Where's the RV Industry's Bailout?
Sun Mar 1, 2009
Author: Don Magary
Source: RV News.com
RV News tries to look for a glimmer of good news in these difficult economic times and stay positive; however, it's nearly impossible.
The news is all bad and getting worse by the day.
As a sign of the times in the RV industry, Elkhart, Indiana, the heart of RV manufacturing in the U.S., drew national attention last month when President Obama chose to visit that city because of its extraordinarily high 15.3% unemployment rate, the highest in the nation. It's now up to 18%.
Two Oregon based RV manufacturers, Monaco Coach Corporation and Country Coach, among the best companies in the industry, filed for Chapter 11 bankruptcy protection within the last few days.
Publicly-owned RV companies have been hit hard overall, but Monaco and Fleetwood have seen the bottom drop out of their stock prices and both companies have been dumped by the NYSE. A year ago, both companies' stock was selling for over $10 a share and today they are trading over the counter at less than 10-cents -- Monaco dropped to 1 cent a share last week and is currently at 6 cents.
Consumer confidence, one the leading economic indicators, is at historic lows. Over the past 20 years, if you track consumer confidence on a bar chart, it superimposes on the health of the RV industry almost exactly.
Despite the hundreds of billions of dollars the Federal Government has pumped into banks to ease the credit crunch, RV companies cannot secure financing for operating expenses and consumers that would buy RVs right now cannot get financing; therefore, RVs are sitting on RV dealer lots across the country gather dust. RV dealerships are going out of business at an alarming rate.
The ripple effect is not only devastating to the thousands of people who have lost their jobs at RV companies, but it also effecting the hundreds of suppliers that provide components and parts for RVs -- such as refrigerators, awnings, air conditioners and thousands of others.
Among Monaco’s 10 largest unsecured creditors are companies like generator supplier Onan Corp. on the hook for $1.05 million; amanufacturercturer Carefree of Colorado for $619,540; and Horizon Transport Inc., Wakarusa, Ind., the company that delivered Monaco's RVs to dealerships stands to loose $684,037.
You start adding these numbers to the hundred or so other manufacturers that are having trouble paying their bills and wonder if these supplier companies can survive. And you also wonder which ones will be around when the industry recovers and needs refrigerators, awnings, air conditioners to build RVs.
And what about the RV owner, the engine that drives our whole industry. Is there dealer going to be there for them when the dust settles and the industry rebounds. And who is going to cover their repair costs on their warranty claims?
These are difficult questions to answer in these troubling times and if anyone has any good news please let us know.
People's lives are being torn apart and are worried about their futures.
Blake G from Warsaw Indiana, who posted his concerns on our blog, expresses the thoughts of many of us in the industry. His wife was laid off in November from Bison, a horsetrailer/living qurters 5th wheel, owned by Monaco, and was finally terminated in Monaco's melt down a few days ago.
Blake said, "I have been with Thor Keystone divison for 3 years now and I worry every day about my job. Is there any end in sight? For all of us trailer factory employees, we can only pray. If the industry goes down it will effect so many people. People only talk of the big 3 auto makers; nobody thinks of how many the RV industry employs directly or in-directly."
So many of us are asking, where's the bailout for the RV industry?
