Gaeddert: Government Failings Hurt RV Industry

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November 15, 2013 by   2 Comments

Doug Gaeddert

Editor’s Note: The following is a column authored by Recreation Vehicle Industry Association (RVIA) Chairman Doug Gaeddert,  a general manager for Forest River Inc., which appeared in the latest edition of RVIA Today sounding off on the effects of the government’s recent shutdown on the economy and the RV industry.

This is the fifth piece I’ve written for RVIA Today, and I’m going to stray a little from the style and content of the previous articles. When I wrote the first one, I thought I didn’t have the time to do it. Now it’s almost become a therapeutic break from the normal schedule.

When the time comes to put something together, I set aside an hour or two (longer if I’m typing!) and take time to reflect on what has been, is, and what I think is going to happen in the RV industry. As I sit here tonight, it’s Oct. 24, so by the time you read this, I’ll either be right or wrong on some things and it will be too early to tell on others.

Our industry is obviously on a roll as demonstrated by both the shipment and retail registration increases, as well as the financial performance demonstrated by those companies that are publically traded. The industry just enjoyed the best September for RV wholesale shipments in six years. I predict tonight that October, November and December will follow suit.

The recent Open House events in Elkhart enjoyed increased attendance and sales results for the fifth consecutive year! The fast approaching National RV Trade Show has solidly increased the amount of space booked by the OEMs and tremendous results are anticipated to cap off the year. In the last couple of days, oil prices have continued to decline, automotive numbers have been excellent, and the Dow and the S&P indexes have been at or near record highs. Our overall industry is in excellent health right now with very few exceptions.

If you glanced at the title of my column, you probably have an idea of where I’m going with the article. The “kick the can” reference in the title is pretty self-explanatory when applying it to our elected representatives and their inability to jointly acknowledge and address our growing and unsustainable budgetary and spending issues. Instead, they continually “kick the can” down the road. The “harmful to your health” part I’ll get to at the end.

I’ve said before that due to the uniqueness of our industry in the areas of consumer popularity, healthy industry consolidation, solid credit availability, improving camping options, and favorable demographics in particular, “even the federal government can’t screw this up!” I hold 99% to that statement, but I want to add “totally” before “screw this up.” The recent temporary suspension of various government activities (including national parks, etc…) coupled with the perceived threat of default on our nation’s debt had an impact on our industry, proving that the government can “partially” screw up the RV industry. Kudos to the states and people that came up with creative ways to operate anyway! I had several conversations with some of North America’s top retailers the week after the federal government began functioning “normally” again, and each experienced a drop in traffic during the shutdown and a hesitation on the part of some prospective buyers who wanted to wait and see what happened first. A large Canadian dealer also said “that when the U.S. has a cold, Canada coughs!” It can impact our industry partners to the North somewhat as well. Fortunately, it’s back to business as usual for the industry this week as the sun, the moon, and the stars are all lined up once again and the financial markets are reflecting agreement.

I want to make it clear that I’m not singling out a political party, I’m just talking about the impact of bad math and, I guess, bad manners. We all have to compromise in some way, shape or form every day in our businesses (sometimes with each other). We can’t often get away saying “my annual deficit is going down” (we’ll be about 17 trillion – that’s with a “t” – in the hole as a nation at the end of December). When we as companies don’t have a viable plan to balance our “budgets,” the flooring company repurchases inventory and shuts you down if you’re a dealer, or the bank takes possession and liquidates you or sells your assets if you’re an OEM or a supplier. I guess that would be kind of like term limits?

Speaking of which, I would probably be prone to vote, regardless of party affiliation, for every candidate who agrees up front in the next elections to help pass term limits in both houses. How about a six-year max on either side? Not only would it help straighten out the math, manners, and a host of other things, it would be good for the economy including the RV industry. Limited term politicians would be far more likely to make decisions beneficial for the country as opposed to decisions beneficial to their next election! I encourage each of you to put pressure on our elected representatives to get the framework for a long term grand bargain in place ASAP. And, hammer them on term limits too. We don’t need two more politically created, unnecessary crises in January and February to start the year. The longer we go without a viable plan, the bigger the numbers get that we have to overcome and the longer the uncertainty lingers that delays investment into jobs, facilities, etc. This is holding back an economy that is anxious to really run. We’re doing pretty darn good right now; imagine what it would be like if the foot was off of the brake!

The only reason I’m doing a “semi-rant” in an industry publication is that if we don’t resolve “governing by crisis” and put our financial affairs in order, it will eventually and negatively affect our industry. We’re “bullet resistant” as an industry, not “bullet proof.” Regardless of what happens on the spending/debt limit issues in January and February (within reason), our industry is going to continue to healthily grow. I just don’t want to see us get forced to “settle for a field goal.

”Oh yeah, back to the part of the title about being harmful to your health. When I was a kid, my siblings and I used to play kick the can with the other kids in our back yard. We used an old Crisco can that had been kicked so many times that the crimped ring over the jagged metal edge finally came off in the dark, and I happened to be the next one that kicked it! The jagged edge split my foot wide open (my brothers and sister and I never wore shoes in the summer). I needed about 12 stitches from a doctor that I was already on a first name basis with from previous emergency room visits. I learned at the young age of nine that kicking the same old can too many times can be harmful to your health. I hope the adults we elected get around to it pretty soon, as they’ve been kicking the same old can for a long time already. I’m pretty sure the crimped ring is getting loose!

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2 Responses to “Gaeddert: Government Failings Hurt RV Industry”

  1. Michael Kumbier on November 15th, 2013 2:41 pm

    Doug, well stated! I could not agree more with you on term limits for all politicians. We must start pushing now, before the next election, for term limits and a balanced budget amendment. Our government should be no different than any business out there. Politicians cannot continue to spend beyond our income. We must vote for what is right for our country without regard for political party.

  2. Michael W. Nebel on November 17th, 2013 10:57 am

    Good Job!!