Winnebago closes Class C plant

RV Business reports that Winnebago has closed one of their Class C motorhome plants. 

excerpts from: Analysts React to Winnebago's Plant Closing
RV Business Tuesday, June 3, 2008

Late Monday, Winnebago said its Charles City facility will close in
August, with work being transferred to its Forest City plant during the
company's fiscal fourth quarter. [This will lead to the elimination of 270 jobs.]

According to the Associated Press, company officials blamed rising fuel
prices, a difficult lending environment and low consumer confidence for
a decrease in motorhome demand.

In March, Winnebago said it had cut its work force by about 9%, or about
300 people during the second quarter, to bring production in line with
slowing sales.

RBC Capital Markets analyst Edward Aaron said in a client note that he
was not overly surprised that Winnebago was closing the plant, but said
the move "underscores the severity of the current downturn in the
recreational vehicle industry."

The RV sector, along with many other industries, has been squeezed as
consumers tighten spending due to the continued housing slowdown, rising
food and gas costs, eroding credit and recession fears.

other analyst comments...

William Blair & Co.'s Robert Simonson said Winnebago's decision to close
the Iowa plant indicates that industry conditions are worse than
previously thought.

"We remain of the opinion that a slowdown in consumer discretionary
spending, especially on big-ticket purchases like a motorhome, is likely
to prove longer and deeper than is the current consensus view," the
analyst wrote.

Unfortunately I don't think this will be the last to close production facilities.

I believe things are getting very tough in the RV world. We purchased a used Class A DP from a very reputable RV dealer four months ago for $139,900. Today, we went back to see if we could trade for lower cost unit and the most they would consider giving us for it was $82,000. That is a drop of $57,000 in 120 days. Yes - the same dealer and salesman. NO, we didn't do it.

We purchased a used Class A DP from a very reputable RV dealer four months ago for $139,900. Today, we went back to see if we could trade for lower cost unit and the most they would consider giving us for it was $82,000. That is a drop of $57,000 in 120 days. Yes - the same dealer and salesman. NO, we didn't do it.

Click to expand...

That price has little to do with the current market - you bought at retail (possibly high retail) and are selling back to the dealer at wholesale. You should expect to lose 40% or more of the retail value if trading back in less than a year. The moral is: make sure you are buying the right rig cause it is horrendously expensive to trade in two years or less.