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Vern Raburn: Never Saw It Coming?

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The axe fell swiftly and hard on Monday as Eclipse's voluble CEO, Vern Raburn, was shown the door by the company's board of directors. Despite the fact that Eclipse's arc has been defined by one stumble and delay after another as the company burned through hundreds of millions in funding, Raburn seems to have been genuinely surprised by this sudden turn of events.

In a letter to Eclipse owners and position holders on Monday, Raburn said "As you can imagine, this development came as quite a surprise to me and it saddens me more than I can tell you to have to leave Eclipse." As of late Monday, it still wasn't clear to us how complete Raburn's divorce from Eclipse really is, since the company says he will retain duties in international marketing.

Whatever. Could he actually be that na´ve, not to have seen this coming? Or could the company's billowing and relentless promotion mask the fact that along with producing a sexy little light jet, it had also burned a giant hole in its own credibility. Evidently, as of this week, investors in the company--who have reportedly invested more than a billion dollars--had had enough. Raburn's departure was linked directly to the next round of funding. Evidently, it was either Vern or the money and we know what won.

So now what? Eclipse's financials are an unknown, but the picture is probably not very pretty. Following its announcement in May that it would raise the Eclipse 500's base price to $2.15 million, a significant number of position holders asked for their deposits back. When Eclipse failed to do this in a timely way, it raised the ire of a few. New acting CEO Roel Pieper promised those customers on Monday that this will get tended to as soon as possible.

Eclipse still has an uncertain future, in our view. The vast air taxi market that its economics were based on remains unrealized. It has been delivering what are essentially incomplete airplanes, without moving maps, without GPS, without FMS and without known icing. As all those approvals finally come together, Eclipse will have a long IOU list to tend to at a time when it will really need to ramp up production to generate revenue. And even when the much vaunted Avio system comes together with a kick start from Garmin 400s, it will be well behind the state of the art in small aircraft EFIS.

From the outside looking in, what we think Eclipse most needs is management that can drive down the center lane without being distracted by building grand promotional palaces at Oshkosh and other shows or by constructing certification and delivery schedules unattached to the realities of building airplanes.

And it will need leadership that knows how to devise practical specs for airplanes and avionics and freeze them early enough for its engineers to actually develop and build them. Some owners we've talked to say that Eclipse's biggest mistake was trying to build too much sophistication into an airplane that didn't really need it.

You can complain about vendors missing their due dates or not having the developmental savvy to pull off a modern integrated airplane, but in the end, it's really all the fault of the guy at the top.

Comments (14)

Vern did a lot of things right, but the bravado and showmanship that got the eclipse off the ground isn't the kind of personality that handles the infinitesimal little details of getting an aiplane certified and into production. Vern reminds me of Jim Bede in the 60s and 70s or maybe even Bill Lear men with incredible vision and drive who leave the details to the little people. But then sometimes there are just not enough little people to sweep up after the parade of their leaders.

All that said, I for one am happy that this personality type still exists because aviation would be incredibly boring without them. Just hang on to your wallets

Posted by: Jack Wybenga | July 29, 2008 4:07 PM    Report this comment

The original idea was a jet for under $1m. Then it was $1m in 1927 dollars, now it's $2.15m. A naive believer myself at first, I was brushing off the critics. If Raburn had been honest and truthful about it's pricing, performance, avionics and delivery plans, Eclipse would never have made it off the ground. A comparison with Lear seems flattering, perhaps Freddy Laker is more appropriate. Still, Eclipse's failure to open a new market constitutes, after Thielert, the 2nd big loss for GA in a short time.

Posted by: Peter De Ceulaer | July 30, 2008 3:33 AM    Report this comment

P de C: a comparison with Freddie Laker would be no less flattering than with Bill Lear. Both men had a product, both speculated on the market and underestimated the costs of their venture. I bought Freddie Laker's product - I could not have crossed the Atlantic any other way. You might not realise how alike are Laker Airways and Ryanair - except for (1) the massive weight and malign influence of the British national flag carrier in Laker's day and (2) the old fashioned service that Laker's staff still offered.

Posted by: R L S Butler | July 30, 2008 6:06 AM    Report this comment

Arrogance personified. Not that there's anything wrong with that. Except, of course, if you can't get the job done. Vern, sayonara.

Posted by: Mark Medvetz | July 30, 2008 6:07 AM    Report this comment

Arrogance personified. Not that there's anything wrong with that. Except, of course, if you can't get the job done. Vern, sayonara.

Posted by: Mark Medvetz | July 30, 2008 6:07 AM    Report this comment

Paul, I think your comment on "...drive down the center lane without being distracted..." is on point. Why the Eclipse 400 ads? I could see if this technology (and its economics, delivery,etc) was proven and then tweaked into different configurations (in some ways ala Mooney) but not this. Of course, the skeptic in me says they knew probably for quite some time around the $2M+ price tag and wanted to address the "lower end". By the way, wasn't the "lower end" the whole point of the company?

That said, I would still like to see the company succeed (and I think many in aviation do as well).

Posted by: Ben Rosenberg | July 30, 2008 8:11 AM    Report this comment

My prediction: Eclipse is up for take-over or for sale... Why??? Look at the track record of the new CEO... in the high-tech world he has a record of coming in and merging/selling the companies he took over.

Posted by: EDWARD LEGAULT | July 30, 2008 11:04 AM    Report this comment

In my view - Vern Raburn's primary contribution was getting the market and financial world to believe in the VLJ type on jet. Yes other had concieved it before Raburn but none articulated and sold it to these on such a mass scale.

Then his contribution was in being an excellent fund raiser - who else in aviation has raised $700 Mil +?

So in my opinion the Eclipse decision makers should have have recognized his fund raising role a full time job and have a good management team below him to oprate the production & delkivery of airplanes - why ask him to do both jobs - each a full time pre-occupation?

Thereby follow 2 questions - 1 Is it just his fall or is it also a fall of the decision makers who forged their production management organization?

2 How does removinjg him from his role help if the management of the production & delivery system remains the same?

Time will tell, if he alone bears the responsibility.

Posted by: Unknown | July 30, 2008 11:16 AM    Report this comment

Well, I think Raytheon ought to make a run for Eclipse. Piper has their VLJ as well as Cessna, Cirrus and Diamond. The E500 would fit perfectly under the Premier. They should jerk out the Avio system and certify it with the G1000, which they have experience with. The Eclipse is a great airplane, the problem is getting the bugs out and into steady production.

Posted by: Lee Burk | July 30, 2008 11:20 AM    Report this comment

Let's see--- A billion hear a billion there, eventually it adds up to real money. For a billion you could buy 333 mustangs or 465 eclipses and give them away. OK enough sarcasm. Got to hand it to Raburn very few people have gotten so far on promises repeatedly broken. Is it his fault - partly- but even the shrewdest businesspeople woefully underestimate the cost of a startup aircraft manufacturer. I can't realistically see eclipse surviving given that they still don't have a completed product ready for prime time. When Cessna announced the mustang it took about 18 months from first flight to full certification, including FIKI as well as full navigation suite that Eclipse is still "working on". I love the dreamers of the world and Eclipse is one of them. But perhaps the forced everyone else to the VLJ game -- only to never really compete on there own.

Posted by: MARK MITCHELL | July 30, 2008 1:03 PM    Report this comment

I agree with the notion that Raytheon should make a run for Eclipse. I also agree with yanking out the over-hyped, buggy, and just plain stupid Avio and get something that's already certified and working in there (be it Garmin or the new King setup). As a guy in the Computer Industry, it pains me to see bad software pushed out the door, and that's what the Avio system is...BAD! Sorry Rayburn had to lose his job over this, but sometimes change is a very good thing.

Posted by: R. Doe | July 30, 2008 1:20 PM    Report this comment

I agree with the notion that Raytheon should make a run for Eclipse. I also agree with yanking out the over-hyped, buggy, and just plain stupid Avio and get something that's already certified and working in there (be it Garmin or the new King setup). As a guy in the Computer Industry, it pains me to see bad software pushed out the door, and that's what the Avio system is...BAD! Sorry Rayburn had to lose his job over this, but sometimes change is a very good thing.

Posted by: R. Doe | July 30, 2008 1:20 PM    Report this comment

Rayburn's worst sin was trying to convince the world that a $800,000 was possible through negotiating with suppliers and "stir welding". It is now priced correctly(2 million plus) and five years late. But his unrealistic claims made other planes like the Jet aerostar unmarketable.

Posted by: todd stuart | August 8, 2008 5:53 PM    Report this comment

Vern was selling economies of scale that no aircraft manufacturer has ever realized. A logical concept, but suppliers need to be capable. It is tough to find a supplier willing to admit they are not up to the task, considering the carrot in front of them.

Vern thought he could change the culture of manufacturing in the aircraft business, and hit the ground running.

Even Cessna these days is using hole matched tooling, so aircraft manufacturing is evolving. This evolution just didn't happen fast enough to fullfill Vern's vision.

Posted by: Jack Wybenga | August 12, 2008 3:25 PM    Report this comment

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