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RV Maker Sees Pent-Up Demand in Western U.S./Canada

July 9, 2009 by · Leave a Comment 

After facing an uncertain financial future, Riverside, Calif.-based Pacific Coachworks, a travel trailer manufacturer founded by two former executives of Thor California in July 2006, is returning to full production, according to the Riverside Press-Enterprise.

The company, which builds the Tango and Tango Twist brands of travel trailers and fifth-wheels that can be towed, laid off most of its 150 employees in December. Executives plan to rehire 85 workers immediately. Tom Powell, founder and CEO, said he’s confident the travel trailer market will see a rebound in the fourth quarter, but “we’re still going to remain staffed as though it doesn’t,” he said.

He expects to have his full staff back by spring to work at the company’s 66,000-square-foot factory, he said.

The nearly 60 dealers in the Western United States and Canada that the company still sells its recreation vehicles to have reported a pent-up demand for trailers, he said.

“The feeling now of most people is, ‘OK, I’ve been through the worst recession since the Great Depression and I still have my job, my camper is still old and needs to be replaced,”‘ said Powell, adding that lending for trailer purchases has loosened.

At its height, the company employed 187 workers who were building 10 to 12 trailers a day. Now the company can manage to make a profit by building just four to five trailers a day, he said.

Powell, a 32-year RV industry veteran, said he had hoped to restart production by February or March but, despite having orders, he didn’t have the capital.

His company’s fate may have been much different had he not made a private stock offering that closed on June 30 and gave him the funding necessary to stay open.

Powell wouldn’t say how much was raised.

“There are a lot of people who are optimistic about 2010,” said Jeff Kurowski, director of industrial relations for the Recreation Vehicle Dealers Association (RVDA). But they’re not unrealistic, he said.

Industry forecasts indicate that the next year will see an increase in shipments but won’t exceed the volume of shipments in 2005 and 2006. Financing remains a challenge both for dealers seeking loans to buy new models to sell and for customers who have to put more money down, sometimes 20%, on trailers and motorhomes than they did prior, he said.

Kurowski said dealers are saying they’re running low on inventory and would like to order more if they can get loans.

There were 128,100 conventional travel trailers shipped in 2008 and another 57,000 fifth-wheel trailers, according to the Recreational Vehicle Industry Association (RVIA). The trailers accounted for 78% of the total recreational vehicle market in 2008.

Only 3.7% of all conventional travel trailers and about 4% of fifth-wheel trailers were built in California, according to the group.

Powell said 24 of his competitors have left the industry in the past two years — including Fleetwood Enterprises Inc. in Riverside, which filed for bankruptcy March 10 and sold its trailer division.

“There are dealers scrambling to replace Fleetwood products and Weekend Warrior products and 22 others,” he said.

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