How Itll All Happen

Eclipse CEO Vern Raburn explains how technology, smart management and market timing will make the two-engine personal jet for under a million bucks soar.

How are these guys gonna do this? Eclipse CEO Vern Raburn has more than 5000 hours of flight time and has owned 30 aircraft. He joined Microsoft shortly after its start-up and has been a senior exec at both Symantec and Lotus Development. We recently interviewed Raburn seeking more detail on Eclipses plans.

Youve been quoted as saying for the past several decades, the managers in the GA industry have been in zombie mode, with no innovation and no risk taken. But what about recent products such as the Lancair Columbia and the Cirrus SR20?

The industry has been in survival mode, with the exception of avionics. Its only because of companies like Garmin and Avidyne and more recently UPS/Apollo that youre starting to see any innovation. It certainly didnt come from existing avionics manufacturers. On the airframe side, I think the Lancair and Cirrus are both nice aircraft but its hard for me to call those the magnitude of breakthrough that were proposing with the Eclipse. Those airplanes are the classic five or 10 percent better.

The Eclipse is the difference between a Lockheed Constellation and a Boeing 707 or between a DC-3 and a DC-6. Those are big changes.

The Williams EJ22 and its variants will drive the emergence of small jets. Yet Williams has said the EJ22 represents no special technological breakthrough other than cheaper price due to economy of scale. So the engine isn’t really magic?

Yes, its fundamentally correct in the sense that if you look inside this engine, you wont see a technological breakthrough. There have been engines built like this before.

What makes this engine possible, is, frankly, manufacturing technology. The analogy is found in the micro-electronics world. Intel was neck-and-neck with its competition in designing the fastest processor. For 20 years, they led the industry.

But what the world didnt understand is that the reason they led was not just because they were good chip architects but that when theyd bring out a new generation of the Pentium, theyd build a new fab facility that had capabilities that none of the previous fab facilities had.

You can draw a direct analogy to the way Williams is building this engine. They have machining technology which they are extraordinarily closed mouthed about that basically lets them build stuff faster and cheaper than they could build it before.

Which leads to the airframe itself. Eclipse has selected aluminum as the primary material, while Safire will use composite. But aluminum seems so…five minutes ago.

There are a lot of reasons for going with aluminum but manufacturing is the big one. Composites don’t scale well, scaling from a production through put point of view. It has to do with the lay-up process. I know Boeing, with military contracts, and Raytheon are proving that you can decrease the labor hours involved in composite lay-up. But what you cant decrease is the number ofhours it has to sit cooking in an autoclave.

And if you want to get to any kind of high volume, pretty soon you end of with literally acres of autoclaves that are very expensive and can only be used for maybe two shipsets a day. So the utilization rate and the amortization rate is prohibitive.

Thats not going to change until someone certifies a thermoplastic as opposed to a thermal-set composite. We looked very seriously at trying to certify a thermoplastic system and we figured it would cost as much as $50 to $100 million. So anyone who says theyre going to build more than one composite airplane a day is basically kidding themselves. Or else theyre going to put a big investment in infrastructure.

How about the weight issue between the two materials?

Well, composites are heavier than aluminum and I think that reality is finally being understood now. Composites have an immense advantage in certain applications, especially in time to produce the first article. But then speed to the second article isn’t appreciably faster so the advantage is lost.

Given the FAA certification process, when you look at an all-up certified composite airplane, you see that there’s at best maybe a half percent, or one percent weight advantage for composites and at worst, it will be much heavier.

And thats a result of the material system, not bad engineering. Thats just where we are today in the development of this material and thats why aluminum is the better choice. And there’s a third issue: I don’t want to be a Chicken Little, because I don’t really feel that way, but the fact is, we still have some issues with exactly how to inspect and maintain composites over the long-term.

We have the same issues with aluminum, but theyre known. We know how to look for corrosion, we know how to inspect non-destructively. I have no doubt we’ll get there with composites, but were not there yet.

Im not going to tell you that were never going to build a composite airplane. But I think that going with composites now is… I wont say its a risky move, its a bold move.

Speaking of which, the term automotive-type production is being heard to describe the Eclipse. Are we talking a factory full of robots here?

Its easier to answer the question by saying what you wont see. You wont see a lot of conveyor belts and overhead pulleys and the sort of thing youd see in an automated automotive production plant.

When you look at automation and production, you basically have to break it down into two parts. Part one is material handling and part two is actual assembly. On the assembly side, youre going to see a lot of automation and its going to be a combination of robotics and fixtures that lend themselves to automated fastening systems.

You wont see a lot of materials handling. You have to get into the tens or hundreds of thousands of units a year before material handling systems make sense. A guy pushing a fuselage around on a fixture works just as we’ll as going out and installing a million dollar conveyor system.

The aircraft industry is the last great touch industry in the world. Its still an industry where there’s just a massive amount of individual hand touch labor. But from the standpoint of the number of people, the Eclipse factory is not going to look like a conventional aircraft factory. Far fewer people.

Your promo material suggests that 200 airplanes a year will be the initial production rate. At Oshkosh three years ago, NASAs Daniel Goldin predicted 20,000 GA aircraft a year. Is that number remotely achievable?

I don’t know. Im not trying to be coy but it simply comes down to my experience. Throughout my career in the technology business, Ive always been wrong about estimating the up side of the marketplace.

And its not because Im a stupid guy, its because anybody who tries to estimate new market growth when youre introducing a disruptive technology will inevitably be wrong.

You have absolutely no metrics and no way to understand how people are going to use your product. An example: I was a Beta tester at VisiCalc. About four months after VisiCalc was shipped for the Apple II, Im in a magazine store in Palo Alto. The guys got his Apple II on the counter doing an inventory control system for the store in VisiCalc.

I asked him how he did this. Did he know Basic or Fortran? No, he said, I don’t know any of that crap. But I know how to do a ledger sheet. And thats all VisiCalc was to him. No one had ever thought the program would be used for inventory control.

The point is that you introduce something that because of either capabilities or price or value [thats so different from whats gone before] that people are going to start using it in ways that you never even conceived of.

I was at an unnamed aerospace company a couple of weeks ago talking to their vice-president of research and strategic planning. He had looked at the airlines origin and destination database and figured that if one percent of current airline passengers on trips less than 500 miles shifted to something like the Eclipse 500, there’s probably a market 40,000 to 60,000 airplanes over 10 years.

I said, well, thats a nice number, thank you. But is our business plan based on that? No, absolutely not.

Are you saying that the competition is the airlines, not other GA airplanes?

Thats exactly what Im saying. There’s this big lie that the general aviation industry was done in by product liability. But it was a combination of terrible invested R&D-there just wasnt any-and poor value.

Its not Piper competing against Cessna or Cessna competing against Beechcraft. Its GA competing against the airlines. What drove the volume of the general aviation industry was transportation, not recreation, not training, although both are important.

What were trying to do is build an airplane that brings the same attributes that people are used to today when they go over to the airline side of the airport and they get on a 737. Its a jet with high altitude, high speed and the only compromise is the size of the cabin.

How critical is having a price below $1 million?

I think its very much a potential price point. Im not going to blow smoke and tell you we have all kinds of extensive market research proving price elasticity at certain points. We don’t.

But I think intuitively, you can say beyond the million dollar point, there will be some price resistance. But if this airplane ends up being used in a kind of limo or air taxi environment with high utilization rates, the acquisition cost will be less important than the direct operating cost.

These intro prices are a little crazy…the price has already inched up, from the $775,000 announcemed price to the $837,000 being quoted now…

Let me be clear on one thing: The price didnt inch up because when we announced the early price, we said that it was a target price. When we made the announcement in March, we had to nail all that stuff down, we werent finished with the costing analysis.

Four, or six years out, after a thousand airplanes, will there be a price increase? Possibly. Were not going to guarantee a number. But is this the price were going to deliver the first airplane for? Yeah, absolutely.

Speaking of guarantees, youre cutting it close on performance claims, promising speed and payload within 2.5 percent on an airplane thats never flown. Seems like a long shot to us and bound to be derailed by surprises.

Well, Oliver Masefield would disagree with you. [Oliver Masefield managed certification of the Pilatus PC-12 and will oversee the Eclipse 500.] They didnt have any surprises on the PC-12 when they first started flight testing it.

Given the compute power that you have today, you really have to screw up something badly to miss the mark. Boeing builds airplanes this way, Airbus builds airplanes this way.

The GA guys have, for a variety of reasons, not built their airplanes this way. But in reality, were designing this aircraft exactly the same way that Boeing designed the 777.

Yeah, but Boeing has a gazillion developmental dollars and lots of political juice to push a certification through. Smaller companies havent done as we’ll and even bigger companies have struggled.

Weve already had 18 meetings with the FAA. Im not going to make any projections, because its something I cant control, but were optimistic that were going to have our certification basis in record time.

I think it has a lot to do with how you approach the FAA. Oliver Masefield tells all the engineers in the weekly meetings the same thing: Your customer is not Vern, your customer is not Sam Williams, your customer is not the guys that arebuying the airplane, your customer is the FAA and you must satisfy them in the same way you satisfy people buying the airplane.

And it does take money. Most of the start-up companies that I see try to do certification on a shoestring. My experience, having been on the boards of or investing in we’ll over 60 companies, is that execution is 90 percent of the challenge. The idea is 10 percent. The rest is just good management.