Vans Aircraft suffering cash flow difficulties

[rodgerc]

https://www.vansaircraft.com/2023/10/business-announcement-from-vans-founder-dick-vangrunsven/

[facthunter]

Candid enough. Always been a pretty reliable mob.  Nev

[onetrack]

Oh dear - where have we heard this before? ....

 

QUOTE - "we learned that one of our overseas contractors had used an inferior primer, resulting in aluminum corrosion forming on a large number of quick build kits. This required us to scrap many kits, while further increasing production to replace affected kits. This alone represented a multi-million-dollar setback for us."

 

If you hand over manufacturing to an overseas supplier and do not install on-the-spot QC checks, of course a supplier is going to try and ream you. Oldest trick in the book, and one especially prevalent in Asia.

[Litespeed]

Outsourcing constantly proves a deal with the devil esp if out of your quality control.

 

So by outsourcing OS when surely local could have been done, to save pennies they lose millions and wreck their reputation. Customers peeved, products thrown away and confidence destroyed.

 

Now anyone with a Vans built aircraft using subcontractors parts may be considered suspect fairly or not.

 

I know many companies do this but it rarely fails to bite back and remove large amounts of flesh.

 

7/10 for admitting the issue but 1/10 for doing it to start with.

 

If they couldn't make em fast enough,get more machines and more staff you control. Covid meant people had patience and understood costs increases and delays. It also meant employees became very loyal to good employers. Instead it appears they did a  Boeing and ignored the downsides.

 

 

Given the raw materials involved and the machinery used it cannot have been much cheaper esp with freight. 

 

Great example of a USA company shooting itself in the foot then saying management took some economic acid, freaked, shot themselves but blamed the cheap shotgun shells on the injury.

 

Short sighted fools

 

 

[sfGnome]

The toughest transition in business is from small/medium to medium size. That’s when things get out of the direct control of the management, but they don’t have enough experience with a larger organisation to know how to run it. You can subcontract work, but you have to have really good processes in place, and small companies generally don’t. 
 

I really hope they get it sorted. 

[RFguy]

I dunno if you can blame them that much for this.  If it was to get volumes up, not prices down.

 

More interesting, what's the issue with the laser cutting ???? That's interesting. I gather prior kits have been stamped/ punched ? 

[skippydiesel]

1 hour ago, RFguy said:

I dunno if you can blame them that much for this.  If it was to get volumes up, not prices down.

 

More interesting, what's the issue with the laser cutting ???? That's interesting. I gather prior kits have been stamped/ punched ? 

Vans, as with all kit/plans suppliers , is at the mercy of the builder for the  QA of the finished aircraft. This the supplier vulnerable to complaints that may be the responsibility of the builder but at the same time obscures issues that originate with the suppler (very muddy!).

 

I would speculate that laser v punch likely have diffrent metallurgical outcomes - this may, in certain circumstances, then led to differing fatigue resistance.  Personally I think there would be little if any difference in a small unpressurised , relativly low hour aircraft. 

[RFguy]

Skippy said "I would speculate that laser v punch likely have diffrent metallurgical outcomes "
Skip you are fantastic at stating the obvious. You should go on Mastermind and give Barry Jones a run for his money.

Certainly there is heat treatment going on.    The internet is full of stuff on this- all metals LASER cutting leads to substantially reduced fatigue life compared with other (cold) subtractive processes.... there are advanced post LASER cutting heat treatments but they are exotic.

 

Edited October 28, 2023 by RFguy

[Methusala]

This is the same financial cancer that destroyed Boeing, AMP, Leighton and so many firms around the capitalist western world. Beware the MBA's. 

[sfGnome]

My understanding is that the laser cut holes can end up with stress cracking. Where the hole is smaller and is drilled out, it’s not a problem, but now that Vans are using final sized holes, the laser cut has to use a very focussed beam so that the metal is not heated too much beyond the cut edge. Apparently, the contractor used a broader beam (ie older) cutter, resulting in the crack-susceptible finish. Where the holes are non structural, Vans is not replacing the parts, but where they are structural, they will. 

[KRviator]

20 hours ago, onetrack said:

Oh dear - where have we heard this before? ....

 

QUOTE - "we learned that one of our overseas contractors had used an inferior primer, resulting in aluminum corrosion forming on a large number of quick build kits. This required us to scrap many kits, while further increasing production to replace affected kits. This alone represented a multi-million-dollar setback for us."

 

If you hand over manufacturing to an overseas supplier and do not install on-the-spot QC checks, of course a supplier is going to try and ream you. Oldest trick in the book, and one especially prevalent in Asia.

I think that's a bit rough - for many, many years Vans has had their QB's assembled in (from memory) the Philippines- including mine!  AIUI, they then started a new partnership with someone in South America, and I believe (but am not positive) that that is where the primer issue came from - not their long-established Asian partner. Apart from a few rivets that were a right prick to do when installing a canopy bracket after the fact that, IMHO, should have been done as part of the QB assembly, there's been little-to-no issues until the QB-primer one reared its' head.

18 hours ago, Litespeed said:

Outsourcing constantly proves a deal with the devil esp if out of your quality control.

 

So by outsourcing OS when surely local could have been done, to save pennies they lose millions and wreck their reputation. Customers peeved, products thrown away and confidence destroyed.

 

Now anyone with a Vans built aircraft using subcontractors parts may be considered suspect fairly or not.

 

I know many companies do this but it rarely fails to bite back and remove large amounts of flesh.

 

7/10 for admitting the issue but 1/10 for doing it to start with.

 

If they couldn't make em fast enough,get more machines and more staff you control. Covid meant people had patience and understood costs increases and delays. It also meant employees became very loyal to good employers. Instead it appears they did a  Boeing and ignored the downsides.

 

Given the raw materials involved and the machinery used it cannot have been much cheaper esp with freight. 

 

Great example of a USA company shooting itself in the foot then saying management took some economic acid, freaked, shot themselves but blamed the cheap shotgun shells on the injury.

 

Short sighted fools

 

 

Again, that's a bit rough. The difference between "Standard" and "QB" kits for the RV's was (at the time I built) around $5,000USD - it's now about $9,000 - and it is worth every cent of that differential. The Phillipines guys doing it do it day in, day out, and do a very good job. The simple fact is Van's couldn't expand at the rate they needed. The RV's are very popular kits - witness the 18month-2 year lead time for the QB kits before Covid came along. Word of mouth is a very powerful selling agent and the RV's perform pretty much exactly as the brochure says, so the word went out.

8 hours ago, RFguy said:

I dunno if you can blame them that much for this.  If it was to get volumes up, not prices down.

 

More interesting, what's the issue with the laser cutting ???? That's interesting. I gather prior kits have been stamped/ punched ? 

Vans has traditionally punched their kits, including to final-size on the later ones. But with the growth in business, they couldn't get enough throughput, fast enough, so they contracted with a third party to laser-cut some parts. For whatever reason, this provider modified the toolpath for the laser such that it resulted in slightly out holes, as well as spatter on the parts, as well as the aluminium now becoming prone to cracking while riveting due to the heat-affected zone caused by the laser. Now, the occasional bad rivet is acceptable - I have a half dozen flying in my RV now that'd I'd probably goober-up trying to fix so I leave them there as a reminder that I built this in my back shed - but builders were finding a lot of small cracks in a lot of rivets and they weren't happy campers, and rightfully so. Until this issue, no one knew Vans was laser-cutting parts. 

What's got me stuffed in this whole thing is not that Vans did it, I can certainly understand why they did! But that they have apparently zero recourse against the two companies involved - for the bad toolpaths at least (probably not so much for the cracking from the laser as that's something Vans' should have detected earlier) but especially the primer issue. That's something I would have thought either the supplier would have to make good on, or their insurer.

[kgwilson]

Waterjet cutting is the preferred method where parts being cut are susceptible to heat related issues. I'd have thought they would have used this process rather than laser cutting.

 

Laser cutting can't cut some materials (metals are no problem)  but it can also engrave parts it cuts which is an advantage for example cutting machine parts. Each part can be engraved with all the relevant material, part, batch Nos etc.

[skippydiesel]

9 hours ago, RFguy said:

Skippy said "I would speculate that laser v punch likely have diffrent metallurgical outcomes "
Skip you are fantastic at stating the obvious. You should go on Mastermind and give Barry Jones a run for his money.

Certainly there is heat treatment going on.    The internet is full of stuff on this- all metals LASER cutting leads to substantially reduced fatigue life compared with other (cold) subtractive processes.... there are advanced post LASER cutting heat treatments but they are exotic.

 

Ooooh! - tad condescending - I used the word "speculate" because I have nothing other than a very small amount of general knowledge on metal chemistry/heat treating  and therefore made no statement of fact "obvious" or not.

 

I am pleased that you have confirmed my speculative observation and thank you for that.

 

Not a fan of Mastermind,  much preferring the low brow comedic entertainment of Hard Quiz 🙃

[Flightrite]

I see a Chinese Co (or other opportunist) taking this joint on. Vans have shot themselves in the foot!

[Litespeed]

I accept they had the Philippines QB kits and they were no problem. Cost effective and good quality 👍.

 

But getting a new unproven contractor to do it negates all that hard built relationship and quality control of your partner in business. Years of goodwill blown away.

 

If you need far more built then invest in your Phillipines partner to increase productivity, ie more machines and well trained staff. Even if you need a bigger building to do it.

 

Scaling the Philippines side should have been easy and relatively cheap. The cost of the machinery including water jets that also can laser etch has dropped year by year for the throughput.

 

A few million investment and the problem would have been solved long term and increased profits per kit. And dropped the big wait for a kit set making customers happy and far larger cashflow for a minor investment. All whilst reducing costs per kit and further improving quality.

 

Instead they have thrown away millions, trashed their relationship with customers and probably screwed their Philippine partner that made them successful.

 

You know you have screwd the pooch when you close shop to sort it out. Saying they should have been covered by the dodgy contractors misses the point entirely, even if they would replace the kits which couldn't be trusted anyway. Also waiting for them to pay potentially millions in US dollars compensation is very wishful thinking.

 

Laser should never be used for any aircraft parts without expensive post machining and heat treatment. No iffs or butts, it is a recipe for disastrous stress crack formation under far lower than designed loads and cycles. If it was designed to 6G it becomes a 3G airframe at best and will almost certainly fail if flown as originally designed.

No different from building a SF Falco from cheap Bunnings wood and PVA glue.

Up close laser work looks like cuts by a plasma or gas axe, very ugly and ready to crack even just by the riveting process. Aircraft need every bit of strength as designed esp. given the skin thickness used. The margin of error becomes vital, Russian roulette and aircraft parts don't mix.

 

You invest in CNC punches and water jets which make beautiful parts to aircraft standard. The latest can even laser etc all the bits before it water jets to label pieces. Simple, fast cheap and high quality.

 

 

Also that Vans refuses to replace what they consider non structural parts is disgraceful. A dodgy part is still dodgy even if it's a seat bracket etc and prone to premature failure. Any part breakage in a aircraft is a safety issue.

What do they consider non structural?

Such an attitude says volumes about their management style and quality control. "Whoops,we shot ourselves in the foot so decided to buckshot the customer to spread the pain around"

 

Just like " if it's a Boeing, I ain't going"

 

Welcome to "Vans Air Farce".

 

If I was a current or future kit buyer, I just wouldn't trust them at least until a few years of new kits are built, flying and thoroughly checked.

 

Remember if your kit has structural failure Vans will blame the builder.

 

I value my meatbag body too much to trust them.

 

[BrendAn]

 

[RossK]

Filed for Chapter 11 Bankruptcy on Monday.

Plan to restructure and continue trading.

 

https://www.youtube.com/watch?v=D4rWWokdchQ

[facthunter]

Chapter 11 allows trading while technically insolvent.  Nev

[KRviator]

19 hours ago, RossK said:

Filed for Chapter 11 Bankruptcy on Monday.

Plan to restructure and continue trading.

 

https://www.youtube.com/watch?v=D4rWWokdchQ

AIUI, it's not technically bankruptcy but bankruptcy protection while they restructure - ie, the debts Vans currently owe to the likes of Lycoming and Stein cannot be enforced while under Chapter 11. If the court and creditors vote to approve the restructure, then they move on with the approved pathway. If the creditors vote to not approve the proposals, only then could Vans actually be declared bankrupt.

I don't see that happening. Vans is an immensely popular kit supplier, for the reasons I posted above. To enforce bankruptcy on them would hurt the creditors many times over through lost sales triggered by builders purchasing a kit and needing an engine (Lycoming) or avionics (Stein) or even the metalwork for engine mounts and things. Even copping a loss of 50c in the dollar for each and every creditor  supplier- they'll make that back and more with the higher kit prices and ongoing operations than winding up the company. Of course, that may not necessarily help the builders who could lose out in such a scenario.

As it is, they're looking at a 30% increase if they want to proceed with their kit purchases. As I posted over on VAF, I would encourage builders to cop that pineapple, but recoup it down the track by purchasing a used engine or prop, or installing simpler avionics, in order to come out the end of the process at the same "overall" cost, and still have a flying RV. Otherwise, you won't have an aeroplane and you'll still be out those $$$.

Edited December 7, 2023 by KRviator

[RossK]

I hope they survive.

Starting an RV build of some sort was on the cards for some time in the next year. (trying to get the builder to finish our house first - 2months overdue 😒 )

Low budget 7 build most likely, basic VFR with a used O-360.

[facthunter]

You get a very good deal on a new one by getting it with the Plane.  Nev

[skippydiesel]

For a very long time, I lusted after the tandem seat RV's (4 & 8 )- was on the bucket list for ever. Then I moved from GA to RAA and discovered the world of economical flight. No way back to the noisy spam cans.

 

I suspect that the future of private flying, is two seat (most private pilots run out of friends/family to fill the space in a 4 +seater) small engined aircraft.  You can go from extreme STOL , through the best of both designs, to the high speed cruiser, that in many cases approach/equals, the speeds of RV's without the noise, fuel consumption/running costs.

Edited December 7, 2023 by skippydiesel

[KRviator]

1 hour ago, skippydiesel said:

You can go from extreme STOL , through the best of both designs, to the high speed cruiser, that in many cases approach/equals, the speeds of RV's without the noise, fuel consumption/running costs.

True, but in defence of the RV's, once you've actually built the thing, there's very little difference in operating costs vs a Jab if you were to compare them side by side. A bit different if you have to pay a LAME to maintain it though.

For example: I use 25LPH for 140KTAS, or 9.73L/100km. The J160 uses 14.3 to get 100KTAS or 7.72L/100km. Much better efficiency granted, but at 30% slower speed and a lot less payload, so you're spending less on fuel, yes, but your other costs, oil changes, engine hours and other lifed components are reaching their limits earlier given the same flight profile.

My last decent flight was up to Gladstone & Townsville return, total of 13.5 hours in the RV but would have taken 17.6 in a J160. 337.5L of fuel in the RV, or 251.7L in a Jab would give an 85.8L difference at about $2/L, so call it $170 cost saving in fuel alone, but at the expense of 4.1 extra engine and airframe hours. 

With the -9, I simply fly for the cost of fuel, oil, filters and plugs. I don't have an engine overhaul budget, or an avionics upgrade budget so the hourly cost is around the $70 mark. Or $120 if you include insurance - though I don't for the same reason I don't have an hourly cost for our 4WD or caravan or boat that includes insurance. It's just another bill to pay.

[RFguy]

yep, Lycoming can lean aggressively. 

also try      Litres/nm

that's easier  to calculate. the piper will do about 244mL/nm at 90 kts at sea level, or about  260mL/nm at 120 kts at 10k feet fully loaded
J230 will do about 230mL/nm at sea level, 115k.  212mL/nm at 6kfeet ~ 125k...  The J160 15/100 = 150mL/nm 

 

Your RV at 25 lph at 140 tas = IE 178mL/nm..... (really ?????) gather at 12k feet ?

 

 

[skippydiesel]

KRviator/RFguy,

 

Two very interesting/thought stimulating responses.

 

Two points of rebuttal;

• This is what can be achieved with a Rotax 912ULS - http://worldrecordplane.com/gallery  just a wee bit faster & more economical to boot 😎

and

• This is pie in the sky at the moment (still in test/modification stage) but my Sonex/Rotax 912 ULS looks to be able to cruise at 150 KN true, at 5500 ft consuming somewhere between 15-18 L/hr ULP. Down side of the Sonex is payload - with full fuel , 95L, can only carry me and about 40-50 kg.

I like to highlight Robin Austin's two Sonerai because it just shows what can be achieved,  a wonderful combination of speed & economy, in a relativly cheap airframe. This is the sort of aircraft Australian pilots need - long legs at minimal cost. If I had the dosh I would be exploring how to put such aircraft into production.