Eclipse Jet: The Real Story

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Even as Boeing parked its cutting-edge Dreamliner in ConocoPhillips Plaza last week, it is fashionable to decry the lack of innovation in aviation. Same old engines, same old airframes, same old high prices, same tired comparisons to the automotive industry. It's almost as if innovation itself is the product, not airplanes that are actually useful and can justify their stratospheric prices.

But the proof that innovation of itself is not enough lies in the spectacular failure of Eclipse Aviation, a company that burst upon the scene a decade ago, brashly promising to remake transportation and to rewrite the rules of aircraft manufacturing. It did neither, although it did relieve investors of more than a billion dollars in capital. What went wrong? To answer that in detail, you need an insider's view and that's what Dennis Maxwell's new book, The Great Eclipse, manages to do in what is an excellent case study of how not to run a business. Maxwell was involved early on with Eclipse founder Vern Raburn as a marketing consultant even before the company had its name. (It was originally called Pronto.)

Most of us understand the global view of Eclipse's failure. Its business assumptions were fundamentally flawed. As Maxwell explains in his book, the company based its cost structure on an automotive model of high volume and reduced man hours per unit. This, unfortunately, placed Eclipse in a race against time to ramp up production rapidly enough to meet low cost projections while simultaneously delivering finished airplanes to generate revenue. Although Eclipse was, at the end, at a 20-per-month production rate, the curves were never going to merge. The airplanes simply cost too much to build and sold for too little money. (One owner told us Eclipse bankruptcy data showed that his airplane cost more than $2 million to build, but he paid only about $1 million for it.)

Maxwell fills in many of the blanks that we, as journalists, were never able to color in. For example, we assumed that Eclipse was lavishly funded with money from the booming tech sector and it was. But the company constantly struggled to find the next round of financing and was especially hard hit after the 911 attacks. Moreover, it had poor internal cost control and budgeting and burned through money faster than it could be replenished. In an interview at AirVenture Maxwell told me that Eclipse's marketing and promotion tended toward the "high, wide and handsome," as evidenced by the TajMahal years, when Eclipse's vast white tent dominated the grounds at AirVenture.

But behind the scenes, the company was slowly unraveling, falling short on three parallel challenges that the likes of a Cessna or Beech would never take on simultaneously: a new airframe and manufacturing method, a new engine and vastly complex avionics and integration. The book explains that the innovative friction stir welding process, which would save more than 7000 riveting operations, was actually an impressive success. But Eclipse never managed to leverage into the whole to capitalize on the intended efficiencies. The dismal failure of the Williams EJ22 further stunted Eclipse's progress, delaying initial deliveries by at least two years, costing millions in additional work. Design engineer Oliver Masefield said as much as 85 percent of the Eclipse had to be redesigned to accommodate new, more powerful engines from Pratt & Whitney.

Vern Raburn's public dressing down of Williams and later Avidyne and other vnedors for delays in delivering promised components marked a turning point in how the company was perceived from the outside. It began with a forward-looking and friendly public and press relations persona. The company talked the talk of a winner. But by 2006, it practically had a Nixon's enemy list. Raburn forbade the staff from talking to anyone from Flying magazine for some perceived slight in a column then-editor J. Mac McClellan wrote. This reached the utterly absurd at one AirVenture when the company's press staff refused to let AVweb's Mary Grady cover an Eclipse announcement because we weren't on the company's "approved" list. Ms. Grady happened to be also freelancing for Robb Report, so when she flipped her press badge around, she was magically transformed and allowed to cover the event. This passed for logic in the schizophrenic world of Eclipse.

Another interesting nugget Maxwell reveals is the background of Raburn's show-stealing revelation of the single-engine Eclipse 400 at the 2007 AirVenture, at a time when the company was known to be struggling. I remember thinking—and asking—how the hell did the board ever let him do that project? The answer Maxwell reveals is that it didn't. In fact, the board expressly forbade the project, but Raburn did it anyway. A year later, Raburn was publically sacked during AirVenture and new management attempted to salvage the company, without success.

What surprised me most about this book was Maxwell's even-handed treatment of Raburn. On the one hand, he is described as an overbearing micro-manager with a volcanic temper. At one meeting, he flashed a slide of Eclipse managers, describing how each had damaged the company. Two of those managers were in the room at the time. On the other hand, Raburn deserves credit for actually doing what others just talked about. Raburn was a brilliant salesman and promoter of his small jet idea, understood the enormous amount of capital required and raised it. There's no question that what he attempted to do, had it succeeded, would have marked a significant and innovative contribution to aviation.

But transformational? Maxwell's not so sure and neither am I. Eclipse had a part in the glass cockpit revolution for light aircraft, but that would have happened anyway. And Eclipse certainly deserves credit for popularizing the light jet concept, but it's uncertain if even that idea has legs. While it's true that Cessna and Embraer are doing well with their lightest jets, the Mustang and Phenom 100, and Piper and Diamond are in the wings with theirs, those airframes aren't as advanced or integrated as the Eclipse was intended to be. If they get there someday, Eclipse will have pioneered the concept.

Now that new owners have the Eclipse and have renamed both the company and the airplane, they have before them the challenge of proving it's an idea whose time hasn't passed or, perhaps, never was. And thus my only serious critique of the book: The subtitle of the book is: A Dream Design Bankrupted by Marketing and Mismanagement and Saved by a Sensible Business Strategy.

The second part of that title might be true. I certainly agree that the new company appears to have things right. But it's not making new airplanes yet. I've sipped the Kool-Aid, I'm just not ready to chug the entire pitcher.

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Comments (13)

Reality finally caught up to marketing hype. The Eclipse was not "innovation" at all. Eclipse was indistinguishable in design or construction or per-hour manufacturing costs from any other small business jet. Being slightly smaller is change, not innovation.

Posted by: Mark Fraser | August 1, 2011 7:49 AM    Report this comment

I think it would have transformed things if the price point could have been hit. That transformation would have been the air taxi industry where it the common joe could go to his local airport on the spur of the moment and catch a flight to another small local airport with a cost to match his budget. It's possible the manufacturing techniques would have trickled down as well to make the 4 seat GSA market more affordable. We could sure use that.

Posted by: STEPHEN EGOLF | August 1, 2011 4:14 PM    Report this comment

Perhaps if the economy hadn't tanked resulting in Dayjet, Eclipse's largest customer cancelling something like 1000 orders and the other air taxis (or as I like to call them limojets)falling away, Eclipse could have survived its mistakes and evolved into something that would truly have been innovative in aviation, not merely the manufacturing process of the airframe, single pilot integrated systems etc, but the ubiquitous aircraft for the air taxi industry, which we still desperately need to provide swift, inexpensive air service to the 5,000 Eclipse capable airports in the country rather than being enslaved to the few airlines which service around 60 airports at their convenience with a baffling price structure and subject to intolerable security procedures. Whether it arrives thru new Eclipse, Adam Aircraft, Hondajet, D-Jet or the Cirrus single engine, single pilot jet, Eclipse pioneered it, spurred all those competitors, and we would all benefit greatly if they ultimately succeed.

Posted by: Elliott Meisel | August 1, 2011 4:33 PM    Report this comment

Nowhere did I read a reference to the role of the FAA in delaying the delivery of the early planes. Did I miss something or was that a false rumor ? Even at $ 2 million, it's the plane to beat.

Posted by: Louis Simons | August 1, 2011 5:20 PM    Report this comment

As well as being based on flawed business model and unrealistic volume projections it assumed that the average cirrus pilot would do what was required to become an ATP level pilot. while there are always a few exceptions where an individual can be a part time pilot and fly to ATP requirements it usually requires a professional pilot with thousands of hours and lots of expensive training to do that. Vern expected that he would find enough cirrus pilots that could make it through the ATP level and they simply don't exist.

Posted by: BILL LAWSON | August 1, 2011 5:49 PM    Report this comment

Does the forthcoming air taxi revolution have to be a jet? The world is awash in piston twins, single and twin turboprops, and high performance singles like the Piper Meridian/Mirage/Matrix. Most of these aircraft are cheaper than jets, but still not cheap. If the numbers won't add up for air taxi in one of these planes, the numbers won't add up for a new jet either.
"if the price point could have been hit" is a fantasy. Eclipse's initial price was a third of what it really costs to sell a small jet. This is obviously clearer in hindsight than it was when Eclipse promised us the revolution.
I thank Mr. Bertorelli for working for years to convince me that airplanes are inherently expensive and, sadly, will stay that way. They are handcrafted by elves in tiny quantities and subject to inefficient regulation. The comparison with almost any other "manufactured" product falls apart very quickly.

Posted by: John Schubert | August 1, 2011 5:59 PM    Report this comment

The final product is an amazing aircraft with great flying characteristics. With new combustions liners it's back to 41000 feet and the FMS is a great improvement. The plane is easier to fly than a high performance single. It's fuel economy is amazing at altitude and it's the quietest jet in the country. Every one of these accomplishments to due to Vern's dream; it's too bad he wasn't able to pull it off. The new company has accomplished amazing things in supporting the airframe and completing all the promises made by the old company. I'll bet they start definitive steps to resume production by year end.

Posted by: ROBERT WATTERS | August 1, 2011 9:33 PM    Report this comment

William, the first flight actually was with the williams EJ22 engines. You can google "the little engine that couldn't" for another perspective on the engine and eclipse / williams falling out.

Posted by: BYRON WARD | August 2, 2011 8:24 AM    Report this comment

Early Cessna Citations were certified for single pilot operation. Eclipse was not the first.

Check with your insurer as to whether they will allow it.

Huge obstacle to overcome for a jet regardless technical innovation, or lack thereof.

Posted by: Edd Weninger | August 2, 2011 1:29 PM    Report this comment

Just a reminder: You cannot post URLs here. The reason is that if we allow it, you will be buried in spam.

So the solution is to just past in the URL without the prefix. It can then be pasted directly into a browser, but it cannot be linked.

Sorry about this. The &^%$ spammers were killing us.

Posted by: Paul Bertorelli | August 2, 2011 6:17 PM    Report this comment

Thanks for the heads up. Let me try again.

Posted by: Mike Zippy | August 2, 2011 9:49 PM    Report this comment

As this whole Eclipse thing was unfolding, it brought Preston Tucker to mind. There are many parallels. History can't decide if he was a brilliant innovator or just a plain old Huckster!

Posted by: Steve Tobias | August 4, 2011 2:09 PM    Report this comment

"On the other hand, Raburn deserves credit for actually doing what others just talked about."

Well ... he didnt quite do it did he? Driving this business concept was an assumption that the market would support the volume needed to make the economics work. It wasnt there, isnt there and wont be there in the foreseeable future for reasons Eclipse management failed to grasp.

Posted by: R Boswell | August 7, 2011 8:23 AM    Report this comment

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