Sender: <marv@lancaironline.net> (Marvin Kaye)
To: lml@lancaironline.net
Date: Tue, 06 Jan 2004 22:12:12 -0500
Message-ID: <redirect-2920481@logan.com>
From: Gary Wolf <gwolf@vallnet.com>
Subject: Re: Builder's Week and alternate engines
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Posted for Doug Pohl-

Dear fellow Lancair Enthusiasts,
I understand that there have been some recent postings concerning the 
"EngineAir" engine. I don't call it that anymore. In the interests of 
honesty and truth, and at Dave Link's request, here is my summary of the 
events of the past and current state of engine production.
There are few who don't know the story of Jim Rahm and his attempt to 
develop a V-8 application for the Lancair IV. Jim's attempts were well 
meaning and with the assistance of his old friend, Al Joniec, development 
proceeded - but at a very very slow pace. In retrospect, Jim's biggest 
mistake was pricing the engine at $46,000 to be competitive with the 
Continental that was being sold at about that amount at that time. This 
pricing elicited 25 customer orders and the engine progress payments 
provided seed money for development. However, it costs at least $50,000 to 
build one of these engines and add to that development costs and you don't 
have to be a major mathematician to understand that Jim was not going to 
make it. Jim's EngineAir went out of business. All of the customers were 
left high and dry, without engines. With the exception of Tom Zedaker, who 
received an engine with a prototype gearbox, I don't think EngineAir ever 
delivered an engine package to anyone.
A subgroup of the customers led by Fred Moreno and consisting additionally 
of John Barrett, Dave Schroder, Steve Ramsay, Don Mayer, Gary Wolf, Tom 
Hakes, Chris Frame, Bruce Sanchez, Chris Zusche and myself began an 
initiative to reorganize and recapitalize a new company in order to 
continue producing the engine package and fulfill orders to the customers. 
The new company, Engine Power Systems LLC was literally run by the entire 
group above, using the internet to plan, make decisions and frequently 
argue among ourselves. I was the lead Manager until November 2001 at which 
time I resigned and Dave Schroder took over. Dave was also the finance 
officer for the entire time it was in business, managing the finances 
remotely using QuickBooks.
John Barrett's negative comments on the Lancair List were shared with me by 
several of you. While I fully appreciate the source of John Barrett's 
negative comments recently made on the Lancair List (frustration, money 
lost), please keep in mind that all of the individuals above (including 
John) were fully knowledgeable about the operation of the company during 
the time it was in business and all of the individuals above only have 
themselves to blame for what happened, myself and John included. John, if 
you lost your $70,000, you were fully aware of the manner in which it was 
lost, every step of the way.
Back to Engine Power Systems, LLC, good but initially slow progress was 
made toward purchasing the gearbox rights from Jack Kane and EPI. Next came 
the vexing issue of producing the gearbox. If you buy a few parts from a 
vendor, the parts are twice as expensive. A decision was made to 
manufacture parts in sets of 25 to decrease cost. Gears were manufactured 
by the aerospace company Perry Gear, aluminum housings by the aerospace 
company Unexcelled Castings and shafts and machining were made by aerospace 
company DFP manufacturing. These parts were expensive, consuming 
considerable working capital of the company. As a "little guy" in the 
world, EPS did not have as high a priority in production as Pratt and 
Whitney etc and the gearbox parts were slow in coming. As time went by, 
money continued to be burned and Al Joniec took on other projects to keep 
money coming in, including the Duke project. There was dissent among the 
Managers concerning this. Guys like John and Dave Schroder felt the focus 
should be on finishing customer engines. Others (like myself) felt the 
focus should be on finishing engines AND the long term survival of the 
company. Whether any of you agree with Al's decisions or not, the books of 
the company clearly show that the income stream from these projects, as 
well as additional cash provided by myself and other Managers, kept the 
company afloat for a longer period of time.
The good news is that the company did in fact deliver engine packages to 
customers. These customers included Marvin May, Tom Hakes, Steve Ramsay, 
Bruce Sanchez, Robert Scherer, Marcus Wilson and myself. Many other 
customers had finished engines and were awaiting gearboxes for completion.
Toward the end of 2002, things were looking grim financially. Three major 
mistakes of EPS (in my opinion) were 1. Assuming that there would be at 
least one engine sale a month, the profits of which would offset operting 
costs, 2. honoring the original engine price (if Jim Rahm ran out of money 
at $45,000, the same could be expected in a subsequent company) and 3. 
crediting all customers with engine progress payments made to the former 
company. Think about it. EPS had to spend $50,000 to complete a customer's 
engine with only a fraction of that money coming back, even after each 
customer paid an additional $15,000 toward the effort. Should anyone think 
that I, or some of the other Managers, did not do their best to make it all 
work, let me assure you that the Managers went to the wire for the 
customers. As an example, I personally poured more than $250,000 into the 
company, plus the $15,000, plus my engine payments plus all of my expenses 
that were never reimbursed. But of course, this means nothing to a guy like 
John who lost $70,000 and never got an engine. And I can't fault John for 
feeling that way. All I can say is that we all tried, and failed.
In the end, the Duke project was the potential savior of the company, and 
unfortunately the cause of its ultimate demise. The Duke was a wonderful 
aircraft that I personally saw fly at the Duke Convention in Saulte St. 
Marie in October 2002 with its two V-8s. It was clear that this application 
was a hit and there were Duke owners at the convention that were literally 
getting out their checkbooks and writing checks for a pair of engines at 
$200,000. Two weeks later, Ron Comeault, the owner of the Duke, made a bad 
pilot decision. An IFR flight was made toward Florida with a bad charging 
system. The port side engine worked flawlessly for 2 hours until the 
battery was run dry and the engine ceased running. Ron and our engineer 
flew 25 miles to Jessup Georgia and in attempting to land with one engine, 
died in a crash of the aircraft. The plane had less than 20 total hours on 
it, was an untested prototype and Ron had not practiced any singe engine 
flight with his new engines. Why was Ron in a hurry to get to Florida? 
Because he and another individual were meeting to finalize purchase of the 
company for a seven figure amount. This purchase would have changed the 
life of the company. Life is indeed a bitch.
With the crash of the Duke, the bad press of the accident, the financial 
situation of the company, there was once again dissent within the company 
as to what to do next. Ron Anderson (a consultant) and I proposed that the 
company be contracted and the individual customer's financial ledgers be 
separated. Engines would be completed for individual customers at the cost 
to complete the engine. This ranged from $15,000-$35,000. This approach was 
absolutely unacceptable to some of the Managers, including John Barrett who 
was already in the hole for $70,000. The expectation was that some of the 
managers should yet again add more money to the pot to finish engines for 
others. Managers like myself indicated that we were not Santa Claus and 
like John, there was a limit to what we were willing to pour into the 
endeavor. Unable to reach an agreement, Dave Schroder resigned as Managing 
Director and CFO and the Managers voted to liquidate. Whatever funds that 
remained in the company's bank account were taken by a Manager on the way 
out the door. There was literally nothing to settle existing debts, 
including taxes that were not paid.
The ensuing months were quite difficult. The Managers assigned the three 
secured creditors of the company, Tom Hakes, Gary Wolf and myself the task 
of liquidation. The schedules of Tom and Gary and the distance between us 
forced me to deal with the liquidation of the company and settle its 
affairs largely alone. With the assistance of a bankruptcy attorney, I took 
care of the liquidation, personally paying the debts and taxes of the 
company. Despite advertising the liquidation, there were no offers for the 
remaining assets and these assets were acquired by the secured creditors 
under UCC law.
In April of this year, I made a decision to continue to produce the V-8 
powerplant and acquired the residual assets. I made this decision because I 
felt the powerplant is still one of the greatest advances brought to 
aviation in recent years. In addition, I felt very bad, and I continue to 
feel bad, for the agony and financial losses of those who did not receive 
engines. After all, I had been one of those people during the EngineAir 
days. I contacted each and every customer of EPS and I offered all of them 
the option of completing an engine at cost, with no money due until engine 
delivery. I did not offer to repeat the mistakes of the past, and apply 
prior payments toward completion. It was time to stop bankrupting companies 
with past debt. Several customers were infuriated by the offer and pursued 
other engine options. Others realized the value of the offer and elected to 
pursue this option. They have not been disappointed. Scott Turner received 
his engine within a month. Jan Hoeffel received his engine several months 
later. Tom Hakes got a new improved engine a month later (a detonation 
accident with low octane autogas damaged his engine). A fourth engine will 
be delivered to Mexico in February.
Updating the activities of Silver Wings Aviation, Silver Wings Aviation has 
spent the better part of the last nine months re-engineering the V-8 engine 
package. No active marketing has been conducted during this time (you can't 
sell a product until it is right). Re-engineering was undertaken because of 
several design flaws that were identified during the development of the 
engine package, the engine's use in actual flight, and the desire of Silver 
Wings Aviation to ultimately certify the package. Various engineers have 
been involved in this redesign process and the current package is (in my 
opinion) substantially better. The engine specifications are known to most 
of you and are repeated:
V-8 aluminum block and head configuration. 375 (420 HP), 400 (440 HP) and 
427 (510 HP) cubic inch configurations. Each engine is blueprinted and dyno 
run. Data from dyno runs is provided to each customer.
Water cooled with dual radiators.
Turbosupercharged. Turbo is water cooled and oil lubricated with ceramic 
bearings. Dual intercoolers
Fully redundant duel electronic and fuel control systems.
Reduction gearbox with gear ratios of 2.05:1 and 2.19:1.
Package is firewall forward complete, including all wiring harnesses, 
alternator, etc.
Some of the key things that have changed in the package include in house 
manufacturing of many parts. For example, the exhaust manifold system is 
fabricated and welded to FAA standards. The configuration of the electronic 
control modules (ECMs) is completely different. They were formerly mounted 
on the engine. They now reside in the cockpit. The system of engine control 
is different too. Both ECMs are always on, always running the engine 
through a proprietary engine control box. Unlike the former system, there 
is no interruption in engine operation when selecting ECM A or B. The 
wiring systems are now FAA standard with high temperature shielded Mil Spec 
wiring throughout. The gearbox design has been upgraded by EPI with a new 
idler system that permits easier assembly and maintenance. The list of 
enhancements goes on and on, but the bottom line is that the engine 
package, like any design, will continue to be made better and better.
Silver Wings Aviation's method of doing business is completely different 
from the former two companies. An engine order requires a 15% deposit, 
however no additional money is due until receipt of the engine. I know of 
no other company (including Continental, Lycoming) that would sell an 
engine like this. It is necessary given what happened in the past. All 
engines are fully warranted and assistance is readily available for 
installations (ask Scott Turner - we were just in Philadelphia with him 
this past weekend). A good company must have good customer service. I 
believe ours is second to none.
Will Silver Wings make mistakes along the way? Of course, everyone does. 
However, the company is in it for the long haul, through certification, and 
will stand behind every engine package it delivers, whatever the cost. But 
please don't believe me. Call the people who have received their engines 
and ask them what their experience has been with Silver Wings Aviation. The 
responses will speak for themself.
The Silver Wings Aviation web site is Silver-Wings.net. It is still under 
development but rapidly growing.
Thank you for the opportunity to speak to speak to you through this forum. 
I quit the Lancair List last year because of the negative comments that so 
frequently appear on the list. We as a group cannot hope to advance 
aviation if we are working against ourselves. John Barrett's comment that 
he would not buy anything from Silver Wings when he knows nothing about the 
company, the changes that have been made to the package, and the way the 
company does business, is just an example. I e-mailed John several weeks 
ago expressing my concern about his pursuing yet another V-8 on his own. 
Speaking from experience, this is expensive and draws capital away from 
existing technologies under development. There is not endless money in this 
business. In addition, there are many surprises along the way (some of 
which can kill you) and we often allow hope to triumph over reality in 
pursuing our goals. Having laid a plane down in the field because of bad 
wiring in my own V-8 (thus the wiring changes in the design), I would never 
wish the same experience on anyone. One gets very lonely when their engine 
suddenly becomes quiet. The SWA V-8 has been flying for more than 8 years 
and Jack Kane is absolutely correct - there are gearboxes and engines with 
more than 500 hours on them with no evidence of wear or failure. Silver 
Wings has implemented a program for all customers, at no cost, where 
gearboxes are exchanged at 500 hours for inspection. In any new design, 
this is prudent from an engineering point to ensure that when a gearbox 
(and engine) lives out its life, it has been inspected all the way from 0 
hours to its TBO of 2000 or 3000 hours.
Fly safe, and have fun doing it!
Doug Pohl
Silver Wings Aviation, Inc.