Van's Files for Reorganization Under Chapter 11

[giorgioca]

Suggestions?

Hey there,
I have ordered a RV12is full kit in July; in October paid remaining on my Tail kit since it was being crated. I have not received anything yet.
Should cut my losses and hope for some refund sometimes, or accept new price and hope for the best?
Hate throwing more money after bad, still the RV12is is a very nice kit!
Any suggestions?

Thanks, Giorgio

 

[jimbom]

Hey there,
I have ordered a RV12is full kit in July; in October paid remaining on my Tail kit since it was being crated. I have not received anything yet.
Should cut my losses and hope for some refund sometimes, or accept new price and hope for the best?
Hate throwing more money after bad, still the RV12is is a very nice kit!
Any suggestions?

Thanks, Giorgio

You'll have to wait and see what the new price will be. Then it is something that only you will know if it works for you or not.

 

[Blake]

Wondering when vans will be able to open there online store again and taking phone orders. Is the judge going to have to approve every move here on out? Sure be nice to send them some support by buying some parts for both my planes

 

[Swingwing]

Wondering when vans will be able to open there online store again and taking phone orders. Is the judge going to have to approve every move here on out? Sure be nice to send them some support by buying some parts for both my planes

Order needed part sooner than later is a relatively low risk investment we can make as builders to convert Van’s inventory into desperately needed cash. This will help not only Van’s but those in our RV community who have a lot to lose.

 

[springer]

Wondering when vans will be able to open there online store again and taking phone orders. Is the judge going to have to approve every move here on out? Sure be nice to send them some support by buying some parts for both my planes

Have you tried ordering online? I did several weeks ago, never talked to anyone but the part was out of stock and on back order. A week later I received an email saying the part was in and being shipped. Received it a few days later.

 

[Desert Rat]

Have you tried ordering online? I did several weeks ago, never talked to anyone but the part was out of stock and on back order. A week later I received an email saying the part was in and being shipped. Received it a few days later.

The online store is shutoff.

 

[GregInIdaho]

Court today

Can anybody give us a rundown about what happened in court today? Did the judge issue any rulings? Is there a new hearing date for anything? Can Van's use the cash to continue business yet?

 

[GrahamF]

Order needed part sooner than later is a relatively low risk investment we can make as builders to convert Van’s inventory into desperately needed cash. This will help not only Van’s but those in our RV community who have a lot to lose.

Or you could take the view that because of Van's large but horribly unbalanced levels of inventory, and ongoing difficulty turning any of that inventory into full kits, every random web order for a handful of parts that someone doesn't really need - obviously prioritised for easy cash - makes another out-of-pocket customer even less likely to get the kit they've already paid for anytime soon.

I'd argue that now is the time to collectively pressurise the company to prioritise shipping to those that have already paid, not exacerbate the issue by waving extra cash in their faces. Continuing operations is what the $6m DIP funding is for.

 

[GrahamF]

Can anybody give us a rundown about what happened in court today? Did the judge issue any rulings? Is there a new hearing date for anything? Can Van's use the cash to continue business yet?

Next hearing on the 19th.

Lawyers for Van's admitted that the business is a mess.

Suggestion that customers should be allowed to form an unsecured creditors committee was batted down.

I didn't hear enough to understand what Van's are or are not allowed to do for the time being.

 

[Brantel]

Can anybody give us a rundown about what happened in court today? Did the judge issue any rulings? Is there a new hearing date for anything? Can Van's use the cash to continue business yet?

In a nutshell. They basically got everything they were asking for at this time. The final rulings will come on the 19th.

Seems the Judge and the trustee’s are happy with the overall plan so far.

 

[rdt7]

An AOPA article said prices are going up 32%. Did I miss that in this thread somewhere?

Also, I thought I read somewhere that Vans said it expected unsecured creditors to eventually be paid in full. Can anyone confirm?

I ordered everything on March 30 this year. If I could get all my deposits back, even over a period of years, I might do that versus continue at a 32% increase.

 

[N82VM]

An AOPA article said prices are going up 32%. Did I miss that in this thread somewhere?

Also, I thought I read somewhere that Vans said it expected unsecured creditors to eventually be paid in full. Can anyone confirm?

I ordered everything on March 30 this year. If I could get all my deposits back, even over a period of years, I might do that versus continue at a 32% increase.

Deposit back??? You and everyone else.
You will have the option to agree to the increase and continue or disagree and file a claim. You’ll get pennies on the dollar for your claim. Judge is allowing a third party to streamline the process which normally would be handled by the court.
He almost did not allow it because the courts paperwork process is designed for the average person to understand and we are “sophisticated” because of our building endeavors and obviously people of “means”. On the “means” part I don’t think the judge understands how many of us are average Joe.
It’s not an easy decision.

For me I’m down to an engine and my 10k deposit. Depending on how much the price increase makes my deposit worthless will determine the road I take.

 

[flyrlfs]

An AOPA article said prices are going up 32%. Did I miss that in this thread somewhere?

Also, I thought I read somewhere that Vans said it expected unsecured creditors to eventually be paid in full. Can anyone confirm?

I ordered everything on March 30 this year. If I could get all my deposits back, even over a period of years, I might do that versus continue at a 32% increase.

Not sure where it came from. In their 13-week spreadsheet, which is full of assumptions, it does appear to show a 30% increase in revenue shortly after 1/15. But it's all reading between the tea leaves.

I'm in your camp. I have an EMP kit and deposits on a QB Fuse and QB Wing. The wing was supposed to be shipped in Oct and Vans refused to respond to my queries 4 weeks ago.

My go/no-go decision is a little easier. I know one person 90% complete, waiting on avionics & engine. The decision is done, but very unpalatable.

Vans Filed and communicated the min. amount of info. to get the CH11 rolling. I find it impossible to believe they don't know what the price increase could/should be, by now. But they know enough to demand contract cancellation.

 

[rv6ejguy]

Deposit back??? You and everyone else.
You will have the option to agree to the increase and continue or disagree and file a claim. You’ll get pennies on the dollar for your claim.

I have a hard time believing Van's would screw deposit holders not wanting to pay more over the originally contracted price, for pennies on the dollar. They'd likely have to wait several years to get their deposit money back of course until the company can generate sufficient revenue to start repayment.

I think the confidence damage and future sales impact would be substantial if this was done.

 

[Swingwing]

I'd argue that now is the time to collectively pressurize the company to prioritise shipping to those that have already paid, not exacerbate the issue by waving extra cash in their faces. Continuing operations is what the $6m DIP funding is for.

That is not how this is going to play out. For Van's to fulfill the paid orders they need to be on a path to recovery. The more cash now the faster that happens. Unfortunately, those with deposits paid and gone will either end up at the back of the line or as unsecured creditors.

 

[Sallcock]

I didn't attend the court zoom meeting yesterday - just curious regarding the situation now based on your comments - it sounds like

1 Vans will stay in business
2 Builders with fully or partially paid orders that have not yet been delivered
will be asked to pay an increased cost to continue the build or have the
build delivered
3 Builders who do not want to continue either their SB or QB and want a
refund will likely be paid pennies on the dollar in terms of a refund

Many have speculated that the whole QB process will be disappearing - can anyone confirm if that's true?

I (probably like many) have fully paid for a 10 QB wing/fuse and finish kit from July 23 and would like to know if anyone has any facts based on the above please

Also - was there a link published for the recording of the Zoom meeting ?

Thanks in advance

 

[calvid]

That is not how this is going to play out. For Van's to fulfill the paid orders they need to be on a path to recovery. The more cash now the faster that happens. Unfortunately, those with deposits paid and gone will either end up at the back of the line or as unsecured creditors.

I don't think it will be a very long line then. I doubt there are hordes of people waiting to place new orders at higher prices while hundreds of us who paid deposits haven't gotten deliveries yet. New people aren't going to jump in unless they have faith that they'll get what they paid for, and that trust can only be built by fulfilling the existing orders.

 

[pilotyoung]

Reorganizaiton

I am surprised that the judge would approve the plan without Van's telling him how much the price increase will be. I think the price increase is an essential piece of information to know so he can assess if the plan has any chance of being successful.

 

[calvid]

Many have speculated that the whole QB process will be disappearing - can anyone confirm if that's true?

There was no mention of anything as specific as QB kits in the hearing (that I heard). It was really just about getting motions approved (that were linked on page 2 of this thread).

Also - was there a link published for the recording of the Zoom meeting ?

I wanted to record it and upload it to Youtube, but recordings were prohibited unfortunately. I wonder if a transcript will be published, but I have no idea.

 

[flyrlfs]

You won't get your deposit back under any circumstances.

If Van's survives you might get a few pennies on the dollar a couple of years from now. If it goes Ch7 then absolutely 100% guaranteed you'll get absolutely zero.

If you want out, it's far more sensible to pay the revised pricing and then sell the kit. Assuming of course they survive long enough to deliver it.

I understand both fully. My confidence in Vans has suffered considerable erosion. My frustration is with the exec team.

Right ... 'Survive long enough' That's what I worry. They are counting on returning customers at higher prices. If that doesn't materialize, those who did jump in will suffer greater loss. Or, I do order the kit and they ship another lemon? Then I'm out more. Too many unknowns with Vans.

 

[Lucmac]

I was dissapointed the judge didn’t poke into the plan ‘better’. He nibbled around it but didn’t investigate how much the cost increase was going to be and get a sense if the plan added up to the numbers he was presented with. He got into the 70% will accept/30% reject but that’s about it. They did discuss in court pretty well how Van’s sells expensive items like props and engines as part of their kit even though they don’t make the parts and they did specifically mention lycoming when discussing the Nigerian line items and with normal kits specifically but the judge also failed to pursue if the plan’s increases were going to include those pass through items. Sounds like we’ll have to wait until at least January or longer before Van’s decides what to do with the engines, props, and avionics components that it sells as part of kit packages. More dragged about frustration which raises the risk factor.

 

[edmo]

Get Well Soon

Well, I’ve been ready to pull the trigger on a RV-14A but that has been on hold for a while, obviously. I’m not getting any younger but rushing into sending money off to a bankrupt company can’t get past my common sense filters at this point. I hope for the best for Van’s. Then I’ll reevaluate.

Money is a big part of this but so is management. It sounds like they’re making the right moves. If they don’t, they’ll be back at square one in short order. The underlying issue is not trivial. To quote a friend, a longtime serial entrepreneur and financial consultant to big time companies: “How does a business run by business professionals with a one year backlog of business manage to go bankrupt? It’s not like they are dealing with clients with limited discretionary income.”

Please get well.

 

[blaplante]

I find it impossible to believe they don't know what the price increase could/should be, by now. But they know enough to demand contract cancellation.

So, the more they raise the price, the fewer customers will pay the higher price. If you raise the price too much revenue actually decreases. Versus what is the minimum revenue increase needed to return to profitability (given lots of liability items like replacement of LCP). And clearly the company didn't know how much trouble they were in until well into it (as in apparently selling QB's at a loss). So, you have financial naivety, some complicated accounting (deposits for various things at various price points)... and I believe co-mingling of money (i.e. deposits apparently used for operations). And suddenly we expect an epiphany of knowing exactly how much the price increase needs to be? Sorry, when I see the financials this out of hand, I don't expect a sudden turn around in accounting.

As I stated elsewhere, the last company I worked full time for went through bankruptcy and re-org. A small privately held company that grew explosively. And accounting was totally clueless. Co-mingled Agent, Customer, and Company money. As long as it grew explosively all worked out. New money paid the Agents and Customers. Once that stopped... It all collapsed. All they ever looked at was 'oh we have 6M$ in the account', without knowing how much was really escrow money. Hence no idea how much actual operating capital was on hand. I see a lot of parallels here. But, they did emerge from receivership after a year or so.

 

[GrahamF]

Well, I’ve been ready to pull the trigger on a RV-14A but that has been on hold for a while, obviously. I’m not getting any younger but rushing into sending money off to a bankrupt company can’t get past my common sense filters at this point. I hope for the best for Van’s. Then I’ll reevaluate.

Money is a big part of this but so is management. It sounds like they’re making the right moves. If they don’t, they’ll be back at square one in short order. The underlying issue is not trivial. To quote a friend, a longtime serial entrepreneur and financial consultant to big time companies: “How does a business run by business professionals with a one year backlog of business manage to go bankrupt? It’s not like they are dealing with clients with limited discretionary income.”

Please get well.

I don't believe it was run by business professionals.

 

[GregInIdaho]

Dreaded price increase

Everyone is discussing the dreaded price increase, but taking the wrong view, imho.

Whether you build a 7,8,9,10 or 14 the Airframe that Van's controls the price of is only a fraction of the total cost of the total project, generally 20-25%. On the RV-12 the percentage is a little higher, nearly 33% of the total cost.

On a $200,000 that means Van's is in control of $50,000 of the project. A 33% price increase would be $15,000, or a total of $200,000.

On a $120,000 RV-12, the price increase would likely be more like 32% of $40,000 or $13,000.

Remember too,m most people have one kit on order at a time. I know that many people have multiple kits, but that is not the norm. The people with only one kit on order would have faced price increases in the future in any event.

I do not think these price increase numbers of $10,000-$20,000 in the grand scheme of airplane ownership, while painful and unfair, should not be significant enough to make you put away your dreams of building a plane.

 

[calvid]

Everyone is discussing the dreaded price increase, but taking the wrong view, imho.

Whether you build a 7,8,9,10 or 14 the Airframe that Van's controls the price of is only a fraction of the total cost of the total project, generally 20-25%. On the RV-12 the percentage is a little higher, nearly 33% of the total cost.

On a $200,000 that means Van's is in control of $50,000 of the project. A 33% price increase would be $15,000, or a total of $200,000.

On a $120,000 RV-12, the price increase would likely be more like 32% of $40,000 or $13,000.

Remember too,m most people have one kit on order at a time. I know that many people have multiple kits, but that is not the norm. The people with only one kit on order would have faced price increases in the future in any event.

I do not think these price increase numbers of $10,000-$20,000 in the grand scheme of airplane ownership, while painful and unfair, should not be significant enough to make you put away your dreams of building a plane.

Agreed for the most part, but before I agree to ordering more kits at higher prices, I'd like to know if engine prices are increasing. Since those are ordered through Van's, I don't think we have a clear picture of what's happening there.

 

[Sallcock]

Scary times to be honest - I have paid just shy of $69k up front for my 10 QB wings/fuse/finish kit - all paid up in July of 2023

However I read a thread on here ages ago that you should always buy using your credit card as it will give you some protection

I never thought (probably like everyone else) that this would happen but did use my CC and then paid it off

I spoke with the CC company and they told me that I could proceed with a refund - but ...........

I want to build on - I don't want to throw the towel in now after such an emotional and fiscal investment (hangars/time/build etc)

So its a tricky situ to be in as I know that to pull that trigger with the CC company means an exit from the dream - I am hoping that Vans will send out the email asap to allow us all to make an informed decision

Fingers crossed

 

[bertschb]

I do not think these price increase numbers of $10,000-$20,000 in the grand scheme of airplane ownership, while painful and unfair, should not be significant enough to make you put away your dreams of building a plane.

Totally agree!

I plan to agree to the price increase on my Finishing kit the day I get the email from Vans. I won't be waiting until January 15th and I have no concerns at all about Vans as a viable company moving forward.

If Vans wants to charge me for an additional "final payment" on my (fully paid) fuselage kit, I'll pay that as well but won't be very happy about it.

The airplane is a toy and something to keep me busy in retirement. It's not an investment and I'm not treating it like one.

 

[Dugaru]

Be sure to get all the details from the CC company about deadlines, procedures, etc. for getting that refund. Whatever you choose to do, for whatever reason, you don't want to inadvertently lose an option while you're deciding.

Scary times to be honest - I have paid just shy of $69k up front for my 10 QB wings/fuse/finish kit - all paid up in July of 2023

However I read a thread on here ages ago that you should always buy using your credit card as it will give you some protection

I never thought (probably like everyone else) that this would happen but did use my CC and then paid it off

I spoke with the CC company and they told me that I could proceed with a refund - but ...........

I want to build on - I don't want to throw the towel in now after such an emotional and fiscal investment (hangars/time/build etc)

So its a tricky situ to be in as I know that to pull that trigger with the CC company means an exit from the dream - I am hoping that Vans will send out the email asap to allow us all to make an informed decision

Fingers crossed

 

[zubbyz]

Audio of the hearing on 12-7-23

https://drive.google.com/file/d/13r-gbjYcjlFbYwxGFrDM1HbW3xMekzfd/view?usp=sharing

 

[JC_Avery]

Well, I’ve been ready to pull the trigger on a RV-14A but that has been on hold for a while, obviously. I’m not getting any younger but rushing into sending money off to a bankrupt company can’t get past my common sense filters at this point. I hope for the best for Van’s. Then I’ll reevaluate.


Please get well.

I'm in the same boat. I am finishing my 8 tail kit and I would love to put in an order for a wing and/or fuse kit, even at higher prices (to a point), but I am having a hard time convincing myself that it's a smart move to send cash into a Chapter 11 company even if the cash is held in escrow.

I was about to pop for the kits after Van's stated they'd no longer include LCP parts in their kits (aside from the parts that have always been laser cut to some extent), but then the videos started coming out regarding the financial troubles and I got spooked. No way was I going to throw more of my hard-earned cash into a company with cash flow issues. I'd already sunk enough time and money doing research, tooling up, getting my workshop fixed up, etc., and I wasn't about to risk several thousand dollars more on hopes and promises.

I don't have any skin in the game beyond my already sunk time, money, and a partially built tail kit, but I absolutely feel terrible for the folks that are caught between a rock and a hard place right now.

It feels wholly unfair to ask current customers to help subsidize the costs of rectifying the cash flow and quality control issues despite whatever legalities that allow Van's to do just that. I understand that Van's needs money to make money, but whatever options that are presented to current customers are absolute gambles right now. I wouldn't blame anybody for walking away and selling their kits just to be rid of the headache.

I sincerely hope Van's survives and thrives. I would love to continue building my 8, but these days when cash is king and hard to come by I think I will wait until Van's is on more solid footing before I risk submitting an order.

I'd hate to walk away from it, but this whole airplane-building thing is still a hobby, and I won't allow it to put my financials at risk no matter how much it might help Van's.

 

[burtw]

Interesting. Having made deposits on QB wings and fuse I assume that is gone if I bail so it probably makes sense to stay in which brings up some questions:

1. What's the new price?
2. What's the new schedule?
3. What's the status/remediation of LCPs in the QB?

I assume that info will be included when Vans makes their new contract offer.

 

[N82VM]

My engine last I heard was to be delivered April 2024. Let’s assume I agree to new terms. I make final payment and they ooopsie themselves to Ch 7. Now I’m out an entire engines worth of money?

They are going to need to set up separate money pots in trust for these big payments.

 

[rkensrud]

My engine last I heard was to be delivered April 2024. Let’s assume I agree to new terms. I make final payment and they ooopsie themselves to Ch 7. Now I’m out an entire engines worth of money?

They are going to need to set up separate money pots in trust for these big payments.

They did that. They went over it with the judge yesterday

 

[1001001]

There was no mention of anything as specific as QB kits in the hearing (that I heard). It was really just about getting motions approved (that were linked on page 2 of this thread).



I wanted to record it and upload it to Youtube, but recordings were prohibited unfortunately. I wonder if a transcript will be published, but I have no idea.

If you go to the Court's web site, you can order a recording for $34. Transcripts are available, but I didn't check the cost.

 

[Plummit]

If you go to the Court's web site, you can order a recording for $34. Transcripts are available, but I didn't check the cost.

I just listened to the hearing and it appears to me that Vans wants to insure that no builders will suffer a loss. Even if they don't agree to a revised "contract" to purchase kits, it sounds like Vans want them to get paid.

Honestly, as long as Vans is in business, I feel that even those who elect to not continue their builds should be able to sell their projects for cost. Of course that would only apply to those that have the kits in "build-able" condition.

-Marc

 

[spatsch]

My engine last I heard was to be delivered April 2024. Let’s assume I agree to new terms. I make final payment and they ooopsie themselves to Ch 7. Now I’m out an entire engines worth of money?

They are going to need to set up separate money pots in trust for these big payments.

They did that. They went over it with the judge yesterday

You might want to check with a lawyer. They want to keep it in a separate account but I am not sure that's separate enough to survive chapter 7.

Oliver

 

[blaplante]

Credit Card Disputes

Be aware, the credit card companies take a dim view of "Chargebacks". A chargeback is where you call the credit card company to dispute the transaction and request your money back. The threshold when I was involved in the business a couple years ago was 1%. If 1% of transactions or 1% of dollars gets disputed in a month (even if Van's makes you whole) it will lead to the merchant being considered HIGH RISK, and some combination of the following:

1) much higher fees taken from the money by the credit card processors
2) mandatory escrow of 10-20% of the money for some period (6 months?) to be held by the credit card processors
3) Termination of credit card processing

So if 1% of us start demanding our money back from Visa... we can certainly make the problem worse.

 

[britbuilder]

I started the chargeback process when vans first announced difficulties. It was not difficult and has secured me my money.

Even if the chargeback failed, the law in my country makes the credit card company jointly liable for contract breaches if vans went bust.

Always get stuff on card if you can.

 

[britbuilder]

Hearing vans accountancy practices left a lot to be desired is very disappointing. How any of the core leadership can remain is beyond me.

 

[squeakersc063]

Hearing vans accountancy practices left a lot to be desired is very disappointing. How any of the core leadership can remain is beyond me.

You don't fire your smartest dudes because you promoted them into a job they weren't suited for. That's an easy way to throw away a ton of skill and what is now very expensive experience. As long as they still do the things they did before well and are still enthusiastic about working there, there's no reason to bring the axe down on those folks.

 

[kirkbauer]

Very disappointed in Van's

I'm really surprised at how many people are still positive about Van's given this situation. I really tried to stay positive myself, but it feels like the only people really getting screwed here are the customers.

Over two years ago I put a deposit down on RV-10 tail kit and quick-build fuselage and wings. About a year ago I switched both QBs to a single slow-build fuselage kit. I stupidly let them keep my extra deposit money. I have almost finished my tail kit and am partially done with the tailcone. My rudder, VS, and elevators need to be rebuilt due to lasercut parts. I can't finish my tailcone until I get lasercut parts replaced.

So my understanding of this situation is:

• I may have to wait another 12 months to get my lasercut parts replaced.
• I have paused building for 6 months, which may extend to 18 months.
• I have to pay some amount of money for all of the other parts in my VS, R, and E that I need to completely rebuild, plus primer, etc.
• I need to spend about 150 hours to rebuild all of those components.
• I have to agree to a ~32% price increase for my fuselage kit well before I will receive my replacement lasercut parts.
• If I don't agree, then my excessive deposit will maybe get back to me in a few years.

So, I can quit now, with about $10k and 250 hours down the drain and another $10k deposit that I might get back one day. Or, I can:

• Accept the 18-month delay in building.
• Donate my time to correct Van's mistakes.
• Pay for all of the extra parts because of Van's mistakes.
• Agree to pay them even more money than I agreed to pay two years ago even though they still haven't fully delivered anything I paid them for.

This has just been a s-show from the start.

 

[BTG1996]

On a $120,000 RV-12, the price increase would likely be more like 32% of $40,000 or $13,000.

This is a good point and will be interesting to see how it is handled. If the increase is on Vans produced parts it would be easier to understand/accept. I'd most likely accept that and move forward without too much angst.

If they add a big markup on engines/avionics it would be more difficult for me to come to terms with since they are mostly a middle man in those transactions.

In the case of the RV-12 it's a little stickier because you have to buy everything thru Vans to get certified as ELSA and it makes everything much simpler- which was the appeal of the 12 for me as a first time builder....but there are advantages to the EAB route and it might not be all bad if I have to source an engine and avionics separately. I'm sure there will be companies that pop up to provide fwf kits if Vans takes the engine/prop price from $45,000 to $60,000. Avionics would even easier to do with an outside vendor as that is common practice on other builds- I know there are things I'd like to to differently anyway.

It would be great if they incorporated some kind of credit for the difference between initial price and increase that could be applied to future kits if/when they return to profitability. Reward the people who power thru an uncomfortable situation with them.

Good luck everyone.

 

[Cholley6]

Is the only price hike guess the one article and the conjecture on here? Or has something more substantial been posted somewhere? In listening to Van's I haven't gotten the impression that they are planning on raising everything by so much that they price out their customers, but that they are going to raise them enough to make them profitable. I have to think QB kits will have the largest price increase. Engines probably the least since they are more of a pass through with Lycoming setting the price. Maybe I'm wrong, but I sure think everyone needs to wait for hard numbers from Van's to make decisions on the future of their builds. Hopefully we will get those numbers soon. The unknown is always worse.

 

[flyrlfs]

I'm really surprised at how many people are still positive about Van's given this situation. I really tried to stay positive myself, but it feels like the only people really getting screwed here are the customers.

Over two years ago I put a deposit down on RV-10 tail kit and quick-build fuselage and wings. About a year ago I switched both QBs to a single slow-build fuselage kit. I stupidly let them keep my extra deposit money. I have almost finished my tail kit and am partially done with the tailcone. My rudder, VS, and elevators need to be rebuilt due to lasercut parts. I can't finish my tailcone until I get lasercut parts replaced.

So my understanding of this situation is:

• I may have to wait another 12 months to get my lasercut parts replaced.
• I have paused building for 6 months, which may extend to 18 months.
• I have to pay some amount of money for all of the other parts in my VS, R, and E that I need to completely rebuild, plus primer, etc.
• I need to spend about 150 hours to rebuild all of those components.
• I have to agree to a ~32% price increase for my fuselage kit well before I will receive my replacement lasercut parts.
• If I don't agree, then my excessive deposit will maybe get back to me in a few years.

So, I can quit now, with about $10k and 250 hours down the drain and another $10k deposit that I might get back one day. Or, I can:

• Accept the 18-month delay in building.
• Donate my time to correct Van's mistakes.
• Pay for all of the extra parts because of Van's mistakes.
• Agree to pay them even more money than I agreed to pay two years ago even though they still haven't fully delivered anything I paid them for.

This has just been a s-show from the start.

Yes. I'm in a similar position. Working on the EMP and have deposit down for QB Wing & QB Fuse. Right now, my exposure is $10K as you are. I'm on the fence, but leaning on walking away.

If Vans had introduced a plan with more certain dates on deliverables, it would affect my decision. Unfortunately, the only plan they put forward is where they get to walk away with my deposit and renegotiate later on their terms. The threat of future CH7 also worries me. It seems a possibility. Their recovery plan has too many missing details.

I'm sure Vans employees are under a great deal of stress. They've been doing a tough job. The Exec team, I feel, has failed. I think they have an interim CEO and CFO. I'm not sure if anyone else has been affected.

 

[Kyle Boatright]

This is a good point and will be interesting to see how it is handled. If the increase is on Vans produced parts it would be easier to understand/accept. I'd most likely accept that and move forward without too much angst.

I imagine there will be an across the board price increase. Maybe not the same increase on everything, but the business is (or has been) losing money, so more money has to come from the entire product line.

 

[Walt]

You don't fire your smartest dudes because you promoted them into a job they weren't suited for. That's an easy way to throw away a ton of skill and what is now very expensive experience. As long as they still do the things they did before well and are still enthusiastic about working there, there's no reason to bring the axe down on those folks.

The old 'Peter principle is still going strong':

"The Peter principle, which states that people are promoted to their level of incompetence, suggests that something is fundamentally misaligned in the promotion process." It states, "In a hierarchy every employee tends to rise to his level of incompetence." In other words, if you work in an organization with a top-down management structure and you are good at your job, you will likely be promoted until you reach one rung above your level of competence.

 

[airguy]

I'm hearing a LOT of whining and complaining about the (yet unknown) price increase, and a lot of "This is so unfair that I will have to pay more..."

But the reality is that the price increase is obviously way overdue. It should have occurred YEARS ago as several small increases over time. Those of us that have bought Vans products in the last couple of years got a DISCOUNT on those products without us (or Vans) realizing it. It's not unfair that the prices are rising to where they necessarily should be - it's just reality, and past due.

Anytime prices rise, people always grouch about it that they have to pay more, yes that's reality, that's the world we live in. The pain is being more acutely felt now, and vocalized strongly by the people affected, simply because it comes all at once in a concentrated dose rather than spread out over time. This is much preferred over the alternative, which would be Vans simply closing their doors.

The price increase will certainly affect the pool of potential customers - but the harsh reality is that the market was too big for Vans to absorb in the first place, as evidenced by the results. The supply/demand curve will once again reign supreme and the market will adjust.

 

[airguy]

The old 'Peter principle is still going strong':

"The Peter principle, which states that people are promoted to their level of incompetence, suggests that something is fundamentally misaligned in the promotion process." It states, "In a hierarchy every employee tends to rise to his level of incompetence." In other words, if you work in an organization with a top-down management structure and you are good at your job, you will likely be promoted until you reach one rung above your level of competence.

At which point you stagnate, able to (just barely) do your job, but not in an exemplary or proficient manner. Good enough that you don't get demoted or fired, and far too poorly to ever get promoted. Here you are, and here you shall stay.

 

[spatsch]

What bugs me about all of this the most is that the Van's leadership team seems to take little responsibility for this. Every announcement is a list of excuses followed by give us more time and in this round give us more time and money.

Have they really not realized yet that this wasn't a random sequence of outside events but it was a total failure of the leadership team (from CFO to QC).

I have seen CEOs stand up at many occasions saying: "I screwed up." Even though saying that doesn't fix anything by itself you do have to reach that level of self awareness to not make the same mistakes again. I am not sure they have.

Oliver