Jayco’s Bontrager: ‘Industry’s Rebound is Real’

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Derald Bontrager

Jayco Inc. President Derald Bontrager dealt with a lot of different topics during his opening remarks at the company’s “Annual Jayco Dealer Homecoming” Monday night (June 21) in Schaumburg, Ill. But his comments on the big picture — of a recreational vehicle manufacturing company gradually emerging from the Great Recession — were by far the most galvanizing and stirring of the evening.

Speaking from the podium at the Renaissance Schaumburg Convention Center, Bontrager said his Middlebury, Ind., company had survived the “economic storm” of the past couple years, thanks in part to the “leadership and determination” of Jayco’s dealers and corporate management team.

“Like all hardships,” said Bontrager, “it was painful and we were forced to do things that we never thought we would have to do. But, we were able to trim our sails and reduce our costs.

“The only way to describe the RV industry during the recent recession is that we were in survival mode,” he added. “And despite major layoffs and reduced production, some companies didn’t make it. Over the past several years, we had taken steps to position Jayco for survival. So when the crisis came, we made difficult decisions, but they were decisions made from strength, not from weakness.

“Mere survival in this environment was an accomplishment. Jayco’s survival was accomplished with a strong balance sheet, a strong management team and maybe most importantly, the strongest, most loyal dealer organization in the industry.

“Today, we firmly believe that the worst of the recession is behind us. There are still lingering issues, like credit availability and consumer confidence. But every day that goes by our customers demonstrate more reasons for us to have confidence and enthusiasm. Our retail sales so far this year are up dramatically over the same period last year — and each month is better than the one before. So we are clearly building momentum.”

A byproduct of the current rebound at Jayco is a renewed commitment to product development, said Bontrager, whose company unveiled an upscale new Pinnacle fifth-wheel and a smaller V-nose Skylark travel trailer while announcing upgrades to its bread-and-butter Jay Flight and Jay Feather towable lineup and the upcoming revival at next winter’s Louisville Show of the brawny Seneca Class C.

“Today, I want to assure you that, in the future, no other area will occupy a greater portion of our resources and management focus than product development and innovation,” he said. “Our product vision includes four primary strategies and they are, green technology, cost control, added value and design leadership with a specific focus on weight reduction.”

Jayco's V-nosed Skylark travel trailer

In an effort to become more competitive at the retail level, meanwhile, Bontrager announced that Jayco is adopting a new pricing policy with regard to advertising by replacing its current MSRP pricing policy with a “Minimum Advertised Price” (MAP). The MAP format is viewed as a step forward as far as allowing Jayco dealers to be more aggressive in national pricing on the Internet by enabling them to advertise beneath MSRP, but only to pre-set or agreed-upon levels.

“The newly established Minimum Advertised Price will apply only to advertising outside your territory and it will incorporate reasonable and competitive margins,” Bontrager told representatives of the 150 dealerships in attendance. “We believe this policy change will help level the playing field for all dealers and it will allow you to be more competitive with dealers of other brands.”

The policy change clearly is a reaction to the growth of Internet marketing.

“Today,” said Bontrager, “ customers can get information about us and our products faster and more thoroughly than ever before. Simply stated, the Internet is the most powerful communication medium ever devised, and it is here to stay. Studies indicate that 70% of our customers get information about our products on the Internet, either from our website, from RV Forums, blogs or other forms of social networking. And many of the 70% end up shopping on the Internet.”

While many companies say they are ecologically sensitive, Bontrager told the assembled dealers, “Jayco decided to do more then say we’re green by having a third party certify us green. So we engaged TRA Certification to audit our manufacturing plants and products.

“The result is that Jayco is the first major RV manufacturer to have all products and all manufacturing plants certified green. Each Jayco built today has affixed to it a Green Certification label, which certifies state-of-the-art use of sustainable materials, energy efficient components, environmentally friendly production methods and reduction of waste.”

Bontrager also touched on several different topics:

On the company’s Twin Falls, Idaho, plant: “We are focused on efficiency and part of that includes our commitment to the success and growth of the Twin Falls facility. Our team in Twin Falls is doing an outstanding job in improving both the efficiency and the effectiveness of the operations. And we believe that we are approaching the point where we need to expand our ability to build more models and product lines in our Western facilities.

On the emerging revival of the Starcraft brand: Jayco is well under way in its effort to reactivate the Starcraft RV plant in Topeka, Ind., under the leadership of Jim Jacobs, the former corporate vice president of sales. The process started several months ago and on May 3, production began on Starcraft Autumn Ridge travel trailers in the reopened Topeka complex.

Travel Star travel trailers will follow later this year. “We have put in place separate sales, product development, engineering and production teams to help differentiate the Starcraft brand,” he said. “And our goal is to move all of the Starcraft production to Topeka within a reasonable, aggressive time frame.”

On Jayco’s recent reentry into the Class A arena: “ I want you to know that we are serious about the Class A motorhome business,” says Bontrager, adding that Jayco’s management believes that the recession has opened up “major opportunities” for a well-positioned company like Jayco with its Entegra Coach brand. Jayco, he added, recently hired former Jayco dealer Tadd Jenkins to head its national sales effort for Entegra.

“I want to emphasize to you that Entegra Coach will not be a distraction from a management viewpoint nor from a resources standpoint,” Bontrager assured the dealers. “We are excited about the Class A motorhome market in the next few years. This new venture will help Jayco enhance its leadership role in the industry.”

On dealers’ plights during the Great Recession: As a testimony to the durability of its dealer body, Bontrager said Jayco dealer losses during the recession were minimal. “Jayco is a survivor and thankfully you are too,” he said. “RVDA has reported to us that more than 175 dealerships have closed their doors since January 2008. We were fortunate to be able to count on one hand the number of Jayco dealers lost during that same time.

“The fact that you survived is testimony to the durability of the partnership we have with each other. There is simply no doubt that we are important to each other’s success.

And, finally, on the Jayco’s unchanging corporate ethic: “The Golden Rule is still a major part of Jayco today and is a vital part of our vision of being the most respected name in the RV industry,” said Bontrager, whose 42-year-old, family-held company has always made a point of projecting the Amish-Mennonite nature of it’s northern Indiana environs.

“This vision requires day-to-day decisions at Jayco which affect our relationships with our dealers and our customers. We have always believed that these relationships are fundamental to Jayco’s success. As you know, our dedication to customer service is rooted in this commitment to strong relationships. We have an ongoing dedication to customer satisfaction and we are proud of the fact that more than 160 of our dealers have a CSI score of 90% or better. Sixty-five of you have a score of 95% percent or better. That is truly a remarkable achievement.

This company is built on the concept of trust and service. I assure you that Jayco will continue to operate that way. And our goal will always be to engage in business partnerships with dealers who will operate the same way.”