Friday, June 12, 2009

A few lessons learned

As I move from custodian of this blog back to an interested observer of VLJ's, I thought I'd put together a short essay highlighting what I've learned. Where appropriate I'd included comments from others and of course provided links to other web sites. There were many 'themes' on the blog during the past 18 months, which I'll try to interweave with my own opinions. So, with that short introduction, here goes...

Many people, myself included, were attracted by the siren call of a very light jet. The concept seem to offer a beguiling combination of speed, low cost of ownership and ability to get into may fields a larger aircraft would have problems with. In the 'age of Google' it's very easy to research almost any subject with a few mouse clicks, so pretty quickly I found myself orbiting the Eclipse Aviation web site, and associated stories. One caught my attention. It was of course, the original critic site, run by Stan Blankenship. Read his first headline post, which made many correct observations/predictions.

In April, 2006....

From the middle of 2007, I started to participate, having been a reader for many months. Stan 'kept house' with regular headline posts and his own comments, and a range of fascinating individuals (and Ken Meyer) kept the pot stirring. For reasons already explained by Stan, he decided in early 2008 to pull up his own drawbridge. Yours truly stepped up with 'this' blog, and we had a very 'clubby' atmosphere, which still managed to keep a critical view of the peculiar behavior in ABQ. One of the very first comments, from Gadfly, summed up what the blog was about during early 2008:-

"Put on the kettle, and this will seem like home in no time."

We also covered the 'Russian' factory, various suppliers disputes and FAA rumblings about the Production Certificate. Almost all material that reached me during this period was from suppliers, staff, customers or officials who had genuine concerns and felt that our blog was the only place remotely interested in what they had to say. I also took the opportunity to say why I'd gotten involved, by finishing one headline post with a favorite motto:-

"Only make promises you can keep. And keep the promises you make"

And then IT happened. On Friday the 18th of April 2008, an email hit my BlackBerry which began:-

"Google has received a civil subpoena that demands information regarding the source of anonymous comments posted on your blog eclipsecriticng.blogspot.com"

Things got very 'interesting', very quickly. Vern Raburn saw fit to go after 29 bloggers, alleging they were employees who'd violated a Non Disclosure Agreement or NDA. We were very fortunate that a civic minded publisher, Rich Lucibella, decided to head Vern Raburn off at the pass. And proved successful.

So successful that Vern himself was ejected from his own company exactly 100 days after I got that infamous notice. He was even forced to make the announcement himself, on the opening day of Oshkosh in July 2008. In typical style he said he was taking up an 'advisory' role in the company only to break all ties a few weeks later. He did, however, manage to hold onto an E500, for a limited period. I wonder if he's still flying it....

During this period we also saw contributions from many more parts of the world. The blog became more 'international', which was clearly a new experience for some of our longer serving American readers. A steep rise in the cost of oil, continuing doubts about the reality of the '2,700' orders and a very clear 'failure to launch' at DayJet cast a cloud over the future of Eclipse.

The House Transportation and Infrastructure Committee held a hearing on the 17th of September, regarding the Federal Aviation Administration's issuance of its type certificate (TC) granted to Eclipse Aviation Corp. for its Eclipse 500 very light jet (VLJ). The result was a 'victory' for EAC, in that nothing came out of the woodwork to question the original grant. However, in the fashion of 'don't get mad, get even', I learned that a very strict view would be taken of any future Production Certificate reviews.

Things looked up, at least for a short while, when Ken Meyer broke his (self imposed) exile from the blog and returned with a bang. I 'gave' him a headline post which he used in describing his many flights, the capabilities of the E500 and generally promoting the aircraft. The nicest part was his own description of himself as The Cardinal, which was a reference to his leading position with The Faithful. This was the name given by 'us critics' to those who supported the E500 through thick and thin.

However, this is not a month I look back to with any joy. My father passed away, suddenly, leaving us all shocked and saddened. The day before I buried him, one of the very few truly bad people I interacted with on the blog, sent me the following:-

"See you in court, thief. 


Jim Campbell, Editor-In-Chief/CEO 

Rocket Racing League X-Racer Mk 1 Rocket Pilot"


Have you noticed, in life, how the really small minded people always have the longest job descriptions? Captain Zoom is a prime example. All through his mindless support of Vern Raburn he parroted whatever EAC released as 'fact', without bothering to engage even the tiniest part of his brain in the most basic question which faces everyone in business, all the time.

Will I get paid?

Thankfully, there is a 'higher justice', and Zoom later got hit for $80,000 when EAC went bankrupt. Is it too much to hope that someone, who is a prime example of what we Irish call a gobshite, will make the same mistake again?

This month was generally a 'bad' one for EAC. The premise behind the vast order book was air taxi, the most prominent of which was of course DayJet based in Florida. On the 19th of September, without any notice, they closed their doors. They blamed the inability to raise further finance and difficulties they had had with the Eclipse 500.

During this period I was also allowed access to the customer conference calls given by Mike McConnell, with input from Roel Pieper. Both came across as dismissive of the depositors in particular and made very light of in service problems with the aircraft. There were lots of promises to 'get back to people' but (surprise, surprise) nothing happened.

All in all, probably the 'busiest' month during my time here.

October 2008 was not a good month for EAC, publicity wise. Richard Aboulafia of the Teal Group published his much anticipated report on the VLJ market. Basically, he rubbished the Eclipse 500 and predicted that EAC would not produce any aircraft in 2009, as he thought they'd be bankrupt. How right he was....

November was interesting, for several reasons. First, there was a temporary delay in payment for the staff, quickly corrected. EASA certification was granted, with conditions. Then Vern Raburn made a speech, fully reported only on the blog, at the VLJ Forum in West Palm Beach, FL, on Tuesday 11th November. He made several remarks that bear reviewing, but his venom for 'us' was clear, as was the denial that he had made any mistakes. This thread didn't last very long, as 4 days after I put it up we got this:-

Eclipse Aviation Seeks Court Approval for Restructuring under 363 Sale
Procedures and Debtor in Possession Financing


The 25th of November 2008 was the (long predicted) first step to bankruptcy and clearly a 'pre cooked' event. In a effort to control every aspect, Roel had a) valued the assets and set the price, and b) arranged the DIP finance with Al Mann. We all know now that he a) didn't have the money to buy the company and b) the didn't have the DIP either. He 'borrowed' it off Al, who's now suing him personally to recover it.

Oh, and another thing. This was the month that America elected it's first president called Obama. Michelle will clearly be the second....

December 2008 was a time of 'Notices', a number of which first appeared here. Various groups formed, some to purchase the company, others to pursue lost deposits, still others to represent owners. The inbox became a job on it's own, almost to the point that I needed assistance. Thankfully it never came to that, but it was a very busy month 'behind the scenes'. What rapidly became clear was the 'false' feeling around Roel's bid. I became convinced that he either didn't care or had alternative motives. I still think there was a background to his activities which would not bear close scrutiny. Remember the background at this time was of increasing disorder in the financial markets, with banks being rescued and the capital markets in free fall.

2009 opened, as always, with January. Initially there was optimism for the staff at EAC, since Roel was on a clear run to purchase the assets and move forward. But I began to get informal hints that all was not as it seemed, especially from people 'close' to the process.

During February I posted an in depth headline written with help from several Eclipse 500 owners. It's worthwhile going over it, if you're ever tempted to buy one! However, this was also the month when the wheels and the wagon finally parted company. On the 18th almost all the remaining staff were furloughed and on the 25th the 'Senior Note Holders' filed a Chapter 7 motion, which the company didn't oppose. Again, the inbox filled rapidly, especially with notices from prospective purchasers. I talked to several, none of whom seemed to have access to enough money to a) satisfy the Note Holders and/or b) restart production.

March began with the formal notice from the Court, and proceeded with a 'beauty pageant' of various entities who were preparing bids. Of note was one from our very own ColdWetMakeralofReality, who's professional background in aviation and interesting 'take' on what should be done with the airframe is worth looking at. I was also filled in on the whole 'Russian' thing, some of which is so hot it's radioactive. My lawyers will publish the book, if I ever come to an untimely end.

The EOG (Eclipse Owners Group) scored a notable success early in April, when they persuaded Hawker Beechcraft to become involved with servicing the Eclipse 500. Mike Press got his bid going, initially with Roel Pieper, but then (wisely) dumped him. Stan Blankenship contributed a 'Birthday Post' which illuminated some of the background to his own blog experiences. I began the process of seeking 'another' to move the blog forward, and several interested parties contacted me.

The 'tail cone' issue came to the blog in May. I can't convey how much email I had around this single issue, all of it most helpful in reaching a successful conclusion. We also had our 'official' list of the good, the bad and the ugly. Finally, another update from Mike Press reminded us all how little had changed since the Chapter 7 motion was granted. Nobody bid enough to satisfy the Note Holders. Talented people continue to leave ABQ, and the whole sad affair seems destined to end with an orphan aircraft. I hope I'm wrong, but it sure looks that way.

I don't think Vern Raburn started Eclipse Aviation Corporation as a Ponzi scheme, but I pretty sure he ended up that way. Roel Pieper was probably the worst possible 'investor' at the time, but by Vern's own admission there was no option. Those worst affected by all of this sorry mess were, in this order, the staff of EAC, the suppliers to EAC, depositors who didn't get an aircraft and finally the owners of what will almost certainly be 'orphans'.

So there you have it. I can't include everything I've 'learned' as the inbox is vast and some of the correspondence is (still) too hot for a more general audience. We have a couple more headline posts before I sign off, at least one of which will be worth reading.

I know, I've seen the drafts...

Shane



322 comments:

«Oldest   ‹Older   201 – 322 of 322
WhyTech said...

"I have been out of work since last October, but I don't want a bail out. I am more opposed to the socialist movement in this country than ever before."

Bravo! Keep the faith. I have been involuntarily unemployed (fired) at least three times in my career. Went on to bigger and better things each time. So will you.

chickasaw said...

Gad,

Thanks for the link. Somebody is doing this without government mandated health care, what a concept.

WhyTech,

Thanks for the words of encouragement. My career has had more ups and downs than a roller coaster at Cedar Point, and I would do it all over again.

baron95 said...

ATM, UAW Mid-West employment has been going down for over 3 decades. You are talking like this is a new phenomenon. Yes many industries have suffered deeply in the past 18 months. But mid-west UAW auto companies are in decline for decades.

The financial sector, retail, etc laid off hundreds of thousands on the immediately to right-sized their workforce to demand. The Detroit Big-Looser 3 were forced for 3 decades to pay workers to stay home, keep 3 times as many factories open than needed and other suicide practices.

These things are ONLY sustainable without competition. E.g. in government or, in closed fields - e.g. the Boeing/Airbus duopoly with both equally beholden to unions.

The UAW model ONLY worked when GM, Ford, Chrysler sold 85-90% of the cars in America and priced their cars at cost-plus into Americans.

Once markets were open it all collapsed.

The 787 program was Boeing's mismanaged attempt to change the game. The 789 (which was supposed to be EIS now) was priced 30% below the 772 and A330 it would compete with.

And so it will go....

Just like Korea learned to build world class cars (e.g. Hyundai Genesis), some day China will as well.

I'm typing this on a $600 US-designed, Chinese built Laptop.

In 10 years, I may be driving to work on a British designed Indian built car and in 20 years I may be flying on a French designed Chinese-built airliner.

And in 30 years, the free workers in Europe and the US may again start building those things are "market-wages".

Either way, I know one thing. Adjusted for content, the prices of all those things will go down. And companies that fail to managed their costs (including labor costs) will go down with it.

baron95 said...

Chickasaw said .... I have been out of work since last October, but I don't want a bail out. I am more opposed to the socialist movement in this country than ever before.
=================================

Chickasaw - this is a trying time for Americans in most fields. And yes, it is more trying and more difficult than past recessions.

I know you don't want a bail out, I don't want a bail out and most Americans don't want one.

However, let me say this to you. Our government, has made a decision that $3T+ be injected into the economy or outright given to certain companies (like the $70B gifted to GM, Chrysler and GMAC).

Americans who can take advantage of that $3T SHOULD take advantage of that, without feeling guilty.

You need to act in your best interest and that of your family. If you can get a piece of that bailout in some form, go get it.

You can't (directly) control that the gvmt is throwing that money out there. You can't control (directly) that we'll all be paying taxes in the future to cover the cost of the "party".

So get a piece of it. Get the extra unemployment amounts, they to get one of those "artificially created jobs". Help a family member benefit from the cash for clunkers, or first time home buyer incentive or whatever.

I am not opposed to the injection of liquidity or the concept of "stimulus" for the economy. I may disagree with specific details and the practices of gifting GM and Chrysler to the UAW and Fiat, but that is the result of our political process - I accept it.

So, best of luck to you and your family. Things WILL be painful in the short run, but they WILL get better.

I have lived and worked in 3 continents. I speak 5 languages. I love foreign cultures and have friends all over the world.

There is NO COUNTRY in the world that as a present or future as bright as the USA. None. And that is not an emotional analysis.

The aging and anti-consumer postures of Japan and Europe are deeply troubling.

Brazil and China are riding high (Russia was too for a time), but the lack of safety (Brazil) and rights (China) will plague them for a long time.

If we don't overreact to this recession, we'll be in great shape soon. Even if we do, we'll still be head and shoulders above the rest.

Once again - hang in there, be creative, go get a piece of that bailout (no shame in that), enjoy time with your loved ones while you wait for your next job.

As to convincing Fred and Shane, no need to. Remember, we want them to continue to over tax and over regulate their industries. We want more Mercedes and BMW and VW factories to move to the US. Heck, I even want us to give them the tanker contract to have Airbus assembly over here.

baron95 said...

bill e. goat said...

Right to work states (in green, "open" shop states)
See any correlation?
===============================
Yes. I do. But more importantly.

See map of internal population migration and census-based expect congressional seat gains/losses.

This is not the best one, but will do

A direct correlation.

Americans taking action. ;)

chickasaw said...

Baron,

Even though I do not have the "entitlement" mindset, I have taken advantage of some of the educational benefits. You can never go wrong learning new skills.

My last few words on the stimulus package; I always thought that it was more beneficial to economically stimulate the consumer not the manufacturer or service provider.

baron95 said...

Fred, for a smart guy you seem to have problems with real data vs how you think the world should work.

Fact: US - Most productive agriculture in the world - unlikely to change.

Fact: US - Most dynamic financial market in the world - unlikely to change.

Fact: US - Largest, most competitive, lowest priced consumer market in the world - unlikely to change.

Fact: US - Largest, most capable military in the world - unlikely to change.

Fact: US - The ONLY country in the world where ALL import/export/lending/financing transactions are performed in their OWN currency - unlikely to change. You fail to understand the significance of this fact and try to apply debt/currency risks from other countries to the US - that simply never existed and will never exist in the US.

That leaves out manufacturing competitiveness. It is a relatively small percentage of the US economy. Even if it went to ZERO it would still be a relatively minor impact.

But....what do we see?????

Wages and transportation costs in China, India, Brazil going UP.

Regulatory and taxation penalties going UP compared to the US in Europe, Japan, and virtually the whole world.

Manufacturing wages in the US (in the aggregate) going DOWN. A lot of it due to migration from union north to union-free south.

Result? Inflow of auto assembly plants from Asian/European marques to the US. US steal and aluminum producers doing well and being price leaders. US semiconductor production at an all time high (by volume and value).

Anyway....

Only real threat to the US economy is the consumer buying power and buying confidence. We have real threats there, and misguided policies (again union-induced). We need to open up to continued and increased immigration. We needto capitalize on the desire of many in the world to come live in the US. Immigrants are consumers, are young, have more babies, are more entrepreneurial (natural selection) - we are missing the boat on that.

In the end, it matters not if:

A - US worker makes $10/hr but a car costs $20K and a TV $2K over here or...

B US worker makes $5/hr but a car costs $10K and a TV costs $1K over here.

So long as prices (adjusted) for content of everything (other than healthcare and education) continues to go down faster than wages/income, we'll always be better off.

airtaximan said...

"ATM, UAW Mid-West employment has been going down for over 3 decades. You are talking like this is a new phenomenon. Yes many industries have suffered deeply in the past 18 months. But mid-west UAW auto companies are in decline for decades."

Same with ALL of US based manufacturing jobs.

Try again

airtaximan said...

chick,

not that any of this was a good idea, but IF the gov't wa hell bent on supporting the market by printing and giving out money, they should have just provided a garantee/credit enhancement to the homeowner and be done with it.

Credit risk would have gone down, no money required, really, and in return, they could have demanded principal and interest reductions to stabilize the market.

Instead, they gave their friends money... should have supported from the bottom

baron95 said...

ATM said... Same with ALL of US based manufacturing jobs.
----------------------------

No!!! Us manufacturing jobs actually increased in many sun belt states.

baron95 said...

Auto assembly jobs simply didn't exist in the South decades ago - now there are tens of thousands of such jobs.

airtaximan said...

yup, textiles/garment industry jobs move to the south US as they were all going off shore as well...

I guess your point is being well understood - without unions we would still be able to compete with 3rd world labor wages in the US?

RETHINK

airtaximan said...

this whole union discussion reminds me of those who thought EAC's problems were that they could not attain 1-2 planes built per day...

Problem was, there was no demand for this rate...

Problem with the union is evil argument is, its moot. US standard of living requires higher compensation.

The evolution of these jobs and these industries are such that lower value activities will get lower pay - off shore, here, wherever - the jobs seek the lowest cost/highest value.

Its easier for US humans to ad higher value in knowledge-based activities, other than trying to deliver 8-1 cars in the same work shift, or produce 19-1 pairs of Calvin Klein underwear to the third world employee cost equivalent.

It's not the unions fault, we are victims of our own success... so to speak. And, I am not fatalistic about this, so victims is the wrong word, but I am trying to be clear - the unions are not the reason for a lack of US competitiveness where labor is concerned.

The idea that people are not OK with living at the poverty line is a good thing - it means we are beyond that.

OH, and by the way, I think the union is obsolete, anyways. Just as Detroit was once a popular place to make cars, the union servedit purpose. Today, we have sufficient regulations such that the union goes by way of the buggy whip... but its not their fault there's high unemployment.

This would be like crediting the whip makers demise for the invention of the car!!

baron95 said...

Nope. Not without unions. There is nothing intrinsically bad about unions, quite the contrary - they can aid in productivity and efficiency.

The issue is unions pretending that GM/F/Chrysler had market monopoly, only competed with each other, and trying to hang on for as long as they could (within their rights) to unsustainable compensation and work-rules. Nothing more, nothing less.

ATM, you need to separate two issues. One is the general and natural trend of advanced economies to have a lower mix of manufacturing as a percentage of total economic output(vs knowledge work for example). The other, is rendering entire companies non-competitive by intransigent labor contracts.

The auto assembly lines in the south also Spirit (ex Boeing) and Piper moving from PA to FL and Honda, Eclipse, Embraer setting in the sunbelt is a total rejection of northern UAW, high taxes, etc.

The US right-to-work states are VERY competitive with any country for manufacturing of high-value items (cars, planes, steel, aluminum, etc). There is no need to fear. They are getting even more competitive as labor costs are rising in China, Brazil, India along with transportation costs.

Anyway....back...to .... aviation and avionics....

baron95 said...

Just to show how hard it is to develop a new integrated avionics suite and find a market, L3, ahving failed to find an OEM for Smart Deck has resorted to suing Cirrus for basically choosing Garmin over L3.

How cool is that? Any OEMs will want to do biz with L3?

And in another sign that nothing changes in GA....$14M jury award against Cirrus and other parties for an accident where a non-IFR rated pilot crashed in IMC.

How cool is that?

WhyTech said...

"L3, ahving failed to find an OEM for Smart Deck has resorted to suing Cirrus for basically choosing Garmin over L3."

Possibly a bit more to it than that. IIRC, Cirrus announced some time ago that they had selected L3, and perhaps had entered into a contract, then apparently did an about face. Others may be more familiar with the details.

WhyTech said...

"$14M jury award against Cirrus and other parties for an accident where a non-IFR rated pilot crashed in IMC."

Cirrus seems to be a magnet for accident prone pilots. Read the NTSB reports - quite an eye opener.

WhyTech said...

Here is a snippet from AIN on Cirrus/L3:

Last fall, L-3 Avionics Systems won the competition to supply the cockpit for a single-engine personal jet under development by Cirrus. L-3 has been testing its SmartDeck cockpit aboard a number of Cirrus SR22s as part of its agreement with Cirrus, which could spell more bad news for Avidyne if Cirrus decides to bring the L-3 system down to its piston line, where Avidyne avionics are standard.

WhyTech said...

And another snippet from the This & That blog:

L3 - has spent what must be a small fortune developing a pretty damn good integrated avionics suite, then another stack of cash getting it certificated only to find temselves without an OEM customer. Pre-cancellation it appears that someone at Cirrus ordered 75 SmartDeck systems that the company no longer needed. Dropping L3’s SmartDeck has lead to a lawsuit being filed by L3’s lawyers claiming $18.7 million for the 75 systems and another $3m that is owed for Stormscopes and other standalone products

baron95 said...

WhyTech, always too sides to a law suit.

Point is that L3 failed to win and keep a customer on the merits of their avionics vis-a-vis the competition.

Same with Avidyne.

As far as OEM glass, we are down to the natural order of GA - one dominant system. It is either Garmin G1000/G600 or it is not. (Like King Silver Crown in the late 80s early 90s).

The thing is that both Prodigy and Perspective implementations of th G1000 are showing quite a bit of ship-systems integration. In a couple of years, the level of Avio integration is not out of the question.

That will be about the right time to start a project to re-do the EA50 avionics with a G1000 base.

agroth said...

From WhyTech:

"Possibly a bit more to it than that."

WT,

The good thing here is that it should all be on paper in contracts. I'm really curious to see what those agreements entail.

Regarding the selection of L-3 for the jet program, the way it was presented to us more than once (by everybody on up to Alan K.) is that L3 was only selected for the development aircraft at that point.

In fact, L-3's press release makes this clear when, in my opinion, that AIN article doesn't.

Garmin Perspective deliveries started over a year ago (early June 2008, IIRC), and development must have been well underway in later 2007 when L3 was selected for the jet test program. That said, I'm also really curious what those 75 orders referenced in your other snippet were for? Maybe a plan to offer multiple avionics suites (Avidyne, Garmin and L-3) in the SR20/22? If so, I wonder what caused the reversal?

fred said...

Baron :

1st :

i am NOT smart ...

if i would be it would be known for a while ... now !

2nd :

i understand very well your point , the question = would you bet your life on ? your kids life on ?

you see your arguments about your predominance are a bit funny to me ...

It sounds exactly like the thousand years the Third Reich was supposed to last ; reason for : Deutsche Ordnung ... (German efficiency )

exactly like the British Empire ; reason : the sun was always shinning on it , somewhere ...

Exactly like the French Vignerons who believed for much too long that no one in the world could make Wines of this kind of qualities ...

exactly like the Roman Empire that went to the extent of calling "Barbarious" any who was not kneeling in front of them ...

they ALL believed to be THE one to last ...

the list could be almost endless as it has always been the same in human history ...

it is anybody right to live where they want , in that i recognize the right for Chikasaw to prefer a place to an other one ...

what is MOSTLY IMPORTANT : to know the limitations of the system you are living in !

if you really believe in what you write , please do not change anything ...

unfortunately the last election in USA seems to prove you wrong !
(unless off course , the ones who voted were not True-Americans ...)

time is changing ... all the time , be prepared or be late !

PS: if you have all the qualities you mentioned :

could you explain why 68% of what is sold in the US is Chinese made ?

why those "sold items" are (were, i doubt it will keep the same pace) financed at 91% by Chinese funds ...

How a "wet" 300 millions can "consume" more than a 1 billion 300 millions ? they can very well spend the 3 Trillions$ + they amassed playing you to benefit their own population ...


you see not a problem of "here = better than there...."

just a question to be aware of what are the + and the - and act accordingly ...

knowledge of system can prevent going too far in problems ...
Blind faith in it = NEVER !

julius said...

fred,

bonjour!

knowledge of system can prevent going too far in problems ...
Blind faith in it = NEVER !


perfect conclusion!!!

We learnt about it during the A330 accident - and the so-called "finance crisis".

And this applies to our social systems (as you said) even more as it is a very dynamical system.
India and China are well developed contries (despite some indegenous people in remote areas) - desite their social and ecological dumping (they will pay for it!).

Living better than ... with insecuritiy staff (because of insecurity) is not so nice like living good without insecurity problems.

Julius

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

"Garmin Perspective deliveries started over a year ago (early June 2008, IIRC), and development must have been well underway in later 2007 when L3 was selected for the jet test program"

I suspect that Cirrus was attempting to "discipline" Garmin with all the publicity re L3. Perhaps a negotiating tactic to get a better deal with Garmin.

As you point out, its what's in the agreements that matters, not what's in the press. If Cirrus did actually order 75 shipsets, they will most likely have some legal exposure for canceling.

WhyTech said...

"As far as OEM glass, we are down to the natural order of GA - one dominant system"

Agreed if you mean at the low end of GA. (Collins and Honeywell middle and high end). IMO, its unlikley that any other OEM than Garmin will gain significant market share without some kind of disruptive event - most likely on the product innovation side - similar to the way Garmin knocked King our of the box in the 90's.

WhyTech said...

"they ALL believed to be THE one to last ..."

Fred, I dont think that B95 was making this point. Nothing lasts forever. Economies cycle and the US has survived some poor choices of political leaders over more than two centuries. To paraphrase Mark Twain, news of our death is greatly exaggerated.

Keep in mind that had it not been for US intervention, all of western Europe might be part of the Third Reich today.

stan said...

"Keep in mind that had it not been for US intervention, all of western Europe might be part of the Third Reich today."

Does that history make our system superior to theirs?

If it weren't for the French, we might be wearing powdered wigs.

Does that history make the French system superior to ours?

BTW, I'm working on a new blog, Recipe For a New Economy. It is very difficult to write because I want to make the arguments so clear that even baron might be able to understand my points.

WhyTech said...

"Does that history make our system superior to theirs? "

Where did I say that? I cant find anywhere in my comments any reference to superiorty or inferiority, just history.

stan said...

"Keep in mind that had it not been for US intervention, all of western Europe might be part of the Third Reich today."

Then what's your point?

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

Stan,
"BTW, I'm working on a new blog, Recipe For a New Economy. It is very difficult to write because I want to make the arguments so clear that even baron might be able to understand my points."

I thought the Eclipse Aviation Critic deserved a Pulitzer Prize.

This latest good work will desrve a Noble Prize !!

(...for both economics- and peace! .)

fred said...

Wythech :

Western Europe owe for the "Third Reich episode" =

2/3 to the Soviets : 9.7 Millions dead soldiers , 26 Millions civilians

1/3 to the rest of allies ...!

i could say that it didn't come for free ..
it was the "Lease-Lend" agreement for which U.K. stopped paying back only very few years ago ...

for the Frenchs : the first troops who landed in Normandy had a Rally-word : " La Fayette , Nous voila !" (La Fayette , here we come )

so our common history is very messy , but i doubt anyone was ONLY good or ONLY bad ...

What i was pointing out :
Yes , NOTHING just nothing is meant to last forever ...

the best (i am going to be kind not saying The only ...) advantage in the last decades for USA was US$ ...

if you take $ out of the equation = USA become like most European countries , only with a debt XX times larger than ALL European debts together ...

if you analyze Baron post :

Agriculture = do you think you are going to make a GNP of 10 T/ year ? without the $ to heavily subsidize your exports ??? ( the same problem for E.U. ... if we want Africans and third world countries to live a bit better = stop agriculture subs. !)

so the point is totally out of scope !

Finances : so dynamic that it made the Global World economy to go down ...
still the same remark , take $ out of equation = what is left ???

so the point is out of scope !

Market : this is right , up to now it WAS the biggest market !

still the same problem , take $ out of equation ...

how are you going to replace the 68% of chinese goods ? and the 15 to 18% coming from E.U. ?
if buyers cannot rely on printing new bills for paying ?

this is a "Market distortion " or when excess become the norm = problems at next corner ... translated for US in : up to now it was Goods against green-paper

Military : USA spend alone more than the rest of the World ...
what the point ? can you keep on financing such excess ?

if you take $ out of equation : NO !

so if you add the new policies from B.O. + the Debts level in USA + the BRIC clearly stating their will to dump the $ as trading currency

=

the end of the period where everything was booming is very probably gone , already ...

the choice , now :

you want to see it

or

you refuse to see it ...

up to you !

WhyTech said...

"Then what's your point?"

Let me get right to the point: I am annoyed by the US bashers on this blog whose lifestyle is enabled in multiple ways by the US. Got it?

WhyTech said...

"the end of the period where everything was booming is very probably gone , already ..."

Fred,

What can I say? You seem to have all the answers and must certainly be right.

fred said...

Whytech :

i wouldn't consider myself as a basher ...

i have been living +/- 2 years in USA , where i have met among the best and nicest ones i have ever met ...

still , some have accumulated so much blindness and self-sufficiency ...

you know my friend :

when you are drunk out of your head ...
who is your best friend ?

the one to tell you "let's get home! i carry you if need be..."

or the one to say "let's party even more ... tomorrow is another day ..."

fred said...

What can I say? You seem to have all the answers and must certainly be right. ...

i wrote it before :

the point is not to believe me or anybody ...

it is ONLY about KNOWING WELL the limits of the system you are living in !!!

WhyTech said...

"the one to tell you "let's get home! i carry you if need be..."


The US has been doing this for the rest of the world for more than a century!

WhyTech said...

"it is ONLY about KNOWING WELL the limits of the system you are living in !!!"

If only anyone could know this kind of thing with a high certainty! Your points are certainly worthy of consideration. However, how often have unforseen events/circumstances evolved to totally change the outcomes predicted by the most savvy political/economy watchers? Your forecast of the beginning of the end of US economic success may well be right, but is by no means certain.

fred said...

Whytech :

I am speaking about World Economic Dominance ...

yes , i may be wrong (i could add that it would make me happy for you ...)

than again : do you watch Meteo before getting out on a walk ?

this is the same , take it as " Umbrella is required ... rain may be coming !"

as the same time :

The US has been doing this for the rest of the world for more than a century!

yes , more or less ...

BUT NEVER FORGET : this is seen from the US side ...

do you really believe that the Brazilians , Russians , Indians , Chinese see it with the same angle ?

is it fair ?
no !

but not more than when accepting Green-papers for valuable goods !

WhyTech said...

"do you really believe that the Brazilians , Russians , Indians , Chinese see it with the same angle ? "

I am certain that they dont. Which makes me sad that the US did not adhere to George Washington's policies of neutrality and avoiding foreign alliances over the last 200+ years. Let's deny these countries access to the US markets and see how well they prosper.

fred said...

Let's deny these countries access to the US markets and see how well they prosper. ...

this is the starting point of all ...

it is quite normal for you to believe nothing is above your country ...
(germans even have it in the National anthem)

if you just stop considering the US market as a end in itself ...

you would probably start to see what THEY see ! (bric)

at same time , in last decade+ don't forget that you were consuming being financed mostly y foreigners ...

you see balance

julius said...

Fred,

(germans even have it in the National anthem)


correction!
You are referring to the first strophe, which is not part of the National anthem!
The third strophe only is the National anthem and is now really peaceful!

BTW: The G7/8 summits gave some ideas of "economical dominance".
We are now talking about G8+5 (India, China, Brasila, South Africa, and Mexico).....!

Julius

HowardHughes said...

Well, that's it, I'm done. No more comments and no more lurking from me.

Baron, Whytech - you have the arrogance and smugness that we have come to identify with people who have done well out of the status quo. You are both really obnoxiously smug, unpleasant and uncaring about those less fortunate than yourselves.

You are unable, apparently, to understand the difference between correlation and causation, and assume that cause follows whatever your inclination is.

I live in the US, and I see a country which individuals are preoccupied with their medical insurance or lack of it (what, 40m uninsured people?). But rah! rah! rah! U-S-A-num-ber-one!

This is not a great country, except in size; it's certainly won't be a civilized country until it takes the step of giving everyone medical care (so that you're no longer behind Morrocco, say).

Shane: it's been an interesting journey the last year or so. Stop now - there's really no reason to continue. Baron/Whytech/etc can move on to some other venue to spread their thoughts...

Oh, and don't waste your time and other people's patience by replying - I won't be reading.

WhyTech said...

"This is not a great country, except in size; it's certainly won't be a civilized country until it takes the step of giving everyone medical care (so that you're no longer behind Morrocco, say)."

This is pure horse crap. Residents (citizens and otherwise) are allowed to reproduce without limit, and we have somee 12 million illegals, and those that work for a living are supposed to pay for free healthcare for the rest? Your kind of thinking is what will destroy this country, and unfortunately, the socialism agenda of the current administration will only accelerate this. Perhaps you'd be happier living somewhere other than the US, say Morocco or Lybia? Tens of millions of others are waiting to take your place, even without free healthcare.

Dave said...

Oh, and don't waste your time and other people's patience by replying - I won't be reading.

So long and thanks for all the fish.

WhyTech said...

"Baron, Whytech - you have the arrogance and smugness that we have come to identify with people who have done well out of the status quo. "

Yes, I have done relatively well. However, I began my adult life living below the poverty level, and except for some assistance with college expenses, no one has given me anything in the way of financial wealth. Over a 40 year career, I have paid out about half of my income in Fedrally mandated charitable giving (taxes), the majority of these dollars going to social programs. In retirement, I am still paying through the nose. Can you tell that this pisses me off? How much is enough?

airtaximan said...

...Nope. Not without unions. There is nothing intrinsically bad about unions, quite the contrary - they can aid in productivity and efficiency.

please check your history, an look at the garment industry, for example.

you might want to rethink instead of trying to finess some argument that the progression away from manufacturing/labor in the US is somehow NOT an issue.

The movement to the south is just one step closer to offshore.

Its OK if you do not want to see this, but its as plain as the nose on your face.

PS. cars are also somehow made in Western Europe with much higher overall labor costs... there's a lot to this.. including regulations, incentives, market access etc. The unions have nothing really to do with it, except perhaps they thought, JUST LIKE THE EXECS AT THE BIG THREE THOUGHT, they had a monopoly.

I wonder WHO was more at fault regarding the demise of the US automotive industry?

I still maintian, its just imploding as a reaction to the inflated credit induced demand... but, its moot. Bottom line, unions are obsolete... but they are not really the casue of the demise, as you suggest.

airtaximan said...

fwiw,
Whytech and BAron, I have no personal issues with either of you, and would really enjoy meeting you both. You have provided some terrific insight, here.

I love insightful opinions. Especially differing ones.

ATMan

Dave said...

Perhaps you'd be happier living somewhere other than the US, say Morocco or Lybia?

I think this is good news. Now we don't need to send aid to Morocco of over $100 million per year...afterall, if they're ahead of us, they shouldn't be taking money away from us. It seems downright insulting that they'd take our money.

WhyTech said...

"You have provided some terrific insight, here."


Thanks for your support! Most of my posts refelct my true opinions; a few are bogus in the interest of stimulating discussion. I wont say which is which.

baron95 said...

Fred asked...
could you explain why 68% of what is sold in the US is Chinese made ?
-----------------

Fred, Fred, Fred, you are losing it. China exported $338B to the US. Consumers in the US "bought"or spent about $12T in 2008. So Americans spent less than 3% of their total spent on Chinese goods - hardly a reason to lose sleep over.

And even if it were 5% or 10% or 25% or 75%, so what? What does that mean? Nothing. We are still buying the best bang for the buck products in the world in a free market and paying with our own currency.

Monaco imports everything - you don't see anyone in Monte Carlo losing sleep over it, do you?

Get over it pal. Making low cost (and some higher cost) manufacturing goods is not the nirvana for any economy.

That is soooooo last century thinking.

And as to the other "Empires"you cited, has any one of them ever had the power to instantly (like in 30 minutes) annihilate any other country without actually using that power, and has any one of those also had all their trade conducted exclusively on its own currency. And has anyone of them have their debt/bonds held as the vast majority of reserves by ALL other nations on earth.

You seem to have a problem with reality.

Yes, it sucks. It may be unfair. It may be different 100 years from now. But for now that IS how it is.

EADS will continue to sell Airbuses in US$ and China will continue to sell shoes in US$ and France, Germany and China will continue to hold US$ as their reserves and they will continue to do all they can to prop up the US$.

They have no choice - get over it and be happy.

WhyTech said...

"They have no choice - get over it and be happy."

Wonderful!

Shane Price said...

Snippet Time

Seems Socata were interested enough to have a pretty hard look at EAC. However, it appears that the didn't like what they saw....

They confirmed that they looked at Eclipse, but walked away when they couldn't find documentation for engineering changes on the airplane design. It certainly makes one wonder how Eclipse ever achieved FAA certification, let alone EASA approval.

Hmmm....

Makes one wonder what other 'issues' are lurking in the files down ABQ way.

Shane

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

Guys - come on.

There is no reason to have a transatlantic war.

I think it is actually quite healthy that we have different countries using different approaches.

China is building an export-based economy. Europe is a producer-friendly economy (with lots of protections for producers vs consumers). The US is a consumer-based economy. All three are not pure and use elements of one another. That is quite healthy.

Europeans are happy paying much higher prices for the same goods than we pay and they are quite happy paying a 20-25% VAT tax that is very regressive and they think that health care is actually "free" (as in provided by the tooth fairy). They also think they'll be able to keep their pension systems in place as their population ages and declines in numbers. That is cool.

We (the US) still believe that some amount of swim or sink personal responsibility is good. We provide tax-payer-paid (note, not "free") health care to the old (Medicare) and the poor (Medicaid) and to anyone (including tourists) on an emergency basis (though you get a bill later). For the rest, we let them decide what, if any health care to get. That is cool too.

What is also true is that the US politicians are perennially trying to convince us that we should be more the EU and the EU politicians are perennially trying to be more like the US.

Year after year the world is becoming more alike and more homogeneous. Those of us who do extensive overseas traveling/living know that. 25 years ago moving from Dallas to São Paulo or from Toronto to Beijing was a shocking experience. Today? It is less traumatic than moving from Orange County to South Central or Fairfield County to the Bronx.

Yes, the US economy as a percentage of the global economy will CONTINUE TO GO DOWN. And Fred is latching on to that fact to predict doom.

What he fails to note is that there is NOT another US-like power emerging. Instead, for the foreseeable future, you will have the US (giant economy) and a disparate collection of smaller second-tier contenders (Japan, China, Germany), and a a third-tier (India, Brazil, Russia, France, UK, etc,...).

So are you going to trade in Yen or Yuan? Is China, Japan or Germany replace the US enforcing peace on rogue nations?

Of course not. It will continue to be the US and the US$.

You don't need to be more than 50% of the world economy (like we were in 1949) to yield control. You just need to be much larger than second place. [oh, and forget about claiming that "alliances" can yield power - what a joke the BRICs currency posture in their last meeting - lets have a good laugh, shall we]

Got it Fred?

Oooops - I got my olive branch became too sharp. Sorry. Lets all be happy for what we have. Yeah to French Wine, German cars, Chinese laptops, Japanese Playstations and US Fighter Jets.

WhyTech said...

"Makes one wonder what other 'issues' are lurking in the files down ABQ way."

Given the protracted and less than orderly wind down of the business, I dont think we need to wonder - my bet is that its a 55 gal barrel of worms!

baron95 said...

Shane Price said... Seems Socata were interested enough to have a pretty hard look at EAC.
===========================

Why wouldn't they? It is a pretty inexpensive (as in free) way to learn a lot about all aspects of a VLJ program to avoid the same mistakes on your own program.

If you knew the number of companies that the likes of Cisco, Microsoft, Raytheon, etc look at (as in due diligence) every year, you'd be surprised. They learn *A LOT* from the companies they don't acquire but get a "look see".

I really, really doubt that THE REASON EADS passed on the deal was lack of EC docs. That may have been the reason GIVEN, but it was not THE reason. Most likely they just want to "learn" a bit anyway or had a possible interest.

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

"Yeah to French Wine, German cars, Chinese laptops, Japanese Playstations and US Fighter Jets."

I think we are witnessing the decline of German cars. Within 10 years, Japan will dominate the luxury/performance sements. Check out the Lexus LS (MB killer) and Nissan GT-R (Porsche killer). Not quite there yet but soon! This scenario has already played out in motorcycles.

Shane Price said...

Baron,

Yes, that was my initial reaction, when I heard (months ago) that they were 'lurking'. In fact, the started looking, in a vague sort of way, way back in November last year.

When Roel tried his Chapter 11 'stunt'.

So I share you're skepticism that it was the ONLY reason they walked away.

What you seem determined to ignore is the STATED reason.

EAC's paperwork sucked.

This tied in with what I was told a lot of the workforce were doing during Chapter 11. It apparently involved working through a whole bunch of issues involving many and varied parts of the FAA inspections.

They sure weren't delivering E500's, but they managed to keep busy doing 'something' else.

Shane

Dave said...

They confirmed that they looked at Eclipse, but walked away when they couldn't find documentation for engineering changes on the airplane design.

So if someone from a foreign country buys Eclipse, does that make Eclipse an undocumented immigrant?

airtaximan said...

there was interest from another major OEM in 2002-3 timeframe, and they walked.

it was not a fishing expedition, it was serious - AND they did learn a lot - bigest fact - EAC was Full of shit regarding costsing and rate and the orders.

no OEM in their right mind would want waht EAC had - it was a basket of bogus promises... and no real market.

this is a quote, BTW

baron95 said...

ATM said... no OEM in their right mind would want waht EAC had
-------------------------------
True, but....

If you could get it for "free" as part of a bankruptcy 363 free and clear of liabilities, with all the certs in place, the math would be different than in 2003.

I really think that it was only the financial crisis + Russian oil collapse that prevented someone (RP or Mann) from getting the thing running again after a Ch11 cleansing.

Dave said...

If you could get it for "free" as part of a bankruptcy 363 free and clear of liabilities, with all the certs in place, the math would be different than in 2003.

I really think that it was only the financial crisis + Russian oil collapse that prevented someone (RP or Mann) from getting the thing running again after a Ch11 cleansing.


I can't say for sure. If there are serious technical problems lurking that greatly shorten the life of the aircraft, getting Eclipse for free might not be bargain if you have to re-design the whole thing. Unless you wanted the factory and wanted to make a whole other aircraft there...but again with that, I don't know that would be so good either. The longer this plays out, the more we'll probably see.

julius said...

baron95,

transatlantic war

no need for that!

BTW: GDP (purchasing power parity):
light advantage for EU compared to US (2008) and - I know that's not fair - advantage for combined China, India & Japan compared to U.S.(2008)
(all US sources)
I think in 2007/8 amount or value of EUR-notes and USD-notes: nearly the same (but I don't know the exchange rates).

Back to EAC!

After the Nimbus-deal every due diligence should have resulted in a reaction of the BoD - why not?
What about Peter R.? ....
The wedge... "so what" - I can do it...?
Or: The OEM didn't say anything -
another competitor to fail!

That might be correct!

Julius

baron95 said...

Not quite Julius. You are being kind to the US in that case.

2008 GDP was about $14T US and about $18T EU. If you use todays exchange rate it is more like $14T to $17T. Lets call them about the same size.

That is out of a $60T total world economy. So US+EU is more than half the world economy. If we add aour full fledged allies (Canada, Australia, Japan, etc) we control 2/3 of global economic output.

For comparison, China is about 6% and Russia about 2%.

But then, if you look at it per capta, US GDP is about 45% higher.

Then if we adjust for size of US families vs EU families it is about 60% higher per household.

If we further adjust for lower costs of goods, housing, fuels, etc in the US, you see that the typical US household can afford approximately double (100%) more "things" than a typical EU family.

And that is typically what you empirically see by visiting a typical American home vs a typical, say French home.

So all in all, the US+EU+Australia+NZ+Japan+SK+Canada will be driving this bus for a long time.

China knows it and is very, very happy providing the tires, upholstery, bolts, changing the oil, etc of the bus. It is a good living. They don't want to drive the bus. They want to make money keeping the bus running.

Now Russia, has delusions, of owning the bus, driving the bus, stopping the bus, etc.

Fred has delusions that the bus will rust out and disintegrate leaving Americans stranded.

Now that, ain't happening. ;)

WhyTech said...

"Now that, ain't happening. ;)"

At least, not in a time horizon relevant to anyone here.

airsafetyman said...

Baron, in my travels to Europe the Swiss, Germans, Danes, Dutch, Norwegians, French, Swedes, and Finns all seeem to have a much higher standard of living and quality of life than we do in the US. It means a lot to most people in those countries that their families will have medical care and their kids can go to college if they lose their jobs. We are a long way from even having universal literacy in the US. The English are hopelessly backward, not because of any socialist trends, but because of their god-awful class system they can't seem to get rid of. Perhaps they should ask the French for some sharp ideas?

baron95 said...

Sorry, ASM, that is not my experience.

The average Northern European lives in cramped housing, many have a single bathroom, some even share bathrooms, they drive underpowered cramped cars, a 3-car garage home is basically unheard of, 2 car garages are relatively rare, plane ownership is non-existent, etc...

As to the US, I don't know where you get your information, and most Americans got this wrong from the media, but the FACT is that NO POOR CHILD in America lacks health care. Medicaid and state programs like Huskies in Connecticut guarantee free health coverage to EVERY poor child and to poor families.

The people without healthcare in the US is comprised of people who could (or at least are deamed capable of) afford health care and choose not to buy it.

Example. Young/single males. It makes no sense for them (who think of themselves as invincible) to buy healthcare. They roll the dice. They know accute illnesses or accidents will by law be treated at at emergency rooms no questions asked. Long term illness, while very unlikely, would simple force them into bankruptcy or poverty/Medicaid. People fail to understand that it is just Americans exercising their CHOICE to use their money for something other than medical coverage. Simple as that.

AGAIN.

All those over 65 in the US have health coverage.

All those under 18 (or twenty-something if in school) from poor families get Medicaid health coverage.

All families below the poverty line get Medicaid.

Most children and some families somewhat above the poverty line get federal, state or local funded health-coverage.

Well-to-do, employed with most larger employed - no prob get free market health coverage.

Middle-class = make their choices to spend limited resources on health coverage or roll the dice.

That is the situation.

Children in the US are not dying or suffering from lack of health care. If you read that, it is just propaganda.

baron95 said...

Even the left union cheerleaders like Robert Reich - Clinton's Labor Sec know that manufacturing job decline is a non-issue.

----
First and most broadly, it doesn't make sense for America to try to maintain or enlarge manufacturing as a portion of the economy. Even if the U.S. were to seal its borders and bar any manufactured goods from coming in from abroad--something I don't recommend--we'd still be losing manufacturing jobs. That's mainly because of technology.


When we think of manufacturing jobs, we tend to imagine old-time assembly lines populated by millions of blue-collar workers who had well-paying jobs with good benefits. But that picture no longer describes most manufacturing. I recently toured a U.S. factory containing two employees and 400 computerized robots. The two live people sat in front of computer screens and instructed the robots. In a few years this factory won't have a single employee on site, except for an occasional visiting technician who repairs and upgrades the robots.

Factory jobs are vanishing all over the world. Even China is losing them. The Chinese are doing more manufacturing than ever, but they're also becoming far more efficient at it. They've shuttered most of the old state-run factories. Their new factories are chock full of automated and computerized machines. As a result, they don't need as many manufacturing workers as before.


Economists at Alliance Capital Management took a look at employment trends in twenty large economies and found that between 1995 and 2002--before the asset bubble and subsequent bust--twenty-two million manufacturing jobs disappeared. The United States wasn't even the biggest loser. We lost about 11% of our manufacturing jobs in that period, but the Japanese lost 16% of theirs. Even developing nations lost factory jobs: Brazil suffered a 20% decline, and China had a 15% drop.

What happened to manufacturing? In two words, higher productivity. As productivity rises, employment falls because fewer people are needed. In this, manufacturing is following the same trend as agriculture. A century ago, almost 30% of adult Americans worked on a farm. Nowadays, fewer than 5% do. That doesn't mean the U.S. failed at agriculture. Quite the opposite. American agriculture is a huge success story. America can generate far larger crops than a century ago with far fewer people. New technologies, more efficient machines, new methods of fertilizing, better systems of crop rotation, and efficiencies of large scale have all made farming much more productive.

Manufacturing is analogous. In America and elsewhere around the world, it's a success. Since 1995, even as manufacturing employment has dropped around the world, global industrial output has risen more than 30%.

We should stop pining after the days when millions of Americans stood along assembly lines and continuously bolted, fit, soldered or clamped what went by. Those days are over. And stop blaming poor nations whose workers get very low wages. Of course their wages are low; these nations are poor. They can become more prosperous only by exporting to rich nations. When America blocks their exports by erecting tariffs and subsidizing our domestic industries, we prevent them from doing better. Helping poorer nations become more prosperous is not only in the interest of humanity but also wise because it lessens global instability.

Want to blame something? Blame new knowledge. Knowledge created the electronic gadgets and software that can now do almost any routine task.

bill e. goat said...

Hello Baron,
Thanks for posting Robert Reich's column, he is one of my favorite commenttators.

I feel he has jumped the tracks on this time though.
Consider his concluding remarks (concluding for "part 1"- I'm curious to see part 2):

"On the back of every iPod is the notice "Designed by Apple in California, Assembled in China." You can bet iPod's design garners a bigger share of the iPod's purchase price than its assembly.

"The biggest challenge we face over the long term -- beyond the current depression -- isn't how to bring manufacturing back. It's how to improve the earnings of America's expanding army of low-wage workers who are doing personal service jobs in hotels, hospitals, big-box retail stores, restaurant chains, and all the other businesses that need bodies but not high skills. More on that to come."
--------------------------------

I don't know what is left to be said in his scenerio. I can think of no pleasant outcome. He seems to be on a bit of a giddy high from the tone of things- let's see what he has to say- he IS a smart guy, maybe smarter than I think, and will have "breakthrough" (disruptive!) idea. But, I doubt it...
--------------------------------

"Want to blame something? Blame new knowledge. Knowledge created the electronic gadgets and software that can now do almost any routine task."

Nope- I blame short term profit mentality: corporations, unions, stockholders, consumers, politicans.

Everything is about greed and instant gratification.

Reastically, it probably always has been, to some degree. It's just now with increased social (not economic) mobility, we move from one wreckage to another- in your example you proposed, it would be of manufacturing jobs leaving the Michigan for Poverty Flats, temporarily, until they can be sent to Mexico or China. Poverty Flats will give lots of tax breaks to get Cheapo, Inc. to relocate there too- that is EXACTLY the scenerio of Eclipse- cheaper labor then Kansas, tax breaks from the state of New Mexico- Wedge threatens to leave if workers unionize to bring wages up to an industry-level competitive position- then the whole thing is sold to Russia (except it fell through).

I don't see any long term benefit from this- just a race to the bottom for wages, maximizing corporate profits.

If the workers earn less, then they pay less taxes, so government services will have to be paid by taxing corporate profits even more, or offer less service.

That's the future:
1) Wider income disparity, and accompanying social (crime) unrest
2) Higher taxes on those who earn more
3) Decreased government services

I'd prefer to see:
1) Less income disparity (and lower crime)
2) Closer to a flat tax
3) More government services

But unless we change course -and create MORE AND BETTER PAYING JOBS- just the opposite is going to happen.

bill e. goat said...

Hello Fred,
Thank you kind sir for the most generous and hospitable invitation to come and visit Morocco over Christmas time!

While I sincerely regret that family obligations intervene, your kind offer has made me even more resolved to meet you in person!

(Morocco does look like a nice place- do you spend much time there- is it a holiday destination, or "home base" for you?)

baron95 said...

BEG said... it would be of manufacturing jobs leaving the Michigan for Poverty Flats, temporarily, until they can be sent to Mexico or China.
============================

Nope. You are missing the point. Auto Manufacturing jobs at GM, Ford and Chrysler did not leave Michigan for the South. They left the US/Canada to escape UAW/CAW.

It was the OTHER (not subject to UAW/CAW crazy contracts) that COULD and determine that the best place to assemble cars and trucks for sale in the US was..... drum roll..... the US (only the right-to-work, non-UAW US).

And Mercedes to Hyundai, the auto plants in the US south are some of the most productive ($output/$totalcost) auto plants on the planet today.

As to the iPod ecosystem, think about it.

Apple designs, markets, keeps the profits from iPod.

Apple designs, markets, keeps the profits from iTunes.

American (by and large) artists, directors, managers, create the iTunes music, video content and keep profits.

AT&T provides the service and lock customers into 2 year contracts worth $1,200-$3,000 and keeps the profits (some shared with Apple).

Intel, Arm, provides some of the components and keep the profits.

Google maps, Documents to Go, etc design, built, market aps and keep some profits.

Some contract manufacturer in China and Mexico (in the iPod example) builds the thing under contract and keeps some profit under tightly manged margins.

So, all in all, about 98% of the iPod value chain ends up with American corporations and Americans.

I see nothing wrong with that. And it is very likely, that in the near future, some iPods will be built in Alabama or North Carolina because that is the most cost effective assembly site. But even if it isn't it is noise.

Would I prefer to see the iPod built in the US? Yes. Would I pay $50 more for it to support an uncompetitive workforce/workrules? No way.

Would I choose to buy an iPod, Blackberry or Pre vs HTC or Nokia on patriotic grounds? Yes, IF they are made under free market conditions AND "good enough". Would I ever buy a GM or Chrysler car again? Not likely given that it is repulsive that the US Govmt chose to prop those up for the benefit of the UAW and the detriment of Ford and other manufacturers.

Would I buy a german car engineered by a social-union-dominated system? Yes, so long as they are the absolute best in the world. Will I admire them? Yes. Would I give preference (extra good will consideration) to the GL, R, R, X5/X6 models assembled in the US? Yes.

Would I buy Chinese goods? Yes. Will I feel good about it? So long as they are subsidizing my life style by supplying cheaper products and helping keep my interest rate down on my mortgage by buying my debt, YES. If they try, or even hint of flexing any muscle against that - I'll turn them off like a light switch. And most Americans would to - by choice or by legislation. Errr..... sorry, China, I think you are aiding North Korea and Iran, ooops....we are freezing all coupon payments on US debt to you and we'll raise tariffs on your imports 5% this year, 10% next year, and so on, until you play nice again, ooops..... so sorry.

ExperiencedAviationProfessional said...

"Snippet Time
Seems Socata were interested enough to have a pretty hard look at EAC. However, it appears that the didn't like what they saw....
They confirmed that they looked at Eclipse, but walked away when they couldn't find documentation for engineering changes on the airplane design. It certainly makes one wonder how Eclipse ever achieved FAA certification, let alone EASA approval.
Hmmm....
Makes one wonder what other 'issues' are lurking in the files down ABQ way.
Shane"

I'm shocked! Shocked I tell you!.

I had a friend, long time AP/IA who briefly worked at EAC. He described some of the structural repair work as "illegal as hell".

I'd be surprised if a new buyer finds anything more than an empty shell of a corporation. I'll bet most of the hard drives and files have been wiped or removed, just to protect the management from any later fraud lawsuits.

I hope the city is getting full rent payments for those buildings at ABQ. I know of another business that would like to move in, and toss everything Eclipse-related into the dumpster.

fred said...

Baron :

i'm quite glad you didn't get elected president ...

for sure , the rest of the world would have to kiss your feet , if not worse ...

we have diametrically opposite views on s few subject ...

i just hope the very short sight and short term attitude you've shown so well won't prove you wrong ...

but i still do not see , if there is "market wages" (with the Shorter-term profit mentality) how you're going to make your economy to work IF most are getting those wages ...

very recent history has shown that Patriotism in your country is for the ones who have no "iron in the fire" for the top-brass ones , it is ONLY a question of making a buck faster ...

so if "Market-wages" are in force , peoples are going to get paid less and less (as in "Made in China" it's cheaper ) ...

if they get less and less , how are you going to make your GNP ... since it is based at 76% on consuming ????

i never wrote that USA was going to go back to stone-age ...

ONLY that it was VERY HIGH time to understand that :

If one tries to dominate =Problems
(in the case of USA = Unfairness , bringing all radicalisms against it , bringing more insecurity , bringing more security spending , bringing ... etc ... etc)

If everyone tries to cooperate =it might be OK ...


yes , off course the attempt of the BRIC (on new currency) is probably going nowhere ...

nonetheless : what is the best ENGINE for Economy ? = the trust you have in it ...

ON what the power of $ is build ?
the confidence others (on which you have no control) have in it ...

For me it sounds very much like the British Empire (one of the most powerful at the time) who got rotten and had to withdraw from every colony because at one point a simple guy just decided to sit down in the street ...

his name was Gandhi !

you see : it is exactly the same problem = it is not the meeting they had , the important ...

it is the simple fact that some said it openly ...

confidence is at stake , the worm is in the fruit ...!

fred said...

Billy :

i never meant Christmas !

a period to be defined between the one(s) who wants and me ...

Christmas is a Family-gathering period , so proposing to join at this time of year would sound like "a swiss offer" (meaning : a nice offer presented in such a way that it make no sens to accept ...)

i am supposed to spend 183 days /year in Morocco (or at least keep a "permanent" residency there) for Income Tax regulations ...
(extremely cheap if i can have the resident statute which is granted if one stay 1/2 of year + one day )

on top of it it , is my birth country ...

and the place where i have a house , quite modest it is only 12.000 Sq-feet house on a bit more than 7 acres of land ...

the weather is very mild in winter , usually around 18° (64f°) , ski slopes are 60 kms away , sea 2 hours drive ...

what i had in mind for your transport was to have a plane-ticket ready for you at the airport of your choice (1st class , off course , i am not a selfish pig !! ;-) )

if you have wife (or GF) and kids , they are welcome as well ...

fred said...

I really think that it was only the financial crisis + Russian oil collapse that prevented someone (RP or Mann) from getting the thing running again after a Ch11 cleansing.

NO !

once again a perfect example of :

"it isn't us , it is because of them ...."

you are getting confused between causes , results and pretext !

if there would not have a been a Finances crisis (Btw , made at 99% in USA ) Oil wouldn't have dropped ...

and RP and all his gangsta would have had ONLY to find an other scapegoat !!!

bill e. goat said...

"Nope. You are missing the point. Auto Manufacturing jobs at GM, Ford and Chrysler did not leave Michigan for the South. They left the US/Canada to escape UAW/CAW."

Nope- they selected their location to maximize profit, escaping OSHA and EPA regulations, worker protection provisions, and evade taxes.

"It was the OTHER (not subject to UAW/CAW crazy contracts) that COULD and determine that the best place to assemble cars and trucks for sale in the US was..... drum roll..... the US (only the right-to-work, non-UAW US)."

The Japanese came here to avoid import car tarriffs. The Europeans came here to avoid union wages. And they would have gone to Mexico instead, except they didn't want to compromise their "brand image", at least not yet.

"As to the iPod ecosystem, think about it. Apple designs, markets, keeps the profits from iPod. Apple designs, markets, keeps the profits from iTunes."

This is true- but the point ISN'T about corporate profits- they are doing fine for the most part. The point is- how is that profit distributed? To a small number of relatively low paid marketing people- the rest goes to the stockholder, with a minimum number of US jobs created- so to sustain our government services, taxes on the stockholders will have to be increased- that's what I'm trying to avoid, by having MORE AND BETTER PAYING jobs created.

So, I'll say it again:

That's the future:
1) Wider income disparity, and accompanying social (crime) unrest
2) Higher taxes on those who earn more
3) Decreased government services

I'd prefer to see:
1) Less income disparity (and lower crime)
2) Closer to a flat tax
3) More government services

But unless we change course -and create MORE AND BETTER PAYING JOBS- just the opposite is going to happen.


DO YOU GET IT- IT'S NOT A QUESTION OF CORPORATE PROFITS. IT'S A QUESTION OF INCOME DISTRIBUTION- HAVING PEOPLE WORK TO GET IT, IS BETTER THAN HIGH TAXES ON THE WEALTHY. AND THOSE ARE THE ONLY TWO CHOICES, UNLESS YOU WANT THE NATION TO DECLINE TO SECOND OR THIRD WORLD STATUS. NO OTHER OPTIONS EXIST. NONE.

CAPITALISM MAXIMIZES CORPORATE PROFITS- SO THAT AVENUE WILL RESULT IN MAXIMUM TAXES ON STOCKHOLDERS, RATHER THAN WORKERS. IF THAT IS WHAT YOU WANT FINE- THAT IS WHAT YOU WILL GET. (And apparently Robert Reich agrees with you: $7/hour service jobs ARE NOT going to finance the government).

"So, all in all, about 98% of the iPod value chain ends up with American corporations and Americans."

I'm happy the foreign cost is low too. But, that profit does not go into worker's pockets for taxation- it goes disproportionately into shareholders pockets- so, to finance government, we will have to raise taxes on shareholders.

"I see nothing wrong with that."
Me either- what did it used to be, 90% I think.

"And it is very likely, that in the near future, some iPods will be built in Alabama or North Carolina because that is the most cost effective assembly site. But even if it isn't it is noise."
I don't think that will happen because Chinese labor is so cheap, and the cost of shipping electronics is so low.

"Would I prefer to see the iPod built in the US? Yes. Would I pay $50 more for it to support an uncompetitive workforce/workrules? No way."

The long-term sustainable choice is this: pay higher labor rates to US workers, or pay higher taxes- how you spend the extra $50 is your option- but you WILL be spending it. (Or more- by delaying the hard choices, and allowing national debt to accumulate).

bill e. goat said...

"Would I ever buy a GM or Chrysler car again? Not likely given that it is repulsive that the US Govmt chose to prop those up for the benefit of the UAW and the detriment of Ford and other manufacturers."

Yes, it really is a consequence-free world, isn't it: NOT. Zesh- China is TOTALLY subsidizing their auto industry, and evading worker protection and environmental protection, locks up political discidents, and filters the internet and press, and murders 10,000 of their own citizens at poitical rallys- but ah, how did that go again, "it is repulsive that the US Govmt chose to prop those up..." Yeah, okey-dokey. (That is REALLY over-the-top).

"Would I buy a german car engineered by a social-union-dominated system? Yes, so long as they are the absolute best in the world. Will I admire them? Yes. Would I give preference (extra good will consideration) to the GL, R, R, X5/X6 models assembled in the US? Yes."

(Finally- we don't disagree on quite everything .)

"Would I buy Chinese goods? Yes. Will I feel good about it? So long as they are subsidizing my life style by supplying cheaper products and helping keep my interest rate down on my mortgage by buying my debt, YES."

China is getting more out of it than they are putting in. Does the balance of trade mean ANYTHING ???

"If they try, or even hint of flexing any muscle against that - I'll turn them off like a light switch. And most Americans would to - by choice or by legislation."

Um, EP-3, April 01, 2001??? How'd that go again, "or even hint of flexing any muscle". Oh- you were perhaps referring to ecomic muscle- you think they are going to do anything to bring down the only house of cards more fragile than Eclipse was? Not as long as they are making money off us.

"Errr..... sorry, China, I think you are aiding North Korea"

Ah, yes?

"China is North Korea's most important ally, biggest trading partner, and main source of food, arms, and fuel. In the hope of avoiding regime collapse and an uncontrolled influx of refugees across its 800-mile border with North Korea, China has helped sustain Kim Jong-Il's regime and opposed harsh international economic sanctions."
Washington Post, July 2, 2008

"and Iran"

Hmmm: "But the new Tehran-Beijing relationship is likely to further delay or dilute international diplomacy, because the two powers share a strategic vision, experts say. Both are determined to find ways to contain unchallenged U.S. power and a unipolar world, said Ilan Berman, vice president of the American Foreign Policy Council. China's voracious appetite for energy has cemented the relationship, U.S. experts say. China's oil consumption is expected to grow by about 6 percent over the next two years, analysts have said. 'Iran has become the engineer of China's economic growth. It may not be like Saudi Arabia is to the U.S. economy, but it's close,' Berman said."
Washington Post, 17 Nov 2007
(Of course, we sell them Britney Spear's latest C.D., instead of oil, so we DO have some leverage... :)

"ooops....we are freezing all coupon payments on US debt to you and we'll raise tariffs on your imports 5% this year, 10% next year, and so on, until you play nice again, ooops..... so sorry."

China: "Okay, how about we start using Euros to pay for oil, and, ah, stop buying your debt"
US: The dollar no longer the middle east currency? And you mean, mortgage rates of 12%?, hey- just never mind"

bill e. goat said...

Since we caved and let China in the WTO, we lost any politcal or economic leverage we had. Selling them our ever increasing debt has only made us even less influential with them, and everyone else.
We're still the top dog, but it's eroding fast. (A strong military, but a weak economy, is what brought down the Soviet Union).

fred said...

ASm :

Baron, in my travels to Europe the Swiss, Germans, Danes, Dutch, Norwegians, French, Swedes, and Finns all seeem to have a much higher standard of living and quality of life ...

don't you get it ???

baron said : "The best of the best = it is us !"

for failing to bow , you are sentenced to repeat this mantra all day long until you are convinced ... ! ;-)

yes , you are very wrong !
Germans are ONLY the Europeans who are traveling worldwide the most ... probably because it is so bad at home... (compared to the 2% of US citizens who "cross the boundaries" of their state more than once in their own lifetime , if perfect at home = why go away ?)

Frenchs : big-mouths was a house ownership ratio higher than in the USA (normal ! they all live in slumps !) paying a hell lot more tax , but managing to have the second best savings ratio in world ...

in fact , the average net-worth of french household is of some 262.000 Euros while in USA it is -249.000 $
due mainly to debts not allowed to go over 33% of earnings by law (while average debt-ratio of US citizen is 180% on coast and +/-140% in midwest)

probably due to the fact that ONLY a few months of yearly interests on US debts would repay ALL french Debts accumulated since Louis XIV , the King who build Versailles castle ....


so you see , you should start your mantra !!! ;-)

bill e. goat said...

Hi Fred,
Baron kept me up past my bedtime! It's "your turn" to work on him- ha ha.

Thank you for the kind offer of hospitality- and including transportation- I am most touched! (Although Baron insists I am already a bit touched- in the head- I am sure :)

Your "modest" house sounds quite acceptable- but I was not sure if the ski slope is nearby- or inside it?

.)

fred said...

I was not sure if the ski slope is nearby- or inside it? ...

well ...

if you want the slopes inside ...

i fear i have to change my name into some kind of nobility title ... ! ;-)

fred said...

Julius :

Gutten Tag ... und aufrichtigen Entschuldigungen !

you are right !

the German Anthem became peaceful ...

i was trying to show and explain where it leaded us ... when in previous version !!

fred said...

China: "Okay, how about we start using Euros to pay for oil, and, ah, stop buying your debt"
US: The dollar no longer the middle east currency? And you mean, mortgage rates of 12%?, hey- just never mind"
...

well , billy , here you are wrong !

if the bric start using Euro (which i wouldn't even wish in my most painful nightmare ! our politicians stand no chance to be any better than yours ... so the actual problem would be only displaced !)

it would be "probably" the best gift that they could do to you ...

your debts would vanish ...
your product would become competitive ...
you could have any fantasy numbers as Mortgage rate ...

off-course : that is for the outside look ...

as for the inside :
Oil would become a luxury ...

Wall-Street crooks and thieves would have to dig the earth with bare-hands to feed their family (given the fact that wifey wasn't with them for their social statute )

politicians would make campaigns using real horses powered cars ...
(not because they wouldn't afford oil , only not to show too much to electors "damn fools , we're playing you , again!" )

Canada would Erect a wall , like the one in the south ...

julius said...

Baron95,

according to US-sources the
GDP (purchasing power parity) 2008 of China was more than 50% of that of the U.S.

"China" does not care about U.S. wages: if production is cheaper in U.S. they will produce in your country. They don't care about any impacts. But Indians and Chineses are really eager to learn and adopt.

I think you mean: I put some money on the table and I get my return - if not in U.S., then somewhere else - not more, not less.

In 2011 we know more!

Julius

julius said...

fred,

bonjour!

I thought it was just a simple test! And I got my point!!!

I agree with you: Words can be dangerous....

EAC failed - so what? The next one will learn the lessons - maybe in China, Russia, India... The wedge was simply to expensive - there were enough Greebacks on the table!
Should, could, crisis, perhaps ... no excuses please! Is that the only answer in our life?

Julius

fred said...

Julius ...

it is not really the words which are dangerous ...

more the idea behind or the absence of consciousness going with those (bad) words ...!

never heard the term : "LumpenProletariat" ?
(in USA it is "LumpenInvestors")

a group of peoples , a gathering , a nation : even if they shout a non-sens all days long , it cannot become truth ...
they only "simplify" any concept or idea until it bear no more real meaning ...!
then pretend it to be THE truth ...!

julius said...

fred,

Lumpenproletariat

are the poorest of the poorest - in German (Marx a. Engels). They deal with stuff that's good for nothing.

Lumpeninvestors are those creative people who are able to design a wrapping that even the current EAC would be bargain as a top, secure investment at north of $100M?

Words are obviously not dangerous per se, but who says these words, when ... etc. The german history has enough bad examples.
BTW: The U.S.A. also had special experiences with words - even during this century...

Julius

fred said...

Yes , Julius ...

i always thought Fpj was a result of the "atmosphere" it did grow in ...

3B$ ... it is nothing ... for developing such on wonder ...

(only valid if you do not have to pay and on condition it can be finished at some point )

then some come with the idea that they "NEED" a jet ...

when "Wishes" or "Want" is more appropriate ...

funnily enough , it is about the same than wanting a wife with "Big Lungs" ...

it starts by some cuckoos ...
soon everybody "NEED" ...
then 78% of Miami women have silicon transplant ...
leaving the few "naturals" to feel different ...

or when an aberration become a norm !

"Screwee" said...

Back on topic (I think). Has anyone else had the opportunity to read one of the most recent threads on the owner site that relates a narrative of an actual recent icing encounter in an Eclipse? Just reading it sent shivers up and down my spine. That post was followed by others sharing nearly identical scenarios that they had experienced. It was the most poignant example yet of why this airplane should be at the very least limited to day VFR (just my personal opinion). It was even more shocking to read another owner's caution about filing a NASA report on the event, lest the entire fleet risk grounding. This sort of mindset is 180 degrees opposed to the AOPA air safety foundation philosophy of creating a safer general aviation environment. I count my blessings that I lost only my deposit on an Eclipse.

Black Tulip said...

Fred,

"then 78% of Miami women have silicon transplant ..."

A silicone transplant would have much greater utility for both the females and their male friends. Although the second most abundant element on earth, silicon itself is inappropriate for this application.

Orville said...

Screwee,

Are you able to post the 'icing thread' for the benefit of 'non-members'?

julius said...

Screwee,

icing

is there any SB according to which FIKI is enabled for Avio NG 1.3 fpjs?
IIRC some "minor" modifications are necessary for FIKI. FIKI should come with Avio NG 1.5!


Julius

Shane Price said...

Orville, Screwee,

I have a 'gentleman's agreement' with the EOG.

I don't post their discussions here, and they don't post ours over there.

Without advance agreement.

The E5C is a private, members only, forum. This is a public blog, and there is a difference in how people treat both.

An awful lot of what we chatter about has nothing to do with Eclipse. Which is no bad thing, when trying to understand what happened in ABQ, because it sure as hell was not your 'normal' aviation enterprise.

Theirs is a forum for people with a shared experience and (pretty major) concerns about one specific topic.

So, if you want to read E5C, join up by paying their $125 annual fee.

Just don't buy an E500, whatever you do!

Shane

baron95 said...

Screwee said.... another owner's caution about filing a NASA report on the event, lest the entire fleet risk grounding.
------------------------------

Shocking!!!! I guess the owners (at least some) have the same "circle-the-wagons and deny any faults" mentality that Vern displayed in vivid colors.

If you flew in icing conditions in a non-FIKI plane, file a NASA form NOW. If you had operational difficulties because of it, do your best to make sure every other operator can learn and benefit from it.

But that is just me.

baron95 said...

Fred said... then 78% of Miami women have silicon transplant
-------------------

One of your better lines Fred - LOL.

Though I think it is a silicon "implant" not a transplant.

Let me just go on record that I support socialized medicine for that ONE purpose - free boob jobs for all women. Of course, Obama would have to create a task force to determine the exact implant volumes, shapes and mileage that the implants would get.

There you go BEG - that would not be a "bad" job, regardless of the pay, right? Local government breast implant quality inspector. Well except for the ones in Florida, where the average age is 76.

Black Tulip said...

Baron,

Your proposal may be a good one. However, we need to get a feel for its outstanding points and a grasp on its assets.

WhyTech said...

"Obama would have to create a task force to determine the exact implant volumes, shapes and mileage that the implants would get."

I volunteer to be Implant Czar!

baron95 said...

BEG said... DO YOU GET IT- IT'S NOT A QUESTION OF CORPORATE PROFITS. IT'S A QUESTION OF INCOME DISTRIBUTION-
====================

Actually 0 I had not gotten it till now - I didn't know you were trying to make that point - I was on the economic leadership question.

Yes. I do get your concern now. And I do get that you (and many) are apprehensive. It happens in EVERY recession.

Remember how in the late 70s and early 80s Japan was going to take over the world, and all our jobs would go there?

What happened? Japan stagnated and the US boomed.

Now in this recession China sits in for Japan. Oh my god, all our jobs and income will go to China.

It ain't happen BEG. China is coming off a very low base and doing a wonderful and pragmatic job at growing their economy and is the ONLY large economy with higher GDP growth rate than the US. But that is GOOD for the US.

This is the analogy. After WWII Europe/Japan were in shambles and the US was virtually the only functioning western economy.

Ask yourself. Would the US be better off if Europe and Japan continues in perpetual shambles? Or was it better for the US that we helped Europe and Japan rebuild and turn into great trade partners to the US? I can't find anyone that would argue the former would be better.

So same with China and India. Is it better for the US for 1/3 of the world population to be in peasant/poverty, or is it better for them to develop into partners/competitors to the US?

It is not a zero sum game, you know. The world economy has grown each and every year.

Our (US) share of the pie will continue to shrink. But the pie will continue to get bigger.

We used to plant the wheat, make the crust, create the recipe, bake the pie. Now the Chinese bake the pie, but we create multiple flavors, market it in innovative bundles and deliver the pie via the internet. Those jobs are better than tending a pie oven all day.

You can be worried that the oven attendant job moved to China OR you can go into the Internet pie advertising business.

Your choice.

fred said...

OOOPPPs

yeah , sorry ... implants ... transplant would be for brain ... but it remain to be invented ...! ;-)

Baron , no the pie won't keep on growing ...unfortunately !

mother nature is around to teach us that resources are scarce ...

just for the fun of it :

USA in the last decade made an average GNP of some 10 T /year ...

since every of each year of the last decade , USA accumulated debts of all kinds ...

since GNP is the richness and services produced into a said country , regardless if it is in or out of this country ...

IF you accumulated debts of all kinds while making those 10T/year :
what is , then , the REAL NET VALUE ? ;-))

ps : you see the shrinking is not starting ...
it started much before when in need to borrow outside to make it happen inside ...

with the golden palm on the Chinese Deal : borrowing their money to buy their products = Wonderful !!! ;-))

fred said...

but i must admit your Oven example is quite good ...

only one flake in it :

since they have the raw materials and the oven : if they stop producing = you're lost !

the difference :

they are over a billion more than you are ...
they just need to sell on their own market to start the Eco.cycle all over ...

Jim Howard said...

"Cirrus seems to be a magnet for accident prone pilots. Read the NTSB reports - quite an eye opener."

Are you crazy??? Are you trying to imply that someone with $600K of disposable income to spend on an airplane (which gets 10mph btw) is a fool!!!!!!

Jim Howard said...

Shane, is there any way to moderate the long tiresome China v. Europe v. USA v. unions v. standard of living posts? At least the ones with little or no aviation related content?

There is still excellent aviation related content in the comments, but increasingly these useful comments are being drowned out by these long rambling off-topic diatribes.

julius said...

baron95,

You can be worried that the oven attendant job moved to China OR you can go into the Internet pie advertising business.


in Gemany, in Europe we have learnt: we cannot afford the "oven attendant" jobs - in summa they are too expensive! It's cheaper that the persons get better educations and better chances: the yields are bigger for the persons, employers,... more taxes etc.!


Julius

bill e. goat said...

Hi Baron,
These are the things that concern me:
1) Nobody is paying the bills (debt and deficit)
2) Balance of trad
3) Inflationary pressures
4) Socioeconomic mobility (versus stratification)
5) Global competitiveness
6) Income equality (disenfranchisement and crime)
7) Quality of life (clean air and water, parks, roads, etc.)
8) Government services to promote all of the above.

Regrettably, I haven't seen anything in your proposals that address ANY of those- in fact, just the opposite- only short-term viable solutions which erode all of those priorities.

I don't know if you're a dedicated Reaganomics advocate or not, and I believe you do want what is "best" for the country. I would urge you to consider what policies would best promote the objectives listed above.

And I'm intersted in what your financial objectives for the country are- the real underlying objectives. So far all I've discerned is:

1) Maximizing corporate profits.

Nothing else.

??

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

"Are you trying to imply that someone with $600K of disposable income to spend on an airplane (which gets 10mph btw) is a fool!!!!!!"

Did I use the "F" word? Read the NTSB reports and you decide.

BTW, I think that the assembled multitude on this blog concluded recently that one could spend $2mm on an airplane and be a fool, so, maybe. ;-)

WhyTech said...

"is there any way to moderate the long tiresome China v. Europe v. USA v. unions v. standard of living posts?"

Jim, instead of mostly lurking, contribute some more aviation content instead of leaving it to a small group of "regulars."

I personally dont mind a reasonable amount of OT material while we await some substantive EAC developments. There are some great thinkers here (not me) and I have learned quite a bit beyond aviation. Partly for this reason, this is the one of only two forums/blogs in which I participate. Would be nice if the software permitted multiple threads as part of a single blog/forum (along with easy edit and spell checking) similar to the PPRUNE forum. Then folks could tune in to only the threads of interest to them. If this blog survives, perhaps it could move to PPRUNE.

fred said...

Jim

i am sorry not to be more an expert into aviation things ...

but , contrary to your post, some diatribes here are much related with the Fiasco (or nightmare as you wish) called EAC ...

if it would have been done in any other part of world (with some exceptions like U.K.) the first thing that would have asked from Vern and mignon would have some prospectives and market analyzes ...

then the bankers would have laughed their heads off ...

(i agree on other parts of body ... since i have got a stock of Silicon Transplants ! ;-) )

the plot would have been finished within the next 10 minutes ...

most victims wouldn't have lost their deposits ...

which is actually the "Market Distortion" i was talking about ...

when Money seems to be free (it was since inflation was higher than rate) anything can happen ...

With EAC the theory has confirmed itself for the worst !!

fred said...

Whytech :

you would be amazed by the amount of total fool i have met with all fortunes expressed in tens of millions if not hundreds ...

just for the fun , i give you one (not personally met and absolutely no wishes to ...)

Paris Hilton !

rich and with an IQ level that seems to be invented as a negative value , just for her ...! ;-)

WhyTech said...

BEG said:

"4) Socioeconomic mobility (versus stratification)"

Hard to imagine a country where there is more potential mobility. Very few if any barriers to enterprising, hard working people. No class system, no govt dominated hirerechy, no military dominated hiererchy, etc. Yes, it takes some effort to move up, but a kid from the slums of D'troit can be the next Bill Gates. I dont know of more mobility in any other part of the world. If anything, this kind of mobility has increased in our society over the last 2-3 decades.

5) Global competitiveness

This is a potential concern in some markets, but in the highest value added markets, we seem to be mostly in first place and holding on to this position, or, improving our position in some markets. Can we be competitive in most product/market segments? Probably not. Do we need to be? Probably not.

6) Income equality
(disenfranchisement and crime)

Not exactly sure what you mean by this - I assume the extreme range in incomes from low to high. This does create social issues, however, anyone who doesnt like his current income can chose to do what it takes to qualify to earn a higher income. Redistribution of wealth is not the answer. This has already gone to extremes. Just take a look at some of the IRS data on where tax dollars are coming from. The highest income taxpayers are already paying a hugely disproportionate share of alll tax dollars collected ( from individuals). Part of the answer here is to stop making so many poor people - a concept loaded with controversy and conflict.

7) Quality of life (clean air and water, parks, roads, etc.)

These issues seem to be moving to the foreground and I believe will be constructively addressed.

8) Government services to promote all of the above.

Government services is an oxymoron in the US so far. The waste, fraud , and lack od service in most govt run entities is shocking. Ideally we can fix these problems. A more realistic solution is to have the private sector perform more of these services, and to do some hard nosed zero based budgeting to greatly reduce the level of services our govt(s) is attempting to provide.

fred said...

Billy :

yes , you are right !

Only short-term ; if not enough shorter-term ...

one of the thing that most seems to forget :

in a capitalistic system , what is the most important notion ?

A: Richness Creation !

when you make too many deficits of all sorts = where is this Creation ???

it might be compensated by inflation of monetary masses which create the illusion ...

but it never last very long !

that is the story of the Jobless borrowing a million $ ...

he can live very well on this money ...
he can decide to have a simple life and earn the fruits of this money ...

or spend it like tomorrow will never exist with cars , alcohol , girls , jets , etc ...

when the million will have evaporate , this poor s.o.b. will be twice deeper in the shit :

he will have to make a living AND reimburse the million !

short-term is good ONLY for short-term ...

the only other way out is the "Sun Follower strategy" ( a saying in High-Finances-World = "where is the best place for a financier ? A: where the sun shine for money !")

with the demonstrated love for their respective countries , does readers want to be taken for "bag-holders" again ?

(like in EAC , the ones professing the most interest are the ones staying in the shamble , now ... while Vern is enjoying fishing in a quiet spot !)

airtaximan said...

"It was even more shocking to read another owner's caution about filing a NASA report on the event, lest the entire fleet risk grounding"

from the very beginning, the DNA of EAC was completely in line with the above comment - the BIGGEST reason to never do business with them.

WhyTech said...

"or spend it like tomorrow will never exist with cars , alcohol , girls , jets , etc ..."

If only I had figured this out at an early age!

baron95 said...

Present for you BEG....

The CEO of Tesla Motors said Monday that the material cost of the electric car company's Roadster sports car has dropped to about $80,000, which should help the company reach profitability next month.

Elon Musk said in a blog post on Tesla's Web site that the material cost, which is the total cost of the parts and components that make up each vehicle, was as high as $140,000 in the summer of 2007.

Musk said a key step toward lowering the costs was moving production of the vehicle's battery packs from a factory in Asia to the San Carlos, Calif.-based company's home state.

"This may sound counterintuitive, but our unit cost actually went down and quality improved as we went to a more automated system and could iterate quickly with engineering to find design efficiencies , " Musk said.

baron95 said...

And that was in California - the highest tax/energy state and the most regulated environment in the US.

Cool, huh?

Dave said...

There is still excellent aviation related content in the comments, but increasingly these useful comments are being drowned out by these long rambling off-topic diatribes.

These things tend to self-correct. When something with Eclipse happens, the talk will be about Eclipse.

baron95 said...

Jim Howard - I'll self moderate. Point well taken.

Here is the connection...

Eclipse, with the massive infusion of funding, and all the advantages and disadvantages that came with it, could ONLY happen in America. You can argue that it was a failure, but it got farther then all the incrementalist approaches like Adam and Grob and the like.

Current GA/BizAv VLJs are only produced in America.

BizAv/GA Light Jets are only produced in the US and Brazil (with all the Phenoms to-date only delivered to the US).

VLJ/LJ engines are primarily only designed/made in North America.

VLJ/LJ avionics are primarily only designed/made in the North America.

Yet, BEG is very worried about foreigners.

While, me, I'm worried about the destruction of BizAv that our OWN elected American politicians created with demonizing GA/BizAv.

See?

It is usually the snake that you don't see or that you think is friendly that gets you. It is never the two headed dragon (be it Japan in the 80s or China in the 00s) that you are looking at.

WhyTech said...

"I'll self moderate."

Baron,

Dont take this too far. When you are on your medication, your posts are superb!

Shane Price said...

I'm nearly finished guys (and gals) so I persuaded our 'blog satirist' to produce a special, just for me.

Being a nice guy, he's allowed me to share it with you....

Enjoy 'my' penultimate headline post, number 106 since I started back on the 16th of February 2008.

But fear not, friends. Another has agreed (silly blogger) to take up the challenge!

All will be revealed at the end of the month.

In the meantime, laugh (or cry) as Black Tulip magically moves us ten years into the future, as only he can...

Shane
PS. That means there's a NEW HEADLINE POST UP in case you're in any doubt...

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