100% agree. Absolutely no way I'd start building a Vans kit right now. And I feel bad for the folks who are currently mid-build and have their flying futures hanging in the balance of this reorg.
The secured creditors, possibly including vendors if they have a security interest in unpaid inventory, will have priority up to the limit of their security. Then unsecured creditors like employees and customers with deposits, then equity holders will be last. "Investors" with equity will get screwed. "Investors" who took security in exchange for debt will get more, but that's the trade for putting cash into a potentially failing business. The customers wouldn't have been better off of that investment hasn't happened.
There are more than 11 000 or so RV planes flying out there - not sure what is the actual completion rate but cant be that bad if there are so many of them flying …
There is no known correlation between airplane kit completion rate and sanity.
You could make a case for inverse correlation.
Vans needs suppliers. In aviation those suppliers are limited. I wouldn’t anticipate a supplier that got burnt to run back into the fire. Payment in advance or no goods.
There's no limit to good suppliers that can form sheet metal.
Brakes, weldments, canopies, engines, props, landing gear, some (all?) fiberglass components are sourced...
There are a limited number of suppliers that can do engines and props but everything else on your list is easily sourced. Also, the "suppliers get screwed" thing is not necessarily true. It can be, but it's not a foregone conclusion. In a lot of chapter 11 bankruptcies the suppliers are made whole after a bit of a delay.
Agreed, at least COD with a limit to how much I'd build up front or PIA, pay in advance.
Not really, especially in the volume Van's is working in, someone who can hit tolerances, quantities and delivery is probably not easy to find. When I was selling stuff, I dinged twice, learned my lesson and it didn't happen again.
Bring forward someone with the tooling to make the Wittman tapered rod landing gear in quantity and to close enough tolerances that it fits a weldment made by another supplier. Bring forward someone with the molds and fixtures to make the dozen different cowlings, 3 types of wingtips, the RV-10 cabin top and doors, plus all the other smaller fiberglass parts that go with the airplanes. Oh, and they have to fit and the supplier needs to be able to produce thousands of those items a year.
I worked in Tier 1 automotive for 30 years. Thousands a year is small volume and we'd outsource those jobs because they weren't worth our time. We never had any trouble finding suppliers in the midwestern US, Asia, or Mexico that could handle small volumes like Van's deals in and our parts & assemblies were much more complex than anything that goes into an RV. Those smaller shops didn't have the in-house quality systems or personnel of the big players. We'd help them set up quality plans and our quality engineers would make regular visits and in some cases we'd do incoming inspections. I'm sure Van's learned their lesson on that. There's nothing in a Van's kit that is challenging from a tolerance point of view. They aren't being made by people beating metal on anvils - even small mom and pop operations have modern machines that can hit +/- a few thousandths all day long and sub-thousandths for critical parts. Van's isn't building turbine engines. Brakes, weldments, gear legs, etc just aren't that challenging these days.
But apparently, it only takes one that’s not good at it to bring the company down.
My experience is that tooling is owned by the customer, not the supplier. Every custom molded or formed part I've ever worked with required us to pay for the tooling up front, and we always have a bailment agreement in place so that we can recover the tool if the supplier becomes untenable for any reason. You might have a challenge finding a supplier with the right machine to run the tool, but it's not impossible.
If you're going to use JimBob's Laser Cutting and Beef Jerky you need to keep an eye on them.
Any business that employs anyone knows employees have a tendency to go off script despite explicit instructions 10 minute prior.
New orders will suffer from Vans previous announcements and substantially decline from the Chapter 11 announcement.
Their new pricing isn't out of line with other 2 seat experimental aircraft on the market and is actually less than most while providing a better all around airplane. Over on the Vans forum the new pricing seems to be the least of their concerns, most are annoyed at the long wait for kits and parts. If all goes to plan, by the time Vans catches up with the backlog of existing orders the Chapter 11 should be long gone history. If anything was to substantially hurt their business moving forward aside from consumer confidence it will be their new down payment and kit ordering terms. 23k down on a 62k kit that you want see for 1-2 years is a tough pill to swallow. Their new policy on no component deletion from kit orders has rubbed a lot of people the wrong way. There are a lot of aftermarket parts builders would rather use than the OE sourced ones. 2-3 years from now is when the staying power will be determined. There are so many wealthy RV fanboys I don't expect the company to disappear even if current management crumbles.
What about builders who (a) questioned the quality of some of these parts and were initially told, "build on," or (b) bought quickbuild kits with these parts already integrated? True, "the manufacturer" (i.e. builder) is ultimately responsible for the condition of his/her airplane but I think the hole was pretty well dug before they got assembled anything.
I'm behind them all the way on this one. They ain't Burger King and Vans is not stopping anyone from using the aftermarket parts.
In a way they actually are. It's not like they have kits sitting on the shelf pre-packaged and ready to go as soon as an order is placed. Each kit is built to order and hand packaged before going out the door. On the other hand, the credit on some of the substitutions is so small it's not worth crying over. Most of the big dollar deletions are going to be FWF so instead of ordering a FWF kit, just buy the individual components you need.
That was then, this is now:
Exactly.
23k down with a multi year wait on a company that just filed for Chapter 11... that's a tough sell
My understanding is that it was the rivet holes and 4x plus shipping container costs that burned them
That plan is called an interest free loan with no guarantee your principal is secure. At todays interest rates one would be effectively sending Vans >$25,000
that was part of the problem. vans was operating a medium to large operation and using small business processes. my family company recently went through this, luckily we saw it before the bottom line was hit as hard. at some point in your operation, manual processes must go a way and automated processes need to take over. erp systems are the way you do it. all processes are integrated in a computer system. that means that pick list, production lists, inventory all are standardized. we were amazed at how much small changes to single orders really cost in terms of man hours and production costs.
Absolutely. My business went through the exact same thing as we grew, and ERP was the solution. Then it takes sustained management focus and executive skill to draw insight from ERP data and turn that into action and effect. That is why many small business entrepreneurs cannot make the leap to CEO of a medium to large business. Smart founders recognize when it is time to bring in a pro. Thinking maybe that is where Van lost the script.
i wouldn't say so much that he lost the script. giving his conservative views on business, i would say it was more balking at the cost. im sure you know well the cost of starting up running an erp system. expensive, but in the long run, cost effective.
6 figures, which sounds expensive until you realize it saves the cost of several 6 figure accountants.
We have a new EAA chapter at my airport, so seems there is a lot of support or commiserating available.
I'm thinking there will be a lot of partially completed kits for sale at a discount as people try to salvage some of their investment. If your risk tolerance is higher, you should be able to get a good buy.So I'm actually wondering if now is the time to hop off of the fence and try my hand at an RV-14 build. I've been hemming and hawing about it for a long time.
My thinking is -- I'm "new money" so I get to cut line in front of the rubes who are renegotiating their BK'ed contracts. Parts QA scrutiny is likely at a high point right now. I can plant the flag on my build as a "post-snafu" build which will avoid the cloud of the older planes. It's going to be like the ruddervator fiasco for RV sellers for the next decade or two. "Did you have them thar laser holes in your plane?" -- I can skip that entire category of BS.
Of course, building a plane seems to be its own category of BS, so I'm still hesitant to commit to 2 or 3000 hours of frustration and my own ineptitude. But maybe it'd be fun?
They aren’t shipping the old parts any longer, so that shouldn’t be a consideration. My question would be around the security of any new deposits you place. I don’t understand how they are sequestering those funds. Previously, deposits were not sequestered, so “old” deposits are mixed up in the bankruptcy and may or may not be recoverable.How do you know you're getting the "new" parts? vs the old ones?
As they say in Oregon, Just Do It.
How do you know you're getting the "new" parts? vs the old ones?
So I'm actually wondering if now is the time to hop off of the fence and try my hand at an RV-14 build. I've been hemming and hawing about it for a long time.
My thinking is -- I'm "new money" so I get to cut line in front of the rubes who are renegotiating their BK'ed contracts. Parts QA scrutiny is likely at a high point right now. I can plant the flag on my build as a "post-snafu" build which will avoid the cloud of the older planes. It's going to be like the ruddervator fiasco for RV sellers for the next decade or two. "Did you have them thar laser holes in your plane?" -- I can skip that entire category of BS.
Of course, building a plane seems to be its own category of BS, so I'm still hesitant to commit to 2 or 3000 hours of frustration and my own ineptitude. But maybe it'd be fun?