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Thor Buyout Confirms Ind. Officials’ Optimism
Posted By Sherman Goldenberg On June 4, 2013 @ 12:31 pm In Breaking News,News In Focus | No Comments
Wakarusa, Ind., Town Manager Jeff Troxel and others had sounded curiously upbeat over the past two weeks that a company would step up and acquire the 150-acre campus that formerly housed motorhome operations for Navistar RV.
The property was placed on the market when Allied Specialty Vehicles Inc. (ASV), parent to motorhome builder Fleetwood RV Inc. and a subsidiary of American Industrial Partners (AIP), purchased rights to Navistar Inc.’s RV assets on May 16. In the wake of the acquisition news, ASV announced that it would be relocating operations from Wakarusa to Fleetwood’s headquarters in Decatur, Ind., impacting some 520 workers involved in the production of Holiday Rambler and Monaco motorhomes.
Now Troxel’s confidence appears to have been well founded with Monday’s (June 3) announcement that Elkhart-based Thor Industries Inc. was purchasing the facility from ASV with initial plans to move at least part of the company’s Thor Motor Coach into the plant as well as paint operations to be overseen by Thor’s Goshen, Ind.-based Keystone RV Co. division.
“This purchase marks an important step forward in the growth of our RV business,” stated Thor President and COO Bob Martin in a press release, noting that the facilities comprise nearly 1 million square feet of total production space. “With this new production complex, we will be better positioned to achieve our long-term strategic growth initiatives. Even more compelling, this purchase will allow us to expand capacity faster and at a lower cost than other options. We are excited about the future prospects of reinvigorating the Wakarusa facilities.”
John Draheim, president and CEO of Fleetwood RV, noted that the company’s plan to consolidate motorhome production hinged on logistics.
“Our plan all along wasn’t necessarily to sell to Thor,” he said, noting that Fleetwood has around 1,000 employees in Decatur. “But our plan all along was that we didn’t need the production capacity. We didn’t want to run two buildings. We felt that the Decatur campus has plenty of upside and we have a work force there that is a known entity to us. And we also have a management team in place that is also a known entity to us. So, it made sense to get the brands relocated to the Decatur campus, and put the facility on the market.”
A key factor fueling hopes that a buyer would step forward was the overall health of the RV industry, as growing sales have pushed companies into expansion mode.
“We believe through our studies that the RV business is in a growth mode, and that there are capacity constraints, especially on the trailer side of the business,” Draheim said.
Wakarusa also represented a prime manufacturing location, offering room to expand along with 35 paint booths designed specifically for recreational vehicles.
“This is a massive manufacturing complex in Wakarusa, and the real sweet spot of that whole production facility is the paint facility,” Draheim said. “A lot of the manufacturers are going outside and having third parties do their paint work, which is expensive. It increases your working capital because you have excess WIP (work in process) in your operations. So, we felt that somebody out there would see the attraction because of the paint facility and also because we could expedite the sale because we’re a cash buyer.
“You know, we didn’t have to sell it fast, but we could. And AIP has made several other acquisitions where we’ve gone in and acquired a company, relocated the product to one of our facilities and then sold the real estate. So, they have a good track record of being able to do that.”
Draheim added that ASV will retain a very limited presence in Elkhart County, running towable operations out of a former Roadmaster chassis plant in Elkhart while also maintaining some offices at an unstated location in Wakarusa for engineering and product development.
“We will operate those offices for an extended period of time – for months if not years,” he said. “Employees include Monaco people plus some additional hires that have occurred since the acquisition of Navistar RV.”
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