Elkhart, Ind.-based Forest River Inc. has completed the sale of 14-year-old Hart Housing Group, a modular home builder in Wakarusa, Ind., to Maryville, Tenn.-based Clayton Homes, Forest River President and CEO Pete Liegl confirms.
The transaction between Clayton and Forest River, both units of Berkshire Hathaway Inc., was quietly finalized nearly two months ago but never reported in the press.
The sale of Hart, originally purchased by Forest River about eight years ago from RV industry entrepreneur Dave Hoefer, includes Hart Housing’s three-building complex on the south side of Wakarusa where 190 to 210 workers had typically been employed.
Although Clayton Homes spokesmen were unavailable for comment, RVBUSINESS.com has learned that the Wakarusa plant is now being managed by personnel out of Clayton’s Middlebury operation, one of the Tennessee company’s 35 plants.
“The sale entails them taking over Hart Housing and everything involved with Hart Housing,” Liegl told RVBUSINESS.com. “And, specifically, we got out of it because that’s (manufactured housing) not our core business. It is Clayton’s core business, and they’ll do better with it than what we have.
“We never did what we thought we could do or would do (in the housing sector), and we just decided that Clayton could do a much better job and it would fit in with their marketing and manufacturing locations,” said Liegl, who predicts that Forest River will post revenues this year of close to $3 billion. “So, obviously, Clayton is a sister company and it’s better for Berkshire Hathaway if they handle it.”
That said, Liegl emphasized that this was not a distress sale.
“In the last six or eight months, we were doing quite well with it, particularly for the units that we were building for up in North Dakota (where an oil boom is underway),” added Liegl. “But, again, how long is that going to last? So, I can’t look at one little item here and say this is good enough to keep it. I mean, we have not in the past accomplished what we wanted to accomplish in housing. And that’s Clayton’s forte. And, in fact, they’re hiring as we probably wouldn’t be right now.”
First acquired by Warren Buffett and Berkshire Hathaway in 2003, Clayton’s 12,000 employees build, sell, finance, lease and insure manufactured and modular homes — as well as relocatable commercial and educational buildings — under the Schult, Karsten, Crest, Marlette, Golden West, SEhomes, Norris, Giles, Cavalier, Bucaneer and Clayton Building Solutions brand.
Shasta RV, a division of Elkhart, Ind.-based Forest River Inc., announced the launch of its all-new Phoenix mid-profile and “super-mid profile” fifth-wheels during the recently completed Elkhart County RV Open House. According to a press release, Shasta is securing a 55,000 square-foot production facility to meet demand for the product and anticipates the hiring of 75 new employees by year’s end.
“The Phoenix is a uniquely constructed, value-added-fifth wheel,” said Product Manager Chadd Johnson, previously of CrossRoads RV who is overseeing sales in Canada for the Phoenix brand. “We have instilled a creative thinking process in our team, and have invested the extra effort to be inventive and attentive to details.”
Johnson noted that Daric Fail will handle sales in the southern U.S. while Kris Lash covers the northwestern states. The Phoenix will also be on display during this week’s the Recreation Vehicle Dealer Association’s (RVDA) Convention/Expo in Las Vegas.
“The response to the product at the Open House was unbelievable,” reported Mark Lucas, president of Shasta RV. “We had dealers standing three and four deep just to get inside. Dealers made positive comments and complimented the overall unique look and feel, as well as the commitment to our value added design and construction method.”
The Phoenix utilizes a mechanically-fastened, 16-inch on center, six-sided aluminum cage for its construction. Tongue-and-groove plywood covers the floor structure, while a rolled-edge roof caps off the modern colored, hung fiberglass exterior. “This product will compete directly with the current mid-profile products on the market, but we’ve integrated features and eye appeal normally found at much higher price points,” said Lucas.
Standard features include wide-body construction, unique wall treatments, leather-style furniture and a “designer-inspired” bathroom. Phoenix fifth-wheels will range from 27- to 34-feet in length with MSRP’s starting around $30,000.
“Most people inherently want to feel they have something unique and special. We deliver that wish, and then some, without asking them to pay $60,000 to do so,” said Johnson. “Most products in the mid-profile segment all look the same and are all built the same. We instead, invest time and expense in the best possible construction, and pair that with a contemporary interior and class-leading exterior design. This Phoenix fifth-wheel is sure to have a broad appeal.”
For more information, available territories or details on the Phoenix, call (574) 825-7178.
Driving down the Indiana Toll Road and passing the RV/MH Hall of Fame last week a person would have had to wonder just what’s going on.
As reported by the South Bend Tribune, hundreds of recreational vehicles were on display in the field adjacent to the hall, parking lots were busy, hotel rooms were full and lots of people were roaming the grounds.
Thousands of RV dealers from all 50 states, Canada and even China were in town checking out the 2013 model offerings of most major RV makers in Elkhart County.
Thor industries Inc.’s Open House was held at the Hall of Fame. But most of the other 11 shows were just a short distance away on County Road 6.
For dealers such as Bruno Tombari Jr. from Bella Vista RV Centre in Hawkestone, Ontario, it was quite an opportunity.
“We set our tone for our entire season pretty much at this show,” said Tombari, as he toured the grounds at the hall with his father, Bruno Sr., checking out all the latest offerings from Thor’s brands including Keystone, CrossRoads, Heartland, Dutchmen, Breckenridge and Thor Motor Homes.
“Thor is one of the largest lines we carry,” Tombari Jr. said
The South Bend Tribune reported that Thor’s President and COO Bob Martin said at least 3,000 dealers were at the Thor Open House alone from Tuesday through Thursday. But many dealers such as Tombari got in their cars and visited the other shows.
“We go down to Forest River and also to Fleetwood and Newmar as we represent those lines also,” Tombari said.
What Tombari likes most of all is how much he can get accomplished with so many shows going on just a few miles from each other.
“It allows you in a few days to do something that might take you four to five visits throughout a year,” he said. “Now you can do it in a three-day segment.”
In the business world, this is really a win, win, win with the dealers, the manufacturers and the town of Elkhart all reaping financial rewards.
It all started five years ago, with Forest River Inc. holding an open house for dealers, said Mark Bowersox, executive director of the Recreation Vehicle Indiana Council (RVIC). Thor got on board three years ago.
“With the two big players in the industry, all of the other manufacturers jumped on board,” Bowersox said.
The end result is a show that has doubled its numbers the past few years, says Diana Lawson, executive director of the Elkhart County Convention & Visitors Bureau.
Bowersox said one of the keys is the casual atmosphere of the shows.
Nowhere was the pulse of the industry more evident on Tuesday (Sept. 18), the first full day of Elkhart County’s Annual RV Open House Week, than Forest River Inc.’s teeming Dynamax facility on the north side of Elkhart, Ind., where lunch was being served to thousands of dealer personnel as members of the company’s senior management greeted the U.S. and Canadian retailers.
“So far, it’s noon of the first day and it’s packed in here,” quipped Forest River President & CEO Pete Liegl, drinking coffee amid the clatter inside the expansive Dynamax plant in which motorhomes are displayed on elevated lifts. “We’ve got a lot of people coming in and, so far, the enthusiasm’s good and the ordering’s good.”
And why shouldn’t there be plenty of enthusiasm around Forest River’s Open House display and northern Indiana’s RV-building hub of Elkhart in general, considering that business is “extremely good right now” and has been all year for RVs and the other markets in which Forest River has a hand, including marine, commercial bus, cargo trailer and manufactured housing?
Pointing out that last week’s Hershey Show in Pennsylvania was a “barn burner” of an event at which Elkhart-based Forest River did “phenomenally well” in selling “virtually hundreds of units,” Liegl anticipates that Forest River, a Berkshire Hathaway subsidiary, will exceed $3 billion in annual gross revenues for the first time in calendar 2012.
Even the first rain to fall in five years on the Open House didn’t seem to dampen spirits around Forest River’s County Road 6 complex where more than 500 towable and motorized recreational vehicles are on display.
“This industry’s doing extremely well – extremely well, and marine’s come back strong, especially in the pontoon area which we’re in,” he added. “Cargo trailers are doing good. Buses are doing extremely well, very profitable with big back orders. RVs are doing good, motorized and towable. You know, there is no problem here. Last year was one of our best years ever, and this year is turning out to be even better. “
Liegl’s comments are particularly interesting, considering this is an election year in which the uncertainties of a presidential campaign are often said to cast doubt and indecision among consumers.
“I know we’re doing OK,” said Liegl, noting that Forest River only saw a serious recessionary impact in part of 2009. “A lot of other people in the area are doing well. I don’t think it’s as bad as people make it out to be, but it’s not as good as it could be, either.”
Meanwhile, Don Gunden, a divisional general manager and another outspoken member of Forest River’s management team, also sees good things in the products he handles such as the Rockwood, Flagstaff, Palomino, Sabre and Columbus towable brands.
“Business has been good,” said Gunden. “I mean, I look at my numbers and consistently, month over month, we’re better than we were a year ago and better than two years ago. So, its been consistently better in the towable brands I handle, which top out in price at about $55,000 retail for a Columbus (fifth-wheel).”
And Gunden is also anticipating another solid growth year in 2013, although he’s clearly keeping an eye on the nation’s political landscape.
“Yes, my outlook is tempered because we have elections that could have consequences,” he told RVBUSINESS.com. “You know, the only (negative political) thing that I see, honestly as the industry progresses and grows today is that we’re leaving a segment behind. The population that everybody professes to be trying to bolster is the segment that keeps getting hurt — the first-time buyer. Lower income people are being hammered worse than anybody else. And if we don’t change things politically, they’ll just get worse. We’re not doing anything to enhance their life because we’re taking opportunity away from them.”
Priority One Financial Services, Inc., a division of Forest River Inc., has expanded its credit card program for RV and cargo trailer dealers to the marine industry. According to a press release, the Forest River Credit Card can be used on boat engines, parts, accessories, service repair bills and winterization.
Consumers can now enroll for the credit card to receive multiple financing options on marine products and services along with exclusive offers while also experiencing quick and easy approval processing, low monthly payments and no annual fees.
As with RV and trailer dealers, participating marine dealers will receive individual training that will help to maximize program benefits, an EZ transaction guide with step-by-step instructions for processing applications, sales through the online system and marketing assistance.
“The Forest River Credit Card program really took off for towable products, so it’s natural to move into assisting Forest River marine dealers as well,” said Jared Zimlin, Priority One Business Development Director.
For additional information go to www.ForestRiverCard.com.
Middlebury, Ind.-based Shasta RV, a division of Forest River Inc., announced the introduction of its completely redesigned lineup of products and newly assembled management and sales team.
“We’ve built an enthusiastic and highly qualified team, with long-standing dealer relationships,” said Shasta President Mark Lucas in a press release.
Todd Schmitz, formerly with Heartland RV’s Prowler division, is the product manager for Revere and Oasis while Kevin Combs, Dan Gill and Kris Lash handle sales for all of North America.
The Revere, a conventionally built, wood-and-aluminum trailer line and the current flagship for the company, has a new exterior look, higher-end interior decors, wide-track axles, under-mounted sinks, recessed stoves and rounded interior walls.
“We’ve not only stayed true to the features customers have come to expect, such as 7-foot interior heights and extra-deep slides, but also value added items not normally seen in this conservative price point,” said Schmitz.
In addition to travel trailers, Revere will also offer three fifth-wheel floorplans. “These fifth-wheels are a nice upgrade for customers who want extra amenities, increased storage and longer range towing, but don’t want to stray from this price point,” said Schmitz. Destination trailers are also new for this year, and include wide body construction, 8-foot interior heights, residential kitchens and fiberglass front caps all as standard equipment. Each of the three Revere segments is available with optional fiberglass exterior walls.
The “aggressively repositioned” Oasis is 8-foot wide and available in five floorplans. “Instead of playing games with packages, discounts and long lists of options, we’ve included everything you need as standard equipment, and eliminated any fluff in the pricing,” said Schmitz. “This is not just an LE or a Limited Edition trailer you can only buy once a year or in limited numbers, but rather has been designed and built from the ground up to be a show-stopper, sure to generate traffic and retail sales year round.”
Lucas added, “Success is great-looking, well-built product at an aggressive price. Other companies only focus on 30 or 40 units being produced each day. We will focus on each individual one and pay attention to the details. Volume will be the reward for our efforts, but not the primary focus.”
All Shasta products will be on display at this year’s America’s Greatest RV Show in Hershey, Pa., and the Elkhart County RV Open House, along with the RV Dealers International Convention/Expo in Las Vegas and the National RV Trade Show in Louisville, Ky. For more information call (574) 825-7178.
Members of the Elkhart County Council Saturday (Aug. 11) approved two tax phase-in agreements for Elkhart, Ind.-based Forest River Inc. that promise to bring as many as 160 new jobs to the area.
According to the Goshen News, a tax phase-in is a partial or temporary exemption of a company from having to pay property taxes with the express purpose of stimulating economic development.
First to be approved Saturday was a resolution supporting an eight-year tax phase-in agreement involving Forest River’s Millersburg complex. Dave Ogle, director of business retention and expansion for the Economic Development Corp. of Elkhart County, helped present the proposal for Forest River.
“I always want to reiterate our appreciation of Forest River being one of our premiere employers in the marketplace, employing well in excess of 3,000 Indiana or Elkhart County employees at their facilities, and certainly one of the higher paying facilities in the county,” Ogle said. “So we appreciate the opportunity to compete for their business.”
According to county attorney Craig Buche, the Millersburg expansion promises approximately $2 million in real estate redevelopment coupled with approximately $150,000 in new manufacturing equipment.
In addition, the company has indicated plans to hire approximately 120 new full-time positions. Such hiring is expected to lead to an annual increase in payroll of nearly $5.5 million.
“We recognize the fact that Forest River could build their plants anywhere,” said Elkhart County Council President John Letherman following the phase-in approval. “We’re thankful that you’re choosing to make significant investments in Elkhart County, which further cement Forest River in the community.”
In order to qualify for the tax phase-in agreement, Forest River has agreed to stay in operation at its Millersburg location for no less than 10 years. Should the company fail to meet its obligations under the phase-in agreement, Forest River would be forced to repay the county a prorated portion of the total real estate and personal property taxes saved as a result of the tax phase-in agreement.
The Goshen News reported that also approved Saturday was a resolution supporting a five-year tax phase-in for Forest River’s Middlebury complex that should bring 40 new full-time positions to the area.
In connection with this expansion, the company has indicated plans to invest approximately $1.25 million in new manufacturing equipment.
As for the 40 new full-time positions expected, Buche indicated that an annual increase in payroll of nearly $1.8 million can be expected.
As part of its tax phase-in agreement, Forest River has agreed that it will stay in operation for no less than seven years at its Middlebury location or face forfeiture of the agreement.
Forest River Inc. President Pete Liegl indicates that his company, based on current registrations, is expecting to reach or exceed last year’s dealer count during what has become known as Elkhart County’s 4th Annual RV Open House.
Forest River conceived the whole Open House concept in 2009 as a morale-booster for U.S. and Canadian dealers during the depths of the global recession.
In fact, things are looking pretty good right now for Forest River’s own agenda for the Open House, which is slated for the week of Sept. 17-21. And, generally, when things are looking good for Forest River, they’re looking good in terms of traffic count for the rest of the manufacturers who set up shop that week at their home facilities or in temporary exhibits on Elkhart’s north side to socialize with out-of-town dealers and show them new model year units.
“It’s looking very good, better than last year for the same time period,” Liegl tells RVBUSINESS.com. “When all is said and done, it (attendance) should be about the same as we had last year. I think last year, we pushed 3,000 people through there. And, again, it’s a little misleading because that total might have included competitors and some suppliers.”
Best estimates for the total number of visitors expected in Elkhart and the area towns of Goshen, Bristol, Wakarusa and Nappanee for the Open House, are for about 4,000. But it’s always a rough estimate since the Open House never has had an organized registration or cohesive governing organization.
The biggest days for Open House Week are Sept. 18-19, and Forest River will be following a similar game plan as it did last year, meaning that the world’s No. 2 RV builder — a division of Berkshire Hathaway Inc. — will be serving dealers dinner and libations at its Dynamax facility on County Road 6.
“It’s probably not going to deviate much at all,” Liegl added. “All we are going to do is have a little gate control because we had a couple of entrances where people came in and were in the display before getting their name tags and registering. And so we want to have a little better control to know exactly who’s coming and who didn’t come. I guess, basically, we are going to duplicate last year, maybe make a few minor changes here and there, but insignificant. And we’re going to have the same number of units displayed, probably in the neighborhood of 500, and serve food and sell as many units as we can.”
The Goshen, Ind., City Council approved tax phase-ins for Kinro Inc. and Forest River Inc., two manufacturing companies dealing in the recreational vehicle industry, that will bring at least 220 new jobs combined to the Goshen area by the end of 2014, according to reports from Mark Brinson, director of the Community Development Department.
Forest River’s proposal is tied into a broader request for local and state tax breaks that would assist in expansions at five of its Elkhart County facilities and add 440 jobs by the end of 2015. Company representatives made a presentation to the Elkhart City Council Saturday and a vote will be taken in a second meeting on Aug. 11 after a public hearing.
The Goshen News reported that during the City Council meeting, Dave Ogle from the Economic Development Corp. of Elkhart County spoke on behalf of the projects, and said these were “significant” moves.
“It’s significant that we have two of our biggest employers in Elkhart County in the room tonight,” Ogle said to the Council. “They have the option and opportunity to locate in any place in the county, and they choose Elkhart County, and specifically Elkhart and Goshen, as their home.”
The Kinro request provides a five-year phase-in for the project, which is a proposed move of production lines currently at 1201 S. Eisenhower Drive to a larger manufacturing facility in Goshen, according to the project overview.
The Forest River request provides a seven-year real property phase-in, with a five-year personal property phase-in for the project, for the construction of two new manufacturing facilities in Goshen.
Forest River Inc.’s plans to hire an additional 440 people by the end of 2015 – which hinges on the approval of various local and state tax breaks – includes expansions at five of the builder’s facilities in Indiana’s Elkhart County.
As reported by the South Bend Tribune, the recreational vehicle maker’s expansion plans in Millersburg and Middlebury were presented Saturday (July 14) to the Elkhart County Council. A vote will be taken in a second meeting on Aug. 11 after a public hearing.
A similar presentation regarding two facilities in Goshen will be made to the Goshen City Council today. All told, Forest River’s expansion covers five facilities, including a third site in Goshen for which the company is not seeking any incentives.
“I am glad to see Forest River step up and take this action,” said Dave Ogle, director of business retention and expansion for the Economic Development Corp. of Elkhart County.
“The market is contracting rapidly to fewer significant players and as a consequence more states want our stuff,” Ogle added, citing Oregon, Michigan, California and Ohio as states seeking RV companies. “I am glad they are giving us a chance to compete for their business here. We do not want that to be diluted in any way. That also impacts the supplier chain integrity as well.”
Forest River is seeking the normal tax phase-in on new properties and improvements to existing facilities, Ogle said, along with phasing in its new investment in equipment for these properties.
“It’s important people understand a tax phase-in does not impact the tax rate of an existing facility,” Ogle said. In other words, Forest River will continue to pay what it has been paying at its facilities.
“The tax abatement impact is just on the new investment that is increasing the assessed value of that property,” Ogle said.
The jobs are good paying jobs, Ogle said. Some are in the $22-per-hour range.
But Ogle said it is his understanding that Forest River is being conservative with those estimates. “In talking with the people at Forest River, it is not uncommon for people to make $25 to $30 an hour,” he said, adding that there are bonuses tied to the amount of work employees complete.