At the RV Industry Power Breakfast Thursday (May 8), some of the top leaders in the RV industry – both manufacturers and suppliers – took the stage at the RV/MH Hall of Fame’s Northern Indiana Event Center in Elkhart, Ind., for a round table discussion.
Those leaders included RVIA Chairman Doug Gaeddert, a general manager at Forest River Inc.; Bob Martin, president and CEO of Thor Industries Inc.; Derald Bontrager, president and CEO of Jayco Inc.; Mel Adams, president and CEO of Airxcel Inc.; Jason Lippert, CEO of Drew Industries Inc.; and Todd Cleveland, president and CEO of Patrick Industries Inc.
The power-packed group, representing some of the largest RV manufacturers and suppliers in North America, weighed in on topics ranging from the industry’s future to the impact of Obamacare, from how the September Open House and the RVIA National Trade Show relate to each other, from the transportation backlogs in the RV industry to the drop in unemployment in the Elkhart area.
Looking at the future, all were optimistic, and some of them pointed to the demographics Jim Rogers, chairman and CEO of Kampgrounds of America Inc. (KOA), identified earlier in the program as positives for the campground industry.
As Gaeddert put it, “Just like Jim Rogers said, we’re in a sweet spot in the industry.”
Martin said those same statistics — millions of campers who don’t yet own RVs, abundant gasoline supply projections, a societal need to get outdoors and connect — “are something we talk about every day. We have bright days ahead of us because of the demographic. It’s a great future for the RV industry in general,” Martin explained.
Bontrager said that even during the recession, “The customers never left us. They sat on the sidelines,” and he expects continued growth.
Cleveland agreed, saying, “our future really depends on tapping that piece that they talked about earlier, those individuals who haven’t been part of the RV experience, the RV lifestyle.”
When discussing the Affordable Care Act, the biggest thing in common between the company leaders was that nobody knows the long-term impact. The one thing Bontrager likes is that “it’s putting responsibility for health care back onto the individual.”
Adams summed up his views with a quote attributed to Henry Ford: “Any man that thinks that he can be prosperous and happy allowing the government to take care of him need only look at the American Indian.”
Lippert, who balked at trying to follow Adams’ quote and the ensuing laughter, suggested, “we can’t rely on the government to take care of this problem. What we need to do is take it upon ourselves, like we do with every other problem, and try to address it.”
Taking a look at the September Open House phenomenon and the RVIA’s show in Louisville, the group all agreed that both events are important for manufacturers. “We’re doing what the dealers are asking us to do,” said Martin, reiterating what he’s said previously regarding the whole trade show issue.
Gaeddert said the two events have settled in and “they complement each other extremely well. The demand is there for both events.”
From a supplier side, Cleveland said, “I think the Louisville show is absolutely a necessity.” During the Open House when OEMs are busy selling products, “they’re not completely interested in seeing Jason, myself and Mel, and talk about business.”
Bontrager, Martin and Gaeddert all addressed the struggles RV transporters are experiencing. “Dealers are screaming for product,” Martin said. “There aren’t enough drivers. I think RVIA and some of the meetings we’ve had recently are a good step forward.”
Bontrager said the cycles of the industry throughout the year aren’t good for driver retention. “We’ve got to figure out how to smooth it out over the rest of the year,” he said.
Gaeddert said that getting transport companies together with RVIA may lead to efforts to get some legislative hurdles out of the way that “would be a big help.”
The final issue the group talked about was how to continue growth when the manufacturers and suppliers are having a hard time filling jobs, not only in the Elkhart area, but in Airxcel’s case, the Wichita, Kan., area.
Gaeddert noted, “We have gone from a 20% rate of unemployment down to 5.8%. That’s like dropping 150 pounds in a short period of time.” While he has publicly voiced frustration with the difficulty of filling more jobs, he also put it into perspective. “We’re down to the two-yard line. Yardage it tough, but we’re all going to work together. You look back, there’s 70 to 80 years of culture with this area, this workforce and these people with the RV industry. It’s pretty tough to replicate that and move out, especially with a supplier base here.”
Martin agreed it would be tough to move, and said, “it comes back on us as employers to create a good work environment.”
Lippert said business has gotten more complex over the last 20 years, and the work place needs to be improved for employees to help reduce turnover. “We can all become a lot more efficient and struggle with this issue a lot less if we can figure that out,” he said, adding that more companies are focusing on lean manufacturing and increasing automation.
Cleveland, though, said companies are hesitant to make significant capital expenditures despite the industry’s growth. “A lot of our political leaders aren’t giving us that confidence that we’re going slow and steady,” he explained.
Adams said those expenditures are part of the industry’s long-term future. “We know we get a better result if we spend the dollars to make sure it’s right every time we build a piece of equipment.”
In the long run, Adams said, “we’re ingrained in the psyche of the American consumer and we roll with the economy. It’s not a case that we go out of style. We are in style every day. We make great products. They serve a useful purpose, providing freedom for people, and making it so they can get out and do the things to make life more beautiful.”
The Recreation Vechicle Industry Association (RVIA), which will soon open a new satellite office in Elkhart, Ind., will present several current-interest topics during a casual, off-the-record session in conjunction with the RV Industry Power Breakfast on May 8 at the Northern Indiana Event Center in the RV/MH Hall of Fame.
The RVIA Town Hall Meeting is scheduled for 10:30-11:30 a.m. following the main program in Ingram Hall. Presenters for each topic will be introduced with background and updates before opening for discussion.
Topics and presenters are as follows:
• National RV Trade Show (Louisville) – Discussion will include new show features that are under consideration and analysis of location and reorganization of show staff. Presenters: James Ashurst, RVIA vice-president of communications & marketing and Scott Graham, RVIA’s new national show director.
• RV Service Technician Training Pilot Program – Update of pilot program findings and direction of the program, successes and hurdles. Presenters: Sharonne Lee, RVIA director of technical information and Mel Adams, Airxcel Inc. president.
• Trends in Extended-Stay Camping – Update on extended-stay and destination camping trends to identify opportunities through coordinated initiatives of private and public campgrounds. Presenters: Matt Wald, RVIA park trailer executive director and Jim Rogers, Kampgrounds of America Inc. CEO.
• RV Transportation Update – Review of the initiatives being explored to address expediting the shipment of RVs from manufacturers to dealers. Presenters: Jay Landers, RVIA director of government affairs and Maryellen Adams, employment network account executive.
• Legislative and Regulatory Developments – Update and analysis of current legislative and regulatory issues affecting the RV industry; e.g., “vehicle” titles for park models, RV-specific franchise laws and the Generalized System of Preferences (GSP) program and its extensive impact regarding products containing imported wood. Presenter: Dianne Farrell, RVIA vice president of government affairs.
All attendees to the Power Breakfast, facilitated by RVBusiness magazine, are invited to the Town Hall Meeting as part of their event registration.
“We’re eager to open up a genuine, off-the-record conversation among our guests,” said BJ Thompson, event coordinator and Town Hall moderator. “We’ll be connecting people that have a front-row seat to the real-life conditions surrounding these topics with those who know how to affect change. And that’s really the essence of what the Power Breakfast is all about.”
Tickets to the Power Breakfast ($30 for singles or $225 for a table of 8) are available at RVBusiness.com, the RV/MH Hall of Fame or RVBusiness’s Elkhart office at 2901 E. Bristol Street.
Along with the omelets and pork sausages in the buffet line, Doug Gaeddert, chairman of the Recreation Vehicle Industry Association (RVIA) and a general manager of Elkhart, Ind.-based Forest River Inc., served up some straight-shooting opinions in his remarks during the RV Power Breakfast, May 9 at the Northern Indiana Event Center, a part of the RV/MH Hall of Fame in Elkhart. Here’s a few highlights from Gaeddert, who served with Dicor President Gregg Fore as a co-emcee:
Current shipment vitality: “Total shipments for the first three months of 2009 were approximately 30,500 units compared with 79,422 units for the January through March period of this year. That’s a whopping 160% jump. So, if you feel like you’ve been running faster and working harder – you have been and that’s great for all of us. It’s also great for the local communities in Northern Indiana and Southern Michigan. We’re all somewhat joined at the hip and the positive ripple effect has been felt by nearly everyone – even the local, state and federal governments who seem to be constantly complaining about revenue.”
Hershey Show & the Open House: “Not as RVIA chairman or a long-term Forest River-Pete Liegl guy, but as an industry guy, I think the Open House Week, as it has come to be known, has been a positive for the industry and hits at a perfect time. While negatively impacting the Dealer Days of Hershey, whose wholesale value has steadily declined anyhow over the years, it has more than made up for it by further enhancing the retail portion of the show. With the Open Houses immediately following Hershey, the number of dealers attending the Pennsylvania Show from outside the market who don’t show product has declined, but most, if not all of the products being displayed at Hershey, are now what’s ‘new’ for the upcoming year. This gives retail customers the opportunity to get the first look and actually purchase new industry offerings. This is something that can’t be duplicated anywhere else in North America.
“Becky Lenington and the folks at the Pennsylvania RV & Camping Association (PRVCA) have done an awesome job of developing Hershey into one of the most outstanding retail shows on the continent. They draw people from a wider geographic area and in larger numbers than ever before, and dealers sell a ton of product. This has become, in my opinion, a destination show of the highest quality. I’m not going to get drawn into a comparison though of it versus Tampa or Pomona. They’re all tremendous shows!
“Hershey kicks off the fall schedule and Louisville effectively closes it. Post-Louisville surveys over the last couple of years have shown that the majority of dealers participating will continue to go to the Open Houses and will continue to attend Louisville – and don’t want to change the time frames of either. Seems pretty simple: They like both of the events as well as the timing. Obviously it’s not unanimous, but it’s an overwhelming majority. With that being said, I predict a certain degree of consolidation will occur among these other fall events, just as it has occurred in other sectors of the industry over the last few years. Nature will take its course over time, but nobody will successfully force it.”
RVIA’s Louisville Show: “Although industry shipments have been rising rapidly over the last few years, the number of OEMs, suppliers and dealer/owners has shrunk by around a third. With an approximate 33% reduction of players in these key categories, not even taking the campground ownership consolidation into consideration, why in the world would you expect attendance at this show to have grown? In my opinion, Louisville has hit the leveling-out point, and with possible further industry consolidation ahead, I don’t see it growing significantly, but I do see it remaining steady and continuing to grow in value.”
RV-Specific Legislation: “Cars and RVs shouldn’t operate according to the same rules. As our industry continues to grow, mature and consolidate, I believe it will become even more important that we see RV-specific legislation replace automotive legislation in those states in which we as an industry are governed by car laws. Oklahoma is an excellent recent example of a win/win/win for our industry by everyone working successfully together to get RV-specific law into place. RV manufacturers, RV dealers and RV suppliers deserve to play by rules specific to our industry. We are the RV industry, not the car industry – and proud of it.”
RV Transportation Issues: “One challenge which the industry seems to face every year in the spring is a shortage of finished goods transportation availability. As many of you are aware, this sector is currently struggling to keep up and will be until at least the first week of July. We are attempting a new and different approach by utilizing RVIA’s resources to see if we can’t help smooth it out for the long haul.
“RVIA is exploring several possible strategies in hopes of being able to positively impact the RV transportation sector for both the United States and Canada. No promises at this point, other than we are diligently working on it. If successful, however, it will be too late to affect spring and summer of 2013. We hope to be able to help the industry improve the peak shipping periods of 2014.”
Credit Availability: “I think it is crucial our industry — which includes all of us — remains disciplined in our approach to credit. Solid practices are one of the keys to our growth remaining real and sustainable. If we slip back into the same lax practices the industry utilized in 2008, we’ll end up with the same result. 2009 reminded me of a fastball I once threw that was hit back at me a hell of a lot faster than I threw it, resulting in my second broken nose and a busted tooth! Let’s not throw that same fastball as an industry again!”
Industry Relationships: “Probably the single coolest thing to me about being involved in the RV Industry for all of these years is the people. Take a minute to look around the room. Most of us compete with each other, sell to each other, buy from each other, finance each other, represent each other, write about each other and, yeah, probably even cuss at each other sometimes. But at the end of the day, we’re also basically good friends. It’s a close-knit industry that, while growing rapidly, is also getting smaller at the same time.”
The good times are coming back for the recreational vehicle industry.
As reported by the Goshen News, speakers at the RV Power Breakfast Thursday (May 9) morning contended that while the industry is still far below its output of the pre-recession years, growth has occurred in the past two years and is expected to continue through the end of 2013.
“We had some good times back in the 70s,” said Robert M. “Mac” Bryan, Recreational Vehicle Industry Association (RVIA) vice president of administration while he stood in front of a screen full of numbers recounting the historic ups and downs of the industry. But all the recent numbers are moving upwards.
RV shipments from manufacturers were 353,400 units in pre-recession 2007, then dropped to 165,700 units by 2009. Since then the industry has had steady growth, with gains each year through 2012. When 2012 ended, 285,900 units had been shipped. The RVIA forecast for this year’s shipments is 307,300 units.
The North American demographics favor the RV industry, Bryan said. Based on historical data there are 8.9 million RVs in use now and there should be about 11 million RVs in use by the end of the decade. To reach that milestone the industry will have to produce about 350,000 units on average each year, he said.
Reflection on hard times
“With creativity and imagination, there is no limits to the amount of RVs that can be sold in the next decade,” he told the industry leaders. “And I see no lack of either in this room.”
But there most likely were fewer RV members at the breakfast than would have been attending in the past. Richard Coon, RVIA president, said that in 2008 the trade organization had 555 member companies. Membership was 410 members in 2013.
That decline of 26% is due to the recession and the resulting consolidation and winnowing that occurred.
“Since 2008, 53 companies have gone away,” Coon said of the industry. Eight of those RV companies were absorbed by others. He said only one company quit the organization during the recession and has not rejoined.
A positive trend is that there have been 23 new RV-related companies created in recent years, Coon said.
Always a preacher of the RV gospel, Coon was a strong advocate before, during and now after the recession for the RV lifestyle and the quality of products produced.
Even during the height of the recession, the travel trailer segment of the industry remained strong, according to Coon and in 2012 that segment was still solid.
And, consumers can find a travel trailer bargain.
“The price of a conventional trailer is almost the same as it was 15 years ago, but the product is better,” Coon said. “That is a real tribute to the people in the room.”
To read the entire article in the Goshen News click here.
A crowd of about 400 manufacturers and suppliers showed up bright and early Thursday (May 9) for the RV Power Breakfast at the RV/MH Hall of Fame in Elkhart, Ind, to learn more about the industry’s future, according to a report by the South Bend Tribune.
On the heels of an excellent first quarter and projections for the fourth straight year of increased shipments, they received more good news.
From north of our borders to the Far East, the short- and long-range forecasts look promising for the industry, said Richard Coon, president of the Recreation Vehicle Industry Association (RVIA).
In the case of China, it will take 10 years, Coon said, but the potential is huge. “China has tremendous potential for the manufacturers here,” he said. “It’s just barely starting to come about.”
“Go back and take a look at the auto industry in China,” Coon said in an interview after his talk. “The U.S. manufacturers have been working 10 years to bring that to fruition.
“China last year took over as the world’s leading producer of automobiles. What’s interesting about that is most of those are partnerships with U.S. manufacturers.”
That’s what the RV industry is hoping to have, too, he said.
“Everybody is worrying about them copying and coming back here,” he added, before again citing the automobile industry. “They’ve been doing it for 10 years. Somebody name me a Chinese-built car in the United States today. No such thing. There’s so much market there they can’t meet the market demand in their own country. They’re not going to come over here for quite a while.”
To read the entire article click here.