... and its 945 employees in Albuquerque can be thankful this week that they remain employed, at least through the reorganization process. The Eclipse filing comes on the heels of Dayjet, the OEMs biggest customer, liquidating under Chapter 7.
In October, Forecast International, a Connecticut-based market research firm, projected that production of the Eclipse 500 VLJ would come to a halt in early 2009. Turns out, they may be right.
Meanwhile, another prominent Eclipse 500 customer, Pogo, has been surprisingly silent in recent months. Pogo, like Dayjet, was to create an air taxi network utilizing VLJs, and has been high profile because it has former AMR/American Airlines CEO Robert Crandall behind it. A search of Pogo’s website shows that its last press release, distributed in March, concerned Pogo’s decision to pull its initial public stock offering.
The Eclipse Chapter 11 filing follows earlier layoffs, a brief period when it could not make payroll, and the exit of CEO Vern Raburn, the man who started it all. Current CEO Roel Pieper, in a statement, says that “it is clear that the sale of the Eclipse business through the Chapter 11 process was the right course of action to maximize the value of the business, secure its future and protect the best interests of Eclipse's stakeholders, including customers, suppliers, employees, and creditors." Eclipse plans to sell most of its assets -- valued at some $100 million to $500 million -- at a public auction in January, according to reports. The company reportedly has more than $1 billion in liabilities.
According to The Wall Street Journal and others, barring an offer from a higher bidder, Eclipse would be sold to an affiliate of its largest shareholder, ETIRC Aviation. (On the good news side, Eclipse was able to add 300 European aircraft orders to its books after the Eclipse 500 received certification from the European Aviation Safety Agency last week.)
The onset of Vern Raburn and Eclipse into the general aviation marketplace has injected quite a bit of enthusiasm during the past decade. It also inspired other manufacturers like Cessna and Embraer to introduce their own VLJs – moves that appear destined for a better level of success than the Eclipse Aviation experience. Alas, the flight of fancy that has been the Eclipse 500 may be coming to an end.
Thanks for reading. jfi