Thursday, February 26, 2009

Light(s) at the end of the tunnel?

UPDATED Sunday 1st March 2009

URGENT, FAA issues a "Special Airworthiness Information Bulletin" for Eclipse owners.

Check out the official notice from the FAA. They've clearly been fielding questions about the current 'issues' affecting the FPJ. Read it, fully, and act accordingly. Anyone operating one of these aircraft may find themselves in more hot water if they choose to ignore the advice. In particular I'd draw your attention to the issue affecting those with IS&S displays (AvioNG), which cut on on s/n 105 and may have been retrofitted to a few of the earlier aircraft.

Original Post
I've been watching, in my quiet way, a few of those who were interested in the original Chapter 11 sale for the assets of EAC. I did so in the firm belief that the pre cooked sale by Roel, to Roel, would end in tears. I'm aware of several entities who may, or may not, be able to make Eclipse V 2.0 happen, some of whom will make a go of it, and others who will not. As often happens in these matters, those who 'come out' early on get an advantage, if only by being brave enough to explain what they are about.

Herewith two of those efforts. Make of them what you will, and understand that I provide this space in a sincere effort to find a way forward for staff, suppliers and owners seeking some solace in difficult circumstances. Others, with similar intentions, are of course welcome to contact me. In the meantime, the best of 'Irish Luck' to Phil, his team and now the 'owners group', who join the fray below. I should add that this has been sent to me by the official representative of the the owners, who is know to me for some time.

So, now there are two. May the best 'entity' win....

Shane, updated 27th February 2009, 16.30 GMT

Dear Eclipse 500 Owner,

As you must be aware, Eclipse Aircraft Corporation has been in Chapter 11 bankruptcy for the last two months. In the last few days events have unfolded that will take the company into Chapter 7 liquidation.

The future utility and value of our aircraft is now in serious jeopardy. If we as owners do not take control of these events, we risk having our planes grounded, become unserviceable, and ultimately become worthless. We can no longer rely on someone else.

The only way the owners can be assured of the continued use of their aircraft is to come together as a group and as a group participate in the creation of a successor organization that will have full control of the serviceability, modification, and long term reliability of our airplanes.

Today there are a number of outside entities that are “looking” at the owners as an income stream that they can fully exploit like a monopoly. These entities believe if they control the assets of Eclipse, they can charge the owners hundreds of thousands of dollars just to get their plane upgraded and serviced. One of these plans wants to charge owners a $300,000 surcharge for any modification plus the marked-up cost of parts and labor. Another plan wants to charge owner a yearly fee of up to $90,000 just to access service. This would add $500 an hour to the average cost of operating your aircraft significantly reducing its value.

We as owners can either sit by and watch others take control of our airplanes or we can take that control ourselves. This will not be easy or without cost. But it will be far better than the alternative.

The Ad Hoc Committee of Eclipse Customers has recommended that Eclipse Owners join together and form their own group, taking charge of their destiny. We, the owners on the steering committee of the Ad Hoc Committee of Eclipse Customers, will be holding conference calls in the next few days so that we can reach out to all owners and discuss next steps in this process. We ask that you join us on one of these conference calls.

Just email your name, street address, telephone number and Eclipse serial number to EclipseOwnersGroup@gmail.com and we will send you the access number, dates and time so that you can be part of one of these conference calls. If you cannot attend one of these calls, we will send you full information on how we can all join together.

We are on a very fast timetable. The liquidation sale will take place very quickly. We don’t have a great deal of time to protect our future. Let’s all unite, and as a solid unified group we will be able take control of our Eclipse future and be able to fully utilize our aircraft without being held hostage by others.


Mike Press, Randall Sanada, Ron Lebel, David Green, Ken Meyer

P.S. As we mentioned there are a number of “plans” being developed by others. Please make sure that if you have to sign an NDA to view those plans that you are not limiting your ability to join all the owners in a common effort.


ALBUQUERQUE, NM — February 26, 2009 — Today Phil Friedman announced the formation of New Eclipse Acquisition LLC (“New Eclipse”) which intends to bid for the assets of Eclipse Aviation Corporation in the Chapter 7 bankruptcy proceedings.

Mr. Friedman is an experienced aerospace executive who has turned around several companies over his 28 year career. He is currently CEO of Harlow Aerostructures LLC in Wichita, KS which manufactures electro mechanical and structural assemblies for many OEM’s in the aircraft industry. Peter Reed, former CFO of Eclipse for seven years, is part of Friedman’s team and has actively participated in developing the New Eclipse business plan over the past
several months.

“I have been studying the Eclipse situation for over a year,” said Friedman. “It is sad that the company has ended up in bankruptcy, but I believe there is an excellent business opportunity going forward if managed correctly. Our plan is to take the first 24 months to stabilize the fleet of 259 aircraft and restore the brand. All aircraft will be brought up to the current type certification level so that ongoing service and support is as efficient as possible. We will also retain a significant number of engineers to improve aircraft reliability, upgrade the avionics suite, and focus on reducing manufacturing costs to industry benchmark levels. We will open several smaller service centers around the country to provide more convenient access to service the fleet and will also provide pilot training here in Albuquerque.”

“We will be charging customers to bring their aircraft up to the latest certification level. Our business plan assumes some of the customers will not be able to afford the upgrade. Our sales representatives will work with these customers at no charge to find new buyers who will have the means to pay for the upgrades. In providing this service, and with a business plan that translates into the New Eclipse becoming a company with a profitable long term future, we will be supporting the investment that the existing owners have made in their aircraft. Our objective is to bring the aftermarket price of the Eclipse up to the $2 million range, thereby providing a valuable service to all existing owners. We also plan to finish and sell seven new aircraft on the production line that are about 95% complete. In addition there are 28 DayJet aircraft that will need to be upgraded and refurbished and new owners found.”

“Employment levels over the next 24 months should be about 400 people as we upgrade and service the fleet,” said Friedman. “After the engineers have upgraded the avionics to the latest functionality, reduced manufacturing costs, and we have re-established relationships with the supplier base, we plan to restart new aircraft production in 2011 at modest levels, approximately 100 aircraft per year with pricing in the $2.4 million range. At that point employment will increase to approximately 600 people.”

“We certainly recognize that bringing Eclipse out of bankruptcy will be challenging. There are many parties that have been badly hurt and bridges will have to be rebuilt and relationships restored to execute on our plan. We understand that the employees who have been laid off need to feed their families and pay their mortgages. We are actively exploring ways to hold the key talent together during the Chapter 7 process so we can re-employ them with the new company.”

Mr. Friedman may be reached at (702) 449-8312 or email at phil@harlowair.com.

536 comments:

1 – 200 of 536   Newer›   Newest»
airtaximan said...

Peter Reed...

as I said last week, someone should locate HIM.

Nice job, best of luck.

Seems like a sane plan, as long as they count on selling 100 planes per year max.

PS. I fear someone is going to sue Peter Reed for breaching his NDA.
;)

Great news Shane - imagine, story broke on this blog!!!

If this ain't Black Tulip - its a great scoop

gadfly said...

If Eclipse were originally manufactured under the conditions that seem to be apparent in the "Harlow" website, they would possibly be alive and well, today. But remember, the basic design still has major questions.

And get rid of that "stir frying system", and "chem milling" to reduce weight . . . both of which are a farce. Do it right, this time . . . or don't bother! The design is too minimal in too many areas to include these problems.

gadfly

And never, never, ever lie to a customer, or the public . . . ever! One time and your as dead as DI's "parrot".

Shane Price said...

ATman,

The Honorable Black Tulip was NOT responsible for this headline.

Let's hope Phil is not the only one to 'have a go' and that there is a real competition for the assets this time.

Unlike the Chapter 11 'non event' which smelled rotten, all the way.

Shane

Dave said...

Where in the World is Roel Sandiego?

ea500s said...

Unlike the Chapter 11 'non event' which smelled rotten, all the way.

Shane I do agree with you about that.

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

hane,
Great coverage!
H-O-T D-A-N-G !!

Baron,
"Shane, how many obituaries do you plan to write for Eclipse. This is like number four, right?"

Mr. B95- I would say instead, how many times has the blog been declared dead due to anticipated "lack of material" !!
:)
---------------------------------
I would have to say:
NEVER "MISUNDERESTIMAGE" THE STAYING POWER OF THIS CRAZY STORY !!
.)

ExperiencedAviationProfessional said...

In the previous thread,


“H.M.E said...

2) How do we ensure that all the intellectual property will be intact at the auction? Specifically I am referring to the AVIO source code and executable programs needed to generate / install valid binary images (activation codes are S/N specific?) .

3) EAC may be obligated by law to deliver the IP to the ch7 trustees, complete and intact at the time of change to ch7 status. But what happens in the next few hours till then? Keep in mind that the EAC IP is not currently used as loan guarantee. For all I know, a handsful of EAC personel may be locked up behind closed doors doing serious clean up as we speak...

4) During the typical pre ch7 "cover-your-ass" cleanup operation, what if a few critical files got deleted by mistake together with MOM, emails, financial data, production QC records, internal test results, etc...? Does this leave ETIRC Aviation as the only entity capable of upgrading / maintaining Avio using the only complete / intact copy of the IP (code) that was packaged / transferred to it a few months ago by a subcontractor (cannot recall the name)?

5) I presume that the packaging of all the IP has resulted in the transfer of the Avio source code (an EAC copyright) from EAC to ETIRC, which may be illegal without US government consent. There is a big difference between EAC supplying complete (pre-programmed) boxes (same a garmin or other OEM) vs. smuggling out the source code to sell underground to the highest bidder in a latter time. I am referring to the issues pointed out in the second part of this article. With that in mind, can a bit of arms-twisting be exerted on RP to cough up a certified / complete IP copy without paying him $100K / plane upgrade for each binary activation code? (attention Fish).

6) Alternatively, in the interest of the debtors, can motions be filed with the court to ensure that said subcontractor submit an exact / complete / certified copy of the IP transferred to ETIRC? IMO, this is critical, otherwise the fleet is AOG very SOON and the assets (including TC and patents) have near ZERO value.”



Shades of Berlin, 1945.


I think H.M.E. makes some very important points.


It wasn’t a total layoff.

There IS a handful of people still feverishly working at Ecorpse HQ right now.

And at least a few of them are in REALLY bad moods. If looks could kill, I’d be a dead man.



Hmmmm,

What could they be doing?

1. Tidying up the place for the next tenants? Scrubbing the walls, sweeping the floors, cleaning the restrooms?

OR, perhaps....

2. Destroying all evidence that could later be used to prove fraud?

3. Stealing the place blind, including the Intellectual Property, lightbulbs and trash bins?


I’ll bet it isn’t #1.



And while I sat in my car, in front of HQ, enjoying lunch and listening to Wagner’s Die Gotterdammerung, the security guard asked me to leave.


I just may hang out at the assembly building at 2am and wait for the moving trucks to show.

bill e. goat said...

Now if we can only get Wedge and lasers involved. I think lasers would be cool !!

bill e. goat said...

ExperiencedAviationProfessional
(whew, and HME);

"How do we ensure that all the intellectual property will be intact...?"

My goodness EAP,
You make everything so complicated (and can count much higher than I can).

I simply suggest we cut Wedge's head off and put it in a basket.

(I guess that wouldn't preserve any intellectual property- but it wouldn't harm any- and anyway, it might be fun).

bill e. goat said...

I am joking, of course.

I think a small box would do quite nicely.
.)

...It would not need to be very big...

bill e. goat said...

Make that-"Hi S"hane,

(Sorry, I reverted to the funky curved keyboard- it's starting to grow on me, even if my typing skills don't reflect it.

(Especially cut and paste...think we could to that with a donkey and Wedge's head ?!?)

bill e. goat said...

Although- the two resulting critters, plus the original, might result in a three way tie in a "biggest Ass" contest.
:)

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

Okay okay,
I ran out of beer- gotta go to the store.

Oh yeah? Well, before I leave:
Has it occurred to anyone (like say maybe three or four hundred depositors) than our favorite C.O.N., er, CEO, is flying around in one of THEIR airplanes ???

How big did you say that box needed to be ???

.)

EclipsePilotOMSIV said...

Bill,

Are you drunk or just really really bored?

You can never have enough beer.

bill e. goat said...

What time is it?
Time for me to shut up?
Sorry, NO.

It's time for another edition of one of the blog's favorites:

FUN WITH NUMBERS !!

Okay smart guy EAP: even though I can't count, I can push buttons on a calculator.

(Too bad Wedge never learned to do either !)
--------------------------------

So this Friedman feller wants to have 400 workers, for 2 years, and update 260 airplanes at $500K each. Or so.

Well, let's figure an average yearly salary+benefits cost of $80K (mostly mechanic/electrician folks until new development starts- if ever...)
---------------------------------

400 workers
$80K per year per worker
2 years

400*80K*2 = $64M

So, $64M for labor, for two years.
---------------------------------

Now,
Let's consider how much moola will be coming in:

260 airplanes
$500K per airplane for upgrades
260 x %$500K = $130M

Let's say half of that is for parts, the other half for labor:
$130M/2 = $65M for labor
---------------------------------

In other words, it turns (about) a $1M profit!!

How...DISRUPTIVE !!
(and decidedly un-Wedge like !! :)

bill e. goat said...

EPx,
"Are you drunk or just really really bored?"

Why, BOTH !!
.)

Beedriver said...

Owner supplied parts

To get information on this google "owner supplied parts"

Some locations with information are:

http://www.amtonline.com/publication/article.jsp?pubId=1&id=1257

http://showcase.netins.net/web/gregscheetah/Maintenance_files/i%20versus%20We.htm

Another one A letter from the assistant chief counsel for regulations AGC-200 Subject Information Definition of "owner Produced Part " FAR 21.303(b) (2);
type in;

www.bomar.biz/request.php?702

Any problems let Shane know and we can exchange e mails etc.

bill e. goat said...

I had something smart to say, but then I forgot what it was.
That happened to me several years ago (the smart part).
What was I talking about??

bill e. goat said...

Oh yeah; expenses besides labor.
Well, I'm going to use Wedge-o-nomics here, and say that will take care of itself.

(Sell them-there 30 or so airplanes in partial assembly, and that's dang near $1/mo for light bills and stuff. Plus a boat load of tires, some pimp-daddy-radical stripe kits, etc. Heck- don't forget Wedge Doll commissions from the gift shop).

Oh- and don't forget the fortune that will be made of Phostrex !!

HA HA HA

Sorry-
:(

bill e. goat said...

B-DRVR,
That's a pretty liberal interpretation of "owner manufactured" indeed!

(I guess the Ernest and Julio cork in the ERcoupe fuel float is legal after all, since although I didn't make the wine, I helped drink it ! :)

Until I read your post, I though this was about the only legal part I could install:
Owner Produced Part

MagicSky said...

Wow,

Shane, you never cease to amaze me. This is incredible and it broke on the blog! Well, I once again am amazed at how the this saga never really ends. That poor fat lady, she must be exhausted.

Good luck to all involved. Sounds like some real adults are about to take charge. It's about time!!

Blown away!!!

MS

bill e. goat said...

S-E-R-I-O-U-S-L-Y though,
(REALLY !!)

What ever happened to that Fauxtrex stuff??

I had dismissed it as rubbish, and figured it would never be on an airplane engine.

BUT TODAY,
I was looking at an APU "fire box" enclosure, and though, "Hey, this IS a place where that stuff could be used". But I haven't heard anything about it being used even in a relatively simple application such as this.

Hmmmm.

The B.S. flag is auto-deployed.

bill e. goat said...

Mr. Gad,
"The basic design still has major questions."

I B.E.G. to differ !! ;)

While I fear and dread many things (sobriety, giant Iguanas, Wedge-like aberrations, the IRS), I do not fear evil traits of the EA500 emerging.

After all, it stalls at 69 knots, goes faster than any other VLJ, and handles sweetly at both ends and every where in between. It's heck-for-stout per Eclipse PR's, (enough so the FAA was impressed enough to grant it a preliminary fatigue life of 10years/10K hours, even without fatigue testing- this will likely be extended if that is ever done). The engines are Verntastic (ahem), well, very good.

Avionics have been a little suck-o, but it sounds like software version 1.5/1.6 is plenty good. Tire wear? Michelin or Hoosier or somebody is working on more durable tires. Oh, it's more than mortal man deserves !!

Pass more Guinness !!

Well, okay: I think it's a nice airplane with a lot of potential.
:)

For our European friends, who might be wondering what the heck a Hoosier tire is, I would say, think Budweiser, not Guinness:
Hoosier Tires

bill e. goat said...

(an example of a Wedge-like aberation):
Be Afraid, Mr. Mann, Be Very Afraid
:)

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

Shane said... Let's hope Phil is not the only one to 'have a go' and that there is a real competition for the assets this time.

I'm really surprised by your comment.

A competitive biding for the assets will only serve to lengthen the process, inflate the payments to secured creditors (RP, Mann, etc), risk a split of the assets. This benefits none of the stakeholders other than secured creditors.

The BEST scenario for the owners, depositors, employees, suppliers, etc, is for NEw Eclipse to acquire all assets fast, with no bid process, for $1.

This way, all their available capital will go immediately to productive uses: build service centers, acquire parts, finish/deliver planes, support owners, seed suppliers, etc.

I'm really shocked by your "hope/wish", Shane. And here I thought you were on the side of the "innocent" stakeholders (owners, employees,suppliers, etc).

Now I found out that you wish to inflate the money that goes to the secured creditors.

Wow. I am shocked. WOW!!!!

bill e. goat said...

Shane !!
I bet you even secretly sent a Holiday card to Wedge !!

And maybe Ken too !!

.)

bill e. goat said...

BTW...
My hypothesis on Ken's absence of late, and Wedge's mysterious disappearance from his speaking engagement last weekend:

They are colluding to take over Eclipse.

Or develop their own line of RP dolls and stick pin kits.

(Ken- that's my gig- you can have Eclipse. But you have to promise to take Wedge too :)

bill e. goat said...

(And, as helpful to my defense as it would be, I must profess to NOT being a drunken fool tonight, but confess to the more serious charge of being a sober one!)

Niner Zulu said...

That's the first time I've seen anything written with the word "Eclipse" in it that actually makes sense from a business point of view.

Speaking for myself and a lot of other critics, I certainly wish Phil Friedman all the best. I hope the numbers work in his favor.

FreedomsJamtarts said...

Our plan is to take the first 24 months to stabilize the fleet of 259 aircraft and restore the brand.

Are there 259 customer A/C, or does that include the flight test fleet of seven (?). 28 are Dayjet planes which last flew when? I think realistically there will be some planes locked in personal bankruptcies, divorices etc, and then some where teh owner has an automatic payment on the hangar, and is doing there best to not think about the FPJ rotting inside it.

The real number of owners worth talking to has probably already decayed somewhere closer to 200.

We will also retain a significant number of engineers to improve aircraft reliability, upgrade the avionics suite, and focus on reducing manufacturing costs to industry benchmark levels.

So the newly constructed team is going to be torn between continued airworthiness, product development, redesign for manufacturablity, and production of the last seven. These four things are not synergistic. They divide and distract the group.

Our sales representatives will work with these customers at no charge to find new buyers who will have the means to pay for the upgrades.

So this company is going to waste valuable resources on a sales team which will try to "push butter up a rats arse with a hot needle" chasing non existant customers.

Our objective is to bring the aftermarket price of the Eclipse up to the $2 million range, thereby providing a valuable service to all existing owners.

If this isn't a refusal to face reality, I don't know what is. $2M for a Jet which cost $1.x new, with little future? You need to pack about $1.7M in Franklins/Bullions/Cocaine in the baggage area to bring the resale value up to $2M.

we plan to restart new aircraft production in 2011 at modest levels, approximately 100 aircraft per year with pricing in the $2.4 million range.

2011 ends in 34 months. According to these guys the team spends the first 24 focused on engineering work pulling in four different directions. No way in hell do they have production up and running in 34 months, which is lucky as there are no buyers for the EA500 at $2.4M. 100/Y is not a modest level of production. It is near the peak this industry has ever sustained on a business jet.

fred said...

yes , freedom ...

"in the kingdom of blindness , a one eyed guy is the king !"

so they say ...

it is probably one of the first time that i can read something about the Fpj which is not completely-weird-extrapolation-mad-numbers ...

still , even if i could wish all possible luck to this , i remain believing that it would make more sens to start by KEEPING the already existing for 1 or 2 years

have a little side-work to find out all glitches in SW , fatigue , design ...

use this time to see on which owners things can be counted on ( your 200 can be only at beginning , taking as granted that ALL owners will follow is foolishness ! as time will go by , the numbers will be less and less ...)

then IF some profit can be made , and IF it makes some Economic sens to build new ones ...

start producing new ones ...

but 100/year sounds already to me like "Wedge's delirium" again ...

FreedomsJamtarts said...

Your are correct Fred.

This is the second most realistic business plan ever offered in connection with Eclipse. (The most realistic plan is still my driving range charging people $1 per ball to try and hit the jet!)

It is wildly unrealistic, and would incinerate tens of millions of dollars before collapsing in failure, but is still the second most realist plan.

fred said...

i am not so sure about your plan ...;-)

$1 seems to be enough to have plenty to take revenge on the matter ...

but don't you think "hitting the Thing with Golf balls" is going to use up pretty much all produced FPJ within a very few days ???

the first to hit will pay , but then the fifth ?

not sure the guy won't ask you "do you want me to believe THIS has been a Fpj ?? " ;-)

unfortunately , your plan is good (almost too good !) but like many things in here : ONLY short-term ! ;-)

Dave said...

A competitive biding for the assets will only serve to lengthen the process, inflate the payments to secured creditors (RP, Mann, etc), risk a split of the assets. This benefits none of the stakeholders other than secured creditors.

So how is the RoelJet thing working out?

fred said...

yes , Dave ...

for Roel to remain a secured-creditors : he has to give away his current location ...!

even if i agree with baron on a bid of 1$ ...

RP should be banned of getting a kopeck from this ...

Unless he can prove any money put in the mess was really his own property and be present to BK-Hearing .....!!!

Niner Zulu said...

FJT, after looking at the comments a little closer I think your conclusion is probably correct.

In the current economic climate, it is extremely unlikely that there is anything the new company can do short of packing the luggage area with cash to increase the value of existing Eclipse jets from $1.x million to $2 million. Especially when you consider the prices of Mustangs (and all other jets for that matter) are headed the opposite direction and may dip BELOW $2 million.

A more likely scenario would be a slowing in the rate of decline in value, and possibly the leveling off of prices somewhere south of the $1 million mark.

You guys are right about another thing - there isn't a market for 100 Eclipse jets per year at $2.x million, completed or not. Maybe in 2005. Not in 2009-10-11. That forecast is just too optimistic, a little too reminiscent of all the rosy forecasts made in the past about Eclipse.

The next question is: who is really going to invest in this new company in this environment? There is a huge downside risk, and the upside potential is just not all that great under the best of scenarios.

I wish them all the best, but I'm going to hang on to my "critic" badge for awhile longer.

WhyTech said...

"It is wildly unrealistic, and would incinerate tens of millions of dollars before collapsing in failure, but is still the second most realist plan."

Got that right! Hope springs eternal.

julius said...

Fred,

good night,

you are right, nothing has changed, apart from the reputation of further new "player"!

Maybe, some victims, employees, and suppliers have some dreams...

The plan reminds me at RP's money conservation mode phase (with much more employees but with a negatve affect to suppliers and victims). RP only managed to get the partial EASA cert - this time the full EASA cert (plus - again - some FAA accepted improvements)?

And start of production in 24 months (with an fpj design of 1999-, while Cessna prepares Mustang+): DOA? (RP intended to ramp up production in the third quarter 2009 but has no money, no suppliers, no victims?)

Naturally, it's to early to fully comment Mr. Friedman's intentions. The auction etc. haven't yet started!

BTW: Did Judge Mary Walrath determine any time limit for RP to deliver the money for the bid?
(Perhaps the partial EASA cert, UBS.. and the 363 were just a stunt to optimize the books? I do not think so!)

Now it's really time for zzzzzzz...
it's aready the 28th and the Iden of march are ante portas...

Julius

TBMs_R_Us said...

Having slept on this idea, I'm flabbergasted! Where in the world will they come up with the capital, the customers, etc? It would be good news except that it isn't believable. The nuttiness that is Eclipse is contagious!

Baron vs Shane: Very interesting debate. Competition to buy the carcass leading to a waste of capital? I think I have to side with Baron on this one. Economic Darwinism will probably set in soon enough.

There is no sizable market for EA500s, even with AvioNg 1.5, at $2.4M each. To think that is to discount all of the other issues with the FPJ besides Avio. Sad to see anyone want to piss away another hundred million dollars on this.

Heinz Peier said...

Friedman's Businessplan will fail as well because the former CFO Reed is also part of the the plan and Reed was helping Wedge to cover up lies in the past and then got cold feet and left , Buyer's Investors beware...............

Dave said...

Friedman's Businessplan will fail as well because the former CFO Reed is also part of the the plan and Reed was helping Wedge to cover up lies in the past and then got cold feet and left , Buyer's Investors beware

Aside with having issues with the plan itself (notably the "modest" 100 units per year), I considered having Eclipse's former CFO to be the biggest issue of all. I think the CFO was involved in unethical actions if not illegal actions and as such I see this Eclipse 2.0 being similar to Eclipse under the Roel and Vern Show. If any new company is going to succeed it needs to be clear of the old company. With the plan I don't know if it is just a scheme meant to tick owners/investor or if Kool-Aide is being drunk - again this goes back to the CFO. This guy must have been involved in the test flight progress payments scam, so be careful!

fred said...

Gut Nacht , Herr Julius ...

already the 28Th for you ?
you must be even more eastern than i am ... ;-)


talking about Easa,partial mode , even if i don't want to start again this polemic , "rumors" reached me that they got it more due to time-frame-regulations than to the overall-quality ...

which is more or less making sens = to my knowledge : not a single Fpj has been made with all EASA requirements , how could they get it ?

iden of march at the door ?? time for cleaning the dirty linen within the family ????

Tu Quoque , filli ? ;-))

flyboymark said...

A thought about Friedman and Reed:

Lets sit back for second.

The "Economy" had tanked!
Sooner or later it WILL resume......"When?" is the question. By planning to resume production at a future date, let say 2 years from now, there may be a new market again. How much is the second question. But as Friedman says, there is a need for support and parts now. This is a good foundation to start. Possessing all the assets (TC, intellectual rights, ect. is jus' a bonus, if it's bought for the rite price)

I hope this is not just an underhanded attempt to "boost" the bidding prices. (thru Reed and his ole' connections......) That is the last passing thought in my mind…….


DAMN!
That 24”X2” Lag bolt hurts!!!

fred said...

TBM

i don't think too many want to go pissing $ on this , again ...

more something like "gone fishing" kind of things ...

you know i suppose , you throw a hook in water ... if a fish is stupid enough to swallow it ...

well , tough life !

Shane Price said...

Baron,

I presume you are being ironic...

As it happens, I'm not endorsing Phil's plan, or encouraging others to bid.

I'm just hoping for a little transparency in the process, which is probably me being a bit optimistic...

This is, after all, still the Critic's blog, not E5C or the company website!

Shane

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

flyboy :

yeah , that's probably the worst overall problem ...

1° the product need to be finished
2° it has to keep its cert.
3° it has to be maintained
4° it can eventually be re-produced
5° it needs a new factory
6° it needs new service-center(s)
7° it needs new staff-costs
8° etc...
9° etc...
10 etc...

you see even if eco recover (it will , it's not that bad!) , it's going to leave a stain in many wallets ...

the main aspect of all the N° above , they are all too costly and it is very (read extremely) difficult to treat one after one ...

so , more or less , it is all in one go or nothing !

who's gonna pay ?

Tail.Dragger said...

yet another individual wanting to make a small fortune out of a large one in aviation....

Spoons81 said...

Does anyone here know about NDA's after a company files chapter 7? I am sure there are some former employees who have acquired important documents to the planes function (wiring diagrams, FT's etc) that may or may not be openly given during the chapter 7.

flyboymark said...

That’s precisely what I'm driving at Fred. The two year "down time" would give the new company time to work out the bugs without cramming incomplete aircraft down the throats of, well I hate to say it, stupid customers. "Cramming" and B.S. I.O.U.'s would increase the chances of failure as before. EVEN without producing a new aircraft, it WOULD be a good idea to support the existing fleet. They are going to charge $ and that is a fact of life as in the Aerostar scenario. Aerostar IS making money and does have a plan to resume production IF the rite conditions exist. And as in the situation with EAC, they may never resume production. Nobody has the real answer yet, but the potential IS there. Public owned companies are down sizing, it’s considered obnoxious to own a “large” jets for now. Yes there are competing smaller jets, but there is a market for it down the road. Jus’ not rite now…..

AND THE QUALIFIER IS:

"If it can bought for the rite price"

Spoons81 said...

Does anyone here know about NDA's after a company files chapter 7? I am sure there are some former employees who have acquired important documents to the planes function (wiring diagrams, FT's etc) that may or may not be openly given during the chapter 7.

flyboymark said...

T.D,
How true, I can't say if that happend they would make any fortune but they would make something out of the "large fortune" invested.....

flyboymark said...

Ken,
If your still out there and not crying too much in your beer, can you chime in on your "new" NDA you signed during the CH 11 relating to what Spoons says?

Shane Price said...

UPDATED HEADLINE POST

Officially and from the 'horses mouth', the 'owners group' have their hat in the ring.

Read it carefully, and note who's signed it.

Shane

flyboymark said...

Kenny,
You sneaky little dog!;)

airsafetyman said...

I think it is possible to maintain the existing fleet and even to upgrade it in time. The integrity of whoever winds up with the Type Certificate and the willingness of the ACO to work with them is absolutely critical. The TC owner is going to have to be in charge of developing and issuing service bulletins, letters, and notes, as well as managing the service and parts manuals and the flight manuals. Management of the rotable parts is also critical. Serial numbered rotables that are replaced need to be out for overhaul at an FAA approved repair station, or returned with a servicable tag and in safe storage AND listed in a database available to all operators. Fleet requirements for high-value parts that are not reusable, such as windshields, need to be ordered in quantity at regular intervals to get a lower price from the vendor, and to ensure availability when needed. There are a lot of airliners that have had a production run of around 200 units or less that have been service for decades. It can be done but, in this instance, ONLY with everyone's cooperation.

TBMs_R_Us said...
This comment has been removed by the author.
Spoons81 said...

Absolutely, Airplanes not secret recipes. but what does that mean? Who owns the information now? Is there someone I can talk to? I would like to help all these owners service and repair what is to come. I put everyting into this AC and will continue to do just that. Hell Honda has the same NDA and if you leave paperwork laying around you are liable to get fired. Whats the big deal?

FreedomsJamtarts said...

ASM wrote There are a lot of airliners that have had a production run of around 200 units or less that have been service for decades.

Which one did you have in mind?

Shane Price said...

I'm giving serious thought to renaming the blog, again.

First, I'm impressed that so many people think this is the place to 'advertise' their interest in the assets, so how about:-

'Eclipse Buyers Beauty Parade'

Then I realized that my earlier suggestions that this blog would become the 'final resting place' for FPJ owners might have come true earlier that I thought possible, so this one might work:-

E5C, but not as we knew it Jim

Finally, it struck me how much 'we' have been through together. We've been threatened, sued, sneered at and slagged off. The industry (and Zoom) told the world we were morons, idiots and (famously) cockroaches. Now Wedge, Roel and a host of dodgy 'experts' have shuffled off the stage and the company itself is (almost) no more. So I think this one might suit us all the best:-

The Blog That Did It All

What, my friends and long standing 'sparring' partners, do YOU think?

Shane

Tail.Dragger said...

how about?

Eclipse Idol

TBMs_R_Us said...

Eclipse Final Resting Place

Shane, you had it right to begin with...

airsafetyman said...

"Which one did you have in mind?"

Trident, VC-10, CL-44, BAC 111, some of the Fokkers.

Shodan said...

Hi,
I'm a P&WC assembly & test worker
I've just been told I will be laid off in mid-april thanks to eclipse and that senate guy who villified the automakers CEO for coming on private jets to beg for money

(yeah, makes sense, waste 2000$ an hour on the private jet, or waste many more hours of GM CEO at 80000$ an hour)

well anyway, thanks america for the shit sandwhich

fred said...

that's kinda funny to me ...


even if the "Kenny's boys band" is probably the safest bet for owners (on costs ) it is still a wtf hell of a job to be done ...

surely , difficult choices are about to be made ...

for the time being , i would get a "bailiff" ( an oath person who can testify what is where with who !) to make a "check-list" of what is still in EAC buildings ...

soon all papers and documents are going to scattered all over the place , if no one is careful about ...

it start by assuming the "merry band" left the important bits at their right place ...

off-course , normally it is a question of "good faith" but did they show any in the last few years ?

i wonder why the "Ad Hoc" didn't have this kind of request to the judge when 363 started ???

airsafetyman said...

"Which one did you have in mind?"

Martin 404, Convair 880, Convair 990, Hawker-Siddley 748, Argosy, Gulfstream I, YS-11, Britiannia.
That enough?

Black Tulip said...

Sobering words from the Eclipse owners group; looks like reality is setting in. I’d like to revive the suggestion of time-shared key components. When they finally get down to the last AVIO box or FADEC, it could be passed around like a Netflix DVD… everyone gets to fly at some point in the year. Empennage or windshields will be more difficult but not impossible.

Tail.Dragger said...

or windshield, or window, or landing gear strut, or engine, or any one of a million other sourced parts that can't be substituted...

H.M.E said...

Spoons81 said...
Does anyone here know about NDA's after a company files chapter 7? I am sure there are some former employees who have acquired important documents to the planes function (wiring diagrams, FT's etc) that may or may not be openly given during the chapter 7




You need legal advise which I cannot offer.
But since no one volunteered, I will make a guess at it.
You better check with your USA solicitor before taking any action based on my idle rambling:

1) The NDA seizes to exist after ch7 because one of the two parties to the agreement is no longer alive.

2) This means you can spill the beans and disclose anything you wish to share: stories, company facts, past strategies, rumours you heard or events you saw, etc... as long as it is not "libel" to an existing third party.

3) Even clauses that forbid you from working for a competitor for the next two years etc... are no longer valid. You can take your acquired know-how and apply it immediately in another company.

4) But the IP property is a different matter all together. It is protected by copyright laws not just the NDA. The ownership of the IP is passed along to whoever buys it in auction.

5) You do not have a legal right to be in possession of said IP in the first place. Unless you have a written agreement from EAC, you would be wise to tread carefully.

6) If you share the IP with anyone other than the new owners, they can come after you with a vengeance.

That said, say you happened to find some interesting looking documents (by chance) in a dumpster outside EAC property.
Your solicitor then makes an anonymous offer to the new IP owner (on your behalf) to deliver said documents for a reasonable "finders fee".

Works, as long as your solicitor make the transaction on cash basis and you are never directly involved .

One more thing: new owner will want you to sign a paper stating that you have turned over all copies, blah, blah...
NOP. You must remain anonymous, or else you may get trapped.

jstrickl said...

asm - nice list! Small nitpick - weren't there more than 200 HS748's built?

On that list, FWIW (which is not much), I have seen a G-1 and an HS748 up close and personal. Actually, the last time I saw an HS748 it was "not operational", but about 7 years ago I saw them in use. I would be interested to know how many of any of the types you mentioned are still in service. If any.

The HS748 was in service for over 40 years. Hands up all those who think there will be EA500s flying in 2046? :-)

airsafetyman said...

"Small nitpick - weren't there more than 200 HS748's built?"

Actually there were 380 built. The airplanes I listed bounce around an average of 200. For example there were 54 VC-10s built and 33 CL-44s. I forgot to list the Concorde of which 20 were built. The point is that you can maintain a limited production-run airplane in an airworthy manner for decades.

vmabuck said...

"well anyway, thanks america for the shit sandwhich"

Sand which what?

Why don't you go get a job that isn't reliant on America there Mr. fiery, independent Canookian...

Dave said...

well anyway, thanks america

Don't blame America because Eclipse was so poorly run. If you want to blame someone, there's a few politicians in NM as well as a few execs from Eclipse. I don't know how much kool-aide drinking happened at PW, but maybe some execs there deserve some blame too.

baron95 said...

Shane Price said...

Baron, I presume you are being ironic...


I was not being ironic AT ALL.

I was HOPING that you typed that without thinking about the consequences of a bidding war for the assets. But since I know that you take great care in your headline posts, I was shocked.

Now, I am further disappointed. I REALLY thought that the purpose of the critics blog was to warn and protect the innocent (people considering buying the plane, becoming suppliers, etc).

I really thought this blog had a value system, not a hate system.

Please, Shane, tell us that you really don't want a bid war, the splitting of the assets and more money going to the secure creditors, which were ALWAYS the only ones in control of the situation.

bill e. goat said...

Hi Shane,
Thanks for the updates!
I see Ken is on one of the bid teams- I think that's great, and they'd do a good job. I think the Friedman team would do a good job too- although waiting a couple of years to restart production sounds a little too cautious to me- I'd like to see 'em start cranking them out about 1 per week by mid Spring.

I'm glad for the owners and employees that there are finally some good choices available- best wishes to all involved.

I want first shot at the giftshop!!

GettingReady2FileSuit said...

Ken, Ken, o where aret thou? Are you out researching where to purchase the bandaid for whatever is ailing N85SM? Or was that Columbian coffee so good you decided to never leave the house again?

I'm not much of a betting man, but if I were to place a wager on the next flight of N85SM, I would certainly go with the "over"

baron95 said...

"Which one did you have in mind?"

Martin 404, Convair 880, Convair 990, Hawker-Siddley 748, Argosy, Gulfstream I, YS-11, Britiannia.
That enough?

Why go that far back?!?

Concorde - 20 built, Boeing 717 - 156 produced, MD11 - 200 built, L-1011 250 built, etc, etc, etc.

Short production runs in airliners or GA planes is NOTHING UNUSUAL.

FreedomsJamtarts said...

ASM Cool list of planes. What is the connect to Ecorpse's prospects? Were any of the planes on your list not government sponsored prestige projects?

airtaximan said...

baron,

this is America, and choice IS GOOD.

I for one think its best to have multiple interested parties...
sorry.

And if it takes a few months longer, who cares? Its been 13 years.

PS. I should not have deleted my post Yesterday about a rumor Pratt is cancelling the PW610 program. I am not saying this is the case, just seems like they are on the way to perhaps doing that.

Sorry about your jobs.

FreedomsJamtarts said...

The point is that you can maintain a limited production-run airplane in an airworthy manner for decades.

Unless it has AVIOnFg.

Just replace MU-2 with any of the other examples you gave:

Comparision of the future support of the EA-500 with the MU-2 case:

MU-2.........................EA-500

Avionics
OTS...................Boutique (x2)

Electrics
OTS CB's.................Integrated

Engines
Widely installed.......Unique model

Engine control interface
Push rods.......Uniquely Integrated

COM's/Navs'
OTS Plenty of space......Integrated

Airframe
Conventional............Partial FSW

Status at time of orphaning
Complete.................Incomplete

Grasping at such straws just prolongs the agony.

February 23, 2009 12:13 AM

baron95 said...

Re NDA, HME said... 2) This means you can spill the beans and disclose anything you wish to share

That is NOT CORRECT

I'm not a lawyer and I do not know the specifics of the NDA, but I didn't want anyone to get hurt by relying on the above information.

Intellectual Property (IP) is an asset of the company. The value of that IP is typically protected by NDAs, and as such, the NDAs are also considered an asset, and the NDA follows the assets in any acquisition. In addition, most NDAs have survivor clauses, and in any case Eclipse has NOT liquidated yet. It is an existing company and can enforce the NDAs at this time.

If you violate the NDA and cause the value of the IP to decline because of that YOU CAN BE LIABLE FOR SUBSTANTIAL DAMAGES.

For example, if you divulge confidential information about FSW and cause the value of the FSW technology (an asset of Eclipse or an asset of the acquirer after liquidation) to be diminished from say $25M to $5M because others can now duplicate it, you CAN BE HELD LIABLE.

You signed an NDA - live by it. There is no gain to be had in violating employment agreements.

If you have information on criminal activity and/or risk of injury to someone, then report it to the agency with jurisdiction (FAA, FBI, local police, attorney general, etc).

Else, live by your NDA employement agreement.

That is usually the best approach.

flyboymark said...

Shodan,
If your tostesterone glands have calmed down and you have some more "details", we'd like to hear them. Think for a moment where you scocialist government would be it we suddenly stopped buying 25% of our gross national oil from you and from somebody else. The United States is NOT obligated to support you or your economy and you should have alternate routes/means for survivel. Striking out at my country in derogatory descriptive adjectives because of your and your comapany's failure to read the situation correctly is NOT condusive to a working situation. I apologize for some comments by fellow bloggers but you should “cool your jets” too.

FreedomsJamtarts said...

I disagree with Baron for a change.

I think a nice drawn out court battle would be cathartic. The A/C are doomed either way, but a good court battle might at least flush out the true nature of this debacle, so that lessons may be learned.

airsafetyman said...

"Short production runs in airliners or GA planes is NOTHING UNUSUAL."

My point exactly, Someone made the comment that a short production run could not be supported.

"ASM Cool list of planes. What is the connect to Ecorpse's prospects? Were any of the planes on your list not government sponsored prestige projects?"

The Concorde is the only one I am aware of that was a government(s) sponsored project. The connection is that the fleet CAN be maintained if people get their act together. You would need somebody who has "been there, done that" managing the program and I don't see anybody listed on the articles at the head of the posts who would remotely qualify.

baron95 said...

ATM said...

The PWC610 will not find any civilian application outside the EA500.

It is too small for ANY single engine jet, and there will likely be no more attempts are 6,000lbs-class twin jets after the single engine jets are in the market.

It is possible that it can find application on an UAV, but Williams seems to be better positioned there with a wider range of light turbofans.

WhyTech said...

"And if it takes a few months longer, who cares? Its been 13 years."

Some will care as the 10 year clock is running on the existing airframes.

WhyTech said...

"well anyway, thanks america for the shit sandwhich"

What? No "thanks" for the prime tenderloin sandwiches you have been wolfing down for the last 5 years?

baron95 said...

FreedomsJamtarts said...
I think a nice drawn out court battle would be cathartic.

If you are interested on destruction of value, grounding of airplanes, further devaluing general/business aviation, then a drawn out process is best.

If you want to see our community, which is comprised of owners and pilots - are you a member of AOPA? - have the "least bad" outcome, you'd want the oposite.

But, hey, yes, you are free to wish good or bad into the Aircraft Owners and Pilots of Eclipse.

Dave said...

I really thought this blog had a value system, not a hate system.
Please, Shane, tell us that you really don't want a bid war, the splitting of the assets and more money going to the secure creditors, which were ALWAYS the only ones in control of the situation.


I thought you believed in capitalism and the free market and it seems like you have a hate on for the secured creditors.

We've already seen the failings of just picking someone out - Roel picked himself and that has only resulted in burning through more money and causing more delay. I don't know how you can say with certainty that anyone one of the bidders has the best plan and so should be given a multimillion dollar gift (which sounds more like socialism than capitalism). It might be best for all involved to have the assets split as for instance having one company work on the existing fleet and another company buy the rights to manufacture future aircraft - I don't know, but I wouldn't want to give multimillion dollar gifts to either one company or multiple companies because not only could I be wrong but I could cost a lot of money in being wrong. Those who have to put up money show both how solid they are as well as how serious they are - when it was time for Roel to put up the scratch, he folded. Eclipse (and the owners and suppliers) would be in even worse shape if cash-strapped Roel got Eclipse for $1.

Niner Zulu said...

The future utility and value of our aircraft is now in serious jeopardy. If we as owners do not take control of these events, we risk having our planes grounded, become unserviceable, and ultimately become worthless.

Weren't we critics lambasted by Ken and the other Eclipse Cheerleaders for saying pretty much the same thing? In fact, didn't Vern attempt to silence us with a lawsuit because he didn't want us saying precisely those same things?

Unbelievable!

WhyTech said...

"If you are interested on destruction of value, grounding of airplanes, further devaluing general/business aviation, then a drawn out process is best."

Where have you been for the last 10 years? About 99.9% of the value has already been destroyed. Show me the money!

Niner Zulu said...

We as owners can either sit by and watch others take control of our airplanes or we can take that control ourselves. This will not be easy or without cost. But it will be far better than the alternative.

Actually, I proposed a solution many months ago. I told owners to sell their planes and take a tax writeoff on any loss. That would have been the least costly option.

Ken's reply to me "Sell? Are you nuts?"

FreedomsJamtarts said...

Baron wrote:
If you are interested on destruction of value, grounding of airplanes, further devaluing general/business aviation, then a drawn out process is best.


What value is there to still be destroyed? Th planes are heading for a grounding.

I am unfortunately a realist.

WhyTech said...

"If we as owners do not take control of these events, we risk having our planes grounded, become unserviceable, and ultimately become worthless. "

Talk about bad to worse. Can anyone imagine what life will be like if the inmates are running the asylum? Will likely take 3 years for the management group to agree on what to order for lunch!

gadfly said...

Anecdotal:

Another caller for a CNC machinist position . . . former employer lost a “small” (to some) fortune on un-paid invoices to “guess who”. ‘Couldn’t help the man, but gave him a lead with another local company. And the list goes on . . .

It’s not likely that the local companies that “might” survive, are going to accept orders on a “new” Eclipse. This is a small town . . . the resources ‘just don’t exist to bite a second time.

And it will be many years before the “aroma” disappears from the west end of the ABQ runways.

The man from Wichita wants what’s left? I’m sure he can find enough local labor to load up the trucks, and take the entire stir-fried combo to Kansas. Shucks, we’ll even contribute a couple sacks of roasted “Hatch” green chili.

gadfly

(. . . overheard on a hot-air balloon come next Fall: “We’re not in Albuquerque anymore, Toto!”)

Beedriver said...

twin engine Personal jet market

People seem to think that a single engine jet is going to take this catagory. however I think there is a need for a twin engine personal jet which the EA500 and several others may fill.

the reason is no engine is infallible and the airports a personal jet will go to alot will have birds. I have seen bird strikes and virtually any propeller driven airplane piston or turboprop will survive a bird strike and if it does not go through the windshield it is primarily an expensive annoyance.

One even small bird (think duck or bigger) will take out a small jet. without a second engine that will be disastorous. for myself my home field has flocks of geese and seagulls flying by quite frequently and I would think very carefully about regularly flying a single engine jet out of it. I think there will be a class of small company/owner flown jet where having two engines is definitely worth the extra money. hence the justification for the EA500 personal jet category.

my guess is that the total available market for the twin engine personal jet is 300 to 400 airplanes per year or so. thus the EA500 could get a good chunk of this market if they get their act together and can sell profitably at a price somewhere between the the single engine jets and the larger cabin class jets with a potty such as the Mustang

As far as the future of the 610, from several sources, some of which are looking at twin engine personal jets it appears that 1200 to 1400 pounds of thrust is what is needed a for a small personal twin engine jet if you are not trying to do a perfect single point design. thus I think the PW 610 is going to be obsolete however the 615 will become a useful category.

NoFPJ4me said...

I wish the 260 owners the best of luck in their quest to find an reasonable partner to insure the continued airworthiness of their EA500s. As a depositor, it is time for me to move on as the new Chapt 7 will be the final end to any hope for those of us who put up our deposits(intended for an aircraft purchase) that were apparently used to fund this ill fated venture. If anyone out there has DIRECT KNOWLEDGE of what happenned to my deposit money, along with the other 200-300 million it would be appreciated if you contact me via email. Thanks and I hope you all get jobs with a reliable company for your future employment. Thanks to the blog and contributers for getting the truth out. my direct email:
enronjetvlj@gmail.com

gadfly said...

Subscript to my last post:

Anything that happens, better happen fast. The “friends of Eclipse”, including the governor, mayor, and countless “underlings”, may soon be up to their armpits in political/legal green chili soup, unable to keep more than their own heads above the “hot broth” . . . and no longer of any help with government assistance to the little crippled bird.

gadfly

(In the fall, up in Santa Fe, there is a giant creature that is burned in early September . . . “Zozobra”!

“Fiesta has been celebrated in Santa Fe since 1712 by proclamation of the then-governor of the province Jose Chacon Medina Salazar y Villaseor, the marquis of Penuela. It is the oldest civic celebration of its kind in North America. ZOZOBRA, which has gone up in flames every year since Will Shuster created it in 1924, became one of the symbols of the city, a potent reminder of the madcap celebrations of those times and one artist's generous dedication to his adopted home.”
It might be a good idea to get Eclipse out of town before they design this year’s “effigy” . . . or Zozobra might have “wings” and “twin burners” for the first time . . . although, I cannot think of a better model of doom and gloom for many citizens of New Mexico.)

Beedriver said...

Re the future of the PW 610

I understand that the 610 is an entirely different design than the 615. Is that so? if it does not have a high parts commonality with its larger brethren its future is doomed unless the volume is large enough from just the EA500 which does not look like it will happen.

If there is a future for the smaller jets it is as a power section for the engines which have giant fans ie turboprops. that market has a lot of players and the Rolls Royce RR 500 is looking like a god contender for the small turboprop of the future.

jstrickl said...

Actually, I would contend that short production runs are not the norm at the top end of the commercial jet marketplace. That is, unless you consider a Boeing 717 to be fundamentally different from the rest of the MD-80 series, and an MD11 to be completely different from a DC-10, "etc, etc, etc." (quoting Baron). I am not an expert on this matter, but surely there is a lot of parts commonality between variants, and even the big differences such as engines and avionics tend to be more modern "off the shelf" items, right? i.e. updating the design makes it more maintainable in the long term, not less.

Anyways, regardless of this point, the question is whether the existing Eclipse fleet can be maintained at a cost that the existing owners are willing (and able) to pay. I suspect not. As endlessly discussed, Avio is likely a killer. I also wonder if the current 10 year life limit could also be prohibitively expensive to resolve.

flyboymark said...

Bee,
Your are on to something there. A single turbo prop might be the answer in this "small" class of aircraft. Tiny turbofans are VERY subject FOD

Just a wild thought to put out there:

A single turbo shaft engine 600-800 shp 6 place Piaggio type doing 370 kts @41k with a single engine in the tail cone. A composite fuse thats well sealed would resolve the pressurization containment issue in case of high altitude engine failure.

Any engineers out there that can crunch the numbers for quick examination of the idea?

In the past small turbo shaft aircraft have generally been conversions of "old" GA designs with the assocciated ceiling and speed restrictions. A Piaggio type from the git-go on a smaller basis could be very interesting.

gadfly said...

Beedriver is on to the right picture, if small personal jets are to survive. The only thing I wish to add, is a “throw-a-way” engine. Make it the appropriate size, with a practical life . . . “no fluff”, and no concern about “re-building”. Those days are over, except for the heavy iron . . . and even their day is not far off.

A “re-built” is never on a par with “new” . . . so why fight what we know. Give it a “good reliable life”, and figure that into the equation, right up front. Missionaries are already on that page . . . a “P&W” turbo-prop flying over some little island in the South Pacific . . . Borneo . . . West Irian . . . cannot take the “chance” on a re-built . . . nor can a little jet flying over the “Rockies”.

(A little turbo-prop outfit up in Idaho, or somewhere . . . may have something “almost there” (not quite, but “almost”) . . . and we’ll see what happens.)

Low cost fuel . . . low cost engines (non-rebuild-able . . .with near-perfect reliability) . . . and an aircraft without “oil-canning” in the “chem-milled” stressed-skin (an oxymoron, to be sure) . . . and maybe someone will get the picture.

It’s more than possible . . . but at my age, I’m getting tired of talking to folks that know everything, yet haven’t any experience in real design and product. But somewhere, there is someone with the knowledge, experience, financial “where-with-all”, and political clout to bring it together.

It may yet happen. And then, again, pigs may fly!

But enough of my rambling . . .

gadfly

(Two more comments:

1. A “throw-a-way” engine . . . think “P&W” and “Williams”, with a “Timex” or “Swatch” mentality. (The original “Swatch” cost $5 US to make . . . fantastic!)

2. Get “Eclipse” out of your brain, and go on to better things . . . it was “dying” before it got off the drawing board . . . get over it. It’s a dead bird!)

bill e. goat said...

Re: single engine Turboprop
(sorry, not a pusher):

Our chum Rich ought to be picking up his Epic LT right about now- it specs out like a hum-dinger !
Epic LT
---------------------------------

Before Cessna bought Columbia, it was working on the "Next Generation Piston", sort of a 210 replacement, as I read it. After the Columbia factory purchase, the project became "Next Generation Propeller". Interesting to note the prototype had a 320 HP IO-580, whereas the RR-500 is rated at "up to" 380HP. Seems like it would be a nice fit...

(Not sure of the NGP, or the long-term future of the Columbia lineup either- it was bought to be a "Cirrus fighter", but Cirrus sales are down a lot...)
Cessna NGP
Rolls Royce RR-500
--------------------------------

It is interesting Cessna bought Columbia for $27M, about the same as Eclipse was going for ($28M+vaporware stock promises).
Cessna buys Columbia, circa 2007

airtaximan said...

inmates are running the asylum..

who said that???

bill e. goat said...

Baron,
I'm impressed with your propriety towards the Eclipse contract enforcement.

And you would say to Wedge regarding purchase agreements??

gadfly said...

Goat

We’ve been friends for many moons. But you’re stretching it in your logic. All this talk about various acquisitions, etc., etc., is no more than the same as a “shell game” (not implying anything in your direction).

None of these scenarios “fits” . . . Eclipse is by itself . . . out in the cold, stark naked! It hasn’t a feather left, to keep it warm. It’s all over!

Wishful thinking can’t correct Eclipse . . . only a “banker” would believe the prospectus. And in 33 years, I have yet to meet a single banker that knew the first thing about starting and running a business. (But I have to admit, they sure get good “PR”.)

Anyway, continue to “fluff up the story” . . . whatever keeps the readership coming back. Personally, I only read the comics . . . my wife reads the “obits” . . . as an "ex-RN" . . . I guess it's sort of a quality control sort of thing with nurses . . . other than that, the ABQ Journal wouldn’t get a dime . . . and I know the folks that do the printing.

It’s a funny thing . . . by the time the Journal prints the story, the “critics” have fully discussed it, turned it every which way from Saturday (or is it “Tuesday”), and gone on to other things.

And here I am, adding to the “fluff”!

gadfly

(And they wonder why they are losing readership! The “liberal” paper already went down the tube.)

airtaximan said...

reality check:

It will be very expensive to make the fleet common

It will be very expensive to bring avio up to FIKI/COmoonality/Currnent

It will be very expensive to suppor tthis fleet with low production run parts

It will be very expensive to maintain continued airworthiness

Upgrades will be very expensive.

IF ANYONE PROMISES YOU AFFORDABLE SOLUTIONS FOR THIS, RUN!!!

So the cheap jet is GONE.

This my friends, id fact.

The value proposition you all bought, is gone.

I suggest, if you were looking for an affordable personal jet - you lost your shit, here folks.

From now on, this is a hobbiest aircraft - expensive as any other to fly and support.

If someone provides fuel burn as an excuse for inexpensive DOC, I will just split my ass laughing at you. This is the dumbest line of reasoning available...

Modestan said...

There may be two paths which travelled independently may result in an end product which would be a win (less of a loss) for both Argonauts.

One path is the Chapter 7 fire sale of remnants (unknown quantity) from the Eclipse entity. An organization such as Harlow (Phil Friedman) may be able to orchestrate a redesign process which could offer support to the many unknowns associated with the E500. Assuming the published 24 month time period for analysis ends in a superior support solution for the long term airworthiness of the aircraft.

The second regards the owner/operators of the existing private fleet. It seems their capital and time would yield a higher return if focused on the parts which have the highest probability of failure or scheduled replacement prior to the end of the 24 month clock. What would they do with a dozen or more pressure vessels?

This would require a partnership/alignment (trust) between the owners and such an organization as Harlow.

The short term requirements could be met through the owners group contacting suppliers of those components with a relatively short lifespan (windshields/windows for example) and establish a prepaid delivery system which would keep the jets airworthy and possibly reduce some of the metallic taste in the mouths of the parts vendors.

If they get into a bidding war with each other, they may end up with a victory akin to Hannibal’s.

Not suggesting either as viable or a sure hit; it may simply be a choice of less punishment.

flyboymark said...

BEG,
The "LT" is almost there but limited to 28k. Need to be at 41k or better.

Suggestion for the pusher is to protect prop and intake of engine from FOD by way of aircraft frontal area.

bill e. goat said...

Hi Gadfly,
I remain a fan of the airplane-
Others have mentioned facts which we are all aware of- pilot error causes most accidents.
And I don't think there is a turbine aircraft with safer aircraft available for the money, even if it is $2.4 (Mustang comes close, at $2.7M, and I'd recommend it instead, but the fact is, for $2.4M, the Eclipse is the safest airplane out there.

Sustainability/maintainability are issues which new management will address.

New production? That depends on getting the factory overhead down- not salaries, but excess floor capacity.

That's my story, and I'm sticking to it :)

I'm not saying the FACTORY can survive- I'm not even saying Boeing or GM or Heinz Catsup can survive in this market. But that's not the fault of the product.
--------------------------------

ATM,
"It will be very expensive..."

Airplanes are ALREADY very expensive.

I don't think a mom-and-pop Eclipse factory support is going to be any worse than any other airframer- (and in fact, I would say less, due to the lower time on the airframes).

Avionics upgrades are going to be pricey; I think the owners have already figured $0.5M, so that money's a done deal.

It's more a question of capability than cost, I think, for the "new" factory.
--------------------------------

Gadfly,
I'm going to go put on my fluffy bunny slippers and drink some beer- Toast to Truce !!
:)

gadfly said...

Although I am neither a prophet, nor the son of a prophet, I can say this with certainty: Anyone buying the remains of the little bird at a fire sale will be burned!

gadfly

(And that's a fact!)

bill e. goat said...

Gadfly,
I don't think Wedge had much "profit" in him either.
.)

Shane Price said...

Baron,

Sadly, I have no influence with either the FPJ owners or other potential bidders.

You guys live in a pretty freewheeling capitalist country, where money talks and business grows from nothing. Anything is possible with the FPJ, even though some of us think the future is bleak.

Remember, I got involved with this mess because I thought it was a SCAM. In my very first interview I said I smelled a rat.

I think history will agree that I was right.

Going forward, I want whoever buys what's left of this to do so in a transparent manner, with adults in charge of the bidding process. Nothing underhand, no 'pre cooked' 363 selling to a CEO, by the CEO, just a clean simple transaction that we can all understand.

That way, Eclipse V 2.0 will have a truly fresh start, and as clean a slate as possible to begin with.

I honestly don't agree that a bidding war will be protracted or cause more damage. What's done is done, lets move on.

Now, anyone else what a share of the headline post?

Wedge, fancy a run at the remains of your old company?

Go on, you know you're tempted...

Shane

bill e. goat said...

Shane,
Please !!
Wedge-NG !!! ???
.)

"Remember, I got involved with this mess because I thought it was a SCAM. In my very first interview I said I smelled a rat."

Wedge's Inspiration !?!
Eclipse? It smells like, ...VICTORY !!

"Wedge, fancy a run at the remains of your old company? Go on, you know you're tempted..."

Every day, Ken's out there, going stronger...
Wedge, Waiting ??

The prospects ??
Wedge ReDux Marketing Plan- FAILS !!

Or...
The End, My Friend??"

bill e. goat said...

???
Smells like Victory...Hmmm, I didn't know Franklins had that characteristic.

The new anti-counterfeiting technology, I suppose...

bill e. goat said...

...Jim Morrison doesn't look much like a fat lady.
.)

Finally weighing in said...

Ole Kenny-Boy...

Seem to singing a different tune eh?

2/27/09:
...
The future utility and value of our aircraft is now in serious jeopardy. If we as owners do not take control of these events, we risk having our planes grounded, become unserviceable, and ultimately become worthless.
...
One of these plans wants to charge owners a $300,000 surcharge for any modification plus the marked-up cost of parts and labor. This would add $500 an hour to the average cost of operating your aircraft significantly reducing its value.
....
We don’t have a great deal of time to protect our future.
...
Ken Meyer (version 2.0)

A reminder of Ken Meyer version 1.0:

"The Eclipse 500 is a really good design that will live on no matter what happens to Eclipse Aviation, Inc. I have a high level of optimism that the new Eclipse management can and will fix the problems the company has had in the past. But even if they don’t, the Eclipse 500 will live on precisely because it is a good design, there is a type certificate, a production certificate, a proven production line, FIKI, and a growing support network."

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

"Sell it? You're nuts. 12/19/08"

"My point is this: Precisely because the plane is a good design that is fast, comfortable, quiet and very efficient, it will live on even if the names on management's doors wind up changing (which right now looks less and less likely). 11/16/08"

"Now that you've held the wake before the patient died...

Friends, the Eclipse is the most fuel-efficient, cost effective personal jet on the market. Its nearest competitor costs 40% more upfront and 40% more every mile you fly it. There isn't anything that can touch it on the market or even on the horizon.

Whatever happens, the design is fundamentally a very good one that fills an important niche for owner/operators and thrifty commercial operations alike. You just can't find a jet with this combination of good speed and great efficiency.

The design will go on... That's the drama we're watching play out in Albuquerque, lessened ever so much by the news reports that long term financing has been arranged. 11/15/08"

"So, you keep falling back onto the "they are doomed" line that hasn't worked for you the nineteen thousand times you've said it over the last two years.

They are not doomed, fellas, sorry.

But let's say one day you turn out right, and Eclipse reorganizes. Do you not realize the plane will still be around 'cause it's a very good design with no significant competition?

So the heading of the Shane's entry, "Sadly, it looks like the end" is pretty silly, isn't it? 11/18/08"

So Kenny-boy, who's the one with egg on their face now? Still stand by all of your pronouncements?

And the critics die laughing on the floor....

julius said...

Gadfly,

there must not be a fire sale,
but some competition might open the books for everyone.

What about Russia/EASA cert?
What was really sold to ETRIC or Eclipse Jet?

Is Friedman the person that reactivates some suppliers?

Up to now the trustees are not yet appointed, the books not opened,
the ch 7 auction not started...

Let's see, if Roel will utter some nice words to his employees or the dutch media.

And Ken is now looking for his next bell-wether - good luck!....


Julius

P.S.: Are there some goodies at EAC in ABQ (not Post...), someone could be interested in?

baron95 said...

Dave said... I thought you believed in capitalism and the free market and it seems like you have a hate on for the secured creditors.

What gives you that impression. I think I am a fairly transparent guy. My only interest in this matter is its impact in GA/bizAv.

I am 100% on the side of owners/buyers of the EA500, the plane, the enjoyment and utility of the plane.

I want what is best for the present and future owners of the EA500, and I don't want to see them adversely impacted and I don't want them to be discouraged and abandon aviation because of that.

I have absolutely no ill feelings towards the Eclipse secure creditors.

I simply choose to "wish" and root for an outcome that is the most beneficial to the owners and pilots of the EA500.

That is all.

I'll defend everyone's right to bid, the biding war, splitting of the assets if it comes to that.

But I WILL NOT hope or wish for that outcome like Shane did.

bill e. goat said...

"Seem to singing a different tune eh?"

Well, I posted a few above!
:)

Weighing In,
You sound a lot like our 'ole bud Frank !!
(I hope so- I, ah, think :)
-----------------------------------

(btw, I think at the time Ken's posts were made, they were largely correct- except for the part about Eclipse surviving- and I think he's doing the right thing by bidding on the factory).

baron95 said...

Whytech said... Can anyone imagine what life will be like if the inmates are running the asylum? Will likely take 3 years for the management group to agree on what to order for lunch!

Coldn't agree more. I doubt many owners can or want to be directly involved with running an aviation company.

But I didn't take that as the desire of the Ad Hoc committee. They need to organize to take control of the process that DOES NOT MEAN that they'd buy the assets.

For example, they can vet all the proposals, choose the best, and pre-pay upgrade fees to the their favorite bidder, in exchange for guaranteed upgrade prices.

This way their favorite bidder will have more resources.

They can also put others on note that they will oppose any other team.

Or they can just pre-negotiate the upgrade fees with all bidders and support the winner.

Point being that they SHOULD act on a single voice and exert pressure as the guys that will be sending money to the winners of the bidding process.

Shane Price said...

Baron,

Which outcome?

The one where the FPJ limps along in it's present, incomplete non FIKI/EASA form?

The one where it gets back into production, at a lower rate?

The one where the bits turn out to be worth more than the entire?

The one where a 'Russian backed' Dutch scam artist couldn't deliver the promised funds?

The one where air taxi companies bought thousands of FPJ's, to darken our skies?

The one where anyone with $889,000 could buy at sub 6,000lb 6 place twin jet with a 1,250nm range?

I'm losing track, and I've made a three year study of the subject....

Shane

Finally weighing in said...

Owners group who will salvage the jet and buy out of bankruptcy on behalf of 250 owners:

Mike Press (salesmen who convinced how many gullible prospects to buy positions while he pocketed several million in commissions over 3 years... but then again he's perhaps the only person who has made money on eclipse's, maybe he is the right guy?)

Randall Sanada (have you even met or spoken to him? Investment banker)

Ron Lebel (former executive under Al Mann)

David Green (former hamburger mktg exec - McDonalds)

Ken Meyer (need I put anything here?)

gadfly said...

About forty-five minutes ago, I was leaving the shop to go home . . . turned up the radio to give the impression that folks are still in the building . . . lo and behold, the news was on, quoting some “UNM” professor, stating that a “buyout” by our Wichita person “would not work” . . . so, you don’t have to take the word of a bunch of “critics”, we now have it from a “professor” at our university . . . the buyout and re-start-up won’t fly.

Shucks! . . . ‘Wish I’d have thought of that!

gadfly

(Just think, I could have been on the radio!)

WhyTech said...

"pre-pay upgrade fees to the their favorite bidder"

What ARE you on?!

WhyTech said...

"they SHOULD act on a single voice"

All 260 of them? Righhhhhht! Difficult enough if there were only 3!

gadfly said...

WhyTech

"they SHOULD act on a single voice"

Actually, it would be a “Requiem” (“rest”), or actually, “Missa defunctorum” (“mass of the departed”).

gadfly

(That “defunctorum” seems to be the main theme . . . in a minor key.)

bill e. goat said...

Gad,
"Missa defunctorum"

?? Mass Dysfunction ??

(I think that described EAC pretty well :)

gadfly said...

Goat

You done me proud! You got it!

gadfly

Dave said...

For example, they can vet all the proposals, choose the best, and pre-pay upgrade fees to the their favorite bidder, in exchange for guaranteed upgrade prices.

This is something arbitrary and this was done with ETIRC being selected by the secured with ETIRC having to do X, Y and Z for the customers and the owners and we all see how that worked out. The only difference between the disaster that was EclipseJet and what you are proposing is that it would be the unsecured creditors instead of the secured creditors being the kingmakers.

You are talking about either a very complicated process getting hundreds of owners to come to consensus or you are talking about Ken being a kingmaker - neither of which I think is appealing or in the best interest of the owners. By all means the owners should be able to bid, just I don't think it is in their best interest to be kingmakers. It particularly creates a conflict-of-interest when some of the owners say they are going bid.

The best way to do this is with cash on the barrel. If there are competing bids (like one bid for all and a couple bids for parts), then you leave it up to the judge and all the creditors to weigh in to reach a decision and get concessions.

The secured creditors thought they were doing what was in their own best interest by making Roel king and all that did was cost them money. There's no reason to believe having the owners be kingmakers would fare any better. There's any number of reasons to actually believe they'd fare worse: there's more of them than the secured creditors so it is administratively complex, some owners want to be bidders and there's a greater chance that the owners would be emotional in their decision rather than purely logical compared to the secured creditors (whom clearly got burned in their decision even with their clearer heads).

Having the bidder put up money is the best way to practice economic darwinism rather than having some committee give a multimillion dollar gift plus pre-payments. Just think of if RoelJet got Eclipse for $1 plus getting paid by owners before work was performed...all it would have done is cost the owners even more than what it has cost them so far. Making the owners perform for the bidder rather than the other way around is backwards...the bidder should show financial strength rather than making owners cough up. Look at all those people who were burned by putting down deposits already. Having risk repeating that nightmare would only greatly increase their chances of being feeling miserable and their bank accounts drained for nothing.

ColdWetMackarelofReality said...

The only light at the end of this tunnel that MIGHT not be a train is the owner play, IMO. The others will probably have the financial resources but will only fail on a smaller scale than Eclipse 1.0.

For the owner play to succeed it will take experienced airplane people, a solid plan, an iron fist, and more than a few sheckles.

I have given all the free advice I intend to provide - if any party wants more, bring a checkbook - you know where to find me.

Black Tulip said...

"If we as owners do not take control of these events, we risk having our planes grounded, become unserviceable, and ultimately become worthless. We can no longer rely on someone else."

A sad and telling quotation... The owners are a day late and a dollar short.

gadfly said...

Dark Blossom

It occurs to me that the time has come for both critic and diehard alike, to assist in bringing this thing to a close. Both sides have known for a long time that this thing was not viable . . . and now the “diehards” need all the help they can get, to back out, without totally losing their “self worth”, and possibly their marriages . . . spending all that money on a toy.

What they need is a reason . . . some insurmountable disaster . . . that under no circumstances can the little jet ever be delivered, complete. A “reason” so far reaching, that no human effort can overcome it.

Flip Wilson used to say, “The Devil made me do it!” . . . so we can’t use that one. Obama and the economy? . . . Sorry Carter already did that. A “tsunami”? . . . unfortunately, Albuquerque is too far inland . . . although we have “White Sands” near by . . . a wonderful beach, without water.

But somehow, if we all put our heads together, the least we could do is come up with “something” . . . that can be blamed, before these folks spend the rest of their milk money . . . and their kids have to go on the assisted “lunch” program.

We’ve had our fun . . . now it’s time to “give back”, and not rub it in.

gadfly

(In a pig’s eye!)

Dave said...

But somehow, if we all put our heads together, the least we could do is come up with “something” . . . that can be blamed, before these folks spend the rest of their milk money . . . and their kids have to go on the assisted “lunch” program.

I believe the FAA is already working on that.

airtaximan said...

"Today there are a number of outside entities that are “looking” at the owners as an income stream that they can fully exploit like a monopoly. These entities believe if they control the assets of Eclipse, they can charge the owners hundreds of thousands of dollars just to get their plane upgraded and serviced. One of these plans wants to charge owners a $300,000 surcharge for any modification plus the marked-up cost of parts and labor. Another plan wants to charge owner a yearly fee of up to $90,000 just to access service. This would add $500 an hour to the average cost of operating your aircraft significantly reducing its value."

Well, either these folks think I am going into this business, or my GUESTIMATES have been BANG on, regarding someones idea of what to charge for upgrades and service.

I can tell you this, folks, if you are allergic to thiese sorts of figures, better get rid of your ea50 - reality bites - as they say, but if I can gonculate these numbers, and I am not far off what you have already heard from some seriosu suppliers of these services - you better sell you EA50's right now - becasue guess what?

The cheap jet is gone

This one will cost a lot to maintain and support -

And if I can figger it out, so can you or anyone else... so head out of sand, move along.

CW, imagine this? So guy Ken dismissed for two years, is now benchmarking support costs on the back of a napkin, to the dollar? Someone is a moron...

bill e. goat said...

FUN WITH NUMBERS, part 2 (of ???...)

Suppose...
Ken, or about anyone thinking of buying EAC, will be checking with owners about interest in upgrades.

Lets say one third of the owners commit to doing the upgrade, and agree to $500K, and agree to half down up front, to get things moving.

260 airplanes
1/3 of owners commit
$500K per airplane
1/2 half down

260 x (1/3) x $500K x (1/2) = $22M

I reckon EAC could be had for something like this, if RiP was offering $28M, in better times.

How far would it go?
Let's say, 500 employees, at $100K per year (benefits, wages, color copies, etc), 50 weeks per year (2 weeks unpaid for Koolaid cult deprogramming clinic):
500 x $100K / 50 = $1M per week

So, things could run for about six months- enough time to get production restarted, if additional capital could be secured.

Doesn't sound that improbable to me. I agree with others, that it might be more of a headache than any owners want to get involved in- but if they can put up the $20M to get things moving, they ought to be able to screen management and business plans.

I hope it works out.

airtaximan said...

bill,

OH, now I get it... you take exception with my characterizing the future support of the Ea50 fleet as expensive, BECAUSE all of GA is expensive.

Guess what? These cheap jet buyers WERE seeking a bargoon, al la jetIncomplete, the $1M twin, etc...

They are SOL buddy, and yes, I know this for a fact - becasue reality is, the future of the cheap jet will BE VERY EXPENSIVE.

Am I stating the obvious? NOPE - they seem to be just as confused today about this, as they have always been.

So, remind them, again - this is going to cost an arm and a leg, and the less expensive route was, another choice.

I know you don't want to believe it, but you will soon have it sucked from your bank accounts...so you will finally realize the truth.

YOU GOT SHAFTED, and your cheap jet will cost you a lot more than some other sane choices.

This, my friends, I know.

bill e. goat said...

ATM,
"YOU GOT SHAFTED"
I think the owners completely agree- probably more than we can know.

"OH, now I get it... you take exception with my characterizing the future support of the Ea50 fleet as expensive, BECAUSE all of GA is expensive."

Ah, well, yes. (Once the $500K avionics upgrade is done- this was a warranty issue that Eclipse stuck them with- I predict the maintenance expenses will be a bit lower than a similarly out-of-warranty Mustang).

"the less expensive route was, another choice."

No- the less expensive route IS another choice. But not "was".

IMHO.
---------------------------------

I yield to ATM's (vastly) superior fleet knowledge. But, regarding Eclipse, I think the numbers are still not completely known, and I think will be favorable once they are (after the $0.5M updates).

bill e. goat said...

Here's the deal: I don't blame the owners for risking $100K on a $1.6M jet. I figured EAC would lose their shirt on the EA500 (not unusual for a new company's first model of anything- car, toaster, airplane). Then, I figured EAC would come out with an up-market profitable model, and the EA500 would serve as a subsidized stepping stone into it. And worst case, EAC would go bankrupt, depositors would lose 10% deposit, but be granted the same amount in credit towards the revised price when the company exited Ch 11 (this almost happened).

But instead:
1) EAC shock the depositors down for 60% progress payments
2) EAC came out with a smaller model, instead of larger
3) EAC/DJAI went didn't recover in Ch11, they went Ch 7.

I have been one of the earliest and most skeptical of the EAC business model, and even I didn't foresee the degree of:

a) incompetence
b) unethical-ness
c) criminality
d) all of the above
(take your pick)

of EAC's conduct, so I can't say I would have expected any more from the enthusiastic depositors, who were getting smoke blown up their south end on a regular basis.

Deep Blue said...

FreedomJT:

excellent analysis on the prospects. spot on. the statements coming out of these buyer groups (if they can even be called that) are as absurd as EAC's and ETIRC's.

bill e. goat said...

And regarding those who scoff at the notion of sustainable demand for the EA500...

I say, pshaw !!
:)

Consider:
1) Cirrus SJ50, 400 deposits ($100K)

2) Diamond D-jet "more than 300 firm orders (a year ago!!)

3) Piper has more than 200 orders

4) Eclipse had around 400 outstanding EA500 orders

That's a lot of airplanes folks, yeah, most of them are a little cheaper than the EA500, but they are all single engine jets. Figure a Baron is around $1.2M or so, and I think there is indeed a market for around 100 EA500's per year.
IMHO- but heck- if EJAI would have got going, I think at least half of the orders would have been completed. Or more.

A-g-a-i-n, IMHO...

Cirrus SJ50
Karen DiPiazza: D-Jet
Piperjet

(Nice article by our friend Karen!)

bill e. goat said...

Clarifying- at least half of the EAC/EJAI orders would have been completed, even at $2.3M or so.

A dramatic / critical opportunity exists for the new EAC to substantially reduce overhead, by substantially reducing factory floor space (eliminating excess- wantonly excess- capacity. And sadly, also trimming headcount to a sustainable level, probably, around 400 or so for the upgrades- I'll accept Friedman's numbers for the "upgrade"-only phase as a starting point- hopefully, if new builds, and later on new models were introduced, this would go up).

(Hopefully, whatever production that was associated with activities utilizing the excessed floorspace, would be able to utilize the "excessed" employees, as well- maybe making some components for other manufacturers, such as Cessna, HBC, etc, or defense airframers- it is afterall, a pretty modern and state of the art aviation manufacturing facility, in a nice location, with a good workforce).

bill e. goat said...

And something to contemplate when considering Ken's stance on things- if he's got sn 15x or so, he must have "signed up" a long time ago-

1)before there was a blog to warn him- and,

2) before EAC's ill behavior became so blatant, and it was easy (?fashionalbe?) to blame Williams engines, and,

3) back when the price was -really- low.

So, I can see why he would have "stayed in". I would have counciled the same, given the knowledge available at the time.

Finally weighing in said...

Bill.e.

1.) $28 million to bid/purchase assets, or $28 million to run... Unless your name is Madoff, you can't use the same $ money for both.

"260 x (1/3) x $500K x (1/2) = $22M

I reckon EAC could be had for something like this, if RiP was offering $28M, in better times.

500 x $100K / 50 = $1M per week

So, things could run for about six months"

2.) I do believe this Blog and the pronouncements from Teal, Karen D, and other experts were well along before Ken.e.Boy bought his position for the E CON Jet or his second E500 spot. As they say, fool me once... fool me twice.... fool me three times....
;-)


"So, I can see why he would have "stayed in". I would have counciled the same, given the knowledge available at the time."

fred said...

billy ...


i really do not think that the numbers any Vlj makers had (even) a year ago is going to make any difference ...

as you probably know , if you look at Kondratieff's stuff , the Vlj is already an "aberration" of the cycle ... (Not for the one who love flying , more for the "NEED" to fly in jet !)

so if you analyze this "aberration" when is going to be the next time when Economics will enable buyers to "Risk" a few hundreds thousands ??

let's have some fun with maths :

no recovery forecast before END 2010/beginning 2011 ...

then a few "months/ years" for potential buyers to "forget" about the sloppy-scam EAC has been ...

then a few others "months/years" to have the same peoples to loose cautiousness enough to make the "need" looking more as a "need" when it is only a caprice from some having too much money ...!

this analyze point that to maintain the existing fleet MIGHT be some kind of possible ...

to be looking at Producing again the Fpj is pure madness/foolishness ...

as it would suck away resources from already owners , resources that will already scarce enough ONLY for maintaining the fleet ...

resources spent to buy useless stuff such as FSW and the like ...

resources spent on keeping more or less a factory ...

resources spent on finishing the Fpj ...

resources spent on keeping the NOT needed European partial cert.

resources spent on finishing the European cert. (anyway , the very few that could be sold in euroland aren't worth the expenses !if buyers will be , N numbers would be enough ...not to fall again in the trap of Air-jet-taxi)

resources spent on ... etc...etc...etc...

only of this for the ONLY satisfaction of RP ... since , at the present time , he would be the only to praise a Biding-war ...



my conclusion : drop the thing , to spend needed funds on what already exist , instead of running after chimeric plans to start producing again ...!

just for keeping the existing ones flying is already going to costs an arm , a leg and a eye to the victims ... sorry owners ...

what would be the point on keep trying to fill the Abyss called Fpj-bizz-plan with Franklin ?

for darkening the skies ? again ?

if too many have too much money = look around you , there is lots of goods you could do with only half of it !!!

BricklinNG said...

Jeppesen withholding NAV data updates

Word reaches me from Jeppesen that for "legal reasons" they are reluctant to provide further NAV DATA updates for EAC aircraft. My source thinks it has to do with fear of violating an agreement with Eclipse and possibly somehow adversely affecting some paper asset of Eclipse. I am not a lawyer and neither is my Jeppesen source. Probably this will get solved, but just at the moment, I do not think one can get current NAV DATA from Jeppesen for an Eclipse product

Black Tulip said...

Gadfly,

Perhaps we need an expert in cult de-programming and re-education. Do we know anyone who has escaped the clutches of Scientology? Eclipsology seems to be at least as powerful and consuming.

bill e. goat said...

FinallyWeighingIn,
(That was a New Year's resolution of mine, by the way... :)

Good point about bid price versus operating expenses: my supposition was that the current investors are going to get zilch, and all the money that is ponied up to buy EAC really IS going to go into operations, rather than buying out the previous investors. But, if we want to address that, then let's say the 28 partially finished jets are aold at $1M profit apiece, that pays off the previous investors.

That's rough math- but inadvertently illustrates my point: somebody's getting a huge manufacturing infrastructure- for FREE.

1)They are getting the TC for a glass cockpit twin jet, for FREE.

2) They are getting a training program for 900 employees, for FREE.

3) They are getting a ready customer base of 200-400, for FREE.

4) They are getting service contracts on 260 jets, for FREE.

5) They are getting upgrade contracts worth $500K (older airplanes) to $200K (newer airplanes); on something like 85 (my example, one third premise) to all 260 fielded airplanes; for FREE.

6) They are getting manufacturing technology (FSW) that took years to develop- for FREE (Okay, some minor licensing fee, $100K per year or some such- or maybe it was a one-time fee-either way, FSW knwo-how for the factory purchaser is essentially- FREE).
--------------------------------

Maybe the factory is not exactly "free", but if you figure $10-20M, for a $200M+ facility, I'd say 5%+ really IS essentially FREE.

To make a profit, ALL a new owner has to do is cut overhead expenses- that's all. They can even make a profit for years by just selling off excess capacity, and not even touching an airplane. (This is the worse-case scenerio in my book, and I applaud the owners for moving before this happens).

It really IS THE PERFECT time for someone to snap EAC up- I simply can't believe the OEM's aren't on it like it's hot. (Instead, they seem to be treating it like radioactive "hot"- it flabbergasts me, and I can only explain it by noting the OEM's have laid off 1/3 of their staff, and there is some expectation of another 10-15% downsizing for the next year or so- still, is seems someone would by it- airplane manufacturers (oops- previously noted problems), beer can manufacturers (heck Anheuser-Busch was bought out), auto industry (nope, about BK too ). It's simply a great time to buy it, because NOBODY ELSE is going to, it seems. Right now- one year in the past, and I think one year in the future, it wouold be considered a FANTASTIC buy for $10-20M.

What about the old investors and the $160M stock promise from EJAI? Okay, yeah, sure- throw 'em a bone, and promise them gazillions in future worth with EAC-genXYZ stock- whatever. They were willing to stretch for ETIRC, I think they'll be willing to stretch for EAC-GenXYZ stock too.
---------------------------------

You're right about Ken buying into the second EA500, and the ConJet.

(But I specified sn15x).

The later deposits were a calculated risk, maybe or maybe not made when the advice was available for the second EA500, and certainly for the EA400. and he got took. But he's not here groaning about it- we are.

And least we be tempted to throw the hypocrisy flag, note that Ken is sincere in his perception of value (whether right or wrong), enough so he is involved in factory sale negotiations.

airtaximan said...

bille,

you forgot:

- a deal to manufacture the plane in Russia under license, for FREE

- 300 orders from ETRICK for FREE

- PHOSTERx technology that will replace all current fire suppression systems on planes, for FREE

you should pile on the Baloney


Remember 1 thing, the plane cannot make a profit. Either you need to sell too many of them at a low price, or too few at a high price, but this plane has been misdesigned according to the market - not enough demand at high rate low cost production or too expensive at low rate high cost...

Somoene points out that the early adopters agreed to buy some planes right before BK for $2.5M.

I would propose that the early adopter market is pretty well saturated, and only these folks pay through the nose for the right to show off a neat product before everyone has one... like the $600 Iphone. A few months later, to keep up the market, Apple refunded money and lowered the price by 1/2.

Anyhow, I would caution anyone looking to perpetuate the EAC business, or ratchet down production to make money with this plane - it was designed to make money and meet a cheap jet market.

Keep reading the last sentence until its burned into your brain.

it was designed to make money and meet a cheap jet market

at $2.5M, any reasonable customer buys the Mustang, and in the future considers SEJs.

I once said it, and I'll repeat:

EAC/Vern found the sour spot in the market with this plane. The market is very small, and at the practical price, the alternatives win.

airtaximan said...

bill.e,

Ken was there at first flight. Anyone who remained onboard after that sham, well....

the writing has been on the wall since first flight, Nimbus, dayjets "orders"... why trust these guys with your life or your money?

Foolishness

airtaximan said...

beedriver makes a good point aboutt eh PW engine...

PW will consider who "wins" (term used very loosly) the BK, and will decide if its a bunch of clowns, to cease providing engines for any future planes, or perhaps even support the current fleet.

I heard UT is laying off thousands as of last week or so, and many are from the PW610 line. Many are not, too.

fred said...

anyone should be very careful when things are announced to be :

For Free ...

most of times , whatever seems to be free or for very cheap, is in the long run , only bloody more expensive ...!

Fpj is no exception !

bill e. goat said...

Hi Fred,
"my conclusion : drop the thing , to spend needed funds on what already exist , instead of running after chimeric plans to start producing again ...!"

Fred-??
Drop It Like It's Hot ??

(By the way, Wedge STILL gets an "F" !! :)
---------------------------------

I agree that the big upturn in the av market is 2011 or so- but most think it will indeed at least bottom out soon (mid year, perhaps).

I had not been to disturbed by the posturing about BizJets, and figured the only tangible thing that matters is tax laws and interest rates. I don't know if anyone caught the good news- I hadn't heard it reported- but Congress IS helping the industry:
Tax Incentives for GA

Here's a good summary, by our friend Richard Aboulafia:
Boom Market Ends
(Maybe instead of a drastic drop, we're just seeing a realistic return to "normal"- I wish it were a little "less normal" for all our friends who are laid off though).

It's a bit dated, but here's Honeywell's Aviation forecast from October 2008- it's predicting peak deliveries in 2009, then a slight dip for the next couple of years- I'm hearing that it's still about right- 2009 deliveries (at least for turbine aircraft) will be +/- the 2008 deliveries.
Honeywell Forecast, Oct 2008

For reference on the helicopter forecast:
Honeywell Helicopter Outlook- Feb 2009

EclipsePilotOMSIV said...

You know there has been a lot of people popping up here and there with an interest for purchasing EAC. Some of them have some weight behind them, others don't. I think this is the tip of the iceberg my friends. Who knows who is lurking in the dark and keeping their mouths shut until the time is right to show up and just do the deal. And I am sure we all are familiar with the saying "Money talks and bullshit walks." Unfortunately for Roel, or anyone with his intentions are going to realize this saying is very true. Just food for thought.

Regarding the Jeppesen thing. They will not update Nav data for NG airplanes. Limiting them without DME. Which means no RVSM. So hopefully some deal happens real quick for their sake.

WhyTech said...

"Which means no RVSM."

Which means max of FL280. So, Ken, what were you saying about the wonderful fuel efficiency of the EA50?

WhyTech said...

"Which means max of FL280."

Possibly a max of FL240 w/o DME? And, Ken, how about that weather topping ability? Now you are down below the turboprops!

bill e. goat said...

ATM,
"at $2.5M, any reasonable customer buys the Mustang, and in the future considers SEJs."

I'd have to say, I consider the EA500 superior to a SEJ, for the same money.

"EAC/Vern found the sour spot in the market with this plane. The market is very small, and at the practical price, the alternatives win."

Well, I think Wedge found the market for 200 airplanes per year, and tried to grow it into a market for 2000 per year. Good airplane- bad business plan.
--------------------------------

The Phostrex spectacle is indeed an interesting one- perhaps a "smoke screen" to secure MORE financing back then.

Where there's smoke, there's fire. Hmmm- rather ironic.
---------------------------------

I'm not sure though- the press release i found is August 2005- I think EAC wasn't hurting yet- the idiotic production ramp up didn't start it's crazed plunge over the cash cliff until Jan 2006, and Wedge didn't resort to blatant tricks like the "auction" until late 2006.
Phostrex, circa 2005
Phostrex- a mystery we may never know the answer to.

(Ever MORE Wedgian intrigue... !! :)

bill e. goat said...

EPx,
"Who knows who is lurking in the dark..."

?!? Wedge !?!

(Well, he was in the dark most of the time anyway :)

WhyTech said...

Anyone run a basic financial model based on the Friedman numbers, in particular, 400 employees? This would seem to project to about $40mm per year in compensation costs alone, not including other operating & overhead expenses, materials (parts likely to be a large fraction of expenses), etc. What does all this mean in terms of required revenue per active acft to at least breakeven? My intuitive reasonableness checker says this will be hard to make work without heroic assumptions.

airtaximan said...

bill.e:

GA is a lagger

What you see happening in the other markets is going to hit aviation later, not sooner, so to speak. It has really just begun.

fred said...

oh yes , ATM ...

apart from the bottom of the crisis somewhere in the second part of this , i would not share too much goat's optimism ...

if the nearly nationalization of citigroup is going , expect Tax on richness and high income to go really up ...

there is no secret , money has to be taken where there is money ...!

so my guess is that keep Fpj flying is going to be hard enough already for the one unfortunate to have one , not to go for more troubles producing new ones ....!

airtaximan said...

whytech,

sure, simple math.. 400 employees, 200 planes per year = $100k-$200k per plane in labor. That is direct and indirect... not a hige hurdle, IMO...

100 planes = $200k-$300k per plane

And no, I do not think this is a realistic number. I think EAC needed 1500 employees to produce 200 planes/yr or so. Maybe at 1000 employees, it might work, and:

that's $700k-$800k per plane or so in labor for 100 units, of course $350-$450k per plane, for 200 units .

The plans for 100 units per year are really difficult to imagine, based on labor, ecoonomies of scale (lack thereof) and parts cost for conventional production.

The plans for higher production seem to drive a nice spreadsheet, and in reality, will not work due to lackluster demand.

The comment regarding the ea50 being better than a single, is obviously circular - comparing a $1M 7 place (sorta) SE Cirrusjet (their stated goal) with a $2.5M 5 place EA50, well does not really compute in favor of the EA50.

Who knows? but I do not think these owners will even stick with the ea50 - many have already been sold by the original depositor, MANY according to SHane bought multiple spots and these were not fleet operators.

Folks, I do not think the ea50 serves it customers well at normal expensive GA maintenance costs, all things considered. YES, some people have a fetish with this plane, but not many, and the fetish will grow old fast, when the plane costs more than competitors to keep in the air.

LAstly, Vern made a cooment to the press the other day saying he has learned alot - the problem with the EA50 was it did not reach high rate production fast enough.

This my friends is the ridiculousness stuff that's been fueling the blog for years.


Maybe Vern has a way to get the price back down to $1.25M.. in this case, I'm all ears. Otherwise, its just more BS.

Beedriver said...

If Someone buys the Eclipse Product line they need to be ready to spend real money before they will be able to make any.
When you buy a product line you do not get all that capability for free. usually everything except the right to build it is relatively useless. many times it costs as much to get what you bought running as to do it from scratch. The existing aircraft in process could be worth something if all the parts are available. probably they are most useful as spares for the existing fleet.

AVIO is not finished and will cause a huge expense. mechanical stuff is very straightforward but software is incredibly expensive to understand and maintain especially if you did not write it.

that is why I feel that AVIO is at best a stopgap if any more EA500s are going to be sold. The cost to keep it competitive with other navigation systems will be prohibitive. keeping it as the control system for the airplane, may be worth it but if the EA500 is to be competitive the avionics will need to be based around G1000 or an equivalent system.

The engines could be a real problem as they are too small for any other personal jet to use as I blogged before.
PW will probably need to support the 610 since by law I think any product needs to be supported for 7 years. If PW does not think the 610 has a future the cheapest thing for PW to do probably is to buy Eclipse and shut it down. eventually AVIO and the other unique systems will ground the fleet and then PW will not have a requirement to support the engines.

Beedriver said...

A small support group could do alright buying Eclipse. they will have the present owners by the ---- and can charge what ever they need to or want to, to keep the airplanes operating. they just need to operate with COD and Cash in advance as their only payment terms and they will make a good living for a few years. I have seen this many times when someone buys the rights to an obsolete product they can make substantial money riding the product down into oblivion. as they are not the original company and not interested in future sales of complete systems they can charge what they want.

if they are small and do not have deep pockets they will not be a target for lawsuits, thus they do not need liability insurance etc (The example is Maul for that)

If you are not worth anything no lawyer will sue.

I have watched this very business strategy used in the laser and controls world many times very profitably

Dave said...

You know there has been a lot of people popping up here and there with an interest for purchasing EAC. Some of them have some weight behind them, others don't. I think this is the tip of the iceberg my friends. Who knows who is lurking in the dark and keeping their mouths shut until the time is right to show up and just do the deal.

I agree in that now that Roel and his phantom bid are out of the way that there could be lots of interested parties. Frankly I hope there is.

Dave said...

Well, I think Wedge found the market for 200 airplanes per year

Yes and no. That was for filling years old backorders and as such I wouldn't count on those numbers to be sustainable. Also you have to keep in mind the damage to the brand that Eclipse has suffered. In theory there might be 200 sustainable orders per year, but in reality too much has happened not the least of which include the bankruptcy.

Shodan said...

a job that isn't "reliant on America" ? my job wasn't relying on america, all you had to do was not fuck up, but then you deregulated your subprime mortgage market and all hell broke loose, our engine are worth what you pay for them, you're not doing us a favor by buying them, but don't come around saying ok we'll take 4900 engine next year, then in november 2008, hey sorry Pratt & Whitey Canada, we'll only be taking 3700 'cause we're broke and our big governement won't let us buy toys until we've eaten our vegetables

"raise your hands if you plan to sell the company jet, for the record state that no hands were up"

-the next day, OMG cancel the new company jet OR WE DON'T GET FREE BAILOUT MONEY

"Think for a moment where you scocialist government would be it we suddenly stopped buying 25% of our gross national oil from you"
if you could stop buying cheap oil you would, why else would you be lining those arabs' coffers then ? seriously we could just hog that oil until markets went up, also we could keep our cheap electricity too, remember those california rolling blackouts ?

"United States is NOT obligated to support you or your economy and you should have alternate routes/means for survivel. "

hey we're selling you engine, we are trade partners, I'm not mooching off your welfare, you're doing me no charity, but we do expect you to keep your economy healthy, our industries count on it, but you let us down, that is the provervial shit sandwich, don't make the mistake of thinking that you are not responsible of your own demise on this one, you are taking us with you, through no fault of our own

"I understand that the 610 is an entirely different design than the 615. Is that so? if it does not have a high parts commonality with its larger brethren its future is doomed unless the volume is large enough from just the EA500 which does not look like it will happen."

all the "special" parts are unique to the 610, but that doesn't matter, the same CNC mills EDM and broach make part for both engines, we can make 1 610 and 15 615, or 80 610 and 1 615 the cost per engine does not change, it doesn't have economy of scale because most parts are cut in-house by the same people and it's assembled on the same line, as long as we make enough of the whole 600 series we're ok, of couse we're not ok because we're only making 15 a month now , and like 9 next month and just wait 1st april when a new "order cancel" window opens for Q3, all hell will break loose again

btw, I'm not as bitter as I sound, I have a good plan B, plan C and plan D I'll be alright, but some of my work collegues are taking this quite hard, (think "Ant and the Grasshopper"), me I knew shit was gonna hit the fan down south before I even started working at P&WC, before I even read this blog I didn't swallow that there would be a market for the VLJ yet, the numbers didn't add up then and they still don't, though they might in the future in some other incarnation

bill e. goat said...

Beeman,
I think the reference many have made to Mooney aircraft comes to mind.

(I figure somebody -either the factory or some mod shop- will do an avionics conversion eventually, but that's probably several years down the road- when prices drop even more, and Avio becomes more dated).

Mooney Aircraft Co.
Mooney Ovation2GX
----------------------------------

Eclipse models:
Eclipse 400
Eclipse 500


I thought about Mooney, I've always admired them as plucky underdogs, and it occurred to me, what a nice merger that would be with Eclipse- giving the combined company a nice model lineup (Twin jet, SEJ, prop).

Okay, so far, er?

Then why not through in SinoSwearengineWhatever
SJ300 Jet
SinoSwearingen
Ed Swearingen
(Seems like Ed is still around- haven't heard much about him lately).

But, it occurs to me, that at $7.5M, it's quite a step up from an Eclipse to the SJ-30 at $2.5M

Something in between? Maybe a revamped Adams A-700 (Maybe even keep the A-500) ??
Adam Aircraft Industries
Adam A-500
Adam A-700

We'd then have a company, with a model lineup:
Piston single (Mooney family)
Piston twin (Adam A-500)
Single Engine Jet (Eclipse 400)
Very Light Jet (twin) (Eclipse 500)
Almost-VLJ (Adam A-700)
Light Jet (Swearingen SJ-30).

What to name the company?
Well,
Swearingen
Adam
Mooney
Eclipse

How 'bout,
The S.A.M.E. Aircraft Corporation??

(Ken, I'm available for market consultation, as well as gift shop services :)

WhyTech said...

"don't make the mistake of thinking that you are not responsible of your own demise on this one,"


No doubt that we are responsible for our OWN demise, .... but, we are NOT responsible for YOUR demise.

Markets are subject to cycles, and the aviation markets in particular seem more volatile than many. If you want the upside, you need to accept the downside.

bill e. goat said...

Hi Shodan,
Seems like we're pretty good friends (USA and Canada) even if both sides get a bit annoyed with each other at times.
USA trade partners
(But take comfort in the fact that the Democrats and Republicans argue even more vociferously).

I welcome your comments, put adjure you to adhere to the "no potty mouth word" policy.

You see, we are all so civilized and genteel here.

Ahem
.)
---------------------------------
Sorry about your buddies getting laid off, but it's hitting all sectors of the US scene as well, you can blame us for causing it (I agree- inadequate regulation, over-consolidation, etc.), but we aren't holding anything back preferentially- it's hurting us just as much as our fine neighbors to the north.

(My rant: P&W shouldn't have exported jobs to Canada in the first place- but that's not the Canadian's fault).

WhyTech said...

"Avio becomes more dated)."

Current functionality is no better than early 70's. How much more dated does it need to become?

bill e. goat said...

Hi Shodan,
Seems like we're pretty good friends (USA and Canada) even if both sides get a bit annoyed with each other at times.
USA trade partners
(But take comfort in the fact that the Democrats and Republicans argue even more vociferously).

I welcome your comments, put adjure you to adhere to the "no potty mouth word" policy.

You see, we are all so civilized and genteel here.

Ahem
.)
---------------------------------
Sorry about your buddies getting laid off, but it's hitting all sectors of the US scene as well, you can blame us for causing it (I agree- inadequate regulation, over-consolidation, etc.), but we aren't holding anything back preferentially- it's hurting us just as much as our fine neighbors to the north.

(My rant: P&W shouldn't have exported jobs to Canada in the first place- but that's not the Canadian's fault).

paul said...

Shodan:
Welcome to the world of aviation!
You think a downturn is something new?

airtaximan said...

bill.e,

I believe PW Canada was founded by some Canadians, to overhaul and repair PW engines, in Canada. It just so happends, they developed the PT6 and became the world leader in small turbine engines, arguably.

The Canadian gov't pays for a lot of RD, and UT (the US parent) reaps the benefits.

Thinking we exported job to Canada via PWC, is off the mark, if I am correct.

I wonder if PWC purged their website of any embarrassing reference to Vern and EAC?

I may have a looksee

Dave said...

hey we're selling you engine, we are trade partners, I'm not mooching off your welfare, you're doing me no charity, but we do expect you to keep your economy healthy, our industries count on it, but you let us down, that is the provervial shit sandwich, don't make the mistake of thinking that you are not responsible of your own demise on this one, you are taking us with you, through no fault of our own

Why should you expect anything, particularly in regards to economies? I'm not even middle aged and I'm both aware of and have been through multiple economic cycles (and each time I've had a downsizing to show for it I didn't whine).

I knew shit was gonna hit the fan down south before I even started working at P&WC, before I even read this blog I didn't swallow that there would be a market for the VLJ yet, the numbers didn't add up then and they still don't, though they might in the future in some other incarnation

I don't see why you are complaining at all then if you knew before you took your job that Eclipse had a bad business model. You took a gamble on business model that you admit didn't add up and you lost. Trying to blame subprime mortgages for Eclipse's bad business model is just a red herring.

bill e. goat said...

Hi ATM,
Thanks for the info on PWC- I figured like the auto industry, PW had shipped work north for lower labor rates. (And a tip of the hat to the Canadians- good workmanship as well. Nice job on the PT-6 !!). My apologies to Shodan for my poor reference.

(Rats. Now I'll have to find something else to gripe about :)

PWC overview

bill e. goat said...

I don't think most Americans are aware that Avio built airplanes in Canada, long before the Eclipse came along.

(Boy- THAT ought to get 'em wound up:)

Sorry- NOT Avio: AVRO
Avro Canada
Moller is still trying to catch up!
CF-105 Arrow
(The CF-105 was not an modified F-105- it's a completely different- and stunningly advanced concept- same as Avio?? :)
CF-105 history
(Maybe a shame, or maybe not- too advanced for it's time, like the F-111? Sure is pretty though !!)

Sort of looks like the PanAvio (Oops- Panavia) Tornado, without the wing sweep feature. (Heck, back then, everyone wanted to go fast, not slow and fast)
Panavia Tornado

WhyTech said...

"And a tip of the hat to the Canadians- good workmanship as well. Nice job on the PT-6!"

In P&W we trust!

bill e. goat said...

WhyTech,
"Dependable Engines"
.)
PW Logo
(Same logo for PW and PWC. Too bad it's not a snow goose when appropriate- I see a lot more of them where I live. I suppose I see a lot more PWC engines than PW engines too, come to think of it :)

bill e. goat said...

Okay,
Inquiring minds want to know...
Great Northern Diver
The Canadian national bird is "the common loon", not the Canadian Goose.
But I can understand why the Canadian Aerial Demonstration team sticks with "Snow Gooses" instead.
Canadian Goose
Canadian Air Show Team

I think the Candians have a CF-18 demo team, but couldn't get the web site to open-
http://www.airforce.forces.gc.ca/site/airshows/demoteam/cf18demo_e.asp
(But here's a video- looks like one airplane- nice show though):
Canadian Forces CF-18 Demo

(Birds of a different feather):
List of "Official" birds

flyboymark said...

Shodan,
Your still passing the buck. All of your arguments are simply becaue you placed all your eggs in one basket and refuse to take responsibility for your actions and attempt to blame it someone else. Kinda like the Muslims do over in the middle east... I can digest what's wrong INTERNALLY with my country.
To take the failure of one small company becuse of few crooks and blame and entire nation......

Kinda childish! I'm going to find my post about my little dog for you and repost here...

Shodan said...

oh no , don't mention avio, you'll attract all the crazies conspiracy theorists !!! ;)

btw, P&WC used to be just a regional service center, they started doing production of the P&W piston engines when P&W wanted to concentrate on turbine engines
at some point P&WC designed the PT6 and it was a huge success and not sure when but it was decided that P&W would do big engines and P&WC would do the small ones (with 10000lbs being the cutoff between big and small, but now we are starting to go over that with the PW800 and PW1000G)
we do a bunch of JTF parts but other than that we don't do anything for P&W, but we do share a lot of R&D and ACE

right now work is being sent to Polland mostly , but that is slowing down a lot because of shipping cost and currency exchange rate since they switched to the euro

"I don't see why you are complaining at all then"

well it still sucks to lose a job like this, working there is a real carreer and whatever I will be doing in two months will just be something while waiting to go back to P&WC

it wouldn't be so bad if it wasn't for this guy

Brad Sherman

he pretty much precipitated the layoff by a good 6 months, for what, just to smear a few incompentent CEOs, it was completely gratuitious and it hurted a lot more the aviation industry than those guys

in fact I have a video, and you can tell the exact second I lost my job

0:38 on this video
http://www.youtube.com/watch?v=A-RQfoW1lZs

private jets are are cheaper to run than commercial when the guys they carry burn tens of thousands of dollars for every hours of their time spent not turning their company around, that smug douche doesn't get that it's not money wasted, it still goes to pilots and mechanics and other staff who will continue to pay their mortgage and contribute to the economy


"You took a gamble on business model that you admit didn't add up and you lost."

even knowing what I know today, I'd still make the exact same choice, it wasn't much of a gamble, working here is the cream of the cream and I'm glad I did manage to work here this long, I got hired because of eclipse but I only worked on the 600 for 5 months, I worked longer on either the PW100 and today the PT6 (my personnal favorite)

"Trying to blame subprime mortgages for Eclipse's bad business model is just a red herring"
P&WC could easily have taken the failure of eclipse, they didn't bet much more than 100M$ on it, and in the end they still have that exceptionnal PW200-sized turbofan to show for it, in the long run they are still coming out on top

also the subprime mortgages is what got the ball started back in april 07, this is the root cause of the recession and it's the recession alone that is crashing UTC, but I knew this was going to happen eventually, only I thought I had until about late 2010, it's not called "Slack and Whitney" for nothing ! (not sure this means what I think it means in english but it's the company's informal nickname here ;) )

Dave said...

even knowing what I know today, I'd still make the exact same choice

Then you really have nothing to complain about.

ColdWetMackarelofReality said...

Why does anyone think that having one of the architects of the first failed plan around will somehow have better results the second time?

400 is the same 'development' staffing that Eclipse had until around 2004/2005 timeframe I bet. And 400 is inappropriate to service the fleet, such as it is (too big).

The Harlow plan, if it were to win the assets, will be stillborn.

$150-200M will be needed over the first 2 years, JUST for people, facilities, equipment and completing and productizing the design - we know that cuz Roel said so, and everyone else has figgered it out too.

If you want to restart the line you need somewhere around $200-250M to buy the assets and then pay for completing the plane DESIGN.

What about the 260 planes in varying stages of 'completion'?

Only a smartly run, lean, minimalist approach will work - recreating the Hydra that was Eclipse OG into Eclipse NfG only serves to ensure the same result.

What is the real desire, incinerate $300M but do it in record time? And why did Peter Reed announce and carry out his voluntary retirement, within a week?

The owners are ready to ante up to get the plane they were promised, that much is clear - even though the size of that ante is an unknown at this time.

There is no need for any support concept to be punitive in its' dealings with the owners, but significant investment will be required, in advance, to make it work.

In an ideal world, Dr. Masefield and the true heavy lifters at Eclipse (names now mostly known to me) would be given the opportunity to finish the plane that they intended to deliver. If this Fish is involved in any way, that would be my desire as it is just.

bill e. goat said...

Shodan,
Just so you are prepared for the worst (in cae FlyBoyMark's plans come through):
Wizard of Odd, (Wedge??)
.)
----------------------------------
CWMOR,
I see Peter Reed was the old Eclipse CFO- did he pick safes, or use a gun?

I agree on Oliver Masefield- make him King for a Day (or 365), if he'll take it.

bill e. goat said...

...I wonder if Wedge uses an umbrella...
BoD minutes, with a visit from Wedge

Wedge's exodus announced in Munchkinland (Aug 2008):
Period of Shock and Mourning

flyboymark said...

Shodan,
The present economic climate has ABSOLUTELY NOTHING TO DO WITH THE FAILURE OF ECLIPSE!

It was a failed company after 2 BILLOIN DOLLARS were spent and the company simply lied and skimmed/scammed everyone to death until there was NO MORE MONEY LEFT OUT THERE. Even the "faithful" Ken has admitted to this to some degree.
EAC was in trouble MANY years ago from the git-go because impotent management.

Did Cessna spend 2 BILLION dollars on Mustang development?

Our family discussed buying an Eclipse several years ago...but after remembering "other" sagas, we waited to see what was going to happen first.

Still passing the buck...EH?

flyboymark said...

Gotta find that story I posted here about my little dog "Spooky"....

ColdWetMackarelofReality said...

Omsiv, do you have the no Jepp for NfG in a verifiable way? E.g., letter from Jepp, etc.?

Is a reason given? Should just be a database dump, not sure why they would bail on the NfG guys unless they have 'other' concerns about NfG.

airtaximan said...

"What about the 260 planes in varying stages of 'completion'?"

This is pure mental masturbation:

one could argue, this is someone else's problem... the whole thing makes no sense, but IF you got stuck with a certain config, and somehow, another config is coforming and can be flown and warranteed, it is YOUR problem to PAY to have it brought up to snuff.

I personally wouldn't care about the cost to bring the fleet up to a single uniform conformity - whatever it costs, it costs. And the Ken's will pay.

Even if its $750k. Accrrding to some, people paid $2.5 for this plane, so, if the Kens paid $1.25 or even $1.5, another $750k should be no problem.

Also, $500/hr for MSPs, no big deal, right? Its a little more than the old plans, but heck, we're not in Kansas any more, right?

Pure masturbation - if yu pile on the real costs, and the risks, there is no market for this plane.

The Disney-plane was JetComplete at $200-$300 per hour, and a plane for $1.25M - $1.5M or so.

All gone.

This plane properly priced and realistically priced for support, has a fetish market. Its really small, and very expensive.

airtaximan said...

someone could argue that if PWC sold the engines to EAC at 1/2 the price they chose, the whole story would be a happy one at this point.

;)

Blame is a funny thing... I would look at the root casue.

I maintain, the casue of this $3B mess is a failed product spec, one that failed to meet the market, failed to take risk into account properly and could not make money.

PW bought into the business plan, that failed, and they are just as much to blame, for not seeing the reality - their engine bloated the cost of the plane, to a point where the market did not materialize, and it failed.

airtaximan said...

CW, my guess is, the computer-airplane-guys tied up Jepp, and now they think they are breaching an agreement by selling direct.

IOW, Vern's deal was exclusive to Jepp for agreeing not to sell direct, behind EAC's back.

Shane Price said...

Mini Snippet

Seems the airframe '10 year life' is not that serious a problem, after all....

The engines have a 12 year overhaul limit.

Better hope P&W Canada are still interested in building those 610's in 2018.

Oooops.

Shane

ColdWetMackarelofReality said...

The problem ATM is tha Shoeless Joe Jackson never showed up, never did any of the other players.

If you build it, they will come.

Nope.

The existing planes CAN be supported, but production for this plane, if it were ever restarted, would be in the 60-90/yr range, AT BEST. Even in good times, with housing values skyrocketing, the Dow working back towards 13,000 and so on, they only 'sold' a little over 1000 positions, in about 10 years, and that was when the pricing was INSANELY low.

If the EA-500 will cost within 10% of a Mustang, and won't be available again until the Mustang-1 is announced (I bet), who thinks they will do better than they did when the plane was half-off on a blue-light special?

Now Harlow is talking about saddling a new product line with a $250M startup cost, if you can sell and deliver 250 over the first 5 years, you need to extract$500K each.

I am sorry, I know the Harlow name from Wichita and I am beside myself that they have been roped in on this.

It is, IMO, another IPO scam - build a ridiculous unbelievable business concept (only this time make it slightly less ridiculous and slightly less unbelievable so that it will be believed), raise a ton fo cash, start showing progress and then magically cash out at just the right moment. Yeah right....and I have some beach front property I want to sell, it is near Scottsdale.

There are some OEM's with product lines that could accomodate the EA-500, but are they willing to drop $250M to get there?

A sustainable business can be built to supportn the existing fleet, but only if the right assets are in the right hands.

If the owners fracture into a Harlow camp, and an E5C camp, and God forbid a Wedge Part Deux camp (you know it is out there) there will be no unified owner community, and the last EA-500 will stop flying within 24 months, possibly, very, very much sooner.

If there is a bidding war for the assets nobody wins.

If the restart production line guys win, everybody loses.

If the Wedge Part Deux guys win, everybody loses.

The Owner play, believe it or not, the (E5C) is the best chance for success in my opinion IF, and only if, they bring in the right team to develop the fixes and to carry them out.

If the E5C leadership team insists on a leadership role in the support company, kiss it all goodbye - experienced airplane people or give it up.

Shane Price said...

Several of you have commented on their being 'others' lurking in the long grass, about to emerge and 'snap up' the assets of EAC.

That, my friends, borders on delusion.

Yes there are other groups out there. Not a day goes by without someone contacting me to explain what they are 'going to do' and who their backing is coming from.

But they are all pretty vague about a key question.

Who will buy FPJ's in the next few years?

The market is shot, for any luxury toys, for at least 18 months, and that could easily run into three years if we are unlucky.

By the time we get through this, the FPJ could be a 10 year old bird, with a market seeking something completely different.

And don't forget, as some seem to, that there are more than 50 FPJ's with no owners right now. The 28 DayJet birds as well as the 28 (or so) unfinished in the factory.

It will take some time to get these updated and/or finished, and another year or so to sell them. Especially at anything like the price they NEED to be sold for...

So, you have a damaged brand, with a large 'overhang' in stock and an unknown number of current owners who may wish to cut their losses.

Would you join the sales team at that company?

Shane

WhyTech said...

"Better hope P&W Canada are still interested in building those 610's in 2018."

IMHO, will be irrelevant looooong before 2018!

airtaximan said...

CW,

"Go the distance...."
"Ease his pain...."

Your last post pretty much covered it all...

My favorite scene is when the brother-in-law shows up to foreclose, and eventually when he sees the light (so to speak) he admits he was wrong and they should never sell.

- get it?

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