Open letter ISP/AT

I don't really wish to get into a prolonged discussion about this whole thing but I think we can all be pretty well assured that Gary and AT are not down for the count - far from it I would guess. I would stake my last dollar on it in fact. It is my understanding that Gary has his life's work invested in the rocketry industry. It is what he and they know best and it is what they do best. In whatever format, Aerotech products or Aerotech equivilant products will continue to be produced and available into the forseeable future. Of that I have very little doubt. Even if someone else picks up the assets of AT/ISP - you can bet your bottom dollar that Gary and the AT crew will be back at it the following morning - AND ramping up production because of improved cash flow and the elimination of their debt burden and litigation distractions. Frankly, I don't know what took them so long to seek relief..... No, I DO know what took them so long. Nobody likes to give in - everyone wants to believe that they can resolve their situation without resorting to 'drastic' measures. Hell, I did it some years ago. Been there. Done that. I was open for business the next morning next door and that was almost 20 years ago. I have never looked back. My dumbest mistake was waiting so long to seek relief. I can empathize.

From strictly a business standpoint, I can understand competitors using this opportunity to have a look at the business data of AT/ISP - serious competitors or those that are just 'curious' may believe that there is some valuable business information to be had by delaying the proceedings and demanding further informaton and access to ALL of the company records. Or they may just be dropping a few of their bucks to slow things down a bit.... delaying a return to full production and hence, full competition, by AT/ISP. Delay things long enough and you just might get a peak-flying season without the AT/ISP competition for your own products. Don't get your hopes up though. I think that the timing of this filing was calculated to permit a return to full production by the spring/summer peak flying season. Makes sense to me anyway.

As a businessman and an entrepreneur for the past 30 years I understand this as a business decision.... I would be seriously concerned about the information, management and marketing skills that are NOT included in this deal - it would be a real tough go of it should someone asides from Gary/RCS buy the physical assets and try to start it up again, keeping in mind that it is very VERY likely that Gary/RCS will be in full competition in short order. They have both the technical expertise and the experience. Not a very sound business investment for an outsider IMHO. On the other hand, with all of the red ink cleared, even poor old me would think about dropping a few bucks as an investment into what is presently a profitable operation (on a going forward basis), with all litigation dealt with and out of the picture. But only with the experienced and proven operations team in place and in a state of high morale and perhaps with a few more of their own dollars invested.

I apologize if I came on strong in my previous post.... but I am really bugged by anyone feigning that they are concerned for MY investment in AT casings and concerned for Gary and the AT employees. Believe me, I have been around for a while and have heard this story before. It is indeed a dog eat dog world out there. You snooze you lose. Etc. Etc. Just don't tell me that you are concerned for me while circling overhead with your tummy making gurgling sounds. I have also been at the receiving end of that type of kind consideration and have the wounds and the t-shirt to prove it. I was, at that time, much younger and naive.

My guess is that AT/ISP and Gary will land on their feet, continue production and in fact, ramp up production considerably once all of the litigation and red ink is behind them. In fact, of this I have little doubt. I am only sorry for those that might be hit in the wallet by this whole thing and for those that have already been hit in the wallet by this while attempting to keep AT afloat. That's part of the cost of doing business but it is, nontheless, a hard pill to swallow. We have had customers take a tumble in similar circumstances and have taken the hits (unhappily - and some were rather hefty). Many were in business the next morning. Did we do business with them? For the most part, yes we did. To do otherwise is to 'cut off your nose to spite your face' as they say. We did business with those that were honest and forthright with us through their ordeals. And I am happy to report that in almost every case our monetary loss was eventually recouped in the margin made on the business done following their reorganization. A few, incredibly, even ponied up for their old debts voluntarily.

Now I will get down off my soapbox again. And again, apologies if I came on strong in my last post on the subject. I wish no ill towards any hobby rocketry-oriented business. I especially love those Pro-38's (and now Pro-XX's) and am looking forward to finishing my CTI HyperTek setup in the next little while. But it has been those AT E, F and G motors that have allowed us to fly mid-power as a family.... in Aerotech mid-power rocket (kits).

Murray

P.S. For the record - I have no financial or other interest in Aerotech or any other rocketry related business; the opinions stated are my own and based on little good information. Frankly, I just like to get up on the soapbox now and then. Thanks for listening.

Someone can send ATF such a petition but the only place it will go is straight into a file folder.

Years ago the anti-gun rights people got ATF's budget to conduct investigations for "petitions for relief of disabilities" ZERO BUDGETED in perpetuity. Still in effect AFAIK.

That is why I suggested that the NAR initiate a L0 aand L00 user certification program. The idea is to get the mmanufacurers liability insurance to substantialy reduce rates for product sold to L0 and L00 certified users and pass most of the savings down to the consumers.

Alan

Alan,

The more I think about this, the more I like the idea.

It's also bringing back a very vague memory of a program either Estes or Centuri had (I think) back in the late 60's (if I'm not hallucinating). Does anyone remember some kind of program where you could get a certificate, or something of that nature, as you 'worked up' from skill level 1 through skill level 5? If it was real, does anyone remember the details?

This could be one good way of encouraging growth of numbers for younger members, as well as increasing the safety (perceived or real) for insurance companies. Kids would love to get some kind of 'certificate' for accomplishing this kind of task, and with the internet, it's easy to generate such things...

It needs some thought, but if anyone remembers anything similar to what I THINK I remember, please chime in (and I'm going to start waxing nostalgic about the fact that there WERE 5 skill levels--just remembering about building the Mercury Redstone escape tower out of dowels and the fins out of separately shaped pieces of balsa wood...).

David Erbas-White

Thereason itis a horrifficallybadidea?

1. The current customer base is about 500,000+ model rocket consumers.
2. If such a thing were implemented and even if NAR participating folks TRIPLED that would still only be 15,000 customers nationwide. (97% market size reduction)
3. If it were practical don't you think ESTES would have already done it?
4. Who appointed anybody but the vendor as an expert on how to deal with liability insurance costs?

Extraordinarilly BAD idea.

That's actually worse than illegally asking for ATF permits. And you have SEEN how bad that has been. A proven 90% market contraction over several years.

Jerry

The idea doesn't seem so bad when you just can't get insurance or manufactures motors because they can't afford insurance. One way or another the cost comes to the consumer. If the consumer can choose to pay 2X as much per launch or take a simple safety course what do you think will happen. Got a course overview?

Layne Rossi

Jerry,

Knock it the heck off. You have no idea what I may be thinking of, and you're running off at the mouth without removing your feet first.

I'm tossing ideas around here. I'm not REMOTELY in favor of mandating any kind of level 0 type of certification, but it would be a very positive thing to be able to show to the insurers if a program were in effect to try and get 'more safety' into the minds of those who typically CAUSE problems with model rockets (such as launching in brush, etc.). My point is that if a program can be put into effect that rewards those who use the product safely, this can be used as positive PR to the insurance companies. I don't have any full-fledged ideas in place, I'm kicking around thoughts of how the insurance problem can be reduced in order to allow more mid-power manufacturers to enter (assuming insurance really IS the issue).

David Erbas-White

CAUSE problems with model rockets (such as launching in brush, etc.).  My point is that if a program can be put into effect that rewards those who use the product safely, this can be used as positive PR to the insurance companies.  I don't have any full-fledged ideas in place, I'm kicking around thoughts of how the insurance problem can be reduced in order to allow more mid-power manufacturers to enter (assuming insurance really IS the issue).

David Erbas-White

Hmmm.... I know Anthony C. said his insurance premiums would be much higher if he were selling "model rocket" sizes, but there wasn't too much detail given as to what the insurers' actual criterion was for the greater perception of exposure - whether it was in fact the issue of "user safety as such" or simply the fact that the small motors could be sold (if marketed as a "hobby" product) in a much larger volume... (An F motor could start as big a grass fire as a K motor, in a worst case situation, and if some lawyer decided to claim that it was somehow the manufacturer's fault, it could stir up just as big a lawsuit...)

Would it help the situation if the small motors were only distributed in the "classical HPR" way - i.e., on-field sales to known customers - rather than via the usual "consumer" hobby product channels?

-dave w

Having worked with insurers, I question this claim. My point is it would be helpful to know what to address before you address it.

Rocketry is already safer than about anything else and anything further done will be along the lines of the NFPA regulations. Rules without real purpose or justification.

What is needed is probably a PR campaign to educate existing regulators on the actual pattern of safety and wilingness on the part of rocketeers to be good citizens. This way whatever irrational fears they have that lead to their draconian moves can be allayed and those moves can be ceased willingly.

I have recently learned that many of the "claims" of misdeeds by various people, even though none of those claims have been adjudicated, are being used as a basis to claim further regulation is needed. Some of those claims are rmr posts! We all know how unreliable rmr posts are, especially from anonymous posters, but the authorities do not. They are perfectly willing to take it all as assumed fact and act accordingly. And they do.

So all those reports over the years by TRA and competitors against a variety of industry participants have come back to bite us.

Just how important is an Aerotech (or RCS) and TRA/NAR monopoly over motor access anyway?

I get the impression new players to the CONSUMER motor business will NOT be allowed unless they:

1. Do not post on the internet.

1. Get ATF permits for exempt materials and then sell ONLY to other folks who have done the same (the anthesis of a consumer).

2. Further cowtow to whatever arbitrary rules TRA or NAR make up at the time, even if in direct conflict with NFPA codes they authored and the states adopted.

All to serve a declining customer base of 3000 people?

What this industry needs is a real advocate with a belief in freedom and faith in consumers and a willingness to use whatever legal permissions we already have to grow the industry and raise funds to widen the legal window a small amount.

Why is that a bad thing?

I don't understand your 97% market reduction. In my earlier message I suggested that the NAR use L0 and L00 certification as an outreach program, without restricting it to the NAR membership. However, only the safest and most skilled rocketeers would be certified, perhaps only 5,000 or so. If all consumers were certified, the insurance companies would be conceding too much money for no real reduction in risk. What certification would do is lower the participation cost of the safest, best, and most active rocketeers enabling them to remain active in the sport longer, thus increasing the total number of participants (consumers).

Ask them. Estes does not cater to the certifiable group of rocketeers, or even to NAR/TRA members. They make most of their money selling RTF and starter kits through Walmart and toy stores, to rocketeers who fly for one summer or less. The high cost of manufacturers liability insurance is a barrier to entry. Why would Estes want to make it easier for potential competitors to get established? CTI has stated that they have developed model rocket motors but will not market them due the outrageous cost of liability insurance. Apogee, AFAIK, went without liability insurance, but reduced their risk by marketing to NAR competitors, a highly skilled and certifiable market niche. The biggest benefit would be more model rocket motor companies, which is not In Estes interest. The secondary benefit is greater user participation and reduced cost to certified consumers.

The vendors (or potential vendors and manufacturers) themselves would. This an industry wide insurance industry problem. The best way to get the insurance companies to reduce premiums for product consumed by safe certified rocketeers is to form an industry wide trade association to negotiate with the insurance industry. They might even choose the NAR to negotiate for them. The NAR is the obvious organization to certify MR users, and the user certification requirements will have to be set (or negotiated) with the insurance industry.

There is NO downside to the idea. The problem is the difficulty in persuading the insurance industry, so it will probably never fly.

What the &^%! you talkin about! ATF permits are not required, nor proposed for model rocket motors. L0 and L00 certification is entirely voluntary and not codified in any law or code. It would have no effect on uncertified users, except that there might be more manufacturers.

is there an echo in here?

- iz ;)

POINT!

POINT!

this should be in the FAQ

- iz

Consumer certification is used as an access limiter right now. Are you saying your proposal would not somehow morph that direction within a couple of years?

I doubt it.

What we need is to eliminate any access restrictions for consumer products even if we have to define consumer to be a K or L limit.

I think it would lower the available pool of qualified consumers (topay premiums) and reduce the insurance pool and consentrate the risk.

Right now insurance premiums are paid through product cost. You can get a pack of D's for ten bucks. Any deviation from the current system will result in price INCREASES due to a new compliance regime.

USR got product liability insurance for about $5000. That is not as big a barrier to entry as TRA/NAR/their dealers asking all consumers to get ATF permits to buy motors.

You see CTI not wanting to enter the narrow margin model rocket business as insurance driven. It is not. It is manufacturing driven. He has the equipment to make a million motors a month if he wants to. But there is no market for that in the FGH range.

Been there, done that.

I simply do not see a connection between certifying users and insurance costs.

Problem is, how are you going to convince all those kids they need to be NAR certified? Worse yet, stores would have to require NAR certification before you could buy low power motors. Do you think they'd bother to do that, or would they just stop carrying Estes stuff? And if you don't put these restrictions into place, the certs would have no effect on insurance at all because they're unenforced.

If instant gratification is not possible, you lose 85% of all retail sales of any product.

this pertains to everyting, not just rockets. Proven in tests for over 10 years by huge fortune 500 manufactures

Art

hallucinating).

'certificate'

The real problem is chickenshit hypocrites who will sign liability waivers whereby they agree to act "at their own risk", but then if shit happens they turn around and file suits for "damages" anyway, even if it's not actually the fault of the defendant... there needs to be a law that says that a signed release of liability is an enforceable and contractually binding promise, and that if you give me a release and then try to sue me anyway, not only will the suit be dismissed immediately, but you can be sued for "breach of contract" for violating the promise not to sue.

-dave w

On 29 Jan 2004 20:54:55 GMT, snipped-for-privacy@aol.com (RayDunakin) wrote:

I would not. They would be self motivated to become certified users by the prospect of buying motors at a reduced cost. Furthermore, one condition for L0 or L00 demanded by the insurance industry might well be that certified users must be adults, in which case "kids" would be a non issue.

There is an issue of how a dual price structure could be implemented. conceptually what today is a $10 pack of motors, could be priced at $5 with a $5 insurance pass through (or Tax) for non certified consumers. If you show your certification card, you could buy the motors for only $5. This of course would be extremely unpopular with retailers and uncertified users. More likely the regular price will still be $10, but certified users could get a $5 discount. This $5 discount might be in the form of a manufacturers rebate to certified consumers. Or the discount might only be available on direct purchases from the manufacturer or authorized distributor. Then too, you could have a manufacturer who decides only to sell to the small pool of certified users. But nobody is going to stop selling Estes stuff to non certified users as long as there is a dime to made.

Alan

I was only addressing the high cost of motors due to manufacturers liability insurance costs and insurance industry FUD. The cost of individual dues and/or personal liability insurance is another issue. I personally feel that the NAR incurs much more expense serving the needs of HPR flyers than MR flyers, and that dues should reflect that. Perhaps the recent dues increase should only have been applied to HPR certified flyers. I personally feel that flying HPR poses a greater risk than flying MR, but it depends on the particulars, and both are remarkably safe.

Alan

Nah, but all failed contest flights are reported, and I'd like to see more motor failures reported.

Alan