- ok ; 2 = no way !) for many reasons , i am not sure the Russian plant would be the safest bet ...

alternatively , they can keep ABQ , use ULY as a service-center all out of USA (the problem:who is going to fly to Russia for servicing?) and off-course optimize the production (Q: to produce nothing , now they need 100's = to find out how to do it ?) and reduce the salaries ...

still , it would be a tremendous challenge ...

as well as keep ABQ open till ULY can roll-out anything of substantiate quality ...

bill e. goat said...

Ken,
(Touche'!! :)

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fred said...

zed ...

have you ever seen a bank PAYING a borrower to get a loan ?

sorry to bore you with that , but this is what is meant by "Royalties" ... ;-)

TBMs_R_Us said...

Aerlyper (actual spelling) makes avionics. So maybe RP has a plan to refit the E500 in the Russian plant so as not to be reliant on AvioNG. Perhaps Aerlyper was willing to invest the $75M due to a commitment from RP to give them this business.

The posts above misstate what the $159M in notes are. These are notes to be issued by EAI, not by ETIRC, and they aren't "stock". In other words, the sellers (senior note holders of EAC) get $28M in cash and $159M in new notes from EAI. If EAI fails, that paper is as worthless as the paper they already hold in EAC (cents on the dollar). Fred, this has nothing to do with the capitalization of ETIRC. Seems to me to be a pretty standard approach to BK financing: old note holders get cents on the dollar plus new notes.

Zed said...
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fred said...

TBM ...

i think this is where we disagree ...

Etirc is European ...
IF Etirc can Guarantee 160M$ , why they didn't make a higher capital ?

in Luxembourg (i have been working there for some times...) one can see "MOUSE that wants to eat WHALE" everyday by 10 or 12 ...
(the mouse being a firm with very little capital having the ambition of EATING an other firm 5,10,100,1000 times bigger )

i agree very much with you on the fact that if Etirc fails , papers , notes and shares will be worthless ...

i pointed out that in European Banks , you Guarantee to the concurrence of what you have on the day you issue it !

this is one of the main difference between US and E.U ...

and actually one the reason why we are in the mess we are in ...

so in a Lux. bank , if you ask what is the actual value of such a guarantee ...

they will probably answer by : "promises engage the ones who believe in them, ONLY !"
(underlining : Worthless , NOW!)

on the side , this is called a monetary creation , how to get 160M$ out of 50K Euros ?

make Notes !

TBMs_R_Us said...

Zed,

No, nowhere does it say Eclipse Jet stock. It says they get $159M in notes from Eclipse Jet. Big difference.

Hey, as to whether or not an Aerlyper deal is folly, the whole thing seems like huge folly to me. It's obvious that there is stuff going on here that none of us understand very well. The whole idea of taking a bankrupt aircraft manufacturer from the US that had numerous problems with its product, and somehow setting up in Russia to make a viable product is simply beyond comprehension. That could succeed in some other universe. But, honestly, I don't know squat about it and RP knows whatever he knows.

Fred, where does it say that ETIRC guarantees the notes? The court documents says the notes are to be issued by EAI.

fred said...

Zed ...

the spanish firm putting 75M$ in Russian ?

When Spain is suffering the biggest european downturn in economy of the whole continent ?

for a firm ONLY installing equipments ??? sounds like quite a lot ... for something lost in the middle of nowhere far away and very unsure ...!

TBMs_R_Us said...

Fred,

Confusion reigns!!

There are two new entities here: EAI, which is purchasing the assets of EAC, and ETARUS, which has the deal with the Russians. The "owner of the patents" will be EAI, and they are due to get the royalty payment and the $75M equity investment. What business they will conduct remains to be seen. So it isn't clear that the money going into EAI has anything to do directly with the Russian folly.

fred said...

TBM ...

i understand your point ...

what i am trying to tell you :

out of the Anglo-saxon (British&US) bank world the "self-certified" DOESN'T WORK !

if it is EAI that guarantee the "notes" , why not emit "notes" for an other 3 Billions $ ?

why ? cause : caught once , careful long time !

whatever we can argue about the matter , it doesn't change things a iota ...

those notes are a bet on the future ... a very unsafe bet ...! placed at a very bad moment of the economic cycle ...!

fred said...

yes , there is lots of confusions ...
just ask yourself the fatal question :

WHY some much confusions ? ;-)

Zed said...
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fred said...

but on the notes :

how can you buy something with the money you are supposed to do with the thing you are buying ?

160M$ is smoke and mirrors ...

the real price is 28 , nothing else !

TBMs_R_Us said...

Fred,

No, the notes are not a bet, and they aren't being issued to European entities.

The notes are a settlement of a US bankruptcy. EAC owed hundreds of millions US to certain banks (all US, I believe). Those banks have agreed in the bankruptcy proceedings to accept $28M cash plus the $159M in notes from EAI in exchange for allowing the bankruptcy reorganization (363 sale) to go through. Their other choice was a Chapter 7 liquidation, in which they would be lucky to even get the $28M. Whether the notes are actually worth anything is largely irrelevant. They might be worth something in the future, which means they are certainly worth more than nothing that the banks would get otherwise.

fred said...

still , the question remain :

IF EAI is owner of Patent , and receiving hypothetical royalties ...

EAI is formed by EAC bought back by RP ...

so what was the point of doing so ?
EAC was owner , they should have got those royalties ...

then the question of the "screwed ones" come back to the surface ...

so i wouldn't call this " IN GOOD FAITH " no ?

fred said...

which means they are certainly worth more than nothing that the banks would get otherwise

this is where we disagree ...

in the present time , it is much better to have something (even absolutely worthless) to show than to have to state , for a bank , investors , etc ...:

"We screwed Big Time , and have nothing to show against it ...!"

TBMs_R_Us said...

WHY some much confusions ? ;-)

Well, for one thing, we are talking about private companies here, ones that are under no obligation to discuss their business plans with the public. They certainly could give a rat's ass about this blog and what we think or say or know or don't know.

The fact is, we don't know very much, but try to surmise what's going on through small amounts of information. Sometimes the blog is correct. Often it isn't. So, I don't see anything nefarious or telling in this fact that we are confused about what really is going on. We simply don't know, and RP isn't writing on the blog to tell us his plan. Whatever it is in reality will become somewhat more clear over time, maybe.

Fred, again no. EAI is purchasing the assets of EAC in a court supervised bankruptcy transaction. That includes the patents. EAC was bankrupt, meaning they had no viable ongoing business. Perhaps EAC could have sold rights to those patents at some point, we don't know. Was there bad faith involved? We don't know, but not so much and so blatant that the bankruptcy court would intervene. Did Roel have some fiduciary duty to bring all of his business connections and ideas to EAC? I don't think so. EAC never paid for those connections or ideas. So RP brings forward some of those in the course of EAC going bankrupt, so what? There is nothing wrong with that. RP did not cause EAC to become bankrupt, its management before RP did that (Wedge et al). I'm not trying to defend RP, just to clarify that not everything going on here is corrupt.

in the present time , it is much better to have something (even absolutely worthless) to show than to have to state , for a bank , investors , etc ...:

"We screwed Big Time , and have nothing to show against it ...!"


The banks got all they could get through a negotiation. I doubt that they were incompetent in that negotiation. They have the $28M to show for it, plus the notes in the new company. This is very standard practice in this type of bankruptcy. Sure, they screwed up by lending to a company that couldn't repay. That happens all the time. What's happened since then is what usually happens. They got what they could get out of a dead deal.

Jackrabbit said...

So it truly is Eclipski. ALL the financial backing is Russian with ETIRC as the customer-facing EU Company.

Interesting that Eclipse was conceived in late 1990's when every internet-bubble millionaire wanted his (mostly) or her own jet, and the ETIRC-Russian connection was conceived when Russia was riding high on the oil bubble.

fred said...

tbm

i partly agree ...

there is lots we don't know !

but remember that i am a foreigner , only used to this side of the pond rules ...

what i try to point out :

what did RP brought in taking over EAC = Nothing , the russian deal was on the table for quite some times ...

what was the need to create EAI = in the rules of this side , i would tell you this = to erase the 3 billions $ ...

this is what i found extremely strange ...

you have 3 B$ , we form a joint-venture with aim : a project ...

i am very messy for 10 years , so the venture is totally broke ...

so you have no other way to take over , but find out pretty soon that it will NEVER be profitable for the following reasons :

too much time wasted (what was booming times at launch is now something worse than 1929 )

too much money wasted (3 B$)

what should you do ? knowing that you cannot run back into time ...

act on the debt ! BK ...

you manage to wipe-out 3 Billions $ for 28 millions$ and to help such a big pill to go down the throat by creating a fictional fiduciary instruments worth 160Millions $ ...

as i tell you , this is HOW i see the plot from here ...

then you start again with then a better risk of being one day or an other profitable ...

which is both wonderful and very strange to me ... as an economist , i would add : don't go complaining that you have Trillions of fictional value , nowadays ...this how the system works 160M+160M+160M0160M +etc...etc... at the end of the day , when the till is opened it is supposed to be absolutely full of cash , but there is only "toxic assets" instead ...

ps: if anyone has lots of cash to waste , i can surely use many of it on a very good project ... just going BK ...off-course !! ;-)

fred said...

Jack ...

sorry to contradict you ...

but in the 90's , Russia wasn't exactly ridding high ...!! ;-)

Dave said...

Their other choice was a Chapter 7 liquidation, in which they would be lucky to even get the $28M. Whether the notes are actually worth anything is largely irrelevant. They might be worth something in the future, which means they are certainly worth more than nothing that the banks would get otherwise.

Well purely financially speaking the banks might very well be getting less with the 363 sale than with this. Keep in mind that there are deductions that come out of the $28M (such as the ongoing DIP financing as well as being on the hook for providing labor so that RoelJet gets a PC) to the point where the sellers have to give money to the buyers. When the terms of the sale put ongoing and unknown expenses onto the sellers, it makes Chapter 7 look like it would return more.

TBMs_R_Us said...

Dave,

You may well be correct. The point I was trying to make was that the EAC senior note holders negotiated what they thought was the best deal for them. I would imagine that the $28M wasn't very meaningful given the size of the indebtedness.

Remember in the case of Adam, that the company went Chapter 7, and a few months later investors bought the estate for $10M cash (no notes in the new company). Of course, Adam had fewer assets than EAC by far, but then, $10M isn't very much money. That was a few cents on the dollar. My guess is that the banks had written off the entire indebtedness. And the same is probably true for EAC's lenders. As Fred observes, better to say we have $160M in notes than we have nothing. But I bet the banks list those notes as having no value.

fred said...

yes , dave ...

this is a very good point ...

The banks had 2 choices :

1° let the 363 happen and have the (fallacious) dream that may be one day , they will get some returns ...

2° go Chap.7 , share what was left (nothing) and have to pay the dip ...

fred said...

Tbm


No , those notes to the banks are worth "something" ....

they put it in the column "Toxic assets"

it is something that is a big minus for the bank(s) , so they call-up the feds and ask for a bail-out ...

even if Notes have No value , the bank don't put it under "valid-assets" but still manage to make money out of it ...

only one thing a bit disturbing = tax-payers money ...!!!

baron95 said...

ATM said ... the idiotic attitude regarding business aircraft is astounding... as he boards AF1

Very good point ATM. I'll add that to my letters and calls. IIRC Pelosi also has government provided transport. Typically a C-20 or C37.

For those of you who don't know, that the USAF designation for a Gulfstream III/IV or Gulfstream V respectively.

Jackrabbit said...

Fred: Its my understanding that ETIRC only became involved with Eclipse in early 2008, or maybe late 2007.

I think you may have misread the post. I was drawing the following analogy: Late 1990's phantom internet wealth (the "wedge" came from Micro$soft) and 2007-2008 phantom oil wealth.

(I know emerging markets, including Russia, fell apart in 1998.)

Jack

fred said...

Jack ...


sorry to contradict you once again ...

but IF Etirc would have been involved with this mess only in 2007/2008 ...it would be almost ethical ...

the problem is that before being called Etirc ...it was called Eclipse Aviation Int.

what a coincidence ...!

Jackrabbit said...

Fred: Very interesting! So when did the Russians get involved?

fred said...

even if i applause the Internet-bubble-madness reference ...

to me it has always more or less had the taste of those years ...

you remember , i presume ...

when one could have everything for nothing ...
when profits were "junk of the past" we were going to make fortune on Volume ...

problem = when everybody was busy dreaming about millions made overnight , they forgot a simple simple rule : profit 0 X few millions items = overall profit still 0 (i am not even talking about costs !!! ;-) )

baron95 said...

Shane said .... Ken seems to WANT Roel to win, but I'm not so sure that's a good idea.

What is the alternative Shane? No one else stepped up. If RP/Mann don't make it, EA500s could go disruptively unsupported for quite some time.

Shane Price said...

Baron,

As you well know, there were three other parties who had 'expressed interest'.

They may have had a viable plan. But Roel made SURE the alternative plan(s) never got properly considered because of his 'notes' offer to the banks.

Roel APPEARS to be spouting the same mantra as Wedge. Airtaxi orders everywhere, we need another factory to keep up with the backlog, the order intake will look after everything.

This is nonsense. We know it's nonsense, Roel knows it's nonsense and the aviation community as a whole knows it's nonsense.

So, when does a nonsensical 'business plan' become a scam?

The first time a non-industry dreamer tries it?

Or the second?

I'd really love to know what you think....

Shane

fred said...

jack ...

when the Russians got onboard ?

that's the part TBM meant as NOT-Known ...

as i mentioned before , i have been working in Lux. for a while ...

i even have firms in the same way than Etrick ... i only use them for what they are supposed to be used for ...without pretending buying-off half the planet ...

hide what you want to hide !

actually to know who is REALLY in a firm such as Etrick is VERY difficult ... not to say almost impossible ...!

Shane Price said...

I should state that I believe there is a business plan that COULD make sense. It goes something like this:-

1. Raise the price of the FPJ to the region of €2.75 million.

2. Lower deliveries (and a lot of variable costs) to the point where you make a small profit on, something 50 a year, or whatever you can sell based on CURRENT order intake.

3. Charge the existing owners like a wounded elephant, for EVERYTHING. After all, they are 'pot committed' and have no choice but to pay your prices.

4. Fix the bugs in the aircraft, even if that takes some time, or halts' deliveries for a period.

5. Tell the existing note holders that they are history, even if that means Chapter 7, and a gamble with the Type Certificate.

6. Ditch the 'Russian' experiment. Eclipse owners, suppliers, depositors and staff need another factory like a hole in the head.

I could go on, but I won't. Anyone who's interested can see the same ideas floating around the blog for the guts of a year now...

Regards

Shane

Jackrabbit said...

Fred: Even now, the opportunity for any meaningful profit is unclear at best! As has been pointed out on this blog, there are several good alternatives that don't have the stigma of Eclipse's past.

Prehaps they know something that we don't. Maybe Eclipski can produce planes for much less (less govt oversight, cheaper labor, etc.)

airtaximan said...

the plane was supposed to ave a market, becasue it was cheap to buy, cheap to fly, easy to fly. ALso it was supposed to have a large "Air taxi" market.

forget the AT market
forget the high volume = low cost

unless the Russian can produce and sell the plane for $1.5M... the market for this plane, even when finished, is very, very small.

You need to find someone who does not have enough money to buy a Mustang, or other potentially competing twin jet... will not fly a single jet, and will not buy used. They also need to want to go jet vs. prop really badly.

How big is this market? Pretty small... maybe 100-150 planes a year, IF the Russian make a damn good plane and the cost to produce is around $1M... at normal volumes, this will require some real innovation.

** I would think f you just add up all the parts, at normal production rates, you are likely over $1M.

Anyhow, it will be hard... I would LOVE to see them (or anyone) pull it off.

- Does anyone still think ABQ will be producing planes with this whole Russian factory deal?

baron95 said...

Shane et al, it is pointless to try to predict future success/profits.

EclipseJet is very much a spculative venture funded high risk business. Chances of "success" should be way less than 1 in 10, like all other such ventures. Or I should say 1 in 50, which seems to be the aviation/GA track record.

The only thing that matters now is: Will they survive in some form to continue to support planes (at some price) and build new ones (at low volumes).

If the $205M +/- comes in, it appears that the answer will be yes for another 18-24 months or so.

Two years from now we'll be discussing another cash infusion, CH11 proceeding and the like.

Such is the way of GA ventures.

Jackrabbit said...

airtaximan: Yes, I agree. Even a cheap Russian-built jet is not going to find a ready market in the West, but it might find enough buyers in Russia and elsewhere to limp along. And, after years of building a track record (assuming that record was OK), it might find a larger market in Western countries.

In good times (6 months ago?), Eclipski would be viewed as a long term portfolio investment by wealthy Russians and the Russian government (i'd guess that wealthy Russians are probably piggy-backing on the govt investment in some way). But the failing economy and low oil price - with no end in sight! - has increased the risks to the Russian govt and wealthy Russians.

Makes you wonder what kind of caveats, conditions, side agreements, breakup fees, etc. are attached to the Russian investment(s).

airtaximan said...

I just keep thinking back to all the hype so many people bought into.

The board
The customers
The suppliers
NASA, FAA
Local and State gov'ts
Investors
Russian Gov't
The guy at Forbes (Kaarlgard)
Even some industry analysis
The Collier Award

- I think Baron is right, this is just par for the course in GA - except it received so much publicity and so much financial backing - its a WHALE.

Also, it was so outlandish - a $1M twin jet, with all that advertised performance and low operating cost... designed for "airline" type durability... so easy to fly...

12 years in development, $3B blown away...

This is the mother of all GA screwups...

Will they live to die another day?
Seems like it.

I guess that's Baron's point - this is the GA condition. Heavy investment upfront, long development cycles, labor intensive, and mostly a niche market.

Tough to adjust to econ swings, and Newcos are vulnerable to the major entrenched OEMs who, notwithstanding all the Vern-EAC hubris, know something about this space.

Anyone looking to develop a new plane, bettwe consider the long history of the OEMs, and respect their insight. Chances are, IF they have not tried something, it is really tough, or they know they can catch up pretty fast, if they care to compete.

Respect was the main ingredient missing, IMO. Perhaps they could have concentrated on low cost, andleft all the Avio and FSW BS aside?

Who knows.

gadfly said...

The Eclipse debacle is a “microcosm” of our national economy (US of A, to our foreign friends). There is a sickness that says, “Throw money at the problem, and maybe it will magically go away.” And if that doesn’t work, throw even more money at it. And when even that doesn’t work, blame it on the critics . . . and use foul language, name calling, and generally cause confusion . . . with insults, and rapid changes of topic.

It isn’t a matter of rearranging the overall discussion . . . in both cases there needs to be a product. At the macro level, it appears the “Chinese” have that well in hand (Wal-Mart, Target, . . . and the list goes on) . . . even for the Europeans . . . and yes, even for products that were once the pride of Germany.

An “aside” here . . . a friend whose father worked on the weapons at Peenemünde, visits the “fatherland” each year, and sends children’s clothes (the “gadfly” has 19 grand kids) . . . and we pay her for “German quality”. German quality is more often “Made in China” any more . . . there is somehow a certain sense of justice in all this . . . but I digress!

At the “micro level”, Eclipse, et al, including the technology (whatever that might be), is being shipped off to the Russians . . . or so it seems. When the dust settles, if there is anything to be salvaged, it will be produced (at a profit) in China . . . or maybe in India. But Albuquerque will still be left “holding the bag” . . . hardly a major player in this farce.

Unlike our national economy, Eclipse stopped the use of the “color copier” a few years back. At the national level, the “color copier” is working overtime . . . printing money, almost faster than the ink-cartridges can be loaded. It’s humorous . . . the “tree huggers” and “global warming” folks should be demonstrating on the capital steps . . . about the use of trees to make more play money . . . but from that sector, complete silence.

The Arabian curse is coming true . . . “May you live in interesting times!”

gadfly

Frankly, I could better deal with that other Persian curse, “May the fleas of a thousand camels attack your armpits!” . . . At least, I can see the fleas . . . and maybe use some insecticide, “flea powder” (“Made in China”).

But for those that wish to buy “Amway” . . . or “Shaklee” . . . let the buyer beware! Even though such things acquire a life of their own . . . until all the garages in the country are filled to the rafters, with un-sold soap and health products . . . remember the famous words of P. T. Barnum. In case you have been on the moon, or Mars, for the past couple centuries, basically he said there is an everlasting market available, to anyone who wishes to promote it. Well, those are not his words, but the bottom line comes out the same.

TBMs_R_Us said...

Gad,

I think you are exactly right.

Microsoft certainly practiced a "throw money at it" approach, followed by throwing even more money at something, to the point of absurdity. I watched them go through years and years of ever larger and grander ambitions around the subject of video-on-demand, even though they had been shown pretty good research that folks just weren't going to purchase very much of it. But they must have spent hundreds of millions of dollars on it anyway. And, today, they have no revenue to show for it. None, zip and zero.

That's the environment that Vern "grew up" in, if you can call it growing up. And it shows in everything that Eclipse did. Lots of pizazz, lots of hype, lots of promises, lots of marketing bs, lots of everything money could buy. And in the end not a glimmer or a hope of ever making a profit. I disagree with Baron that this is just par for the course for GA. No, it isn't. This is special hubris, the kind only born in an incubator like Microsoft (and Paul Allen later), where they have more money than they know what to do with, so make really piss poor decisions about how to spend it.

So now, to send it off to Russia? It should be a Peter Sellers movie, made in China.

baron95 said...

ATM said... - I think Baron is right, this is just par for the course in GA - except it received so much publicity and so much financial backing - its a WHALE.

Also, it was so outlandish - a $1M twin jet, with all that advertised performance and low operating cost... designed for "airline" type durability... so easy to fly...


Yep, with predictable results when all such ventures get over-hyped and over financed. Just like E-pets or Tesla Motors or Segway.

In the end, most die, some survive with much more modest accomplishments.

baron95 said...

Gad said... Throw money at the problem, and maybe it will magically go away

Yep. And it just got a lot bigger, with all of us (taxpayers) having our $$$ sent to banks, Detroit, and now every mayor with a construction project at a clip of some $1,000,000,000,000 to $2,000,000,000,000 a year.

Gad also said... German quality is more often “Made in China”

Last time I checked the German products that I have/have had recently have no meaningful Chinese content. Neither have the British (Coventry design, Castle Bromwich, assembly) products. And thank got they are (mostly) rid of cheap, low quality, poorly built, substandard American Ford parts.

baron95 said...

So TBM, has any venture funded startup company purporting to certify/build a jet done better than Eclipse since Lear 45 years ago?

Any?

Didn't think so.

gadfly said...

It occurs to me that many who read this “critics’” blog, do not contribute to the discussion. And yet, you may have much of value to add to the discussion. Why not take the time to “sign in” and offer your thoughts. None of those who read this blog have any way of identifying who you are . . . so you have the freedom of a “secret ballot”, to offer comments or advice, that may have great impact on the overall discussion. Or maybe you just need the opportunity to express your own concern . . . about your own future, and that of your family.

Some of you may be employees of Eclipse . . . and many of us would like to know your thoughts. And, some of us have some influence within the Albuquerque community, that may, either directly or indirectly, help you in the near future. Please do not hesitate to express your concerns. Not all who contribute to this “blog” are wealthy . . . in fact, some of us have very little in financial assets, on which to rely. For the record, I live on that dubious form of income called “Social Security” . . . the other earnings went on to better things . . . of which I have no regrets.

(And, by the way, those other "invenstments" continue to earn eternal things . . . far more rewarding than silly little things that fly around overhead.)

Yet, by God’s continuing grace, we continue to survive. And our future is secure.

But there is an understanding that within the situation of a “less than ethical enterprise”, there are not only employees, but entire families, with great concern about their future.

There are, even in the Albuquerque area, folks with a concern about your future. Whether or not we may be of help . . . never-the-less, we understand and wish to be of help. Some of us have “been there, done that” . . . so to speak. God never promised that life would be fair . . . in “this life”.

Now, I am speaking from the heart . . . no humor ‘just now! Every day, every night . . . families in Albuquerque are concerned about the future. This is not a light thing . . . this is not a joke. We don’t care if the little bird is “legal” while flying through a cloud layer, that is clearly flying into known icing . . . bending the rules, to justify some silly argument . . . slip something under the table to the FAA . . . it doesn’t matter any more. The “FAA” has shown their true metal . . . by now a “joke”.

In the early days of aviation, it seemed that only the safety of those on board an aircraft . . . an “aeroplane” . . . that was the important thing. But today, the safety of that “aeroplane” involves far more than the pilot, co-pilot, and those sitting in back. It involves the very lives of thousands on the ground . . . and their families, etc., etc., etc.

No . . . the “gadfly” has not gone “ballistic” nor “Postal”.

But it’s time to “tether” the balloon, and bring the thing back down to earth . . . and re-focus our attention to things that truly matter.

So, let’s address specific issues:

Some of you cannot express yourselves, without profanity. You are hopeless! And you will answer for every word, . . . make no mistake.

Some of you cannot express yourself without attacking your adversary.

Some of you cannot answer a simple question . . . something as simple as “yes” or “no”, . . . looks more like a question given to someone with a political position. (I’ve had “food poisoning twice in my life . . . the results were almost more acceptable than the response of these folks. At first, I thought I would die . . . . and then was afraid I wouldn't.)

And then there’s the rest . . . unable to use the English language . . . you must have “flunked” English in high-school, or college . . . I would have failed you, had you been my student in English Rhetoric . . . there is no excuse. Even “Word Perfect” and “Microsoft Word” offers a simple “click” of “spell checker” . . . how much trouble is that? If it isn't worth saying "correctly", please don't bother!

The “gadfly” is shown in Scripture, as an irritating insect . . . I don’t intend to violate that “commission”, as an irritation. Rather, I intend to be an irritation, for as long as Eclipse continues to irritate those who put their trust in a “scam” in Albuquerque.

To take this a little further . . . an incident that I have already shared: I met this young “Hispanic” man, in our frequent place of evening supper (McDonald’s . . . on the east end of Albuquerque . . . the “off ramp” from I-40 West-bound . . . contrary to common belief, a “big night out on the town” is taking my wife, and maybe my sister-in-law, to McDonald’s, for the green chili cheese burgers . . . two each, coffee, and fries . . . and whatever exotic deserts). The “young man” and his family brought home to me the basics of what it means to work for Eclipse . . . believing in the “hype” that our long lost friend . . . shucks . . . his name escapes me for a moment . . . wait . . . it’s coming back . . . something like “Burn’ (as in moneyt) . . . no that’s not it . . . Vern . . . yeh . . . that’s it! Vern Raburn! Voila! (Give an old guy enough time . . . sooner or later something will turn up . . . but ‘just don’t be too “critical” . . . us old folks don’t calculate all that quick and proper like, as it were!) (Hey, someone just looked behind the greeen curtain . . . not fair! . . . go away!)

No . . . I did not forget the train of thought . . . the young “Hispanic” man was wearing his “T-shirt”, with the Eclipse label clearly displayed. I spoke to him, in nothing but positive terms . . . he was most enthusiastic, about the fact, that he was employed by a jet aircraft company . . . and had a great future ahead of him. His wife and young child were also present . . . and internally, my heart sank . . . as I knew more about his future, that he knew. It was a “heart-wrenching” moment . . . knowing that disaster was about to strike, without the authority to help this young man, and his family, through what would be within “days”, a most terrible experience. (As memory serves, it was prior to one of the "layoffs" . . . beginning with those who had the least seniority . . . in "time", but not necessarily in knowledge, and abitilty. I detected in this young man, the qualities that I would immediately hire, if I were in a position of seeking new help, new employees. I have no idea as to the outcome of the story . . . hopefully he will somehow survive. But today, there are those who “fly”, thanks to the sacrifice of others . . . and, as I read certain blogs, about going from “A” to “B”, with graphics to prove that the bird can fly above a solid cloud cover, I think back to that encounter, with a young man, who had put his entire trust into the hands of “liars” and “cheats” . . . and today may be paying a high price for the privileges of a few, that may, for a brief time, fly above the clouds . . . hoping against hope, that they will never repeat the incident at Midway, or "Brandywine" . . . yet with less than excellent results.

(Landing gear . . . poking through "wet wings" . . . please! . . . give me a break!)

‘Sorry, folks, but the “gadfly” has no sympathy for this Eclipse debacle. It has shown, on numerous occasions, its lack of ethics . . . on all levels. I have no sympathy!

gadfly

(Period!)

Baron . . . you are Wrong! A close friend, who often visits her home, Germany,. . . many months out of every year, attempts to buy "German made" products, only to find they are made in China. Believe anything you wish, the fact is that many/most things sold in Germany, have a label showing "Made in China"!

TBMs_R_Us said...

Baron said,

So TBM, has any venture funded startup company purporting to certify/build a jet done better than Eclipse since Lear 45 years ago?

Any?

Didn't think so.


So, Baron, I know you find it difficult to impossible for anyone to disagree with you. But, that isn't what I said and no way resembles the meaning of my post that disagreed with you.

No other GA startup in history has had the sort of background that Eclipse had, nor had the type of funding that Eclipse had. Your assertion that what has happened with Eclipse is "par for the course for GA" is simply not a true statement. Yes, most GA startups fail. But most of them don't have this background or funding, nor this type of absurd management. If your point is that failure is par for the course, well fine, we all agree. But your attempt to pass off Eclipse as a typical GA failure falls way short of the mark, IMO.

gadfly said...

It appears that most arguments are based on comparison with other companies. However, in the final analysis, it matters not what anyone else does . . . we are each held accountable for our own actions. A “liberal judge” may rule according to a curve, but even in our own company, we do not allow such thinking to be our method.

Every few days, I go over a few blocks to CostCo . . . right there on Eubank Blvd near Central Ave (“Old 66") . . . to pick up some groceries, and basic supplies. One of the things on the list is “Hebrew National Hotdogs” . . . since we have a zillion grandkids, . . . the “grandma” likes to have plenty of Kraft dinners (noodles) and “hot dogs” to serve the little folks.

Right there, on the Hebrew National Hotdogs . . . 14 per package . . . “We answer to a higher Authority”. You know? . . . I like that. I’m not Jewish, but I have exactly the same ethics . . . I answer to a Higher Authority.

When you answer only to “yourself” . . . what in the world is your standard?

Eclipse . . . what in the world was their standard?

Back in the Navy, I answered to the “Old Man” . . . a young guy, probably in his thirties, a “Lieutenant Commander” . . . “Lt. Cmdr. R. R. McDonald” . . . but to the 85 of us aboard that diesel electric submarine, he was the same as “god” . . . his word was absolute law. And we answered to his authority. Fortunately, he was a good “god” . . . and we eagerly obeyed his every wish. We answered to him . . . our very lives depended on that relationship . . . whether on the open sea, or deep inside an enemy port . . . and because of that close relationship, I am here, today, to make my opinions known. In a way, I owe my very life to that relationship . . . those days were not fun and games, by a stretch.

But he “earned” that position.

So far, I have not seen a single individual within the scope of Eclipse, to have “earned” the position of loyalty, required for a successful enterprise. In fact, I have seen nothing but the opposite of anything requiring respect. And that is truly a disgrace.

gadfly

Jackrabbit said...

Russia may default:

http://zerohedge.blogspot.com/2009/02/russia-about-to-default-on-debt-again.html

Turbulence ahead?!?

Jackrabbit said...

From Bloomberg:

Feb. 10 (Bloomberg) -- The euro fell, halting a three-day gain against the yen, after the Nikkei newspaper reported that Russian banks and businesses may ask foreign lenders to reschedule loans worth $400 billion.

The yen gained for a second day versus the dollar on speculation the financial turmoil in Europe is worsening, prompting investors to sell higher-yielding assets. The 16-nation euro also dropped against the dollar after European finance ministers signaled increasing concern that some governments are finding it harder to borrow in financial markets.

“European banks may face more financial difficulties, given the Nikkei’s report that Russian banks may negotiate a debt rescheduling,” said Yuji Saito, head of the foreign-exchange group in Tokyo at Societe Generale SA, France’s third-largest bank by market value.

. . .

‘Driving Euro Lower’

The euro weakened versus 12 of the 16 most-active currencies as the Russian Association of Regional Banks has submitted a plan for rescheduling loans to the Russian government, the Nikkei newspaper said, citing an interview with Anatoly Aksakov, the head of the association. The group is already in talks with HSBC Holdings Plc and Deutsche Bank AG, the Nikkei reported.

“The Nikkei report of rescheduling debt is driving the euro lower because European financial institutions have bigger exposure to Russia than their counterparts in other countries,” said Takashi Kudo, director in Tokyo at NTT Smarttrade, the foreign-exchange unit of Nippon Telegraph & Telephone Corp., Japan’s largest fixed-line phone company.

baron95 said...

TBM said... Yes, most GA startups fail. But most of them don't have this background or funding, nor this type of absurd management.

Thanks for clarifying - apologies if I didn't get it earlier.

I agree 100% with the statement above. Eclipse did a great job hyping a market, raising money, lining up vendors. Then they squandered it by an avionics and engine selection mismanagement and compounded it by their paranoid communications and management.

So they did more than most Biz Jet startups since Lear, but, I agree with you, they lost a royal opportunity to really create a GA success story.

That is really the tragedy of the situation. Not that they accomplished nothing. But that they wasted so much money and hype and failed to accomplish more.

Jackrabbit said...

Note: Vnesheconombank (VEB) is Russia's state development bank and will probably not be directly affected/impacted by any restructuring.

But this is indicative of the economic stresses that Eclipski faces.

Bubba said...

Ken Mayer said: "On another note--congratulations! I see you got your Student Pilot Certificate. That's a great first step. How is the training coming along? I hope one day you'll be able to fly your Mustang and truly enjoy it rather than just sitting in the back. Trust me, it is ever so much more fun to be the pilot than the passenger of a VLJ. And Mustang is a great plane--maybe not as fast or efficient as the Eclipse but almost as fun to fly."

My guess is the Ken would swap places with this guy in a heartbeat! I'm guessing Kenny doesn't have the financial ability to walk away from the E500 POS and get a real plane. I, for one, would rather be a student pilot riding in the back of a real airplane than an ATP in a potential death trap!

And, yes Ken I walk the walk and can talk the talk. I'm a high time pilot who owns and flies multiple aircraft - including a CJ3! I once considered (and flew) an E500. It was obvious from a one hour flight the aircraft was not ready for prime time. As a high time pilot you know in your heart this POS shouldn't be sold to the general public. My problem with your shilling is that you MIGHT actually convince somebody it is OK to buy a used E500.

bill e. goat said...

Zed, Fred, TBMs_R_Us,
Thank you for the excellent discussion of the terms of the sale. Unfortunately, I have no clue as to what you are talking about. (The first sentence HH is more than half the length of the Gettysburg Address!!).

(I would be remiss without posting it, a stunning and timeless work):
Gettysburg Address

But, even I can tell it is one of the best discussions in a long time, and I am challenged and intrigued enough to re-read it over the days ahead, and maybe it will soak in.

(At least that's the way I interpret people who tell me to go soak my head).

Fred summed it up well for me:

"Confusion reigns!!"

For now, it sounds like;
1) VEB is out $205M
2) The Spanish firm is out $75M
3) Investors in Old-co get $28M, and a bunch of promises.

So this leaves me particularly curious (curiouser and curiouser!) about one issue:

4) Where is the $125M for Stir-Fry and Faux-Trix going?

(To the investors (presumably, the former patent holders) in Old-Co ??)

Thanks!!

btw,
Passage Statistics Tool

Zed said...

Bubba,

Maybe Ken's other airplanes were bigger POS than his Elapse 500.

Maybe this is a real step up, as sad as it is.

Most GA pilots learn to love the various POS they fly from hour one, and settle for less when they could have had something nice.

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

TBM,

What was (one of) Bill Gates' core philosophies?

The only thing that matters is volume!

bill e. goat said...

Marginal apologies proffered, but I can't not post the test of the Gettysburg Address...

"Four score and seven years ago our fathers brought forth on this continent a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal.

"Now we are engaged in a great civil war, testing whether that nation, or any nation, so conceived and so dedicated, can long endure. We are met on a great battle-field of that war. We have come to dedicate a portion of that field, as a final resting place for those who here gave their lives that that nation might live. It is altogether fitting and proper that we should do this.

"But, in a larger sense, we can not dedicate—we can not consecrate—we can not hallow—this ground. The brave men, living and dead, who struggled here, have consecrated it, far above our poor power to add or detract. The world will little note, nor long remember what we say here, but it can never forget what they did here. It is for us the living, rather, to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us—that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion—that we here highly resolve that these dead shall not have died in vain—that this nation, under God, shall have a new birth of freedom—and that government of the people, by the people, for the people, shall not perish from the earth".
-------------------------------

Would that circumstances never again be created that birth the horror behind these words.

Sadly, and more correctly, never recreated again.

bill e. goat said...

Zed,
"BEG,

Me thinks the $125M will go to general operating expenses of NewCo."


That's how it sounds to me, too.

I reckon it will take $200M to make a go of it, so this gets them close. If the other $75M from the Spanish is thrown into the pot, well, things look relatively promising, at least for 2009.
-------------------------------

Fred: "Will ABQ be ever profitable in term of ROI?"

Zed: "...just about what they are getting from KGB."

Goat: I think there will indeed be ROI. But I'm not sure it will be coming from ABQ.

Jackrabbit said...

Shane,

Russian debt restructuring coming at this time seems like a real compelling story for a European Publisher. I can see the headline now:

"Russia finances $205 million buyout of defunct, scandal-plagued jet maker as Russian banks seek EU bailout"

bill e. goat said...

Pete Solvik,
Congratulations on your student permit! And, on your Mustang!

I just made things "legal" in the recent past, and the one thing I didn't do, but wish I would have, was make a journal, sort of a personal post-flight debriefing log.

I got in a hurry, and didn't bother to document my thoughts; I think your journey will be extra special, and very worthy of documenting, and inspirational to others who may be thinking of doing the same thing. I strongly encourage you to do so!

(My flight instructor and check pilot were both in their 80's, and had stopped counting their hours at 20K, and both of them said, you can never write too much in your log book- where you went, who went with you, the weather, what you did, who you visited, etc. The kids that are "racking up time" won't want to bother, and will, with the understandable eagerness and enthusiasm of youth, forego such annotation in the interest of ambitious "professionalism", but if you're flying for fun- the heck with it- make it a truly personal log book- the FAA doesn't care, but you will, later.

(Log books are cheap- why worry about an extra inch or two per entry. My thoughts anyway.)

Congrats!!

Jackrabbit said...

Some tweeking:

"Russian state finances $205 million buyout of defunct, scandal-plagued luxury jet maker as Russian banks seek EU bailout"

bill e. goat said...

(I do offer apologies to Gadfly, what with test vs text, and numerous other errors!).

Regarding a few good men (and women) at Eclipse...I'd offer Oliver Masefield as a fine example- I've never heard a bad word about him, and many good words!

Eclipse is not a den of vipers, in fact, I'd give the work force high marks for dedication, although not particularly well managed at the top (was that nice?)

I do take exception to the assertion that Eclipse is the most successful biz jet startup since Bill Lear 45 years ago though. I can understand this sentiment, but the fact is, a dozen other companies would have matched Eclipse's success, if they would have been graced with:
1) 10 years of development time
2) $3B in funding
3) A compromised certification process.

With those circumstances, one could build flying Winnebagos.

For a while.

Just not at a profit, so only until the investment was burned though.

Winnebago WGO- check past 2 years
(I don't think they were involved in a VLWJ- Very Light Winne-jet, but maybe...)

Eclipse's distinguishing accomplishment was fund raising, whether through fraud or not.

But with (near) completion, it really is a dang nice airplane!

(As I've said, I think only the Safire was a better design. The Mustang is a better airplane, but so is a G5: neither are (or at least with the original pricing, were) in the same category as Eclipse though).

Jackrabbit said...

I suggest a contest for the tabloid version of the headline. My entries:

Russian bear growls to investors: "Feck off!"

Moscow to investors: You'll be paid ... when pigs fly!

Jackrabbit said...

Just a reminder: these tabloid headlines are IN JEST and meant to be attention-getters while highlighting the irony inherent in the more business like (but lengthy) headline above.

Aside: In the 70's New York City was mired in a deep financial crisis and sought help from the Federal Government. The President at the time was Gerald Ford who refused to help. Prompting the famous tabloid headline:
FORD TO CITY:
DROP DEAD.

bill e. goat said...

Bubba,

"My guess is the Ken would swap places with this guy (new Mustang owner) in a heartbeat!"

No Bubba, in a heartbeat, and with about $1.5M, or double what the Eclipse cost Ken.

Or for a heartbeat, and another $4.5M, or quadruple what he paid for his Eclipse, he too could get a CJ3.

Or you could, with a heartbeat and another $15M get a "real jet" like a Challenger 300, instead of a CJ3.

The Mustang is a modestly better airplane, but when Ken bought in, it was twice as expensive. For $1.5M, what is a safer new airplane, than what Ken is flying now?

Money, like heartbeats, is finite (and more quantifiable). And I'd say Ken will likely have more heartbeats flying an Eclpse, than any other new airplane for $1.5M.

"If" he and a hundred or two other guys had it to do over, with what they know now, maybe they'd opt for a Mustang also. "If" they had $3M or so.

But "if" my nose were 12 inches long, I'd have three feet. It's not, and I don't. So I make do with what I have, and am grateful for it, and don't spend time worrying about people with noses that really are 12 inches long. Like Wedge (er, Pinocchio).

Jackrabbit said...

Russian Banks Ask Government to Help Them Renegotiate $400 Billion of Debt

Feb. 10 (Bloomberg) -- Russian banks asked the government to moderate talks to restructure $400 billion of loans to foreign banks falling due within four years, said the head of the Russian Association of Regional Banks.

The association wrote to the Russian government after talking with banks including HSBC Holdings Plc that had sought clarity about the capacity of some companies to meet obligations, Anatoly Aksakov, the association’s president, said in a phone interview from Moscow today. The government hasn’t responded, he said.

“It would be most effective if the debt were restructured so it’s clear to everyone, creditors and borrowers, how the debt will be paid,” Aksakov said. “The government has the money. Some companies and banks have rather large hard currency liabilities on their balance sheets.”

Speculation of European bank losses on Russian loans drove declines in the euro against the dollar and yen today. Russia has pledged more than $200 billion in emergency funding as plunging oil prices push the world’s biggest energy supplier into its worst economic crisis since Boris Yeltsin’s government defaulted on $40 billion of domestic debt in 1998.

The central bank expanded the ruble’s trading band against a target dollar-euro basket 20 times since Nov. 11 as the currency tumbled 35 percent against the dollar since August. Russia’s foreign reserves plunged 35 percent in the past six months.

**NOTE: And the Russian stock market has declined from an index level in the 1900s last June to about 700 today so there is limited ability to raise equity. ***

“No one in the Russian government has ever suggested any debt restructuring was contemplated,” said Eric Kraus, head of strategy at Otkritie Financial Company, a Moscow-based bank and brokerage. “The entire purpose of the slow, stepwise devaluation of the ruble was to allow companies to purchase sufficient foreign currency to repay debts maturing through 2010.”

Euro Slide

Laine Santana, a spokeswoman at HSBC in Hong Kong, was unable to comment. A Deutsche Bank AG official inSingapore declined to comment. Deutsche Bank is among the foreign banks that indicated they would welcome Russian government involvement, Nikkei reported.

The euro fell to $1.2865 as of 2:46 p.m. in Tokyo from $1.3003 late in New York yesterday. Europe’s single currency slipped 1 percent to 117.67 yen.

“People expect that part of these debts were from the European banking system,” said Sebastien Barbe, a strategist at Calyon in Hong Kong, the investment banking unit of France’s Credit Agricole SA. “You already have a very weak banking system in Europe. If you have these Russian issues, the next step would be questions about whether similar problems will come out of other Eastern European countries.”

Russia, the world’s second-biggest oil supplier, will enter a recession and run a federal budget deficit this year for the first time in a decade, according to the government.

Prime Minister Vladimir Putin this month approved a further 400 billion rubles ($11 billion) of aid for Russian banks in the “second stage” of a bailout plan that targets consumers and companies in the “real sector” of the economy.

fred said...

Jackrabbit :

yes , the R. Banks have asked for bail-out ...
in case you do not know , it is worldwide ...

as written in the the "brief" from bloomberg state it : this is "speculation" (the default of Russia)

Basically speaking , you have to be careful with such comments ...
most peoples take it as "God's words" when it is mostly only ONE sound of a bell in a ocean of noises ...!

situation now is vastly different of 1998 ...

in the year Russia experienced Payment Default mainly because they had to fulfill commitments to pay and the cash-till was totally empty ...

confidence were extremely low , following the collapse of Soviet-Union , the western countries made a terrible mistake = we had worked a lot to destroy FSU , but when they needed us the most , nobody was home !

so we were not there , perfectly understandable ... after a war (even a cold one) the ones who believe to be the winner DO NOT want to hear that the hardest job is still ahead ...

nothing abnormal with this ... at the end of WW2 , many survivors from Nazi death-camps COULDN'T tell their story = no one was interested in listening to them !!
(too many horrors to date)

so , as any crisis has its roots in past, 1998 is the result of the lack of presence of the "Democratic world" to show them , NOT teach them, the + and - of all different ways it can have ...
because this simple thing should have been acknowledge by ALL western countries BEFORE that the most perfect system STILL remain to be invented ...

USA is very far from being perfect , European Union is , at the best now, a big mess ...

so WE let them experience their lack of anything ... (contrary to what most think , the end of communist system has been replaced by ... nothing at beginning ! a big gap filled with anarchy ... mainly because too many Russians thought that Liberty was to do anything they wished ... which is TOTALLY WRONG , we have been living in liberty in the west long enough to "forget" about this : liberty = "do what you want in respect each other in the limit of the respect of the laws" )

we were very happy (West) to see this former foe crumbling down ... without seeing that WE were planting the seed of many crisis ...
a bit in the same way that Hitler came into power in Germany NOT because Germans are bad ... ONLY because Allies decided , at the end of WW1 , to pressure them as much as they could ....!!
or closer to you , The Patriot-Act (the biggest attack against civil rights ever created in US) has been voted following the 9/11 ...

so as usual , we didn't look at our past to make a better future , we kept (and still keep) on doing the same mistake over and over again ...

so the 1998 crisis happened in Russia , the Govt in that time was a joke , the cash till was strictly empty (very well helped into such by peoples like Berezovsky who took all he could in the cash-box , just before being granted political asylum in UK , because he had lots of cash with him and the fact that "everybody knows Russia isn't democratic!" like it could be so easy ... in white are the good-guys , in black all the scums )


NOW :

situation IS VERY different !
even if most western medias portray Mr Putin as a kind of soft (more or less ) Despot , he has succeeded into one thing :

when Oil-Price reached high levels , instead of spreading money on the peoples to "buy" their support (like all Western politician would have done!)...

he decided to save a big chunk of it ... (called the "stabilization fund")

this is where the actual money given as bail-out to banks is coming from ...

will it be enough to last the crisis ? we don't know as no one knows yet where this crisis will ends ...

one of the "good" thing i can see in this :

unlike most western countries , they do not rely (or at least try to) on writing debts for next XXX generations ...

in this kind of crisis , to use Tax-payers money is like shooting your left foot with your right hand ...

if the Keynes-theories prescribe Govt to spend in order to re-launch the Eco-engine , i believe that in a crisis consecutive of a giant-surplus of cash floating around , the need for more cash to be added is nearly a foolishness ...

as it will ease the symptoms , but absolutely not cure the disease !

so in the Eclipsky plot , i feel that spending 1$ of Russian money into something which has been characterized as :

unethical
really messy
unfinished
with "fuzzy" cert.
cash starved over and over , again and again ...

is at the best a F****G waste of resources ... as well as the exact opposite of what Russians need , in term of "trust they can have in foreigner firm"

and therefor , a risk far greater than keeping a scam alive for the pleasure of some to have a "maintenance firm" at hand ...

for a product any D.I.Y-lover could have achieved in his backyard or in the sink of its kitchen ... provided the same amount of cash , hype and dream would have been spent ...!

so , YES , EAC has achieved something ... the MOST important question : AT WHAT PRICE ?

remember a chain is only worth its weakest link

so EAC has achieved =

+ Certify a twin-jet

- destroy the dream of many depositors who could have bring cash in some other project ... and will probably NEVER again trust a start-up !

-Spend so much money , that even mind has difficulty to figure it out ...(3 Billions $ when 1.2 Billion is curing all Africa's AID for the century to come ...)

-Make Talented peoples do the wrong choice in joining and staying in EAC , and by such voiding the fact that if EAC had any success (in term of achievement) = it is absolutely NOT because of the joke called Management or board ...!

-Make an institution goes under "special congress audit" because some inside were corrupted or greedy enough to bend the system ...

-Make politicos to sustain a blatant pitfall to the expenses of local tax-payers ...

- and last , but not the least , to have a judge to accept a deal made by the banks to get worthless papers as pure gold (the notes) because they know only too well that the risk is going to spread onto tax-payers ...

all of that for a product which has NO real , understood and quantifiable market at the time of writing ...

I wouldn't say the Fpj is good or bad for Russia ...

i would say it isn't f***g good for Anywhere !!!

Shane Price said...

A note to our bloggers

We are all facing challenging times. Many people who read the blog treat it for what it is i.e. a place where adults (well, some of us....) share thoughts and ideas in an open manner.

Every now and then a few facts emerge. EAC announcing price increases, Wedges' departure, the various Airworthiness Directives, the Chapter 11 process and many other items are aired and discussed. This is a good thing, and reflects the best use of what is, after all, a BLOG.

But, and I stress this, we must maintain civil standards in the words we use.

Please be careful what you write. Avoid personal abuse and/or 'anglo saxon'* terms.

Some of the comments in this thread have stepped over the line. Two have been deleted by 'the powers that be'. We don't want to do this, but feel we have no choice.

Thanks

Shane
* I love blaming the English for 'fowl language'....

Jackrabbit said...

Fred: Yes the financial crisis is global and there is plenty of blame to go around (especially in US where it started). Still, it is a remarkable and ironic situation: Eclipse burns investors in US and now Russian state will finance buyout while EU investors face losses in Russian investments.

I think EU investors would prefer to be paid. I think Russian citizens would prefer . . . a less risky investment that produces something that betters their lives (like trains, not small luxury planes).

Jackrabbit said...

Here another one:

FLYING BEARS TRUMP INVESTOR CARES

fred said...

Jack :

i am not so sure EU investors are going to loose anything in Russian Investments ...

i mean the ones made in "good faith" and not dictated by some greed , half-baked deal ...

after all , this the "beauty" of capitalistic system : No pain = No Gain !
(btw capitalism is really a very bad system ... but i do not know any better ...!)

You got my drift : Russians have ABSOLUTELY no need for personal jet ...especially such as the Fpj !

this is articulated around 2 of the things which made me react on this very Blog :

1°)Russia is a country far away , with a need for Visa to get in (or out if you're russian yourself...)

for me it is madness !

as it only permit peoples from both sides to be kept in the "unknown of the other" and eventually be fed with any garbage-talk by any pseudo-entrepreneur ...

if we could freely go and come to each other country , for a limited period of time and without any rights of earnings ...

we would find out that we are not that different ...!! ok , the American-Dream would stop living as American (everybody has the same , with equal possibilities of reaching it , in developed countries) but apart this ???

2°) you are absolutely right ! Russia and russian do not need to see another "Cow-Boy" coming , selling them a fuzzy-project , make a fortune overnight and finally disappear , leaving behind the unpaid bills ...

for something like 70 years , they have been raised with one idea :
"Foreigner = Evil ! "
the same than most of us :
"Better dead than Red !"

so , how many dream-breaker do we need to send them to remind them of this "evil stuff" ?

fred said...

BTW ...

Monsieur Shane ...

i promise to try to grow-up a bit ...if that is possible ...

no one can turn vinegar into a good wine , as they say ! ;-)

Jackrabbit said...

Fred:

In an earlier post I made the point that we live in a VERY different world today than we did even 6 months ago. Just 6 months ago, Eclipski made some sense as a Russian investment in a portfolio of investments (helped to diversify the economy, for example).

The situation that we ALL face today is dire. All individuals, and nations too, have to carefully consider their capital commitments.

It is too soon to say if investors will lose money on the PRINCIPAL of their Russian investments, but a restructuring will mean a reduced interest rate and/or extended maturities, which reduce the value of these investments. And banks with this exposure will have to write off that value. The banks are in such bad shape that they must raise capital to match such write-downs. And that capital raising is expensive at this time. (That is why the Euro fell --> there is a real effect.)

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