Eclipse - the beginning of the end?

TMetzinger

TMetzinger

Final Approach
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Tim
Just got an e-mail from Avweb:

Albuquerque television station KOB is reporting that Eclipse Aviation failed to meet its payroll for the first two weeks of this month and that at least some employees have "emptied their desks and left." Eclipse public relations manager Alana McCarraher did not immediately respond to two voicemails and an email request for comment from AVweb. The station quotes unnamed Eclipse employees as saying the workers were called to a meeting early this morning and told they would not be receiving paychecks for the previous two weeks. It said employees "expressed anger, frustration and uncertainty before speeding out of the facility's parking lot." Today's events would appear to be the culmination of a what has amounted to a media death watch over the company in the past two weeks.
It was widely reported that Eclipse abruptly cancelled its appearance AOPA Expo last week and there has been speculation on the various blogs that monitor the company that the end was near. The company has publicly stated that it needs $200 to $300 million in capital to continue operating and that it was hopeful the money would be in place before the end of the year. There has been no announcement so far on the company's immediate plans.
 
Wow. The company won't be around to see the results of the revolution it started. I wonder if another company will snatch up the operation. I'm willing to bet someone will find it attractive, even with the dodgy market for financing. China, perhaps??

Maybe they shouldn't have been sinking money into that personal jet. Probably could have used it to fix problems with the first one.
 
flyersfan31 said:
Maybe they shouldn't have been sinking money into that personal jet. Probably could have used it to fix problems with the first one.
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The development cost of the 400 is a drop in the bucket. Their problems are far deeper, in that the production delays have jacked up costs to the point where they lose money on the legacy orders.
 
With todays economy I would say this is just the start of things to come. If the big 3 automakers are having trouble, you know aircraft companies are right behind them, if not leading the way.
 
I would be willing to bet that somebody will buy the company and actually turn things around. I just read an article that showed that businesses have not slowed down the use of jets even though the economy is in a great slowdown or depression.

Only time will tell how things transpire for Eclipse. I hate to see this happen but I knew there would be problems when the cost of the jet skyrocketed. Even very successfully run companies are crashing and burning right now. In the future I see micro manufacturing in this industry as being the only ones that survive in these trying times and very stable large companies that have substantial backing. Eclipse main issue is that they are new and nobody wants to continue to dump money into them after the recent performance.
 
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That's really rotten they stiffed their employees out of two weeks pay. Inexcusable.


Trapper John
 
I'm sure someone will be able to answer this...

It seems to me as an uneducated outsider that the majority of these failed 'revolutionary' manufacturing companies are getting caught promising things that they can't follow through on. It sounds to me like the marketing folks are basically running loose making promises that can viably be filled. If the marketing folks would actually talk to the production managers/industrial engineers that have to deliver what the sales people promise, they probably wouldn't be able to make the extreme promises that they are making now, but they might be able to actually follow through with 'lesser' products. Even if it's not as whiz-bang as it could be, something is better than nothing!

If it comes down to the point that the product that CAN be produced isn't marketable, then so be it. At that point, you go in and improve production systems or you abandon the market. Either way, you're not killing the industry by making promises that can't be kept.
 
webdaddy said:
I would be willing to bet that somebody will buy the company and actually turn things around. I just read an article that showed that businesses have not slowed down the use of jets even though the economy is in a great slowdown or depression.
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It would be nice if that was true but it's not. The business jet industry is sensitive to the economy in general and is in a slowdown as well. Both Hawker-Beechcraft and Cessna have announced layoffs because of a softening in their new aircraft orders. The inventory of older aircraft for sale is up and charter traffic is down.

From http://www.ainonline.com/news/single-news-page/article/ubs-business-jet-activity-continues-to-fall/

AIN online said:
UBS Investment Research’s business jet report–released yesterday–shows that business jet flight activity was 13 percent lower last month compared with the same period last year, although the data was slightly better than the 18-percent year-over-year decline in August. Year-to-date, flight activity is down 9 percent.
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Personally, I think anyone who tries to purchase the company is out of their mind. The airplane was impractical for use as an air taxi and there aren't that many people who want to pay the price to step up from a piston twin, especially in this market.
 
CJones said:
I'm sure someone will be able to answer this...

It sounds to me like the marketing folks are basically running loose making promises that can viably be filled. If the marketing folks would actually talk to the production managers/industrial engineers that have to deliver what the sales people promise, they probably wouldn't be able to make the extreme promises that they are making now, but they might be able to actually follow through with 'lesser' products. Even if it's not as whiz-bang as it could be, something is better than nothing!
If it comes down to the point that the product that CAN be produced isn't marketable, then so be it. At that point, you go in and improve production systems or you abandon the market. Either way, you're not killing the industry by making promises that can't be kept.
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When I began working in research and development as a young electrical engineer 30-years ago, I asked my boss who I could discuss the project with. His response, "Anyone but Marketing. They will sell it before we finish it. Then management will be on us to hurry up and get it out the door."
[As an aside, he next told me, "Marketing's counter arguement is that engineers are never finished."]
 
Interesting to speculate, though: if someone (some well capitalized one) were to pick up the company for a song (a likely occurrence), the ability to sell the jet for a price which did not have to include the amortized development costs could make it viable again. This would be most likely to work if the acquiring entity were a well-established company in the industry, one with good engineering and design staff able to get over the remaining humps in design and acceptance.
 
We in the subdivision development business used to say the first developer of a master planned community never makes money; it's the second or third owner after it's written down. Not the same business, but some of the same principles could apply.

Would be one heck of a poor economy to be trying to sell that into; as has been said, limited commercial/corporate use.

Best,

Dave
 
Ken Ibold said:
The development cost of the 400 is a drop in the bucket. Their problems are far deeper, in that the production delays have jacked up costs to the point where they lose money on the legacy orders.
Click to expand...

Local watermelon vendors solved a similar problem with a bigger truck.
 
SCCutler said:
Interesting to speculate, though: if someone (some well capitalized one) were to pick up the company for a song (a likely occurrence), the ability to sell the jet for a price which did not have to include the amortized development costs could make it viable again. This would be most likely to work if the acquiring entity were a well-established company in the industry, one with good engineering and design staff able to get over the remaining humps in design and acceptance.
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Precisely. That's why I think we will see Eclipse 2.0. Buy the assets for a song and you've got a pretty good chance.

There's still a lot of development to go though. Aren't the avionics still a work in progress? Everytime I pass the Eclipse on our field I chuckle about the 496 on the yoke.

I think the personal jet market is there. Plenty of folks jumping in, either from the big piston twins or the guys flying PC12 and TBM750/800s. What'll be interesting is how the market bifurcation between the sub 25kft crowd (Diamond and Cirrus) and the upper FL crowd (Eclipse, Cessna, Embraer, Piper) will play out.
 
flyersfan31 said:
There's still a lot of development to go though. Aren't the avionics still a work in progress? Everytime I pass the Eclipse on our field I chuckle about the 496 on the yoke.
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In the end, I suspect that Cessna will be proven right when they said an airplane like the Eclipse needs to sell for about 2.5 million.

There's another big issue here. The Eclipse POH requires that all maintenance be done by Eclipse themselves, no exceptions AFaIK. If the company closes their doors, the plane's will not only be orphaned, they'll be grounded the first time maintenance is required.
 
I wonder how ole Vern is sitting right now for his own financial security?
 
lancefisher said:
In the end, I suspect that Cessna will be proven right when they said an airplane like the Eclipse needs to sell for about 2.5 million.

There's another big issue here. The Eclipse POH requires that all maintenance be done by Eclipse themselves, no exceptions AFaIK. If the company closes their doors, the plane's will not only be orphaned, they'll be grounded the first time maintenance is required.
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Lance, I did not know that. That fact alone ensures that some sharp someone will acquire the entity, if only for the purpose of milking that cow dry.
 
SCCutler said:
Lance, I did not know that. That fact alone ensures that some sharp someone will acquire the entity, if only for the purpose of milking that cow dry.
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When the Starship was a bust, Beech reacquired the few that were actually flying and discontinued support. I think an Eclipse acquiror would of necessity need to increase the fleet size to make parts/service ops a profitable business.
 
Not only maintenance, but the Eclipse POH also says that pilot training needs to be done by Eclipse, no exceptions. So, someone will need to come in and take over or there will be a bunch of airplanes sitting around without any way to qualify pilots to fly them.
 
SCCutler said:
Lance, I did not know that. That fact alone ensures that some sharp someone will acquire the entity, if only for the purpose of milking that cow dry.
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Unless that's a limitation on the type certificate, I'm not sure it's legal. We'll see. Certainly you'd take your plane under warranty back to the manufacturer. Once out of warranty, you take it where it'll get fixed in a cost-effective manner.

PARTS, on the other hand, can be a very big deal, as Eclipse may well be the only approved source for parts.
 
TMetzinger said:
Unless that's a limitation on the type certificate, I'm not sure it's legal. We'll see. Certainly you'd take your plane under warranty back to the manufacturer. Once out of warranty, you take it where it'll get fixed in a cost-effective manner.

PARTS, on the other hand, can be a very big deal, as Eclipse may well be the only approved source for parts.
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I'm not certain how it's worded but it's my understanding that to retain airworthiness the maintenance has to be done by Eclipse. Vern Raburn supposedly had this written into the certification data with the idea that this would somehow improve safety.
 
Some other issues one flying one raised:

Transponder would change codes.
On occasion, evert frequency on the
panel would change,
Bogus alerts on the CAS (Crew Alerting System)
No Anti-Skid, no Spoilers, no Reverse, and a high idle speed. Which means
you'll roll forever without BRAKES (I said BRAKES!) Gotta be careful with
'em because the tires are tender, average is less than 100 landings (at $1200
each.
No computational capability whatsoever (No FMS). No fuel remaining at
destination or any waypoint.
No flight planning capability. No "direct"
clearances, except to a VOR. No tracking on autopilot, ever.

No boots, no windshield heat, no FIKI (Flight Into Known Icing). This is far
more critical on a jet. And you'd better not do it, because the FAA WILL
violate you for it.

No auto-tune on anything, all frequencies MANUALLY set.

All ILS approachs MUST be hand-flown, using raw data.

DSU records EVERTHING, literally thousands of
parameters, all the time. It is such an integral part of the airplane and it
cannot be turned off. It's wonderful for troubleshooting. But what about
the FAA? Nothing to keep them from going fishing.

Best,

Dave
 
Eclipse put out a statement yesterday at 5 pm eastern that the company expects everyone to be at work on Monday and that they would meet payroll "no later than Tuesday." They also said they told employees that on Thursday when the issue arose, but a lot of workers got angry and stormed out. They said no one was laid off (I presume this to mean on Thursday or Friday.)

I'm not drawing any conclusions one way or the other. Just reporting the company's statement.
 
I'd hate to see Eclipse fail, looks like a great plane that would have filled a business niche. When dayjet folded that must have hurt them.
 
petemac said:
I'd hate to see Eclipse fail, looks like a great plane that would have filled a business niche. When dayjet folded that must have hurt them.
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IF it worked as advertised and IF the company could make money on it at $1.3 million, we wouldn't be having this discussion. Unfortunately, the company is losing money on the early contracts and doesn't have the cash to get to the later, profitable ones, the airplane doesn't work as promised, and at the new price it's competing with more capable machines.

That said, it's a fun little airplane to fly. Pretty fast given the fuel burn, really quiet, handles great. I hope someone, someday, irons out the bugs in the airplane and makes it supportable over the long haul.
 
CJones said:
It seems to me as an uneducated outsider that the majority of these failed 'revolutionary' manufacturing companies are getting caught promising things that they can't follow through on.
Click to expand...

Dave Siciliano said:
We in the subdivision development business used to say the first developer of a master planned community never makes money; it's the second or third owner after it's written down. Not the same business, but some of the same principles could apply.
Click to expand...

There's an old saying: "Pioneers are the ones with arrows in their backs".

There is truth to that statement....
 
No boots? I didn't realize it was that far off from being a viable fast airplane....
 
Here's a link to the TCDS.... Link

For training, it appears that any FAA approved program will do, unless the FAA approved AFM says otherwise (which would then be an apparent conflict with the TCDS).

As for maintenance, there is a callout for a specific maintenance manual - the question is whether Eclipse makes that available.... and more to the point, how is maintenance done if a failure occurs at an airport where Eclipse is not present? Seems to me that's an unreasonable limitation....

Parts is a whole nother animal.
 
wsuffa said:
Here's a link to the TCDS.... Link

For training, it appears that any FAA approved program will do, unless the FAA approved AFM says otherwise (which would then be an apparent conflict with the TCDS).

As for maintenance, there is a callout for a specific maintenance manual - the question is whether Eclipse makes that available.... and more to the point, how is maintenance done if a failure occurs at an airport where Eclipse is not present? Seems to me that's an unreasonable limitation....

Parts is a whole nother animal.
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That opens up a question or two...

If the company is defunct and one source has the manual, is it still copyright protected if there is no one to file a claim for copyright infringement? Could the one source simply make that copy available to others for duplication costs?

Then, what if you have an otherwise airworthy aircraft and it requires a part no longer manufactured? Can you seek out a machine shop to do the work and have it inspected by the FAA for compliance with a 337? Or, is there a way to bypass that procedure and remain in compliance with an airworthy aircraft?
 
wsuffa said:
Here's a link to the TCDS.... Link

For training, it appears that any FAA approved program will do, unless the FAA approved AFM says otherwise (which would then be an apparent conflict with the TCDS).

As for maintenance, there is a callout for a specific maintenance manual - the question is whether Eclipse makes that available.... and more to the point, how is maintenance done if a failure occurs at an airport where Eclipse is not present? Seems to me that's an unreasonable limitation....

Parts is a whole nother animal.
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Looking at the TCDS I have a couple questions:

What's with the first three lines in the engine limits table(3 identical limits except the time) and why would there be a 10 minute limit on approach power?

Engine Limits
................N1. N2. MAX ITT Time Limit
Max Take-off... 102 100 795 5 minutes
Max. Continuous 102 100 795 Continuous
APR............ 102 100 795 10 minutes

Transient...... 103 102 850 20 seconds
Also in the CG range charts the allowable range is less at the max ramp weight than it is at the max takeoff weight. Why would that be?
 
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lancefisher said:
why would there be a 10 minute limit on approach power?
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APR doesn't stand for "approach", it stands for "automatic performance reserve". Depending on the airplane, the system is armed for takeoff and it will activate if the engine computers see a certain amount of split in the engines (as in an engine failure). The APR system will then provide an increase in power above normal takeoff power. But because the engine(s) are operating at higher temperatures and RPM there is a time limit for use.
 
Everskyward said:
APR doesn't stand for "approach", it stands for "automatic performance reserve". Depending on the airplane, the system is armed for takeoff and it will activate if the engine computers see a certain amount of split in the engines (as in an engine failure). The APR system will then provide an increase in power above normal takeoff power. But because the engine(s) are operating at higher temperatures and RPM there is a time limit for use.
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Ah, that makes sense now. But what about the first three lines having what appears to be the same RPM and temp limits but different times?
 
Sadly, this is not the beginning of the end. It's the End of the End.

I know Ken I is kinda fond of Vern, but I am not. I got to speak to him for about 30 seconds way back when I had a position (Bank of Bahrain refinance). He was condescending. I got out.
 
In other airplanes, the seemingly inconsistent list of numbers is accompanied by footnotes that clarify the logic. For example, some of the PT-6 numbers in King Airs show similar numbers, but the notes explain that the max continuous number is for single engine ops, etc.

lancefisher said:
Ah, that makes sense now. But what about the first three lines having what appears to be the same RPM and temp limits but different times?
Click to expand...
 
Everskyward said:
It would be nice if that was true but it's not. The business jet industry is sensitive to the economy in general and is in a slowdown as well. Both Hawker-Beechcraft and Cessna have announced layoffs because of a softening in their new aircraft orders. The inventory of older aircraft for sale is up and charter traffic is down.

From http://www.ainonline.com/news/single-news-page/article/ubs-business-jet-activity-continues-to-fall/


Personally, I think anyone who tries to purchase the company is out of their mind. The airplane was impractical for use as an air taxi and there aren't that many people who want to pay the price to step up from a piston twin, especially in this market.
Click to expand...

This appears to be an issue with the media reporting incorrectly. I should check out aviation specific sources next time. Sorry to have made some possibly incorrect statements.... :mad2:

It's all speculation. I agree with the statement that with development its usually the 2nd or 3rd person that makes money and the original developer usually loses money. That has been the case in alot of the condo real estate market that I have been researching.
 
It could be worse for Eclipse owners. They could own an Adam 500 too. :blush:
 
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