January 1
Wow… this is a lot bigger than what initially it initially appears. A few immediate questions. Flight Design, being owed mid six digit figures on two separate occasions appears to have waited quite a long time before taking any action. Why? They have lost a lot of leverage they may have retained namely acting swiftly and decisively once trouble was detected. It doesn’t take long to figure out someone isn’t going to pay you. Definitely not mid six figures on two separate occasions.
Other customers, all of them, however, specifically the smaller ones, good luck trying to get your plane ,or planes anytime soon, or, when promised. Employees will be looking for work elsewhere if they haven’t already started. Employees often know what’s going on before management. They have eyes and ears. Apparently management doesn’t.
This story will continue to unfold. By the way, any updates on the Van’s RV financial comeback situation?
1 reply
January 1
Lilium, Volocopter, Flight design? what’s going on in Germany?
1 reply
January 1
▶ Mad.Dog
People finally figured out they’re losing all their money. Too much money and no brains.
January 1
FD claims an ‘undisputed’ debt in the mid sixes, but the oher missing revenue is described as ‘delayed’ payments. No indication as to why they were delayed (perhaps delayed product deliveries?), but neither are they described as past due debts. Future cashflow, at best.
We also haven’t the foggiest notion of what collection efforts have been made, let alone whether they were swift and/or decisive.
On the other hand, we have the insolvency expert opining that the company should be a going concern, and that short term, bridge financing should be able to keep the company in business until their debts are collected, delayed payments are finally made, and finances are stabilized.
Sorta like what happened to Vans.
And sorta like the way bankruptcy laws are supposed to work.
2 replies
January 1
Coincidence or a thoughtful, responsive editor. I’ll go with the latter.
January 1
▶ rpstrong
“undisputed debt, delayed Payments” It makes no difference to the person, or company owed the monies. You still do not have the funds owed and you cannot operate without funds. When a collection agency enters the picture it means your efforts to collect have failed and it’s a last resort. A lot of time passes before bankruptcy is initiated because you have no money to operate and you admit you cannot do it on your own.
Nobody wins in bankruptcy, especially the one owed monies, or, the product they bought. No one is as happy as they were before bankruptcy. No one is happy after the out come of bankruptcy. The people owed money, or, a product always get screwed in the end. The only variable is how bad you get screwed.
1 reply
January 1
▶ tommy
Almost correct. The lawyers are paid up front before they commence the bankruptcy proceedings. Then it’s amazing to see them in court. They file, negotiate, amend and settle the case while standing in front of the judge. You see, there is no ongoing revenues for them to collect so they finish the case post haste. Creates terrific insight into the customary “a legal case takes 3 years to file and litigate” nonsense. Be your own lawyer. Never hire a lawyer.
January 1
▶ rpstrong
I knew a credit manager whose boss over-rode her decision not to grant credit to a long overdue creditor who suddenly paid the debt then turned around and asked for credit. No she said, but … I don’t know if the creditor turned its behaviour around.
January 1
Two mid-6 figure payment problems and the Company is insolvent? That’s just a few airplanes equivalent worth of money. This tells me they were operating SO close to the brink that any hiccup would cause what happened. NOT a Company I’d wanna be buying any airplanes from. When you need some unique part for your airplane, you’d be screwed. Irregardless of what’s really going on here, this Company just committed suicide in the aviation world.
2 replies
January 1
▶ Larry_S
Not necessarily, Larry. You have a good point, but most of the LSA and experimental kit manufacturers are basically mom and pop companies that work near the financial edge much of the time. As with Vans, relatively small financial hiccups can lead to insolvency. It could well hinge on how loyal the Flight Design customer base is. It was customers that saved Vans when it went insolvent.
One thing I did find interesting in this article might say something about the collapse of Lillium and Volocopter. When they went under, they laid off around 1,000 employees. Flight Design, a viable company producing products that people are buying, has only has 100 employees - a tenth of what Lillium had. That might explain one reason why eVTOL companies are foundering.
2 replies
January 1
▶ jbmcnamee
I understood that Van’s problem was that new management failed to recognize impact of large increases in costs, then founders tried to keep it going out of their savings.
January 1
Can help to have other product lines.
Airbus has claimed to be losing money on the A220, struggling to get costs down. Great airplane but… Kept going by income from other products like the A350.
Delays in design development are of course a cash flow problem, i include ‘certification’, that hurt Bombardier.
And gummint - Boeing’s sleazy trade rules attack on the Bombardier C-Series airliner, that backfired big time as the airplane is now the A220.
January 2
▶ jbmcnamee
Interesting comparison of number of employees.
Muti-rotor electric aircraft are more complex, and batteries are a challenge. But does require sharp people who combine adventurous with sensibility and ability to change when something didn’t work out. The Mouth Mus had some of that but crashes of his rockets. (He wised up enough to tell staff to fix problems solidly not fiddle and patch (my words).
January 3
I don’t know much about Flight Design, but I always had a very positive impression of their aircraft. Unlike so many companies today, they don’t peddle BS and snake oil, they make honest-to-goodness planes that work as advertised. I hope that they successfully emerge from this difficulty.
