Says Company, Customers Can Work Together To Lessen Burden

In a published message left on the Lancair Mailing List Monday, Lancair International CEO Joseph Bartels (pictured below, right) acknowledged the impact the closure of avionics distributor Direct-To Avionics has had on his company's customers... and suggests a way both Lancair and its customers who purchased avionics from D2A can lessen the financial hit on them both.

Bartels' message is presented below, unedited. Explanatory comments by ANN Editorial Staff are noted in brackets [].

Lancair and Lancair Avionics Customers:

The D2A business failure is one which has touched all of us in one way or another. I see the postings and I am sickened by the finger pointing because I know that there must be more to this story than meets the eye. I have never agreed fully with Kirk's business decisions, however, for the well being of my customers, I continued purchasing, in good faith, because it was Chelton products that I believed I was purchasing, through D2A. I await, perhaps a bit more patiently than most, the full story. I just can't believe Kirk is 100% at fault here.

On several occasions I spoke with customers and explained that I was concerned about paying 100% up front for the Chelton package, especially when there was such great controversy over which, if any, AHARS/ADAHARS/GADAHARS would be appropriate for the IDU-1's. The truth is the customers had already made up their respective minds about Chelton having been so indoctrinated by so many D2A advertisements alluding to the fact that Chelton would give you "...so much blue for so little green." Our customers were cutthroat in trying to save every dollar and would on so many occasions attempt to go outside of Lancair Avionics, Inc. to buy direct from D2A. Last significant fact on this part of the subject, there wasn't then and isn't now a product which compares to the IDU-1's in price and performance, even if you now have to pay a small amount more to get all that you thought you would get.

So what do we now do? Well, Lancair Avionics, Inc. is reviewing its contracts with its customers who are still without an AHARS/ADAHARS/GADAHARS. For those customers whose contract calls for Crossbow 425's, they will get 425's. For those customers whose contract calls for Pinpoint, they will get Pinpoint, however, they will have to pay the difference between what the 425 costs and what the Pinpoint costs. Contractually Lancair Avionics, Inc. may be responsible to its customers fully, even if it was D2A that failed. I am in no way conceding that point at this time, however, for those of you who have never filed a lawsuit or have never been sued, let me tell you that it is a very expensive, time consuming, and wasteful event, especially when the singular loss to any one customer may be no more than $4,000.00. As to Lancair Avionics, Inc., the total amount may be as much as $145,000.00.

I am suggesting to my Lancair Avionics customers that we share in the loss as follows: 1) Chelton has obviously proposed providing product at or near its cost; 2) Lancair Avionics, Inc. would like to pay one-half of the amount required to acquire the items which D2A failed to provide; 3) Lancair Avionics, Inc. proposes that the customers pay the other one-half of the amount due necessary to acquire the items D2A failed to provide; and, 4) Those customers who participate as requested will receive a special discount on any item that they purchase through Lancair which will total at least that amount equal to their contribution to this effort. For instance, if a customer still has an engine to purchase, we will discount the engine by the one-half mentioned above. If the customer has already purchased items such as engine, prop, panel, etc., Lancair will offer a discount on any other airframe kit that we offer or will allow a special discount on parts and accessories until such time as the customer's contribution to the purchase of the back ordered D2A products is satisfied.

This offer, initially, is beneficial to Lancair and that is because we would rather not have to suffer this financial loss all at once. We hope that all or at least a majority of you will accept this offer.

Now, let me address the comments of a "lister" [who commented that it was foolish or unwise that buyers pay 100% of the cost of expensive purchases "upfront"--E-I-C] with whom I take special exception. Lancair obligates itself to pay each engine manufacturer every time it places an order with that manufacturer. We are fully up to date with most every vendor, including, but not limited to, Continental, Lycoming, Avia and Hartzell. As a matter of fact our efforts to pay in advance have caused each of these manufacturers grief as they do not have a procedure by which to assign a pro-forma invoice and accept funds before their final invoice is rendered. Since we wish to keep our good credit with them, we demand payment from our customers up front so that we may pay as soon as an invoice is rendered by these companies. Further, we demand a 50% deposit on our kits now to assure that those customers who order actually purchase the totality of the kit they have ordered. Why? Because we have to forecast well into the future our need for strategic materials, their transport to the Philippines where we actually manufacture many of the parts contained in our kits and arrange for those parts to be shipped back to the States, the parts we keep on the shelf and the parts that go into your kits. Believe me, the TSA/Border Patrol, etc., has not made importing of these manufactured goods either easy or cheap. Our vendors require significant annual commitments in order to get discounts, not to mention, actual product. Torey, who provides us with the bulk of our Carbon Fiber, must know well in advance our needs, otherwise, there just won't be any! Wolstenholme Machine requires significant advanced notice of orders just to procure the correct materials. Duke Fuel Pumps has a 6-9 month lead time. Multiply this by a thousand or so various parts and you can see how one slip up can bring us to a grinding halt! So you see, orders beget funds, funds beget parts, parts are manufactured into product and the cycle continues.

Finally, did I tell you that it costs millions to run Lancair every year? How do you think we get the funds...solely through the sale of kits? NO! We hope to generate additional revenue by the sale of instrument panels, engines and propellers. Unfortunately we are not getting very many of these sales for several reasons: 1) We perhaps are not being as aggressive as may be required to get the sale; 2) we may not be marketing the fact that we now have factory remanufactured engines from Continental at significantly lower prices than that of new (even though they are not painted red or sport chrome intake tubes and rocker covers, but at least much quicker), and 3) our instrument panels may cost a bit more because of the overhead factor associated with the business as a whole, up to and including having to absorb a portion of the loss associated with D2A, but we do warrant our product and will make any necessary repairs to those who take time to call us (or me if you are having difficulty 541-350-2901) for assistance. The distraction caused by former Lancair Avionics employees is over. You can get a panel within the 2 - 4 month period promised.

I ask that you support Lancair... not for me, (God knows I'm an attorney so I must have been rich at one time, right?) but for the 55 - 60 employees who work in Redmond and the 100 employees that work in the Philippines all who bring you the finest home built kits available, bar none!

Joseph C. Bartels, CEO -- Lancair International, Inc.

FMI: www.lancair.com