Hi Buddy,
From what I hear through the grapevine, Karl Petersen is no longer with Cyclone. Hoyos isn't an engineer either, he races cars, he left Cyclone to manage a drag strip in Florida and I hear he is in the process of moving to another job out of state.
The problem with all the engineers is that they did very little engineering. The product lines were pretty much set in stone by Schoell's patents, as was the pitch to investors. As you noted, he isn't an engineer. He also isn't a machinist, machine builder, production specialist or anything else that you would look for as qualifications to design and build mass market engines. They started out by subcontracting all the machining for their prototypes rather than having a Bridgeport, lathe and grinder in-house; that HAD to cost a pretty penny, slow down development and add resistance to the notion of changing designs in response to testing.
My estimation is that Cyclone assumed they were going to grow into a big company, so they gave everyone a title, sold a ton of stock and acted like they were much bigger than they are. According to some of their balance sheets admin costs exceeded R and D.
Where I work, we don't sell customers Beta versions. We don't even sell them Gamma versions, although we will bring in journalists and consumer focus groups for testing. It's way too easy to build a bad reputation by shipping hardware of unknown quality. In the computer industry they offer Beta test software, but my experience with Beta software is that they usually offer it for free and it disables at some point --- where you then have to buy the finished product. So they aren't selling you what may potentially be junk.
Their projected build rate mitigates against mass production. I can't see anyone setting up a fixed line with parts hoppers, assembly jigs, fixtures and so on for such a low production rate. The builds are more likely to be closer to onesies and twosies style hand builds...you can just feel the cost escalating.
The problem with some of the things you mention, like using prehoned tubing for the cylinders, is that it presupposes that a radial engine with bolted on cylinders is actually a good design. The vast majority of engines have cylinders placed inline and cast enbloc. The cylinders are now mutually reinforcing, making the engine lighter and stronger. The machining can be done without constant part rotations. There are fewer parts to deal with...and I could drone on for a bit. The basic design indicates that the developer really wasn't conscious of how economical and competitive engine production is done. Not that this is as huge a liability in these low production numbers, but it sets a low ceiling for business growth.
Other things, like the anodizing, polished surfaces and so on are pure Cyclone. As you know from being in the business, customers often cost themselves far more money than does the shop. Schoell went on record as stating that a major part of the reason for the system layout was that it looked good and he felt the appearance would be valuable for sales. It might draw investors, but most customers don't intend to put their gen set on the mantle and could care less. If your spine shivered at the idea of centering engine design around appearance, join the crowd.
Truthfully, I think the whole idea of licensing other companies to build the engines was nonsense from the word go. There is almost nothing purely original in their patents, all the basic concepts are in the public domain and have been for maybe 100 or more years. About all they have patented is specific ways of implementing these well known and documented concepts. This might be OK if your mechanical engineering is light years ahead of everyone else on the planet, but that isn't the case. Actually, you can download a copy of Professor Johann Stumpf's 1922 edition of "The Unaflow Steam Engine" from Google Books and find a large portion of the design concepts spelled out. Some of the other ideas, like oil free lubrication, are great (although still not original) but depend on developing and proving out technologies that aren't on the market. If you don't have the tech, and you haven't tested it past the failure point, you can't claim you have a market ready product.
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