Since holders of Eclipse Aviation senior notes have filed a motion in bankruptcy court to convert the company’s Chapter 11 proceedings to Chapter 7, giving them control of the assets, New Eclipse Acquisition LLC has been formed with intent to bid for the assets and return the innovative VLJ to production.
The new company is lead by Phil Friedman, an aerospace executive who said he has turned around several companies over his 28 year career. He currently is CEO of Harlow Aerostructures LLC in Wichita, KS, which manufactures electro-mechanical and structural assemblies for many OEMs in the aircraft industry.
Peter Reed, CFO of Eclipse for seven years, is part of Friedman’s team and is participating in developing the New Eclipse business plan, which has been in the works for several months, Friedman said.
“I have been studying the Eclipse situation for over a year,” said Friedman. “It is sad that the company has ended up in bankruptcy, but I believe there is an excellent business opportunity going forward if managed correctly. Our plan is to take the first 24 months to stabilize the fleet of 259 aircraft and restore the brand. All aircraft will be brought up to the current type certification level so that ongoing service and support is as efficient as possible. We will also retain a significant number of engineers to improve aircraft reliability, upgrade the avionics suite, and focus on reducing manufacturing costs to industry benchmark levels. We will open several smaller service centers around the country to provide more convenient access to service the fleet and will also provide pilot training here in Albuquerque.
“We will be charging customers to bring their aircraft up to the latest certification level. Our business plan assumes some of the customers will not be able to afford the upgrade. Our sales representatives will work with those customers, at no charge, to find new buyers who will have the means to pay for the upgrades. In providing this service, and with a business plan that translates into New Eclipse becoming a company with a profitable long term future, we will be supporting the investment that the existing owners have made in their aircraft.
“Our objective is to bring the aftermarket price of the Eclipse up to the $2 million range, thereby providing a valuable service to all existing owners. We also plan to finish and sell seven new aircraft on the production line that are about 95% complete. In addition, there are 28 DayJet aircraft that will need to be upgraded and refurbished and new owners found.
“Employment level over the next 24 months should be at about 400 people as we upgrade and service the fleet,” said Friedman. “After the engineers have upgraded the avionics to the latest functionality, reduced manufacturing costs, and we have re-established relationships with the supplier base, we plan to restart new aircraft production in 2011 at modest levels, approximately 100 aircraft per year, with pricing in the $2.4m range. At that point employment will increase to approximately 600 people.
“We certainly recognize that bringing Eclipse out of bankruptcy will be challenging. There are many parties that have been badly hurt and bridges will have to be rebuilt and relationships restored to execute on our plan. We understand that the employees who have been laid off need to feed their families and pay their mortgages. We are actively exploring ways to hold the key talent together during the Chapter 7 process so we can re-employ them with the new company.”
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