RV shipments to retailers were reported at 10,300 units in the February survey of manufacturers compiled by the Recreation Vehicle Industry Association (RVIA), an increase of nearly 40% over last month but 63% less than this same month, one year ago.
Shipments of towables totaled 9,600 units, while motorized shipments totaled 700 units. Seasonally adjusted, February’s results represent an annualized total of more than 120,000 units.
While towable RVs improved in February, moving up 45% compared to shipments of these same products one month earlier, motorhome totals were the same. Conventional travel trailers represented 60.3% of this month’s total shipments as compared to 54.1% for all of last year.
In particular, February 2009 shipments, compared with February 2008 shipments were as follows:
- Travel trailer shipments totaled 6,200 units, down 58.1%.
- Fifth-wheel shipments totaled 2,400 units, down 64.7%.
- Folding camping trailer shipments totaled 900 units, down 55.0%.
- Truck camp shipments totaled 100 units, down 80%.
- Class A shipments totaled 300, down 83.3%.
- Class C shipments totaled 400 units, down 73.3%.
- Class B shipments were down 64.6%, with less than 100 units shipped.
Monaco Coach Corp. is arguing that it did not need to give hundreds of laid-off workers the required 60 days notice of plant closings in northern Indiana because it would have undermined its efforts to obtain financing or sell itself.
The Associated Press reported that Monaco, based in Coburg, Ore., announced last week that it had given termination notices to most of its remaining workers and that it may need to shut down permanently. Most of the recreational vehicle maker’s affected employees have been on furlough since mid-December.
Under the 1989 Worker Adjustment and Retraining Notification Act, companies are required to provide 60 days notice before making mass layoffs or plant closings.
Monaco said additional “unforeseen business circumstances precluded” its ability to give 60 days notice to workers. Among the reasons cited were the economy, record gasoline prices last year, the credit crunch, the declining stock market and rising unemployment.
Monaco said in a notice filed March 3 with the Indiana Department of Workforce Development, that 515 employees would be permanently discharged and more employees had received notice with termination dates. The notice affects nearly 400 workers at its R-Vision Inc. subsidiary in Warsaw, along it Bison and Roadmaster specialty trailer operations in Milford and Wakarusa, respectively.
“If a sale does not occur, or the requisite financing is not obtained, all of Monaco’s operations will be permanently shut down,” said the notice, signed by company Vice President Rich Kangail. “Consequently, all of Monaco’s approximately 2,200 employees would be terminated in several phases with no opportunity to bump into other positions.”
Monaco announced last July it was closing the majority of its Elkhart facilities, idling 1,400 workers. On March 5, it filed for bankruptcy, saying it owes between $100 million and $500 million and has assets in the same range.
Seffner, Fla.-based Lazydays RV Center Inc. dealer achieved 10.4% national market share in the class A diesel motor home category, according to Statistical Surveys Inc., an independent firm based in Grand Rapids, Mich., that tracks RV registrations.
Statistical Surveys recently announced retail sales performance for new RV registrations for calendar year 2008. During this time period, Lazydays gained national market share in each category that it represents; Class A diesel motorhome, Class A gas motorhome, Class C motorhome, travel trailer and fifth-wheel.
“I am very proud of our sales professionals and our entire company,” said CEO John Horton. “Having one out of every ten new diesel motorhomes in the United States sold by Lazydays is a result of the relationships we build with our customers and the industry leading products we offer them.
“We will continue growing our market share by maintaining our focus on making customers for life.”
A judge has ordered Coburg, Ore.-based Monaco Coach Corp. to pay a former business partner $1 million after it failed to make a payment that came due in connection with a lawsuit settlement agreement, according to a report in the Register-Guard, Eugene.
But with Monaco in Chapter 11 bankruptcy proceedings, it’s not clear when or if Outdoor Resorts of America will see the money.
Outdoor Resorts is owned by Robert Schoellhorn, CEO of Marathon Coach in Coburg. Outdoor Resorts sued Monaco in 2007 in Lane County Circuit Court, alleging it was owed more than $4 million for a share of the profits from RV resort projects that the two companies jointly developed and financed.
Though the case was filed in county court, U.S. District Judge Michael Hogan mediated the dispute. Last June, the two companies entered into a settlement agreement. Terms of the settlement were not publicly disclosed.
But in a suit filed Feb. 27 in U.S. District Court, Outdoor Resorts alleged that Monaco was required to make a $2 million payment on Jan. 2. Outdoor Resorts said it was told by Monaco that it didn’t know when or if it would make the payment.
In response, Monaco admitted that it failed to make the Jan. 2 payment.
Six days later, after no testimony or trial and on the same day that Monaco filed for bankruptcy, Hogan entered a $1 million judgment in favor of Outdoor Resorts. Hogan offered no opinion on his judgment, other than to say it was “based upon the record.” Hogan did not return a phone message Tuesday (March 10) seeking comment.
Schoellhorn said Monaco has been in default on its payment since the start of January, and despite talks mediated by Hogan, Monaco didn’t come up with the money.
“We didn’t know what to do about it,” he said. “I hoped that something would happen where they could pay it. Promises, promises, but it never happened.”
Schoellhorn said he hasn’t “the foggiest idea” if or when Monaco will make good on the judgment.
Monaco spokesman Craig Wanichek said company officials are aware of the judgment.
“It is a pre-petition judgment as far as we can tell,” he said, meaning it was entered before Monaco filed for bankruptcy. “that will be resolved with the other pre-petition creditors.”
According to the Register-Guard, Wanichek said he didn’t know what kind of priority the judgment would have in the bankruptcy case.
The dispute involves three resort properties that Monaco and Outdoor Resorts developed together. In its 2007 complaint, attorneys for Outdoor Resorts described the following version of events:
Between July 2000 and July 2001, Monaco helped to finance Outdoor Resorts’ projects in Indio, Calif.; Las Vegas, Nev.; and Naples, Fla.
In 2002, Outdoor Resorts sold the three properties to Monaco. As part of the agreement, Outdoor Resorts was to share in any profits generated by the Las Vegas and Indio properties, such as from rental income and sale of lots, the suit said. The Naples property was to be a sold to a third party and the proceeds were to be shared between Outdoor Resorts and Monaco.
At the same time, Monaco contracted with Outdoor Resorts to manage the Indio and Las Vegas resorts. Under the terms of stock agreements, Outdoor Resorts was entitled to 20% of the net profit from the sale of lots at Indio and Las Vegas. Outdoor Resorts also said it is entitled to 50 percent of the proceeds from the sale of the Naples property.
Monaco was entitled to deduct from the shared profits “all reasonable overhead costs” relating to resorts operations and management.
In July or August 2003, “much to the surprise” of Outdoor Resorts, Monaco hired away E. Randall Henderson, president of Outdoor Resorts, to manage the resorts and to oversee Monaco’s plans to expand its resort business.
In October 2003, Monaco terminated the management agreements with Outdoor Resorts for the Indio and Las Vegas properties and assumed responsibility for the resorts’ day-to-day operations.
In April 2006, Schoellhorn spoke with Kay Toolson, Monaco’s CEO. In that conversation, Toolson suggested that Monaco owed Outdoor Resorts between $4 million and $6 million in shared profits as spelled out in the stock agreements.
But in a January 2007 letter, Monaco said it owed Outdoor Resorts just $1.5 million. Outdoor Resorts rejected that offer because it was lower than Monaco’s earlier statements and it didn’t jibe with Outdoor Resorts own estimates, the lawsuit says.
Fleetwood Enterprises Inc., the iconic Riverside, Calif.-based maker of recreational vehicles and manufactured housing that has ferried road-trippers and housed owners for 59 years, is continuing day-to-day operations after filing for Chapter 11 bankruptcy Tuesday (March 10).
As reported by the Press Enterprise, Riverside, part of its business will be shuttering its travel trailer division, affecting 667 employees nationwide including 12 at the company’s Rialto, Calif., service center. Other closures include plants in Pendleton and La Grande, Ore., impacting 415 workers, along with a facility in Edgerton, Ohio, that employed 175 employees people.
Fleetwood said that all current orders would be complete at the plants before they were closed down.
In addition, the company laid off another 65 Inland workers in corporate positions Monday. More than 600 workers remain in Riverside.
The company, which will now be concentrating on its motorhome and manufactured housing markets, still has 15 factories and 3,000 employees nationwide. That’s a far cry from its heyday in 1998 when 21,000 people in 62 factories built RVs, trailers and homes.
A Fortune 500 company for 28 years, the company boosted Riverside’s business image and made the Inland region a destination for other RV makers.
Now, bruised and battered by failed attempts to expand, ballooning debt and an economy in tatters, Fleetwood’s stock traded for a penny per share on Tuesday. The company hasn’t made an annual profit since April 2000.
Since then there has been a flurry of management changes, while the company winnowed its losses from $284 million to $1 million by 2008 after shuttering factories and cutting costs. By then, though, Fleetwood was faced with the country’s deep financial slump.
Buyers couldn’t get bank loans to purchase an RV and dealers couldn’t get financing to order new models from manufacturers.
Plus declining property values meant many buyers could no longer draw on their home’s value and use the cash to buy an RV.
“What we are seeing in the RV industry at this time I don’t believe any dealer or manufacturer anticipated,” said Mellanie Ingle, spokeswoman for Giant RV – one of the largest RV dealerships in California with locations in Colton, Corona, Montclair, Murrieta, Westminster and Indio. “Giant RV is confident Fleetwood will emerge from the Chapter 11 filing. Fleetwood is the foundation of the RV industry.”
The Press Enterprise reported that the company was delisted from the New York Stock Exchange in January. It dropped from 7 cents per share to a penny per share in over-the-counter trading on Tuesday.
There will be 609 employees in Riverside – 200 in corporate headquarters, 93 in its manufactured housing operation and 316 building motor homes – down from a peak of a few thousand in the late 1990s.
In 1998, the company was one of the largest makers of motorhomes and travel trailers, with about a 26.1% market share in RVs and 21.6% share of the travel trailer market.
In 2007, it accounted for just 7.6% of the RV market and 5.9% of all travel trailers sold, according to the company’s most recent annual report.
Joe Hixson, a spokesman for Fleetwood, said there are no immediate plans for more layoffs.
The company is seeking bank funding to keep operating, but “we have what we believe to be sufficient cash for the immediate term,” Hixson said.
Monaco Coach Corp. filed for bankruptcy this month. Perris-based National RV sought chapter 11 protection in late 2007. Weekend Warrior Trailers of Perris closed in September last year.
Christian Eddleman, an analyst with Argus Research, said that Fleetwood’s move was just one more in an industry in serious contraction. “It’s just a nightmare scenario for the RV industry that’s not getting better,” he said.
Eddleman has advised stockholders to sell since the last quarter of 2007. “It’s likely that the shareholders are wiped out,” he said.
As for buyers for Fleetwood’s RV and manufactured housing divisions, the marketplace for struggling RV-related companies doesn’t include a lot of suitors.
“It would have to be someone with deep pockets,” Eddleman said.
Thor Industries Inc., Fleetwood’s competitor with more cash on hand and less debt, could be a possible candidate, he said. He also pointed to Warren Buffett’s Berkshire Hathaway Inc., which bought Indiana-based RV company Forest River Inc. in July 2005. Forest River bought Coachmen Industries Inc. in January.
According to the Press Enterprise, Hixson would only say Fleetwood is “moving with a sense of urgency with discussions with our buyers,” without naming those interested.
Several employees at Fleetwood’s Riverside factory where motorhomes are painted say they’re not discouraged by Tuesday’s news.
“You’re never prepared for this kind of stuff, but you see it happening on the street all the time,” said Ralph Montes, a 63-year-old maintenance supervisor who has been with Fleetwood for 21 years. “We might have some bumps and bruises, but we’ll come out of this OK.”
Montes and Andy Villegas, who works with him, said as of noon Tuesday that no employees have been told their jobs are in jeopardy, and they praised Fleetwood’s past employment practices.
“It’s a great company. We’re going to come out of this whole,” said Villegas, 49, who has been with Fleetwood since 1980. “It has good people and good managers. That’s why I’ve been here so long.”
Villegas said he accepts that the company is struggling because people are less likely to buy luxury items during a recession.
But there were weak sales due to the early 1990s recession, and the company survived that, he said.
“The airline companies had their problems, and they came out of it,” he said. “They’re still flying.”
CT Coachworks LLC, a small builder in Riverside, Calif., has introduced the Siena Suite, a 35-foot Class A motorhome with an 8-foot by 18-foot rooftop patio covered by a manual A&E awning. “It takes only three to four minutes to set up and is a good place to get above the crowds,” said sales representative Bruce Mullen. Built on 22,000-pound Workhorse W-22 gas-powered chassis, the double-slide floorplan is one of three in the Siena lineup. Access to the patio, equipped with a removable indoor-outdoor carpet and water, cable and 110-volt electrical outlets, is via a 33-pound aluminum ladder that stores on top of the 14-foot-long living room slideout. Patio rails fold down in the travel mode. Amenities in the vacuum-bonded fiberglass-and-aluminum Siena Suite include residential appliances, solid surface countertops and stainless steel sinks. MSRP: $131,232