So once again, Vans knew they were in financial trouble as early as 2022 but continued to take kit orders that they could not fulfill.
They were in financial trouble in 2022, I’m not sure they knew it though.
I think that only hit home earlier this year.
They were in financial trouble in 2022, I’m not sure they knew it though.
I think that only hit home earlier this year.
They were in financial trouble in 2022, I’m not sure they knew it though.
I think that only hit home earlier this year.
(emphasis mine)AURORA, OREGON – June 18, 2021 – Van’s Aircraft today announced changes to its management and organizational structure designed to enable the company and its employees to advance and meet opportunities created by significant growth in customer demand.
Over the past 24 months, orders for Van’s RV aircraft kits have increased nearly 250% as new builders take advantage of the latest technology and designs. To fulfill this substantial, ongoing growth in orders – while simultaneously designing the next model RV aircraft – company leadership determined it was the right time to adjust the focus and priorities of the management team.
Rian Johnson has assumed the role of President and Chief Technology Officer. Rian has worked at Van’s Aircraft for more than 20 years, most recently in his previous role of Vice President and Chief Engineer. He will lead the company as a whole from the engineering and design perspective that has made Van’s a successful company for nearly 50 years.
Greg Hughes has assumed the role of Vice President and Chief Operations Officer. He maintains responsibility for marketing and community relations while his role expands to a broader operational focus. Greg joined Van’s Aircraft in 2018.
Mitch Lock has shifted from his prior role as president of the company to the newly-created role of Chief Financial Officer, bringing greater focus to the critical work of managing the company’s financial operations and investments into the future.
“We’ve always been an innovative company that’s been led from a solid, technical foundation and we will continue that culture into our future,” said Van’s Aircraft President and CTO Rian Johnson. “The singular purpose that has made Van’s Aircraft the defacto industry leader for nearly 50 years – designing great aircraft that people love to build and fly – remains our primary purpose and we will continue to bring new technology and capabilities to our designs and customers.”
Van’s Aircraft’s recent growth has, of course, come at a particularly challenging time. “It’s a bit cliché to say, but also quite accurate,” said Van’s Aircraft Vice President and COO Greg Hughes. “The past 18 months have been a wild ride for everyone, including Van’s Aircraft. We’ve managed through natural disasters and supply chain challenges, plus expanded our manufacturing capacity and added significant new technology, all while building our team and growing rapidly as a company. We continue to be completely committed to our incredible customers and employees, with the sole purpose of delivering the best product possible. Nothing makes us happier than seeing each and every person who builds one of our aircraft kits with that famous RV Grin on their face.”
As a service or business grows, employees - whom may well be very competent in their previous position - get promoted to new or broader management positions… often realistically exceeding their skill sets and knowledge. More than once I’ve seen very competent supervisors and lower level managers move into administration and find themselves in over their heads. We called it “promoted to their highest level of incompetence”.
One question I have is whether using customers' deposits to run operations is legal. It seems clear that much of the money is gone. For people who paid a deposit towards a Lycoming engine, was it legal to treat these funds as assets and not liabilities?
I am thinking about similar scenarios, like the FTX debacle. They used customers deposits to run their business and have been found guilty of misappropriation of funds. Even if the Van's execs didn’t mean to do something that smells like that, was it legal? Is there a lawyer here who could clarify the US law in this regards?
And if it was only potentially illegal, why is Van's not taking precautions and investigating the execs? Shouldn't this be basic due diligence, if only to prove that the execs did nothing wrong? I am really struggling to understand.
One question I have is whether using customers' deposits to run operations is legal. It seems clear that much of the money is gone. For people who paid a deposit towards a Lycoming engine, was it legal to treat these funds as assets and not liabilities?
I am thinking about similar scenarios, like the FTX debacle. They used customers deposits to run their business and have been found guilty of misappropriation of funds. Even if the Van's execs didn’t mean to do something that smells like that, was it legal? Is there a lawyer here who could clarify the US law in this regards?
And if it was only just potentially illegal, why is Van's not taking precautions and investigating the execs? Shouldn't this be basic due diligence, if only to prove that the execs did nothing wrong? I am really struggling to understand.
One question I have is whether using customers' deposits to run operations is legal.
One question I have is whether using customers' deposits to run operations is legal.
Because lawyers make everything better, right?
Sometimes, yeah. It's lawyers who will be getting them out of the mess they put themselves in, don't forget.
No need to bash the legal profession. Some of my best friends are lawyers .
Sometimes, yeah. It's lawyers who will be getting them out of the mess they put themselves in, don't forget.
No need to bash the legal profession. Some of my best friends are lawyers .
Sadly court proceedings pretty much require attorneys, so their presence is critical.
I'm not actually sure that's the case...Unless they told you the deposit was being held in escrow (they didn't), it is perfectly legal.
It just shows that it would be very easy to loose track of things when the sky is falling.
Running a company without robust accounting practices (particularly cost accounting) and systems is like flying in the mountains IFR without navigation instruments. Eventually, you fly into the side of a mountain. Sounds like they didn't have anyone involved with any financial sense. The apparent incompetence is just astounding.
I'm not actually sure that's the case...
From a purely accounting point of view, there are specific standards and requirements to be applied to various income, cash on hand and monies received in accordance with internationally-agreed rules. I would have thought a customer deposit for something like an engine or prop being sourced from an outside vendor would be considered a Restricted Financial Asset - it (the deposit) was paid to Vans for the specific purpose of being a deposit (part payment for) on a product they would then purchase from an outside vendor.
That Vans was using these deposits to run the business, rather than towards the cost of each customer's engine or prop says they certainly weren't[ considered RFA's and that's one for the accountants to look into to determine whether there's any financial impropriety going on, but at first glance, it doesn't seem kosher from a Beancounter's POV...
I'm fairly certain that the management team Van put in charge did NOT include a CFO. Also not uncommon for small private companies to not want to invest in financial systems - rather invest in a LCP process to make products....
Au contraire, see post #2 link, Vans June 2021 update appointing a CFO.
"Mitch Lock has shifted from his prior role as president of the company to the newly-created role of Chief Financial Officer, bringing greater focus to the critical work of managing the company’s financial operations and investments into the future."