I Hope they will be able to come out of this. Vans is a beacon for the ga community. Homebuilts are becoming some of the only realistic affordable ways of being a recreational pilot.
Thank you kindly for the important information you have given. Unfortunately, in addition to the financial and organizational disaster, in customer information Van's is also incredibly lacking! In my case I have already paid over US$120,000 to Van's of which US$50,000 is for materials that I have not yet received (deposit for the engine, propeller, Finishing kit and FWF Kit already fully paid for) ...
So since the consumer is now an “ unsecured “ creditor how many orders do they expect to be coming in and if orders slow where will the cash come from to get out of chapter 11. I feel for the people that have been waiting for their kit not only do they stand to loose money but now they have no idea when their kit may come if ever.
As an unsecured creditor (like Lycoming & other suppliers), are they just shit out of luck for the money Vans owes them? Seems like filing for Chapter 11 absolves you of all your debt, and in turn, absolutely SCREWS every one else you've worked with. Am I missing something?
Maybe you’re thinking Chapt 7? Chapt 11 is a reorganization attempting to keep the business going while keeping everyone whole. Vans still has a positive net worth.
@@Dinngg0Below cost? Do you have a link? I don’t see much of an aftermarket. Perhaps they need to reduce the number of models. I’d keep the older models for which several upgrade SB’s have been issued. My understanding is that a recent model has had some issues. Van’s designs have been superb. Perhaps recent inflation caused some cost control problems.
@@Dinngg0kits were never priced below cost. They actually were priced at about double cost or more but Van’s made several mistakes that cost them time and money. The mistakes were clear errors that lead to several bad business decisions in an attempt to regain their profit margins. I believe they could have taken different tracks to recover without screwing over customers and vendors. This is the problem when you get a business that puts profits before customers and product quality. Not saying they shouldn’t make profit but when you mismanage the problems and alienate the customers and vendors there may not be a business left to recover. They should have partnered with AOPA or EAA to resolve the issues and keep customer support. Customer support is their only business that will get them out of the mess they created.
Vans is the only company that produces a high performance airplane kit in such quality that will allow a normal builder to construct an aircraft in a reasonable amount of time. My airplane took 5 years to build while working a fulltime job. The performance of the aircraft is just phenomenal.
In 1996, I flew my Aa5a 5 hours, landed at Vans grass strip and paid for my RV8 tail kit. As i waited for it to be loaded into my airplane, i walked into the warehouse. Van was working alone at a workbench. I approached and said "hello". He turned, looked at me then went back to work without saying a word. I finished my -8 six years later but never forgot that moment. Now this . . . sorry no sympathy.
I started talking to them in 2019. They were awesome. Very solid. Not overloaded with debt, cash in the bank. I committed. Then there was the primer debacle which delayed my fuselage. Maybe for the best since I ended up ditching the quick build. I feel like I got it done just in the knick of time. Although I pray for their success for all other builders and really for continued support with parts.
@_skyyskater inflation. Simple as that. Biden has done nothing to bring down the cost of living. He's compounded it with policy decisions. Just Google it and stay away from the liberal media. Try sky news or a neutral RUclipsr who actually reports the news and doesn't pitch an agenda.
Too help vans keep moving forward instead of laser cut there is another type that uses water to cut could this be used due to one can vary the pressure of the cut ie water pressure to cut slower therefore less stressful on the product
From what I understand, no one is going to lose their deposit - it's just that they thought the kit would be 30k and now it's going to be 40k (just an example). Sucks, but better than a total loss. Glad my RV-8 is finished - I can assure you it's an excellent kit and and an excellent aircraft. In the immortal words of the T-800 with the Austrian accent, "Van's will be back!"
nope. this has literally NO impact on other kit manufacturers. Others might even see an uptick from customers who were thinking Vans, but now changed their minds and bought a different kit instead.
@@Pilotpaulie no, you don't lose your deposit, you just pay more in the end, including your deposit. Prices went up, your deposit goes towards the total price same as before.
From my perspective using my little pea brain, these kits are still going to be priced decently. I have a little experience with other types of kits and the quality just isn't there. Take a pop rivet high wing from another manufacturer for 40k$ and compare it to the RV12 in person. The difference is very noticeable. Our economy has been through the wringer the last few years. I paid 29k for a truck in 2014, thanks to inflation it would take around 37k dollars to have that same buying power currently (22% more money). Unfortunately that's what we have to deal with. No matter what people decide, I hope for the best for everyone. And if you can't or won't pay the increase, hopefully a new customer can buy you out and take your spot in line. That should keep the cash flowing and make everyone whole and happy.
Vans better take care of existing orders and customers. These customers did not sign up to take risk, they signed up to receive a product for an exact price. If Vans can’t deliver & refuses to give a quick & full refund they will be out of business. New customers will not give Vans money while existing customers are getting screwed. I admired how Vans started handing the situation and was impressed. However at this point if they refuse full and quick refunds to customers I believe they will go out of business.
What a huge blow to vans owners and future owners. Vans brought this on themselves though thru mismanagement and the biggest single mistake in their history of switching to laser cut holes in aluminum. What a stupid move that was! There is no way they will survive this as no investor in their right mind would take on the future liability of all those laser cut holes cracking. The resulting failures will lead to countless lawsuits and eventually a class action that will finish off what is left of Vans.
In the worst case scenario Van’s goes out of business, their assets are sold including aircraft designs. EAA buys the designs and coordinates with aircraft spruce, McFarlands and others to produce the kits in preordered quantities. The costs for the kits goes down and vendors know they are being paid prior to shipment. With the profit requirements reduced you now have quality and prices that help EAA and AOPA insure reasonably priced kit planes available to a future generation of pilots/mechanics.
I loved my RV-8 and should never have sold it 16 years ago. As I enter my retirement years, I'd be the perfect customer to sell another kit to. However, I'd never, ever lay down a deposit with any company in bankruptcy.
Everyone keeps dancing around the most significant unknown: How much is the price increase? If 10%, most builders will accept it and continue. But if the prices triple, many builders will be incapable of accepting it and will have to walk away from the project. Of course in half a year, this will be more clear. But AOPA could provide a great service to discuss this issue to help builders.
How will orders be filled if the external suppliers are being treated as unsecured. I’ve been in the situation the external suppliers are in and the last thing I would do would be continue supplying any more stock. If it came down to it I would say that I can to get my account with them square then cut ties. I can see it coming now we need more money and when they get it they will blame the suppliers for not supplying it the parts. It won’t be their fault for failing…but they will have more money on the way out
Did anyone notice that the largest debt (Lycoming) listed was a little over $500,000? Or that some quick math reveals a total of about $2,000,000? Frankly, for a company of this size, that’s really not a lot of money. What that tells me that payroll is, likely, a major issue. From this, I would expect that Vans will reorganize, primarily, via layoffs. Also, I would expect that things such as the special pricing deal with Lycoming for kit purchasers may not survive the reorganization. I fully expect Vans to survive. Given the runup in aircraft pricing across the board (Cessna 150s have doubled in price over the last five years), I believe that the market can easily absorb price increases of 10-20% or more. Just look at what completed RV-7s go for these days, it is up to double the total kit cost. A kit aircraft is not going to be the bargain it once was but, I believe, that since kit aircraft are the only source of new, relatively low-cost aircraft this will ensure the overall health of the industry.
you almost got it. it protects vans from lawsuits which is the largest liability by far. vans was grossly negligent with the laser parts and changed the product materially which means they would lose every case. chap 11 protects vans from its customers. pretty sleazy
@@pwffstube - That’s a good point, but it does raise the question about insurance. For the flying club I help to run, we carry a pretty substantial Errors and Omissions policy. I really can’t imagine that Vans wouldn’t have some sort of liability protection.
@@bunkie2100thats the gross negligence and material change part. forming laser cut aluminum will fracture. this is common metallurogical knowlege and constitutes gross negligence which typically negates insurance. the product is cut and formed aluminum so a material change in that allows breach of contract claims under the ucc. vans is now exploiting the good will of its customer base.
Vans is a great company. My dad and I bought a plane kit from Wheeler Express in 1989, they had quality issues and lost the demonstration planes and that probably led to their folding. We never got the upper fuselage and finishing parts, no one did. We the builders where unsecured creditors. We got nothing. It was terrible. I wonder if the laser cut sheetmetal parts being rejected cause Vans to go into bankruptcy?
I’m sorry, but vans got themselves in this position. It is no longer financially feasible to build a vans aircraft. The new prices for the kids have gone up massively in price. It’s really a shame. I will never build an RV.
Everything in this country has gotten more expensive. If your a company and don't raise your price your not very smart. You will just need to work harder to get paid more so you can then buy what you want
@@MauriceColontonio Perhaps, but the real scenario is, given the major warning signs, would you gamble an extra 30% that it doesn't go up to 100% ... or worst case they go chapter 7 and you lose everything? I think if you're not rolling in dough this effects more people than we think.
What Jeremy Browner says at 1:33 doesn't make sense. He suggests that all of the top 15 creditors listed in the court filing are "unsecured creditors" same as kit customers. Then, Colin Stagnito follows up and says "unsecured creditors" have two options: pay more for their kits or request a refund. What about the 15 top creditors? Something seems off with this analysis and explanation. Don't you mean that the 15 top creditors are "secured creditors" and that the kit customers are "unsecured creditors?"
What nobody seems to be touching is whether the top 15 will continue to do business with Van's. Will Steiin continue to build RV-12 harnesses, for example. Will Abby continue to provide upholstery for the RV-12? Will the third party who makes engine mounts continue to do so?
Mark, a "secured creditor" holds a lien on property they can legally foreclose or repossess to satisfy the debt in the event of default and an "unsecured creditor" holds a simple I.O.U. from the debtor. A secured creditor can foreclose or repossess property. Examples are banks that hold a mortgage or car loan with their name as a lien holder on the title or a contractor who has filed and "perfected" a mechanic's lien. If you give somebody money or things of value and all you get is a promise to be repaid, you are an "unsecured creditor." Like a credit card company or the electric company. You can't repossess a promise.
I get the impression that it's generally a financially troubled industry, the kit planes. Van's was in trouble in 2016 as well. I get the sense that most every kit maker is flirting with financial difficulties. Even Lancair, maker of great planes have died multiple times iirc. What I would suggest is that they abandon kit making, like Cirrus did, and make great looking simple aerodynamic composite planes in as few parts as possible and certify them in their simplicity. A single piece composite fuselage is easier to believe will hold together without a lot of analysis, same with wings. Making them from carbon fiber offers a weight advantage that quickly pays for itself many times over and a very light plane could well be done without flaps at all. A polish outfit has made a performance glider plane called the Gekon that weighs 69kg with everything. It's not an exotic construction, it's just CF which in a double curved aerodynamic form is naturally rigid with very thin walls. It's a construction that's hard to beat weightwise or construction ease wise. Don't do two sides as it's classically done, that adds a lot of work and complexity. Lay it up as one piece. Any clumsiness in the process is well worth the gains. That includes a long tail boom that can be laid up with a pole device thingy. Getting rid of flaps nicely simplifies the construction and risk in development but with extremely low weight it can land on a dime anyway. Less to manage when flying as well. Light begets light. Optimization is king. Let rivets die with the titanic. And I don't want to hear any lip about the titan submarine :) When a plane can be ultra simple as a single bubble shell then all that folded metal and thousands of hours of build time is just not worth it. You can have a fully complete, factory built, beautiful performance aircraft with less effort than it takes to make the kit parts. Which is more commercially viable. If you do it right you can defeat Cirrus. Start with a 2 seater though if you dont have a lot of money. And if you really want to do well you have to make your own small turbofan jet engine with 100kg thrust. Then we are talking billion dollar valuation.
Vans isn't going anywhere. Vans sells more kits than all other kit manufacturers combined and has been in business for more than 50 years. Worst case scenario is somebody buys them out. Short term? Kit prices are increasing and there will be delays in getting kits. I'm building an RV-14A and I'm not worried at all about Vans - and they have $35,000 of my money in deposits right now.
In this case the money to keep operating is coming from Van himself so unless he wants to kill the company if they don't pay him back on the court appointed timeline maybe not. The real danger right now is all the people who have sued since they declined to give refunds to people before filing Ch 11.
Chapter 7 will be next. Hint: take a look at who is putting more money that gets to decide what next, and who gets all their money and all the deposits if they go ch. 7. Given the laser cut issue, I don't see how they possibly make their way out of this.
@@philipmcbride-pilotengineer Mr VanGrunsven is funding the company through Chapter 11. He wants his legacy to continue after he's gone. It's not going to Chapter 7.
You mentioned several time the customers will potentially have to pay more money but didn't elaborate. Is this going to be a percentage of the total kit cost and if so what is fair.
It’s unfortunate that supply chain issues, incorrect parts, and the financial state of the American economy has hurt Van’s this way. It’s more unfortunate that owners who paid partially for kits can only get a part of the return (likely) or suffer continuing and paying more than initially quoted. One missive from Van’s said as much as 30% more. That’s like paying $100K for a kit, then finding out it’s actually gonna cost you $130K. Makes you wonder where the management was in all this, to let it go this far. My ultimate question is: Are they too small to fail 😂? I bet the government doesn’t bailout the GA community…………
@alienxyt Also think this is the byproduct of a piss poor economy. Banks are failing, small biz, it's a matter of time until the looming Recession 2.0. When prices are 2.5x the norm, this is bound to fail.
If you're lucky and put your deposit down with a card or some financial vehicle that can deal with the voided contract resulting from Ch.11, then they will get your money back. If not, then you have to decide to walk away, or put more money in to continue. The latter is a big risk because them next going to Ch. 7 is rather high. Meaning you can lose even more money. I have friends that got their money back, and some that didn't. Tough times.
The CC company must subjugate against vans on your behalf. Since the chapter 11 dissolves your contract, the CC company will get nothing, so neither will you.
At least all the unfinished kits -- that were never going to be finished by their "builders" anyway - can be sold on the secondary market for full price. Airplane building isn't for everybody.
Wow, with the largest and most successful experimental aircraft mfg filing bankruptcy what does that say about the rest of them? Why did they have to file? What are some of the kit owners think about this?
Thanks immensely for this informative video! Such a bummer that Van’s is going through this… the Van’s vendor and customer community, and the broader kit building “family” is going to hurt. Please keep us informed!
This means - as I told all of you 6 weeks ago - they were trying to find an Angel buyer - willing to come in and put up alot of money to allow em to survive. No financially responsible company or individual would buy in to what is essentially a gigantic pool of litigation and unmitigated risk - The companies going away - being liquidated. any and all parts will now be made by one off after market mom & pop companies - and its such low volume - the prices will skyrocket. Good luck RV buyers - I'm really sorry - for you, and for the home builders market
Any new kit buyer will take a second look before making the purchase. I love their planes and want to build the RV-15, but deposits must be in an escrow account, and the time between order and production must be shorter, not the 12 -18 month window. I suspect new orders to disappear and builders might stop their builds and sell partially completed planes. Vans need to only offer kits of their top sellers. I suspect the top sellers are there latest models. By reducing number of models will help financially, reduce stock inventory of parts, streamline production speed, and shorter delivery. How this occurred is a result of not watching the financials, and making corrective action. The immediate price increase 32% indicates that they we not off my a small rounding number, but clearly not focused on the finance condition of the business. Some times the people that start a business are not exactly prepared to run the business once they grow. New management is needed to save the company, and to restore confidence of customers that clearly want to purchase and build their own planes. The RV-12 as a production only plane will not be the model to solve this problem. The RV 12 in its current form does not have the performance that kit plane owners are looking for, its a trainer with limited performance that competes with the Cessna 152.
We saw the prices go from 25k to 65k for lots of these kits. This is just the begining of the karket correction. Car repos are already happening. Banks are ynderwater on these vehicles and next is realistate
I think they may have gotten too big. I've visited the Van's booth at Oshkosh the last 2 years, they have a huge staff and booth there ALOT OF $$$ right there.
Rapid growth led to outsourcing some parts. One big problem was a supplier’s use of lasers to cut the rivet holes in the skins, causing some metallurgy issues leading to cracks. A lot of those skins will need to be replaced.
@@chaosensues1656, yet many boot lickers still claim Vans is a good company.....Quality control went out the window, builder's projects are substandard possibly unairworthy and some claim that Vans is still a good company?
I just lost my Medical at 66. I have not problems but they want me to see a Neurologist which would cost me $3000 out of pocketed. I have no problems with my body at all. I talk to my doctor he is going to sign my Basic medical. I screwed up and should have gone to him at first and I would have not have this problem. I didn't know. Senses I am now denied a medical the Basic med no good. I now have to sell my plane and cant fly no more. I am a license A & P and can work on airplanes Ok for that and my Job but cant fly. I'm looking into Motor gliders no Medical require on them. I wonder how many other pilots are there that this has happened. I would think seeing so many Cessna and Pipers for sale. This has happen .
One of their main problems is certainly this rotten economy. The same demographic of people that used to buy things like this don't have the same amount of disposable cash to spend on luxury items like they once did. Not even something you have to put together yourself. That's just a fact. Don't get mad at me for pointing it out. I do the shopping for our family. I know what's going on first hand. Cost of materials. Labor. Energy. Shipping. Everything is up across the board. A niche kit plane company like van's would certainly feel it more than most I would think. Doesn't matter if they dominate the category. Since they're bigger, they have bigger operating expenses. Blame whomever you want, but expect more of the same because this was supposed to happen. In fact,...there are those in power that don't think the private citizen should have a right fly about anyway. That's where we are.
@@damham5689 Things were better economically with those who "were" in power. Now things stink. No way to argue out of it. And ,...maybe privatizing air traffic wouldn't be such a bad thing. We have gov in charge of transportation right now. With the little boy they put in charge - it's a disaster. He's busy chasing after racist roadways. Sexist pilot terminology. Sorry. I don't have faith in those running things right now at all. And I do blame them for some of van's economic issues. Cheers.
I really think it is Van's fault for not figuring out how to prosper using Biden-economics without falling prey to Biden-flation 🤣 Maybe after Van's Aircraft gets out of bankruptcy they can fire all of their high paid employees and replace them with cheap labor employees from some of the millions of people that flooded over our borders since January 2021 😉
And all those RV owners who snub their noses at us plans builders....lol I was at first enamored at the owner for helping finance the company when the piper came calling....but when a company goes bust like this, it demonstrates a complete lack of respect for their customers by allowing sucky business practices and potential embezzlement to bring them to ruin...But hey, if you can't manage your money, make room for someone who can...I say bid them adieu.
I Hope they will be able to come out of this. Vans is a beacon for the ga community. Homebuilts are becoming some of the only realistic affordable ways of being a recreational pilot.
They really need to move operations somewhere with lower costs. Being in Oregon probably increases kit prices by 20%.
Thank you kindly for the important information you have given. Unfortunately, in addition to the financial and organizational disaster, in customer information Van's is also incredibly lacking! In my case I have already paid over US$120,000 to Van's of which US$50,000 is for materials that I have not yet received (deposit for the engine, propeller, Finishing kit and FWF Kit already fully paid for) ...
So since the consumer is now an “ unsecured “ creditor how many orders do they expect to be coming in and if orders slow where will the cash come from to get out of chapter 11. I feel for the people that have been waiting for their kit not only do they stand to loose money but now they have no idea when their kit may come if ever.
Yes. And also very presumptive that builders will pony-up large sums of extra cash because they have no other choice.
As an unsecured creditor (like Lycoming & other suppliers), are they just shit out of luck for the money Vans owes them? Seems like filing for Chapter 11 absolves you of all your debt, and in turn, absolutely SCREWS every one else you've worked with.
Am I missing something?
Maybe you’re thinking Chapt 7? Chapt 11 is a reorganization attempting to keep the business going while keeping everyone whole. Vans still has a positive net worth.
You're not missing anything, that's how it works.
The best option will be to pay the increased kit price. The kits were previously priced below cost.
@@Dinngg0Below cost? Do you have a link? I don’t see much of an aftermarket. Perhaps they need to reduce the number of models. I’d keep the older models for which several upgrade SB’s have been issued. My understanding is that a recent model has had some issues. Van’s designs have been superb. Perhaps recent inflation caused some cost control problems.
@@Dinngg0kits were never priced below cost. They actually were priced at about double cost or more but Van’s made several mistakes that cost them time and money. The mistakes were clear errors that lead to several bad business decisions in an attempt to regain their profit margins. I believe they could have taken different tracks to recover without screwing over customers and vendors. This is the problem when you get a business that puts profits before customers and product quality. Not saying they shouldn’t make profit but when you mismanage the problems and alienate the customers and vendors there may not be a business left to recover. They should have partnered with AOPA or EAA to resolve the issues and keep customer support. Customer support is their only business that will get them out of the mess they created.
Vans is the only company that produces a high performance airplane kit in such quality that will allow a normal builder to construct an aircraft in a reasonable amount of time. My airplane took 5 years to build while working a fulltime job. The performance of the aircraft is just phenomenal.
In 1996, I flew my Aa5a 5 hours, landed at Vans grass strip and paid for my RV8 tail kit. As i waited for it to be loaded into my airplane, i walked into the warehouse. Van was working alone at a workbench. I approached and said "hello". He turned, looked at me then went back to work without saying a word. I finished my -8 six years later but never forgot that moment. Now this . . . sorry no sympathy.
I started talking to them in 2019. They were awesome. Very solid. Not overloaded with debt, cash in the bank. I committed. Then there was the primer debacle which delayed my fuselage. Maybe for the best since I ended up ditching the quick build. I feel like I got it done just in the knick of time. Although I pray for their success for all other builders and really for continued support with parts.
That was pre Biden
@@flyingcountryboy
Bingo
@@flyingcountryboy What does Biden have to do with this? I'm asking seriously.
@_skyyskater inflation. Simple as that. Biden has done nothing to bring down the cost of living. He's compounded it with policy decisions. Just Google it and stay away from the liberal media. Try sky news or a neutral RUclipsr who actually reports the news and doesn't pitch an agenda.
Nothing, just some people want to make everything political for no reason.
Too help vans keep moving forward instead of laser cut there is another type that uses water to cut could this be used due to one can vary the pressure of the cut ie water pressure to cut slower therefore less stressful on the product
This is going to be a setback for the entire kit market. People will view it as a risk to put deposits down.
From what I understand, no one is going to lose their deposit - it's just that they thought the kit would be 30k and now it's going to be 40k (just an example). Sucks, but better than a total loss. Glad my RV-8 is finished - I can assure you it's an excellent kit and and an excellent aircraft. In the immortal words of the T-800 with the Austrian accent, "Van's will be back!"
So basically you don’t lose your deposit but we will increase the kit price as much as your deposit. =. You lose your deposit.
nope. this has literally NO impact on other kit manufacturers. Others might even see an uptick from customers who were thinking Vans, but now changed their minds and bought a different kit instead.
@@Pilotpaulie no, you don't lose your deposit, you just pay more in the end, including your deposit. Prices went up, your deposit goes towards the total price same as before.
From my perspective using my little pea brain, these kits are still going to be priced decently. I have a little experience with other types of kits and the quality just isn't there. Take a pop rivet high wing from another manufacturer for 40k$ and compare it to the RV12 in person. The difference is very noticeable. Our economy has been through the wringer the last few years. I paid 29k for a truck in 2014, thanks to inflation it would take around 37k dollars to have that same buying power currently (22% more money). Unfortunately that's what we have to deal with. No matter what people decide, I hope for the best for everyone. And if you can't or won't pay the increase, hopefully a new customer can buy you out and take your spot in line. That should keep the cash flowing and make everyone whole and happy.
Vans better take care of existing orders and customers.
These customers did not sign up to take risk, they signed up to receive a product for an exact price.
If Vans can’t deliver & refuses to give a quick & full refund they will be out of business.
New customers will not give Vans money while existing customers are getting screwed.
I admired how Vans started handing the situation and was impressed. However at this point if they refuse full and quick refunds to customers I believe they will go out of business.
Plus, I imagine all vendors such as Lycoming, etc will want to be be pre-paid for all parts & services for quite a while. No more credit terms.
Current customers already brought the money, so for Van no benefits to support them in current situation
What a huge blow to vans owners and future owners. Vans brought this on themselves though thru mismanagement and the biggest single mistake in their history of switching to laser cut holes in aluminum. What a stupid move that was! There is no way they will survive this as no investor in their right mind would take on the future liability of all those laser cut holes cracking. The resulting failures will lead to countless lawsuits and eventually a class action that will finish off what is left of Vans.
Basically, the customer gets screwed. Thanks a bunch!
In the worst case scenario Van’s goes out of business, their assets are sold including aircraft designs. EAA buys the designs and coordinates with aircraft spruce, McFarlands and others to produce the kits in preordered quantities. The costs for the kits goes down and vendors know they are being paid prior to shipment. With the profit requirements reduced you now have quality and prices that help EAA and AOPA insure reasonably priced kit planes available to a future generation of pilots/mechanics.
I loved my RV-8 and should never have sold it 16 years ago. As I enter my retirement years, I'd be the perfect customer to sell another kit to. However, I'd never, ever lay down a deposit with any company in bankruptcy.
Everyone keeps dancing around the most significant unknown: How much is the price increase? If 10%, most builders will accept it and continue. But if the prices triple, many builders will be incapable of accepting it and will have to walk away from the project.
Of course in half a year, this will be more clear. But AOPA could provide a great service to discuss this issue to help builders.
30% increase
Everyone is paying 3 times as much for everything else. Why did we think the price of planes weren't gonna do the same? #FJB
How will orders be filled if the external suppliers are being treated as unsecured. I’ve been in the situation the external suppliers are in and the last thing I would do would be continue supplying any more stock. If it came down to it I would say that I can to get my account with them square then cut ties.
I can see it coming now we need more money and when they get it they will blame the suppliers for not supplying it the parts. It won’t be their fault for failing…but they will have more money on the way out
Did anyone notice that the largest debt (Lycoming) listed was a little over $500,000? Or that some quick math reveals a total of about $2,000,000? Frankly, for a company of this size, that’s really not a lot of money. What that tells me that payroll is, likely, a major issue. From this, I would expect that Vans will reorganize, primarily, via layoffs. Also, I would expect that things such as the special pricing deal with Lycoming for kit purchasers may not survive the reorganization.
I fully expect Vans to survive. Given the runup in aircraft pricing across the board (Cessna 150s have doubled in price over the last five years), I believe that the market can easily absorb price increases of 10-20% or more. Just look at what completed RV-7s go for these days, it is up to double the total kit cost. A kit aircraft is not going to be the bargain it once was but, I believe, that since kit aircraft are the only source of new, relatively low-cost aircraft this will ensure the overall health of the industry.
you almost got it. it protects vans from lawsuits which is the largest liability by far. vans was grossly negligent with the laser parts and changed the product materially which means they would lose every case. chap 11 protects vans from its customers. pretty sleazy
@@pwffstube - That’s a good point, but it does raise the question about insurance. For the flying club I help to run, we carry a pretty substantial Errors and Omissions policy. I really can’t imagine that Vans wouldn’t have some sort of liability protection.
@@bunkie2100thats the gross negligence and material change part. forming laser cut aluminum will fracture. this is common metallurogical knowlege and constitutes gross negligence which typically negates insurance. the product is cut and formed aluminum so a material change in that allows breach of contract claims under the ucc. vans is now exploiting the good will of its customer base.
Inflation has raised everything except the amount of money in the buyer's wallet.
Vans is a great company.
My dad and I bought a plane kit from Wheeler Express in 1989, they had quality issues and lost the demonstration planes and that probably led to their folding. We never got the upper fuselage and finishing parts, no one did. We the builders where unsecured creditors. We got nothing. It was terrible.
I wonder if the laser cut sheetmetal parts being rejected cause Vans to go into bankruptcy?
"Vans is a great company."........hmmmm
Was. Fixed it for you.
No, actually those days are long gone. Now they are just screwing everyone who has supported them.
I’m sorry, but vans got themselves in this position. It is no longer financially feasible to build a vans aircraft. The new prices for the kids have gone up massively in price. It’s really a shame. I will never build an RV.
Everything in this country has gotten more expensive. If your a company and don't raise your price your not very smart. You will just need to work harder to get paid more so you can then buy what you want
If a ~30% increase on the kit would torpedo your budget, you were doomed before you ever began.
@@MauriceColontonio Perhaps, but the real scenario is, given the major warning signs, would you gamble an extra 30% that it doesn't go up to 100% ... or worst case they go chapter 7 and you lose everything? I think if you're not rolling in dough this effects more people than we think.
@@Airplanefish LMAO "work harder to get paid more" is that how you think it works?
AOPA provides great service!!! Great video....I stuck in the middle of this!
What Jeremy Browner says at 1:33 doesn't make sense. He suggests that all of the top 15 creditors listed in the court filing are "unsecured creditors" same as kit customers. Then, Colin Stagnito follows up and says "unsecured creditors" have two options: pay more for their kits or request a refund. What about the 15 top creditors? Something seems off with this analysis and explanation. Don't you mean that the 15 top creditors are "secured creditors" and that the kit customers are "unsecured creditors?"
The way I understood it was that the top 15 and kit buyers are all unsecured.
What nobody seems to be touching is whether the top 15 will continue to do business with Van's. Will Steiin continue to build RV-12 harnesses, for example. Will Abby continue to provide upholstery for the RV-12? Will the third party who makes engine mounts continue to do so?
@@BobCollins If they decide not to sell the Van's I'll bet there are a few other companies in line to take over for them.
@@dermick Probably not on credit though ...
Mark, a "secured creditor" holds a lien on property they can legally foreclose or repossess to satisfy the debt in the event of default and an "unsecured creditor" holds a simple I.O.U. from the debtor. A secured creditor can foreclose or repossess property. Examples are banks that hold a mortgage or car loan with their name as a lien holder on the title or a contractor who has filed and "perfected" a mechanic's lien. If you give somebody money or things of value and all you get is a promise to be repaid, you are an "unsecured creditor." Like a credit card company or the electric company. You can't repossess a promise.
I get the impression that it's generally a financially troubled industry, the kit planes. Van's was in trouble in 2016 as well. I get the sense that most every kit maker is flirting with financial difficulties. Even Lancair, maker of great planes have died multiple times iirc.
What I would suggest is that they abandon kit making, like Cirrus did, and make great looking simple aerodynamic composite planes in as few parts as possible and certify them in their simplicity. A single piece composite fuselage is easier to believe will hold together without a lot of analysis, same with wings. Making them from carbon fiber offers a weight advantage that quickly pays for itself many times over and a very light plane could well be done without flaps at all. A polish outfit has made a performance glider plane called the Gekon that weighs 69kg with everything. It's not an exotic construction, it's just CF which in a double curved aerodynamic form is naturally rigid with very thin walls. It's a construction that's hard to beat weightwise or construction ease wise. Don't do two sides as it's classically done, that adds a lot of work and complexity. Lay it up as one piece. Any clumsiness in the process is well worth the gains. That includes a long tail boom that can be laid up with a pole device thingy. Getting rid of flaps nicely simplifies the construction and risk in development but with extremely low weight it can land on a dime anyway. Less to manage when flying as well.
Light begets light. Optimization is king. Let rivets die with the titanic. And I don't want to hear any lip about the titan submarine :)
When a plane can be ultra simple as a single bubble shell then all that folded metal and thousands of hours of build time is just not worth it.
You can have a fully complete, factory built, beautiful performance aircraft with less effort than it takes to make the kit parts. Which is more commercially viable.
If you do it right you can defeat Cirrus. Start with a 2 seater though if you dont have a lot of money.
And if you really want to do well you have to make your own small turbofan jet engine with 100kg thrust. Then we are talking billion dollar valuation.
ill pass ya a million you start yourself a company like this and see how ya do
@@idekav. ya got a million to spare?
Let's see how Dark Aero works out over the next few yeas
@@JosephHHHo I'm concerned about their apparent lack of progress for what seems like 2 years now. Not sure what they are doing. Not a good sign.
@@DanFrederiksen they are probably going through integration hell
Wouldn’t deal with Vans now for any price.
Is there any knowledge on what's owed to banks?
So, I was considering a VAN's RV 14. Not any more. Chapter 11: Kiss of death.
Vans isn't going anywhere. Vans sells more kits than all other kit manufacturers combined and has been in business for more than 50 years. Worst case scenario is somebody buys them out. Short term? Kit prices are increasing and there will be delays in getting kits. I'm building an RV-14A and I'm not worried at all about Vans - and they have $35,000 of my money in deposits right now.
In this case the money to keep operating is coming from Van himself so unless he wants to kill the company if they don't pay him back on the court appointed timeline maybe not. The real danger right now is all the people who have sued since they declined to give refunds to people before filing Ch 11.
That's Chapter 7 dingus
Chapter 7 will be next. Hint: take a look at who is putting more money that gets to decide what next, and who gets all their money and all the deposits if they go ch. 7. Given the laser cut issue, I don't see how they possibly make their way out of this.
@@philipmcbride-pilotengineer Mr VanGrunsven is funding the company through Chapter 11. He wants his legacy to continue after he's gone. It's not going to Chapter 7.
You mentioned several time the customers will potentially have to pay more money but didn't elaborate. Is this going to be a percentage of the total kit cost and if so what is fair.
Hope all turns out for the best. Vans always been at the forefront of homebuild designs!
It’s unfortunate that supply chain issues, incorrect parts, and the financial state of the American economy has hurt Van’s this way. It’s more unfortunate that owners who paid partially for kits can only get a part of the return (likely) or suffer continuing and paying more than initially quoted. One missive from Van’s said as much as 30% more. That’s like paying $100K for a kit, then finding out it’s actually gonna cost you $130K. Makes you wonder where the management was in all this, to let it go this far. My ultimate question is: Are they too small to fail 😂? I bet the government doesn’t bailout the GA community…………
"Makes you wonder where the management was in all this, to let it go this far." Exactly! Ill equipped to handle the success of the original product.
@alienxyt Also think this is the byproduct of a piss poor economy. Banks are failing, small biz, it's a matter of time until the looming Recession 2.0. When prices are 2.5x the norm, this is bound to fail.
@alienxyt It Aldo didn't help that they made an error using their laser cutter and now have to replace those parts. Plus the plethora of other issues.
What happened ?
If you're lucky and put your deposit down with a card or some financial vehicle that can deal with the voided contract resulting from Ch.11, then they will get your money back. If not, then you have to decide to walk away, or put more money in to continue. The latter is a big risk because them next going to Ch. 7 is rather high. Meaning you can lose even more money. I have friends that got their money back, and some that didn't. Tough times.
Unfortunately the chapter 11 will stop you from getting your money back from the credit card company…I called and am out 10k
@@jms241965 Depends on the card company. The super expensive cover you for everything expensive fee cards handle it. Friend got his back.
The CC company must subjugate against vans on your behalf. Since the chapter 11 dissolves your contract, the CC company will get nothing, so neither will you.
@@MauriceColontonio You get your money back, and yes, the CC company likely doesn't. Depends on our CC company and relationship.
I just went through Bank of America and Mastercard and was told I’m 💩 out of luck.
Please don’t sell to China please don’t sell to China…
America is long gone 😢
They should be forced to sell plans for the existing owners.
At least all the unfinished kits -- that were never going to be finished by their "builders" anyway - can be sold on the secondary market for full price. Airplane building isn't for everybody.
Who "f"ed up? Owners taking too much off the top?
Wow, with the largest and most successful experimental aircraft mfg filing bankruptcy what does that say about the rest of them? Why did they have to file? What are some of the kit owners think about this?
I worked there for a miserable 3 months in 2004. Bankruptcy could not happen to a more deserving company.
Thanks immensely for this informative video! Such a bummer that Van’s is going through this… the Van’s vendor and customer community, and the broader kit building “family” is going to hurt. Please keep us informed!
This means - as I told all of you 6 weeks ago - they were trying to find an Angel buyer - willing to come in and put up alot of money to allow em to survive. No financially responsible company or individual would buy in to what is essentially a gigantic pool of litigation and unmitigated risk - The companies going away - being liquidated. any and all parts will now be made by one off after market mom & pop companies - and its such low volume - the prices will skyrocket. Good luck RV buyers - I'm really sorry - for you, and for the home builders market
Any new kit buyer will take a second look before making the purchase. I love their planes and want to build the RV-15, but deposits must be in an escrow account, and the time between order and production must be shorter, not the 12 -18 month window. I suspect new orders to disappear and builders might stop their builds and sell partially completed planes. Vans need to only offer kits of their top sellers. I suspect the top sellers are there latest models. By reducing number of models will help financially, reduce stock inventory of parts, streamline production speed, and shorter delivery. How this occurred is a result of not watching the financials, and making corrective action. The immediate price increase 32% indicates that they we not off my a small rounding number, but clearly not focused on the finance condition of the business. Some times the people that start a business are not exactly prepared to run the business once they grow. New management is needed to save the company, and to restore confidence of customers that clearly want to purchase and build their own planes. The RV-12 as a production only plane will not be the model to solve this problem. The RV 12 in its current form does not have the performance that kit plane owners are looking for, its a trainer with limited performance that competes with the Cessna 152.
i'm ok with them shrinking their offerings, so long as they make plans-built an option.
It means the dream is over for a lot of people who still hope they survive bankruptcy. Does anyone know if Microsoft Flight Sim is any good???
We saw the prices go from 25k to 65k for lots of these kits. This is just the begining of the karket correction. Car repos are already happening. Banks are ynderwater on these vehicles and next is realistate
They plan to use the deposits…that’s why they’re not in an escrow account.
Obviously a case of mismanagement.
Bummer. Wonder what precipitated this.
I think they may have gotten too big. I've visited the Van's booth at Oshkosh the last 2 years, they have a huge staff and booth there ALOT OF $$$ right there.
Rapid growth led to outsourcing some parts. One big problem was a supplier’s use of lasers to cut the rivet holes in the skins, causing some metallurgy issues leading to cracks. A lot of those skins will need to be replaced.
@@chaosensues1656, yet many boot lickers still claim Vans is a good company.....Quality control went out the window, builder's projects are substandard possibly unairworthy and some claim that Vans is still a good company?
I just lost my Medical at 66. I have not problems but they want me to see a Neurologist which would cost me $3000 out of pocketed. I have no problems with my body at all. I talk to my doctor he is going to sign my Basic medical. I screwed up and should have gone to him at first and I would have not have this problem. I didn't know. Senses I am now denied a medical the Basic med no good. I now have to sell my plane and cant fly no more. I am a license A & P and can work on airplanes Ok for that and my Job but cant fly. I'm looking into Motor gliders no Medical require on them. I wonder how many other pilots are there that this has happened. I would think seeing so many Cessna and Pipers for sale. This has happen .
One of their main problems is certainly this rotten economy. The same demographic of people that used to buy things like this don't have the same amount of disposable cash to spend on luxury items like they once did. Not even something you have to put together yourself. That's just a fact. Don't get mad at me for pointing it out. I do the shopping for our family. I know what's going on first hand. Cost of materials. Labor. Energy. Shipping. Everything is up across the board. A niche kit plane company like van's would certainly feel it more than most I would think. Doesn't matter if they dominate the category. Since they're bigger, they have bigger operating expenses. Blame whomever you want, but expect more of the same because this was supposed to happen. In fact,...there are those in power that don't think the private citizen should have a right fly about anyway. That's where we are.
And there were those in power who want back in power that want to not inly destroy general aviation but privatize air traffic control and airports.
@@damham5689 Things were better economically with those who "were" in power. Now things stink. No way to argue out of it. And ,...maybe privatizing air traffic wouldn't be such a bad thing. We have gov in charge of transportation right now. With the little boy they put in charge - it's a disaster. He's busy chasing after racist roadways. Sexist pilot terminology. Sorry. I don't have faith in those running things right now at all. And I do blame them for some of van's economic issues. Cheers.
I really think it is Van's fault for not figuring out how to prosper using Biden-economics without falling prey to Biden-flation 🤣 Maybe after Van's Aircraft gets out of bankruptcy they can fire all of their high paid employees and replace them with cheap labor employees from some of the millions of people that flooded over our borders since January 2021 😉
Let's go Brandon!
And all those RV owners who snub their noses at us plans builders....lol I was at first enamored at the owner for helping finance the company when the piper came calling....but when a company goes bust like this, it demonstrates a complete lack of respect for their customers by allowing sucky business practices and potential embezzlement to bring them to ruin...But hey, if you can't manage your money, make room for someone who can...I say bid them adieu.
sad
They are trying to sell Ferrari's while humanity needs Model Ts