EK Waterblocks: Liquidity shortage and mismanagement

[FlyingPotato_is_taken]

8 hours ago, leadeater said:

but it's a much different situation for precision products like what EK has that sells to anyone in the world.

 

No it's not.

There isn't a reason why outsourcing has to be price prohibitive compared to in house: identical machines, same material, same toolpaths, same task/jobs and so on.

It takes a shop that specialized in this kind of low volume, high customization orders to get a price that works out for both sides.

 

8 hours ago, leadeater said:

You also can't know 30 guys in different places to make a wide range of products, that's quality control hell. We may talk about EK being low volume but it's not "know a guy" low.

Over time you will know a handful of shops as such this isn't quality control hell.

 

7 hours ago, leadeater said:

Also "universal" GPU blocks did or do exist, full cover was mainly preferenced for aesthetics followed by VRM/power cooling.

Didn't meant an universal GPU bock:

Make a sub assembly that is reused in the custom cooler assembly. All RTX4090 can use the identical cold plate. All AM5 CPUs can use the same coldplate. The part that changes is the surrounding that cools memory and VRM. 

 

Another benefit is that now complexity is in the one part that is identical across all coolers of a certain GPU & CPU generation. Milling some wide channels in copper for the custom part isn't difficult and within the range of most shops.

Operating  a slid saw (and or horizontal mill) to make a cold plate is far more difficult. Once you get to thin fins there is always the risk of bending it during machining. Similar getting a good surface finish on those channels requires good chip evacuation, fresh saw blades and good toolpaths (those thin fins also like vibrating causing scatter). Not the easiest job in the world.

[GarlicDeliverySystem]

More information:

So apparently Jay is also waiting for money for ads

Igorslab as well:

https://www.igorslab.de/en/ekwb-and-a-financial-disaster-with-an-announcement-unpaid-invoices-exploited-employees-and-annoyed-creditors-like-me/

[atxcyclist]

4 hours ago, GarlicDeliverySystem said:

More information:

So apparently Jay is also waiting for money for ads
 

Igorslab as well:

https://www.igorslab.de/en/ekwb-and-a-financial-disaster-with-an-announcement-unpaid-invoices-exploited-employees-and-annoyed-creditors-like-me/

Jay’s video is illuminating; EK pre-paying for content and basically ghosting creators is crazy stuff. EK clearly mismanages funds.
 

Edit: To be clear it’s much worse that they are currently not paying invoices and employees they owe, though that is a much more common scenario. They’re seemingly unreliable in all aspects of business relations.

[GarlicDeliverySystem]

Just now, atxcyclist said:

Jay’s video is Illuminating; EK pre-paying for content and basically ghosting creators is crazy stuff. EK clearly mismanages funds.

Yeah, that also struck me as ominous. I mean he apparently had to constantly chase them for payments as I understood it, but they basically had already paid for marketing and couldn't decide which products to run?

Come on, either there is some absolute incompetency at play, or they have some really dysfunctional management structures. Like that is not even about money primarily, I would think it is just someone from marketing needing the green light on a product campaign for the next year.

[leadeater]

4 hours ago, FlyingPotato_is_taken said:

There isn't a reason why outsourcing has to be price prohibitive compared to in house: identical machines, same material, same toolpaths, same task/jobs and so on.

I literally did not say it has to be. But also you forget profit, you can outsource and they can have all the same costs, literally exactly but then also require a margin of 4% which you'd be paying so that would be 4% more than doing it yourself, all things being literally equal. Nothing is ever exactly equal though. If you go back and actually read what I have been saying I did not say only do one or the other, I just simply disagree small shops is a better idea than in house for the low volume stuff. It's also not just me that disagrees, every other company in the area of size of EK other than EK does it and only EK is having their problems.

 

Not only do EK not do what the others are doing, making some or all of their products, they outsourced to their competitors i.e. Swiftech.

 

The point is they can outsource the manufacturing of their rads for example for large scale cheaper manufacturing and in house Z790/X670 etc with a more costly process but not be subjected to minimum order quantity. Why push this out to some smaller scale person who may not even have the capacity to do the job with changing workload demands precisely due to who they are. Dealing with more manufacturers is a QA problem, it's the cited biggest issue that anyone like EK talks about or really anyone that designs products and gets other entities to make them and just because someone is doing it right now doesn't actually mean they will keep doing it right.

 

Just because you can find someone to do something doesn't mean it's the right choice or the best choice, just like doing it yourself isn't always either. But I simply do not see managing many different small entities making various different products at different times in different locations of the world as a remotely good idea for EK. It's also not going to result in affordable products, if you really want to relegate something to ultra low volume make it price undesirable, guarantee of it not selling.

 

Scale is an very important issue here, it's the cause of some of the problems for EK. Not every shop is actually going to want to accept the job or they might so long as it's 1 a month or 5 or 10 or whatever amount. They could well decline or counter with minimum order quantity... back to the problem again.

 

4 hours ago, FlyingPotato_is_taken said:

Over time you will know a handful of shops as such this isn't quality control hell.

So exactly what they are doing now then which is not working for EVERY product they make. Have you considered how many products they manufacture even for themselves they would call low volume and what that volume actually is?

 

4 hours ago, FlyingPotato_is_taken said:

Didn't meant an universal GPU bock

That wasn't a comment or reply to something you said.

[ToboRobot]

Is this just an issue with excessive inventory?  Perhaps they didn't forecast the sales growth from COVID well?

Is there an issue with consumer vs enterprise parts of the company?
Did they over invest in manufacturing capacity?

Selling or splitting the company many be the best option, will be interesting to see their books if that happens.  Who would buy the consumer side?

[ToboRobot]

10 hours ago, Doobeedoo said:

Not getting paid in time let alone months should instantly have any company under inspection and microscope. Can't believe we're still in time where people can't even feel safe to get paid under contract, sad. 

Reality is that even big companies can be poorly run or inefficient, or simply abuse their power to hold on to money, but it's not uncommon for people in the finance department to have some vendors that are frequently late.  But sometimes it's just stupid bureaucratic crap.

I'm not defending not paying bills on time, but it's not something to freak out about, as they say, shit happens and it doesn't necessarily denote a serious problem with the company.

[Doobeedoo]

10 hours ago, ToboRobot said:

Reality is that even big companies can be poorly run or inefficient, or simply abuse their power to hold on to money, but it's not uncommon for people in the finance department to have some vendors that are frequently late.  But sometimes it's just stupid bureaucratic crap.

I'm not defending not paying bills on time, but it's not something to freak out about, as they say, shit happens and it doesn't necessarily denote a serious problem with the company.

I get that, but not compesating people that literally bring money for the company will always look like some excuse as they are not CEO payments but regular wages. 

Now stuff like this happens even more in private sector, which is insane as most businesses are. So back to my point that it's insane is that how regular people can't feel safe to get paid by private companies even more. Sad.

[FlyingPotato_is_taken]

@ToboRobot If a company can't pay salaries it is either past bankruptcy (in Germany this would be a criminal offense, other countries have less strict rules so EK is probably on the good side here) or very close to it.

 

If EKWB would be a German company they probably would already have been required by law to file for bankruptcy (likely a restructuring) and the salaries might have been protected/"paid" by the social welfare system.

 

As a supplier doing business with EK I would also be very careful. Under German law there might be a possibility that it has to be paid back. Especilly now where these details are public.

Being chronically late on invoices is also a risk for business partner (in Germany): There have been court cases where it was found, that this is enough for you, the supplier, to assume they are illiquid. Once they file for bankruptcy the insolvency practitioner might approach the business and demands  the payment to be returned.

 

 

[ToboRobot]

1 hour ago, Doobeedoo said:

I get that, but not compesating people that literally bring money for the company will always look like some excuse as they are not CEO payments but regular wages. 

Now stuff like this happens even more in private sector, which is insane as most businesses are. So back to my point that it's insane is that how regular people can't feel safe to get paid by private companies even more. Sad.

I am not talking about issue about NOT PAYING people, but paying them on time.  

5 figure invoices sound important to people, but when you have 6, or 7 figure invoices and contracts that go into the 8 figures, those little ones aren't as important as you think.

[ToboRobot]

2 minutes ago, FlyingPotato_is_taken said:

@ToboRobot If a company can't pay salaries it is either past bankruptcy (in Germany this would be a criminal offense, other countries have less strict rules so EK is probably on the good side here) or very close to it.

 

If EKWB would be a German company they probably would already have been required by law to file for bankruptcy (likely a restructuring) and the salaries might have been protected/"paid" by the social welfare system.

 

As a supplier doing business with EK I would also be very careful. Under German law there might be a possibility that it has to be paid back. Especilly now where these details are public.

Being chronically late on invoices is also a risk for business partner (in Germany): There have been court cases where it was found, that this is enough for you, the supplier, to assume they are illiquid. Once they file for bankruptcy the insolvency practitioner might approach the business and demands  the payment to be returned.

 

 

You can't play "if they were a company in another jurisdiction" games, they operate according to the laws of their markets.  If they were a Chinese company, the laws would be totally different as well.  

You keep referring to German law which does not apply here.  Just like Canadian laws don't apply to companies in Slovenia! 

[FlyingPotato_is_taken]

@ToboRobot Slovenia is a member state of the EU and significant portion of the laws are unified between all of the 27 EU states.

 

[Doobeedoo]

9 minutes ago, ToboRobot said:

I am not talking about issue about NOT PAYING people, but paying them on time.  

5 figure invoices sound important to people, but when you have 6, or 7 figure invoices and contracts that go into the 8 figures, those little ones aren't as important as you think.

I get that yeah, but just saying that it's very common for regular people average wages not being paid in time, literally main crown carrying business. Common folk that depend on those little wages way more then big businesses or investors though. So many contracts mean nothing sadly, employers are not held accountable at all.

[tkitch]

15 minutes ago, ToboRobot said:

I am not talking about issue about NOT PAYING people, but paying them on time.  

5 figure invoices sound important to people, but when you have 6, or 7 figure invoices and contracts that go into the 8 figures, those little ones aren't as important as you think.

Jay mentioned being owed a 6 figure sum from EK.

[FlyingPotato_is_taken]

20 minutes ago, ToboRobot said:

You keep referring to German law which does not apply here.

Reading a bit about Slovenia:

1. Management has to file -> similar to Germany (is this the reason why they took all the money out of the US branch to prevent HQ from filing for bankruptcy?)

2. similar but less strict rules when a company is bankrupt -> similar to Germany

3. There are also rules how money has to be distributed -> somewhat similar to Germany

 

 

For your the EU doesn't matter:

Quote

The objective of this Directive is to contribute to the proper functioning of the internal market and remove obstacles to the exercise of fundamental freedoms, such as the free movement of capital and freedom of establishment, which result from differences between national laws and procedures concerning preventive restructuring, insolvency, discharge of debt, and disqualifications.

https://eur-lex.europa.eu/eli/dir/2019/1023/oj

[ToboRobot]

16 minutes ago, FlyingPotato_is_taken said:

Reading a bit about Slovenia:

1. Management has to file -> similar to Germany (is this the reason why they took all the money out of the US branch to prevent HQ from filing for bankruptcy?)

2. similar but less strict rules when a company is bankrupt -> similar to Germany

3. There are also rules how money has to be distributed -> somewhat similar to Germany

 

 

For your the EU doesn't matter:

https://eur-lex.europa.eu/eli/dir/2019/1023/oj

I didn't say that German law applies in other countries, nor did I imply that EU laws do not apply to EU member nations who agree to them.

German law applies in Germany.  Slovenia is not Germany.  EU laws apply to the EU.  

Don't try to apply German laws to other countries.  

[FlyingPotato_is_taken]

40 minutes ago, ToboRobot said:

EU laws apply to the EU.  

While the USA has federal laws the EU doesn't. Overall the US federal system isn't similar at all to the EU.

 

The EU institutions vote or publish certain type of documents. This document isn't a law (isn't as simple as this but lets keep it basic). The member states have to implement these documents into national laws (e.g. German laws). National laws can point at EU legislation but this is still fundamentally different to the EU releasing a law as the member state has to implement this "pointer" in their national laws.

 

This also means that the laws between countries are similar. A German law isn't binding in Slovenia (there are also exception to this under certain conditions) but likely it will be similar if the matter is related to the single market as the roots for this system  dates back to the ECSC (half a century before the EU was founded).

[wanderingfool2]

20 hours ago, FlyingPotato_is_taken said:

No it's not.

There isn't a reason why outsourcing has to be price prohibitive compared to in house: identical machines, same material, same toolpaths, same task/jobs and so on.

It takes a shop that specialized in this kind of low volume, high customization orders to get a price that works out for both sides.

You aren't looking at it from the smaller customization aspect.

 

First, right off the bat; it takes time to setup machines, plan out everything etc.  Compare that to in-house and you will likely already be more setup etc...so the overall cost per job in terms of setup and such would be lower right then.

 

You need to factor in that there are contracts at play, and you now have to add the cost of getting those contracts all hashed out [which could include lawyer fees on both sides to review the contract...especially as NDA's are likely involved].  That adds extra amounts to the build from a 3rd party

 

As a smaller low volume one as well, you would have to factor in the skilled labor into the price of the part and the amount of times you might get a contract.  e.g. When I contract myself out to smaller companies for support, my hourly rate can be placed at $150/hr...am I worth $150/hr, absolutely not...but I don't typically accept support stuff because I have other things, and the requests don't occur too often.  I essentially mark it up, because those who really do need me to come in will accept that pricing; and the way I look at it, it's a way to convince me to drop what I'm doing to help them.

 

A similar case case be made here; if the small volume provider is so busy they always have work you are going to be essentially bidding against other companies...so there will be a higher margin [lets say the cost is $100 for them to fabricate and make after expenses...if they are always busy they might mark it to $150 as they know they can still remain busy].

 

On the flip side to the above, if a shop is only at 80% capacity, their employee cost would be 20% higher per job than a company at 100% capacity...so that $100 part might cost them $120 after wages come into play...and then they still need to make additional profits so it's marked higher.

 

Then there is additional QC that EK would have to do,  as they would need to make sure their parts are up to spec.

 

 

This doesn't even address that EK from what I heard had to place minimum order sizes as well

[Senzelian]

Whatever. EK sucked anyways.

[AnonymousGuy]

I'd be fine with EK disappearing.  Quality on par with China and price on par with Europe.  But every kid buys them because they don't know any better than sponsored youtubers telling them that's what they use *cough jayztwocents*.

 

And I'll never forgive or forget them blaming literally everything but their own shitty nickel plating.  Hell I have a picture somewhere of their "gold" plating peeling off.

[leadeater]

5 hours ago, wanderingfool2 said:

-snip-

Also every part made would have to be shipped to an EK facility to be retail packaged and then shipped again to a customer. In a larger contract from a bigger partner packaging might happen at the same facility it's being made, not always but I'm pretty sure it wouldn't at a smaller scale. So it basically doesn't matter if you can find someone in the US for example to make it because you'll get killed by shipping, anything outside of EU would be a no go other than China which only wants to do things with much larger minimum order quantities which is where EK got in to all this trouble (not saying they have their stuff made in China, just an example).

[StDragon]

23 hours ago, ToboRobot said:

Is this just an issue with excessive inventory?  Perhaps they didn't forecast the sales growth from COVID well?

There was probably a minimum quantity they had to order and expected to profit from low volume with high margin. That's a very bad idea when dealing with a enthusiast market with high turnover in technology.

 

In this market, you need both high and low volumes. High volume for market share, stability and to keep your suppliers happy, and markup the high-end because you're also catering to a very noisy enthusiast market; you want brand recognition.

These guys fucked up in a multitude of ways.

[Mark Kaine]

maybe don't make things that rely on water if you don't have liquids? seems like a no brainer tbh. 

 

Just now, StDragon said:

These guys fucked up in a multitude of ways.

yeh, no water, no deal! 

[StDragon]

6 minutes ago, Mark Kaine said:

yeh, no water, no deal! 

From fire to water. During bankruptcy, liquidation can be part of that process.

[Motifator]

The best in the business? This brand has been garbage for a complete two decades. The oxidating GPU blocks, the CSQ fiasco, nickel plating tearing out... remember older days? And they don't do their own stuff usually it's just stuff they take from Asetek in AIOs, and pumps from some company down Slovakia.

The country they're from aren't even great for producing high tech stuff. If you look at who makes these things, you'll see a lot of hippies that worked for this company. Not people like uh... name me a tech giant? Igor Rosanov, who built Dr. Web anti-virus in 1992... after working on MIG planes. Nobody out of EK, as a person, holds any redeeming value to watercooling. Their stuff is overpriced and garbage. They're the Fiat of watercooling, everybody knows Fiat, entry-level.

People who are better at watercooling would buy Aquacomputer, Heatkiller and similar brands... actual gear is out there, let EK rebadge unreliable, cheap DDC's.

Why do you think EK's DDCs pass out in couple years while the old school Swiftech ones have been going for so long?

Yeah, EK sucks, just like EVGA. They deserved this themselves long ago. I will not miss them.