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Van’s Aircraft Facing a Cash Crunch

Van Aircraft have become a firm favourite over the years for any home builders, with well over 11,000 kit builds completed to date and hundreds more still in progress. Van’s Aircraft were forced to share the sad news on the company’s financial state and announced a two-week push to conduct an “internal assessment” that is likely to lead to price increases. Meanwhile, refunds are on hold leading to many questions being asked by customers.

Vans Aircraft founder Richard van Grunsven read a prepared statement in a video posted on YouTube and presented online along with a detailed Q&A addressed to customers that explains the current state of the company and plans to concentrate, with the help of consultants who specialize in business emergency management, on developing a plan for next steps by mid-November.

“Due to a number of factors, Van’s is facing serious cash flow issues that must be addressed for ongoing operation,” van Grunsven said in the video, viewed more than 79,000 times by October 30. “We are confident we can work through the situation, but some changes are required. Candidly, since early September, Van’s has only been able to continue operating through loans of operating capital made by my wife and me.”

In the written Q&A, Van’s detailed three primary causes of the situation: a combination of supply chain snarls and increased demand during the COVID-19 pandemic, which caused shipping costs to spike as Van's hired and trained new staff to work on the increased volume of orders; a “multi-million-dollar setback” related to the use of inferior primer on parts sourced overseas, which led to corrosion "forming on a large number of quick build kits" that resulted in many parts being scrapped; and another issue with outsourced parts with holes that were laser-cut rather than punched, with customers reporting cracks around the laser-cut holes. Company tests determined the parts were usable, but many customers requested replacement of affected parts nonetheless.

“This has resulted in an unmanageable number of requests to replace laser-cut parts and cancel orders,” the company stated. “More than 1,800 customers are currently affected by this issue, some of whom have received more than one kit.”

Unconfirmed reports claim that Mikael Via, who previously led Glasair Aviation for just over a decade after it was purchased during bankruptcy proceedings, will become interim CEO of Van’s.

Van’s noted that refunds will not be issued during the "internal assessment period" expected to conclude in mid-November, nor are returns or cancellations being processed. “You may place orders for parts, but your shipment may be delayed due to temporary employee reassignments during assessment. We will do our best to ensure timely parts shipment.”

The company celebrated 50 years of manufacturing affordable, popular aircraft kits in 2022, and made a splash at EAA AirVenture Oshkosh last year with the introduction of the RV–15, the company’s first high-wing design. Many Vans Aircraft owners feel that the push to get the RV-15 released may have played a big part in the financial crunch they are experiencing.

"Changes need to be made,” VanGrunsven said in the video “Beginning today Van’s is going to spend the next few weeks performing a focused internal assessment on inventory, production, and shipping capabilities, and overall operating efficiencies. At the same time, we will be reviewing our cost to determine what our kit pricing needs to be for us to operate profitably going forward. And most importantly, we'll be evaluating all reasonable means of satisfying builder concerns regarding laser-cut parts, and formalizing our program for getting parts to builders.”

Van Grunsven said the shipment of kits may be delayed while the company conducts the internal assessment, and while the parts inventory is good, the company is “short on cash. So until our cash situation improves, we will not be issuing any refunds.”

Van Grunsven thanked customers for years of loyalty, and closed his message with “I am deeply distressed over the need to communicate our current constraints to you, and I want to personally assure you that we are working very hard to solve these issues, and to return Van's to a strong position to be here to serve you long into the future.”



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