The recent acceleration in car sales is impressive, but there’s an even better sign the U.S. economy is getting back on track: surging sales of recreational vehicles. Bloomberg Business Week reported that makers of RVs shipped 32,054 machines in the U.S. in April, a 19% increase from a year earlier, according to data compiled by the Recreational Vehicle Industry Association (RVIA).
RVs are a notable niche because it takes no small amount of consumer confidence to buy a gas-guzzling home on wheels. Between 2007 and 2009, more than half of the RV market disappeared. Light-vehicle sales, by contrast, dropped by 36%. “No one needs an RV,” said Jeff Tryka, a spokesman for Thor Industries Inc., one of the biggest U.S. RV makers. “It’s a purely discretionary purchase, while there’s always going to be a base-level demand for cars.”
The motorhome and towable RV business, a $14 billion market in the U.S., is on track for its best performance since 2007. For the year to date, shipments are up 13% and RVIA expects more than 307,000 vehicles to roll by January. The sales boost doesn’t matter much to Detroit, but it’s big news about 200 miles away in Indiana, where roughly half of the country’s RVs are made. It’s also great for companies like privately held Jayco Inc., the Forest River Inc. unit of Warren Buffett’s Berkshire Hathaway, and Thor, which cranks out some of the most popular RV brands.
When the RV market bottomed out in 2009, Thor’s payroll dropped to 5,400 workers; today it employs 8,800. And in anticipation of higher demand, it just bought a factory in Wakarusa, Ind., equipped with 35 booths for painting giant campers. The company will give a progress report when it announces earnings later today. Last quarter, Thor posted income of $19.9 million—a 45% increase from a year earlier.
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Officials in Wakarusa, Ind., got some very exciting news Monday (June 3). As reported by the Elkhart Truth, Thor Industries Inc. announced it is taking over the beleaguered campus that used to house Monaco Coach, and more recently motorhome operations for Navistar RV, on the town’s south side.
“This is awesome. I’m ecstatic. It couldn’t be better for us,” said Jeff Troxel, Wakarusa Town Manager. “It adds stability to the town. We haven’t had stability on that side of town for years.”
Bob Martin, president and COO of Thor, said it’s too early to know how many jobs will be created as the company plans to move part of its Thor Motor Coach subsidiary along with painting operations for Keystone RV Co. into the Wakarusa site.
“We’ll have a clearer picture of what our plans are,” Martin said. “I know people always want to know how it’s going to affect people in jobs, but long term it should be good for the county and the community and we’d like to see it come back to production numbers it was at years ago.”
The move will mean new production for Thor Motor Coach and won’t reduce any of those jobs in Elkhart, he said. “It will be in addition to our plant in Elkhart. The Elkhart work force will stay the same,” Martin said.
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Wakarusa, Ind., Town Manager Jeff Troxel and others had sounded curiously upbeat over the past two weeks that a company would step up and acquire the 150-acre campus that formerly housed motorhome operations for Navistar RV.
The property was placed on the market when Allied Specialty Vehicles Inc. (ASV), parent to motorhome builder Fleetwood RV Inc. and a subsidiary of American Industrial Partners (AIP), purchased rights to Navistar Inc.’s RV assets on May 16. In the wake of the acquisition news, ASV announced that it would be relocating operations from Wakarusa to Fleetwood’s headquarters in Decatur, Ind., impacting some 520 workers involved in the production of Holiday Rambler and Monaco motorhomes.
Now Troxel’s confidence appears to have been well founded with Monday’s (June 3) announcement that Elkhart-based Thor Industries Inc. was purchasing the facility from ASV with initial plans to move at least part of the company’s Thor Motor Coach into the plant as well as paint operations to be overseen by Thor’s Goshen, Ind.-based Keystone RV Co. division.
“This purchase marks an important step forward in the growth of our RV business,” stated Thor President and COO Bob Martin in a press release, noting that the facilities comprise nearly 1 million square feet of total production space. “With this new production complex, we will be better positioned to achieve our long-term strategic growth initiatives. Even more compelling, this purchase will allow us to expand capacity faster and at a lower cost than other options. We are excited about the future prospects of reinvigorating the Wakarusa facilities.”
John Draheim, president and CEO of Fleetwood RV, noted that the company’s plan to consolidate motorhome production hinged on logistics.
“Our plan all along wasn’t necessarily to sell to Thor,” he said, noting that Fleetwood has around 1,000 employees in Decatur. “But our plan all along was that we didn’t need the production capacity. We didn’t want to run two buildings. We felt that the Decatur campus has plenty of upside and we have a work force there that is a known entity to us. And we also have a management team in place that is also a known entity to us. So, it made sense to get the brands relocated to the Decatur campus, and put the facility on the market.”
A key factor fueling hopes that a buyer would step forward was the overall health of the RV industry, as growing sales have pushed companies into expansion mode.
“We believe through our studies that the RV business is in a growth mode, and that there are capacity constraints, especially on the trailer side of the business,” Draheim said.
Wakarusa also represented a prime manufacturing location, offering room to expand along with 35 paint booths designed specifically for recreational vehicles.
“This is a massive manufacturing complex in Wakarusa, and the real sweet spot of that whole production facility is the paint facility,” Draheim said. “A lot of the manufacturers are going outside and having third parties do their paint work, which is expensive. It increases your working capital because you have excess WIP (work in process) in your operations. So, we felt that somebody out there would see the attraction because of the paint facility and also because we could expedite the sale because we’re a cash buyer.
“You know, we didn’t have to sell it fast, but we could. And AIP has made several other acquisitions where we’ve gone in and acquired a company, relocated the product to one of our facilities and then sold the real estate. So, they have a good track record of being able to do that.”
Draheim added that ASV will retain a very limited presence in Elkhart County, running towable operations out of a former Roadmaster chassis plant in Elkhart while also maintaining some offices at an unstated location in Wakarusa for engineering and product development.
“We will operate those offices for an extended period of time – for months if not years,” he said. “Employees include Monaco people plus some additional hires that have occurred since the acquisition of Navistar RV.”
Thor Industries Inc. announced that Bob Martin, Thor president and chief operating officer, will present at the Citi 2013 Global Consumer Conference to be held at the Hilton New York Hotel in New York City on Wednesday (May 30).
The management presentation, which will include information on Thor’s operations, is scheduled to begin at 2:30 p.m. EDT, and will be available via live webcast at the company’s website, www.thorindustries.com. Click on “Investors,” then click on “Presentations.” Replays of the presentation will also be available at www.thorindustries.com for 90 days following the presentation.
Bob Martin, president and COO of Elkhart-based Thor Industries, addressed the 2013 Baird Growth Stock Conference in Chicago on May 8, and his talk covered Thor’s past, present and future, as well as some of the bigger trends in the RV industry in general.
The Elkhart Truth reported that Martin talked in some detail about recreational vehicles and the growth in the motorized RV market, as well as why Thor is in the bus market and why the company just sold its ambulance business.
In his prepared remarks and in answer to audience questions, Martin laid out a look at Thor:
• 96 brands in its subsidiaries (Keystone alone has more than 20 brands)
• Largest RV manufacturer in the industry.
• 36.3% of the RV market.
• 33% of the travel trailer market.
• No. 1 in the fifth-wheel market, with market share greater than 50%.
• No. 2 in motorhomes, but growing this year.
• 8,800 employees overall.
• 96 production facilities across seven states.
• More than 6 million square feet of combined indoor production.
To read the entire Elkhart Truth article click here.
Thor Industries Inc. announced the sale of substantially all of the assets of SJC Industries Corp., a subsidiary that manufactures ambulances, to Wheeled Coach Industries Inc. According to a press release, Wheeled Coach is a subsidiary of Allied Specialty Vehicle Inc. (ASV), a privately held company based in Orlando, Fla., that is parent company to Fleetwood RV Inc.
Bob Martin, Thor president and COO, noted, “The sale provides the opportunity to streamline our bus operations and refocus these assets on our core business in a way that leaves our Goshen Coach operation better positioned to take advantage of future opportunities.”
Peter Guile, Chief Executive Officer of ASV stated, “I am pleased with the addition of the McCoy-Miller and Marque ambulance brands to the Fire & Emergency Segment of Allied Specialty Vehicles, Inc. Both McCoy-Miller and Marque have been respected manufacturers within the ambulance industry for many years. ASV plans to build upon the strong reputation of the McCoy and Marque brands by supporting and enhancing their respective dealer’s and providing an outstanding customer experience.”
Thor Industries Inc. today (May 2) announced record sales as well as an improved backlog for its fiscal third quarter and nine months, ended April 30. The third quarter was the first time in the company’s history in which quarterly sales exceeded $1 billion.
Sales in the third quarter were a record $1.05 billion, up 13.3% from $926.5 million in the third quarter last year. RV sales totaled $929.3 million, a 15.1% increase from $807.2 million a year ago. Towable RV sales grew 9.1% to $742.1 million from $680.5 million while motorized RV sales in the third quarter increased 47.8% to $187.2 million from $126.7 million. Bus sales were flat at $119.2 million compared to $119.3 million the previous year.
For the nine months, Thor posted sales of $2.67 billion, up 21.4% from $2.2 billion last year. RV sales grew 24.6% to $2.33 billion from $1.87 billion last year. Towable RV sales during the period totaled $1.9 billion, up 17.3% from $1.62 billion the year prior while motorized RV sales rose to $423.2 million, up 72 % from $246.1 million. Bus sales were $338.4 million, a 3.6% gain from $326.6 million last year.
Consolidated backlog on April 30 increased 28% to $849.2 million from the previous year. RV backlog was $649.6 million, up 44.9% from the end of the third quarter of fiscal 2012. Towable RV backlog increased 27.1% to $439.6 million and motorized RV backlog more than doubled to $210 million. Bus backlog was $199.6 million, down 7.2% from the end of the third quarter of fiscal 2012.
“Thor achieved record sales for the third quarter of fiscal 2013 based on the strength of the overall RV market and in particular, the growing recovery of the motorized RV market. We have seen improving retail traffic and increased dealer optimism as signs of a healthy market entering the seasonally important spring and summer selling period,” said Peter B. Orthwein, Thor chairman and CEO. “Although we are still in very competitive environments in both RVs and buses, we believe Thor is positioned well to support future growth in both of our businesses. We expect to report our third-quarter operating results on June 6.”
There’s no formal organization that oversees the annual Elkhart RV Open House because that’s not the way things work with this wildcat industry trade show that’s taken the industry by storm ever since September of 2009 when Elkhart, Ind.-based Forest River Inc. President and CEO Pete Liegl called dealers together for new model year product debuts and some morale-boosting social time with the company’s management team and fellow retailers.
The Elkhart RV Open House since then has become an annual must-see trade event, drawing an estimated 4,000 dealer personnel to Elkhart’s RV-building zone from around the U.S. and Canada to see the unveiling of new model year product lines from a wide variety of OEM’s at displays located in various locations around Elkhart and LaGrange counties — particularly along County Road 6 on the northeast side of the Elkhart.
Of course, setting a date for the Open House is typically left to the senior management teams of Forest River and Thor Industries Inc., the world’s largest RV builder, also based in Elkhart. Both companies confirmed with RVBUSINESS.com that this year’s Elkhart RV Open House will be held a bit earlier this time around, slated for Tuesday through Thursday, Sept. 17-19.
For the second time in less than four months, Indiana’s Elkhart County is scoring another corporate headquarters, according to a report by the South Bend Tribune.
Following on the heels of Thor Industries Inc.’s move from Ohio to Elkhart, Drew Industries Inc. announced it would move its corporate headquarters here from White Plains, N.Y.
Thor, which already is a major employer at its recreational vehicle plants in the region, recently moved into its new headquarters along the St. Joseph River in downtown Elkhart.
Drew, a manufacturer of components for recreational vehicles and manufactured homes, will move into a vacant building at 3501 County Road 6. A ribbon-cutting event is scheduled for sometime in June to mark the move and expansion in the county, said Dorinda Heiden-Guss, president of the Economic Development Corp. of Elkhart County.
All told, the announcement by Drew is expected to result in about 800 new jobs over the next several years. Beyond the move of corporate headquarters, Drew’s subsidiaries, Lippert and Kinro, will undertake industrial expansions at existing plants in Elkhart and Goshen that will result in the lion’s share of the new jobs.
Goshen City Council took the first step Tuesday to approving tax abatement for the industrial expansion that will create nearly 400 new jobs at Drew Industries’ plants in the city. Elkhart City Council is expected to take the first step Monday for its portion of the expansion.
Drew plans to invest $12.75 million to renovate and equip four manufacturing plants it operates in Goshen and Elkhart. The company will install new manufacturing and production lines, which are expected to be operational this year.
“We have experienced significant growth over the past three years,” said Jason D. Lippert, chairman and chief executive officer of Lippert Components and Kinro, in a release from the Indiana Economic Development Corp.
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Thor Industries Inc. Wednesday (March 27) announced that it has completed the planned move of its corporate headquarters to Beardsley Avenue along the St. Joseph River in downtown Elkhart, Ind.
According to a news release, Thor was previously headquartered in Jackson Center, Ohio, and announced the move in January as a strategic decision to be more accessible and active in the community where a large majority of RVs are produced and more than 70% of the company’s operations are located.
The new headquarters building was previously unoccupied and was renovated to include new design features providing a “world-class atmosphere,” according to Thor.
The reuse of this building is a prime example of the recent efforts being made to revitalize the downtown Elkhart area, Thor said in the release. The new office will have the capacity to host a variety of meetings and events with dealers, suppliers, investors and the broader Elkhart community. Thor’s corporate human resources, finance and accounting, legal and information technology departments are now housed at the new facility.
“We are pleased with the smooth transition to our new offices on Beardsley Avenue and are looking forward to working in close proximity to the majority of our production facilities as well as our key suppliers,” said Thor President and COO Bob Martin. “In addition, our new offices provide us with the flexibility to host events that showcase our RV and bus products on-site. We believe the investment in our new headquarters will provide a significant return in the form of more efficient management of Thor’s resources in Elkhart and the surrounding area, as well as even stronger relationships with our customers and suppliers.”
Contact information for Thor’s corporate headquarters is:
601 East Beardsley Avenue
Elkhart, Indiana 46514-3305