Quick Takes: Vans Aircraft Cash Flow Woes

October 31, 2023 Written by; Aviation Seminars

Recently, Richard VanGrunsven, the founder of Van’s Aircraft, took to YouTube to communicate with the company’s customers about its current state and future intentions. As we approach mid-November, the company, with the help of specialists in business emergency management, is formulating its next steps.

In his address, VanGrunsven transparently discussed the financial hurdles the company is facing. “We are indeed experiencing significant cash flow problems that are critical for our continued operations,” he said. Notably, since early September, the company’s lifeline has been loans from Richard and his wife.

There were three main catalysts for these challenges:

  1. Pandemic-related Disruptions: Like many businesses globally, Van’s faced disruptions due to the COVID-19 pandemic. Their supply chains got knotted, and as demand rose unexpectedly, shipping costs soared. This led them to hire and train new personnel to manage the sudden surge in order volume.

  2. Quality Control Issues: A substantial financial setback occurred because of an inferior primer used on parts obtained from overseas. This resulted in corrosion on a significant number of their quick build kits, causing a considerable amount of those parts to be discarded.

  3. Manufacturing Setbacks: Another significant issue was with outsourced parts that had laser-cut holes instead of punched ones. Customers noticed cracks around these laser-cut holes. Although Van’s found the parts functional, many customers demanded replacements, leading to an overwhelming number of replacement requests. This affected more than 1,800 customers, some of whom received multiple kits.

As of October 27th, Kitplanes announced that Hamstreet and Associates from Portland, Oregon, would offer advisory services to Van’s Aircraft. Mikael Via, formerly with Glasair Aviation, is set to step in as the interim CEO of Van’s.

During the upcoming “internal assessment period,” which is slated to end by mid-November, Van’s emphasized that they wouldn’t be issuing any refunds or processing any returns or cancellations. However, they will try their best to ensure prompt shipment for parts orders, even if there might be some delays.

The announcement by Van’s has sparked a widespread reaction in the aviation community. On the Van’s Air Force user forum, this news garnered over 200 responses and 64,000 views in just three days. The overwhelming sentiment is one of concern for the company’s future. Yet, many appreciate Van’s transparency during these challenging times. Ken VeArd, a prominent voice in the community, stated, “Van’s is pivotal. If it were to shut down, it would be a significant setback not only for the homebuilding community but for general aviation at large.”

Celebrating its 50th anniversary in 2022, Van’s Aircraft has made significant contributions to the aviation industry, notably introducing the RV–15, their first high-wing design, at the EAA AirVenture Oshkosh.

In closing, VanGrunsven emphasized the company’s commitment to addressing these issues head-on. They are embarking on a comprehensive internal review, focusing on inventory, production, shipping capabilities, and overall operational efficiencies. Most critically, they’ll be looking into ways to address concerns about the laser-cut parts and ensure they fulfill builders’ needs.

Despite the challenges, VanGrunsven expressed gratitude to their loyal customers, assuring them of their unwavering dedication to resolve the current challenges and ensuring Van’s Aircraft continues to soar for many years to come.

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