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The roster of RV manufacturers participating in Elkhart County’s 4th Annual RV Open House in September increased again today (July 25) with the announcement by Carriage Inc., that the Millersburg, Ind., luxury fifth-wheel OEM would be showing its towable product on part of a 15-acre parcel a few minutes south of the RV/MH Hall of Fame.
Moreover, Ed Kinney, vice president of sales and marketing for the Millersburg, Ind., RV builder, reports that his company will be sharing the site with Coburg, Ore.-based Monaco RV LLC and Travel Lite, a truck-camper manufacturer headquartered in New Paris, Ind.
And Kinney told RVBUSINESS.com that he’s still got room for more open house exhibitors “if any other manufacturers wish to join us.”
The location, at the intersection of County Road 17 and U.S. 20 in southeast Elkhart, provides easy access and plenty of parking in close proximity to other manufacturers’ open house displays for some of the 4,000 dealer personnel expected to visit Elkhart County during open house week – Sept. 19-23.
“Last year, we tried it (participating in the open house) in Millersburg, but it was too far for dealers who are only in town for a couple of days,” said Kinney. “This new location is the perfect spot.”
Carriage will have approximately 15 units on display during the event, with hors d’oeuvres and drinks available beneath a tent. “Once we determine all the manufacturers participating (at the site), we’ll decide what to do about added entertainment,” he added.
Carriage’s display will be manned 9 a.m to 5 p.m. Monday through Thursday, “but obviously, whatever the dealer’s needs are, we’re going to be there,” said Kinney.
Interested parties may contact Kinney at firstname.lastname@example.org for additional information.
He keeps coming back to northern Indiana, as if magnetically drawn to some ore of truth there.
For the fourth time in 15 months, President Obama will arrive in this blue-collar manufacturing area –this time the town of Wakarusa — to sample the mood of the heartland and bring a message of change. He returns today (Aug. 5) to a community that has been as hard hit as any in this recession, according to the Los Angeles Times.
“Each time he comes here, I keep thinking things must get better,” said Rosalie Collins, 43, an unemployed recreational vehicle worker, as she waited in line at a local unemployment office.
Elkhart encapsulates a key part of the country’s industrial downturn. Unlike the great Midwestern auto towns that are locked with a single industry, the region occupies a slice of industrial America that encompasses a range of manufacturers from musical instruments to high-tech engines.
It is a place that Obama has also found attractive. Elkhart, locals say, is in a traditionally conservative region that has shown a willingness to tilt Democratic. The county backed Sen. John McCain in the last presidential election, but the state went to Obama.
The visit fits a pattern of high-level White House trips to states that are historic presidential battlegrounds. Obama is looking to hold the state in 2012 – and so Indiana is receiving a disproportionate share of his travel time.
Salvation won’t come soon enough for the nearly 16,000 people in a county of less than 200,000 who currently don’t have a job. More than 45% of the businesses in the area are in manufacturing, and one-quarter of those are tied to the RV industry. More than a dozen factories have shut down in the past 12 months.
People here say they have begun to see a slight turn in their world, small improvements and some hiring that hint that the worst may be over. But after so many months of grim news, they are still worried.
“We’ve all been scraping the bottom, and there’s not much left to scrape,” said Loren Begly Sr., 78, a retired truck driver whose six children have all had trouble either finding or keeping full-time work.
Since the late 1800s, when shops building medical products and brass machine fittings crowded along the rail line, the area’s backbone has been its diverse industries.
The region has grown accustomed to economic roller coasters.
It survived after many jobs making musical instruments were moved overseas. It bounced back after gas prices eased and interest in RVs resumed in the 1980s.
It recovered after the Miles Laboratories plant, where Alka-Seltzer and Flintstone vitamins were made, closed its doors in 2001.
“It’s a national icon for economic cyclicality,” said Ken Rosen, chair of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley, Haas School of Business.
The latest cycle is about the worst it has ever been.
No one here could have imagined such hardship was coming when then-Sen. Barack Obama first stopped here in early May of last year in his campaign for the presidency.
When Obama returned that August, he was leading in the polls, and factories across this northern stretch of Indiana were shedding jobs. People were so eager to hear what Obama had to say, they arrived 12 hours early to wait outside of Concord High School.
When Obama came for a third stop in February, he came as a president trying to put a human face on why the country needed to support his $787 billion stimulus package.
Collins had lost her job by then and was scared. Gas prices had soared. Credit had dried up. Unemployment in the city of Elkhart had skyrocketed to 18 percent.
In the months since, the area has poured its resources into searching for the next manufacturer to bring new jobs.
The area has banked on help from the president’s stimulus plan. The county has attracted its share — $38 million approved so far. Of that, the city of Elkhart has had $14 million approved.
Now, there are hints of recovery. Seven area manufacturing companies, ranging from auto-insulation parts and an office-chair maker to RV manufacturers, have announced plans to expand.
On Tuesday, Dometic Corp. said it would put more than 240 people back to work in Elkhart, when it moves a manufacturing here from a factory in Sweden.
Obama is scheduled to speak today at the shuttered Monaco RV plant in Wakarusa.
He will use the trip to announce grants for advanced battery and electric-vehicle production, according to the White House. He’ll also talk about what’s needed to build conditions for sustained growth.
A federal judge on Friday approved the sale of Monaco Coach Corp.‘s recreational vehicle assets to Navistar Inc., according to bizjournals.com
The $52 million deal is expected to close in early June.
Coburg, Ore.-based Monaco (Pink Sheets: MCOAQ) in March filed for Chapter 11 bankruptcy protection and laid off the majority of its 2,225 remaining employees. It had earlier been looking for buyers for its RV manufacturing operations and motorhome resorts business.
On April 27 the company announced it had an accepted an offer from Warrenville, Ill.-based Navistar that includes certain manufacturing facilities in Indiana and Oregon, as well as all brands, intellectual property, inventories, and equipment relating to the company’s motorized and towable recreational vehicle segments.
Navistar (NYSE: NAV) is manufacturer of commercial and military vehicles, as well as diesel engines and related services. It has $15 billion in annual sales and a market cap of $2.4 billion.
Monaco at the time warned that the proceeds of the sale will cover payments to creditors, but it won’t likely result in any additional funds being distributed to shareholders.
The Wall Street investment firm Robert W. Baird & Co. sees a silver lining in this week’s quarterly report from Thor Industries Inc.
Thor reported a 41% drop in sales for the third quarter, but topped expectations on share gains and rental orders. “Backlog fell, but improved sequentially hinting at a stronger summer than we had modeled,” the investment firm reported to its clients. “Bankrupt competitors may resurface, but Thor has cut costs and accumulated cash to emerge stronger in the next cycle. We raised our price target to $21 and are looking for an opportunity to get involved.”
Thor reported preliminary sales for the quarter of $415 million, down 41% but it topped Baird’s estimate of $274 million. RV sales fell 48% to $311 million, but “exceeded our pessimistic estimate.” Bus sales fell 3% to $104 million. RV fundamentals remain weak, but improved as the quarter unfolded. It was not as bad as feared, Baird concluded.
The backlog fell to $441 million, down 16% from $526 million last year, including a 9% drop in the RV backlog and 23% drop in the bus backlog. “Importantly, the backlog improved sequentially and implies better Q4 revenue than we had modeled – suggesting Thor will remain profitable in FY2009.,” Baird stated.
Thor improved its towable share to 31.3% year-to-date, up from 30% in 2008, the investment firm noted. “Meanwhile, Fleetwood and Monaco filed for Chapter 11 bankruptcy protection – leaving the door open to survivors like Thor. Together, Fleetwood and Monaco represented 7% of the towable market and 28% of the motorhome market in 2008. Recently, Navistar acquired assets from Monaco but has not indicated whether it plans to build RVs – so the share opportunity remains unclear.”
“We have begun to see faint signs of a bottom in the RV market,” Baird stated in its industry outlook. “Dealers remain reluctant to accumulate inventory, but consumer confidence has improved - hinting at a retail bottom. Meanwhile, Thor has cut costs and accumulated cash to position itself as a lean survivor with share-gain opportunities as the market recovers.”
Baird raised its earnings estimates for Thor based on this week’s report. It projects the company will earn 20 cents per share for the current fiscal year, up from its earlier estimate of a loss of 25 cents per share, and projects the company will earn 85 cents per share in FY 2010, up from 25 cents per share.
Thor reported $296 million in cash and equivalents at the end of the third quarter, a 19% increase over a year ago. This amount, Baird noted, will be sufficient to support acquisitions, internal growth initiatives, share buybacks and higher dividends.
Monaco Coach Corp. got the green light Friday (May 1) to put its major assets up for auction later this month, but only after intensive negotiations that delayed the start of a hearing in U.S. Bankruptcy Court in Delaware.The Press-Enterprise, Eugene, Ore., reported that Robert Orgel, one of Monaco’s attorneys, told Judge Kevin Carey that Monaco was fortunate the hearing was scheduled late in the day because the extra time enabled the parties to resolve all the objections to Monaco’s auction plan.
“I couldn’t have told you that 45 seconds ago,” he said.
Monaco, a Coburg, Ore., RV maker, terminated about 2,000 employees and filed for Chapter 11 bankruptcy protection in early March, seeking to reorganize its finances while getting breathing room from creditors.
Before Friday’s hearing, lawyers for Monaco’s two main secured creditors, Bank of America and Ableco Finance, as well as for unsecured creditors and for the U.S. Trustee, had filed objections to Monaco’s plan to put its major assets up for auction, as well as its request to continue using cash from the main creditors.
Ableco had registered the most vociferous objections in a brief filed Thursday. Its lawyers argued that the proposed $52 million sales price would not come close to covering the $75 million that Monaco owes Ableco and Bank of America. Good faith negotiations to resolve issues had failed, they said, arguing that the company’s operations should be shut down and its assets liquidated.
The Press-Enterprise reported that after talks that apparently went on for most of the day Friday, the objections were resolved.
A subsidiary of Navistar International Corp. has agreed to buy Monaco’s assets for $52 million, but other parties will have a chance to submit bids at hearing scheduled for May 21.
Navistar is a massive Illinois corporation that builds diesel engines, school buses, heavy trucks and military vehicles.
Earlier this month, Monaco signed an asset purchase agreement in which a Navistar subsidiary called Workhorse International Holding Co. would buy Monaco’s major assets for $52 million.
Under such a deal, Navistar would acquire all of Monaco’s RV brand names, its closed factories in Coburg and Indiana, plus equipment and intellectual property. Navistar hasn’t disclosed its plans for the Coburg headquarters, but a Monaco official said in March that the new owner would restart the plant.
Monaco and Navistar have a long-running business relationship. In 2007, the two companies formed a joint venture to build rear-engine diesel chassis in Elkhart, Ind. And Navistar’s president and CEO, Daniel Ustian, has been on Monaco’s board since 2003.