Is there a change afoot in the RV finance arena that perhaps reflects an overall prospect for improvement in the U.S. economy and the recreational vehicle marketplace?
That’s hard to say. Based solely on the fact that Bank of America Dealer Financial Services and GE Commercial Distribution Finance — the two big dogs in RV finance — are talking to the press lately after months of silence during the depths of the recession, it’s certainly beginning to look that way.
Ellsworth “Ellie” Clarke, president of B of A’s Dealer Financial Services, last week provided an overview of B of A’s programs and the RV market in an interview with Jeff Kurowski, director of industry relations for the Recreation Vehicle Dealers Association (RVDA), that was posted on RVBUSINESS.com. And only yesterday (July 1), GE Commercial Distribution Finance’s Pete K. Lannon, managing director and president of GE Capital’s Motorsports and RV Group, addressed modifications to GE curtailment policies in a wide-ranging interview with RV Business.
Lannon also fielded questions on an array of other related topics, the crux of which is as follows:
What can you tell us about finance rates in general? We’re told that they spiked for GE in March across the board – including both the RV and marine sectors. Do you anticipate any sort of an easing of interest rates?
There are a lot of factors that go into interest rates. Part of it is the macro-economic environment, the general cost of funds and what it takes to raise funds in the marketplace. Another component is our cost of operations, and then there’s a risk component. So, we’re attuned to all of these items, and we would make rate adjustments in accordance with what they are telling us.
The Small Business Administration is beginning to provide floorplan financing for RV retailers. Has this played into any of GE’s decision, announced yesterday, to moderate its curtailment interest rates?
I think it’s a little early to see exactly how it (SBA financing) is going to be implemented. The SBA is still concluding its regulations, formulations, etc. I think any additional (financing) capacity in the industry for dealers certainly is welcome, particularly for dealers that are challenged. We just need to see what the final formulation is from the SBA. It’s still somewhat uncertain.
We’re told that GE occupies about a 25-35% share of the RV marketplace’s wholesale financing. Is GE looking to increase that share?
We have a significant share. I’m not going to speculate as to the exact amount, but we know we’re a significant player in the industry. We look to increase business that makes sense, that’s profitable for both us and for our dealers. Whether that leads to market share or not … we’re still dealing with an industry that’s been heavily impacted, and I think most of us are thinking more about just getting to the right size versus getting into a market share ‘game’ at the moment.
‘Right size’ could be applied to the RV industry as a whole. Do you feel that there may in fact still be too many dealers, as some have argued, for a downsize market?
I don’t know about too many dealers… What we’ve got is a situation (where) there’s still an imbalance of inventory in the field to the sell-through at retail. I don’t speculate whether it’s too many dealers. I do know that there’s too many units available right now. It’s depressing the sales prices of the inventory dealers are holding, and there just aren’t enough customers willing or able to make the purchase at the dealer level. We need a better balance for the industry to get healthy again.
So, GE’s decision to eliminate the interest hike isn’t necessarily a reflection of the company’s more confident outlook on the state of the industry?
We do have a fairly confident outlook. Let’s put it this way: we’re ‘cautiously optimistic.’ At this point, I don’t know if we’ve found the bottom quite yet, but if we haven’t, we’re awfully close. We’re seeing some positive indications in our RV business with the way inventory levels have come down, and dealer performance metrics are improving. They’re not healthy yet – we’re not prepared to make that statement – but we’ve seen a couple of months of upward trends in some important performance metrics that indicate that we think we are near, or have found, the bottom.
If you want to take a step up and look across the entire economy, Jeff Immelt, GE’s chairman and CEO, was quoted in London today (June 30) on behalf of GE with an outlook that said, “things seem to be brightening.” Again, I don’t think anyone’s prepared to say that things are where they should be or that they are absolutely healthy, but I think overall in a lot of areas besides the RV industry we are seeing signs of improvement on a lot of different fronts.
Another leading finance provider is telling the industry right now that they are in it “for the long haul.” Is GE?
We are going to continue to invest in and support this industry. We’ve been a very long-term player in this industry. When you think about the predecessor companies that were acquired by GE, we go back in the RV industry at least to the late ’70s, and our intention is to make sure that we are here through this cycle and back when the industry is healthy again. We want to be a participant in that.
How many times have you thought about leaving a job, but hesitated out of fear of the unknown – or, simply, an aversion to change?
Sally Bethea doesn’t know that fear. In her career, she’s been a medical librarian, a financial analyst, a sociology professor and – today – the president of a recreational vehicle repair business, according to the San Antonio (Texas) Express.
Her secret? When a job gets stale, Bethea moves on. In her view, life is too short – and working hours are too long – for boredom. Her latest venture, Full Service RV, was born out of the RVing lifestyle she and her husband, Don Crawford, embarked upon almost by chance.
Crawford suspected the U.S. economic downturn was going to be lengthy and, more than a year ago, suggested downsizing to trim the couple’s budget. The plan including selling their Mahncke Park home, but three dogs made it difficult to show the house to prospective buyers.
The solution? Move out of their 2,000-square-foot traditional home and into a home on wheels. The RV residency was supposed to be temporary, but they found themselves enjoying the lifestyle.
“Life is simple when it’s not cluttered with so many ‘things,’” Bethea said. “Moving into the RV required getting rid of a tremendous amount of stuff. But it’s much easier to stay organized when everything you own fits into a closet and a couple of drawers.”
As Bethea settled into the RV, she noticed her that fellow RVers often needed help with repairs – either to the RVs themselves or to the appliances and fixtures within.
“If your RV’s air conditioner goes out in the summer in San Antonio, getting it repaired quickly is a big deal,” Bethea said. “And none of the appliances in an RV are ‘normal’ – you can’t buy standard sizes to replace them. Don has always had great mechanical ability. One day, I said, ‘How would you feel about getting into RV repair?’”
Crawford was keen on the idea and he enrolled in a repair certification program. While Bethea takes care of marketing, accounting, software and maintaining the company’s website, fullservicerv.com, he handles the labor. The company is in its infancy, but the phone is ringing with requests for air-conditioning, awning, plumbing, generator, refrigerator and vehicle breakdown repairs.
She notes on her website, “Now we have an equipped tool trailer, a good software package to keep track of everything, a website you can use to view your own service records, Facebook for a little fun and a commitment to doing the very best job for you we can.”
Bethea, meanwhile, already is looking to the future – and, possibly, another career change. “I’m putting together a 10-year plan,” she said. “Perhaps we’ll be able to sell the business at the end of that period.”
A dozen white motorhomes clogged Alaska’s Kenai Holiday gas station parking lot Monday morning (June 22), giving locals a rare glimpse at the kind of caravan that has been conspicuously missing from the summertime scene so far this year.
“Our visitation is down about 20% for June,” said Natasha Ala, executive director of the Kenai Visitors and Cultural Center on Monday.
Ala said the center doesn’t keep track of recreational vehicle traffic specifically, but that she doesn’t doubt that vehicle traffic is way down this season, according to Kenai Peninsula Online.
“We’re definitely seeing less people,” she said.
A couple blocks away from the center, Beluga Lookout RV Park owner Jerry Dunn said business isn’t booming.
“It’s been off to a slow start,” he said.
The caravan pulling out of Holiday earlier in the morning had stayed at his park the night before, giving business a much-needed boost. The caravan participants hailed from Germany, and Dunn said many of his guests this summer are foreign nationals.
“We get them from all over the world,” he said.
Dunn said his business is also heavily reliant on retirees, many of whom have seen their stock portfolios and retirement accounts depleted by the economic downturn.
“This year it seems like business if off because a lot of people lost money in their retirement accounts,” he said.
The downward trend in vehicle traffic is nothing new. According to the state’s Office of Economic Development, highway visitors to Alaska have declined in each of the past three years, including a 6.8% drop from 2007 to 2008.
From the Alaska Public Lands Information Center in Tok, the first town of any size for visitors entering Alaska via the Alaska Highway, manager Lisa Conrad said she can’t yet say whether 2009 will be another down year for border crossings. She said things seem slow, but because of a bureaucratic snafu the state has yet to see any numbers for this summer.
“We have not been able to get the border statistics,” she said.
Conrad said the Department of Homeland Security is in charge of the data, and the state has been unable to get the feds to pass the numbers on.
“All we can do is sit and wait,” she said.
A spokeswoman for the U.S. Customs and Border Patrol’s office of public affairs in Washington, D.C., said she was unaware of any delay in getting border crossing numbers out, but was unable to provide any figures by the close of business Monday.
Even without hard numbers, Conrad said things in Tok seem to be slow.
“Just talking to the local businesses, it seems like it’s been down,” she said.
With out-of-state visitors electing not to travel as much, local tourism marketers have had to get creative in trying to attract folks to the Kenai Peninsula, which juts southerly from Anchorage into the Gulf of Alaska. Natasha Ala said one way Kenai has been trying to get more visitors is by trying to entice Alaska residents to take what she called “stay-cations.”
“In tough times, the strategy is to beef up the marketing efforts that we do,” she said.
That includes marketing the Kenai Peninsula to places like the interior of the state.
“We’re kind of an exotic destination for people from Fairbanks,” she said.
Although the peninsula’s roads are far from clogged with recreational vehicles, the poor economy hasn’t stopped everyone from heading north. Visiting Kenai with his wife and another couple from Arkansas, retired Sears mechanic Jerry Russell said the group figured seeing Alaska on wheels would be more fun than flying up.
“We just wanted to see the country,” he said.
Thus far, Russell said the trip has been worth every cent.
“It’s really been an enjoyable trip,” he said.
He’s put more than 5,000 miles on his motorhome, with “at least” another 5,000 left to go. And while many penny-pinching travelers may have elected to stay home this year, Russell said he’s in no hurry to get back.
“When the money runs out we’ll go home,” he said.
The Good Sam Club, the world’s largest RV owners’ organization with nearly 1 million member families, today (June 10) unveiled model motorhome “lemon law” legislation, developed in conjunction with RV industry officials and the International Association of Lemon Law Administrators (IALLA), according to a news release.
If enacted by a state, the legislation will provide specific rights and remedies for motorhome buyers against product defects if the motorhome does not conform to material provisions of the manufacturer’s warranty. If the motorhome purchaser can demonstrate that a purchased unit does not conform to the statutory standards prescribed in the model law, the remedy available can include replacement or repurchase of the unit by the manufacturer.
Most states currently either provide no lemon law coverage for motorhome purchases or offer protection that is extremely limited, typically covering only the chassis. The proposed new model legislation would extend coverage to the structural integrity and functionality of major system components relating to the living quarters of a motorhome.
In 2007, the Good Sam Club joined the IALLA as a corporate sponsor in order to participate actively in this key IALLA project. IALLA presided over a series of conferences and negotiations with key representatives of the RV manufacturing and consumer communities leading to its eventual adoption of the proposed model legislation. The Recreation Vehicle Industry Association (RVIA) is also an IALLA corporate sponsor.
Pursuant to a series of conferences and negotiations sponsored by IALLA, both the industry and consumer representatives were able to agree on standards that would trigger lemon law liability for motorhome purchases, and provide consumer remedies through alternative means of dispute resolution.
“A new motorhome is a major life investment and new RVs are often used for both transportation needs and as living quarters for new buyers, meaning that any major product defects could present a serious hardship to the consumer,” said Sue Bray, executive director of the Good Sam Club. “It’s imperative that state ‘lemon laws’ protect the rights of new motorhome buyers. The model legislation is the first step in putting those safeguards in place for RV owners.”
The draft recreational vehicle initiative proposed by IALLA and the Good Sam Club acknowledges that motorhomes and RVs have components not common to cars and trucks and therefore should be protected by specific motorhome lemon laws.
The proposed legislation would require manufacturers to repair a new vehicle to the standards of the warranty if the product is defective or nonconforming to the warranty. It also offers a reasonable number of attempts clause, depending on the severity of the defect and/or repair. While the model legislation is designed to protect consumers who use their motorhome for recreational pursuits, full-time RVers who live in their motorhomes on an ongoing basis are specifically protected under the model act.
The next step is for those states interested in offering motorhome lemon law protection to their constituents to utilize this model legislation as a template. The Good Sam Club encourages all state legislatures promptly to enact this important new consumer protection for motorhome purchasers.
Led by Chairman Tom Gonser, the Good Sam RV Owners’ Advisory Council, a group of volunteers who assist the club and its members with RV industry relationships and policies, was heavily involved in resolving issues with both the regulators and representatives of the RV industry.
“We are delighted that the RV industry and the RV consumer were able to work out our differences and develop model legislation that will provide more equitable solutions for both sides,” said Gonser. “It’s most important that state legislators recognize that existing automobile lemon laws do not offer appropriate remedies for the many different working parts of both the living and chassis components of a motorhome.”
For complete text of the proposed legislation, please contact Sara Wacker directly at 619-533-7975 or firstname.lastname@example.org.
The Good Sam Club is affiliated with Affinity Group Inc. (AGI) which also publishes RVBusiness and RVBUSINESS.com.
A new loan guarantee is drawing praise from Southwest Florida boat and recreational vehicle dealers.
The Small Business Administration-backed floorplan financing program will be available July 1 through Sept. 30 of next year. It’s available to new car dealers as well as RV and boat retailers who meet certain criteria, according to Tallahassee.com.
“Our industry needs a shot in the arm. … The timing could be almost perfect,” said Tom Hansen, boat dealer and president of Southwest Florida Marine Industries Association.
Floorplan financing is a line of credit that allows dealers to borrow against their inventory, and then repay that debt as they sell their inventory.
Area boat dealers generally order new product in late summer and early fall, Hansen said. However, traditional sources of this financing have curtailed credit lines in recent months. Some have cut off dealers outright.
That doesn’t surprise Tom Nichols, owner of Bonita Boat Center in Bonita Springs: “Most of them, just like the banks, have been hit hard by repos and defaults.”
GE Capital, a mainstay of many local boat dealers, “raised the rates significantly, and the terms have become more stringent,” said Hansen, who’s general manager for the company that owns The Boat House at Boater’s World in Cape Coral.
A similar credit crunch hit RV dealers.
Last December and January, it was impossible to obtain new inventory “unless it was a special order and you had the money from the customer.” said Kathie Eppers, vice president of Skip Eppers RVs, a Punta Gorda dealership. She said things have eased up since then.
Nationally, RV manufacturers shipped out 237,000 units in 2008, down nearly 33% percent from 2007, according to the Recreation Vehicle Industry Association (RVIA).
The trade group attributes the decline to the tightest credit conditions in several decades, higher interest rates, falling household wealth, slower growth in real incomes and the crisis in consumer confidence.
On a more positive note, the RV association is encouraged by the Obama administration’s overall economic stimulus plan.
SBA-backed floorplan financing could help boat dealers, provided banks make loans to qualified consumers, Nichols said, noting: “Why would the dealer want to go through extra product he can’t sell?”
Across America, sales of new boats were down 30% last year and could fall another 20% this year, according to the National Marine Manufacturers Association.
But as summer approaches, some dealers and others in the industry are upbeat, citing low gas prices, plentiful bargains, low interest rates and an uptick in showroom traffic.
Even in Southwest Florida, where buyer demand fell hard in the wake of real estate and construction industry troubles, “I’m seeing a small glimmer of recovery,” Nichols said, adding:
“There are still people who were not devastated by the real estate bubble, who still want to have some fun and enjoy paradise.”
Large gatherings of RVs are fairly common in northern Indiana, long considered the hub of the recreational vehicle industry in the United States – but even by those standards, the group sequestered this week at the Elkhart County 4-H Fairgrounds in Goshen was cause for double-takes by travelers along County Road 34.
All 116 of the units that began pulling into the fairgrounds Tuesday were fifth-wheel trailers.
The 142-acre fairground on Goshen’s east side is hosting the national rally of the Suites Owners International Travel Club (SIOTC), an association limited to owners of DRV Suites fifth-wheels, formerly known as Double Tree RV.
More than a third of the club’s 306 registered members are attending the event, which runs through Sunday (June 7). According to Wayne Rothwell, club president, members have traveled from as far as California, New York and Texas for the program.
“We have 25 states and three Canadian provinces represented,” he added.
The rally, as Rothwell noted, is primarily a social affair, and events such as the welcome dinner are attended by “just about everyone at the fairgrounds.”
The farewell dinner is likewise well-attended, while attendees tend to form up various smaller groups during the week-long rally.
The opportunity to mingle among friends is just one facet of the event, however. As Rothwell pointed out, the rally also features a number of educational seminars ranging from insurance classes to technical dissertations on towing, braking and overall safety.
The 2009 rally’s location, about 30 miles from DRV’s Howe, Ind., headquarters and manufacturing facility, also allows the parent company to maximize its involvement. “We will have a ‘DRV Day’ where they host us at the factory, solicit our ideas and present seminars,” Rothwell said. “Classes are scheduled this year on such topics as hydraulics, electrical interfacing and leveling systems.”
The company enlists the aid of a local dealer in the vicinity of each rally to set up displays. In Goshen, International RV World, Elkhart, brought one each of the three series of fifth-wheels DRV manufactures – Elite, Mobile and Select – to the fairgrounds, allowing walk-throughs by rally attendees while dealer staff was on hand to answer questions.
The 2010 SOITC national rally will be held in June in Colorado Springs, Colo.
Nationally recognized “green” RVer Brian Brawdy will be in Ann Arbor, Mich., June 12 to tour Thetford Corp.’s world headquarters and manufacturing facilities. He will then join Thetford officials at the Outdoor Writers Association of America (OWAA) convention in Grand Rapids, June 13-16, to promote both the state of Michigan and a green RV lifestyle to hunters and fisherman.
Brawdy is known as an outdoor adventure expert and environmental pioneer. He has appeared on countless media outlets across North America.
Thetford Corp. has teamed up with Brawdy for a new product introduction initiative. Committed to developing high-quality green products, Thetford recently introduced a new line of Design for the Environment (DfE)-recognized RV care products. This eco-friendly line meets the Environmental Protection Agency (EPA) DfE program’s rigorous criteria without sacrificing performance.
Safe for humans and the environment, the five-product line includes UltraFoam Black Streak Remover, UltraFoam Awning Cleaner, Wash & Wax, Mildew Stain Remover and Hard Water Spot Remover. Non-toxic and biodegradable, they are packaged in bottles made out of recyclable plastic, including 25% post-consumer recycled content.
“Since RV cleaners are used outdoors, they must meet even stricter requirements than household products,” said Mary Burrows, Thetford’s manager of chemical development. “We will continue working with the EPA to produce more environmentally-responsible products in the future.”
Thetford will host two press panels at the Outdoor Writers event. The first panel features representatives from the Michigan Association of RV Parks and Campgrounds and focuses on the RV industry, with an emphasis on RVing in Michigan. The second panel, featuring Brawdy and Burrows, centers on going green for RV sport vacations.
Thetford is the world’s leading supplier of sanitation and refrigeration products for the recreational vehicle, marine and heavy-duty truck industries. It is a privately held company with eight manufacturing facilities in four nations.
It was the motorhome that couldn’t be sold, brand new back in 2007, last on the lot, a rolling 31-foot beauty with a sofa, dinette and queen-size bed.
Month after month, the vehicle sat at DeHaan RV Center in Elkhorn, Wis., , sat through $4-a-gallon gasoline and the coming of the economic recession, sat through one winter and most of another until early March, when a customer plunked down about $90,000 and drove it off the lot.
“The general public assumes we just have these things sitting out here on consignment, free of charge, and when we sell one it’s all pure profit,” says David DeHaan.
This vehicle was sold at a loss.
David and Kim DeHaan, owner-operators of DeHaan RV Center, have been in the recreational vehicle business for decades and have never seen a recession like this one, manufacturers shutting, dealers struggling and consumers sitting on the sidelines, according to the Milwaukee Journal Sentinel.
America’s love affair with the RV hasn’t ended – it has just adapted to the economic times. The yearning to hit the open road and see the country remains an American passion. When tough times hit, the tough go camping, even if that camping comes with all the comforts of home.
David and Kim DeHaan know all this from experience. They’re RV lifers.
He’s in the garage, running the service department. She’s out front, handling the business.
He’s a gregarious man with a shaved head and goatee. She’s a friendly woman, good with numbers and computers. She got the business on the Internet years before a lot of the competition and ended up selling product to customers as far away as New Zealand.
A DeHaan has been selling vehicles in this part of Walworth County for more than 50 years. David’s dad, Richard, started a car dealership in 1956 and got into RVs in the 1980s. David and Kim are carrying on a family tradition. Their two children also work at the dealership.
This time of year, there’s plenty to do. Customers are coming in to service their motorhomes and towable campers, a blown tire here, a leak there.
The DeHaans are running the business as lean as they can. For four months, they didn’t take a paycheck. For the first time ever, they closed for the month of January. And, for the time being, they’re no longer selling new motorhomes.
They’re concentrating on service, rentals and travel trailers, some that are so luxurious they include flat-screen TVs, fireplaces and king-size beds.
“We’re just selling big toys,” David DeHaan says.
Nationwide, the RV business boomed in the 1990s and flourished again after the Sept. 11, 2001, attacks as Americans craved control of travel. The industry was gearing up to serve the next generation of RV enthusiasts, retiring Baby Boomers eager to hit the road, when the price of gas spiked and the stock market collapsed.
Suddenly, fewer people want big toys.
But the DeHaans are confident that their business, and the industry itself, will endure.
“All indicators are it’s going to come back bigger and stronger,” Kim DeHaan says. “The recession is weeding out manufacturers and dealers. When things clean up, the strong are going to be stronger.”
The DeHaans stick to a vision that smaller is better.
When superstores became the rage in the car business, they got out of selling cars in the late 1990s. When fancy RV dealerships with huge inventories and multiple service bays began to spring up around the state, they didn’t budge from their vision.
Eighteen months ago, they saw the handwriting on the wall for motorhomes, figured Americans wouldn’t want to pony up for gas-guzzlers. They sold their motorhome inventory, right down to that last 31-footer.
But there’s no time to dwell on the last few months. The weather is growing warmer, the end of school beckons and business is picking up.
“Dealers aren’t making the money they should be making but it is still turning,” Kim DeHaan says. “That’s what makes me say, ‘It’s not bad.’ You might be at a break-even point, but this too shall pass.”
President Obama’s car czar came to Kokomo, Ind., Thursday (May 28) to announce much needed aid for the state’s auto dealers. But the help is not just for auto dealers. It’s also for hard hit areas that manufacture RVs.
The Small Business Administration (SBA) and President Obama’s car czar announced a nationwide stimulus plan in the heart of Indiana’s auto industry, planting what they hope is a seed in the industry’s recovery, according to WTHR-TV, Indianapolis.
“We’re not giving up on manufacturing and I’m sure the president hasn’t given up on the auto industry,” said Ed Montgomery, director of recovery for auto communities and workers.
The SBA announced that it will back billions in government guaranteed loans to finance inventory for auto, RV, boat and other dealerships. The so-called floor plan financing starting July 1 gives dealers up to $2 million in much needed credit allowing business owners to borrow against inventory.
“These programs all will give dealers the breathing room that they need, the financing that they need to survive these times when sales are a bit down,” said Karen Mills, SBA administrator.
The federal and congressional delegation chose to announce the nationwide pilot program in Kokomo, where Chrysler’s biggest single work force is now coping with the automaker in bankruptcy. The government hopes the dealer financing will create a ripple effect in an industry that employs thousands of Indiana workers.
“Today’s announcement will help to preserve jobs in the auto dealers, auto manufacturers, the supply chain, small businessmen and women who supply the auto industry and in the recreational industry,” said Sen. Evan Bayh, D-Ind.
The new SBA program includes northern Indiana’s Elkhart County’s struggling recreational vehicle industry, accounting for a nearly 20% unemployment rate there.
“This is going to help dealerships be able to buy the products that the customers want to buy,” said Nathan Hart of the Recreation Vehicle Dealers Association (RVDA).
The National Automobile Dealers Association (NADA) and their members call the new stimulus plan a step in the right direction.
With automakers down-sizing dealers and with GM on the brink of bankruptcy, floorplan financing will likely do little to comfort thousands of Indiana auto workers wondering how long they’ll have a job.
One auto dealer said this week that access to credit is a major problem. The SBA said that the loans will allow dealership to keep their inventory and cash flow intact and save jobs.
Canada’s largest recreational vehicle dealer may have missed out on becoming an RV manufacturer last week, but British Columbia-based Arbutus RV and Marine Sales continues to look at options to gain more control over the supply chain, according to the Times Colonist, Victoria, B.C.
Arbutus lost out on a chance to pick up a La Grande, Ore., travel trailer manufacturing plant being sold by Fleetwood Enterprises Inc., which filed for bankruptcy protection in March.
Arbutus originally bid $1.8 million for the plant, but Northwood Manufacturing, also of La Grande, came up with a competing bid and forced a courtroom auction in California. Northwood won out with a bid of $2.05 million.
“Another manufacturer just down the street didn’t want to see us come in and be a competitor,” said Arbutus owner Craig Little. “I guess somebody else figured they needed it more than we did.”
Northwood, which also makes travel trailers, has said it intends to continue using the plant for that purpose.
According to court documents, Fleetwood will continue to pursue buyers for its major businesses.
Little said his company bid on the plant as a means of maintaining a consistent supply of product and to have some quality control over the products it sells.
That’s becoming more important as the industry feels the pinch of tough economic times in the U.S.
“With the U.S. economy being so challenged it has been a tough time for RV manufacturers with that soft market,” said Little, who was quick to note his company is having a record year.
But that isn’t the case for a number of RV manufacturers that have been forced to take drastic action.
Industry leaders Fleetwood and Monaco Coach Corp. have both filed for bankruptcy protection, while earlier this year, Winnebago Industries reported a loss of $10.4 million in its second quarter — the third quarterly loss in a row.
Little said he would have loved to have some control of the manufacturing side of the business, but he is not concerned about supply. Indeed, he has been meeting with other manufacturers to discuss partnerships.
“We’re in discussions to either get involved on the manufacturing side or be in a position, because of the volume we do, to being hands-on in the product mix to ensure the quality is there for us,” he said, adding there may be a chance for Arbutus to dictate some private labelling of products for its marketplace.
“Whether we partner with manufacturers, it will be a closer-than-ever relationship that we move forward with, and we look forward to added value we can share with our client base,” he said.
Little said his 21-year-old company continues to thrive through tough economic times because of its track record and Vancouver Island’s unique makeup.
“The Island economy has a lot of retired money, so that’s not quite as susceptible to some of the challenges out there, and our banking system has been great,” he said of record low interest rates that make borrowing appealing.
But the big reason RV sales have remained strong, he said, is it remains an inexpensive way to get away.
“It’s still the most cost-effective holidaying you can do,” he said.
“You can pick anywhere you live on Vancouver Island and I’ll bet within five to 15 minutes you can be somewhere RVing.”