Ouchie. Another example of how cheap parts is like a free cat. Ain't no such thing.

More like they got caught by inflation, defective parts, and long lead times.

Sell a kit for $12K. Expect it to cost $8K to make. And it does. But the parts (or the QB kit) are defective and have to be scrapped. You just lost $8K.

In the interim, post-COVID inflation has hit. The kit that used to cost you $8K to make now costs $12K to make. You ultimately produce the kit and it goes out the door for the original $12K price. You've just spent 2 years getting that kit out the door and have (ultimately) lost $8K because of the defective parts or QB components.

Also, because your lead times have stretched out, all of those kits in the current pipeline that were sold at $15K will cost you $14K to make at inflated costs as opposed to the $10K you expected. So if you're digging out of the hole, you're digging out very slowly.

People pay money for a cat?? Huh

People pay money for a cat?? Huh

I started two design and manufacturing business from scratch and spent 30+ years fighting the good fight. Last year I sold my 2nd manufacturing company and couldn't be happier to have escaped the madness with my financial skin still mostly attached. I have great emphathy for Vans; I've been there. The "system" is far more broken than people realize. It was already sucking wind before COVID and its over zealous response broken it for good. We are in the 1st turn of economic death spiral. The spin rate for a global economy is very slow so it isn't obvious, but we're spinning... Maybe a world war will pull us out of it; worked before and it seems like we're going try it again.

Have a great day!

VanGrunsven Said “no refunds“. I would be curious to know what the purchase agreements and sales contracts say. Do all builders agree to a “all sales final – no refunds” policy when ordering from Vans?

If not, it would be logical to expect that there will be some cancellations on new, but yet to be delivered orders, and a “run on the bank”. I also bet that they will not honor pricing on orders that were placed but not prepaid (if they even do that).

He said no refunds for an interim period while they get a handle on things.

I ordered an RV-14 kit a couple of months ago so Vans has my 10k deposit. They will get this sorted out. I expect that my delivery date will move further out and the price will increase. I also won’t be surprised if the quick build fuselage will be unavailable. None of that is great but likely not a deal breaker for me. But based on Vans comments on replacement of laser cut parts (lcp)currently in customers hands. I expect they will back away from replacing all existing parts on request to replacing only those vans deems as critical. This will save a lot of money and speed up new kit deliveries which will improve cash flow but at a huge cost to goodwill and reputation. The lcp issue is a huge management failure and exposes a lack of quality systems and a vendor quality management plan. Vans clearly did not have adequate quality inspection of the vendor parts. I know that they are producing parts for an experiment aircraft but you must have a system to ensure vendor quality not just for the safety of the final aircraft but as we see in this case to protect the business.

I have been there, done that. Built several of similar businesses from start up. Retired 2 years ago, early. My wife was checking me in the middle of the night to make sure I was still breathing. She had enough and retired me. No one can comprehend the stress, financial risk and effort unless they have done it. Pre Covid it was difficult hiring and retaining good people, now post Covid it is impossible. The upward pressure on prices is untenable. The economy will reset, there will be winners and losers. In 1980 the retail interest rate was 22 percent, jobs were scarce, companies closed. But here we are 40 plus years later getting ready to repeat the cycle with no lessons learned. Vans will survive, good people do the honorable deed and take care of their customers, it might take a while but it will happen because the founder is honest businessman with ethics.

I think the first question should be where are the engine deposits being held? Separate from the Vans company finances? From the thread below Lycoming does not take deposits only full payment before shipping.

https://vansairforce.net/community/show ... 401&page=2

[youtube]https://youtu.be/3Qsfw6pmHe4[/youtube]

I’ve seen a lot of solicitations from CubCrafters to invest in their business and found it a little interesting. Similar situation?

If you are a manufacturing business and orders start increasing beyond a normal range…it’s time to raise prices. Not to be selfish, but to survive…

A few decades ago I remember John Monet taking deposits at OSH for a paper airplane (kit) that had not yet shipped. This was a few weeks before he folded his company.

I made a promise to myself that I would never buy a kit unless I was able to drive to the factory and inventory every part before handing over my money.

Dick has been a class act for a few decades. I hope that he, the company and the depositors are all kept whole … before the arrival of private equity goons.

Respectfully, neither are the reason.

Edit: A zillion years ago I read something that always stuck with me.
When asked what their biggest mistake was in business,
The majority of Execs responded with,
"Not charging enough for my product/service."