Eclipse furloughs workers, closes plant

February 18, 2009

Eclipse jetStruggling very light jet pioneer Eclipse Aviation on February 18 furloughed its workforce of 800 employees. An Eclipse spokesman said this week’s payroll had been paid, but the Eclipse board of directors ordered the furloughs in order to reduce expenses while the company awaits funding to keep it operating. Employee benefits will continue to be paid for the foreseeable future, but the spokesman would not speculate on how long the furlough might last.

A few select employees will remain at the Albuquerque, New Mexico, headquarters to maintain security and answer phones. In addition to manufacturing, the training and service centers have also been shuttered. Customers already in training will be allowed to finish using contract instructors. However, airplanes in the service center that are not flyable will be grounded until funding is received.

The spokesman would not speculate on how long it might be before funding is made available to the new company that is emerging from the bankruptcy of Eclipse Aviation, which filed for protection from creditors in November. As AOPA ePilot reported in January, Roel Pieper took over Eclipse Aviation in July with the ouster of founder Vern Raburn. Pieper is also the chairman of ETIRC Aviation, a principal driver of the very light jet industry in Europe and the largest shareholder in Eclipse Aviation. In January the bankruptcy court approved the sale of the Eclipse Aviation assets to EclipseJet Aviation, which is controlled by Pieper. EclipseJet bid $28 million in cash, plus promissory notes and equity for the assets of Eclipse.

The Eclipse spokesman said the company is now awaiting an infusion of cash from ETIRC and its investors in order to reopen the company. The spokesman said the worldwide economic situation was contributing to the delay in receiving funding. “I feel it’s going to work out and we’ll get [the deal] closed,” he said.