Which Glass Vendors most likely to survive?

Hope this isn't to much of a downer ;-)

Just curious if anyone is considering the company's ability to survive in their decision on their glass...and what that would mean to their panel decision. We take that consideration into account in the corporate world whenever choosing a vendor...and quite often in hindsight it was a smart thing to do.

If Garmin were to go out of business, for example, it is likely that the government would step in considering the amount of their install base in critical systems. While a year or two ago that would likely seem preposterous, their stock is taking some serious hits and when companies like Circuit City recently filing bankruptcy and owing Garmin a cool 15 Million, it may not be unheard of in a year or two.

My concern is more in the small to mid sized vendors. Garmin, Bendix, Avidyne and so on can likely recover under Chapter 11 or with other help.

I don't necessarily think the sky is falling, but the number of new builders is going to decrease rapidly in the coming year or two until the economy recovers. Will be interesting to see which companies manage to weather the storm.

Bendix is owned by Honeywell which supplies to many industries and has been around a long time now. They can likely weather this storm.

Garmin is pretty well established now and pretty big as well. They've acquired some good small tech companies in the last while without spending a lot. Garmin has a great product and service rep which does not hurt one bit if your competitors don't.

I'd expect these two to be around for a while but of course we never know how much money they might have borrowed or owe.

$15M is not a big deal to a company like Garmin but I bet they are not too happy about it and will be reviewing their credit policies again.

NO "CRISIS" POSTS, PLEASE!

Your speculations and negative post is an exact example of what causes this "CRISIS" ! Somewhere, a while ago, some stupid jounalist said "WE HAVE A CRISIS!" all the other stupid journalists aknowlidge this and.............. yes indeed everybody believes them, so everybody keeps his/her money in his/her pocket, because of the bad times ahead and does not buy the new car that they wanted to buy and they do not buy the new furniture that they wanted, because they are playing it safe, keep the money in the bank, "because it is crisis" and so on and so on, and yes..... the snowball is roling and............... we actually have a crisis on our hands!

Because of these xxxxxxxxxx people we are not buying cars, we are not buying all the new stuff that we realy want, and all the companies making all this stuff, have to lay off people or even worse, go out of business, and so on and so on. And the snowball rolls on and on! Indead, until some journalist comes allong and tells us it is no longer a crisis, and everything is going to go the oposit way, great!.

OK, I know, no politics on this site! So Doug, you are right if you delete this post. But, oh man it felt good when I was typing this! .

Maybe we can turn this in a positive snow ball? Go ahead, start your project now, order the kit part that you need to get your plane flying, get a nice paint job, spend the money on some good "glass"! Start flying that plane, today fuel is as cheap as it was in 2005 (well at least it is over here in Belgium) Enjoy life now, tomorrow you may be dead!

No reason why the companies that served us well over the years should go out of business and have to lay off people, to!

xxxxxxxxxxxxxxxxxxxxx

Regards, Tonny.

Pilottonny said:

Your speculations and negative post is an exact example of what causes this "CRISIS" ! Somewhere, a while ago, some stupid jounalist said "WE HAVE A CRISIS!" all the other stupid journalists aknowlidge this and.............. yes indeed everybody believes them, so everybody keeps his/her money in his/her pocket, because of the bad times ahead and does not buy the new car that they wanted to buy and they do not buy the new furniture that they wanted, because they are playing it safe, keep the money in the bank, "because it is crisis" and so on and so on, and yes..... the snowball is roling and............... we actually have a crisis on our hands!


Regards, Tonny.

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No doubt that there is some truth in what you say, but whether the downturn is caused by real economics or by emotion (and the truth is that it is caused by both), there is a downturn and there is the real risk that certain manufacturers may go away.

If I was looking to spend $10k on a glass panel, I'd certainly do my best to avoid getting stuck with an unsupported product or in losing a deposit. I've had that happen to me, and I can tell you, it ain't a happy moment to call to inquire where your new toy is only to find that the phone is disconnected and your money is gone...

Wow...

Lol... okay so I guess I really started a fire here.

If we all think realistically that all these vendors will weather the storm, then so be it. Invest the 10, 20, or 50K plus in your avionics stack, smile, and move on.

I personally want to educate myself on the vendors to avoid making a big error. When Lehman brothers can collapse when just a few weeks prior they were claiming they were solid, well...all bets are off in my opinion.

Smaller vendors, like it or not...crisis or not...perceived or otherwise... will have a hard time with certain cash flow, especially those that rely on credit. Banks just aren't willing to lend right now. Consumers are holding off spending.. and pretty much every day there is a posting on the classified here where someone is losing their entire project because they lost their job, home, or what have you.

You can put your head in the sand and pretend it's not happening.... and for those that are... I have a nice bridge in Brooklyn to sell you along with a time share on my ocean front property in Arizona ;-)

OK, look at the problem simply - companies that have been around awhile in this business have learned how to survive in a "niche" market (and yes, homebuilding is a very small market for electronics, etc...). So I'd take a look at how long each vendor has been in business - longevity means that they have at least a track record of survival.

(Yes, by my theory, GM would be in great shape. I maintain that the small, niche businesses are already very lean and conservative, so they are a different story.)

Ask yourself "how well has this company kept it's promises (features, reliability, delivery dates, prices) in the past. if they have a good track record, then why shouldn't they be smart enough to survive?

That's just my way of thinking - your mileage will probably vary...

Paul

Niche...

I tend to agree... less competition and so on will likely help them.

The only exception I would think would be companies who are very new to the market. The Dynon's and BMAs on the smaller size of the spectrum seem to have a pretty loyal following... whereas vendors who are just now getting into it will likely struggle.

who can see the future

If you can see the outcome please let us all know because the ability to see the future will make us all rich. There are people today who are taking a big hit on large company's that no one figured would ever be in trouble.
If you plan on continuous enhancements or upgrades to your avionics then go ahead and worry about the business longevity of your experimental equipment or buy certified equipment from Rockwell Collins, Honeywell, Thales etc but other than that the equipment from players such as Dynon etc is likely to work for a long time and in many cases someone picks up the support/repair effort for a company that ceases to exists.
Decide what price/functionality you want, compare choices and move out when you are ready to do your panel. Many aircraft are happily flying today with equipment that is decades old and you do not have to put a glass cockpit in your aircraft.
Part of the excitement of building an experimental aircraft is getting advanced capability for a fraction of the price of certified equipment from smart, focused niche companies.
Somewhat akin to the old adage "you pay your money and take your choice"

But if the companies are too small....

Ironflight said:

OK, look at the problem simply - companies that have been around awhile in this business have learned how to survive in a "niche" market (and yes, homebuilding is a very small market for electronics, etc...). So I'd take a look at how long each vendor has been in business - longevity means that they have at least a track record of survival.

(Yes, by my theory, GM would be in great shape. I maintain that the small, niche businesses are already very lean and conservative, so they are a different story.)
......

Paul

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...or not keeping up with technology.

They can disappear overnight (Allegro)

Or get left behind by technology (RMI)

gil in Tucson

PS ...anyone want to buy an assembled RMI engine monitor?...
My Allegro has just been sold as a spare to RV owner with one in his panel

Outcome

I cannot see the outcome...but I can reduce my risk.

Part of the excitement for some builders may be getting the latest and greatest at a fraction... but I would take a stab that most of the folks reading this cannot afford to lose 5K or 10K when a company goes out of business and theif EFIS goes on the fritz.
In glass panels especially, it's not so much it failing, as it is software bugs. Every single EFiS on the market has software bugs...100 percent. So you then pick up an EFIS that now will likely never have a bit of code changed in it's future. My avidyne has a new bug that when it went to waas compatible, it won't work with the garmin waas of the 500 series.

Smaller companies tend to use different programming languages...likey don't document the code, and so on.

To each there own on this subject is how it is looking. I'm not a huge risk taker when it comes to losing my money. Even if I am getting it at a fraction of the cost. That being said though, I can certainly appreciate that mindset.
I managed to get my kit and avionics at a fraction of the new cost, so same idea I suppose.

uk_figs said:

If you can see the outcome please let us all know because the ability to see the future will make us all rich. There are people today who are taking a big hit on large company's that no one figured would ever be in trouble.
If you plan on continuous enhancements or upgrades to your avionics then go ahead and worry about the business longevity of your experimental equipment or buy certified equipment from Rockwell Collins, Honeywell, Thales etc but other than that the equipment from players such as Dynon etc is likely to work for a long time and in many cases someone picks up the support/repair effort for a company that ceases to exists.
Decide what price/functionality you want, compare choices and move out when you are ready to do your panel. Many aircraft are happily flying today with equipment that is decades old and you do not have to put a glass cockpit in your aircraft.
Part of the excitement of building an experimental aircraft is getting advanced capability for a fraction of the price of certified equipment from smart, focused niche companies.
Somewhat akin to the old adage "you pay your money and take your choice"

Click to expand...

Should I reply (yes - no - yes - no - o what the heck...)

Well, good question.

there was mention that the smaller guys could be worse off but better in surviving the storm.

I don't know about our direct competitors but I would assume it would be very similar to us.
We have never been as busy as right now. In fact we are seriously considering putting a defined limit to our current production numbers to avoid fatigue of our people and resultant possible pressure on quality.

Yes, this has come as a bit of a surprise for us (Our country is suffering from the credit crunch just like everybody else) - we where expecting that we could take things a little easier for a while, and that would not have been all that unwelcome...

My explanation ? I don't really know but I am assuming that perhaps many builders are moving towards more affordable products - so I am guessing that those vendors that have the expensive stuff may be loosing sales while the lower priced guys are gaining.

My take is that if you are a builder - you build because you want to and because you want to fly what you build. Within reason, it does not matter what the economy is doing. This is personal. Perhaps you'll delay part of a kit or the engine or get a cheaper option - but you are gona fly, come **** or high water. If that means you're going to build something cheaper - that's what you are going to do. Only your wife or the devil will stop you. How am I doing so far ?

Rainier
CEO MGL Avionics

Pilottonny said:

"WE HAVE A CRISIS!" all the other stupid journalists aknowlidge this and.............. yes indeed everybody believes them, so everybody keeps his/her money in his/her pocket, because of the bad times ahead and does not buy the new car that they wanted to buy

Click to expand...

Oh, cripes, here we go again with the "it's the journalists fault." I wish you folks would decide. In one thread, we learn that it's a problem created by consumer debt -- people spending more than they could afford. In another, we find that people bought homes they couldn't really afford. A learned read of the situation (might I suggest the New York Times series on Citibank?) finds that another problem is that banks bought packaged mortgage instruments without knowing their value.

There's no question that a recession is PARTLY an emotional response to a REAL problem, but I get sick to death of the "stupid journalist" stuff. It was a stupid journalist who told you a decade ago that Americans were saving at a rate lower than at any other time in history. Were they stupid for telling you that, or were you stupid for not listening.

Personally, I've done a good job telling people what some of the underpinnigns of the economic crisis are and I resent -- personally and strongly -- the kneejerk reaction that there really isn't an economic boogeyman out there and that I'm stupid.

Just because we want to believe something, it doesn't make it so.

A guy here asked a question. It was a good question. How about we try to answer it? Here's mine. Garmin will survive fine and that's what you get when you pay a premium price for a product that others sell for less but don't have the same nameplate value.

I think one thing we've learned is good products and good value survive, if not in its present form, than as part of another company. If you look at some of the RV-related startups, they've quite often been started by people who specialize in starting companies, building a good product, and then cashing out by selling the product to someone else. I expect that to continue.

The real question is what happens to an oversaturated market? How many more autopilot choices does the homebuilder need, for example?

The good side of this is those companies -- and we all know who they are -- who give crappy service, aren't going to survive the economic downturn. That's as it should be.

This topic is certainly timely for me since I'm in the process of making some final high dollar purchases to complete my RV. If picking a manufacturer who can weather this recession isn't hard enough, now you have to deal with resellers and small service providers who want hefty deposits with long lead times. I certainly understand their need for the deposit, but If they close their doors before you get your stuff, there goes your money!!

An example is my interior choice. One of the most expensive options out there, but certainly considered one of the best. I know the small company is struggling and have done some layoffs, but they want and deserve a 50% deposit to begin the work. They are estimating a 11 week turn around. Will they make it, I don't know. I certainly hope so. Their a great company with a great product. However, If they fold I will loose my deposit. That's money down the drain during a time when it's hard to replace. Tough choice!

You'll never know until it's too late!

The problem is that most small companies are running on a cash shoestring and the string just got shorter. When they fail, it will generally be a shut the door scenario and you are at the mercy of their integrity. You face two completely different issues when ordering expensive glass.

The first relates to the orginal manufacturers ability to survive and support it's product in a down economy. The short story is that companies who size themselves to handle real and not optimistic sales projections will probably do OK since they are not "committed" to a XXXX thousand production run. Usually, they can downsize a little bit and squeeze through while companies who are betting on unrealistic XXX units in a shrinking market have usually sized thier production capacity to something larger than they can conveniently "downsize". (Think VLJ here)

An example is a company like GRT who is realively small, but sells considerable numbers of units. They don't promise 5 minute delivery because they don't have the capacity to turn out huge numbers BUT at the same time, they don't have huge capacity to support when sales go flat. An important thing to look for in small companies is "alternate income streams". GRT provides EIS "guts" to a lot of other glass players, and as such, have a more consistant cash flow than a company with only one product and only one market for that product. (just using GRT as an example)

The other problem is that typically, you will buy glass through folks like StienAir (freely admits to being a lean small business) and so your deposits are only as safe as the folks you give them to. It is much harder to know how well off Stien is (or Stark, or ACS, etc) than someone like Garmin or Honeywell. Going through small distributors puts your money at risk and buying from a small manufacturer puts your technology at risk.

I think in most cases, the good business folks will survive and the one thing you will find in common is a lack of arrogance, a dose of humility, great customer service, a fair price, and a good reputation. For my money, these are the things I looked at hard when I laid down my cash. If you can't check all the boxes, don't send the money!

ALWAYS talk to the supplier and the manufacturer if you can. No feel good,... no order.

Having said that,... if you're building an airplane and have the $$ to even consider this question,... you are greatly blessed so be thankful and place that order!

Just my .02

Bill S
7a finishing