Business Announcement From Van's Founder Dick Vangrunsven

[BenJason007]

I've wondered the same. I've also pondered if some of the anticipated cost increases could be offset by offering items like you mentioned & including Seat Assemblies, as a "buildable group of parts". If not mistaken (and I could be) - said assemblies are pre-manufactured & 1/2 of the cost of a finishing kit. Not sure if this example would fall under in-house or 3rd party.

I almost think that overall exposure would be reduced by having these types of parts be an option available from either Vans or a select group of alternate suppliers. Really no different than today except for the idea that control wouldn't reside in the four walls of Vans HQ & instead on open market (i.e. IP rights to specific items, shared at a premium, to a select group of "partners").

 

[jrs14855]

Components

rivets, hardware etc, Spruce
Wheels, brakes, master cylinders Grove
Avionics, multiple shops doing custom panels, Stein is one of the better known
Multiple options for props especially wood/composite fixed pitch.
Engine-buy a core and rebuild it or send it to a custom shop.
There are dozen's of other options for many of these items.

 

[Jose_Antonio]

So many assumptions, opinions, and some very good points taken.

There is no finished product. The manufacturing of parts is labor intensive and requires expensive capitol equipment unless you stay small. Add to this a huge portion of the value of the product isn’t manufactured by Vans: engines, avionics, etc….
To complicate things further, many high value parts are not manufactured by Vans.

Vans' finished product is kits. Focus allows Dynon to concentrate on developing better avionics without worrying about laser cut parts and Lycoming to improve its engines without thinking about QA at quick building facilities. Vans job is to focus on making better kits. Not even Boeing makes it's own engines.

Thinking of the vendor ecosystem does bring up another possibility for relief for Vans: getting a bailout from its suppliers and partners. How much do Lycoming, Continental and Rotax stand to lose if Vans goes under?

 

[warmi]

It took about 20 months from order date to deliver my QB kits. I honestly was flabbergasted that they honored the list price from that long ago. I was fully braced for a price increase, you know the way supply and demand usually dictates.

I believe this is a big part of what has brought on their cash problem considering how much the cost of everything else in our lives has gone up in that short time. Yes, perhaps they should have been more on top of the situation.

Those who are part-way through their build should expect significant price increases and be understanding that this truly necessary. I still have a kit to buy and am expecting to pay much more for it.

Well, people often bitch that business suit types tend to ruin companies when they take over from the engineers but it goes both ways - you need both to make the magic happen and, crucially, keep it happening.

 

[Sallcock]

Most likely a heroic turn around is unlikely

Bankruptcy could be the only option to protect from future liabilities

Unfortunately current builders waiting for kit delivery are likely the biggest liability

Hmmmmm........

I am sure you meant that in the nicest possible way - I and plenty of the others on this forum are as you say it "the biggest liability" and whilst I want to see the company be successful, I also as an individual want to see myself be successful by building the plane I have already paid for, which so many of you have already had the great pleasure to do the same and are flying them now hopefully!

I hope that just because I bought my kits at the "wrong" time that I don't get sacrificed on the alter of profitability so that Vans may continue to do business but I don't get any kits shipped to me.

That wouldn't work for me personally so I hope they are able to make it work for all parties, creditors and debtors.

I am hopeful they will look after people at all stages of their build.

 

[Jose_Antonio]

I'm in the same boat, but I’m thinking about it differently: There will be enough disillusioned builders looking to sell their kits because the economics of the project they signed up for have changed. Already we are hearing about COVID-era builders abandoning their projects. I'd purchase one of those secondhand kits at a discount before I tie any additional funds with Vans.

The secondhand market is another problem for Vans. If there is a glut of abandoned projects out in the world, they will be competition for Vans. Making decisions that drive even more people to abandon their projects would only make this situation worse.

 

[RV7A Flyer]

rivets, hardware etc, Spruce
Wheels, brakes, master cylinders Grove
Avionics, multiple shops doing custom panels, Stein is one of the better known
Multiple options for props especially wood/composite fixed pitch.
Engine-buy a core and rebuild it or send it to a custom shop.
There are dozen's of other options for many of these items.

I think that's what I said. The point was...perhaps a radically slimmed-down company, offering the airframe only, but with 3rd parties for things like engine mounts and avionics and wheels and such, might be worth someone buying all the Van's IP, tooling, existing inventory, supplier agreements, etc. Let builders source all the stuff that *isn't* unique to an RV, provide the unique stuff with *high quality*, good QA, reasonable order times, not ridiculously high pricing, etc. No QBs.

That might be what we end up with.

 

[jimbom]

As (apparently) a consumer without sense, when I finally decided that building a Vans was what I was going to do, I accepted the length of the queue and the likely possibility of paying more when they got to my number.

My demands of a company who has more business than they can handle probably wouldn't go very far.

Go order a new car and then report back how your demand of a shorter lead time worked out for you.

 

[jimbom]

Thinking of the vendor ecosystem does bring up another possibility for relief for Vans: getting a bailout from its suppliers and partners. How much do Lycoming, Continental and Rotax stand to lose if Vans goes under?

Heckofa good point. Lycoming is backordered 1-2 years and my understanding is this is mostly attributable to Van's kits. It might be in their best interest to help Van's through this cash crisis while Van's works to get things sorted out.

 

[swift12]

so much speculation...everyone feel better?...two weeks right....time to give it a rest. yes i'm very affected...waiting to see. none of this speculation will make a difference.

 

[RV7A Flyer]

Heckofa good point. Lycoming is backordered 1-2 years and my understanding is this is mostly attributable to Van's kits. It might be in their best interest to help Van's through this cash crisis while Van's works to get things sorted out.

Honestly, I think that's a pipe dream. To expect Lycoming to fall on *their* sword in the hopes that things work out for Van's is...unrealistic, IMO.

The risk of throwing good money after bad would probably be just way too high for them. They're not in the business of being altruistic.

 

[Jetmart]

Originally Posted by MIKE JG View Post
Final kit price will have to be determined at the time it's ready for delivery, that's the only way going forward I see this working. Kit price 'estimates only' may become the new norm.

It may sound crazy but this is how several new boat manufacturers that I am aware of operated the last couple of years. New boat deliveries were very slow and price increases were passed on prior to delivery. Contracts were written to allow this.

 

[roadrunner20]

Long story short, we are seeing the end of an era. That’s not to say the new era won’t be OK, but this was really the last kit manufacturer that could be built on an average middle-class budget. With all of the other component prices increasing exponentially, like engines and avionics and props, I think we are really seeing the end of the traditional budget home building era.

Well said. I believe you hit a home run on this comment. Right on the money!

 

[plehrke]

Long story short, we are seeing the end of an era. That’s not to say the new era won’t be OK, but this was really the last kit manufacturer that could be built on an average middle-class budget. With all of the other component prices increasing exponentially, like engines and avionics and props, I think we are really seeing the end of the traditional budget home building era.

Or it goes back to the future of using mid time engines and used avionics like homebuilt aircraft used to do. Much of the price increase (until recent inflation) has been due to increased desire to homebuild with all new latest and greatest stuff including pre-punched kits with CADD created assembly drawings.

 

[spatsch]

I don't think people which want to "disassemble" the kits understand how good Van's kit prices actually are. That's one of their value adds in addition to great documentation and the convenience of a complete kit.

I am currently building a Fokker DR-1. I got some very basic plans (just mayor components not all parts) and a pile of sheet aluminum, tubing, a welded fuselage and very little else (phone support is great though...). So every part I have to form myself. Some I have to design like the entire break assembly.. . Occasionally it is convenient to get parts manufactured by xometry or other manufacturing aggregators (e.g. break mount). When I look what I pay for those parts Van's prices could double and they would still be a bargain.

So one of the values Van's adds is to provide the economy of scale to negotiate good supply contracts and deliver the kit for a very low price.

Oliver

 

[warmi]

I don't think people which want to "disassemble" the kits understand how good Van's kit prices actually are. That's one of their value adds in addition to great documentation and the convenience of a complete kit.

I am currently building a Fokker DR-1. I got some very basic plans (just mayor components not all parts) and a pile of sheet aluminum, tubing, a welded fuselage and very little else (phone support is great though...). So every part I have to form myself. Some I have to design like the entire break assembly.. . Occasionally it is convenient to get parts manufactured by xometry or other manufacturing aggregators (e.g. break mount). When I look what I pay for those parts Van's prices could double and they would still be a bargain.

So one of the values Van's adds is to provide the economy of scale to negotiate good supply contracts and deliver the kit for a very low price.
Oliver

To be fair pretty much all modern kit manufacturers ( Vans, Rans, Zenith, Airplane Factory/Sling 2) offer the same pre-punched CNC level based kits …

 

[scsmith]

Was going to the same, but like you, everything is on back order

Some interesting and (I think) constructive ideas here. I also was just going to buy the replacements outright for LCP and just get out of their way on that issue. It's ballpark $75 for me, so an easy thing. But all those parts show "not available".

The other idea here, I'm thinking of embracing, is to just go ahead and order my fuselage kit now. With the current lead time, it might work out about right, and if the lead times grow, that would be fine. If it helps to have the cash deposits ( I think so, even though it is small in the scheme of things), and also just show the orders on the books - that has to help with any evaluations of the business by creditors, investors, anybody, so I think it is all to the good.

I am busy tomorrow, but I should be able to order a fuselage kit on Wednesday.

 

[Pelley]

I’ll be eagerly awaiting the outcome of this. I also feel that Vans will continue as a company but I’m sure there will be big changes. For me personally I would be happy to pay market price when the kit is ready, as I also feel locking in prices 18 months in advance is crazy. I’m affected by the LCP but I would pay for the replacement parts if needed to keep the company solvent. The impact isn’t huge for me but I’m sure it adds up for vans. If they were paying huge bonuses and living high while making me pay for the mistake I would feel different but we all know that isn’t the case.
One other thing I always thought crazy was partially shipping kits and then eating the freight cost on back ordered parts. I wouldn’t be upset if they got me a mostly completed kit asap and I had to pay to ship a few back ordered parts. Finally I also find the price of extra parts to be crazy low. Having ordered from manufactures like Cessna and Beechcraft I can say I have never seen parts in aviation as cheap as vans. Just my 0.02. I wish them the best through the restrictions and hope they come out smarter and stronger for the long haul.
I always know this outcome can happen to the best of them. One of the reasons I rushed to order all my kits ASAP. I have a deposit on the finish kit which is the last one for me, and I fully expect to pay more when this is done.

 

[jask]

Tool path

I watched a video about the laser cut parts today. The YouTuber said that vans specified a tool path that looked like a pretzel but that was not the way it was cut. Is this factual?

 

[EdH]

I watched a video about the laser cut parts today. The YouTuber said that vans specified a tool path that looked like a pretzel but that was not the way it was cut. Is this factual?

Yes, that's correct. Van's supplied tooling paths to avoid hotspots. Rian mentions that one of the vendors substituted their own reprogrammed tool paths. You can watch it here.

 

[KatanaPilot]

My bet for most likely White Knight is John Torode.

I'm still hopeful. Look at Dr. Torode's CV - multiple degrees in Physics and Computer Science, founded Dynon, Vashon, now Mammoth Overland Trailers. Obviously brilliant, has a passion for aviation, knows how to operate a company and keep it financially viable.

What has Mikael Via done other than enrich himself at the expense of others?

 

[Kyle Boatright]

What has Mikael Via done other than enrich himself at the expense of others?

The Glasair folks I know will tell you he took a company that was no longer viable and brought it back to life, even if that life is in China.

The difference between that situation and the Vans situation is that (IMO) Vans is a viable business, but got in serious trouble because of two major quality snafu's and the simultaneous impact of extended lead times and inflation.

 

[Jonnyb]

While Im sure people are quite entrenched in their opinions of LCP parts right now, I just want to inform what our "regulator" here in the UK has said about it all.

Just for background, here in the UK we don't get to build aircraft in our workshops and go fly them without some quite serious supervision. Our CAA (Uk FAA) has delegated that to the Light Aircraft Association (LAA) and their engineers have to approve everything we do. Either via inspection, or engineering assessment, drawn plans, testing, then inspection. For example, SBs released by Vans have to be approved by the LAA BEFORE we can incorporate them into UK registered aircraft. Most of you would hate it here!

Anyway, for what its worth, our regulator, after considering the engineering assessment Vans has undertaken, plus their own evaluation, and in consultation with Vans, has said they are happy with Vans assessment and will most likely endorse their position.

Full Text below:
Since our mention of this issue in the August edition of Light Aviation, Van’s Aircraft have been toiling away analysing and testing various structural elements to establish the effect that the laser cutting of parts has had on their strength and fatigue life. Detailed updates can be found on their website, but understandably UK builders and operators are seeking clarity on what the endgame will be on this issue. As the issue generally affects potential fatigue life, there is no immediate need to take action. In discussion with Rian Johnson, Van’s President and Chief Engineer, he tells us that they’re working on service information for the fleet that they expect to be published by the end of the year. Having worked closely with Van’s over many years, our expectation is that we will endorse their position.

What I want to emphasise is that an engineering assessment has been considered by an independent 3rd party, and that 3rd party has chosen to endorse Vans view on LCP parts.

Take it for what it is, but if the above helps to inform discussion or lead to some people reevaluating their position (even if they come to the same conclusion) then its worth posting.

 

[KatanaPilot]

The Glasair folks I know will tell you he took a company that was no longer viable and brought it back to life, even if that life is in China.

The difference between that situation and the Vans situation is that (IMO) Vans is a viable business, but got in serious trouble because of two major quality snafu's and the simultaneous impact of extended lead times and inflation.

Let's not forget poor fiscal oversight.

I stand by what I said. Let's meet again in 3-6 months and see if either of us was right.

 

[meloosifah]

Have you priced a used 360 lately or priced the cost to overhaul? This is not a “new” vs “used” issue. Everything is going up far faster than inflation.

I agree that things have gotten worse this year but this has been a steady stream of increases for 3 years - FAR outpacing normal economic models and it goes deeper than supply chain and inflation.


[/B]

Or it goes back to the future of using mid time engines and used avionics like homebuilt aircraft used to do. Much of the price increase (until recent inflation) has been due to increased desire to homebuild with all new latest and greatest stuff including pre-punched kits with CADD created assembly drawings.

 

[RV7A Flyer]

Have you priced a used 360 lately or priced the cost to overhaul? This is not a “new” vs “used” issue. Everything is going up far faster than inflation.

I agree that things have gotten worse this year but this has been a steady stream of increases for 3 years - FAR outpacing normal economic models and it goes deeper than supply chain and inflation.


[/B]

The Invisible Hand strikes again...

 

[bob865]

Let's not forget poor fiscal oversight.

I stand by what I said. Let's meet again in 3-6 months and see if either of us was right.

I somewhat agree with your statement. If we take Van's statement at face value, they have not said they have a profitability issue, they have a cash flow issue. They have bills coming due and no revenue to support it.

My uneducated opinion is that they have struggled to keep up with their success. 2020 brought two unique situations for them: 1) a huge upset to the supply chain that affected their operations and 2) a huge increase in demand. Each situation alone would be a challenge, but they both hit at the same time making it difficult to fill existing orders, let alone the increased demand.

They are still seeing the consequences of this situation. The laser cut parts are just the most recent consequence. They brought on laser cut parts to try to help with the backlog and produce parts faster and that has now backfired somewhat dramatically. This has put a huge burden on the company to spend money to make it right, without a corresponding increase in revenues.

My opinion: Vans will come out the other side. Too big of a customer base and too unique of a product to close their doors. The fact that Dick said he is personally funding the company right now, shows the commitment to keep the business alive. This is a temp measure, so business practices will have to change. I expect the cost of parts and kits to increase. It wouldn't surprise me if Vans starts requiring larger down payments on kits, or progress payments leading up to delivery. to help smooth cash flow. I would also expect lead times to increase as they re-evaluate their suppliers.

Let's catch up in 3-6 months.

 

[RV8JD]

While Im sure people are quite entrenched in their opinions of LCP parts right now, I just want to inform what our "regulator" here in the UK has said about it all.

Just for background, here in the UK we don't get to build aircraft in our workshops and go fly them without some quite serious supervision. Our CAA (Uk FAA) has delegated that to the Light Aircraft Association (LAA) and their engineers have to approve everything we do. Either via inspection, or engineering assessment, drawn plans, testing, then inspection. For example, SBs released by Vans have to be approved by the LAA BEFORE we can incorporate them into UK registered aircraft. Most of you would hate it here!

Anyway, for what its worth, our regulator, after considering the engineering assessment Vans has undertaken, plus their own evaluation, and in consultation with Vans, has said they are happy with Vans assessment and will most likely endorse their position.

Full Text below:
Since our mention of this issue in the August edition of Light Aviation, Van’s Aircraft have been toiling away analysing and testing various structural elements to establish the effect that the laser cutting of parts has had on their strength and fatigue life. Detailed updates can be found on their website, but understandably UK builders and operators are seeking clarity on what the endgame will be on this issue. As the issue generally affects potential fatigue life, there is no immediate need to take action. In discussion with Rian Johnson, Van’s President and Chief Engineer, he tells us that they’re working on service information for the fleet that they expect to be published by the end of the year. Having worked closely with Van’s over many years, our expectation is that we will endorse their position.

What I want to emphasise is that an engineering assessment has been considered by an independent 3rd party, and that 3rd party has chosen to endorse Vans view on LCP parts.

Take it for what it is, but if the above helps to inform discussion or lead to some people reevaluating their position (even if they come to the same conclusion) then its worth posting.

This is interesting information that I'm sure most of us have not seen before. Thanks for posting it.

(But I'm glad I'm in the 'colonies' who revolted long ago! )

 

[jimbom]

Thank you for this. It helps me, for one, with my decision to approach this problem.

While Im sure people are quite entrenched in their opinions of LCP parts right now, I just want to inform what our "regulator" here in the UK has said about it all.

Just for background, here in the UK we don't get to build aircraft in our workshops and go fly them without some quite serious supervision. Our CAA (Uk FAA) has delegated that to the Light Aircraft Association (LAA) and their engineers have to approve everything we do. Either via inspection, or engineering assessment, drawn plans, testing, then inspection. For example, SBs released by Vans have to be approved by the LAA BEFORE we can incorporate them into UK registered aircraft. Most of you would hate it here!

Anyway, for what its worth, our regulator, after considering the engineering assessment Vans has undertaken, plus their own evaluation, and in consultation with Vans, has said they are happy with Vans assessment and will most likely endorse their position.

Full Text below:
Since our mention of this issue in the August edition of Light Aviation, Van’s Aircraft have been toiling away analysing and testing various structural elements to establish the effect that the laser cutting of parts has had on their strength and fatigue life. Detailed updates can be found on their website, but understandably UK builders and operators are seeking clarity on what the endgame will be on this issue. As the issue generally affects potential fatigue life, there is no immediate need to take action. In discussion with Rian Johnson, Van’s President and Chief Engineer, he tells us that they’re working on service information for the fleet that they expect to be published by the end of the year. Having worked closely with Van’s over many years, our expectation is that we will endorse their position.

What I want to emphasise is that an engineering assessment has been considered by an independent 3rd party, and that 3rd party has chosen to endorse Vans view on LCP parts.

Take it for what it is, but if the above helps to inform discussion or lead to some people reevaluating their position (even if they come to the same conclusion) then its worth posting.

 

[dstates]

I also found Greg's response in the thread he started about the business hours changing pretty helpful to how I feel about all of this (added a screenshot below in case some didn't see it). It is good to see they are getting help sorting out the LCP replacement parts.

 

[LettersFromFlyoverCountry]

One of the benefits of being a slow builder and also being an old builder is it's all about patience. Things get done when they get done. Van's has more than earned the time they're taking right now to reorganize their operations. I should probably be doing the same thing in my hangar. :*)

I ordered some parts today I don't really need, just to throw a couple of bucks at the situation and try to turn some of that inventory into cash.

 

[Piper J3]

I won't contaminate the thread... I just want to say "Professional Grandfather"... I like that very much. I have triplet granddaughters @ 15 YO and now a grandson that's almost 2. Patience is definitely a virtue....

 

[georgemohr]

I ordered two hats and a sweatshirt. Don't really care if I get them

 

[lyosha]

Something hit me today. I'm worried that "the inventory" that Vans is so flush may be LCP-affected quick build kits... in which case uncertain how much value there is in them. If you discount the value by the cost to address issues and by a risk premium to incentivize potential buyers, I wonder if there's any value in that inventory left...

 

[scrollF4]

Something hit me today. I'm worried that "the inventory" that Vans is so flush may be LCP-affected quick build kits... in which case uncertain how much value there is in them. If you discount the value by the cost to address issues and by a risk premium to incentivize potential buyers, I wonder if there's any value in that inventory left...

Unfounded speculation. I ordered a NEW RV-8 rudder kit today to replace the one I built for my 7A ten months ago (which had red, green, and blue parts in it). I was told flat-out that there are no parts in today's rudder kit impacted by the improper laser cut vendor/procedure, but to be sure and examine the key effected parts. I will, of course.

Do you really think there are ANY bad parts lurking in the Vans parts bins? Methinks not.

BTW, she asked if I wanted credit for the 6 bad parts. No thank you, keep the change.

 

[kirkbauer]

I was ready to order some LCP replacements at retail price to keep working, but they show out of stock with a prompt to call to order.

I did just that about four weeks ago but nothing has shipped yet. They told me they don't have any of the replacement parts available even though they showed in stock when I placed the order. At this point they won't even let me pay money to get to the point where I can buy the next kit.

 

[BTG1996]

Or bankruptcy could be used to break contracts on placed orders to raise prices retroactively.

I put a deposit down on my fuselage kit last week (lucky me-ha) and after thinking thru, the above quote is what I'm expecting.

I bet the $9,150 kit goes to $14,000 or something and they give me the option of applying the $2,500 deposit I made to the new kit price or losing it completely. I think the vast majority of folks would pony up the increase because it's still a better deal than buying a certified plane and building is fun.

Agree with others that they need to retire models and streamline- new orders for the 10, 12, and 14 only....and roll out the 15 only once the turnaround is complete.

I'd even say build the quick-builds in America and charge what needs to be charged. If the quickbuild for the 10 wings and fuselage went from $30k to $80k, but was built in Oregon with good quality control, I bet people would still line up. Like how Synergy build-assist is booked a year out or whatever.

Vans is a diamond in the rough of general aviation....they've got to make it thru this. Fingers crossed.

 

[lyosha]

Unfounded speculation. I ordered a NEW RV-8 rudder kit today to replace the one I built for my 7A ten months ago (which had red, green, and blue parts in it). I was told flat-out that there are no parts in today's rudder kit impacted by the improper laser cut vendor/procedure, but to be sure and examine the key effected parts. I will, of course.

Do you really think there are ANY bad parts lurking in the Vans parts bins? Methinks not.

BTW, she asked if I wanted credit for the 6 bad parts. No thank you, keep the change.

I think you misread what I said. Vans has a ton of QB kits on site that absolutely have LCP parts. They don't seem to be currently shipping parts to builders from what I can tell. I hope that "inventory" isn't LCP affected QB kits...

 

[dmattmul]

NICE for YOU

BTW, she asked if I wanted credit for the 6 bad parts. No thank you, keep the change.

It’s great they did this for you !!! Hopefully others have the same results !!

 

[gasman]

Agree with others that they need to retire models and streamline- new orders for the 10, 12, and 14 only....and roll out the 15 only once the turnaround is complete.

The seven replaced the six, that was the most popular kit aircraft EVER. Even though they stopped shipping RV6 emp kits 20 years ago.
The RV7 is the current most popular kit..... I don't think Van's will drop the 7,8, or the 9.

 

[roadrunner20]

The seven replaced the six, that was the most popular kit aircraft EVER. Even though they stopped shipping RV6 emp kits 20 years ago.
The RV7 is the current most popular kit..... I don't think Van's will drop the 7,8, or the 9.

Plus, you couldn't discontinue those models where you have a customer base in mid-build. You would orphan all those kits. The customer base would never trust Van's again.
But, you could possibly offer a date in the future, where they would be unavailable, lets say 5 years. This would give the builder an opportunity to expedite their build and/or order it prior to any cutoff date.

 

[gmcjetpilot]

The seven replaced the six, that was the most popular kit aircraft EVER. Even though they stopped shipping RV6 emp kits 20 years ago. The RV7 is the current most popular kit..... I don't think Van's will drop the 7,8, or the 9.

I don't think they are dropping any model, -10, -12, -14, they all sell well. Question on RV15, but who knows.

This video below summarizers it very well and some likely paths Van might take. He is an RV10 builder and Professor in Finances.

https://youtu.be/BZ5W_hVOVpQ?si=iMbgRwu6rN7NOSo5

QB kits shipping cost, losing money
QB kits built with LCP, hard to replace
LCP in general is a liability, issue
Running out of cash (flow)

Good news, strong demand for a very good product, sold company will continue to exist. Video goes into several paths Van may possibly take, but bankrupt not likely. It has too much value.

I looked at Van's linkedin. List 61 employees, and increase in staff last 3 years. I was surprised at how many "officers" Van's has, CEO, directors, managers of many departments. Do you need a CEO or Director of marketing? It kind of sells itself.

I started being an RV-holic late 80's. Van's had 2 models, the -3, -4 and the -6 had just come out. I bought and built a -6.

I flew with Van in the Prototype RV6 off his Shady Grove strip for a $40,000 ride (the cost about to build my RV back then). Van's Aircraft was a small operation, all engineering was Van. He had a retired Gent who built all the prototypes. The Kits were put together and shipped from an outbuilding behind his house. He sub contracted out many parts, gear legs, engine mount, plexi-canopy, fiberglass. That was it, a handful of employees. At this point Van's had been in business 18 yrs from the time the RV3 came out.

This is not the first crisis. The RV3 rear spar issue. Later the RV6 had an option for pre-assembled spars, which were hard anodized. If anodizing is not done right it could cause hydrogen embrittlement of the aluminum. Alodine is a different process, a passive chemical conversion coating. There was the loss of an employee and his son flying to Oshkosh into marginal / IFR conditions, resulting in a fatal crash. There was a lawsuit. There never was a financial issue like this. I could not figure out how Van sold RV kits so cheap. The QB were an even bigger bargain considering the labor. So when the LCP and shipping issue happened they did not have the margins to cover these cost.

Van always ran on the margins, passing on value to customers. It is more of a passion not a money generating machine. I seriously doubt Mr. Van is living high on the hog. I think he still lives in the same modest house at Shady Grove OR. No word on how many private jets however. Ha ha.

For us that are not affected by LCP or pending kit orders, I feel for you, but it will be OK. The biggest hit will be on the employees. I believe they had some employee ownership or stake holders? It is possible that could go away, like say stocks or pensions deflate when companies "re-organize". Worse is lay offs. Hope that does not happen to these folks.

 

[BTG1996]

The seven replaced the six, that was the most popular kit aircraft EVER. Even though they stopped shipping RV6 emp kits 20 years ago.
The RV7 is the current most popular kit..... I don't think Van's will drop the 7,8, or the 9.

I wasn't aware of that- good info. I incorrectly assumed the 14 had overtaken the 7 as two-seater of choice.

Just think they need to streamline some how to get volume. From what I've heard the 14 and 10 share quite a few parts and the 12 can be built as SLSA for (assumed) higher margins on factory built.

Not saying to not support builders finishing their kits, I would just trim the lineup for new orders to get scale.

I'm sure the folks they have are gonna come up with a good plan and fingers crossed that Vans knows enough people with money that they figure out a bridge loan and stop the bleeding without having to take PE or foreign capital.

 

[Desert Rat]

It seems to me that at the end of the day, vans has always been a company that sells sheet metal, started by a guy who's a great airplane designer.

The cost to design, do the M&P work, and tool up for manufacturing that sheet metal is already sunk other that ongoing tooling refurbishment, upgrades, etc. Sure it costs something to fabricate parts on a daily basis, but thats a much smaller number than the initial investment, and it's spread out.

When you look at it that way, it doesn't make much sense to discontinue models as long as the sheet metal is selling well. There are a ton of parts that are common to the 6 7 &9. Presumably the same it true across the other models as well. Seems to me that you wouldn't kill off an one of your streams for parts sales and then still have to make that part for other airframes unless say for example, the 6 is so top heavy with low volume model specific parts that the cost to manufacture them eats up the difference, which I doubt.

 

[Paul Thomas]

I did just that about four weeks ago but nothing has shipped yet. They told me they don't have any of the replacement parts available even though they showed in stock when I placed the order. At this point they won't even let me pay money to get to the point where I can buy the next kit.

That's a good thing. Instead of just taking any money available during this crisis, they are being smart. While not good for you right at this moment, it's great for the long term.

 

[bmellis11]

I think it would be a good idea to break the company up into two companies. One would manufacture kits and do the R&D for new kits. Just like the original Van’s Aircraft. The other would buy parts from the kit company and manufacture QB components. The kits manufacturing has a short lead time and relies on readily obtainable materials. It seems relatively easy to account for cost increases and plan/execute production. The QB component manufacturing relies on foreign labor, international shipping, and container availability. Without requiring customers to pay market price at the time of shipping, it is affected by many unknown factors, such as increasing shipping costs, inflation, labor issues, and currency valuations.

Setting the LCP issue aside, the QB part of the business seems like the biggest source of losses. And that means that people who just want to buy punched sheet metal are subsidizing those people that want to buy assembled components. Separating the companies should allow the kits side of the business to keep its costs, and therefore it’s prices, down. That would be great for aviation and keep kit building accessible to normal people. The QB assemblies are a premium product and should certainly still be offered, but I think it should be separated and contain it’s own costs, and pass those along to people that want the benefit.

 

[bkervaski]

I think it would be a good idea to break the company up into two companies. One would manufacture kits and do the R&D for new kits. Just like the original Van’s Aircraft. The other would buy parts from the kit company and manufacture QB components. The kits manufacturing has a short lead time and relies on readily obtainable materials. It seems relatively easy to account for cost increases and plan/execute production. The QB component manufacturing relies on foreign labor, international shipping, and container availability. Without requiring customers to pay market price at the time of shipping, it is affected by many unknown factors, such as increasing shipping costs, inflation, labor issues, and currency valuations.

Setting the LCP issue aside, the QB part of the business seems like the biggest source of losses. And that means that people who just want to buy punched sheet metal are subsidizing those people that want to buy assembled components. Separating the companies should allow the kits side of the business to keep its costs, and therefore it’s prices, down. That would be great for aviation and keep kit building accessible to normal people. The QB assemblies are a premium product and should certainly still be offered, but I think it should be separated and contain it’s own costs, and pass those along to people that want the benefit.

Considering the potential liability, headaches, and reserves needed to handle issues I think they should axe the QB program entirely, the math simply doesn't work, regardless of what company it falls under. Those *very few* who are willing to pay what it actually costs can find plenty of people and builder assist shops to give them a head start.

Let Vans focus on quality parts. They don't have a demand issue so no need for a QB program [at this time] imho.

 

[kirkbauer]

That's a good thing. Instead of just taking any money available during this crisis, they are being smart. While not good for you right at this moment, it's great for the long term.

I'm not so sure about that. All of my future revenue is now being deferred. I'm hoping to pay them $50,000 (probably more now?) over the next few years, and it has already been deferred at least 9-12 months at this point, and the longer it takes to get me at least some of the parts (that I'm willing to pay for), the more deferred my future revenue becomes.

There is also the chance that I give up on this project and the future revenue goes to zero. For sure, I'm disappointed and unmotivated to proceed at this point.

 

[gmcjetpilot]

I respect everyone's comments. Some imagine the worst. Others speculate making or stocking parts for early models is a drain.

The underlying issues are: Immediate cash flow, more going out than in fir the short term; losing money on kits due to under pricing kits too low, increased cost to manufacture; shipping cost on QB ( sending parts to off shore tonQB factory and funished QB back). The QB issue is made worse with QB kits having LCP parts entombed in the assembly. Overall lingering effect and damage done by Covid Pandemic to supply chains and economy, inflation being www big dot deal. Van's prices were discounted and they did not hsve big cash reserves to weather this. We all benefited from decades of low priced kits. Thank You Van abd Van's Aircraft.

Van's aircraft did screw up. They did not foresee these problems and apparently did not react fast enough or take proper timely action. The influx of orders lead them to fateful decisions, like Laser Cut HOLES.

We are all 20/20 geniuses, "I would not have done that". I pick winning Lotto numbers the day after drawing. However cutting tiny holes (3/32, 1/8) all in a row with laser, not a good idea turns out, programming error or whatever. Heating (can) change heat treat temper of aluminum alloy. Any small imperfections in cut (stress concentration) due to laser start-stop, not ideal. That is a topic I'm sure is debated elsewhere. Even with that Van should have done quality control inspections of this new process and continued testing of hole quality. With that said Boeing, Airbus have screw ups. At this point it's done. I would be surprised if Van's Aircraft is still doing laser cut holes.

I doubt having parts RV6 customer repairs is the issue. Van already discontinued the RV4 and RV6 Kits. If there were a cistbI voukd see them cutting the replacement parts out if they have not already.

Stand down for 2 weeks is the right move, and SOP for this circumstance. Making a public announcement is also good. If not the speculation would be 10 to the 10th power.

Let's wait two weeks. We will get the info. Relax. Keep building the parts of plane you can. It will be OK. Deep breaths. The fact people are talking about just sending Van's Aircraft donations like a GoFundMe is amazing. This shows the strength in the business and product. It may take a loan or grants by State, Fed, private investors, sort through this mess and keep doors open, to turn the cash flow around.Taking loans out would be least of the choices Van should take IMHO.

HOLD ON. DON'T CANCEL DON'T ASK FOR REFUND. BE PATIEINT. If it delays your project 6mo, a year or two...so be it. Keep on going. My project got put on hold several times due to my airlines(s) I flew for folding. Stuff happens. Don't give up.

 

[Snowflake]

Plus, you couldn't discontinue those models where you have a customer base in mid-build. You would orphan all those kits. The customer base would never trust Van's again.

There are lots of RV-3 and RV-6 builders and owners out there who are "orphaned" as the kits are no longer available. Actually I think the -3 came back, didn't it? But the -6 was orphaned with a lot of people still building. Not "lot" as compared to people building -7's, but i'm sure the number wasn't insignificant. They did commit to continuing to make -6 parts as needed.