WSJ: Signs of Revival in the Nation’s RV Industry
Eight months after unemployment in Elkhart County, Ind., hit 18.9% and helped make this middle America spot a symbol of the economic meltdown, people are starting to go back to work.
In November the unemployment rate in the county fell to 14.5%, the lowest since November 2008, when it was 13%. A big reason for the turnaround is the rebound in the recreational vehicle industry, which is responsible for about a quarter of the county’s annual economy, according to the Wall Street Journal.
As a result, Elkhart RV makers that were laying off workers last year are now hiring. The Keystone RV division of Thor Industries Inc. is one of them, adding about 500 workers in recent months. “It’s a very positive thing for our community,” said Ron Fenech, Keystone president and CEO.
Keystone laid off 1,000 employees as the recession took hold, cutting the staff from 3,100 to 2,100 before the recent reversal. The turmoil in the marketplace last year created a lot of uncertainty, Fenech said, but that began easing earlier this year and the buying trend has continued through the summer and fall. “I think things are positive and heading in the right direction, but we certainly are not all the way back,” he said.
Nationally, the Recreation Vehicle Industry Association (RVIA) projects that shipments to dealers from manufacturers will increase 27% in 2010, rising to 203,000 units from 159,500. RV sales nose-dived in 2008 as gasoline prices soared and consumer credit contracted.
At one point Elkhart County had 71 manufacturing facilities that produced about 65% of all recreational vehicles made in the U.S.
For years, employment in Elkhart and the surrounding area was stable, rising from 3.3% in 1997 to 4.6% by the end of 2007. In 2008 high gas prices and the downturn accelerated that, and unemployment in the county tripled to 16% in one year. The two hardest-hit industries were construction and manufacturing.
Earlier this year, when unemployment was at its peak, many restaurant and shopping center parking lots were virtually empty.
President Obama visited in February, pointing to the problems in the area to support his argument that Congress should pass a stimulus bill.
Things have improved significantly since then. Jayco Inc., another Elkhart RV company, has hired 250 employees in recent months, bringing staffing levels to 1,450 people. During the downturn it let go 900 employees and cut its daily production from 30 units to 15 on some assembly lines. Those assembly lines are now producing about 23 units per day, said Sid Johnson, the company’s director of marketing.
The company now has back orders, Johnson said, adding there was “a certain amount of optimism, albeit pretty cautious, as to what we think next year will be like.”
Dorinda Heiden-Guss, president of the Elkhart County Economic Development Corp., said a positive aspect of the notoriety from Obama’s visit was business interest. She said she was hoping to get 25 companies to tour the county this year and consider locating there. Through early December 59 had come, looking at buildings, meeting with local officials and, in some cases, exploring financing.
The county has more than $134 million in new projects going on from outside companies that are investing in property, equipment, buildings and other improvements. That equates to about 3,300 new jobs, Heiden-Guss said.
Electric Motors Co. hired Ed Neufeldt, a laid-off RV plant worker who introduced Obama during a presidential visit. Now the 62-year-old father of seven is helping the company, which partnered with Gulf Stream Coach, to build a prototype truck modeled on the Ford F-150 pickup truck but with an electric engine.
Neufeldt made cabinets for Monaco Coach Corp. for 32 years before he was laid off in September 2008, along with 1,400 other workers. He was volunteering with several out-of-work RV plant employees at a local shelter when he was asked to introduce Obama during one of his visits to the community. He got a part-time job delivering bread afterward and is now working both jobs. “I’m still not making what I made on unemployment, but I am blessed,” he said.
Phil Penn, president of the Greater Elkhart County Chamber of Commerce, said stimulus money — through October Indiana received $848 million, according to the federal government — has to be credited with helping keep some people in the area employed and accelerating work on some local infrastructure projects.
“But that’s not what our economy is built on. We certainly welcomed the stimulus dollars to our community, but as far as direct job creation, quite frankly, that will come from the private sector.”