I'm going to do will call from Lycoming, and my invoice clearly reflects that. After a bad shipping experience with my fuselage kit I don't trust LTL shippers any more! Van's themselves does will call, so I need and fully expect to be able to do this at Lycoming in Pennsylvania.
Van's Air Force
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Engine, Prop and Avionics Update posted
- Thread starter Brantel
- Start date
John Bradley
I'm New Here
Greg, how about those of us that have been paid for in full for our motors months before chapter 11 was announced? We they try to make us pay more for a motor that is already paid for in full before the bankruptcy?? Will a paid for in full customer be first on the list for their motor and or prop ??
OrthoFlyer
I'm New Here
Greg: I have completed the RV10 tailcone section and was awaiting the QB wings and fuselage when the company declared Ch 11. I have received my Hartzell prop and am in line for the Thunderbolt. I plan to make a claim for the rest of the airframe and am looking to buy an RV10 airframe from another builder that does not plan to complete his project. I still want to take delivery of the engine when it comes out of production. Do you see a problem with staying lined up for the Thunderbolt while making a claim for the deposits I had in on the rest of the airframe?
Timing is EVERYTHING! A lot of us are sitting around with nothing to do now because of all the delays. I do not mind the price increases nearly as much as the Price increase ADDED to an indefinite timeframe. My finish kit and engine were due by now. I don't want to pay more to wait longer yet. Will Vans honor the original shipping order or will we be put at the back of a very long line? This make all the difference.
Greg,
I appreciate the additional information here. As others have stated the one thing that is confusing still is what you mean by “having to talk to lycoming” to get timeline information. If we ordered in early 2022 like many of us, we should just be about at the front of the line for non thunderbolt engines. What is there to talk about? is there some factor which causes the inability to quote approximate timeframes? Is there a financial factor relating to the bankruptcy?
We really need to understand if somehow all of this resets the clock. I assume Lycoming itself has the production list and understands their own ability to deliver. We should be able to get answers here or if we cannot an explanation of why not. If less than 100% of the engine deposits result in new contracts that would only improve timeframes (less engines to produce). Thanks!
I appreciate the additional information here. As others have stated the one thing that is confusing still is what you mean by “having to talk to lycoming” to get timeline information. If we ordered in early 2022 like many of us, we should just be about at the front of the line for non thunderbolt engines. What is there to talk about? is there some factor which causes the inability to quote approximate timeframes? Is there a financial factor relating to the bankruptcy?
We really need to understand if somehow all of this resets the clock. I assume Lycoming itself has the production list and understands their own ability to deliver. We should be able to get answers here or if we cannot an explanation of why not. If less than 100% of the engine deposits result in new contracts that would only improve timeframes (less engines to produce). Thanks!
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I’m in the same boat. From the creditor’s call, yes. Regardless of how much you have put down toward your kit/engine/prop/etc from 25% to 100%, it is still considered a deposit and you will now be required to pay the new adjusted price if you wish to continue. Or, you can file a claim and hope to recover your deposit. You will be treated the same as every other creditor with regard to how much you might recover in that process.
John Bradley
I'm New Here
did you pay 100% of an invoice before the chapter 11 filing ??
yes. Paid in full in August. Engine was not ready and they were not requesting payment in full. I just decided (at the time) that the money was safer with vans rather than tempting me in my bank account..... how wrong I was......
dmattmul
Well Known Member
I ordered my TB IO-540 Oct 2020. Delivered Jan 2022. Why did Lycoming stop/curtail TB engines deliveries? Talking to Jeff Schans (Great guy) they were eager for business.
cactusman
Well Known Member
I'm guessing that Lycoming is honoring their contract pricing with Vans. 12% is a little less than 1/2 of a 25% deposit. So the 442 engine deposit holders are taking roughly a 50% hit to their deposit is another way of doing the math. That tracks with with what the BK attorney in PHX told me. He said recouping 50 cents on the dollar was pretty good.
BTW he also said that they don't deal with a lot of manufacturers ch 11 sub 5 recoveries because they usually end up in liquidation - there you might be lucky to recoup 25 cents on the dollar - maybe he said. Hence Starman Auctions...just passing it along.
I'm gonna sign up and withdraw my claim when I get my email.
BTW he also said that they don't deal with a lot of manufacturers ch 11 sub 5 recoveries because they usually end up in liquidation - there you might be lucky to recoup 25 cents on the dollar - maybe he said. Hence Starman Auctions...just passing it along.
I'm gonna sign up and withdraw my claim when I get my email.
Unless I am misreading Greg’s post, it is not uniformly 12% - it is either 2024 prices or 12%, whichever is lower. If you ordered an engine end of last year the 2024 prices are a roughly 4-5% increase over 2023 (maybe less, I’m just doing loose math with the IO-540 and what I had budgeted). It sounds like the 12% is the maximum increase between outstanding orders pre-2024 and 2024 prices - call it a cap on price increases should you have a long outstanding order.
Correct
My engine was due to be manufactured February / March time this year. I, also, am struggling to understand why timelines might have shifted when Lycoming were never historically in receipt of my deposit at this stage, anyway.
I am still very, very worried about sending the remaining balance to a bankrupt company “as my engine goes into production”. I also am nervous that my engine will go to Vans first, as opposed to direct to me. I wish there was a way to transfer Lycoming my final balance and pick up the engine direct from them. That way Vans can take whatever cut they like from my original 25% deposit and send over any excess to Lycoming direct from that fee.
I would feel much safer with that arrangement.
Greg, can you make that an option please?
I am still very, very worried about sending the remaining balance to a bankrupt company “as my engine goes into production”. I also am nervous that my engine will go to Vans first, as opposed to direct to me. I wish there was a way to transfer Lycoming my final balance and pick up the engine direct from them. That way Vans can take whatever cut they like from my original 25% deposit and send over any excess to Lycoming direct from that fee.
I would feel much safer with that arrangement.
Greg, can you make that an option please?
Firstly, as I read it as long as you're not international the engine is normally drop-shipped from Lycoming to you, or you can pick it up from Lycoming. (Maybe you're in Canada, which likely still means you could pick it up at Lycoming).
Secondly, I feel the news this weekend has been generally good, or at least we've finally heard something that we've needed to hear for a long time. Thank you, Van's.
But I, too, would worry about sending the balance some time before the engine was ready to ship. The 'held in trust' account, or whatever it's called, is really no protection at all if Van's has access to the funds at any time. While paying Lycoming directly as you suggest would work, the real solution is a real escrow arrangement where a 3rd party keeps the balance of the funds and disperses them to Lycoming (and to Van's for their portion) when all the parties are ready to complete the transaction.
We all know this is true.
Greg, can you and Lycoming make THAT, an escrow arrangement, an option please? Think of the level of confidence and security it would give your customers (us). I would be happy to pay fees to an escrow company for the protection it would provide.
I'm in the UK, but would be prepared to make a trip to Lycoming
Dan 57
Well Known Member
Yep, that is a very good way to solve a certain uncertainty, and I too would be happy to pay some extra for the added security of an external escrow company.
My engine was ordered In early 2022 before the price increase. Was supposed to be summer of 23 delivery and then became April 24 delivery. I think Lycoming got WAY more orders than anticipated and even with their price increase calculations the amount of orders was more than anticipated. Hence the subsequent very large increases on Thunderbolt engines. IO-360-M1B literally jumped 10k after having jumped 5k.
This makes me think Lycoming is taking this opportunity to increase profits on older orders and get an extra 12%.
New information that indicates this is not Lycoming changing the price.
I think the whole thing stinks. ZERO information about timeframes (although I would add 2 months anyway because they ceased filling any order for Vans Dec-Jan and moved on to other orders)
ZERO explanation about where the extra money is going. Just be honest and upfront. I guess they don’t have to and probably don’t want to explain for “proprietary”, “exclusive”, “sensitive” reason. Convenient
I think after this treatment that anyone replacing an engine or building another airplane will go to any number of other companies like Aerosport, Barrett, ECI Titan, etc.
The only reason I didn’t go that route was about a couple thousand $ more and the prop combo discount. Now that discount is costing me WAY more than what I was saving.
New information that indicates this is not Lycoming changing the price.
I think the whole thing stinks. ZERO information about timeframes (although I would add 2 months anyway because they ceased filling any order for Vans Dec-Jan and moved on to other orders)
ZERO explanation about where the extra money is going. Just be honest and upfront. I guess they don’t have to and probably don’t want to explain for “proprietary”, “exclusive”, “sensitive” reason. Convenient
I think after this treatment that anyone replacing an engine or building another airplane will go to any number of other companies like Aerosport, Barrett, ECI Titan, etc.
The only reason I didn’t go that route was about a couple thousand $ more and the prop combo discount. Now that discount is costing me WAY more than what I was saving.
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One more thought. Will “prices be subject to change without notice”? I fully understand a change IF the customer requested something. Otherwise no, I’ve been waiting almost 2 years and now subject to 12% increase. Will a person have to also agree to a willy nilly increase that they have no control over? If a person agrees to proceed then I assumed they have waived the right to make a claim.
This needs an explanation.
Attached is what the engine order looks like for a new order.
This needs an explanation.
Attached is what the engine order looks like for a new order.
Attachments
Pilot135pd
Well Known Member
What I don’t understand is why do they have to raise those prices (except for when the supplier raises them) when it doesn’t cost them more? They take the deposit, forward it, and then the item gets shipped to the customer, or at least that’s how it was supposed to be. If the 3rd party isn’t raising their prices, why does Vans do it for items sold over a year ago?
I think the executives at Lycoming feel that Vans offers them the advantage of being connected to the check out line like a pack of gum at the register. Which is why they are sticking with them.
I think there are better ways to do this without doing business with Vans.
Literally could create a program with the rest of their distributors. ie the registration paperwork from Vans that you only get after buying ALL kits could be presented to the distributor and whatever 1 time per aircraft deal Vans was giving could be given by the other distributors.
I think there are better ways to do this without doing business with Vans.
Literally could create a program with the rest of their distributors. ie the registration paperwork from Vans that you only get after buying ALL kits could be presented to the distributor and whatever 1 time per aircraft deal Vans was giving could be given by the other distributors.
It's been made very clear previously that Van's did NOT send the engine deposits to Lycoming. Lycoming still wants their original price we agreed to and the only way to get it (or at least most of it) is for us to pay 12% more. In fact, Lycoming is likely taking a hit here too, albeit smaller than the customers are.
This wouldn't surprise me. Any excuse by Textron to make money.
I agree that Lycoming likely did not get the deposits. I am not so sure about the second bit - we don‘t know the details of the contract between Van’s and Lycoming and so we don’t know if, for example, Van’s was previously covering losses between the engine order price they agreed to with their customer and the agreement between Van’s and Lycoming. We just don’t know. I would also be curious whether the Lycoming liabilities listed in the Chapter 11 documentation are cash liabilities (i.e. Van’s didn’t pay an invoice) or order liabilities (Van’s has XX engines on order from Lycoming and can’t pay out of their cash flow for delivery, but has not actually defaulted on an invoice). Perhaps that is just semantics, because the end result is the same for Van’s customers (higher prices).
FWIW, if you buy another aircraft right now (like a Cirrus SR22) you sign a contract for delivery in 1-2 years which includes possible price increases. If you bought the SR22 in 2022, you would be subject to two price increases of ~8% (of course you would also be getting a plane with a significant avionics update, but I digress…).
IMHO, the real problem here is getting in line for an engine with delivery in 3 years and everyone (customers, Van’s, Lycoming) expecting cost to manufacture to not change. It’s very frustrating for us and I can imagine it’s also frustrating for Lycoming and Van’s, since all indications are that they wanted to sell us engines at a reasonable profit margin and predictable cadence.
Pilot135pd
Well Known Member
That's why I wrote this
Well........ Vans took the engine money treated as there own, Had to or should have known,Inflation & market adjustments were far outpacing the price structure. In my opinion called a halt to new orders and created a wait list. The rapid expansion along with the loss of senior employees, The Laser cut parts, overseas shipping & quality control issues have put us were we are today a 50% haircut on Lycoming engines deposits is a calculated number to keep as many in the game as possible. These are lawyers and liquidators not airplane people.I would think they get paid off the top. Keep in mind Vans aircraft live in the same world we do. Any down turn in the economy this all can change again. IMHO
This is my #1 concern as well. I would feel much better about agreeing to the new terms if some arrangement could be made for the final payment to be held by someone other than Vans Aircraft (i.e. Lycoming or an escrow account) until my engine is delivered.
Honestly, I'm not sure if that's how it's supposed to work as for 40 years, Van's was presumably able to use engine deposits as operating revenue, yet carry enough reserve to provide Lycoming and other 3rd parties with their share when needed. Through a series of unfortunate events and financial mis-management, clearly the reserve dwindled away leaving us where we are.
While I don't relish paying an additional 12% on my engine (it's still less than if I ordered today), it seems the most fair deal going forward for everyone.
This makes no sense. The $12k deposit I paid on a $48k engine is gone. Lycoming didn't get it. A 12% price increase doesn't give Lycoming any extra money. In fact, my new $54k engine only gives them $42k now. And that's assuming Van's gets $0.
I have correspondence that indicates to the best of their knowledge that Lycoming did not increase anyone’s price and that it is Vans that has their palm out. My apologies to Lycoming in my previous post.
Basically, considering they mismanaged your entire 25% deposit, asking for half of it again is the best they could do.
If it’s ok for them to ask for more money, is it too much to asks Vans why certain people are still on the payroll? Why a person should trust the same people with money again?
Would be easier to swallow if there had been some more pink slips to responsible parties.
I feel bad for the dock worker or other employees that got let go and were doing their job 100%
Basically, considering they mismanaged your entire 25% deposit, asking for half of it again is the best they could do.
If it’s ok for them to ask for more money, is it too much to asks Vans why certain people are still on the payroll? Why a person should trust the same people with money again?
Would be easier to swallow if there had been some more pink slips to responsible parties.
I feel bad for the dock worker or other employees that got let go and were doing their job 100%
pitts12driver
Member
Yes, but someone inside the company just told me that Lycoming is talking about production delays of multiple years. My engine was supposed to have been delivered in December. this entire supply chain is broken.
I think this is why we need to know more about timelines before agreeing to a new contract.
Carl Froehlich
Well Known Member
Exactly. Now we have an end cost estimate, when we can expect delivery is the primary question. So for the poor slobs (like me) that ordered engines 30+ months ago - do we go to the front of the production line or the end?
howardtlcc
Active Member
Last time I looked the 2 blade prop for the RV-10 was about 10K (maybe last summer). Now it is 12K. More than 3%...But I might have missed price increases from the summer to the December timeframe.
Valid questions.
Pilot135pd
Well Known Member
THIS was my point.
Just tell us who’s getting the extra money
pitts12driver
Member
Honestly - this is the lawyers saving the founder's equity. The proposed solutions are the result of consistently lax financial controls, and are primarily punitive to the customer base which is both sad and unfortunate. I am an engine and cowl away from completion - and it's just maddening.
Likely the bankruptcy lawyers, followed by Vans employees, then Vans creditors. If none of these get the extra money, then we don’t get our engines. Simple as that.
apicreator
Member
If you lived long enough, you know that most of the times Ch 11 precludes a sale to new owners who want nothing of the negative association with the cleanup process. Sadly is this happens at the expense of customers and other unsecured creditors.
Hopefully Vans is getting the extra money. Whether you have a completed aircraft or an under construction aircraft, it is in our better interests that Vans aircraft survives. I owned a Glastar as Stoddard-Hamilton went out of business. Owning an orphaned airplane is not a situation I wish to repeat.
The vast majority of aircraft are orphaned. More out of business manufactures than in businesses since Orville and Wilbur.That’s completely normal for aviation. Dont see the big deal, or the advantages of emptying pockets to “save” a company.
Looking back I remember all “go fund me” posts. Well you got it, and it’s being done via Ch 11 whether you want it or not.
And one can be bitter-understandably given personal losses experienced. The other side of this coin is many relieved who may not express the sentiments on a web forum. Relief that support will be robust and ongoing. For most owners and the community at large, this is a very big, very positive deal in the grand scheme. Make some lemonade from the lemons of the situation. It works for most difficult things experienced in life and often a better enjoyment of it overall. Each of use can choose how to react. I’m disappointed at spending more than anticipated to finish my project, but will focus on being grateful to have the chance to do it. And to still have support, parts, engineering behind it.
Patrick
Chiming back in here to emphasize what I feel is the most important point for those of us who have to decide in 14 days: What is the timeframe for engine delivery? If we had dates scheduled (my order was March 2022) what is the new delivery date? This is as much a Lycoming question as it is a Vans one unless there is something else going on again like the engine delivery is dependent on enough people sending in acceptance of the new contract.
I have sent my question in to vans and have not heard back.
I have sent my question in to vans and have not heard back.
JeremyL
Well Known Member
I second this, or third, or fourth…. Whatever…. It is a good and valid question for those who need to make a tertiary decision on airframe kits.
I feel the same way. Very grateful that Mr VanGrunsven stepped in to save his company. I'm also very grateful that people like Greg are working so hard to make the best of a horrible situation. If not for their sacrifice and hard work, I'd be staring at a very expensive pile of worthless parts.
