The more than 400 employees of Suburban Manufacturing in Dayton, Tenn., received news this week that the recreational vehicle industry that it serves is on the path to recovery from the depths of the economic downturn, according to the Chattanooga Times Free Press.
“Sales have doubled” for the industry, said Mel Adams, president and CEO of Airxcel Inc., Witchita, Kan., Suburban’s parent company.
Adams made his comments as he visited the Dayton plant in observance of what the recreational vehicle industry is promoting as its centennial year.
The deep economic recession caused people to tighten their budgets and habits, but the RV industry has seen people adjust to fluctuations with gas prices, he said.
“They may not go as far,” Adams said, but “boomers are still coming and retiring.”
Airxcel acquired Suburban in March 1998 and made the Dayton operation a division. Airxcel manufactures heating appliances and air-conditioning and other specialty applications. The company began as Recreational Vehicle Products Inc. in 1991 and changed its name in 1997.
Suburban Manufacturing Co. began in 1948, originally making clothes dryers and heaters. Later it introduced RV gas furnaces and cooking appliances to its product line.
Adams thanked employees for their contributions in the RV industry. He additionally offered special congratulations to the 76 people who had worked 30 years or more with the company.
“It’s a great place to work for a local boy,” 41-year employee Clayton Conley said. “Suburban sets a standard to work by” for their employees and products, he said.
“We’re so proud,” said Adams as he handed a plaque and gift certificate to Jesse Fine, an employee since 1960. “It’s an outstanding achievement.”
“I was never one to quit a job,” Fine said.
Concluding the celebration, Adams said, “The future needs to be on the people” who build the chassis and water heaters.
Mel Adams, CEO of Wichita, Kan.-based RV Products, says the RV industry is close to bottoming out.
Sales have fallen to half of the 30-year average, a level that can’t last very long, he said, especially given that the Baby Boomers are reaching prime RV age.
The rebound, when it comes, will be strong, he said, according to The Wichita Eagle.
The industry saw deep recessions in the early 1980s and 1990s that were followed by steep increases.
“The bounce back will be quite remarkable,” he predicted.
In the meantime, the air conditioner and heater supplier is coping the best it can with industry conditions.
If a recent forecast for the industry holds true, this year’s RV sales nationally will fall 45% from last year and nearly 70% from their 2006 peak, a condition Adams likened to “a train wreck.”
The company had 220 employees in 2007, when sales started falling, and the fall kept accelerating. Corporate cost cutting and layoffs followed.
Adams has had to lay off 40 workers since the beginning of the year. The last 10 were laid off Tuesday (March 31), leaving the company with 120 employees.
“That’s the worst,” he said. “You get a dedicated work force that comes to work for you as a career, and that is the cornerstone for their funding their family and, all of a sudden, it’s not available.”
Adams said the company has looked at every expense to find ways to save, including trimming supplies, moving inventory from a rented warehouse into the plant and renegotiating services.
One small saving grace is that the company does sell some product to the replacement market, which is down by only single digits.
Recreational vehicles suffered from a triple blow of high gas prices, a credit crunch for customers and the economic downturn.
Nationwide the collapse in sales has forced several RV companies into bankruptcy, thrown tens of thousands of people out of work, and devastated communities where RV manufacturing is a major employer.
Adams, 63, worked 24 years at Coleman, working his way from assistant foreman to division president before he and three other division executives took RV Products private in 1991 in a leveraged buyout.