A new federal government contract recently awarded to Frontier RV could mean big increases in production and employment levels for the Longview-based company, according to News-Journal.com, Longview, Texas.
“We have about 75 employees now, and that could easily double with this contract,” said Johnny Hernandez, president of the 7-year-old Longview RV manufacturing firm. Frontier topped a field of 16 companies vying for part of the federal contract and was one of four firms awarded portions of the bid, he said.
Hernandez said the initial phase of the contract is worth $2.165 million in revenues to Frontier with the potential during the five-year life of the contract being as much as $176.67 million.
“This contract comes at a time when our industry is in distress,” Hernandez said. “Discretionary spending has really slowed, and our sales have slowed.”
Hernandez said orders for traditional recreational vehicle dealer sales have resulted in production levels at Frontier of about two or three units a day since November. That is about half the normal five to six units a day the plant would expect to produce that time of year, he said.
“Financing is still really tight,” for retailers and consumers to borrow money for products, he said. According to the Recreation Vehicle Industry Association (RVIA), shipments of towable RV trailers were down 71.9% in December compared with December 2007.
Meanwhile, towable retail sales totaled 5,465 compared to 9,095, a 39.9% decrease” in December, said Thomas Walworth, president of Statitsical Surveys Inc., Grand Rapids, Mich.
“Beginning in May (2008), dealers began aggressively lowering new unit inventories,” Walworth said. That trend continued through the end of the year as the national economic recession hit the industry hard, prompting manufacturers to scale back, he said.
The contract awarded to Frontier is one of four national contracts by the U.S. Department of Homeland Security’s Federal Emergency Management Agency (FEMA). It is for the production of as many as 1,500 travel trailers a year for five years. Those units could provide temporary housing in emergency situations.
Hernandez said the contract, for a minimum of 100 units and a maximum of 1,500, could significantly increase production and Frontier’s payroll.
To win the contract, the company had to meet a number of recently implemented standards for temporary housing intended for emergency use, Hernandez said.
“We had to eliminate the use of formaldehyde-emitting materials, maintain continuous air exchange and have air-conditioning systems that meet HUD (Department of Housing and Urban Development) standards,” he said. Each unit also must meet handicapped accessibility standards, he said.
Hernandez traveled to Washington, D.C., in October to meet with federal officials about the new standards.
In March, officials from the Department of Homeland Security, the Department of Defense and FEMA toured the Longview plant.
“On April 7, they announced the five-year contract for up to 6,000 units a year divided among the four makers,” Hernandez said. Frontier has already received a firm contract to make the initial 125 trailers, he said.
This past week, Frontier shipped its prototype model to Washington for viewing by congressional officials, and Hernandez was to appear at a hearing on the quality standards of the new units.
“The units we’re providing are ones that we designed and came up with the materials to meet their requirements,” Hernandez said. “They’re a little nicer than what FEMA has used in the past.”
Each of the 34-foot units would have a retail price of about $28,000 if sold on the open market, he said, because of the special features federal officials are requiring, he said.
Those features include having a 5-foot turning radius for wheelchairs, cabinet and sink fronts that can be removed to make them handicapped accessible and shelving and appliances that are handicapped accessible, he said.
The first of those units are scheduled to come off the assembly line about June 10.
Once completed, each unit has to be tested by an outside independent testing firm, Hernandez said. Toxicology tests for volatile organic compounds, particulate matter and formaldehyde will help ensure the air inside the units meet federal guidelines, he said.
The units produced in Longview will be shipped to a staging area in Selma, Ala., where they will await the next hurricane, tornado, flood or other disaster responsible for destroying homes and sparking a need for temporary housing. Hernandez said he hopes FEMA will establish a similar staging, or storage area for the temporary housing, much closer to East Texas.
“We’re making a pitch for them to do a staging area here in Longview,” he said. With disasters such as Hurricane Ike that destroyed hundreds of homes in the Galveston area, having units available closer to the Texas Gulf Coast makes sense, he said.
The three other firms awarded FEMA contracts under the contract are in Indiana and Georgia.
They are TL Industries, Harbor Homes and D&D Disaster Services, according to a statement released by FEMA.