Just how bad is the RV industry hurting?

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I am 32 years in the high end commercial computer field, although the company is awash in cash as they recently posted record net profits, that said  things are bad for the working folks (like me) because the company is looking to keep every penny, and is firing people daily in preemptive actions, figuring things will be slow over the next year. The same company went through the great depression without loosing one employee. Now bean counters and greedy executives control what were once great companies that were owned and run by caring individuals, like the Watsons. Most companies are forced to down size, this I understand. this is not always the case sadly.
 
Back to the original question re how bad the RV industry is - Monaco appears to be going into bankruptcy.  That means the main Monaco lines are gone, Safari is gone, Beaver is gone, McKenzie Towables is gone, and some other smaller subsidiaries.  VERY BAD for Oregon and Indiana where they shut down a few months ago.

ArdraF
 
OPn one of the Newmar forums it was noted that they are a head of the production and delivery schedules and that they have lots of orders in hand to support production for the forseeable future.  Since newmar gets moneys up front, they seem to be holding in there for now at least/  Hope they do.
 
I would think the real high end companies will do OK, may even do better as other fairly high end options dry up. So Provost,Newmar , MCI and some others will most likely be the last ones standing, or should I say parked. The other winners will be Pop ups and econo rigs.JMHO
 
Even Newmar and Winnie cannot survive if their dealers cannot place orders. They need access to financing (called floor planning) to be able to do that and few can get any.

All RV manufacturers get paid for the RV when the dealer takes delivery. Some of them, however, are under obligation to buy the coach back if the dealer fails to sell it and cannot meet his floor plan interest payments. Dealers get short term financing to pay for the coach until they sell it. That's cost effective if sales are good, but ruinous if the coach sits on the lot for a year.
 
I guess I thought that most top end rigs were custom ordered and not inventoried, floor plan merchandise.
 
Mark,

I can understand how you'd think that, but the factories always have some inventory which, for whatever reason, hasn't (yet) been delivered to dealers. In Monaco's case, there's also the unsold inventory they had to buy back from dealers.

FWIW when we visited Marathon Coach (Prevost bus conversions), across she street from Monaco in Coburg, they told me that 80% of their builds were spec, and only 20% were custom ordered.
 
Most people want to see what they are considering, so the dealers need to have at least one on hand to show. Actually, they really need to have one of each floor plan (interior layout) if they have space and funds to do so.  But a surprising number of people impulse buy - they see it, fall in lust and sign on the dotted line. I have friends in the RV sales business and they all say this is so, in any price bracket. That's why RV shows are great for sales.

Newell only makes custom designed coaches - designed from the ground (pavement?) up for each customer at $1.5-2M a pop.  Even then, a lot of them are built for short term use (leased for a concert tour or Nascar season) and put on the market when it finishes. But those are still bought and paid for when they leave the factory.
 
Gary and Tom, I had no idea, I just assumed if someone was dropping a couple of million on a MH that they would custom order it. That said I agree about lust at first sight and if you got it .........what the heck!  At least these companies can stay in the commercial buss. and get back into RV's when the world turns around, I hope!
 
We were talking about "collateral" damage yesterday when we heard about Monaco.  Imagine all the RV rallies that will not be held, thereby affecting people in the local rally communities that rent the rally space, and supply food and other resources.  We've noticed our RV-related magazines are significantly thinner and with very few of those insert ads (latest issue of Forbes had zero - WOW!).  Now that so many RV manufactureres have gone by the wayside this means the magazine revenues will drop a huge amount.  Wouldn't be at all surprised to see a couple of these RV magazines also disappear.  Then there's FMCA.  They may be healthy in terms of the current balance sheet but imagine how much smaller their rallies are going to be without Monaco, Country Coach, Alpine, and all the others.  Monaco's share of the rally floor was always the biggest so this is bound to hurt FMCA.  :(

ArdraF
 
Ardra

You are so correct. I'm on the National Finance Committee of Family Motor Coach Association (FMCA) and our financial planning is getting harder and harder. Ad revenue in the FMC magazine is down about 50%. Vendor participation at rallies (booth/space rentals and activity sponsorship) is down a lot. Membership and attendance at National Conventions are also down. On the other hand, member participation in chapter and Area rallies seems to be increasing. While the orphaned manufacturer sponsored rallies won't happen any more, FMCA has a lot of chapters of members owning most of those brands and those chapters will continue and run their rallies. It may be even more important now to belong to those chapters in order to get together  with other owners for information and help in maintaining and improving their coaches.

No, we won't have as many display coaches at the rallies, the entertainment may not be at the same quantity and name level as before (I've usually enjoyed the warm ups more than the headliners anyways) and we are looking at smaller venues that cost a lot less. I like seeing all of the new members of our Forum here who are potential and future members of FMCA. The camaraderie and benefits of being a member of FMCA are so strong and with a substantial rainy day fund and constant monitoring of our costs, FMCA will live thru this downturn until the industry regains it's health.
 
I just assumed if someone was dropping a couple of million on a MH that they would custom order it.
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You are probably mostly correct at the $2M level, but the "luxury coach" class starts at around $500k these days and a surprising number of those are bought right off the lot at the big dealers that handle that breed. Lazy Days used to keep 100+ of those new in stock and expected to sell a couple of them EVERY DAY. Even now they have a lot of them in inventory, but the ranks were noticeably thinned when we were there a couple weeks ago.
 
Last night I read the December 2008 issue of Family Motor Coaching and realized there wasn't a single ad in it for Monaco, except for some dealers with Monacos on hand.  I guess the signs of Monaco cutting back were there but not noticed.

ArdraF
 
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