RV Weekly

I heard a story recently about an RV dealer who was in need of some qualified and educated service technicians, so he took a rather unconventional approach to recruiting some to his dealership.  The dealer asked that I not identify him because he’s still kind of shocked at the reaction of his competitors. Frankly, it blows my mind, too.

As graduation day approached at a nearby community college, this dealer set up a beer and pizza night in the technical services building. As students finished classes one evening, they were invited to stop by for free food and drink as the dealer made his pitch for coming to work for the company.

I applauded the dealer for his brilliance. Those of us who are born with testosterone coursing through our veins know of only one thing that can attract a guy’s attention faster than a piping hot cheese and pepperoni pizza and a bottle of ice cold adult beverage.  In fact, most college guys spend more time pursuing beer and pizza than they do their studies.

Several dozen people trained in automotive maintenance, plumbing and electrical systems showed up that night to hang out, munch on some food and learn if the business offered any jobs that appealed to them at a rate of pay they found attractive. Excuse me, but how many RV dealers would give their left arm for the ability to pitch a job opportunity to a qualified horde of hungry hombres who happen to be looking for work?  I suspect the answer to that would be “most.”

As you can imagine, several of the students took the dealer up on the offer and filled out applications. By the time they graduated, they had a job waiting for them.  Sounds like a simple story of an innovative dealer taking a simple, but effective approach to recruiting staff. But the story doesn’t end there.

Apparently, several technicians currently employed at other area RV dealerships were attempting to better themselves by taking tech school classes at night. Despite already having jobs, the guys showed up at the informal meeting anyway — probably lured by the smell of pepperoni and the distinct sound beer cans make when opened. The technicians liked what they heard about the other dealership and jumped ship.

Rather than smacking themselves on the forehead and saying, “Doh, why didn’t I think of that?”, the other dealers took a different approach. They successfully lobbied the state dealers association to remove the offending dealer from its membership ranks. That, in turn, blacklisted the dealer from participating in the local regional RV show which was open only to members of the state RV dealers association.

The offending dealer has more than one store and only one location was banned, so the suspension is pretty much ineffective other than to send a message that ingenuity is unacceptable. I guess the move also signals to other RV dealers that business owners needing staff must play the game by placing ineffective ads in the local paper and hoping for the best. I suppose other dealers in that state must also get advertising and marketing “approved” by the state association’s leadership so as not to run afoul of business owners whose fragile egos might get bruised.  

Retaining staff is a huge problem for most dealerships. But I think if any employee is willing to jump ship because another dealer offered a meal and a beverage, there wasn’t much loyalty to his employer in the first place.

I realize no matter how thinly you slice the bologna, there are always two sides. I may not be privy to all the details leading to the suspension, but I suspect that someone needs a hug. To get that upset over losing an employee to a slice pizza and a bottle of Bud suggests a level of immaturity not often seen outside college campuses. It’s akin to busting someone on the chops for “stealing my girl.”

All I can say is payback is tough. And it’s not the offending dealer I’m worried about.

With a population of more than 1 billion people, China presents an opportunity like no other for companies looking to sell products. All the big American brands are already there: McDonald’s, Pepsi, Ford, Wal-mart and Microsoft. It’s not really surprising the RV industry is headed there, too.

Freedom is universal and the desire to get away from it all and enjoy the great outdoors, for which China has plenty, is a basic tenant in the heart of every man, woman and most children.

The RV Industry Association is planning a trip to China this year to participate in a trade conference in which RVIA President Richard Coon is reportedly the featured speaker. The country is sending signals that they are in the market to buy RVs and they are rolling out the red carpet to American manufacturers. But is the red carpet a welcome mat or is it hiding a trap door?

It’s no secret the Chinese have become masters of the knock-off product. Just ask Hollywood, which has been screaming for years about movie DVDs being copied in China and sold throughout the world.

Part of me thinks the industry should embrace the Chinese market simply for the sheer opportunity to sell our products to a group of people who have been so oppressed for so long that they’ll need RVs to reconnect with families, relax, explore God’s creation and, of course, house the in-laws over the Chinese New Year.

Yet, another part of me sympathizes with RV suppliers for whom several are seething over the fact that an association they pay to join is extending a hand of friendship to a country they fear will destroy their business. They suspect the Chinese will extend that helping hand long enough to get American firms to pay the big bucks to build factories and train staff only to pull the plug a few years from now and use their investment to flood the world with cheaper imitation products.

And they have plenty to worry about. Business Week says “The China Price” are the three scariest words in business today. The China Price is the absurdly low rate at which a product or service can be provided. Business Week says manufacturers and even retailers like Wal-Mart approach companies with The China Price and insist that American firms meet it – or else.

We’ve already seen the impact cheap Chinese-made tires are having on the RV industry as blowouts and accidents are increasing warranty claims and liability costs for manufacturers and dealers alike. Before we get too excited about doing business with the Middle Kingdom, we should approach the opportunity with a wary, skeptical eye and not the open full-run embrace we may be tempted to employ in other emerging markets.

*****

Ironically, I learned recently that many companies that once embraced Mexico as a source for cheap labor are moving jobs to Honduras now that Mexican workers are discovering the sweet, but empty promises made by labor union executives.

Isn’t that just typical of what America has become? As entrepreneurs seek to expand opportunity throughout the world and improve the lifestyle of depressed workers, American socialists seek ways to stifle competition, reward mediocrity and burden employers with excessive costs.

Perhaps it will work to everyone’s advantage if American unions successfully export their ilk upon the rest of the world’s economies. We’ll still have a global market, but at least the field will be level.

The RV Industry Association announced late last week that they had hired professional lobbyists to try and convince Congress not to pass new corporate average fuel economy (CAFE) standards for light trucks and SUVs that could greatly diminish the towing capacity of vehicles.

According to a report filed by the Associated Press, “In June, the Senate passed legislation that would require an increase in average fuel economy to 35 miles per gallon for cars, SUVs and pickup trucks by 2020. There are also at least two House proposals that would boost gas mileage standards.”

Recognizing that at least 75 percent of all recreation vehicles sold in North America are towed by another vehicle, RVIA realizes — as I am sure most of this industry does — that consumers need vehicles large enough to tow a travel trailer, two adults, two kids, one dog and the necessary equipment to ensure a fun weekend in the wilderness.

Congress, on the other hand, is looking for ways to appease the environmentalists heading into next year’s congressional and presidential elections. The yahoos running Capitol Hill are always on the lookout for ways to sock it to big oil, big auto, big business and any other entities that create jobs with benefits and pay well above a “living wage” without the help of the federal government.

As I have said before, the RV industry was devastated by the first fuel economy standards when they were established in the late 1970s. Back then, the RV industry was delivering nearly half a million RVs per year until a gas crunch greatly reduced fuel availability. Rather than thumb their noses at the oil producing countries and plop more wells into American soil, another Democrat-controlled Congress opened their playbook and immediately announced surrender.

They enacted legislation to help us save gasoline by enacting fuel standards that required automakers to achieve minimum miles per gallon standards on all new automobiles. The first victim was station wagons, which were family favorites with enough horsepower under their substantial hoods that they could pass anything on the highway except a gas station. They could also tow pop-ups and travel trailers as easily as a tricycle hauling a kiddie wagon.

With the demise of station wagons, families were left with few options for towing trailers. Some families tried camping in tents and sleeping on the ground. I suspect that worked once, maybe twice. Then they packed the family into their Ford Excuse compact cars with 1.2 liter Briggs and Stratton engines and headed to hotels which truly redefined the concept of family bonding — especially for families with teenagers.

As usually happens when Congress enacts laws, customer-focused entrepreneurs find loopholes around the system. Rather than making ”automobiles” subjected to fuel economy standards, automakers created minivans, sport utility vehicles and light trucks. Demand for these family-friendly vehicles shocked everyone. Moms loved the extra room, dual sliding doors, improved safety and the ability to ride high on the highway. Dads loved the power they offered. Kids loved the gadgets. Everyone was happy, which often sends a clear signal to Congress that something must change.

While environmentalists bayed at the moon and prayed to Gaia, the goddess of the earth, for relief from the popular, but evil gas-sucking polluters, automakers had a hard time pushing these wonder vehicles off the assembly lines fast enough to meet demand.

Higher gas prices over the last two years have caused some grumbling among consumers, but not nearly as much shrieking as you hear from environmentalists. Yet, lawmakers with their fingers on the pulse of the nation and their hands on stacks of cash campaign contributions, see another opportunity to save us from ourselves. 

This time, their action needs to be decisively stopped. I applaud RVIA for being proactive and seeking to stop this silliness before it gets serious.  While I suspect the RV lobby will be powerful in their attempt to keep Congress from enacting more restrictive CAFE standards, the industry’s lobbyists won’t match the firepower of scorned soccer moms who may be forced to give up their practical family support vehicles in favor of smaller vehicles better suited for French roads.

Now that the lobbyists at Sonnenschein Nath & Rosenthal LLP have been unleashed, all I can say is, “Sic ‘em, boys!”

In a 5-4 ruling last week, the U.S. Supreme Court overturned a 96-year-old law that prevented manufacturers from setting minimum retail prices. The decision puts a dagger in the heart of low-price cyberstores that are causing havoc for legitimate RV dealers.

Before the hate mail and phone calls start accumulating, I define a “cyberstore” as an INTERNET ONLY business with no serious brick and mortar storefront. Dealers who sell units, parts and accessories online AND from sales lots are NOT cyberstores. They are legitimate RV dealerships that attract, educate and serve customers online, but which also have a trained staff committed to serving customers offline, too.

Cyberstores are companies that have RVs built to order and when the unit arrives, the firm calls the customer, collects a check and hands the buyer the keys. Need service? Go somewhere else. Don’t know how to use the RV? Read a book. Want to return the product?  Nice try! 

If anyone has any doubt as to which companies are cyberstores and which are not, simply open the yellow pages and call a legitimate RV dealer who actually pays to advertise somewhere other than Google and ask him for the name of an online retailer that gives him migraines. Chances are there are less than a dozen cyberstores in North America that cause serious problems for the thousands of legitimate RV dealers.

Don’t get me wrong, I’m all for free enterprise and allowing the market to dictate prices. And this ruling will do little to hinder competition or eliminate price shoppers, but it will do plenty to improve value for and service to our industry’s customers.

I’m also in favor of a level playing field. This industry has struggled with customer service issues for decades. For every 1,000 RV dealers who are making huge investments in creating the infrastructure to provide exceptional pre-sale and post-sale service to their customers, there is often one RV dealer who undercuts them all, pockets his meager profit and thumbs his nose at his customers and the industry at large.

With the ability to set minimum prices, manufacturers and suppliers now have a way to control the impact cyberstores have on the industry and their legitimate dealers.  We hear lots of talk about taking care of the customer. We hear lots of lectures from OEMs and suppliers alike that RV dealers need to step up and serve their common customers. We’ve heard how dealers need to invest in infrastructure, how they need to maintain adequate levels of inventory and how they need to train their staff to serve an exceptionally picky and demanding customer base. Now we can find out which firms are serious and which are all talk when it comes to helping their dealers deliver the best service for their customers.

Those manufacturers and suppliers who are serious will quickly send a message to their dealers that the companies are willing to establish minimum prices to ensure adequate compensation for dealers who must pay for service bays, trained technicians, property taxes, employee health insurance and a score of other costly expenses incurred by legitimate businesses. They’ll come out and admit that it’s in their company’s long-term best interest to ensure solid, profitable dealer base that will be in business next year and 10 years from now to handle any problems that may occur and to ensure that customers are happy and satisfied.

Those firms that are all talk will suddenly clam up. Their deafening silence will enable and empower cyberstores to continue pounding the profitability of legitimate RV dealers by making it possible for online retailers to collect a 10 or 15 percent markup on parts drop-shipped to customers or units delivered without inspections or customer orientations. These manufacturers and suppliers will shout a message to dealers that they are more concerned about selling a single item a single time than they are in creating a long-term revenue stream for their companies and business partners.

Since the advent of the Internet, manufacturers and suppliers have hidden behind the idea that there was nothing they could legally do to prevent cyberstores from drastically undercutting other dealers. And because of that restriction, these manufacturers and suppliers haven’t tried too hard to clamp down on cyberstores as long as the units and parts roll out of their assembly lines and go somewhere. Finally, they’ll now be forced to formally address the issue.

Bill Gates, of golf equipment maker Ping, was quoted in USA Today as saying, “Not every consumer is a bargain shopper. Some consumers are looking for quality, innovation, personalization and customer service when they shop.”  I agree. But nearly every consumer who knows how to work a mouse will research prices online and use their findings to beat up legitimate dealers by suggesting they are “ripping off consumers” by charging more to cover their considerably higher costs of doing business.