-T / T / +T | Comment(s)

Monday, November 19, 2007

Tail Manufacturer Sues Eclipse, Eclipse Charges Fraud

Hampson Aerospace, which produces the tail section of the Eclipse 500, filed a law suit against lead VLJ producer Eclipse Aviation, citing the company’s failure to make its required payments. The suit was filed shortly after Eclipse announced a 12-aircraft order at the Dubai Airshow. (See related story, this issue.)
“This is a dispute between two companies,” CEO Vern Raburn told Aviation Today’s VLJ Report. “They happen all the time. We’ve met with them but we just disagree and that is how lawsuits happen but this has emphatically nothing to do with our ability to pay.” Raburn indicated that the issues not only involves supply problems – Eclipse is short one tail section at this point – but “severe quality issues.” He indicated “they want to be paid for work they haven’t done and we aren’t going to do that.”
Raburn noted that people are making bad inferences from the stories that are circulating about Eclipse. The recent layoffs, Raburn said, had nothing to do with money issues either but rather the hiring had gotten ahead of production. “We hired 1,000 people in the past year and that is a lot,” he said. Consequently, it was prudent to trim the workforce by 100 which he termed “a drop in the bucket” with the 1,700 now employed. The company has a backlog of approximately 2,650 jets. Related Story
The suit, filed last week in U.S. District Court, said Eclipse made its initial payment to Hampson in March but has yet to makes further required payments despite an agreement between the two companies reducing the amount of the payments. In a confusing turn, after the agreement, Eclipse, according to the filing, said it was entitled to abrogate the contract alleging fraud, according to a story in the Albuquerque Journal.
Supplier issues were cited for production delays. Hampson, based in the U.K., is manufacturing the tail sections at its Grand Prairie, Tex. plant in a contract valued at $380 million when it was announced in 2003, according to the Journal.
Eclipse has had some component problems, the fix for which needs retrofitting. Linear Air, which is scheduled to launch operations with the new VLJ, praised the customer support when the problem arose, however. Related Story  The aircraft has also been subject to an AD limiting night operations. Related Story
Live chat by BoldChat