As most of my readers know, I’m a full time RVer who loves RVing. I encourage families to enjoy the RV lifestyle and all it entails. Despite the awful economy people will continue to enjoy the pleasures of RVing in 2009 and for years to come.
The bad: Manufacturers and dealers continue to fail.
We're not anywhere near the so called “bottom” when RV sales will rebound. Sid Johnson, the marketing director of Jayco recently said, "Most of the experts who have followed the RV industry closely believe we are at or near the bottom now and the market should begin to rebound by the middle of next year." Johnson blames hard-to-get financing as the culprit.
In a CNBC interview, Avondale RV analyst Kathryn Thompson said any rebound in RV sales in the near future is unlikely, noting that "prospects for a recovery in 2009 remain dim."
RV manufacturer CEO Mike Mitchell said his company could not see enough "light at the end of the tunnel to feel confident that market conditions would improve sufficiently to justify continued losses that would be incurred waiting for the market to return."
He is the CEO of the Chanute, Kansas based NuWa Industries makers of the 5th wheel brands Hitchhiker LS, Hitchhiker Discovery and Hitchhiker Champagne. Today they threw in the towel saying they plan to make, “a graceful exit from the RV industry” by maintaining a skeleton staff at the factory to do warranty work and support dealers with parts until 2010.
I know I’m repeating myself, but for those who may have missed my previous articles, please make sure you have any RV warranty work done before your dealer or manufacturer goes out of business. The sooner you take care of it the better!Even high end coach maker Marathon booted 150 workers just before Thanksgiving - nice!
According to CNBC Standard & Poors is giving Monaco Coach the boot tomorrow removing them from the S&P SmallCap 600 trading board because they are now worth less than $25 million and the requirement to remain a public traded company with S&P is $200 million.
According the Fresno Bee newspaper, RV king Dan Gamel closed all but one of his dealerships last week and fired 150 employees.And from Riverside, California we learn that Fleetwood Enterprises, Inc. has been officially notified by the New York Stock Exchange they have failed to keep an average market capitalization of not less than $25 million over a consecutive 30 day trading period. I suppose this means their grandiose financial reorganization plans aren’t working out. Unless they can raise the money soon they are off the NYSE.
The ugly: RIVA goes begging for bailout money.
Richard Coon, president of the RV Industry Association (RVIA) has hired additional federal lobbyists to ensure the RV industry is in line for possible bailout money. Does that sit well with you?
RVIA released the November numbers and they are UGLY! Representing the largest year-over-year decline for 2008 November shipments totaled 6,000 units compared with 21,500 just one year ago. That is a whopping 72.1% decline. No industry can stay and play with these kinds of numbers! These facts continue to bear out my thesis that the RV industry as we know it is history.
Prospects for the RV industry in 2009:
We will continue to see an exodus of both RV manufacturers and dealerships from the playing field. They will attempt to stay afloat by laying off more workers, cutting work weeks and production. They will attempt to restructure their financial obligations by renegotiating their debt through repayment extensions and financial paper manipulation. In 2009 upper management from many of these companies will find themselves in the same position as the employees they’ve recently fired.A few manufacturers who are better financed will manage to hang on through the year but will find themselves staring into the same deep pit that swallowed the others this time next year. I expect only a handful of RV manufacturers to be standing at the end of 2010.
With the disappearance of dealerships where will you get your RV repair work done? Not to worry, many enterprising RV industry workers and technicians who were laid off will start their own mobile RV businesses to service current RV owners.
The RV “elite” are telling us they have seen this kind of downturn before and they will weather the storm just like they’ve done before. They are putting lipstick on the mule because in reality they are scared to death. They have never experienced anything near this magnitude of economic depression and are hoping and praying customers will start buying RVs again before they loose their livelihood. If you’re working in the RV industrial complex and aren't actively seeking other employment right now, you better get into high gear because the pink slip is on the way.And for my detractors (trolls), I am not reliant on the RV industry for my income and am therefore free to express my ideas and opinions and report the news as it emerges. If you don’t like what I have to say, then I invite you to stop reading my column. Also, if you don’t have the courage to tell us who you are in the comments section, then I invite you not to participate. Happy New Year - Jim Twamley, Professor of RVing
18 comments:
Thanks Jim for the information. We applaud NuWa Industries for remaining in place for awhile with a skeleton crew for warranty work.
We're searching for a new fifth wheel for full timing, and we're nervous about which company will stay in business.
We're looking at Carriage Cameo and Jayco Designer. Any work on the grapevine about these manufacturers?
I love your blog, have learned lots and appreciate your opinion. Keep up the good work and Happy New Year to you.
Kelly - Whistler Canada
Acorn. In this economic environment anything could happen, but RV industry analysts seem to think Thor Industries has a strong balance sheet and will be in business for a while. Forrest River who recently purchased Coachmen is owned by billionaire Warren Buffett and for the time being has access to deep pockets. Good luck in your search for a 5th wheel - they are a great way to RV. Jim
Nice to hear that Thor is strong, since I have a Jazz 5'er and full timing. Does anyone know how Americana RV is doing?
As for mobile service companies starting up that is good news for a change.
But, the fact that RVIA is begging for a bailout, that is not good at all. That means nationalization of the RV industry and then look out, all you'll see it the new and wonderful green RV's.
And as for your column, keep the news coming. We don't hear this any place else.
If looking for any rv, 5th wheel or travel trailer, you may want to take a look at Heartland. They are debt free and they are expanding their product line to reflect the economy. The newer products should be out from mid Jan on.
Jim's opinion of the RV industry is possibly a bit extreme, but he is certainly right about the RV industry as we know it coming to an end. What we now need to do in a more serious manner is look at the way they have been building RV's (and cars) in Europe for many years and we will realize there is a lot of creativity and value in their products. Do we want to keep RVing or not?
Hi Jim,
I’m not sure I agree with much you have to say about the RV industry from a journalists perspective. It’s really just common sense that any industry based solely on discretionary spending would suffer more than other industries during a major economic recession. But reporting the demise of the RV industry seems a bit premature.
As far as the current economic conditions go, as related to the RV industry, what is affecting the industry is consumer confidence at an all time low, and the failure of lending institutions to make funds available to consumers and businesses.
When RV sales are down RV dealers have limited cash flow to work with and when you add to the problem that lenders aren’t funding flooring for dealers, small and large dealers alike are in a bad way. Adding more to the problem is that bailout money funded by us, the taxpayer isn’t being used to free up consumer financing so RV consumers with the credit can buy RV’s.
So it is only logical that when RV manufacturers have inventory on dealers lots that is not turning and they are struggling to keep their doors open the weaker and cash strapped will in fact go away and in most cases leave owners of these brands of RVs wondering where warranty and replacement parts will come from.
What you fail to see is that RVIA and RVDA recognize these problems and are actively seeking ways to confront and head these problems off. Because, to this point, the bailout money has not been used as it was intended RVIA has asked government officials to step in and assist in righting this wrong.
RVIA is not, as you so eloquently put it, begging for bailout money. U.S. Reps. Joe Donnelly and Mark Souder asked the Treasury and Federal Reserve to do two things, as explained by Josh Weinhold and Marilyn Odenahl in an article titled, “Lawmakers: Give Credit where Credit is Due”, dated 12/12/2008. I urge you to read this article; it should help to clear up some of your confusion on these topics. Here is a link if you would like to read it http://www.etruth.com/Know/News/Story.aspx?id=469687
1)Include recent and new RV consumer and business loans in the Term Asset-Backed Securities Loan Facility, an institution established last month that protects banks from losses if borrowers default on car, credit card or student loans.
2)Require banks that are receiving funds from the economic rescue plan to make available more consumer and business loans.
"Economic recovery depends heavily on a rebound in consumer confidence," the letter said. "Consumers who are credit-worthy and encounter barriers to financing purchases will make this rebound more difficult."
Here is a link to RVIA’s take on what you refer to as begging for bailout money. http://www.rvia.org/AM/customsource/INCL_PressReleaseDisp.cfm?section=RVIA_Press_Releases&PRID=110&SR=1
RVIA also asks anybody in the RV industry to make these points to members of congress by writing a letter to RVAct website. (Same link as above)
Rather than throw the towel in on the industry we have a passion for we should be looking for ways to help it survive.
Mark Polk
RV Education 101
The prices on Rv's are pretty good right now. we are looking to trade our class A gas for a class A diesel but the interest rates are still not showing any signs of coming down even in a bad economy.
Thanks for the tip on Heartland. They will top my upgrade watch list and from what you are describing will most likely to survive
this financial storm.
Hi, Jim! Thanks so much for your views on the RV industry's future. I'm of the opinion that there will be a lot more hurt and hunger over the next two years in the general economy. Until a significant number of people are financially stable, they won't be buying new RVs. RVs are not the sort of thing most people buy and replace every year, so it is a dicey industry.
Having said that, my heart is set on buying a Sportsmobile Class B van conversion. I believe it is a privately-held company, so its financials might be hard to come by. Does anyone have any sound information on Sportsmobile?
Also, they, like all the other North American van converters, do their conversions on vans made by the Big Three. Any ideas about how this might go if any of the Big Three crash and burn despite all the money thrown to them?
Thanks for the insights your readers can share here. Keep up the good work, Jim.
Jaycee
Baja Arizona, USA
I think the RV industry will be fine. Sure there are all sorts of companies that will need to make adjustments and some will go away, but I do not see long term doom for the RV industry. We have spent the last week on our twice yearly RV trip. We have loved everything except for the breakdown. And we have met a lot of nice folks during this week that were enjoying themselves too. My point, it is a good business and some changes need to be made but all will be OK in the long run. By the way, our coach is 33 years old and it does have some problems once and a while. The main impetus for RV sales in the next few years are the hoards of retiring baby boomers. Lots of them are going to buy and travel in RVs. Count on it. I am in that category. And we are going to start looking for a new (or newer) RV this year. Sure my accounts of stocks and bonds are down, but the price I have to pay for RVs is down too.
Could I impose a question out here from one of those Baby Boomer's that is a full timer in the NM mountains year round?
With Robert's last point in mind and the price of many RV's going to auction for pennies on the dollar or at the dealer's slashing their prices, here is my question. ???What motor coach would you full time in that is four season, could rig to dry camp for extended period, take possibly rough terrain into BLM campsites and tow a GMC Sierra 1500?
Tall question but I'm betting there is enough experience out here answering this blog to get a good answer.
Does anyone know how the RV dealers are doing in Canada? No one is being honest. The dealers here are saying they're doing great, but that seems a bit far fetched considering. Yes, our Canadian economy is doing better than the U.S, but not that much better.
So what really is happening in the RV business in Canada. Are the dealers suffering here too? Would be nice to know if I can use that as a lever to negotiate a better price or are they still as cocky as they were before because they are still healthy enough to walk away from you if you want to deal. Does anyone know the real story here in Canada?
Evolution of the RV Industry, along with the rest of our economic systems, is in high gear. Like the dinosaurs coping with the landing of an asteroid, the falling dominoes seem to be wreaking havoc in all segments of our lives.
Jim's assertion on the demise of the RV industry as we know it is hard to argue against. After all, the 3 big US auto companies are on the edge of demise, or at least facing such major changes that we may not recognize them in the future.
Major evolutionary events are like this. Bam, big economic asteroid happens and it's a major scramble.
No one can say for sure how it will all shake out, though most see from what is happening that is gotten pretty gnarly and getting gnarlier every week. We strive to stay positive, but also accept the reality that many are losing lots of "value" in investments, jobs, homes, retirement funds, etc.
"Confidence" seems to be the key word. We are trying to feel it, have it, emit it. Consumers need to re-find it so they can spend more and go into debt more so the economy can get going again.
Seems like a real catch 22. The RV industry will survive, in what form is yet to be seen, just as the American auto industry will survive, but in a new configuration.
Getting to a new more vibrant economic future will be a bumpy ride, take a lot of ducking and weaving, positive attitude and actions. But also suffering by many from loss and a slow crawling back to some sense of stability.
Ummm, Happy New Year?
The "Big Three" and the RV industry are both victims of primarily the change in fuel price and secondly the general economy. The Big Three and the RV industry made products predicated on a certain level of fuel cost. Because of a variety of reasons the fuel spiked higher unexpectedly and sent GM, Ford, Chrysler, and the RV industry into a big dive. And a few months after the fuel price spike the lumbering calamity in the mortgage lending field dragged the whole economy into the tank.
So now we have fuel price down and nobody wants to buy anything because they either do not have the money or don't want to spend / are afraid to spend.
BTW - both the fuel crisis and the mortgage meltdown were from the same cause. Unbridled greed. Oil speculation (ala Gordon Gecko) ran up the price of oil and enriched a few while beggaring the many. And thousands of Gordon Geckos participated in the real estate fiasco by taking personal gain and basically flipping the finger to all the rest of us.
That is why I love RVing so much. Few Gordon Geckos out in the RV Parks, but lots of really nice people who are worth knowing.
I think Jim has pretty well hit the nail on the head. I think most of the folks who get upset with him find his blunt style of communication troublesome. Being somewhat blunt myself, I know the communication style is not always welcome....no matter how right one is.
I think there will be some kind of RV industry left after the mess we are in is over. My guess is we are at least two years from any rebound. I use the late 80s to middle 90s as the example. I saw real estate in CA fall 30+% from 1988 to 1992. It then took about three years before things began moving. This situation we are currently in is worse. The house I bought and thankfully sold in CA went from its high 2 1/2 years ago to a drop of 28% as of today and the bottom isn't here yet. Not to mention unemployment is just beginning to climb. I remember 11% unemployment years ago and it ain't pretty.
So, the RV industry isn't going to recover before the remainder of the economy picks up. Lets hope for a recovery beginning in 2010.
Don't get me wrong, ther will be some mfgs that survive. Lets hope they are the ones that build quality RVs.
Tony
Someone asked how the RV market was doing in Canada. Well, it has turned south right along with the U.S.A. RV market. Canadian Class A sales were down 25.8% in September and Travel Trailers were down 11% while 5th Wheels were down 14.2%. Class C sales were down 13.3% and folding camper sales were down 5.8%. Overall sales totaled 2,670 units sold compared with 3,045 the previous year according to Statistical Surveys Inc., Grand Rapids, Mich.
Have you heard anything, good or bad, about the survival of the Casita company in Rice, Texas [near Dallas] that builds fiberglass body travel trailers
[13'-17']?
Juanita/Jean
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