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Bontrager: Lightweight Movement Will Stick

April 12, 2010 by · 1 Comment 

Jayco CEO Wilbur Bontrager

Jayco CEO Wilbur Bontrager

The ”Great Recession” probably has made permanent the RV industry’s move toward lighter weight, ”greener” units, Wilbur Bontrager, Jayco Inc. chairman and CEO, told a northern Indiana television audience this weekend (April 10-11).

“I’ve been through a couple of these downturns,” Bontrager said. ”We’re seeing a lot of the same dynamics where we, along with all the other manufacturers, have gone into building lighter weight products. This time around, I believe it will stick.

”This time around, we have technology, we have materials and suppliers who can produce components that can be lighter weight and greener. In the past, this has been more difficult.”

Bontrager made the observation while a panelist Friday on South Bend, Ind., PBS station WNIT’s ”Economic Outlook” hosted by Phil D’Amico, director of business growth for the Chamber of Commerce of St. Joseph County.

Other panelist included Sherman Goldenberg, publisher of RVBusiness and Woodall’s Campground Management, and Matt Zimmerman, general manager of Keystone RV Co.’s Sprinter, Bullet and Outback lines.

While Bontrager suggested lighter weight RVs are leading the industry out of its economic doldrums, Goldenberg predicted that fuel prices, which have been steadily increasing in recent months, should have a role in how the recovery plays out — plus or minus.

”Guys worry every day at the lunch counter if this is going to be a double-dip recovery,” Goldenberg said. ”Gas prices play into that.”

Bontrager agreed to the extent that fuel-price spikes inevitably affect the RV industry. ”When things change more steadily, it doesn’t send a shockwave through the system as much as when they spike dramatically,” Bontrager said.

Zimmerman said that generally, the national economic downturn has changed the way RV consumers think about RVing. ”Maybe the consumer can still buy a bigger (travel trailer),” he said, ”but he knows towing that lighter coach will save him fuel, which ultimately saves him income.”

Bontrager said that Jayco with headquarters in Middlebury, Ind., which recently announced two major factory expansions, saw the recovery begin late last summer. ”We began seeing strong signs of retail activity, the dealers gaining confidence at the wholesale level and us being able to ramp up production levels again.”

As Goshen, Ind.-based Keystone, a Thor Industries Inc. subsidiary, comes out of the recession, it is on the verge of reaching its peak employment level of 5,100 employees after a fall to 3,100 during the downturn’s depths.

”We’re 100 people short of our peak employment at Keystone RV,” Zimmerman said. ”We continue to see positive growth in employment.”

Goldenberg noted that the RV industry still faces the challenge of relatively tight credit availability. ”The talk right now is that if it’s a purchase of $100,000 or more, it’s still problematic on the credit front,” he said, noting that credit seems to be easing some for purchases of less than that. And terms are returning to a time when a solid down payment of 20% or so was expected with most substantial purchases.

Lenders are moving, he said, ”to more reasonable practices that we were seeing (in the RV market) in recent years.”.

Those practices, however, have shrunk the RV market, Bontrager said. ”(They) take a certain amount of people out of the market, especially younger families — the less affluent sector of our society,” Bontrager said.

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