Tuesday, June 2, 2009

We live in interesting times


How times change. This time last year there were loads of E500's on Controller, and even some E400 'positions'. Mustangs were in shorter supply, but there were plenty of people seeking a profit in the earlier production slots. Now, sadly, there are only 12 of our favorite toy jets on the site, the 'most affordable' at just under one million dollars. Meanwhile, Cessna's entry level offering continues to enjoy a following, with 35 jet/positions for sale, the 'best value' at just under $2.3 million for one of the earliest made.

Not that anyone is actually paying this sort of money, it's just what's been asked....

The Trustee of the Chapter 7 process has sought an extension, through the 1st of July, to provide extra time in the search for a buyer. This is positive as it indicates some interest may be (finally) brewing from a 'serious' party. Whispers reach me about one firm in particular, of which more anon.

More Court documents come into my possession, where a detail therefrom caught my beady eye. It appears that EAC values its 'Work in Process' at $22,554,491 and zero cents, alongside 'Finished Goods' at $3,610,235 (and zero cents, for accuracy). Bear with me for a while, as I might be stretching things a little here, but the last time I looked there were 29 E500's in various states of build. Quite a few were (I'm told) brought fairly close to the finishing line, between November and March. Lets take a stab at it and say that 15 (roughly half) were 'almost' finished and the remaining 14 were partially complete. Take that $26 million dollars as the cost for 15 pretty complete and 14 (say, 50% ready) and I'm computing the cost of an E500 was $1.35 million.  I fully understand that these numbers can be messed toyed with all year, but we finally have an internal number that places a direct value on what we know was the work in progress and finished goods. Anyone with a better handle on the numbers is invited to participate in the blog....

And another thing. The whole of GA is under a variety of attacks, to which several of you have reacted by drawing my attention to Greenjets, a company who paid for a well placed ad (copy above) to draw President Obamas' attention to the benefits of private jet travel. After all, he has not one, but several at his disposal, without which his job would be impossible. What is actually wrong with using the right tools for any job?

Some positive news reaches me from Gainesville, the (former) hub of all things E500 down there in sunny Florida. Seems a viable service business in E500's has grown up, almost organically, with regular arrivals and, more important, subsequent departures. In the dim and distant past, when DayJet was the future, I had several glowing reports of the skills employed on keeping the early aircraft flying, based on this very field. I'm sure others are, like me, intrigued and would love to learn more. I would welcome contact with any owners or pilots who've experienced this facility recently, to the blog email eclipsecriticng@gmail.com

The same email address applies to anyone looking for a 'tail cone' repair for the damage highlighted in my last headline post. It appears that a repair procedure has been successfully developed, and is ready for prime time. Congratulations to the shop concerned, which is currently working out pricing and more accurate timescales for those of you requiring such a service. I'm delighted to support this example of the classical American 'can do' approach when faced with adversity, which also encourages me that a way forward will be found to support the E500.

The Eclipse Aviation web site has not been, how shall I put this, a hive of activity recently. The most recent bit I could find makes sorry reading, especially since it's out of date. I was tempted to try the phone number listed, but decided it wasn't worth the cost of a trans Atlantic call.

Especially to listen to Mike McConnell....

Several of you have been kind enough to contact me with words of encouragement and offers of assistance in moving this blog forward. Suggestions have included conversion to a 'forum' format, continuing in traditional blog style but with a wider remit. To be perfectly clear, I intend closing this particular site on (or shortly after) the end of June. This won't of course be the end of the discussions we've all enjoyed, which I'm confident will find a new home, under other 'management'. I also have another few headline posts before I pass the baton, so I'm not quite finished yet!

In the meantime, enjoy the summer sun, as I did over the Bank Holiday weekend just past. The people were in good form, the beer was nicely chilled and family and friends were kind enough to grace me with their companionship. Keep your chins up and look forward in a positive manner.

That's what works for me....

Shane



75 comments:

Beedriver said...

I would suggest the new blog be on the subject of "very light jets" which could encompass the Eclipse of course and the other small emerging single engine and twin engine jets.

Unfortunately a blog takes a lot of someones' time to monitor and keep going.

hopefully someone, maybe someone who is retired or has a full time job where a blog of this type is useful might do it. anyway the growth of this emerging niche is very interesting for people like myself who love airplanes and technology and love seeing how emerging markets are developed and how the many small .players that attack it grow and fail and attempt to succeed.

Shane Price said...

Tail Cone Repair Details

Mr. Dale Gabel, Exec.
VP/Gen. Manager
Applied Aerodynamics, Inc.
FAA Repair Station EUWR225L
2265 Valley Branch Lane
Dallas, Texas 75234

Phone: (214) 393-7785 – Direct
(719) 339-2330 – Cell
(972) 620-2100, ext. 129
dgabel@aerodyn.com

Mr. Gabel will be glad to explain who the direct source that will manage the program, who that contact will be, shipping costs, warranties and pricing.

Applied Aerodynamics, Inc. here in Dallas will be performing the repairs, and final airworthiness sign-offs to FAA Approved Data.


FINALLY, a bit of genuine good news for hard pressed E500 owners worldwide.

And (for me, anyway) a demonstration of good old fashioned American 'can do' at work.

Shane

Fly-an-Eclipse said...
This comment has been removed by the author.
Fly-an-Eclipse said...

Interesting times indeed. A short time ago there were 37 Eclipse ads on Controller and the blog attributes that as a sign of "the rats fleeing the ship." Now there are 38 Cessna Mustangs for sale on Controller and Shane's interpretation is that it's attributed to "profit seekers" selling positions. My interpretation is that the owners are unhappy with the product's performance and value.

Interesting times indeed.

fred said...

My interpretation is that the owners are unhappy with the product's performance and value. ...


May be an interpretation closer to reality is that Mustang Position sellers HAVE a possibility of selling , THEM !

what about Victims-owners ?

how many are going to clinch on ownership of something that can be accepted (in term of property transfer ) at the nearest scrapyard ...

(don't worry Chinese are still looking for Aluminium to be re-used ...)

how about Value-proposition ...?

airtaximan said...

fly-an-eclipse has a point...
perhaps its a bad time to own a plane? Any plane.. especially if you are not uber-rich.... so the value the Mustang owners were looking for may no longer really be there, all things considered. Heck maybe they are trading up?

Also, no matter what anyone says, I would imagine that a large share of EA50 owners would sell their planes IF they could. There's just no realistic prospect of getting any rasonable amount for this plane. Are the owners happy with ea50's performance and value? I suspect, all things considered, NO.

I also suspect that things will get better for the ea50 owners from a support perspective, and maybe from a value perspective as well... but they are going to pay through the nose, first...

Shane Price said...

ATman,

Yes, I'm pretty positive they will 'pay through the nose' whatever happens.

Even since I wrote that headline paragraph, which had 12 actual, serial numbered aircraft, the total has dropped to 9.

I'm pretty happy (in my own mind) that none of those three aircraft were actually sold. I expect it's just a monthly clear out of 'dead stock' either by the advertisers themselves or Controller.

You have to admire the chaps at 'SAS Aviation LLC' who continue to believe they might get someone with '$1,995,000' eager to exchange same for s/n 253.

What do they know about the market that the rest of us don't?

Everything depends on a 'successful' outcome to the asset sale. If the Trustee manages to interest a real 'player' the values will stabilize. But a break up sale will render an E500 almost worthless in the short term.

On the subject of values, my $1.35 million number for the cost of the E500 is what I think the PARTS work out at. I think it's safe to add another $400 thousand for labour.

I'd break this down as follows, based on historical 'communications received':-

2 x P&W 610 = $460,000

1 x Fuji wing set = $350,000

1 x Hampsons empennage = $80,000

1 x IS&S/Garmin etc 'glass cockpit' = $70,000

1 x 6 place interior, inc aircon etc = $140,00

Exterior glass, undercarriage, doors, sundries = $200,000

OK, I might be 'low' or 'high' on individual lines, but overall I can't be out by more than 10% or so.

What do you think?

Shane



Shane

fred said...

Monsieur Shane :

i would say your calculation seems to be right ...

and is a clear indication of the trauma it was for EAC to "deliver" planes which cost few tens per cent more than they have been sold for ...

it is probably one of the most disruptive tech from EAC :

"the sustainable negative margins based on volume ..."

if anyone needed better glasses to read the Bizz-plan , that should be enough , already :

success depended on volume , but volume was a death-trap =

success was not achievable !

any to wonder why nothing has been really finished on this bird ?

answer : they KNEW anyway it wasn't possible , so why bother ?

JustinTime said...

ECLIPSE 2.0 - the saga continues...

I would like to invite everyone that has enjoyed interacting on this blog with Shane to join me at the new Eclipse Blog site:

http://posteclipsesupport.blogspot.com/

I would like to invite everyone associated with the Eclipse 500 VLJ to join me in discussing topics related to the product of Eclipse Aviation. Whether you are an owner, operator, ex-owner, ex-operator, a maintainer, an exemployee or just someone who has an interest in this subject, join me in keeping an active discussion going about the escapades of ECLIPSE AVIATION and the future of "NEWCO" (the resurrection of Eclipse Aviation).

gadfly said...

Shane

Does your airplane kit come with complete instructions and a large tube of Ambroid model airplane cement?

gadfly

(Maybe, when Cleveland Models includes the E500 in their listing of antique airplane kits, and plans, it would make a great RC glider, to fly off “Cajon Pass” in Southern California. But until then . . . ! What's the word? . . . the "parrot is dead"!)

Shane Price said...

Gad,

I'm thinking a paper napkin with a few outlines on it, and plenty of 'bondo' to cover the cracks.

Oh, and a wok.

You know, to stir fry the metal bits together....

Shane

julius said...

Shane,


"finished goods"

which costs are include? Just the direct labour costs, the direct material costs plus costs for their procurement (typical for "work in process")?

I think in this case the list price for the fpj would be around $M2.5 without the typical add-ons!

What about an used Mustang?

Julius

Shane Price said...

Julius,

The document it came from was 'supplied' by a friend of the blog. It bore all the hallmarks of an EAC prepared submission to the Chapter 11 process.

The one bit I'm unsure of is labour cost. I know how many E500's are on the line (29) from the Production Line Group discussions with Roel.

I know how much P&W invoiced EAC for the 610's, from a court document which disclosed they had 'recovered' a number just prior to the Chapter 11 process.

I can make an informed guess on the cost of wing sets, based on how much Fuji were 'stung' for.

The rest is a combination of common sense and some small bits of intel I've put together.

But when you add up all my numbers, you can't make any room FOR a cost for labour, can you?

BTW, the 'finished goods' were a very small proportion of 'work in progress'. Which makes it even harder to work 'space' for labour cost in.

Shane

gadfly said...

Shane

This entire scenario is a story of honesty. Some would divert our attention to all the other aircraft manufacturers . . . as if to find comfort or "common blame" in the problems of others. But in the final chapter, under the heading of “Eclipse”, lack of honesty is the basic theme.

If I were to preach a sermon . . . who would care, except for the “choir”.

Eclipse came . . . made great claims . . . hurt countless people that could ill afford to be hurt in such a way . . . revealed the true nature of crooked politicians, the corporate officers, and some government leaders . . . and like a “B” Western, disappeared into the sunset.

You and Stan have done a great service, exposing this farce for what it truly is. And it has little to do with “aerodynamics”, and manufacturing (although those things would have been “key”), but it boils down to business ethics . . . the lack thereof.

Soon, we’ll part company . . . life is like that, for many reasons.

Before long, we’ll be flooded with countless excuses . . . (an “Excuse” is the skin of a reason, stuffed with a lie) . . . but the words will fall on deaf ears and empty bank accounts.

gadfly

airtaximan said...

2 x P&W 610 = $460,000

anyone know how much per pound of thrust is conventional pricing?

I would think that $250/lbst might be a normal price for engines, which does not really jive with the lower cost business model.

In other words, without some leap in "value" on the engine side... there's no leap in value on the integrated product side so to speak.

Engines usually run 1/3 the cost of the craft... which also put this at a $1.38 cost... if they got the rest right, which I suspect labor, with all the boasting about delivering one-a-day was a huge expense.

water... under...bridge...so...to...speak

fred said...

Julius ...


i don't think the details on costs is this much important ...

ok , it could be for some "forensics" but apart from making it a study-case , what is the need ?

if you add all direct costs , compared to selling price :

obviously something got to give ...

what is the need to know how much workers should have been paid ?

since to make the firm ONLY at results = 0 , workers should have worked for free (or better:pay for working instead of being paid )

little footnote for all (still) dreamers : Volume was making this mess ONLY worse and worse , absolutely not better as touted by Vern and his mignon ...!

Jet-(in)complete was probably the Jewels of the crown ...

they could have made something like "Japan-cars" cheap to buy , a ruin to keep ...and NO , you cannot get it fixed anywhere else !

obviously even this level of Business-expertise was not in their reach ...

the real reason WHY this has always been a scam since the Fly-test = whatever you do , however you try to add the numbers = you make a big hole in investor's pockets ...!

julius said...

fred,

i don't think the details on costs is this much important ...


naturally at this moment it's all over.

IMO the wedge never looked at these "details" (in terms of technic, finance). And the BoD?
The members of the BoD hadn't any aids who reminded them to ask for the details?

What about the RiP's ETIRC aviation in Lux?
The RiP may use his current experiences with BKs in his job at University of Twente ("Venture Lab") and futherrmore how to recover.

Julius

fred said...

julius ...

The RiP may use his current experiences with BKs in his job at University of Twente ("Venture Lab") and futherrmore how to recover. ...

well , i am sorry to remind you that some experiences are to be AVOIDED !! ;-) ;-)

unless RiP did it on purpose for the good of the Twente students , i do not really see the point of going thru so many BK in order to find out how to recover ...

the best remaining , therefor be taught HOW to Avoid it !! ;-)




yes , this is the kind of details most forgot to ask for ...

BoD , investors , clients ...

honestly , how many brain cells have been burned in the process of finding out "It couldn't work" ?
(ok , i admit that in my case more than one will push me close to no brain at all ! ;-) )

so if from far away and a very partial knowledge of what did happen we could see that the numbers had no chances to add-up correctly , what did others needed to see it ?

probably ONLY 2 feet on the ground !!

you see my friends , with a bit of common sens , 2 feet on ground and a bit of humility , anyone can do wonders !!!

Beedriver said...

this is an excellent analysis of the probable weather at the time of the 447 crash. It makes you want to avoid thunderstorms.

http://www.weathergraphics.com/tim/af447/

Beedriver said...

An unfortunate characteristic of the situation of trying to get people to invest in a new venture is that people with money always divide your projections and estimates by a number approaching 10.

If you are honest and provide your estimation of what will happen based on experience, knowledge and somewhat conservative estimates of the real market. it is almost virtually impossible to get funded.

That is why the "Verns" of the world can do their show as even when you divided his claims by 10 it still sounded good.

Especially big money people that made their money in totally different markets are susceptible to this phenomenon and then if you are a grand enough talker and it is early in the process so no one can show how full of bull you are you can get lots of money.

What is needed is people who want to invest that are looking for honest opportunities.

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

beedriver :

An unfortunate characteristic of the situation of trying to get people to invest in a new venture is that people with money always divide your projections and estimates by a number approaching 10 ...

i am sorry to disagree ...

on this side of ocean , if you need 100 for a project = you state 100 for your project !

why ?

very simple ...

if you have decision-power and if you know that numbers and expectations have been magnified 10 X , you mentally divide it by 10 X

if the guy proposing the project fear it , he will magnify by 20X ... 30X ... 40X ... etc ...

the natural question being then , where does it stop ?

so it is better to remain realist ... even if we have plenty "Mister ONE SHOT" in this part of world (the typical guy who has a most brilliant idea to make him Uber-rich overnight ...)

difference = you can smell them , i had a colleague who used to say :

1% return = not interesting ...
3% to 6% = sounds feasible ...
over 10% = Illegal or so risky you'll loose sleep or a fantasy !

what did Vern proposed ? to become very rich , very fast ,in a very relax way ...

did it work ? ;-)

Beedriver said...

Fred,
you have some sense over there.

The VC and investment world in the US operates in an irrational fast buck way over here. There are a few very smart people who do not operate that way here but they are very hidden.

WhyTech said...

"An unfortunate characteristic of the situation of trying to get people to invest in a new venture is that people with money always divide your projections and estimates by a number approaching 10."

Why do you think this happens? I'll tell you: after 20 years of investing in startup companies, I have yet to see one actuallly meet the investors conservative projections, let alone the entrepreneur's projections. Thats not to say that all companies are unsuccessful, just that few if any meet anyone's initial expectations. In virtually every case, it requiresmore time and capital than anyone anticipated. Keep in mind that most VC partnerships have 10 year term - thats 10 years to get invested, build companies, and get liquid. Barely enough time when things go reasonably well.

Deep Blue said...

WhyTech said:

"Why do you think this happens? I'll tell you: after 20 years of investing in startup companies, I have yet to see one actuallly meet the investors conservative projections, let alone the entrepreneur's projections. Thats not to say that all companies are unsuccessful, just that few if any meet anyone's initial expectations. In virtually every case, it requires more time and capital than anyone anticipated. Keep in mind that most VC partnerships have 10 year term - thats 10 years to get invested, build companies, and get liquid. Barely enough time when things go reasonably well."

Very wise, WhyTech. That statement should be on the first page of every venture business plan, in bold letters (if not on the cover!)let alone in the "Risks" section. Setting expectations is hard but crucial; it also helps the entrepreneur filter out the wrong investors that can wreck a company when the inevitable storms come.

Ten years really is the right time frame; sometimes that's just to get stabilized financially; often it can go well beyond 10 years to hit "escape velocity" with real venture IRRs. There's also many dramas and hard work if acquisitions are done. In aviation, just take a look at FedEx or Southwest history: ten years built a small regional company; the big payoffs were much further down the road.

As for EAC, it interesting to think about how this venture could have succeeded if it merely followed (and communicated) the time frame of many, many highly successful projects where ten years (about EAC's life span from concept to production) was just "stage 1." In their case, perhaps just a damn good, finished, final model, ready to go into Phase 2: production (low) with high rate only to be followed if warranted.

This company could have rather easily stayed in business, with great investor patience and supplier backing, by simply pointing out all the precedent for 10-20 year development periods. It really is a crying shame.

Dave Ivedorne said...

Beedriver,

Excellent, EXCELLENT article on the weather in effect for the Air France loss. Here's a live link to it ( for the pathologically lazy ). The article's author, Tim Vasquez, is to be commended for the attention he has provided to the subject.

As I was reading it, an odd sense of deja vu came over me - I'd heard that name before, but couldn't put my finger on it...

Looked at the URL: ...weathergraphics.com/tim/... and thought to myself, "Tim Vasquez? Shouldn't that be Tim Fisher?"

And then it occurred to me - Tim Vasquez wrote the original history of the Fisher Price jet!

Small world.

DI

Orville said...

"An unfortunate characteristic of the situation of trying to get people to invest in a new venture is that people with money always divide your projections and estimates by a number approaching 10."

Depending on what numbers you're working with - in some cases you might want to multiply by 10. Example: cost.

gadfly said...

Over and over, many attempt to find the reason that Eclipse failed. And there may be many reasons that contributed to the overall disaster, but the basic foundation, or lack thereof, remains: Dishonesty.

Too simple? OK . . . whatever you wish, but there it is . . . the emperor without clothes . . . and if you wish to envision him in elegant rags . . . so be it.

Eclipse failed because of ongoing lies, at all levels. And such efforts will eventually always fail.

gadfly

(And there will come a day of ultimate accounting . . . for sure.)

fred said...

Mr Gadfly :

yes , you are perfectly right , the biggest lack of EAC was anything which is conjugated with Honesty ...

as deepBlue mentioned , almost every success has been made out of hard-work and patience ...

when one of the central problem in EAC was that everything shows they didn't even think of a Stage 2 !

(i still believe that Plan A was : launching the firm , bullying , get introduced on NYSE and sell before everybody find out what they bought is ONLY a piece of crap ...)
if you want to put some logical path into this mess , that seems to be the best way !too many bullshit , too many lies , too much marketing stunts = how did they think anyone was not going to ask questions , after stage 1 ?)

the reason why it has been possible ?

A: when short-time returns seems too long away , you just turn to shorter time !

where are the firm developed over few generations ? where is the wish to leave "something solid" to the next of kin ?

it is only an effect of the time we are living in ...

most want to cash out benefits they haven't even started to work for ...

it is on multi-levels :

who decided to spend a few Trillions invading a country to bring "democracy" without taking the time to try to understand : "may be they don't give a damn about it " or may be they are just not fitted for something coming from half-way over the world ...

this kind of antagonism is a ruin !

when a said place ask foreigners to trust into future (Treasury bonds 30 years maturity) while seems being inside unable to plan more than very few years ahead = it always lead to unsustainable problems ...

anyone on earth who borrow on long-term to spend on short term is preparing for himself big headache for as soon as short term is over !

because anyone with 2 feet on ground (humility in other word , no place is better than any other for the simple fact of being there ) and more than 2 brain cells
would understand this =

you should borrow on the shortest possible term for spending on a long term (aka investment)

so , no wonder why the EAC scam was possible ...

suddenly , for some , it became feasible to believe in anything , to expect mega-returns on something not proven yet ...

it is NOTHING like risks-taking : most risks-takers assume a small fraction part of risks , for any other part = they try to know ,in order to avoid risks at the maximum possible ! risks-takers are NOTHING like cow-boys , they mostly hate what they cannot quantify ...

like Europe was waiting on Fpj for air-taxi transportation ...
when NO one country is (or was) waiting on such a toy , transportation infrastructure is just a galaxy away of what it is in USA ... (nothing good or bad in it = only DIFFERENT types of development !)

something that should have been known or learned BEFORE putting a cent on the lie bloated by Vern !


Russia was waiting on Fpj : in a country which is more than 6.000 Miles wide ...
with a slow and without big range plane ?

in a country where infrastructure remain the N°1 problem ?

once again , something to be known or learned : in such a case , you either have enough money to fly something with a longer range (not to have to stop in a petrol-station every 3 hours) or you fly commercial ...!

so you see , i have no form of pity or concern for the victims ...

they played on a game they didn't even want to know the rules and odds ...

too bad for them ! life is tough ...

Kathy said...

Well it looks like Justitime's blog is full of activity.
I'm not so sure that this blog is actually a blog anymore. Considering all of Shane's 'inside info' that doesn't become visible to the participants I'd say the whole story is dead.
Shane, it's been implied that your inbox is a wealth of 'inside info'...there is no reason not to post it on the blog that you are "moderating". EAC IP is almost worthless. ALMOST. Pray tell Sir!
The Fred/Julius stuff will continue. Airsafetyman will continue with only the EA500 info he gets from this blog since he has no idea what the actual jet IS. The complete BS of VC commentary will continue in this little vacuum. Dave Ivedorne is a beacon of sanity among a motley crew.
Have fun stroking eachother folks!

fred said...

Kathy :

please , have fun yourself NOT trying to find a lesson in this dead mess ...

this is the best way to start it over again as soon as memory will vanish ...

airsafetyman said...

Kathy,

Others have called for the grounding of the airplane. All I have said is that is should be treated as a day, VFR-weather airplane until the avionics mess is straightened out. It doesn't mean the pilot shouldn't file IFR and use the high flight levels; it means the wise owner/pilot will avoid take-offs in instrument weather, instrument approaches in actual instrument weather, picking through lines of embedded thunderstorms enroute, and night flying until the avionics and instrumentation are made reliable. What exactly is your problem with that? As for your snide comments about people on this blog, you are the one who worked for a firm with ethics below that of a Manhattan escort service, not us.

WhyTech said...

"Well it looks like Justitime's blog is full of activity. "

Not a single post on the Justintiime blog at the link posted here earlier - complete BS? Kathy, do we have a little attitude problem?

fred said...

asm :

you're perfectly right !

opinions are what they are ...

do you remember the "i remain amused" ?

from that low piece of dirt , i cannot remember the nickname ...

sounds exactly the same to me !

off-course , for some EAC never existed or they know nothing about or it was so long ago or something like that ...

curiously , they are the ones who were the closest to the plot ...

i wonder why ...;-)

airtaximan said...

Kathy,

what IS the plane?

Also, its not fair to the Manhattan escort services to put them in the same category as EAC...

Finally, I think the firm that paid for the call to Obama above deserves some credit. I have noticed the larger OEMs like Cessna spending a lot of PR, and its nice to see a small company doing their part... its critical for GA that attitudes change

Dave Ivedorne said...

I'm not so sure that this blog is actually a blog anymore ... I'd say the whole story is dead.

No, no, it's resting.

The Fred/Julius stuff will continue. Airsafetyman will continue with only the EA500 info he gets from this blog since he has no idea what the actual jet IS. The complete BS of VC commentary will continue in this little vacuum.

"So, other than that, Mrs. Lincoln - how did you like the play?"

Dave Ivedorne is a beacon of sanity among a motley crew.

Well, that can't be a good thing - particularly when you consider that when Gadfly mentioned model airplane glue a little earlier, I got a bit nostalgic about paper lunch bags...

Would you like the combo?
DI

baron95 said...

On other, relevant news, .SPX is above 950 a 40% rise, since the market bottom was called on this very blog ;)

In the end that is what will sell more planes, luxury cars, yatchs and Florida/Barcelona condos.

I also think the "No plane, no gain" campaing to prop up the BizAv/GA image, should run full pages ads showing how a BizJet, Biz Chopper combo is the ONLY tool that enabled the "Most Responsible CEO" in the world to run from DC to NY to "conduct" business.

CEOs all over America should follow the lead from the top and load up on G550s, and the latest Sikorsky exec transports.

What is good for the chief, is good for the subjects.

Shane Price said...

Kathy,

90% of what hit's the inbox gets to the blog, eventually.

The other 10% does not, to protect the guilty.

Currently, the majority of my email is about bidder(s) for the assets. An amount of it is FROM these very same people. It's fair to say that 'we' are involved in 'chatter' about the process, some of the details of timing etc.

But nothing sinister, or even that interesting.

The 'biggest' remaining story for me, is WILL anyone, with any aviation or related background, actually bid more the assets as a single entity than the Trustee thinks he can get for the bits.

Sadly, I can't answer that question in a manner that is positive for the current aircraft owners. One credible bidder has been 'lurking' for some time, but the general consensus is now that they won't put in an offer.

Do you want me to start a speculative frenzy by suggesting that (for example) Piaggio Aero might fancy a twin jet?

I don't, and just to 100% clear, the Italians have never even been close to getting mentioned in connection with EAC.

I'm reminded of some blog commentary from 2007 and early 2008, when the Faithful kept assuring us that even, in the highly unlikely event that EAC went bankrupt, the 'value' in the company was soooo great, investors would be queuing up to put money into a 'version 2'. Now, more than 6 months after Chapter 11, and exactly 3 months after Chapter 7, there is STILL no sign of a buyer.

Some 'value' eh?

Shane

airtaximan said...

"What is good for the chief, is good for the subjects."

here, here...

"what's good for the big chief, is good for the other chiefs..."

need to be realistic!

fred said...

Baron :
(with apologies for the NOT-aviation related post)

sorry to wake you up ...

the Unemployment stats last month were "totally" worked out ...

the "Stress test" has been a sad farce ... (in UK , they are so bad , they aren't published ...)

The $ is tanking , again ...
(that is a more a good news than anything else ... still one glitch = why do you think oil price is getting up ? activity on the rise or $ plunging ??)

Grab some pop-corn , the crisis is far from being over yet ...

baron95 said...

ATM said.... "what's good for the big chief, is good for the other chiefs..."
=========================

Exactly, thanks. That is what I was trying to say ;)

Kathy said...

Shane, copy that. ASM, copy that as well. Dave though, you couldn't have sniffed THAT much glue Sir ;)

Attitude issue? At times that's a BIG 'Afirm'!

Just wanted to shake things up a bit as only an old bitch can do!

ASM I wish you could have had some hands on with the jet. I'm sure you would like to and you would have loved to see how outrageous things were back in the day.

I'm interested in how the 10 year life can be extended safely and within the economic and DOC constraints of the limited and scarred market.

The Tailcone repair was only a matter of time (congratulations to Applied Aerodynamics!) and the Garmin mods are all over the place. NG mods are happening but I'd LOVE to know how the FIKI is going if they still plan to use the Crosslink flowcoat road for the transparencies! Also don't forget about the Phaseblock coating in the pitot/static area! It's no picnic. Seems strange to need a rough surface in an RVSM critical area, but whatever. Won't these modded birds need an RVSM flight test with FAA approved altitude tracking? ASM should be able to shed light on that.

julius said...

Kathy,

nobody said, that the fpj has bad handling chacteristics in the air!
(I only read about lot of timming, no as easy to land as a Mustang, and you know Matt Brown's words about landing).


As far as I know each new cockpit instrument must be approved by EAC and FAA (especially if it is linked to AVIO/ AVIO NG) according to the TC. Perhaps there is a SB to also add a Garmin to AVIO NG.

I think the tailcone delamination is just a production problem or?

"Phaseblock coating" ... there are references etc. or...strange...
(or in transition to experimental fpj? hopefully not)?

Kathy, what about CWMR - he should know it!

Julius

JustinTime said...

ECLIPSE 2.0 - the saga continues...

I would like to invite everyone that has enjoyed interacting on this blog with Shane to join me at the new Eclipse Blog site:

http://posteclipsesupport.blogspot.com/

I would like to invite everyone associated with the Eclipse 500 VLJ to join me in discussing topics related to the product of Eclipse Aviation. Whether you are an owner, operator, ex-owner, ex-operator, a maintainer, an exemployee or just someone who has an interest in this subject, join me in keeping an active discussion going about the escapades of ECLIPSE AVIATION and the future of "NEWCO" (the resurrection of Eclipse Aviation).

There actually are some comments posted and I hope to see more... if not we will just shut it down and furlough all the employees.

fred said...

Kathy :

I'm interested in how the 10 year life can be extended safely and within the economic and DOC constraints of the limited and scarred market. ...

i think you said it all ...

it should have started with a finished product , hopefully produced at the level of other produced items ...

so , i would say the matter is more to find out what has been in the 10 years+ more than "how can it be safely extended..."

sometime the best is to cut the link ...
if you have an old and loved dog , would you like to see his death painful and long ?

with any humanity : probably not !

that's why i would believe the CWMR's plan is probably the best (mind you , nothing can be good after such a fiasco...)

take apart what can be salvaged , throw to the bin any other part ...

make a profit into learning WHY this has been such a mess ...

that is probably the best service EA500 can do to G.A.!

any victim can try to fly it for as long as possible , still and as you said ;

the choice is quite simple , the Eco is limping (i still believe the Japan Scenario is going to be for USA ...)

so why not take this opportunity to buy off the Mustang positions ?
(or others...)

spending XXX$ for something which will remain (in the best case) a question mark instead of spending for something completely different , BUT working ,serviced and finished ...

tough choice !

there is the lost$ in EAC question ...

i do believe that the ones who have been scammed in this plot can be separated into 2 groups :

1° the ones who can turn to something else , and no Fpj never existed ...

2° the ones who have been impacted too badly by Vern and mignon (financially) to be able to switch for something else ...

but here we are touching the limits of Vern's BS ...

if they cannot afford to switch , may be they couldn't afford any jet at all !

Shane Price said...

Snippet Time

Rumblings reach me that the license on PhostrEx has not been paid and as a result will be revoked.

All existing aircraft (and any 'new' ones at the factory) will need a new fire suppression system, won't they?

If, of course, my source is correct....

Shane

Shane Price said...

And you thought he'd gone away, Snippet

Silly you.

It seems that the Peiper family continue to attempt a comeback at what remains of EAC.

Recently, Bart Pieper, son of our favorite Dutchman, had an early morning (and very private) tour of the ABQ factory. Probably checking to see it was the same as when he worked there as a 'liaison' between EAC and ETIRC.

Why such secrecy Roel, when you KNOW that such a juicy titbit was bound to reach me?

Oooops, sorry, forget I told you about this.

It's a SECRET, don't you know...

Shane

Shane Price said...

Kathy,

See, even some of the 'secret' stuff leaks out, if you're patient.

And I have even better news.

One of our many friends is preparing a bumper headline post, for your delectation and delight. He promises it will be a 'doozy' which, coming from him, is setting the bar pretty high.

Or low, if you're Vern Raburn, but I digress.

As the end of my 'term' approaches I'm flattered by the number of people who've emailed me with expressions of regret and encouragement to continue.

However, all good things have a natural cycle. The discussions we've enjoyed so much have now reached the point where a wider remit is appropriate. I will of course be a participant, but have no desire to continue as custodian.

But that day has not yet come, and I have a few more 'headline posts' lined up....

Shane

JustinTime said...

I would like to invite everyone that has enjoyed interacting on this blog with Shane to join me at the new Eclipse Blog site:

http://posteclipsesupport.blogspot.com/

I would like to invite everyone associated with the Eclipse 500 VLJ to join me in discussing topics related to the product of Eclipse Aviation. Whether you are an owner, operator, ex-owner, ex-operator, a maintainer, an exemployee or just someone who has an interest in this subject, join me in keeping an active discussion going about the escapades of ECLIPSE AVIATION and the future of "NEWCO" (the resurrection of Eclipse Aviation).

There are some new comments posted and I hope to see more... if not we will just shut it down and furlough all the employees. REALLY!

Dave said...

The Phostrex patent/trademark are both assigned to Eclipse rather than Eclispe having control through a license. What might be happening is that Eclipse hasn't paid their fees to the US Patent and Trademark Office.

Oh and speaking of Roel, his boat is for sale. If someone buys it for asking price, he could pay off half of what he owes Mann.

Dave Ivedorne said...

The Phostrex patent/trademark are both assigned to Eclipse rather than Eclispe having control through a license. What might be happening is that Eclipse hasn't paid their fees to the US Patent and Trademark Office.

Ah, no.

Eclipse defaulted on the contract under which it gained rights to Phostrex. Peter Haaland, who was granted the patent on it, noticed the Court and the Trustee of the default in March, and provided a mechanism under which the breach of contract could be healed ( Docket #581 ).

While the docket shows no subsequent entries referring to 581, rumors of Phostrex's death might not be exaggerated.

DI

fred said...

Excellent work Dave I. !

i wonder how you can call an empty shell being emptied of the void that was supposed to fill it ???

sounds like the assets are worth less and less ...

ONE single $ , the best offer !

gadfly said...

This morning’s news, KKOB, the state of New Mexico finally admits publicly that the “$19 million” will never be recovered, but they figure that what’s left of the little bird factory is worth about '$60 million, plus', and is willing to offer incentives to whomever would bring it back to life in New Mexico.

gadfly

(Stupider, and stupider!)

Dave said...

Ah, no.

Eclipse defaulted on the contract under which it gained rights to Phostrex. Peter Haaland, who was granted the patent on it, noticed the Court and the Trustee of the default in March, and provided a mechanism under which the breach of contract could be healed ( Docket #581 ).


Yes, I've read the document and per the document itself Eclipse owns rather than licenses the patent. Haaland really doesn't have a leg to stand on as the payment wasn't made while Eclipse was in BK (if this was a pre-BK missed payment that would be another matter). It doesn't even seem like Haaland believes it himeself or else he would have filed an adversary action to get the patent back. If the APA contract was better worded Haaland could have claimed to be a secured creditor or even the patent owner, but it is a poor legal document. I can't really say what Haaland intended to do back in 2007 as the APA claims to be both a sale of property and a license to that same property, but the document emphasizes that it is an asset purchase rather than an IP license combined with the actual patent assignments, so I think if Haaland was to actually attempt to do anything, that is how a court would treat it. As they say possession is 9/10ths of the law and the patent is in Eclipse's name.

I think phostrex should be replaced, but not due to IP issues.

Dave Ivedorne said...

I've read the document and per the document itself Eclipse owns rather than licenses the patent.

Ah, the beauty of bankruptcy - and the uncertainty...

Eclipse entered into a contract, under which they would own the patent. They have not fulfilled their part of the bargain, and therefore the default provisions of the contract come into force.

Of note, Eclipse did not default before filing for protection; this is a post-petition debt that they've failed to pay. Just as Eclipse is required to pay the gas & electric bills for post-petition use of those utilities - even though the service contracts are pre-petition, and bills unpaid as of the filing date are protected by the court - they are required to continue payment if they wish to avoid defaulting their ownership of Phostrex back to Haaland.

Mind you, I don't think Haaland has handled this in an ideal manner. Notable by its absence is a motion for declaration of default, with a request that ownership be reverted by action of the court ( or whatever the sharks would call such a motion ) - or at the minimum, a ruling that the trustee cannot sell rights under the Phostrex patent. It is my speculation that the rumor that Shane alluded to probably references moves in that direction that haven't made prime time yet.

I liken the situation to a rent-to-own contract for a refrigerator. If I enter into that contract, file for Chapter 13 protection, and stop making my monthly, are you telling me that Rent-a-Center can't take the fridge back, when the contract says they can?

Would you like the ice & water dispenser?
IANAL
DI

Kathy said...

The damage that the Phostrex has materially caused through ACS harness corrosion, start/gen replacement and entire engine replacement (because of leakage) is a drop in the bucket when looked upon as the fundraiser that it WAS.
And to think that EAC was looking at it it as a cash cow.

An STC is well underway to get rid of it.

Dave said...

Of note, Eclipse did not default before filing for protection; this is a post-petition debt that they've failed to pay. Just as Eclipse is required to pay the gas & electric bills for post-petition use of those utilities - even though the service contracts are pre-petition, and bills unpaid as of the filing date are protected by the court - they are required to continue payment if they wish to avoid defaulting their ownership of Phostrex back to Haaland.

Howevever we are talking about an asset (in Eclipse's name no less), not a utility service. Everything I see shows Eclipse outright owning it, like here's the assignment status of the Phostrex trademark. At no time is Haalan showing as having a security interest in the trademark and in fact Eclipse used the trademark to obtain financing from others by letting them having a security interest in the trademark and with the patent that was assigned over to Eclipse and Eclipse subsquently used their ownership in the patent to offer it as a security to others. Haalan is on record with the USPTO of giving up the security interest, which to have a claim, he needed to show that he had a security interest.

Mind you, I don't think Haaland has handled this in an ideal manner. Notable by its absence is a motion for declaration of default, with a request that ownership be reverted by action of the court ( or whatever the sharks would call such a motion ) - or at the minimum, a ruling that the trustee cannot sell rights under the Phostrex patent. It is my speculation that the rumor that Shane alluded to probably references moves in that direction that haven't made prime time yet.

That's the thing is that I don't see that Haalan ever handled this right and even if he starts doing it now, I think the train has already left the stables. With the notice of non-complaince over a matter involving $20K per month he didn't even bother to have a lawyer draft it up, but instead he sent it in himself. That letter itself shows the flaw in where Haalan is at as it states he wants Eclipse to give him the rights rather than him already having the rights. Maybe the trustee is seeing about dumping phostrex because it is seen as more of a liabiilty rather than doing so based on how solid Haalan's legal claims are.

I liken the situation to a rent-to-own contract for a refrigerator. If I enter into that contract, file for Chapter 13 protection, and stop making my monthly, are you telling me that Rent-a-Center can't take the fridge back, when the contract says they can?

They give you ownership AFTER you've made all your payments, but Haalan already assigned ownership to Eclipse before all the payments had been received. If some rental places gave you full title without any sort of lien or other registered security interest, I think they'd be treated as just another unsecured creditor. Haalan is in the awkward position of both claiming that Eclipse owns it and that they rent it at the same time...he already assigned the patent over saying Eclipse owns it (he even shows the patent assignment in his notice filing)!

Again, I can see putting all the phostrex-related stuff back in Haalan's lap because I think it is more a liability than an asset, but I don't think he's got good legal claims at all and that based no the legal merits alone, I'd put the odds on Eclipse to win an adversary case.

gadfly said...

It would seem that “Phostrex” would be a lawyer’s dream come true, in future litigation against Eclipse . . . much like the use of asbestos, regardless of the thousands of lives saved in fires, etc.,(with the use of asbestos, that is).

Unlike asbestos, “Phostrex” from the beginning, is known to be a health hazard, and initiates corrosion of the very metal of which the little bird is composed, not to mention the electronics, etc., etc., . . . what an opportunity, for someone like John Edwards!

But, like the old bromide, “You can’t get blood out of a turnip!” . . . so maybe certain people are breathing a sigh of relief, in light of the demise of Eclipse. And, if enough of the “Phostrex” systems leak, the “evidence” will disappear into a pile of white powder . . . some form of aluminum oxide.

gadfly

(Who said, “Planned obsolescence is passe’.”)

Dave Ivedorne said...

Maybe the trustee is seeing about dumping phostrex because it is seen as more of a liabiilty rather than doing so based on how solid Haalan's legal claims are.

We can both agree that Phostrex needs to be replaced for technical reasons, but I don't think that's in the Trustee's purview. And the "Phostrex-as-a-trademark" issue is a meaningless distraction. Were I Haaland ( and I'm sure Mrs. Haaland sleeps better knowing that I'm not ), I could not care less if the estate put that brand name on erectile dysfunction pills - it would be the labrile bromine fire suppressant I'd be concerned with. ( Of course, if I were Haaland, I'd have paid an attorney to submit a proper motion, with a proper prayer for relief ).

If I were Burtch ( same disclaimer applies ), on the other hand - and in light of Haaland's lackluster filing - I'd want to realize some value for the return of the patent - say, claw back a good portion of the $460K or so that EAC already paid towards owning it ( and if Haaland made a substantial payment to that end, he'd be stuck with a fire suppressant for which only an exceedingly limited market exists ). But I'd also recognize that the contract had been defaulted on, with some likelihood of Phostrex's status being tied up in the courts for years on end - IP contract lawsuits have remarkable half-lives, don't they?

The EA50 was certified with a very specific fire suppressant system as required equipment. Take it away, and the TC's less valuable.

The STC Kathy mentioned couldn't happen soon enough.

Haaland's filing may suffer from substantial defects, but that's correctable. I suspect a strip mall lawyer with Westlaw access could find caselaw adequate to the task of rendering the EA50 TC worthless.

And, you can take your refrigerator back when you pry my cold dead hands off of it.

DI

airtaximan said...

KAthy,

I think you are right...AND

I think you could say that about the whole plane!!!

Dave said...

But I'd also recognize that the contract had been defaulted on, with some likelihood of Phostrex's status being tied up in the courts for years on end - IP contract lawsuits have remarkable half-lives, don't they?

Whatever happens with the phostrex IP, I don't think the IP issue will take years to resolve. It's not like Haalan has $30 million dollars and David Boies.

Haaland's filing may suffer from substantial defects, but that's correctable. I suspect a strip mall lawyer with Westlaw access could find caselaw adequate to the task of rendering the EA50 TC worthless.

I don't think it is correctable. To perfect a security interest in a patent you have to file with the USPTO. What Haalan did was file with the patent office that he gave up his security interest prior to being paid off in full. If there had not been a filing with the USPTO Haaland would be in a much better legal position. As you remember SCO with their multimillion dollar legal budget tried to file with the USPTO that they owned certain IP after the officlal IP records showed otherwise...all it did was burn through millions of dollars. Eclipse has the patent assignment specifically assigning away Haalan's security interest and the BK court would have no interest in giving away something Eclipse already owns as an asset. I can see the BK trustee cutting a deal with Haalan, but not because of the strength of his legal claims.

fred said...

well , guys ...

whatever is the outcome for Phostrex , seems to be a bargaining over a dead body !

will you give this body to forensic school ?

No, i prefer to resale it to the family ...

in such case , i would need Dave I. fridge before the body stinks even more that it already does ...

Dave Ivedorne said...

in such case , i would need Dave I. fridge before the body stinks even more that it already does ...

Fred, you don't want anything to do with this particular fridge, trust me. The "body" would be destroyed by alkaline burns.

DI

fred said...

Dave I. :

are you suggesting Phostrex can be HAZMAT as defined by S.A.R.A. ?

oh oh , it seems we don't want to get too close to this kind of body ... ;-)

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

A group that I support ("Reasons to Believe", when able), had the following links:

"http://www.reasons.org/CoolDiscoveriesPart2"

and

http://www.sciencedaily.com/releases/2009/03/090324090518.htm

When I get home, I hope to look at the video.

Will it succeed? . . . probably better than "Eclipse", and maybe just as fun for a lot less money.

gadfly

(Over my life time, I've seen a lot worse!)

gadfly said...

The following is in line with Shane’s “snippets” . . . a direct quote from one of our contacts, at the largest manufacturer of jet engines in the world:

“Production is down to next to nothing at the plant (they just finished a round of retirements and layoffs) and we have been told to keep inventory as low as possible till things pick up.”

Later, in that same “email”: “. . . it will at least be 2010 before we see any improvement.”

There is nothing official about this “info”, but over the years this has been for us a reliable source.

gadfly

(Although this is not from the company that builds the engine for the little bird, I’m sure that the economic condition of GA and military aircraft, will be used as a primary excuse for the demise of Eclipse . . . and a ready made excuse for the local politicians, that have no other excuse.)

fred said...

Mr Gadfly :

i would think your info has all criteria to be true ...

most colleagues working on US situation aim toward the same result :

"recovery before end 2010 ?"

just forget about !

some who are dealing with the banks problems have a very different meaning about the banks paying back the TARP ...

in their view , those banks are in a hurry to have the feds off theirs backs , not because of a "getting better already" more for something like :

if the feds stay too long , they will start to open some lockers that the banks managed to keep close up to now ...

if the feds do it , Banks officials will have a lot more questions to answer , answers that no one want to hear ...

Ken Meyer said...

Kathy wrote, "An STC is well underway to get rid of it [PhostrEx]."

Howzat?

Ken

baron95 said...

Too late for doom and gloom Fred.

As Ferguie says - "You are so two thousand and late..."

Even the Nikkei index blew past 10,000 today - greed is back ;)

Banks are rushing to pay/convert the TARP funds simply because they don't to continue to pay the annual 5% dividend/coupon on those loans. Simple as that. Has nothing to do with getting regulators off their backs.

Back to aviation... Lots of speculation on the net about Boeing flying the 787 to Paris - which I think is a pipe dream. Still those who like Flightaware can be on the lookout for H/B788/Q or H/B787/Q.

That is, at least until the pranksters start filing out false flight plans.

On Eclipse news...well...there are no news ;)

Dave Ivedorne said...

On Eclipse news...well...there are no news ;).

Now that you mention it, there is no news. But I thought of you when I read an article about a car that both you & Fred could love: a Citroen 2CV that goes 183MPH.

Next up: world peace.

DI

baron95 said...

Cool, DI.

Boy - some people DO have a lot of time on their hands for doing a car like that.

I know we "can". But "why"? ;)

fred said...

Thanks a lot D.I.

ok , this 2CV is a bit over the top , but i loved the idea behind the car ...

a simple very cheap car that could be fixed with 2 or 3 basics tools (No vern , NOT you !) on the side of the road , if breaking down ...

something unattractive for all fashionistas (here , i should insert a french saying "the recipe for happiness : live for yourself with no one to notice you ..." )

that is something i always found very funny , others doing "things" to be noticed ...

the question remaining : doing things to impress others is a kind of living for others , no ?

so if you live for others , can transfer the bills as well ? ;-)

fred said...

Baron ...

well , you may think what you want about banks motivation ...

would you trust someone who put you down in the shit before while having a hand on heart promising you the moon ?

sorry , i don't see as you do !

a bit like your comment on DI post , those peoples had a lot of times on their hands ...

i always thought 1 rabbit being cooked in the pot is much better than 3 still running in the bushes ...

this is where we are probably very different ...

i have plenty of time to enjoy my simple life , around September , i will cross the atlantic ocean toward South america on a sail boat (you know that thing so slow and so unattractive for "next minute's lovers")

the question that i haven't answered myself yet : will i stop the whole winter in the Caribbean or should i cross the Panama canal toward Tahiti to come back (if i come back, i may decide to stay anywhere for for a while ) from the other way ?


you see , one of the latest real luxury (not all the faked stuff that can be bought with worthless money) is TIME !

instead of trusting thieves and rely on the greed of some others , i prefer to have the freedom of choosing my own life ... myself !

can you ?

PS: yes , greed is back ... but with a budget deficit of some 32+% for California and 22% for New-York , i wonder if greed is going to be anymore in their financial reach ???

when i think of some colleagues in the "Deutsch BundesBank" **
publicly stating that 6% deficit is already enough for them to start thinking about suicide ...because the Maastricht Treaty (the "thing" make Euro )forbid more than 3% ...

Bad News ! you know who is going to repay those deficits ?

come on , a little guess ...

no ideas ?

YOU , off-course !


**the country's central bank of the place producing the cars you state loving so much ... BTW : is that because it is good stuff ? or more simply because it gives you a fake [cars can be bought on credit] social statute ?

Shane Price said...

New headline post up.

It's the 'penultimate' one, on my watch, and I've taken the opportunity to write a little essay.

Enjoy

Shane