Power Breakfast: Round Table Hits Hot Issues
At the RV Industry Power Breakfast Thursday (May 8), some of the top leaders in the RV industry – both manufacturers and suppliers – took the stage at the RV/MH Hall of Fame’s Northern Indiana Event Center in Elkhart, Ind., for a round table discussion.
Those leaders included RVIA Chairman Doug Gaeddert, a general manager at Forest River Inc.; Bob Martin, president and CEO of Thor Industries Inc.; Derald Bontrager, president and CEO of Jayco Inc.; Mel Adams, president and CEO of Airxcel Inc.; Jason Lippert, CEO of Drew Industries Inc.; and Todd Cleveland, president and CEO of Patrick Industries Inc.
The power-packed group, representing some of the largest RV manufacturers and suppliers in North America, weighed in on topics ranging from the industry’s future to the impact of Obamacare, from how the September Open House and the RVIA National Trade Show relate to each other, from the transportation backlogs in the RV industry to the drop in unemployment in the Elkhart area.
Looking at the future, all were optimistic, and some of them pointed to the demographics Jim Rogers, chairman and CEO of Kampgrounds of America Inc. (KOA), identified earlier in the program as positives for the campground industry.
As Gaeddert put it, “Just like Jim Rogers said, we’re in a sweet spot in the industry.”
Martin said those same statistics — millions of campers who don’t yet own RVs, abundant gasoline supply projections, a societal need to get outdoors and connect — “are something we talk about every day. We have bright days ahead of us because of the demographic. It’s a great future for the RV industry in general,” Martin explained.
Bontrager said that even during the recession, “The customers never left us. They sat on the sidelines,” and he expects continued growth.
Cleveland agreed, saying, “our future really depends on tapping that piece that they talked about earlier, those individuals who haven’t been part of the RV experience, the RV lifestyle.”
When discussing the Affordable Care Act, the biggest thing in common between the company leaders was that nobody knows the long-term impact. The one thing Bontrager likes is that “it’s putting responsibility for health care back onto the individual.”
Adams summed up his views with a quote attributed to Henry Ford: “Any man that thinks that he can be prosperous and happy allowing the government to take care of him need only look at the American Indian.”
Lippert, who balked at trying to follow Adams’ quote and the ensuing laughter, suggested, “we can’t rely on the government to take care of this problem. What we need to do is take it upon ourselves, like we do with every other problem, and try to address it.”
Taking a look at the September Open House phenomenon and the RVIA’s show in Louisville, the group all agreed that both events are important for manufacturers. “We’re doing what the dealers are asking us to do,” said Martin, reiterating what he’s said previously regarding the whole trade show issue.
Gaeddert said the two events have settled in and “they complement each other extremely well. The demand is there for both events.”
From a supplier side, Cleveland said, “I think the Louisville show is absolutely a necessity.” During the Open House when OEMs are busy selling products, “they’re not completely interested in seeing Jason, myself and Mel, and talk about business.”
Bontrager, Martin and Gaeddert all addressed the struggles RV transporters are experiencing. “Dealers are screaming for product,” Martin said. “There aren’t enough drivers. I think RVIA and some of the meetings we’ve had recently are a good step forward.”
Bontrager said the cycles of the industry throughout the year aren’t good for driver retention. “We’ve got to figure out how to smooth it out over the rest of the year,” he said.
Gaeddert said that getting transport companies together with RVIA may lead to efforts to get some legislative hurdles out of the way that “would be a big help.”
The final issue the group talked about was how to continue growth when the manufacturers and suppliers are having a hard time filling jobs, not only in the Elkhart area, but in Airxcel’s case, the Wichita, Kan., area.
Gaeddert noted, “We have gone from a 20% rate of unemployment down to 5.8%. That’s like dropping 150 pounds in a short period of time.” While he has publicly voiced frustration with the difficulty of filling more jobs, he also put it into perspective. “We’re down to the two-yard line. Yardage it tough, but we’re all going to work together. You look back, there’s 70 to 80 years of culture with this area, this workforce and these people with the RV industry. It’s pretty tough to replicate that and move out, especially with a supplier base here.”
Martin agreed it would be tough to move, and said, “it comes back on us as employers to create a good work environment.”
Lippert said business has gotten more complex over the last 20 years, and the work place needs to be improved for employees to help reduce turnover. “We can all become a lot more efficient and struggle with this issue a lot less if we can figure that out,” he said, adding that more companies are focusing on lean manufacturing and increasing automation.
Cleveland, though, said companies are hesitant to make significant capital expenditures despite the industry’s growth. “A lot of our political leaders aren’t giving us that confidence that we’re going slow and steady,” he explained.
Adams said those expenditures are part of the industry’s long-term future. “We know we get a better result if we spend the dollars to make sure it’s right every time we build a piece of equipment.”
In the long run, Adams said, “we’re ingrained in the psyche of the American consumer and we roll with the economy. It’s not a case that we go out of style. We are in style every day. We make great products. They serve a useful purpose, providing freedom for people, and making it so they can get out and do the things to make life more beautiful.”