Van’s Aircraft Facing Challenges

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ateamer said:
The increased shipping cost was from their contractor in the Phillipines.
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Curious as to the background of Vans outsourcing to the Philippines. It sounded like Van's shipped components there which were built up into kits, which were then shipped back to Vans.

I get that sourcing things overseas is a fact of life for many American companies, but it just seems like a long way to go for that kind of work (from Oregon, to the Philippines, and back).
 
ateamer said:
Nope. It was a vendor here in the US that did the laser cutting. Van’s gave them the procedure to follow, and the vendor went off script, disregarding Van’s engineers’ specifications. Hopefully the law will allow Van’s to not only not have to pay the vendor, but the shop will have to pay Van’s costs incurred due to them going rogue.

The increased shipping cost was from their contractor in the Phillipines.
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That's why you have to check a vendor's work, classic case. Once again, never time to do it right, always time to do it over. Sometimes people screw up, sometimes they are just plain dishonest. Need to verify the work.
 
fasteddie said:
Curious as to the background of Vans outsourcing to the Philippines. It sounded like Van's shipped components there which were built up into kits, which were then shipped back to Vans.

I get that sourcing things overseas is a fact of life for many American companies, but it just seems like a long way to go for that kind of work (from Oregon, to the Philippines, and back).
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Let’s look at a QB kit in more detail. All RVs are created from the same parts, and practically all of those parts are manufactured at Van’s factory in Aurora. QuickBuild Kits are assembled at Van’s partner company in the Philippines from parts supplied by Van’s. These skilled craftsmen have been assembling Van’s QB Kits for more than twenty years, and it shows in the quality of the assemblies delivered to Oregon.
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www.vansaircraft.com

QuickBuild Kits - Van's Aircraft Total Performance RV Kit Planes

RV kits include all the parts needed to build a complete airframe. The builder must provide the engine, instruments, propeller, avionics and upholstery. All of our kits have been reviewed by the FAA and have been found eligible for licensing in the Experimental Amateur-Built category. This means...
www.vansaircraft.com www.vansaircraft.com

When shipping was cheap and labor was cheap, margin was easy to make. When shipping prices jumped overnight, those cost changes did not translate to price changes.
 
ateamer said:
Nope. It was a vendor here in the US that did the laser cutting. Van’s gave them the procedure to follow, and the vendor went off script, disregarding Van’s engineers’ specifications. Hopefully the law will allow Van’s to not only not have to pay the vendor, but the shop will have to pay Van’s costs incurred due to them going rogue.

The increased shipping cost was from their contractor in the Phillipines.
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Got a link for the vendor issue? Being in the trade I'm curious what the vendor could have done that was different than what was paid for.
 
Racerx said:
Got a link for the vendor issue? Being in the trade I'm curious what the vendor could have done that was different than what was paid for.
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Van spells it out in their announcement. The vendor decided to laser cut parts instead of CNC punching them. That resulted in micro cracks on some parts.

If you read between the lines, Vans fell victim to the new online world. Vans says the parts "met their design requirements". But builders apparently felt otherwise.

20 years ago, Vans would have told those complaining that the parts were fine, and most builders would have taken their word for it. However, in the age of social media the builders persuaded each other that the parts were not acceptable and began demanding exchanges or refunds en masse. The issue went viral and Vans lost control of the narrative.
 
Ed Haywood said:
Van spells it out in their announcement. The vendor decided to laser cut parts instead of CNC punching them. That resulted in micro cracks on some parts.
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Let me correct this…. Vans intentionally subcontracted laser cutting services for a selection of not-highly-stressed parts. Somewhere along the way, someone changed the tool path for the laser and created a notch at the edge of every hole. This is where the cracks are forming.

But there is no doubt that Vans chose to go the route of laser cutting to add capacity over the short term. (And didnt adequately inspect the completed parts.)
 
kyleb said:
Let me correct this…. Vans intentionally subcontracted laser cutting services for a selection of not-highly-stressed parts. Somewhere along the way, someone changed the tool path for the laser and created a notch at the edge of every hole. This is where the cracks are forming.

But there is no doubt that Vans chose to go the route of laser cutting to add capacity over the short term. (And didnt adequately inspect the completed parts.)
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This is correct. Vans elected to go laser cut parts to speed up the backlog. I have a high def cnc plasma in house. Much faster than laser. But a much larger heat affected zone. Apparently the contractor they hired, on the inside offsets they chose a perpendicular lead in and no lead out. Not minding the aluminum heat affected zone issues this causes, it leaves a REALLY crappy looking hole. A hole that should be match to size. It's really unbelievable any operator that cared AT ALL would do that. There's no reason not to arc a lead in on a hole. Especially holes that size.

Don't expect what you don't inspect. That's on Van's for not rejecting the parts and choosing to send them out. Here's a photo of one of the holes, it looks like a conventional air plasma cut part and really crappy looking hole.

Screenshot_20231031-232115.png
 
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fasteddie said:
There has been a lot of discussion and disagreement regarding what level of cracking is acceptable,
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...L...your airplane or mine? Considering these are brand new parts/airplanes...I'd say none..
 
Ed Haywood said:
To what tolerance? Zoom in with a microscope and every edge is jagged.
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That's kind of what happens when cutting aluminum with a laser, plasma, or waterjet. It doesn't leave nearly as smooth of an edge that steel or stainless does and will leave some dross...as shown by the yellow arrow.
 
Ed Haywood said:
That will be determined by the terms of the agreements Vans and the vendor signed. Unless the vendor wants to avoid the negative reputational impact of failing to satisfy a customer, enforcing those agreements will probably require legal action. The mediation and litigation process can take several years, so it is unlikely to save Vans in the short run, and will cost them $ before it saves them $$. If the vendor does not have fairly deep pockets, prevailing could put them out of business too, and now the whole mess is bogged down in two BK's.
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How many kits would fit on a atlas 747?
 
Murph said:
...L...your airplane or mine? Considering these are brand new parts/airplanes...I'd say none..
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I'd tend to agree, but I'm not privy to all the details, just what I've read here and on other forums.

For example, for all of the "Laser Cut Parts," I keep seeing people refer to these as Red / Yellow / Green / Blue. It sounds like Van's has categorized the laser cut parts into different "buckets," but it's unclear exactly what each bucket means, and the difference between them.

Can someone give us the high points, or point us to a guide to the issue?
 
fasteddie said:
I'd tend to agree, but I'm not privy to all the details, just what I've read here and on other forums.

For example, for all of the "Laser Cut Parts," I keep seeing people refer to these as Red / Yellow / Green / Blue. It sounds like Van's has categorized the laser cut parts into different "buckets," but it's unclear exactly what each bucket means, and the difference between them.

Can someone give us the high points, or point us to a guide to the issue?
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Eh, point and click... https://www.pilotsofamerica.com/com...aircraft-facing-challenges.144881/post-3451646
 
Ed Haywood said:
To what tolerance? Zoom in with a microscope and every edge is jagged.
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Compared to what panels look like that were done with a punch? Apparently units made that way didn't have issues.
Bell206 said:
FYI: Proper hole prep is everything in sheetmetal work. Everything.
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Out of round and a little flaw to one side. I could see where you would get a stress crack... are these holes used as is or do they get a reaming?

I hate it for all involved.
 
kyleb said:
Somewhere along the way, someone changed the tool path for the laser and created a notch at the edge of every hole
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I was curious about the starting point for the cut it they started in the center and walked it out..
 
kyleb said:
Somewhere along the way, someone changed the tool path for the laser and created a notch at the edge of every hole.
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No they likely didn't create a notch, but rather started the cut on the edge of the hole. What they should have done is start the 'plunge' cut in the center of the hole and do an arc outward to do the cut. Where the laser (or plasma cutter, or waterjet) starts a hole is nasty and wider than the typical cutting path.
 
Mtns2Skies said:
No they likely didn't create a notch, but rather started the cut on the edge of the hole. What they should have done is start the 'plunge' cut in the center of the hole and do an arc outward to do the cut. Where the laser (or plasma cutter, or waterjet) starts a hole is nasty and wider than the typical cutting path.
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Watched a vid from Oshkosh and vans showed the lead in they specified as well as lead out. The vendor started in the center but did what my nesting calls a perpendicular lead in, then had no lead out.
Screenshot_20231101-135456.pngScreenshot_20231101-135508.png
 
Mtns2Skies said:
No they likely didn't create a notch, but rather started the cut on the edge of the hole. What they should have done is start the 'plunge' cut in the center of the hole and do an arc outward to do the cut. Where the laser (or plasma cutter, or waterjet) starts a hole is nasty and wider than the typical cutting path.
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I suspect it's a quicker cycle to not lead in.
 
Mtns2Skies said:
No they likely didn't create a notch, but rather started the cut on the edge of the hole. What they should have done is start the 'plunge' cut in the center of the hole and do an arc outward to do the cut. Where the laser (or plasma cutter, or waterjet) starts a hole is nasty and wider than the typical cutting path.
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Which is what I referred to as a notch.
 
kyleb said:
Which is what I referred to as a notch.
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Got it, I misunderstood your post to mean someone put a notch in the toolpath OUTSIDE of the hole. I re-read and see we're on the same page :)
 
Racerx said:
Adding a lead in, or the correct lead would add very little time to the cut cycle.

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Very little time, times thousands of holes adds up to a good amount of time. Just my suspicion. That said, Vans should have caught this, or maybe they caught it and let it go.
 
Murph said:
are these holes used as is or do they get a reaming?
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If it were mine and I couldn't get the hole cleaned up to spec or the next size with edge distance, I'd replace the metal. Regardless, to oversize an entire panel is not right either. Better to start over as it is a forever job.
 
As far as Van's goes, my view from the complete outside is that I don't think their leadership made any crazy decisions. Business require risk. Their model of selling parts that they would deliver later had some risk, but an advantage is that it probably let their customers fund their growth, to reduce or eliminate borrowed money. It worked for a long time. They kept their customer base by not putting in clauses that would let them arbitrarily increases prices after the orders were placed, which I'm sure helped sales, but it was an additional risk. A safer bet for the customers, as long as the company stays running. But it worked for a long time.

Then...costs go up, apparently quite a bit, and delays happened, and it put them in a big crunch. Maybe no way to negotiate the existing contracts. So it sounds like they took another couple of risks, in outsourcing manufacturing overseas, and in changing manufacturing methods. Sounds like both of those things went sideways, and made things worse. But that doesn't mean they weren't decent things to try. My guess would be they underestimated the impact and risk of those changes.

As far as accountant running things, I'd say that's maybe one of the reasons why our economy is falling apart. Maximizing profit for the next month or perhaps long term of 6 months, reducing production cost by moving production to a country that has a 100% chance of stealing the design and producing less expensive copies themselves. A generalization overall, and accountants absolutely have a place in business, along the lines of every pilot should get a weather report before flying the plane.

I'd guess best outcome might be a reorganization, but no idea if that would be a ch 11 or something else for Vans. Something that would let them renegotiate everything with the people who they owe parts to, where the impact is hopefully spread fairly, and where they get to keep the company running and in the future profitably. I say this because my read of this is that they've been an honest company throughout, and just landed here from some mistakes on not predicting the current state of events well, and taking too much risk.

I'd guess worst outcome is someone buys whatever is left, or they have to sell it off, and there's nothing left for the community.

All guesswork on my part. My only inside insight is that I know from experience it's a lot harder to run a business than most anyone thinks going in, and that easy answers usually aren't.
 
PaulS said:
Very little time, times thousands of holes adds up to a good amount of time. Just my suspicion. That said, Vans should have caught this, or maybe they caught it and let it go.
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But they had a lead in. As shown in the screen shot I posted above. Just the incorrect one vans specified.
 
Racerx said:
But they had a lead in. As shown in the screen shot I posted above. Just the incorrect one vans specified.
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Ah got it, still looks longer to do it correctly, and probably more difficult to program. But you still have to inspect. I don't know how many vendors, in my years of doing stuff like this, would tell me, "don't worry, we'll do the inspections, so you don't have to worry about it". I'd say ok, then still inspect and send the junk batches back.
 
Bob Noel said:
profits in constant dollars or then-year dollars?

if then-year, then I would expect profits to go up, if only because of high inflation, yes?
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The secret is companies are just charging more money because they can and then blaming it on inflation.
 
DavidWhite said:
The secret is companies are just charging more money because they can and then blaming it on inflation.
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There's no secret. Charging more money because you can IS inflation. Every company's goal is to maximize profit.
 
PaulS said:
Very little time, times thousands of holes adds up to a good amount of time. Just my suspicion. That said, Vans should have caught this, or maybe they caught it and let it go.
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No doubt QC had to be non existent on Vans end. These holes require more than the light deburring customers signed up for. To use a new vendor with a new to you process...they should have been watching like a hawk with a micrometer.
 
DavidWhite said:
The secret is companies are just charging more money because they can and then blaming it on inflation.
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Ideological babble. Companies ALWAYS charge as much as they can. Doing anything else would be idiotic. It is the job of market competition to limit what they can charge.

The causes of inflation over the last 2-3 years are well documented. A combination of COVID supply chain disruptions, government emergency spending, and very low interest rates resulted in too much money chasing too few goods in the economy.

A big part of Van's predicament is that they failed to charge more, in part because their agreements locked them in to non-viable prices. And now they may go out of business.
 
Ed Haywood said:
Ideological babble. Companies ALWAYS charge as much as they can. Doing anything else would be idiotic. It is the job of market competition to limit what they can charge.

The causes of inflation over the last 2-3 years are well documented. A combination of COVID supply chain disruptions, government emergency spending, and very low interest rates resulted in too much money chasing too few goods in the economy.

A big part of Van's predicament is that they failed to charge more, in part because their agreements locked them in to non-viable prices. And now they may go out of business.
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And compounded by 2 quality control failures...
 
Racerx said:
And compounded by 2 quality control failures...
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It's never just one thing. But failures happen in every industry and business. Good financial management provides the resilience to withstand unexpected negative events. If Van's accounting house was in order, they would have the cash flow to survive the QC failure.
 
Ed Haywood said:
A combination of COVID supply chain disruptions, government emergency spending, and very low interest rates resulted in too much money chasing too few goods in the economy.
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Unfortunately, of those three knobs the only one the Fed can twist is interest rate. (When your only tool is a hammer, every problem looks like a nail.) And thus inflation continues to continue.
 
Half Fast said:
Unfortunately, of those three knobs the only one the Fed can twist is interest rate. (When your only tool is a hammer, every problem looks like a nail.) And thus inflation continues to continue.
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Oh, I don't know. I feel like I could argue well that the Feds twisted the "supply chain disruptions" knob. (The wrong way)
 
Ed Haywood said:
Ideological babble. Companies ALWAYS charge as much as they can. Doing anything else would be idiotic. It is the job of market competition to limit what they can charge.
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Ah yes, market competition. What a fine concept.

1EB45319-CC5C-4386-A8F0-20488C52D1D4.jpeg
 
Half Fast said:
Unfortunately, of those three knobs the only one the Fed can twist is interest rate. (When your only tool is a hammer, every problem looks like a nail.) And thus inflation continues to continue.
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actually, the govt can also control spending.

wait

What am I saying?

Gov't fiscal control? How foolish of me...
 
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