The news out of Eclipse Aviation keeps on coming with layoffs, lawsuits and an FAA investigation. Now it has announced a restructuring even as Founder Vern Raburn rejected the company’s offer to remain with the company to promote overseas sales.
The company is restructuring as part of a “clear path to profitability.” It established a new divisional structure in support of what the company calls its operational excellence strategy appointing Chief Operating Officer Peg Billson president and general manager of the Eclipse Manufacturing Division and Mike McConnell, previously vice president of sales and marketing, as president and general manager of the Eclipse Customer Division. In addition Mark Borseth, Eclipse's chief financial officer will lead the newly established Process Improvement Teams to ensure the success of both divisions. All three executives will continue to report to CEO Roel Pieper as part of the executive management team.
Meanwhile, in a letter to friends and supporters, Raburn said he has left the company. ETIRC ousted him in July but offered him a position to boost sales in Europe and Russia. Related Story ETIRC invested in the manufacturer in January, putting in to motion the current upheavals that exploded during EAA’s AirVenture. Related Story
“After further consideration, I have decided not to accept the position of vice chair of ETIRC Aviation S.a.r.l,” wrote Raburn. “As a result, I have no further relationship with Eclipse Aviation either domestically or internationally. I will, however, continue to stay close to the aviation world through my participation on the boards of ICON Aircraft, EAA and the Museum of Flight in Seattle. In addition, I will also continue to serve on the Board of the Albuquerque Economic Development Corporation. I’ll be in touch with my friends in the media when I determine what my next venture will be.”
Pieper noted his role in several previous turn around efforts. “I have been directly involved in several turnaround efforts over the course of my career and believe these changes will be instrumental in driving world-class manufacturing and a superior customer experience,” he said. “I have absolute confidence in this leadership team's ability to deliver the profitable results this company requires.”
The new divisional structure consists of two individual operating units with a corporate infrastructure to ensure common processes, procedures and reporting. The Manufacturing Division will include engineering, supply chain, quality, production and flight operations. The Customer Division will be comprised of marketing, sales, customer support, product support and flight training. The backbone of the company, said Pieper, is the common corporate staff that will include finance, legal, HR, public relations, brand management, business development, strategic planning, research and technology planning.
The troubled manufacturer of the Eclipse 500, laid off 38 percent of its workforce or 650 of its 1,800 employees as part of its bid toward profitability. Related Story
The company, which has delayed refunds until the next tranche of financing is complete later this year, is responding to a second lawsuit seeking a refund for cancelled orders. The suit comes from a British customer – Ice Blue Air – which said it never received his $180,000 refund despite cancelling the July 2006 order. It contends that the contract calls for cancellation if the aircraft price is raised which happened earlier this year. Related Story For its part, Eclipse said the customer is not due a refund.
The Federal Aviation Administration (FAA) is conducting a month-long review of the Eclipse 500 Very Light Jet (VLJ) in response to allegations of safety issues when the VLJ was certified by the federal agency in 2006. The charges will also be aired at a congressional hearing this month. Related Story The company was also the subject of several airworthiness directors including the most recent one addressing the throttle. Related Story