Ore. Dealership Steers Through Downturn

June 30, 2011 by · Comments Off on Ore. Dealership Steers Through Downturn 

Dramatic declines in sales of travel trailers and motor coaches during the 2007-09 recession forced some dealers and manufacturers to close their doors in the Bend, Ore., area.

But, according to a report in The Bulletin, Chris Jackson, co-owner and general manager of Beaver Coach Sales & Service in Bend, helped steer the company through tough times by getting the staff involved in creating a leaner, more efficient business model.

Jackson and the other owners of Beaver Coach Sales & Service purchased the Destination RV dealership and showroom in Bend in 2001 and changed its name.

People often get Beaver Coach Sales & Service in Bend mixed up with the now defunct Beaver Coach manufacturing company, Jackson said. The manufacturing company was founded in Bend in 1988 and sold to Safari Motor Coach in 1994. In 2001, it was sold to Monaco Coach Corp. It relocated to Coburg in 2005, and filed for bankruptcy in 2009. The company was sold in May 2009 to Navistar, which added motor coaches to the International trucks and buses it builds in Coburg.

“It (Navistar) has nothing to do with us or Bend,” Jackson said.

“For years we were dedicated to the Beaver brand because it used to be made here in Bend and the service center was next door. They stopped producing the Beaver in late 2009, so we aligned with Winnebago and Forest River for new coach products,” Jackson said. And in 2006, Beaver Coach Sales & Service took over the former Beaver Coach service center, which had remained in Bend.

“Nobody is building the old Beaver Coach brand anymore. The ones you see for sale on our lot are all used,” Jackson said.

Initially, Beaver Coach Sales & Service sales increased every year, peaking between 2003 and 2006 at around 100 new motor coaches per year ranging in price from $400,000 to $500,000 and about 100 used motor coaches in the $100,000 to $200,000 range, Jackson said.

During the top of the market, gross annual sales ranged from $50 million to $60 million a year, and the company employed about 65 people, he said.

Unfortunately, he said, the bottom dropped out in 2007 and stayed down until the second half of 2010, when sales began to pick up slightly, but mostly for lower-end motor coaches.

“The RV industry was one of the first sectors of the economy to feel the recession toward the end of summer of 2007, and then the bottom fell out in 2008 and 2009,” with motor coach sales dropping 75% or more, Jackson said.

The huge drop in sales forced the company to cut its staff from 65 to 35 between 2008 and early 2010, he said.

“We saw a steep drop in sales going into the recession, but we haven’t had a very steep rise coming out,” Jackson said. “We saw a slight improvement in the second half of 2010, and I am cautiously optimistic that 2011 will be as good or better.”

During the recession, Jackson said the RV industry was hit so hard that manufacturers and dealerships nationwide shared information about cutting costs and improving efficiency, to help each other keep their businesses going through the tough times.

Getting employees to participate in brainstorming ideas to cut costs and improve efficiency was an idea that came out of the industrywide discussions, Jackson said.

To get employees involved, Jackson said he shut down the business for one day and took the staff to the Riverhouse Convention Center to work on a new business plan, including a new operating model for the service department.

That was where a revolving work plan was conceived, which employees in his service department discussed and agreed to. Jackson said it helped the company hold on to many long-term employees, with groups working two weeks on and two weeks off.

“These are people I have known for years, I know their families, I know their kids. I wanted to keep them on the payroll until things turned around, but we only had so much reserves. So, we went to a revolving work schedule, and the company continued to pay their medical insurance and things like that,” Jackson said.

Many employees in the service department had worked in the former Beaver Coach manufacturing plant or factory warranty repair shop, so they had the skills and training to build and repair motor coaches from the ground up, Jackson said.

When motor coach sales were booming Jackson said it didn’t matter so much that the service department lost money, but that changed when sales dropped.

“It forced us to look at everything we do,” Jackson said. “We had layoffs in 2008 and 2009, and we had some layoffs in 2010. But due to the joint effort on the part of management and employees, in 2011 were able to bring some people back.”

“This was a factory service center for years. We get people from all over the U. S. and Canada bringing their Beaver motorhomes to us for service, but it’s not just Beaver coaches. We service all brands of motorhomes, fifth-wheels and travel trailers,” Jackson said.

“Now our service department is humming along. The people who are still here are busy. We have restructured the shop to eliminate extra steps, so the tools are close by in their work areas, and the parts are well organized.

“We do all kinds of repairs, from fuel tank and brake repairs to roof repairs, body and paint work, air conditioning, replacing the carpet and flooring, you name it, we do it,” Jackson said.

In addition to doing traditional motorhome and RV repairs, Jackson said the service department management is also bidding on government contracts and scientific projects, such as retrofitting a motorhome specifically to house a crew of researchers in the harsh sub-zero winter climate in Greenland, and other projects to bring in additional revenue and to keep the service staff busier during winter months.

So far, 2011 sales haven’t picked up as much as he was hoping they would, but Jackson said he believes that is due mostly to cold weather extending well into spring this year. The arrival of warmer weather has given sales a bit of a boost, but he is not expecting much of a rebound in motor coach sales until consumer confidence improves.

“For the majority of people, a motorhome is a luxury,” Jackson said. “It’s something they have wanted and saved for all their lives, and they are getting close to retirement when they finally buy one.”

“With the economy the way it is, there’s a lot of uncertainty. People are not as confident about the future as they used to be,” Jackson said, adding that people are either holding off on buying motorhomes, or they are making do with a used or lower-end motorhome or travel trailers or fifth-wheels because there is more uncertainty surrounding retirement.

Across Oregon, Jackson said about half of the RV dealerships and many of the larger RV manufacturers have gone out of business since the recession hit in 2007, but he feels good about being one of the survivors.

“The recession cleaned out the RV manufacturers and dealerships that weren’t running efficiently. That has been done,” Jackson said.

“There are a lot of people struggling out there,” Jackson said. “I feel very fortunate that we can employ people right now.”

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