Hurricane FEMA
Not only were Gulf Coast dealers devistated by Hurricane Katrina, a natural phenomenon, now they are being devistated by Hurricane FEMA, a government agency dedicated to screwing up on a Category 5 basis.
News that the Federal Emergency Management Association would be auctioning off anywhere from 20,000 to 40,000 used and, perhaps, never used RVs threatens the integrity and viability of the RV industry. You know, I doubt FEMA even knows how many units are sitting in storage lots across the country — some a few miles away from a community in Arkansas ripped apart by tornadoes a few weeks ago. Yet, FEMA can’t provide those displaced residents with shelter due to some federal red tape. Which proves the point you can always count on government to take your money and deliver empty promises when you really need their help.
One news report suggests the inventory FEMA will unload in the months ahead equals 20 percent of the RV industry’s total towable shipments in an entire year. I wonder how the forces of supply and demand will play into pricing this spring?
I remember how RV dealers in the Midwest and West Coast unloaded nearly all their inventory at full price when the disaster struck. Back then, dealers in the Gulf Region had to contend with the loss of their home, their businesses, their customer base and competition from other dealers — and some manufacturers they represented – to flood the market and capitalize on the tragedy. Now floodwaters will crush dealers in that region again as the FEMA levy breaks and tens of thousands of units rush into the market.
I hope those dealers outside the Gulf Region who sold the units to FEMA in the first place will see this as an opportunity to put used units back on their lots to spread this burden across the entire country.
It’s unfathomable that a U.S. government agency could seek to destroy an entire industry by flooding the market with goods and driving down prices. In reality, the Ladies Auxillary of the First Baptist Church of Puckwater, Iowa, would have a better grip on handling natural disasters than these bunch of yahoos.
March 27th, 2007 at 10:38 pm
Just doing a simple bit of math on behalf of FEMA (since they probably don’t have the common sense to do it themselves):
FEMA spokesperson Debra Wing claims they are auctioning units at a controlled 300 units/ month, nationwide.
If just 70,000 of those units come back to the auctions, that would take them TWENTY (20) YEARS to liquidate just the KATRINA units (allowing time off for Federal holidays)!!
I think FEMA (as an arm of the Federal government) should disperse these units to states in the regions that will have a high likelihood to use them for emergency relief (i.e. the Gulf Coast to Florida [Hurricanes]…Texas through the upper Midwest [Tornado country]…California [Shake-N-Bake country]…Al Gore’s Carbon-Credit-Land [Just in case the Republicans win the next election]).
The local and State governments could surely house and refurbish these trailers on an on-going basis for their intended use, Emergency Relief, without burdening the market with inferior product!!
What do you think?
March 21st, 2007 at 8:52 am
Thanks for the mention Wayne. To clarify a point, we are a border town Texas dealer but we are only 42 miles from Hope, Arkansas.
March 20th, 2007 at 10:50 am
Well just maybe there will be some good come of this unloading. I’ll give you an example of what could happen here. I wanted a golf cart to run around our horse farm…a beater. I looked for and bought a beater real cheap and was thrilled. I used it just long enough to learn that I liked it’s utility around the place and didn’t understand why I didn’t have one sooner. Cheap was cheap and it was broke down more often than running…but it did get me to buy. I blew it off for peanuts as it cost more to fix than it was worth.I WENT OUT AND BOUGHT A NEW ONE! Be patient that Fema “crap” may turn to gold sooner than you think.
March 17th, 2007 at 9:29 am
This is clearly and “industry” problem and it makes a lot more sense for the “industry” to find a “solution” before the unsuspecting consumer finds the “problem” and if they do, you have one less long term customer that will never come back to RVing and will spread such negative venom about our industry that it will takes years for corrective action to take hold. There is far too much industry silence on this topic. The longer we wait to address it, the more customers we lose.
March 16th, 2007 at 10:47 pm
I asked earlier if FEMA was selling units to RV Dealers. Thanks to Jim Palma, an Arkansas dealer, I found out. GSA Auctions lists the campers on their website and gives just enough information to get greenhorns to bid on them. They show 3 photographs including the left side of the trailer, so you don’t know it doesn’t have an awning. They list the size as 32 feet and give you access to NADA’s “retail” values. When you look up a 32′ size you come up with a high value. When in fact its a 27′ or 28′ “Lite” model. Many of these ‘05 & ‘06 units with damage and no mattresses and no LP tanks are bid higher than what I pay for new ‘07 entry level product with no damage, nothing missing, and a guarantee.
IF anyone gets a bargain, it will be a miracle.
March 16th, 2007 at 7:02 pm
I thinki that Bob Zagmi, March 13,2007, 6:24 pm, has the best idea. Educate the buying public as to the buying dangers of units not built to code or with warranty. When I was still in the RV business, we run into this situation more than once and we turned out to be the bad guy because we had to charge for repairs and had to deal with substarded units.
March 15th, 2007 at 9:28 am
guess i’ll have a crack at this myself ,i’ve been in the rv busniess for 35 yrs the thing that gripes my but the most ,is the way the factorys got away with building crap to start with ,i don’t mean fly by nite guys either, i would think any builder in the u.s.a. should be proud of
what they put together … if anyone should take back these unit’s it should be them …. or maybe they were building disposable units ,that are here today rotted tommorrow
March 14th, 2007 at 10:21 am
A single dealer sold $100 million dollars worth of trailers to FEMA ?????
March 14th, 2007 at 7:50 am
Maybe everyone should look to the dealer that sold over $100 million worth of trailers to FEMA and see if he wants any of them back…….. I am sure that his new service facility would be happy to service all of the units he sold, since he was in the inner circle to begin with, we need to look to Tom Stinnet for some advice.
March 13th, 2007 at 6:24 pm
This is where RVDA and RVIA must step up to the plate and tell this story in the national media. They should take out full page ads in major newspapers and buy television time (or use some of the Go RVing slots) to explain to unsuspecting buyers the pitfalls of what appears to be a bargain courtesy of FEMA. FEMA is a joke! As a country we should all be embarrassed at their actions and urge our Congressman and Senators to abolish this bad idea and make it go away.
RVDA and RVIA must get involved here. These units were not built to RVIA standards and should not be called RVs. As many other contributors on this thread have noted, these units will require a lot of work and buyers must understand that. I would suggest that all manufacturers and dealers urge our industry associations to come to the aid of an unsuspecting public and avoid a major public relations blunder for the RV industry when these thousands of people think this IS the RV industry and start blaming everyone but themselves and FEMA for this national disgrace.
March 13th, 2007 at 4:26 pm
Thank you for bringing this to light. I am the warranty manager for our Jayco Dealership. I went to the FEMA auction site and randomly picked out a Jayco VIN. I then ran that through our system as a warranty inquiry. All those units are flagged a FEMA Emergency Relief units and carry NO WARRANTY! This is a classic buyer beware situation.
March 13th, 2007 at 4:24 pm
I called FEMA and they told me that they were not going to sell any new units and who would want a new geniune FEMA trailer anyway. I have been bidding on FEMAs website on coventional travel trailers and have yet to win. The people that are bidding are paying more than retail for some of those units and they are used and I mean more than retail new.
FEMA needs to tell prospective bidders to call their local rv dealer for advice.
March 13th, 2007 at 2:21 pm
DOES ANY ONE KNOW?
1. Has FEMA contacted any dealers about buying units?
2. Do they plan to contact any of us?
3. Who do we contact if we’re interested in buying them?
4. Will floorplanner’s make money available to buy them?
March 13th, 2007 at 1:37 pm
All I can say is “amen”. Our dealership is only 42 miles from the Hope, Arkansas, airport, one of the sites where, as we speak, 100 trailers per week are being auctioned off. Initially, large dealers from all over the US were able to sell units to FEMA, but, because of our relatively small inventory, we had to wait in line. Then, when we did have a chance, Congress passed a law that said only Louisiana dealers could sell units to FEMA for the Katrina victims. Now, we are watching our customers buy units that have not been properly prepared by a dealer, pull them with tow vehicles without proper hitches and with no warranty and no recourse if the unit is in poor or unusable condition. I personally stood in one of those units and the only material holding me up was the vinyl flooring! Who knows what happened to the laminated floor that was severely compromised! Finally, Debra Wing, spokesperson for FEMA and the GSA stated in the Texarkana Gazette that they would not “damage the market”. In an e-mail to me, dated Feb. 16, 2007, she stated “GSA is very cautious and the nationwide sales are occurring at a rate of 300 a month in different geographic locations around the country so the market is not saturated and businesses are not hurt”. As previously stated, 100 per week from one location is far more than “300 a month” from all. Oh, and what about the communities in Louisiana that did not allow the units to be set up in their area? Instead, we took care of those people here in Texas and in Arkansas. Is this just one more example of “no good deed shall go unpunished”? Finally, how can we ask God to bless our nation, when we take no better care of our own people than this?
March 13th, 2007 at 1:07 pm
Chris Beh is perfectly correct. Remember, nothing said about this has mentioned that these units are being aimed at the RV Dealer Market…so anyone with a license…or just Joe Customer off the street might be able to walk up and buy one of these ‘well built’ RV’s. And, when a buyer can get a pennies-on-the-dollar type of deal, do you really expect them to even know what a holding tank or water pump is? Don’t count on it. After all, they haven’t been through RV-101 with a qualified sales person. Then, these same “value driven” customers will be at their local dealer’s door screaming about all the things that are wrong with their new unit & why it should all be fixed under somebody’s warranty. To say this is going to be a real pain is an understatement.
March 13th, 2007 at 1:06 pm
When these units were produced special for FEMA, I was amazed at FEMA’s ignorance of the years that the RV Industry had spent to develop an excellent RV. They asked to have special considerations inside these RV’s that make them not really Recreational Vehicles, but look alikes that are not intended for camping. I had felt that someday there would be tremendous opportunity for the parts & accessories and repair departments of the RV Dealerships when these units need to be converted into a traditional RV. This time is going to arrive soon.
So although it is terrible that these are going to flood the market, which we all knew would eventually happen - there will be good parts opportunity because of the special order requirements of FEMA.
March 13th, 2007 at 1:06 pm
This is just one more demonstration as to why FEMA needs to be shut down and a new organization set up on the state level. The states should control there own disaster relief. The federal government is able to help them with money and very little oversight. The federal government should not do the work of helping actual individuals except at the bequest of the governor for help from the National Guard.
March 13th, 2007 at 1:00 pm
Being in Oregon and far away from this issue, is there anything we can do, or say to help? We did not sell anything to the government. I doubt very many, if any of the FEMA trailers will end up in the Pacific NW simply because of the logistics. However, if they could follow the lead of the Car Rental Companies, haul the trailers to markets all over the US, including Eugene, Oregon. Let market forces absorb those trailers. From what we have seen on Tv, aren’t most of the units low end pieces that are pretty basic stuff? With the possible problems of bugs, mold and water leaks, many of those trailers are probably not going to bring much money. But, they will be a factor, especially the ones never used.
Back in the 80’s I was a Sales Manager buying GM cars at the Factory Auctions. Back then they ran Olds 98’s through for a fraction of the original invoice, some with just a few hundred miles on them. We bought a couple of hundred of these and brought them back to Eugene. They sold like crazy and made 1987 a terrific year for us. The market forces can bring opportunity, especially if FEMA unloads the stuff equally across the USA. Maybe there might be a silver lining?
March 13th, 2007 at 1:00 pm
We are a small dealer who’s main income is from the rentals and not the sales of trailers. However I have mixed feelings about the Fema sell off. We had many dealers and manufactures who could not dump product fast enough to the ask no questions Fema bank roll. We could not get the trailers or the parts we needed, which then bumped up the prices for the units we had on order. Now did all those dealers and manufactures really think Fema was going to keep the 60,000 to 80,000 trailers forever or did everyone really understand that someday sooner than later Fema would dump all of those trailers. You can not have it your way all the time. Is Fema the worst of the Goverment that is up for debate one thing is for sure they are one of the best for wasting our money.
March 13th, 2007 at 12:57 pm
Why would anyone be suprised at anything our government would do? With people homeless in Alabama & Georgia due to recent tornadoes, why would anyone expect FEMA to move units to that area for the new homeless…that’s common sense after all. And, with Ft. Benning not too far away, I’m sure FEMA could find some empty area to use for storage after the fact.
Why aren’t some of our own cities looking to acquire some of these units to use as tempory shelters for homeless families? God forbid they be used in a manner that they were intended!
March 13th, 2007 at 12:54 pm
And this would suprise you because….? And some of the dealers in the Gulf Coast region have had a tough go of it in the last year plus. However, many of them took full advantage of the disaster and made the most of it including dealers who were not even dealers at the time making thousands upon thousands of dollars doing what other dealers in the area would not or could not do. Personally, I think FEMA would have contacted the dealers that they bought the product from and offered to sell it bac kto them at .50 or .60 cents on the dollar. I would have bought back the 8 I sold them and so would many of my 20 group members….
March 13th, 2007 at 12:52 pm
Most of the units FEMA purchased carry neither a fresh water holding tank, nor a water pump, so buyer beware!!