The Future of Epic Aircraft Company

[Lionheart]

For those that do not know, Epic Aicraft Company in Bend Oregon have been shut down now for approximately a year in bankruptcy court. This week, they were to bid out the company to the highest bidder, however several key firms have decided they want the company bad, and now the bid is going into round 3.

It seems a powerful Chinese Govt. owned aircraft related manufacturing conglomerate are bidding on it and Harlow Aviation who had planned to seal the deal quickly, are now finding it difficult to finalize it.

More here on todays news in Bend Oregon;

A Chinese bid for Epic Air?

U.S. firm challenges auction of bankrupt Bend plane maker

By Tim Doran / The Bulletin

Published: March 27. 2010 4:00AM PST
An aviation company emerged as the top bidder in Friday’s auction of bankrupt Bend airplane maker Epic Air.
But who will ultimately control the company and its high-performance composite aircraft designs remains unclear.
By offering $4.3 million in the second round of bidding, Aviation Industry Corporation of China General Aviation Co. Ltd. became the prevailing bidder, according to a report filed late Friday afternoon with the U.S. Bankruptcy Court by Trustee Kenneth Eiler.
But another bidder — Harlow Aerostructures, an aviation industry component maker in Wichita , Kan. , — raised a challenge, according to the trustee’s report.
Would U.S. export control laws permit the sale of Epic to Aviation Industry Corporation of China ?
Or if a sale would be allowed, must certain permits and licenses be obtained first?
Harlow raised the questions Thursday, Eiler’s report states. The trustee could not answer those questions before Friday morning’s auction in Portland . Harlow won the first round Friday with a $4 million bid, according to the report. Aviation Industry Corporation of China bid higher in the second round.
Attempts on Friday to contact a half-dozen attorneys involved in the case by telephone and e-mail for clarification were unsuccessful. A hearing on the sale is scheduled for Tuesday in Bankruptcy Court, according to the auction report and the case schedule.
Specific information about Aviation Industry Corporation of China General Aviation Co. Ltd. also was not available Friday.
A Web site located in China , based on its address, for the China Aviation Industry Corporation describes it as a state-owned enterprise with nearly 200 branches and more than 20 companies responsible for developing all types of aircraft, from bombers and fighters to general aviation airplanes. The page had to be translated using Google.
Generally, export control laws regulate which products can be sent to other countries. Many, but not all, of the rules revolve around products that have both commercial and military applications, according to the U.S. Commerce Department’s Web site.
The questions related to federal export laws and who may buy what are not the only issues involved in the bankruptcy case.
Those who own partially built planes, along with parts, tools, plans and records, still in Epic’s plant on Nelson Road want someone to inventory the items inside the building before the sale. If the task is left until after the sale, it could cause many problems.
A corporation out of the country of Georgia , referred to as Tblisi Aerospace Manufacturing, wants to protect its rights to aircraft being jointly developed with Epic. The project stems from one of the country’s goals adopted after its independence from the former Soviet Union , to build its civil aerospace engineering sector.
Epic, officially known as Aircraft Investor Resources, filed for bankruptcy in September in the wake of a breach of contract lawsuit filed against it.
The company moved into a new $4.5 million plant on the east side of the Bend Airport in 2004 with promises to create 400 jobs. About $1.3 million of the money came from state and local economic development funds.
It became the second airplane maker at the Bend Airport . The other, known later as Columbia Aircraft Manufacturing Corp., filed bankruptcy in September 2007. Cessna bought Columbia in 2007 but shut down the Bend plant last year.

Such an awesome company. I wish I could have helped. I had hoped my flight sim planes would have brought big attention to them. Makes me want to go buy a lottery ticket and try to win it and get them back on their feet.



Bill

 

[Ken Stallings]

I have reached the conclusion that we are pretty much on a suicide pact with our own society to allow others to poach our best ideas and concepts while we self-flaggelate ourselves because so many think we deserve to be punished to sooth their fragile emotions.

We seem to ignore realities that life isn't supposed to be fair, but rather is an open competition where you have to work hard to earn success, which is never guaranteed.

The more barriers you erect to your own success the easier it is for your competition to overtake you. It is even worse when you choose to ignore your competition's own flaunting of the laws on patents and copyright laws. The PRC is now the world's most consistent and worst violator nation of patents and copyrights. Further, they deliberately devalue their currency to predate on overseas trade markets, often selling at less than cost.

These advantages are subsidized by their own domestic population who are exploited to get a few old cronies rich while they hope that further acquisition of fertile companies with innovative products and ideas will help them further conquer overseas markets. To further ensure these cronies can continue to play in their rigged sandbox, they blind their own people to the actual truth by brutal censorship which has recently driven Google out of the PRC as they stood up against these naked efforts to warp honest principles.

And of course, our overriding sense of fear in upsetting fragile egos and interests means this thread will now be locked because the brutal and unpopular truth has been uttered. Meanwhile, Epic Aircraft becomes the latest example of an innovative American company who got buried in massive hurdles put before them, only to be likely swallowed up by a Communist regime who's learned how to ruthlessly play the game for its own advantage.

I guess the thing is that folks like myself who understand what's happening are realizing that forum rules cannot stand against sacred truths that this nation is killing itself and needs to wise up! It's a matter of priorities as I love my country more than I do forum rules.

Ken

 

[Lionheart]

I wanted to write President Obamma about Epic Aircraft last year. Saving 200 to 400 jobs in a place like Bend Oregon would be an awesome thing. Saving and American dream would also be an awesome thing. Saving it from destruction.

Epic were only 2 weeks (14 days) behind on their rent, and were locked out of the buildings by the land lord that owned them. That is just wrong. Its as though he tried to help put them out of business, as though a pawn in a game of corporate manuveres.

The main hurtle you touch upon Ken is 'Certification'. That was the key, number one thing that pulled the most out of their accounts was getting the LT certified (as the Dynasty). They needed to next do the Victory, then the Elite (twin jet) and then the Escape (small version mini LT). Canada offered the service at half price (Certification) as well as an airport (complete fascilities) and everything if they would build there. They almost took it. Now, I wish they had. They had someone that would help them out.

It pains me... It really pains me..



Bill

 

[stansdds]

I have reached the conclusion that we are pretty much on a suicide pact with our own society to allow others to poach our best ideas and concepts while we self-flaggelate ourselves because so many think we deserve to be punished to sooth their fragile emotions.

We seem to ignore realities that life isn't supposed to be fair, but rather is an open competition where you have to work hard to earn success, which is never guaranteed.

The more barriers you erect to your own success the easier it is for your competition to overtake you. It is even worse when you choose to ignore your competition's own flaunting of the laws on patents and copyright laws. The PRC is now the world's most consistent and worst violator nation of patents and copyrights. Further, they deliberately devalue their currency to predate on overseas trade markets, often selling at less than cost.

These advantages are subsidized by their own domestic population who are exploited to get a few old cronies rich while they hope that further acquisition of fertile companies with innovative products and ideas will help them further conquer overseas markets. To further ensure these cronies can continue to play in their rigged sandbox, they blind their own people to the actual truth by brutal censorship which has recently driven Google out of the PRC as they stood up against these naked efforts to warp honest principles.

And of course, our overriding sense of fear in upsetting fragile egos and interests means this thread will now be locked because the brutal and unpopular truth has been uttered. Meanwhile, Epic Aircraft becomes the latest example of an innovative American company who got buried in massive hurdles put before them, only to be likely swallowed up by a Communist regime who's learned how to ruthlessly play the game for its own advantage.

I guess the thing is that folks like myself who understand what's happening are realizing that forum rules cannot stand against sacred truths that this nation is killing itself and needs to wise up! It's a matter of priorities as I love my country more than I do forum rules.

Ken

Before the lock, let me just say that I couldn't agree more!

 

[cheezyflier]

Before the lock, let me just say that I couldn't agree more!

me too, with gusto!

as lucid as that post was, i doubt there's really much of value anyone could add.

nicely done mr. stallings

 

[Bjoern]

Life ain't fair, eh?
At least I'm not the only one, for the time, awfully attached to the products of a dead manufacturer.


Seriously though, let's hope they don't pull a Dornier. Even if it means getting funds from across the globe to sustain operations.

 

[jmig]

In the "real world" it is called, Survival of the Fittest. Since the discovery of fire humans have always found ways to exploit their environment and tilt the odds in their favor. Since Cain conked Able on the head and killed him because of jealousy, humans have always found ways to exploit the weaker to gain advantage.

Societies began to have an advantage over the strong shall take from the weak when they realized that the weak often could give the society strength in other ways. So societies who took better care of their week began to flourish over the greater anarchy found in less civilized societies. Alas, the weak then found ways to use their weakness to exploit the strong in the society. Eventually the society collapses upon itself in the excesses.

What we have here in the US and other Western nations is the weak taking over and draining the vitality out of the nation. We are repeating the Roman cycle. We are bound to collapse from the weight of the unproductive masses draining the fewer and fewer who produce.

Well intended but unthought out government policies that stifle and strangle the strength of the producers. Special interest groups who only see their limited view and not the big picture are leading the charge over the cliff. When you lose balance you topple over.

I don't see any problem with Ken's thoughts. I don't see a problem with people expressing their views, so long as we maintain balance and allow anyone to express views without the majority making them feel unwelcome. Although others can close this thread if it gets out of hand, so long as it we maintain civility and balance, I won't.

 

[Lionheart]

Seriously though, let's hope they don't pull a Dornier. Even if it means getting funds from across the globe to sustain operations.

What happened with Dornier?

 

[Willy]

Speaking of factories closing because of enviroments hostile to their doing business, I found out yesterday that Marlin Firearms of New Haven CT is shutting down their factory due to the costs of doing business in that state. Marlin has been in New Haven since John Marlin quit Colt to start his own arms company in 1870. While Marlin has been rumored to be moving to a southern state, no announcements on that have been made. Just the one closing the factory and putting almost 300 people out of work.

 

[Ken Stallings]

Dornier was the little noted privately owned aerospace corporation that was swallowed up whole by the decision to go national with the European aerospace industry. British DeHavilland was another casualty.

And I do firmly believe that as we lost the competitive values of these two companies, as well as Douglas and McDonnell we traded the raw synergies of privately competing corporations for the supposedly more certain aspect of a few companies considered too big to let fail.

As Bill said, Epic was victimized by the incredible, some would say insane and arcane, rules of aircraft certification that the FAA has created. It's great for the big boys since it pretty much makes it impossible for smaller start-up aircraft companies to survive, much less compete. The FAA has been allowed to become, judge, jury, and executioner as an executive branch bureacracy given its own rule-making authority by act of Congress.

In the past, it seemed to all go downhill with the FAA's arbitrary decision to force Burt Rutan to double the thickness of the outer composite fiber skinning on the Beech Starship. There was no scientific justification for this decision, just the arbitrary and unchecked decision of an FAA certifying official. His order was law once he wrote it on paper. And the decision doomed this innovative aircraft.

Add in tort lawyers who love to get rich off aviation accidents, suing all companies who make a nut or bolt even if they had nothing to do with the accident. The whole American aviation industry has become ripe with stagnation because the costs of innovation have rocketed out of control.

Tort liability overhead in the certificated aircraft and component market is estimated to consume 30% or more of the overall cost of an aircraft, avionic, instrument, or component related to aviation. Worse, the certification process can take years and the often arbitrary FAA decisions can force very costly redesigns and most certainly cost millions in production delays. Since the aviation manufacturer cannot estimate the end of the certification process, that little scrap of paper has destroyed more innovative aircraft designs than any other single cause! This arcane certification process, combined with the terrible capriciousness of tort liability, has driven many manufacturers out of business. This means there is a dearth of competition even among manufacturers of basic components like vacuum pumps and avionics. Used to be two companies that made vacuum pumps. One was put out of business in the aftermath of the Senator Mel Carnahan crash. They were hauled into court by hungry tort lawyers even though the Transportation Safety Board determined that their component did not contribute to the accident! After being sued for millions, they decided the liability was not worth the revenue they brought in. They stopped making their vacuum pumps! Now we have one company left making them!

Further the FAA can release pretty much on its own, Airworthiness Directives (AD) that require aircraft owners and companies to deviate to new procedures, or make expensive modifications to aircraft and their sub components. It started out as a good idea to improve safety, but has now gotten out of control. The FAA required me to install an inertial reel on the pilot seat of my 1977 Skyhawk even though I never had a problem with the seat sliding aft on takeoff, and even if it did, if I kept my wits about me it wouldn't be a problem. Nevertheless, the FAA spoke, and I had no choice but to spend a few hundred dollars for this cheap component of a reel, and now the damn thing binds, making it difficult for me to move the seat aft when I'm trying to get out of the plane. In my informed view, the damn AD now makes my aircraft more hazardous!

Meanwhile, a design little changed from its original design parameters back in the 1950's -- like the Cessna 172 -- cost about $15,000 in the early 1970's and today cost about $300,000! This forced a fundamental change in the entire marketing efforts, away from thinking of aircraft as merely handy transportation devices and toward luxury items for the rich and privaleged!

My mechanic, Robert Love, recently told me that around 1982 he paid $4,000 and a new pickup truck for an airworthy Cessna 310Q! Today, that same used aircraft would be worth more like $50,000 if in good condition! You cannot get one new today because after the aviation destruction in 1985, when Cessna hobbled back to life, it decided to focus on only a few models and chose to discontinue production of the 310 line. Today, Cessna cannot even make its Skycatcher 162 model in the United States, but rather in the PRC.

Like I said, it seems some in our nation believe we owe it to the world to tie an arm behind our back to even up the odds! In my lifetime I've never seen a more pathetic and myopic pathway as the one we see hellbound to march on today! It makes me want to reach out and choke somebody and shake some sense into their cranium!

It is nothing less than the self-inflected stangulation of an aviation industry that only a decade ago was the envy of the entire world. And of all the various causes, I blame the FAA and the tort lawyers for about 70% of the problem.

Ken

 

[Lionheart]

Well put Ken.


Sorry to hear that Willy. 300 Jobs is alot of families. At least they will keep the jobs in the United States.



Bill

 

[stansdds]

Once again, well said and I agree.

 

[b52bob]

It is nothing less than the self-inflected stangulation of an aviation industry that only a decade ago was the envy of the entire world. And of all the various causes, I blame the FAA and the tort lawyers for about 70% of the problem.

Ken

AMEN!

 

[Piglet]

Ken,
Can't really add to what you said, or the others. In PRC (not the Asain one, the one on the Left coast) multiply the B.S. by 10, or even 100. Sacramento seems to have this patholigical hatred of businesses, and others who produce jobs, taxes, products...
I hear ya on that stupid inertia reel for the seat. First time I saw that, I honestly asked my boss if it was some yokel-dokel owner mod.

 

[crashaz]

Geez can you imagine aviation booming in the 30s if government had been as powerful back then?

We still be flying kites and using balloons to get around!

Another case of too much government involvement stifling free enterprise innovation. The mountains of red tape to certify an aircraft helps to keep the bureaucracy (bureaucrazy sp?) fat and happy. No wonder that the best city to find a job right now is Washington DC at the top of the list!


Bad enough they got rid of the Great Waldo Pepper! Never forgave the government about that.

 

[EasyEd]

Hey All,

An amazing thread in that it isn't closed yet! Maybe people are just too jaded.

Most of what Ken said is right but lets not forget that nobody held a gun to American industry's head and ordered them to move to China. You can decide what their motivation was but I don't think it was patriotic. Once China is fully "industrialized" I bet the next cheap labor place will be Africa.

Jmigs comment about unproductive masses is interesting as I cannot help but wonder how many of them were productive before age and/or health caught up with them or we started sending everything to China to be manufactured or set about building a housing bubble. I have a hard time considering these people to be unproductive masses by their choice.

As for government - yes it is a huge problem however at the same time it is the only solution.

-Ed-

 

[Bjoern]

What happened with Dornier?

Got bought by Mercedes Benz (DASA), who imposed a luxury image on Dornier's 328, so it was all awesome and expensive technologies, manufacturing technologies and tools. This upped the break-even point and aircraft sales were low because Embraer and Bombardier jets hit the market and had a much bigger attractiveness to airlines. So Dasa sold the company to Fairchild who tried to save the day with the jet version of the 328, but in the end they went bankrupt and sold their Dornier assets to Avcraft who pumped out a few remaining Dorniers made from spare parts and then canned the production altogether. So all that's left of Dornier is 328 Support hosted in Dornier's old bavarian production plant. They keep the fleet flying and convert the 328 to business aircraft on demand.
At least the 228 went into production again at a swiss company.

 

[Lionheart]

Got bought by Mercedes Benz (DASA), who imposed a luxury image on Dornier's 328, so it was all awesome and expensive technologies, manufacturing technologies and tools. This upped the break-even point and aircraft sales were low because Embraer and Bombardier jets hit the market and had a much bigger attractiveness to airlines. So Dasa sold the company to Fairchild who tried to save the day with the jet version of the 328, but in the end they went bankrupt and sold their Dornier assets to Avcraft who pumped out a few remaining Dorniers made from spare parts and then canned the production altogether. So all that's left of Dornier is 328 Support hosted in Dornier's old bavarian production plant. They keep the fleet flying and convert the 328 to business aircraft on demand.
At least the 228 went into production again at a swiss company.

Thanks Bjoern for the story on Dornier. Sorry to hear that.

My 'close' company that I worked with was actually from England, bought out by a German company while I was working at their secret American test fascility, and later, after I had left, it was sold again to ford, who then sold it to TaTa in India. Who knows its future now......

Once China is fully "industrialized" I bet the next cheap labor place will be Africa.

Easy Ed

I had never thought of that. Locally, I see Mexico becoming more advanced, but soon they too will be higher then the low notch of cheapest manufacturing. I can certainly see Africa being a future manufacturing hub..

I think that America finding out a way to adapt into manufacturing again will be what saves us. We 'must' manufacture or we will certainly starve. 'must'...

Hey, Mercedes, BMW, VW, Toyota build cars here in America, and build them well, and make profits, why cant we?????????



Bill

 

[srgalahad]

[FONT=arial,helvetica,geneva]China's AVIC Wins Epic Auction[/FONT]

An Oregon federal bankruptcy judge will decide Tuesday if a company owned by the Chinese government will take over the remnants of Epic Air and the companies associated with it. The Aviation Industry Corporation of China (AVIC)'s bid of $4.3 million cash was selected over two American bids by bankruptcy trustee Ken Eiler following a daylong auction at a Portland law office on Friday. Also in the running were the LT Builders Group, representing the owners of unfinished aircraft still inside Epic's Bend, Ore., factory, and Wichita-based Harlow Aerostructures.

(more) ---->> http://www.avweb.com/eletter/archives/avflash/1592-full.html#202235

Rob

 

[Lionheart]

Thanks Rob for the heads up.

Interesting that someone had a higher bid, but they would take 'cash' from China over a higher bid.

Really smells bad...



Bill