Icon is Screwing Their Customers http://eaaforums.org/images/icons/angry.gif

[Floatsflyer]

Icon Aircraft, makers of the popular and advanced SLSA A5 amphibian, is putting the boots to and stepping on the throats of their loyal customers. Icon has, in the past month, sent their deposit holders a brand new 41 page(!)Purchase Contract and Associated Ownership Agreement which gives Icon complete control over the use and future sale of every aircraft for the life of the aircraft(defined as 30 years or 6000 hours maximum). Icon is shifting liability responsibility and other critical matters directly to their customers.

The new terms and conditions of this new Agreement are Machiavellian and more odious than a slaughterhouse. You have to read this summary:

http://www.aopa.org/News-and-Video/All-News/2016/March/31/Icon-gambit?WT.mc_id=160401epilot&WT.mc_sect=tts

The control freaks who drafted this are CEO Kirk Hawkins and CFO Chris King. Clearly, this is something Icon didn't want outsiders to know. It has been leaked to on-line forums, media outlets and AOPA by very disgruntled deposit holders.

Despite what Hawkins is saying publicly, very few are signing. You'd have to be insane or brain dead to sign this crap. Once a deposit holder reads, understands and fully comprehends the Agreement, I believe the greatest majority of deposit holders will choose to cancel their current deposit agreements and get their $5000 or $2000 deposits back. The poor schmucks who put down non-refundable $100,000 deposits to be the first 100 in the delivery line may be the only ones to sign the new Agreement unless they can easily afford to lose the deposit.

Icon has shot themselves right between the eyes in that there will no longer be a market for their aircraft. No more sales, no airplanes out the door, no more revenue. If Icon's Hawkins and King sticks to demanding the buyers sign the Agreement, this may go down as the biggest fail in general aviation history since the Eclipse which currently holds that dubious distinction. You will become a case study for elite business schools and not in the way you have heretofore imagined.

For the buyers I say Caveat Emptor. For Icon I say study the launch of New Coke and begin to seriously care about your customers instead of thinking about them with utter contempt.

[rwanttaja]

I guess we now know where the original authors of the EAA Youth Protection Policy ended up... :-)

Ron Wanttaja

[TedK]

lets see, this sure looks like a 30 years lease for $250K up front...

[George Sychrovsky]

Its was in their name right from the start- "I con"

[rwanttaja]

AVweb had a good article on this, too.

One of the leading theories right now is that Icon is doing this to weed out the early customers who were promised a much lower purchase price. They can give these folks their deposits back (in one case, with many thousands extra) and turn and sell the production positions for $50K or more higher than the price they were going to have to accept from the original purchasers. Icon gets another influx of money, without having to actually deliver anything.

Ron Wanttaja

[Gunslinger37]

Delivery position #23 is for sale on eBay.

[Floatsflyer]

The writer of this short article is a recognized trial lawyer, pilot and aircraft owner. He calls Hawkins out on a number of his assertions that are inconsistent with the actual wording of the agreement. He's basically saying he's full of s**t and asks, "who would sign this thing?".

http://www.aviationlawmonitor.com/2016/04/articles/general-aviation/icon-aircraft-a5-purchase-agreement-who-would-sign-this-thing/

[MEdwards]

I think it's interesting AOPA would publish, even online, an article so unfavorable toward a GA company. Icon must not advertise enough in AOPA Pilot.

[Kyle Boatright]

I think this contract will greatly limit the number of airplanes they sell. I don't understand why they are choosing this path.

[Floatsflyer]

I think it's interesting AOPA would publish, even online, an article so unfavorable toward a GA company. Icon must not advertise enough in AOPA Pilot.

Well, the O is for owners and the P is for pilots so their editorial policy would be to protect those entities and inform and educate that member base. Really good on them for doing so. You don't expect EAA to do it, they don't/won't protect their own members as evidenced by the youth protection policy fiasco. And besides, EAA is in a constant state of conflict of interest because of AV. EAA has never and will never criticize a company that pays them big exhibit fees and sponsorships. EAA's mandate is to promote all types of general aviation interests AS LONG as it does not hurt their balance sheet!

To the best of my knowledge and awareness, Icon has never spent a nickel on advertising. They don't have to, their marketing strategy from the get-go was to receive multi-millions of dollars in free marketing and promotion from numerous media by way of written articles, TV shows, awards and aviation media flight tests, etc. The next award for them will be "The Hubris and Audacity Award "for worst business decision ever. I'm beginning to believe that Hawkins may well be the reincarnation of the designer of the Titanic.

[Floatsflyer]

I think this contract will greatly limit the number of airplanes they sell. I don't understand why they are choosing this path.

The next chapter in this 8 year odyssey without a single delivery to a paying customer is Chapter 11. When this occurs, Hawkins must give back his MBA from Stanford because he has disgraced and embarrassed this prestigious school with a self-inflicted and self-imploding worst business decision ever.

As to the 'why", just my opinion. For 8 years Icon has perfectly implemented a bold, hard sell consumer recreational product marketing strategy to the yahoo jet skiers and extreme sports knuckleheads. They have promoted the airplane in an over-the-top irresponsible and cavalier manner telling these target groups that the airplane is a just a jet ski with wings, is so simple to fly and all you need is 20 hours to get a license to fly it. Somewhere along the way Icon had an epiphany. Holy crap, all these jerk-offs holding deposit slots drank the cool-aid they've been hard selling and now they're scared s**tless that after training and delivery, they're all going to crash and burn in droves. Holy crap, they have to transfer all liability and other terms to the owners or Icon will be sued out of existence.

[George Sychrovsky]

interesting new "I Con" article

http://aero-news.net/subsite.cfm?do=main.textpost&id=b3e320db-813f-4832-a5f3-5ee158ea34b8

[Byron J. Covey]

The thread title is a little misleading, because ICON has no customers. They have lots of depositors, many of whom are trying to sell their so-called "delivery slot."


BJC

[martymayes]

http://iconaircraft.com/news/icon-aircraft-slows-a5-production-to-improve-manufacturing-shifts-early-aircraft-to-regional-flight-centers/

Does this company have any intention of ever delivering airplanes? They have evidently run out of room to park completed airplanes so production is being cut from 175 to 20 for 2016.
Lay off the workers? What happens when production resumes? More delays while new workers are trained? Are we to really believe they had no idea the supply chain couldn't keep up with production? Didn't anybody think any of this through?

Why can't customers start taking delivery of the planes that are sitting there?
Oh, we need to create training centers - for the plane that is claimed to be so easy to fly any beach bum with flip flops can do it?
We need support infrastructure? What for? In case a plane accidentally falls into customer hands?
Investors have committed to additional funding? Where do you find investors like this? I'd like to fund a unicorn expedition....

This is my favorite quote from the pr:


"Major revisions to ICON’s Aircraft Purchase Agreement in response to customer feedback."

Ya think? Like "take your agreement and shove it?" how's that for "feedback?"

[Frank Giger]

When does their 30 year clock on the aircraft start? Is it from date of manufacture, or on delivery?

I'd be somewhat irked if the Icon I paid 250K for sat on their lot for a year only had 29 left when I took her on.

[Floatsflyer]

When does their 30 year clock on the aircraft start? Is it from date of manufacture, or on delivery?

I'd be somewhat irked if the Icon I paid 250K for sat on their lot for a year only had 29 left when I took her on.

The 30 year restriction has been removed from the newly revised agreement along with many of the previous onerous and odious clauses but there still remains some contentious stuff.

Reduction of production by 90% this year and reduction of the workforce are serious causes for concern on many levels. All a result of the arrogance and attitude of the CEO and the trickle down effect. They need a cash infusion.

[George Sychrovsky]

I think the "I Con" is finding out that actually building airplanes is a lot harder then making computer animations

https://www.youtube.com/watch?v=lPs0VyD-r9s

[Frank Giger]

I'm actually very pleased they pulled the scale of production back, as it shows they realized they couldn't make quality at the kind of scale they were talking about - at least not on the initial production runs.

Somebody at Icon had a long hard look at what was coming down the line and delivered some hard truths.

This actually says something good about the company.

[martymayes]

"Somebody at Icon had a long hard look at what was coming down the line and delivered some hard truths."

Yup.

I think they found out that every plane so far was built at a loss so they put the brakes on production.

[Floatsflyer]

Frank and Marty, your kindness and apologies for Icon are admirable but in their case simply undeserved. Your altruism is misplaced.

Icon simply does not have the funding to produce on the scale that they so optimistically forecast. They have to pay for those airframes manufactured by Cirrus and they can't. They need another round of financing from the VC's and private equity before they can go forward with the original plans.

They pissed away a lot of $ waiting for over a year to get the weight increase approved and other delays. I wonder how the city of Vaccaville is feeling after they gave Icon all those tax inducements and incentives to locate the production and admin facilities there partly in exchange for guaranteed local hiring practices. And now Icon is laying off production employees from the town and surrounding area and will not be hiring for a year at least if not more--with Icon you will not lose if you bet on more.