Vans Aircraft getting in trouble due to supply chain issues and inflation

[Abid]

Even the largest light aircraft kit manufacturer in the world by far is affected by supply chain issues, late deliveries, 5x shipping costs and so on

Business Announcement from Van's Founder Dick VanGrunsven - Van's Aircraft Total Performance RV Kit Planes

Dear Van’s Aircraft Customers, We need to share some difficult information about the status of Van’s Aircraft, and we invite you to watch this brief video from Dick VanGrunsven, founder of Van’s Aircraft and principal designer of the line of RV airplanes. As the result of a number of factors...

www.vansaircraft.com

 

[Brian Jackson]

Even the largest light aircraft kit manufacturer in the world by far is affected by supply chain issues, late deliveries, 5x shipping costs and so on

Business Announcement from Van's Founder Dick VanGrunsven - Van's Aircraft Total Performance RV Kit Planes

Dear Van’s Aircraft Customers, We need to share some difficult information about the status of Van’s Aircraft, and we invite you to watch this brief video from Dick VanGrunsven, founder of Van’s Aircraft and principal designer of the line of RV airplanes. As the result of a number of factors...

www.vansaircraft.com

Hi Abid.

It's sad to read about. I know first-hand the difficulties many businesses are facing now. My last job went belly-up a few months ago, and they'd been around since the '70s. They went broke honoring contracts for work on skyscrapers in Hudson Yards even though materials cost 3X due to pandemic, supply chain and inflation. Forced a change to a better job personally but was sad to see a thriving company deteriorate from circumstances beyond their control. I do hope Vans is able to survive this. We're going to face much harder challenges ahead.

 

[Aerofoam]

I just heard they filed for chapter 11 bankruptcy....

 

[Abid]

I just heard they filed for chapter 11 bankruptcy....

Amazing. Vans is the largest piston engine aircraft company for 2 decades with 11200+ planes flying and many thousands still being built and still ..

 

[okikuma]

I've been spending much time down on Terminal Island, San Pedro, CA this year which is part of the Los Angeles - Long Beach Harbor complex.

Prior to the Pandemic, it was very normal to see lines of hundreds ot trucks waiting to be loaded with containers for delivery. Tens of dozens of trains daily moving into the port to be loaded and out full with containers double stacked high. The past two years around the harbor, I don't see long lines of trucks or multple trains moving. I see tens of thousands of containers stacked minimum five high sitting weeks on end in the harbor. The port is suppose to be operation 24/7, however I personally have not seen any evidience of that happening when I have been at the port on the weekends and in the evneing. During the nomral weekday, the activity is lass than normal.

Here in Santa Clarita, a major Union Pacific rail line from Los Angeles to Bakersfield by way of Mojave and Tehachapi would have a minimum of four double stack container freight trains passing through Santa Clarita. Now there is only one train a day that I have observed.

Some of the blame of world wide suply chain shortages is the drought around the Panama Canal Zone that has cause Gatun Lake to drop to a water level to 24.2 meters (79.7 feet). It is said that at the end of the rainy season in November, Gatun Lake's water level typically reaches some 27 meters (89 feet) and then drops to slightly below 26 meters (85 feet) after the dry season ends in April. Instead of an average of 36 ship transits a day, the canal is down to 18 ship transits a day.

I don't know how much of Van's supplies transit the Panama Canal.

Wayne

 

[Abid]

It has to do a lot more with laser cutting very thin sheet metal causing high heat related material properties than supply chain I think though supply chain was a problem for all of us last 2 years

 

[Aerofoam]

It has to do a lot more with laser cutting very thin sheet metal causing high heat related material properties than supply chain I think though supply chain was a problem for all of us last 2 years

A friend confirmed this, the rivet holes are cracking from the "heat treatment" of the laser cutting.
The other issue is that the crashing dollar/economy/inflation has raised the material costs far beyond what the depositors agreed to pay and the delays amplified this issue. They can't afford to produce the kits for the original price...

 

[loftus]

A large part of the problem from what I understand is that Vans offshored the construction of their quick build kits without adequate supervision of the process by someone directly responsible to the company resulting in the major quality problems they ran into. Unfortunately I can also see this adversely affecting many of the engine and other component suppliers to the kitplane market as Vans have to comprise a significant percentage of the market.

 

[Abid]

A friend confirmed this, the rivet holes are cracking from the "heat treatment" of the laser cutting.
The other issue is that the crashing dollar/economy/inflation has raised the material costs far beyond what the depositors agreed to pay and the delays amplified this issue. They can't afford to produce the kits for the original price...

Yup. True. Same here. My material costs for stainless steel and composites have increased about 75%. Freight cost has increased about 50%. Labor costs have increased about 30%, engine and avionics and even wire prices have increased significantly compared to 2019. Gyro in 2019 that was $70k is now in mid $80k range. Nothing much I can do.

 

[Resasi]

Vans offshored the construction of their quick build kits without adequate supervision of the process by someone directly responsible to the company resulting in the major quality problems they ran into.

I hesitate to ask...but where did they go?

Off-shore to a point where one's supervision is dictated/prevented can result in degraded quality of one's precious reputation, legal issues, and, loss of hard won customer confidence.

Yes, large and prestigious companies have based themselves in China , and previously were able to supervise and insist on high standards being observed. As that knowledge and expertise has been absorbed, companies have then slowly been squeezed out leaving that knowledge behind...and which is when quality takes a nosedive.

Why I'll pay more to avoid, when I can, products from China. A generalisation... yes. Has basis in fact...yes.

 

[Abid]

I hesitate to ask...but where did they go?

Off-shore to a point where one's supervision is dictated/prevented can result in degraded quality of one's precious reputation, legal issues, and, loss of hard won customer confidence.

Yes, large and prestigious companies have based themselves in China , and previously were able to supervise and insist on high standards being observed. As that knowledge and expertise has been absorbed, companies have then slowly been squeezed out leaving that knowledge behind...and which is when quality takes a nosedive.

Why I'll pay more to avoid, when I can, products from China. A generalisation... yes. Has basis in fact...yes.

Vans has been making the kits in Philli[pines for over 18 years. They just control design and quality and engineering from the US. They figured out that shipping things to Phillipines, processing them and shipping back still cut costs significantly compared to doing in the US because of very high labor costs.
This really isn't just because of shipping costs. This isn't because quality control was not there. It has been the same quality control for 20 years and it has worked. This is because of production engineers in the US who do not know their arse from their elbow. You cannot do laser cutting on such thin sheet metal Aluminum and not expect to post heat treat it. It becomes brittle and loses strength and in this case that Aluminum sheet is the structural element. That was a dumb call on whoever decided to do it. They are green without any experience and Vans went ahead and spend millions on kits and got it done and then found out that this change from routers to laser was not a good call for Aluminum thin sheet metal used in structural application. They are down something like $25 million if they have to replace everything. Engineering matters and hiring green engineers without an experienced guy making the calls or guiding is downright dumb. They thought it is just a production process change and going to laser is more accurate and faster which it is but they did not think of what it does in details.
We do laser cutting of a lot of parts but we are dealing with stainless steel that is much thicker and Aluminum brackets that are not structural and 7 times thicker material than Vans. I did a whole lab test here in Tampa on stainless steel that was laser cut to get the properties of the metal around laser cut to make sure they remained acceptable. The lab test cost me just over $200 at the time in 2015, probably costs close to $500 now but it is a great investment in qualifying a production process.

 

[Resasi]

Ouch. That sounds as though the mistake wasn't made abroad then...and a hugely expensive one. A massive home goal?

Which doesn't detract from points made in my previous post, just to the unfortunate mistake, apparently made by Rans themselves, and if so, contributing to their present financial problems.

 

[okikuma]

"...This is because of production engineers in the US who do not know their arse from their elbow..."

Abid,

I absolutely agree about the young engineers of today in our country.

During the last century within all manufacturing industries, new hire engineers were placed in the production lines for a time and were literally given "hands on experience" in the manufacturing process at the assembly line level. It is unfortunate this hands on educational process no longer exists. Universities try to fill in that gap with a senior project. However, one demonstrative project that takes 50 man hours from start to completion is nowhere equal to 40 hours a week for 52 weeks (2080 hours) of hands on learning.

Wayne

 

[Abid]

Ouch. That sounds as though the mistake wasn't made abroad then...and a hugely expensive one. A massive home goal?

Which doesn't detract from points made in my previous post, just to the unfortunate mistake, apparently made by Rans themselves, and if so, contributing to their present financial problems.

I think you meant Vans Aircraft (not Rans which is owned by Randy Schlitter).
Yes this mistake is the biggest contributor to their current financial problems but there are other factors however, this by a lot put them over the edge

 

[Andino]

This really isn't just because of shipping costs. This isn't because quality control was not there. It has been the same quality control for 20 years and it has worked. This is because of production engineers in the US who do not know their arse from their elbow. You cannot do laser cutting on such thin sheet metal Aluminum and not expect to post heat treat it. It becomes brittle and loses strength and in this case that Aluminum sheet is the structural element. That was a dumb call on whoever decided to do it. They are green without any experience and Vans went ahead and spend millions on kits and got it done and then found out that this change from routers to laser was not a good call for Aluminum thin sheet metal used in structural application. They are down something like $25 million if they have to replace everything. Engineering matters and hiring green engineers without an experienced guy making the calls or guiding is downright dumb. They thought it is just a production process change and going to laser is more accurate and faster which it is but they did not think of what it does in details.
We do laser cutting of a lot of parts but we are dealing with stainless steel that is much thicker and Aluminum brackets that are not structural and 7 times thicker material than Vans. I did a whole lab test here in Tampa on stainless steel that was laser cut to get the properties of the metal around laser cut to make sure they remained acceptable. The lab test cost me just over $200 at the time in 2015, probably costs close to $500 now but it is a great investment in qualifying a production process.

Bingo. There was some tragic lack of engineering oversight, and it came back to bite them in the bum.
Unfortunately, VANS is in a deep hole difficult to climb out of. They will probably need to convince an investor that future sales/profits can cover things.

 

[RogerB]

The phrase “too big to fail” feels reflected here. Buddy of mine is stuck half way through his build and doesn’t have much of a recourse it seems.

 

[Abid]

The phrase “too big to fail” feels reflected here. Buddy of mine is stuck half way through his build and doesn’t have much of a recourse it seems.

No GA or light sport aircraft company is too big to fall. People should get that false notion out of their heads. Mooney failed. Beachcraft went through Chapter 11, Piper has gone through bankruptcy, Cessna has faced bankruptcy. You worried about your deposits .. in aircraft business it does not matter how big a company you go with. Hell not too long ago, the big 3 car manufacturers were looking at bankruptcy.

 

[TJPUMPHREY]

Vans has been making the kits in Philli[pines for over 18 years. They just control design and quality and engineering from the US. They figured out that shipping things to Phillipines, processing them and shipping back still cut costs significantly compared to doing in the US because of very high labor costs.
This really isn't just because of shipping costs. This isn't because quality control was not there. It has been the same quality control for 20 years and it has worked. This is because of production engineers in the US who do not know their arse from their elbow. You cannot do laser cutting on such thin sheet metal Aluminum and not expect to post heat treat it. It becomes brittle and loses strength and in this case that Aluminum sheet is the structural element. That was a dumb call on whoever decided to do it. They are green without any experience and Vans went ahead and spend millions on kits and got it done and then found out that this change from routers to laser was not a good call for Aluminum thin sheet metal used in structural application. They are down something like $25 million if they have to replace everything. Engineering matters and hiring green engineers without an experienced guy making the calls or guiding is downright dumb. They thought it is just a production process change and going to laser is more accurate and faster which it is but they did not think of what it does in details.
We do laser cutting of a lot of parts but we are dealing with stainless steel that is much thicker and Aluminum brackets that are not structural and 7 times thicker material than Vans. I did a whole lab test here in Tampa on stainless steel that was laser cut to get the properties of the metal around laser cut to make sure they remained acceptable. The lab test cost me just over $200 at the time in 2015, probably costs close to $500 now but it is a great investment in qualifying a production process.

From what I have heard and my opinion. It was a big time quality control screw up on the laser cut parts. They had a new outside vendor cut those parts. Supposedly the vendor changed the program and that program resulted in a burr or a gouge in the holes. I think they laser cut these parts in house as well. So they have been proven and checked for any need for heat treating (I hope??? so for any planes already flying). However, they were behind on production and used an outside vendor. Somebody did not check the parts when they came back from the vendor and shipped them out. From what I have read online (Kit Planes), the only thing they have done in the Philippines is pre assembled airframes for quick build kits. However, If I was running a kit build company myself I would eat the savings of having them done overseas and have all of it done here in this country where I could see what was going on. Yes, There are more things wrong with this company than quality control and if you listen to the most recent video online with Van himself speaking, it sounds like to me some heads have already rolled in management. Van himself is forking out the money to help out the chapter 11 case. Nothing like coming out of retirement to bailout a company you started.
I worked at an industrial fan company back in the 1990s where we laser cut and welded 1/8 thick stainless and aluminum all the time and
never had any issues. I would hope they used good engineering practices on moving to a new production method. Even if you are
a green engineer. I would hope that there training would drive them to test everything.
I think Zenith Aircraft still uses routers to cut all there parts in house.

 

[Abid]

From what I have heard and my opinion. It was a big time quality control screw up on the laser cut parts. They had a new outside vendor cut those parts. Supposedly the vendor changed the program and that program resulted in a burr or a gouge in the holes. I think they laser cut these parts in house as well. So they have been proven and checked for any need for heat treating (I hope??? so for any planes already flying). However, they were behind on production and used an outside vendor. Somebody did not check the parts when they came back from the vendor and shipped them out. From what I have read online (Kit Planes), the only thing they have done in the Philippines is pre assembled airframes for quick build kits. However, If I was running a kit build company myself I would eat the savings of having them done overseas and have all of it done here in this country where I could see what was going on. Yes, There are more things wrong with this company than quality control and if you listen to the most recent video online with Van himself speaking, it sounds like to me some heads have already rolled in management. Van himself is forking out the money to help out the chapter 11 case. Nothing like coming out of retirement to bailout a company you started.
I worked at an industrial fan company back in the 1990s where we laser cut and welded 1/8 thick stainless and aluminum all the time and
never had any issues. I would hope they used good engineering practices on moving to a new production method. Even if you are
a green engineer. I would hope that there training would drive them to test everything.
I think Zenith Aircraft still uses routers to cut all there parts in house.

Well they do more than you think in Philippines and have for decades. Honestly there isn’t a problem with that in quality.
Remember there is a difference between 1/8” thick parts and sheet metal that is 0.028” thick of 2024 Aluminum. Testing design changes is something else but testing a production method change requires more discipline than obviously engineers at Vance had. I don’t think there is a question about that it they would not have been in this position. It’s not like it’s a few kits. It’s a whole lot of them. Usually one would do a First Article Inspection and review and discuss with new vendor before approving any parts from them into production.

 

[Andino]

Sort of like "self-certifying" a change before it goes into production. This would avoid an embarrassing and costly "recall" later.