Van’s Aircraft Facing Challenges

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RyanB

RyanB

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That's quite the ominous release.
In my experience when companies stop processing refunds and simultaneously stop taking orders they're only weeks away from issuing a going-concern warning.
 
So you're saying now is not a good time to buy an RV-12?
 
Running a business is hard, and gets harder as the business gets larger. Easy to lose control of your numbers when margin is tight.

A lot of businesses have whiplash going from the sugar high of free money during the Pandemic to the impact of higher rates now.

Hopefully Vans sorts it out. They are a big part of GA in this country.
 
Doesn’t sound good for the company,hopefully they recover from this financial situation. Doesn’t look good for people were purchasing their kits one section at a time.
 
Dang. The laser cut parts bit might be solvable, and the primer corrosion issue should have a chargeback stipulation, but that’s a lot of money tied up.
 
Yikes! Sounds like costs went sideways and they just aren’t charging enough for the kits.
 

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If you have an 18mo delivery delay, and you promise one cost upfront to those that pay deposits, but your cost of goods sold soars in the interim, there’s going to be a cash flow problem.
 
I often wondered how they could offer a 35k RV7 kit while just about every other airplane kit has surpassed 50k. I had hoped that they survived on volume but seems they got trapped in the cyclone of needing sells to keep funds coming while booking them so far in advance that cost exceeded sale. The current state of the homebuilt market is sad. Between materials and shipping it has taken even plans building out of the budgets of all but the most wealthy.
 
Interesting they used laser instead of water jet.
 
If I recall correctly what I read a while back, the laser cutting itself wasn't the problem. The problem was a change made by the vendor after they produced the prototypes and got the contract. To save some time someone changed how the holes were made... and didn't bother to tell Van's, I'm sure.
 
You guys assume it’s material costs. I’d guess overhead has more to do with it. We in business see material prices and adjust for them every day. Overhead not so much.
 
Duplicate thread.

www.pilotsofamerica.com

Van’s Aircraft Facing Challenges

FYI for our Van’s owners. https://www.vansaircraft.com/2023/10/business-announcement-from-vans-founder-dick-vangrunsven/?fbclid=IwAR3NG8t8hY76YPpV_h5mS8ytMALSgDMFy7c56BSvBijNdIUCXQiqh0i_u6o_aem_ATay6zXWLo6AiRwLEJpcz5CLCyRibZuc80CTrKcJCAalJTMfhTKQIgE_1wspv23PE_E
www.pilotsofamerica.com www.pilotsofamerica.com

Ron Wanttaja
 
Stewartb said:
You guys assume it’s material costs. I’d guess overhead has more to do with it. We in business see material prices and adjust for them every day. Overhead not so much.
Click to expand...

It’s total cost of goods sold + shipping. Tough spot to be in.
 
Either admit that Inflation is happening and get out ahead of it or go broke. Inflation is going to kill a lot of sales but one sale at a profit is much better then a hundred at a lose.
I wish the best to Van's Aircraft and hope the Chinese don't bale them out too.:sad:
 
DaleB said:
If I recall correctly what I read a while back, the laser cutting itself wasn't the problem. The problem was a change made by the vendor after they produced the prototypes and got the contract. To save some time someone changed how the holes were made... and didn't bother to tell Van's, I'm sure.
Click to expand...
I thought Van's decided to move to laser cutting to boost production and some parts were cracking during the dimpling and riveting processes. I thought they said cutting the rivet holes with the laser got the part too hot.

They bought a larger punch press and were replacing a ton of parts.
 
Half Fast said:
Hmmmm..... Two weeks while they negotiate a sale to China, perhaps?
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It’s an extremely viable business-they just screwed up their cash flow with two (apparently) unrecoverable vendor snafu’s, development costs on a new airplane, and investments into expensive new tools.

My guess is they had a viable plan until the laser cut parts issue blew up. They had an opportunity to stop-loss that one months or a year ago when field reports of cracks started and they downplayed the issue instead of taking corrective action. 737 Max comes the mind…
 
That probably explains why there's been no movement on the 15. I'm kind of flabbergasted they've gotten into trouble. I assumed they were basically printing money. I'm less surprised they're having trouble with their overseas vendors. I suspect the quick build kits will get much more expensive.
 
Grum.Man said:
The current state of the homebuilt market is sad. Between materials and shipping it has taken even plans building out of the budgets of all but the most wealthy.
Click to expand...

Yup, you're exactly right. Heck, the whole thing is a sad heap. Can't even get engine shops to quote me a repair, 6 weeks in. Just had 4 refuse, 2 refused to quote iran, 2 refused service outright (Penn, Western, Powermaster, Ram, respectively). Just sent out two more rfq's based on recommendations from folks on here, standing by for more radio silence tbh.

Inflation has wrecked the whole thing. People keep faking their position with credit extensions, but the gig is up, street is maxed out. Prices are so whacked out I can't install a new engine on this damage/cosmetic discounted vienna can even if I wanted to; the hull it's mated to can't support it on the resale/insurance end e.g. inflation-driven price obsolescence. I'm not at all surprised to hear buckling in the homebuilt space finally starting to display their mask-off moment.

I don't think Van's gonna be able to get blood out of a turnip. Even if they adjust pricing and keep their most monied patrons, they'll lose a ton of customers. This isn't housing, a "post-covid-priced" lego set is a lot easier to walk away from than the same happening when talking about your kid's school district roof-tied choices. And since nobody is getting that ludicrous low financing terms that created the mess in the first place, that option is right out to support these stoooopid 2023 pricing/income ratios.

Sincere good luck to Van's. My guess this becomes an even smaller space in short order (like we needed more elitism around here), or they sell out to winnie the pooh.
 
It is a sad day - for the Vans people and us Vans Airplane owners. Those who had deposits on kits, engines, and propellers are the ones who will get hurt the most.

The kits are too successful to go away so I believe they will survive one way or another. Best of luck to all involved.
 
Original thread on this topic....

www.pilotsofamerica.com

Van’s Aircraft Facing Challenges

FYI for our Van’s owners. https://www.vansaircraft.com/2023/10/business-announcement-from-vans-founder-dick-vangrunsven/?fbclid=IwAR3NG8t8hY76YPpV_h5mS8ytMALSgDMFy7c56BSvBijNdIUCXQiqh0i_u6o_aem_ATay6zXWLo6AiRwLEJpcz5CLCyRibZuc80CTrKcJCAalJTMfhTKQIgE_1wspv23PE_E
www.pilotsofamerica.com www.pilotsofamerica.com

Mods, might think of transferring the original thread out of Flight Following and into the Homebuilt group.

Ron Wanttaja
 
I got an invoice for the final payment on my Hartzell BA prop from Van's earlier this month. They said Hartzell was ready to ship this month. Its been crickets since I paid the balance. Hope my prop isn't lost in the kerfuffle. It should not be part of this Van's shake up since they ship directly from Hartzell.
 
wilkersk said:
I got an invoice for the final payment on my Hartzell BA prop from Van's earlier this month. They said Hartzell was ready to ship this month. Its been crickets since I paid the balance. Hope my prop isn't lost in the kerfuffle. It should not be part of this Van's shake up since they ship directly from Hartzell.
Click to expand...

Did you pay Van’s? They might not have paid Hartzell, given their cash flow problem.
 
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hindsight2020 said:
Yup, you're exactly right. Heck, the whole thing is a sad heap. Can't even get engine shops to quote me a repair, 6 weeks in. Just had 4 refuse, 2 refused to quote iran, 2 refused service outright (Penn, Western, Powermaster, Ram, respectively). Just sent out two more rfq's based on recommendations from folks on here, standing by for more radio silence tbh.
Click to expand...

Call Jimmy Brod at JB Engines in Sebring, FL. Just had an overhaul done by him. He's a very honest guy with fair business practices, good prices, and plenty of comfort with EAB. If you are asking for something specific that causes engine shops to turn you away, he'll tell you straight up what it is.
 
Lose a little money on every sale, but make it up in volume. Not good when your strategy becomes an MBA school joke.

I was talking to a lady who was an accounting consultant. She commented that accounting was "not exciting". I said oh no, accounting is not boring. To a business owner, profit is the most exciting thing of all, and you cannot profit without good accounting.

Founders rarely have the management skill to run large businesses. The attributes that made you successful often do not scale. Smart owners bring in an experienced executive who has experience with enterprise-level systems and practices. A classic example would be the founders of Google bringing in Eric Schmidt.
 
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How many people have went boobies up building kit planes?
 
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