Screwed, Enron style
With stunned sadness, the RV industry is reacting to the news of Sunline Coach Company’s decision to shut its doors after 42 years. That sadness will soon turn to anger. The fact that a company with a reputation for producing quality trailers — in a market where trailer sales are up 20 percent — would abruptly shut its doors, will not sit well with dealers or consumers. It’s yet another black eye for an industry already struggling with the issue of improving customer satisfaction. The fact that the closing was kept secret from employees and dealers is inexcusable. Today, more than 150 people are left wondering where their Thanksgiving meal will come from. If there is a bright side, the news hit before the National RV Show so dealers left without product to sell can canvass other manufacturers in a few weeks to replenish their inventories. In looking how this story has played out, there is a lot to be angry about. Dealers were informed today, Wednesday, Nov. 15, that the company had shut its doors. But if Sunline’s attorney is to be believed, the decision to close was made Thursday, Nov. 9 and employees were told they lost their jobs Nov. 10. The company’s website remained operational – and, in fact, still is — lending false hope to dealers and potential customers that the rumors circulating about Sunline’s demise were unfounded.
This is just another example of a manufacturer failing to walk the talk in calling RV dealers their “partners.” The partners who helped the company build its brand for 42 years and provided 100 percent of Sunline’s revenue were the absolute last to know the plant was shuttered. There can be no excuse. Now, the company’s assets will be liquidated to satisfy a single primary creditor and a single secondary creditor. Who is left hanging in the wind? Dealers who faithfully sold the company’s products for years and the component suppliers who faithfully delivered equipment and honored the company’s warranties. The customers will be cared for by dealers and suppliers who must act to protect their own reputations as Sunline’s corporate executives parachute out of sight. So far, executives of the industry’s major trade associations have been tight-lipped about what Sunline’s demise means for the industry. But, I’ll go on record saying Sunline’s action stinks. If RV dealers and suppliers can’t count on honesty from manufacturers, especially in areas where the future of their businesses are at stake, then maybe the industry needs to do some internal policing. Perhaps a fund needs to be set up similar to the way Go RVing is funded. Any manufacturer wishing to acquire a seal from RVIA for its products must pay a certain amount into a long-term care fund that will help dealers cover warranty issues in the event the firm goes belly up.
One of Sunline’s executives has gone on record saying they hope a buyer will be found and the company can get back to business as usual. But, after deliberately and secretively screwing their staff, dealers, suppliers and customers – Sunline would need a 100 percent change in management.
January 9th, 2007 at 4:44 pm
Yes a Sunline was a higher end product but one that I
felt was worth the extra money. I can’t remember ever talking to a Sunline owner that didn’t agree. The unit that I have now is my third Sunline and my eleventh rv and I have never regreted paying extra. I guess that is why you can go into an automobile showroom and pay $45000
or $20000 for a car that will get you to the same place at the same time. Obviously one is a little beter constructed.
December 31st, 2006 at 1:20 pm
Do you have contact information for Sunline’s attorney or upper management?
WE may have intereest in buying the company putting the employees back to work and bringing it back to where it should be operating.
Daniel Chaput
Group 1/USA
401 723 3330
group1usa@gmail.com
November 29th, 2006 at 10:14 am
I would be interested in knowing how may units are presently in dealer inventory (new and unsold) anybody
know, or is there any records available. We have worked
on several older model Sunline Trailers and found them to
be great units. We, as a industry may be called upon to help these new owners out, during this UnFun time in their
ownership. Comments ?
November 21st, 2006 at 5:11 pm
-Good News -as far as I am concerned - as a Sunline dealer for many years - They screwed me in the mid 80 s -all orginal owners- and as I understand some of the long time employees bought the company-They ( current management) knew what they were doing. I am sorry for all the regular workers-very unfair.
November 21st, 2006 at 4:29 pm
Comparing the closure of Sunline to Enron is completely off base. Sunline didn’t commit fraud, play accounting games, or attempt to screw and deceive it’s partners. Announcing beforehand that the company was in trouble would have prevented any chance of a turn-a-round, and started crazy rumors flying. What happened here is no different than other business closure. Fact is; this is news because it’s rare to have a RV manufacturer closing its doors, especially one that has been in the industry for so long. If this were a RV vendor or dealer going out of business, I don’t believe much would be said in these pages. Nobody wins when a business fails, and somebody is going to feel screwed.
November 21st, 2006 at 3:38 pm
I am sure the buyout and added debt load was a problem and that Sunline had made its share of mistakes, but I also believe that dealers and consumers fail to truly care about quality and support and foocus too much on price alone. I was a Sunline dealer in the 1980’s and always had the utmost respect for their product and their support. That reputation has always been there. Sunline in my opinion had too many dealers too close together and also abandoned a core 80’s standard “microlight” towable market where they made their reputation. That said, however I am also sure they had a very difficult time holding margins in the face of relentless price focused competioton while trying to remain true to their “do things right” values. Low price and lack of support are still far too common in our industry and those manufacturers and dealers are difficult to match on price. Unfortunately consumers don’t find out the truth until they are owners. They assume we are all good and our products are all good. Unfortunately the good ones can’t compete with the cheap ones. This was most certaily a factor, perhaps a major factor in Sunlines demise. Until we fix that, we are in danger of the same end or gaining a reputation as a substandard, limited support and “no fun” industry. By the way if we take out the FEMA sales, are towables really up 20 percent? I doubt Sunline got any piece of that price-focused action.
November 21st, 2006 at 3:22 pm
Using the Enron example Greg, might not be the best example here. Enron’s was pre-meditated by the original founders, Sun-Line’s appears to be from the new investors who found out they are over their head in running a viable manufacturing business, thought the bottom line bucks might be easy. Sun-Line did build a good quality trailer, and the ex-dealer is right, they were too much money. A few years back, for us to start up with the line, they offered us big $$$ back after the shipment was floorplanned, payable to us personally. We did not sign as a dealer, only because they were overpriced.
November 21st, 2006 at 2:08 pm
Greg,
For a company that called itself “the lightweight leader”, Sunline let everyone pass them by. Instead the owners chose to remain a “stick and tin” manufacturer. “Stick and tin is alive and well but at entry level pricing. Sunlines were anything but affordable. As a Sunline dealer for 35 years, I’ve had numerous conversations with managment imploring them to convert to aluminum framing and a laminated side-wall. My suggestions fell on deaf ears. We stopped selling Sunlines 10 months a go. A tough decision after all those years, but in the end, the right decision. I feel badly for the new owners who purchased a sinking ship and did’nt know it.
November 21st, 2006 at 1:29 am
As a newbie this sounds pretty disheartening to think this could happen to any company any time if I was involved at this time very heavily with this company as a start up I would probably have to close my doors. There is good news though I see a note from Alaskan Campers that they may want to purchase the name and assets, this sounds great they are a large enough company I think and they are from my home state.
November 20th, 2006 at 7:25 pm
Greg,
I usually follow and agree with you, but I’m not so sure I can in this case. I happen to agree with the first respondent to an extent; its not as though, I would imagine, the management of Sunline had been planning and wondering how they could manage to go bankrupt and screw everyone imaginable. I agree, that waiting five days to spill the beans to the dealers might have been re-thought, but I can only imagine the psychological pain involved with the failure of a company like Sunline. I’d be vomiting blood by the middle of the process!But that’s me; perhaps some people in buisiness are so callous that it wouldn’t phase them. Knowing Sunline’s products, however, I would tend to doubt that’s the case here.
It’s unfortunate that there wasn’t better business presence, or another way out, but I am forced to make comparisons with another related industry. The industry I refer to has been suffering foreign competition, and of late, has been suffering financial loss and may be once again receiving government aid. I am, of course, refering to the auto industry in the USA. The thing is, that the US auto industry has had its design and quality problems. Sunline’s products were excellent, even if they were old fashioned, stick and tin trailers. I owned one once, and I adored it. In working in this business six years now, I have never worked on a Sunline trailer for repairs; only accessories. That says something to me, as a service shop.
The last writer wrote “The employees, suppliers, dealers and the RV industry deserve a better explanation than what has been forthcoming out of Pennsylvania the past week.” What more do you want? These people, including the management, have lost everything! There is NEVER a good time to declare, or be forced into bankruptcy, and I am hopeful that some good, in the form of a buyer, can come of this. That said, I agree that some bad decisions were obviously made, but that, unfortunately, happens. NOT knowing the persons involved, or knowing the books, etc, or being a fly on the wall, this mis-management doesn’t make the people involved red with horns and a pitch-forked tail. Let’s, as an industry, learn from this. IF the development of the new product led to this, that’s too bad, but it’s a gamble many business people are likely to take. How do you take a company like Sunline to the next level? I think there are other companies in this business that really need to learn from this before they make a similar mistake(s).
Everyone involved will be in my thoughts this holiday season.
November 16th, 2006 at 6:13 pm
There are a couple of Gregs points that seem naive. I haven’t dealt with this manufacturer, but just reading a couple articles shows a couple things:
1. Management acquired the company in 2004. At that time the company was valued, and the deal was done, and the debt payments set up. For a manufacturing company, it’s typical do this with debt collateralized against the inventory/plant/equipment. If the buyers & sellers overvalued the company at sale, then it would be unable to meet the payments. If the machinery was clapped out, oops..more money gone. If the warranty was great but costing a fortune to deliver…more money gone. Seeing as they just launched the Que and A20 it’s more likely they overspent on new products that failed to gain traction in time, and it was time to pay the piper. The creditor just looked at the backlog, the operations and the bank account and clearly said “I’ll take what’s in the bank today, thanks” It’s likely that the owners were trying to save their equity and the company to the last minute, because announcing a closing essentially kills the company as soon as the news breaks. The key employees start looking, the loafers just don’t show up. Anyway, dealers learned within days, that’s not a crises. Inexcusable would be demanding deposits going into spring and closing just before shipments began…
Yes the website is up, if a business is closed who exactly would be around to change the pages? and who would pay someone to change it? The web guy is busy enough looking for a new job I’m sure.
Are dealers completely surprised? If one is selling their product, you know quite well what you’ve ordered, it’s all well to see the PR on a new trailer, but clearly dealers weren’t ordering. In the end, perhaps it was really the customers (or lack of them) that killed it?
Putting money into a fund to cover warranty costs…yeah, why not put more expenses into a business that is going to be looking at low margins across the board as the deficit grows, the economy shrinks and everything that can moves to China. Hopeful yes, realistic no.
It’ll be interesting to see if they can restart, if the customers really love the product, someone can buy the assets for pennies & get things moving, and it should improve the cost structure. Isn’t that how River Forest roared into the market a few years ago…stay tuned.
November 16th, 2006 at 6:01 pm
You said a mouthful when you said this Sunline deal will turn to anger. Now, I’m thankful to be an RV dealer, but 4 years ago as a mobile home dealer the main manufacturer that I built my business on filed bankrupt. To my shocking dismay, after filing bankrupt they created a liquidation company that sued me for all money they had paid me in the last 90 days. I had to hire and pay attorneys in the state where they were incorporated to fight and defend myself. This was appauling.
November 16th, 2006 at 4:58 pm
How do I contact the primary creditor? Alaskan Campers, Inc. would be interested in acquiring the name and assets.
You can contact me at:
ALASKAN CAMPERS, INC
420 NE ALASKAN WAY
CHEHALIS, WA 98532
360-748-6494 - OFFICE
928-863-0330 - CELL
Thanks
Don Wheat
November 15th, 2006 at 11:13 pm
It’s very disheartening when bad people ruin good companies. There is no logic here, and certainly no backbone either. You just don’t treat your employees and business partners this way. It is inconceivable to me that you could actually pull something like this off without some information leaking out or somebody having an honest and candid conversation with the dealers who have supported them for so many years.
Without having access to inside information, this almost sounds like somebody cleaned out the safe and then just put the key in the door. I have never reviewed their financials so one can only speculate that the new owners purchased the company with somebody else’s money and may have had very little invested.
We can only hope that the former owners walked away with cash that they could invest their way and that they were not left holding the bag with worthless stock and meaningless options that can’t be used to clean the toilets in the restrooms today.
There’s an odor of indifferrence and callousness in the air as people try to catch their breath after being kicked right in the chest. The employees, suppliers, dealers and the RV industry deserve a better explanation than what has been forthcoming out of Pennsylvania the past week. Everyone should demand the truth here, because there’s a missing piece to this puzzle and somebody’s going to find it real soon.