Canadian Dealer Laments Supply Chain Problems

May 26, 2009 by · Leave a Comment 

Canada’s largest recreational vehicle dealer may have missed out on becoming an RV manufacturer last week, but British Columbia-based Arbutus RV and Marine Sales continues to look at options to gain more control over the supply chain, according to the Times Colonist, Victoria, B.C.

Arbutus lost out on a chance to pick up a La Grande, Ore., travel trailer manufacturing plant being sold by Fleetwood Enterprises Inc., which filed for bankruptcy protection in March.

Arbutus originally bid $1.8 million for the plant, but Northwood Manufacturing, also of La Grande, came up with a competing bid and forced a courtroom auction in California. Northwood won out with a bid of $2.05 million.

“Another manufacturer just down the street didn’t want to see us come in and be a competitor,” said Arbutus owner Craig Little. “I guess somebody else figured they needed it more than we did.”

Northwood, which also makes travel trailers, has said it intends to continue using the plant for that purpose.

According to court documents, Fleetwood will continue to pursue buyers for its major businesses.

Little said his company bid on the plant as a means of maintaining a consistent supply of product and to have some quality control over the products it sells.

That’s becoming more important as the industry feels the pinch of tough economic times in the U.S.

“With the U.S. economy being so challenged it has been a tough time for RV manufacturers with that soft market,” said Little, who was quick to note his company is having a record year.

But that isn’t the case for a number of RV manufacturers that have been forced to take drastic action.

Industry leaders Fleetwood and Monaco Coach Corp. have both filed for bankruptcy protection, while earlier this year, Winnebago Industries reported a loss of $10.4 million in its second quarter — the third quarterly loss in a row.

Little said he would have loved to have some control of the manufacturing side of the business, but he is not concerned about supply. Indeed, he has been meeting with other manufacturers to discuss partnerships.

“We’re in discussions to either get involved on the manufacturing side or be in a position, because of the volume we do, to being hands-on in the product mix to ensure the quality is there for us,” he said, adding there may be a chance for Arbutus to dictate some private labelling of products for its marketplace.

“Whether we partner with manufacturers, it will be a closer-than-ever relationship that we move forward with, and we look forward to added value we can share with our client base,” he said.

Little said his 21-year-old company continues to thrive through tough economic times because of its track record and Vancouver Island’s unique makeup.

“The Island economy has a lot of retired money, so that’s not quite as susceptible to some of the challenges out there, and our banking system has been great,” he said of record low interest rates that make borrowing appealing.

But the big reason RV sales have remained strong, he said, is it remains an inexpensive way to get away.

“It’s still the most cost-effective holidaying you can do,” he said.

“You can pick anywhere you live on Vancouver Island and I’ll bet within five to 15 minutes you can be somewhere RVing.”

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