Eclipse CEO Says New Plane Faces New Delays

Eclipse Aviation CEO Vern Raburn on Wednesday acknowledged new setbacks but said the company is working to overcome them and aims to deliver 10 planes this year and more than 500 in 2007.

In a Journal interview, and in a letter sent to customers earlier this week, Raburn blamed "internal processes" for delays in delivering the first plane, which had been expected in early October.

The letter, sent in the wake of Cessna's announcement that it had delivered the first of its $2.7 million Citation Mustang aircraft to a Fresno, Calif. customer, said the hurdle was related to paperwork and internal tracking, and not the aircraft itself.

"It isn't a problem with the build or the quality or the design," Raburn said.

Delays delivering the first plane, Eclipse's recent decision to ground its test fleet for repairs to a wing connection, and the recent disclosure of problems with windshield cracks have fanned rumors that the company is in trouble.

This was Raburn's second letter to customers in recent weeks. In the first, he disclosed the windshield problem and pledged to be more open about any future delays.

Cessna's delivery last week of the first Citation Mustang, which it began developing years after Eclipse first unveiled plans for its $1.5 million twinengine jet, helped fuel Internet rumors.

Raburn said he was happy for Cessna, a company he has called old-fashioned, but added that the Wichita, Kan., company had been developing and building airplanes for decades. Furthermore, he said, even established, experienced companies like Cessna and Boeing have faced delays and even fines from the FAA for various production problems.

"Lots of people would like to extrapolate (the delays) into lies," Raburn said. "When you look at the overall complexity of building an aircraft like this, my perception is we're in pretty good shape."

Eclipse received full type certification for the Eclipse 500 in late September, but it is awaiting an FAA Production Certification, which would allow it to certify the airworthiness of airplanes as they roll off the assembly line.

Until then, FAA inspectors must certify that each plane is built in conformity with the company's construction blueprints before it is given a Certificate of Airworthiness.

While inspecting the first plane, Raburn said, the FAA found problems in company paperwork related to that process.

That plane, whose ownership is to be split between a California businessman and a fractional jet service provider, checked out fine, he said. But quality control procedures aimed at proving each aircraft is built to the same exact standards were flawed, along with procedures developed by Eclipse for testing various aircraft functions.

After some back-and-forth with the FAA, Raburn said, company officials traveled to Fort Worth last week to meet with federal officials.

"We made a mistake," Raburn said. "We thought we were in good shape, that it would be a straightforward, open-and-shut process, but unfortunately some people (in the company) didn't do the job they said they were going to do. It's our screwup."

He said the problem is being rectified, and FAA inspectors are expected to return Dec. 4 to restart the certification process.

"Once we understand a problem, this organization is good at swarming in and fixing it," he said.

In his letter, Raburn acknowledged that some customers had asked "whether it would still be appropriate" for Eclipse to ask customers to increase their pre-production deposits to 60 percent of the aircraft price.

Those payments, which are required six months prior to delivery and outlined in the sales contracts, are key to getting the planes out the door on time, he said.

"The receipt of six-month progress payments is connected to the continued flow of parts to build your aircraft," he said. "This payment schedule is tied directly to the production schedule, and is an integral part of the acquisition process."

The problems did result in some company personnel changes, Raburn said, but he declined to elaborate. Eclipse is continuing to build about 30 aircraft and expects to begin flight tests of additional customer planes in the coming weeks, Raburn said in his letter.

© 2006 Albuquerque Journal



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