Raburn Out at Eclipse as Etirc's Pieper Takes Reins

 - July 29, 2008, 11:27 AM

Amid scuttlebutt about persistent financial problems, Eclipse Aviation founder and CEO Vern Raburn (left, in photo) stepped down today and company chairman Roel Pieper (right), a Dutch IT entrepreneur, became acting CEO, effective this morning. He had been serving as the non-executive chairman of Eclipse since early this year, when Etirc's investment of $100 million gave it a minority stake in the company. The leadership change announced today was required under the “terms of the commitment and agreements” for a new round of financing for the Albuquerque, N.M.-based very light jet manufacturer. The amount of the new funding was not disclosed. In a letter to employees, Raburn said, “As you can imagine, this development came as quite a surprise to me and it saddens me more than I can tell you to have to leave Eclipse. I think you know that I am no quitter. But I have not had any choice but to accept the terms of an agreement that provides Eclipse the first funds in a new round of financing that will take the company to a cash-flow-positive position.” Pieper praised Raburn for his efforts in starting the company and delivering 230 Eclipse 500s since the airplane received certification two years ago, and said, “It is now time to take the company to the next level of growth and operational excellence and this is what the board has tasked me to do. I will work toward this goal in the coming period.”

Pieper told AIN that the Eclipse order book hasn’t changed and “will continue to grow.” In the next few days, he added, Eclipse will roll out a payment schedule to take care of suppliers and deposit holders who have canceled their orders and asked for refunds. Raburn will continue to provide counsel to Pieper and will assume the vice chairman role at Pieper’s Etirc Aviation to assist in the global expansion of the Eclipse 500. Raburn remains proud of Eclipse’s accomplishments, including nearly 30,000 fleet hours flown to date without an accident and delivering twice as many VLJs as Cessna since both the Citation Mustang and Eclipse 500 were certified. (Both airplanes were certified in September 2006.)

As Eclipse continues to grow, Raburn said debt investors “will be paid off,” and equity investors will receive a return on their investments when the company goes public. Raburn still holds some equity in Eclipse, but other than his involvement with Etirc he will not be involved with the company he launched 11 years ago. As for his plans, Raburn said, “I don’t have the foggiest idea.” He left Oshkosh this morning to go fly-fishing in Idaho.