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Engine Deposit info

N804RV said:
I did not read the court filing. Thanks!

Sounds like by the time this gets ironed out, my -8 will be flying with the cheapest used prop I can find that will work.

To be screwed by Superior's Crankshaft AD that is outstanding on the engine I bought and pickled before the AD came out, and now the prop I paid for and will never see, I'm pretty bummed!
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I'm guessing you fall into the category of having a prop in your name at Vans and Vans is now considered a creditor to Hartzell or MT. I think you will get your prop - and I think all the folks who have paid for and an engine is shipped and in your name at Vans - will get that.

Unfortunately it will be up to the court, and more specifically the court-appointed trustee, as to the timing and approval of those shipments.
 
KAndrews said:
I called Vans Monday afternoon to put a deposit down for a Lycoming. By the grace of God, they had a message that they were closed for a company wide meeting. Yesterday morning, I was able to reach Chris Gayman at Lycoming. He seemed to be blind sided and heard the announcement when we did. He said that Vans was their number one customer. I asked if I could order an engine directly from Lycoming, and he said there wasn't a mechanism in place for that. He said the dust needs to settle and management needs to make some decisions, based largely upon what Vans does. He did say that if after that, we cannot order an experimental engine through Vans, then he believes that Lycoming would make a different way to order the experimental engines. Not sure if that would be through other distributors or direct. I do hope that Vans can get back on their feet.
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My hope would be, at a minimum, that Lycoming would allow us to purchase our engines at their wholesale price contracted at the time we placed the order, while maintaining our place in the production queue. While I want to support Van's Aircraft as best I can and want to see then succeed, I also don't want to pay another markup to Van's for something that they have little input into.
 
Given that lycoming doesn't take a deposit from Vans when they place an engine order, the BIG question is whether or not Lycoming is locking in the purchase price to vans of if lycoming expects Vans to pay the going rate once it is complete. Most firms that lock in prices demand a deposit. You would like to think that Vans financial folks would be smart enough to not get caught in that trap, but they did the same thing with QB kits, so lack of financial smarts played a major factor in how we got here. Unfortunately not sure if anyone outside of vans and lyc know the details of the arrangement. However, if Lyc didn't lock in the price to vans, this is going to be UGLY. As Vans has shown us, locking in prices during inflationary times lead to SERIOUS financial issues, so would not be surprised if Lyc has refused to do the same.

Larry
 
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Put my order in for an IO-360-M1B on Oct 2, 2023...

no clue whether Vans submitted the order to Lycoming...

Wait & see I suppose - I expect that i'll receive $ for $ for the deposit even if they have to up the cost to cover increased handling fees or something.
 
lr172 said:
Given that lycoming doesn't take a deposit from Vans when they place an engine order, the BIG question is whether or not Lycoming is locking in the purchase price to vans of if lycoming expects Vans to pay the going rate once it is complete

Larry
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Seeing how in the past Van's has alerted builders of upcoming Lycoming price increases, urging us to get in our order to lock in the lower price, that just can't be.
 
Now that we know for sure about the kit prices and how vans is handling things. Does anyone have anymore insight on what it could mean for our engine deposits and orders? I would like to have a plan together. I would assume Lycoming would honor the ordered price but it seems they didn’t receive our 25% deposits from vans. Would that be part of the money vans “owes” Lycoming and intends to pay them in the future or would it mean the deposits are lost and we are screwed? It would be a shot in the gut to pay even more for a Lycoming seeing as they increased by almost 100% since I first ordered my kit in 2021.
 
The suspense is killing me. I guess we'll need to wait until the 15th of January to see what's next. Sadly, I have an email from Vans that says this, "We received a note from Lycoming today that your engine is scheduled for end of November 2023" I asked for clarification and received a somewhat cryptic response back in November.
 
JeremyL said:
Now that we know for sure about the kit prices and how vans is handling things. Does anyone have anymore insight on what it could mean for our engine deposits and orders? I would like to have a plan together. I would assume Lycoming would honor the ordered price but it seems they didn’t receive our 25% deposits from vans. Would that be part of the money vans “owes” Lycoming and intends to pay them in the future or would it mean the deposits are lost and we are screwed? It would be a shot in the gut to pay even more for a Lycoming seeing as they increased by almost 100% since I first ordered my kit in 2021.
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Lycoming is not in bankruptcy. We have emails from both Vans and Lycoming confirming our orders for the pricing in effect on those dates we submitted our deposits and order forms. I assume Lycoming confirmed their pricing with Vans when we submitted our orders.

I am not a legal expert, but to me it would be tricky for Lycoming to use Vans Ch 11 to renegotiate pricing with us.

I'll bet the outstanding engine order customers are probably the largest dollar amount in this whole deal outside the LC customers.

In fact lately I have been thinking it might behoove the engine deposit folks to throw in together and hire an advocate to make arguments on our behalves to the BK court.

It's not personal, it's just business. See how it plays out - but I wouldn't want to miss any legal filing deadlines either.

I'm a big supporter of Vans and don't want to make things difficult for them, but Lycoming is owned by a large corporation and when corporate lawyers get involved - look out.

We live in a society that requires advocacy to ensure our rights are protected.

There is probably 4-5 million in outstanding engine deposits out there with another 20-30 million in final dollar orders going mostly to Lycoming. Vans acts as a conduit to Lycoming for these engine orders.

But none of us are privy to the actual agreement Vans has with Lycoming.
 
cactusman said:
Lycoming is not in bankruptcy. We have emails from both Vans and Lycoming confirming our orders for the pricing in effect on those dates we submitted our deposits and order forms. I assume Lycoming confirmed their pricing with Vans when we submitted our orders.

I am not a legal expert, but to me it would be tricky for Lycoming to use Vans Ch 11 to renegotiate pricing with us.

I'll bet the outstanding engine order customers are probably the largest dollar amount in this whole deal outside the LC customers.

In fact lately I have been thinking it might behoove the engine deposit folks to throw in together and hire an advocate to make arguments on our behalves to the BK court.

It's not personal, it's just business. See how it plays out - but I wouldn't want to miss any legal filing deadlines either.

I'm a big supporter of Vans and don't want to make things difficult for them, but Lycoming is owned by a large corporation and when corporate lawyers get involved - look out.

We live in a society that requires advocacy to ensure our rights are protected.

There is probably 4-5 million in outstanding engine deposits out there with another 20-30 million in final dollar orders going mostly to Lycoming. Vans acts as a conduit to Lycoming for these engine orders.

But none of us are privy to the actual agreement Vans has with Lycoming.
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Thank you.
Another little piece I noticed by looking at the price changes for the engine list posted back in I think June states that the prices shown are only confirmed to be good through December 2023. Could be another piece to this puzzle and thinking like a lawyer, perhaps that is why they wanted to wait until mid January thus getting out from that price placement from Lycoming. Who knows :(
 
Engine on order at X price
March 2022 $42K
Deposit paid =25% of X price
March 2022 $10.5K


Vans Collects remaining 75% X price
Lycoming expects to be paid the agreed X price $42k.
With what money does Vans pay Lycoming in full?

Vans does not have our deposits...THEY GONE!


Look at new kit prices, they are up 32%. Your deposit will count towards the new price (gee thanks) otherwise you get in line as a creditor. That 32% wipes out your initial 25% deposit. They basically put their hand out for the deposit again plus a 7% for the house.

Basically, if you want to press forward you have to pay your deposit again, your first one is gone. I hope that is not the case for pass throughs like engines


Will they do something cute like tell us it increased 32%($55.4k), then pay Lycoming on an unaltered contract at the old price ($42K)
My previous deposit of $10.5k plus $44.9k =$55.4k. From those payments Vans lost $10.5K but has $44.9K to pay Lycoming the old price of $42k and $2.9k leftover for themselves. Not saying this is what is happening just applying what happened with kits. Also keep in mind Lycoming DID raise their prices in anticipation of delivery and long lead times. The price I locked in in 2022 was substantially higher than it was in 2020.

I called around for quotes and they aren't bad. Even if I have to sacrifice my deposit (it may already be sacrificed) and pay more than I would have to Van then so be it! I'll take my money elsewhere.
 
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N82VM said:
Engine on order at X price
March 2022 $42K
Deposit paid =25% of X price
March 2022 $10.5K


Vans Collects remaining 75% X price
Lycoming expects to be paid the agreed X price $42k.
With what money does Vans pay Lycoming in full?

Vans does not have our deposits...THEY GONE!


Look at new kit prices, they are up 32%. Your deposit will count towards the new price (gee thanks) otherwise you get in line as a creditor. That 32% wipes out your initial 25% deposit. They basically put their hand out for the deposit again plus a 7% for the house.

Basically, if you want to press forward you have to pay your deposit again, your first one is gone. I hope that is not the case for pass throughs like engines


Will they do something cute like tell us it increased 32%($55.4k), then pay Lycoming on an unaltered contract at the old price ($42K)
My previous deposit of $10.5k plus $44.9k =$55.4k. From those payments Vans lost $10.5K but has $44.9K to pay Lycoming the old price of $42k and $2.9k leftover for themselves. Not saying this is what is happening just applying what happened with kits. Also keep in mind Lycoming DID raise their prices in anticipation of delivery and long lead times. The price I locked in in 2022 was substantially higher than it was in 2020.

I called around for quotes and they aren't bad. Even if I have to sacrifice my deposit (it may already be sacrificed) and pay more than I would have to Van then so be it! I'll take my money elsewhere.
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Well said! Yeah, honestly if that’s what they do and the price jumps to that 55k for a standard exp io 360. I will most likely be going to continental with a roughly 4-6 month lead with some extra goodies included with their engine. Just my opinion.
Heck, continental could be a tiny bit of a D and do a “vans kerfuffle” discount and take a ton of business. Might not be kosher for some but it would be a smart business move for continental if that’s how this whole thing plays out.
 
N82VM said:
...

With what money does Vans pay Lycoming in full?
...
Vans does not have our deposits...THEY GONE!
...
Basically, if you want to press forward you have to pay your deposit again, your first one is gone.
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This is all worst-case SPECULATION. Vans isn't necessarily cashless. We know that Van is infusing more money into the company. We know there are a lot of kit orders on the books that will soon be shipping at a profit. They've said they intend to honor original kit deposits toward the purchase of kits at the new price. There must be some cash to carry them until those kits are ready to crate. I think they'll find a way to do so for engine orders, as well.

Surely their business selling Lycomings is profitable to Vans. Lycoming is their biggest creditor. Their engine program is a win-win for everyone and I think they'd lose a lot of kit orders if that program goes away.
 
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jimbom said:
This is all worst-cast SPECULATION. Vans isn't necessarily cashless. We know that Van is infusing more money into the company. We know there are a lot of kit orders on the books that will soon be shipping at a profit. They've said they intend to honor original kit deposits toward the purchase of kits at the new price. There must be some cash to carry them until those kits are ready to crate. I think they'll find a way to do so for engine orders, as well.

Surely their business selling Lycomings is profitable to Vans. Lycoming is their biggest creditor. Their engine program is a win-win for everyone and I think they'd lose a lot of kit orders if that program goes away.
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Plan for the worst and hope for the best. It will be quite interesting to see how this unfolds for the “engines, propellers and avionics” because those can all be bought elsewhere or direct for roughly the same price which is direct competition. With the kits, it’s cornered and vans design (amazing design btw) so we cannot just go to ACS and purchase an RV 8.
 
jimbom said:
This is all worst-cast SPECULATION. Vans isn't necessarily cashless. We know that Van is infusing more money into the company. We know there are a lot of kit orders on the books that will soon be shipping at a profit. They've said they intend to honor original kit deposits toward the purchase of kits at the new price. There must be some cash to carry them until those kits are ready to crate. I think they'll find a way to do so for engine orders, as well.

Surely their business selling Lycomings is profitable to Vans. Lycoming is their biggest creditor. Their engine program is a win-win for everyone and I think they'd lose a lot of kit orders if that program goes away.
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Van’s is not infusing money. He is providing a highly secured loan at nearly a 10% interest rate in addition to some secured loans on company assets he provided over the last couple of months which have been spent. So if they used that money to fund engine deposits they would have to pay it back with interest from profits before they are running out of cash again. That puts a limit on what they can do how fast depending on the profit margin, volume and speed of kit sales.

Oliver
 
Walt said:
Love my 370 stroker with 9.6CR, light and powerful, runs like a scalded dog!
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Same here for my Titan O-340.

"Only' 165HP because I chose low-compression pistons to run Mogas, but if I want to pick up an instant 20HP, swap to standard or high compression for even more in the same weight and package as an O-320.
 
jimbom said:
This is all worst-cast SPECULATION. Vans isn't necessarily cashless. We know that Van is infusing more money into the company. We know there are a lot of kit orders on the books that will soon be shipping at a profit. They've said they intend to honor original kit deposits toward the purchase of kits at the new price. There must be some cash to carry them until those kits are ready to crate. I think they'll find a way to do so for engine orders, as well.

Surely their business selling Lycomings is profitable to Vans. Lycoming is their biggest creditor. Their engine program is a win-win for everyone and I think they'd lose a lot of kit orders if that program goes away.
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Yes this is speculation. And as I stated it was based on what happened to kits. They are not cashless but with 3 million dollars it really isn't much. The days of leapfrog funding things with other people's deposits are over. So when push comes to shove the money comes from somewhere and I don't think it's coming from kit sales. Those went up to cover all the lost deposits and to ensure new kits are actually profitable. I doubt Peter will be paying Paul. Paul will be shelling out extra for the engine. I hope I am proved wrong.
I will be floored if my engine is completed this April and the only thing I have to send is the remaining balance.

Remember Lycoming already appropriately raised their prices. subsequently raised them again. The line is 2+ years long and they set a price to reflect. As a result of the long lead at Lycoming, I was able to find quotes for less because those engine builders are priced for deliveries much sooner and do not have to charge far in the future prices.
 
If anybody happens to receive an engine or a request for final payment, would you be kind enough to keep us posted please? My engine was/is due to ship at end of February.
 
rsr3 said:
If anybody happens to receive an engine or a request for final payment, would you be kind enough to keep us posted please? My engine was/is due to ship at end of February.
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Good luck.

On March 17, 2022 Van’s sent me a note that my engine was scheduled for assembly January 9th, 2023. I still do not have it and my emails go unanswered.

Perhaps I did something wrong to someone…..

Carl
 
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On March 17, 2022 Matthew Boone sent me a note that my engine was scheduled for assembly January 9th, 2023. I still do not have it and my emails go unanswered.

Perhaps I did something wrong to someone…..
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Almost the same story here...
Whilst Anne of Van's is still patiently answering my query mails, none of the addresses I used for Lycoming/Thunderbolts deems necessary to reply.
I thought it might have to do with my location, but your post shows this not to be the case.

It would be nice if we get some news as to what will happen with our orders from Lycoming (Thunderbolt in my case), and deposits.
OTOH I think we have to do the same all affected people do, and exercise patience...

In the hope of my aging engine to keep running reliably ;)
 
Carl Froehlich said:
Good luck.

On March 17, 2022 Matthew Boone sent me a note that my engine was scheduled for assembly January 9th, 2023. I still do not have it and my emails go unanswered.

Perhaps I did something wrong to someone…..

Carl
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Send it to [email protected]

I believe Matthew Boone no longer works there. My engine was "promised" this month when I ordered it 18 months ago (IO-390-EXP119 - non TB) but now kits told me a couple of weeks ago that it is now April although I would love a contact at Lycoming to confirm with.
 
I was contacted 12/16/2022 by Matt saying my engine would be scheduled for 4/2024. Still have the email.
 
Latest from Lycoming

Just received an email from Lycoming. I attached their Q and A statement.

From reading it, if we pay one dime more it’s NOT because of Lycoming. It’s all Vans.
 

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Kitplanes article

Below is a snippet from today’s kit planes article about third party items, engines, props, avionics, etc. This seems like good news that they won’t be raising the prices we contracted, but I’m still unsure about the deposit that is “gone.” We will see…….




“We still need to work out [a plan] for those people who order engines and propellers and avionics, or other third-party parts. We obviously can’t raise those prices like we have on the kits.”
 
When people in positions in power of finance and legal use words like “obviously”, it’s usually code for something else….some other shoe is gonna drop. My tolerance for geico cloggers practicing on the floor above me is at an all time low unfortunately.

Here’s to staying positive in a very rough ocean tho…
 
JeremyL said:
This seems like good news that they won’t be raising the prices we contracted, but I’m still unsure about the deposit that is “gone.” We will see…….


“We still need to work out [a plan] for those people who order engines and propellers and avionics, or other third-party parts. We obviously can’t raise those prices like we have on the kits.”
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There's two ways to read that quote: one is that they won't raise them at all and the other that they won't raise them as much as the kits. Either way, that's good, but I await the details.
 
cactusman said:
When people in positions in power of finance and legal use words like “obviously”, it’s usually code for something else….some other shoe is gonna drop. My tolerance for geico cloggers practicing on the floor above me is at an all time low unfortunately.

Here’s to staying positive in a very rough ocean tho…
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I queued in on the use of that word too. Its feels insulting in a way because it infers customers should see the boundaries of the playing field just as Van's sees them right now. Given the bankruptcy storm cloud, It seems like all the rules are out the window and customers can't rely on common business precedent.

If my interpretation of his statement is right, then It appears to be good news for customers but i wouldn't hold my breath.
 
Digging though the documents on BMC I took a look at the budget that was submitted to the court as part of the Van Loan deal. I found this to be interesting.
 

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Engine Sources

Hi

I hope this doesn't violate the advertiser rules here but under the circumstances the info should be use to some.

The Van's web site quotes a 3-4 year wait for a Thunderbolt engine. I have built 2 RV10s in a total of 26 months (with a 1 year break between). A 4 year wait is impossibly long for me.

I have had Aerosport Power build two engines for me and have attended their build school. The engines were ported, polished and balanced. Built from a kit, all new Lycoming parts were used. They use the SDSEFI.COM electronic ignition / injection system so they run very smooth.

For the record, I have no affiliation with Aerosport (or SDS) other than being a very satisfied customer and really like the people in both companies.
 
kearney said:
Hi

I hope this doesn't violate the advertiser rules here but under the circumstances the info should be use to some.

The Van's web site quotes a 3-4 year wait for a Thunderbolt engine. I have built 2 RV10s in a total of 26 months (with a 1 year break between). A 4 year wait is impossibly long for me.

I have had Aerosport Power build two engines for me and have attended their build school. The engines were ported, polished and balanced. Built from a kit, all new Lycoming parts were used. They use the SDSEFI.COM electronic ignition / injection system so they run very smooth.

For the record, I have no affiliation with Aerosport (or SDS) other than being a very satisfied customer and really like the people in both companies.
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Well and the other problem is Lycoming and Vans have basically gone dark on engine order books last 6 months. Most of us with deposits on the books for approaching 2 years have no real idea what our position is and what our expected delivery date might actually be. But you plucked the thoughts out of my head - a trip to Barrett or Aerosport might be coming in my future. We have a local engine builder with a pretty good reputation in PHX as well. i am curious how these private engine builders are fairing with Lycoming complaining about parts unavailability.
 
Barrett built my first RV10 over a decade a ago from a core (I think from an Aztec). Barret makes the cold air induction system that I have put on 3 (soon to be 4) RV10 engines. If you want more ponies under the hood, CAI is well worth it.

Rhonda Bewley (Barrett) is good people.
 
mackd said:
There's two ways to read that quote: one is that they won't raise them at all and the other that they won't raise them as much as the kits. Either way, that's good, but I await the details.
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The math is pretty simple. They are limited to existing deposits plus the next available 3rd party vendor price. At that point a person would be better off even abandoning their deposit.

Realistically, customers are going to make a calculation of
$Van's price - $3rd party price > expected lost portion of deposit
 
N82VM said:
Has anyone received any communication indicating your engine contract is/has been modified?
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I don't have a deposit, but I did see this in the status document sent to the court from Vans yesterday (1/2/24)...
 

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Last Friday Anne responded to my question on the engine/firewall forward kit status for my 12. “We cant ship any until after they do the update in January”. For the 12 it is not really a kit or engine but appears to be considered an engine order. Was supposed to be crated in November.
 
Just got an email from Vans about IO-360-M1B having a different throttle body installed after Sept 2023 and going forward. It’s to inform the buyer that the VA-132-2 snorkel won’t provide adequate airflow…..

Thanks, but this is the least of my worries. What about my deposit??????
 
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