The Pulse for 2008
RV Trade Digest ran two news stories during the last seven days about manufacturers laying off employees. I suspect that these are merely the first of many manufacturers that will have to readjust their labor force in coming months.
I applaud Winnebago and Monaco for being the first to make this difficult decision, knowing that it will most likely protect the future health of their companies. For obvious reasons it is always hard to make those kinds of decisions. That said, I must add that I truly sympathize with the men and women, as well as their families, who have lost jobs.
RVIA reports that 2007’s total new unit RV shipments were 9.5 percent under 2006’s banner year numbers. Based on predictions of manufacturer’s 2008 new unit shipments, this year will be a little slower than last year.
While press releases on RV manufacturer’s staff reductions reach my computer, I have to wonder how hard RV dealerships, suppliers and aftermarket manufacturers are being hit. They are the front line when it comes to consumer confidence and purchases. Are these companies also finding it hard to keep employees busy?
While attending the Stag Parkway show, it seemed that overall, dealer attendance was down this year –– some exhibitors estimated by as much as 10 percent. But some exhibitors I spoke with also told me that their overall show orders were up this year.
I suspect this means many smaller dealerships didn’t see the need to incur the expense of attending. Larger dealerships with high-end aftermarket retail facilities not only attended but felt that the coming year would see increased parts and accessory sales. It will be interesting to see if the attendance and buying patterns at other distributor’s shows in coming weeks mirror Stag Parkway.
Also on the bright side, with fewer new units hitting the road, this can only mean positive things for service and the aftermarket departments at a dealership. Qualified service technicians have been in short supply for as long as I can remember. Wouldn’t the men and women displaced by manufacturer and supplier lay-offs be good candidates as service technicians? I would think that if an employee can build a travel trailer, or RV furnace, they would already have at the very least a rudimentary understanding of how to troubleshoot and repair units in a dealer’s service bay.
I’d love to hear dealers’ predictions on what kind of year they expect 2008 to be, if they have made staff reductions or if they have considered what benchmarks would make those reductions necessary. Will service and the aftermarket be a bigger priority this year with present market conditions? What can dealers do to seize opportunities in this business environment? As usual, your thoughts are welcome.
February 1st, 2008 at 3:35 pm
In my experience [ about 35 years ] election years are almost always “down” years in the RV business. I think we tend to forget that after 4 years of “Up”. I believe that this cycle is and will continue to be, tougher than usual because of the almost universal concern among conservatives that the liberals , in addition to securing Congress, will wind up in the White House. Also, this election year started about a year early. Let’s face it - our customers are not liberals. They are conservatives .They are waiting to see who is going to be in charge. They are worried that their investment income is going to come under increased scrutiny by Ms Pelosi et al. and have decided to wait and see where it levels out.Things could improve some after super Tuesday but I think we will need to have the candidate field narrowed down to two before things return to a semblance of normal. Once the election is over, I think our customers will be so tired of the angst and anticipation that business will resume with a vengeance.
February 1st, 2008 at 2:29 pm
Dana, congrats on the promotion, you’ve taken to this industry like “a burr on a wool sock” and you’re a great guy “too boot” My fellow service managers tell me that the shop work has not let up in the least. As you know we’re in the Dallas area. Our books have appointments until March and people are still calling. Good help is indeed hard to find but we’re still interviewing for mechanically inclined individuals and then training them. I’m also starting to see people start up their own mobile services in our area with out any training, insurance or liscensing (LPG) and these people are cutting our throats on pricing ($50 less in most cases) so we’ll just have to adjust until they ‘blow up’ somebody or fry some electrical components. But that’s a whole other story i’ll save til next time.
Our company is paying down debt and watching the nickles and dimes just in case RVers park their rigs for a few months. Now as for me and my family we’re headed West this summer in our motor home “Damn the torpedoes!! full steam ahead!!”
January 30th, 2008 at 2:20 pm
It’s interesting that George mentions skipping his local RV Show this year. He’s not the only dealer doing it. There are a few dealers we work with that have opted to do something different with their ‘rv show money’ as well.
On the other hand there are other RV dealers we work with that have taken the rv show to a whole new level and begun having their ‘own rv show’. Not a new concept, but with a few twists it might be worth a look. As George suggests doing some marketing at the same time the local shows are to drive folks to your lot. A little ingenuity and good ol fashion thinking could produce a favorable return.
The exciting part for us is to see dealers willing to do something different. Being courageous to step ‘out of line’ and go against the norm. One of my favorite quotes is … sometimes you gotta go out on a limb, cause that’s where the fruit is!
January 30th, 2008 at 9:18 am
The decision, by Winnebago and Monaco, to layoff employees in anticipation of poorer sales in 2008 makes perfect sense and should be a warning shot to dealers to pay attention.
January 29th, 2008 at 9:15 pm
Anytime there’s lay-offs in an industry, I feel for the employee’s that were released. Life is always in a state of adjustment and change. Things never “stay the same”, that condition is called “stagnation”. I look at the numbers sold each year in the RV industry and always ask….why are they not higher? We do not reach sales levels I feel are in proportion to the amount of people who recreate. As a dealer, I still feel the entire RV manufacturing sector is very complacent. The upper level management for the most part merely looks at the bottom line profit. Granted, profit is a very strong reason to be in the RV manufacturing business, but we’re still not in tune to true QUALITY CONTROL ISSUES. Manufacturers are not what I feel are REAL MANUFACTURERS, merely ASSEMBLERS. Taking the issue another step is WARRANTY, or how it is handled. As a dealer, we are held to a manufacturer that pushes warranty claims and problems to the sub-supplier. As a dealer, we have NO POWER TO GET THINGS COVERED! With that thought in mind, is it any wonder some dealers take short-cuts in repairs? If a dealer cannot get the exact replacement without getting it from the manufacturer, it will not be a rapid part procurement. Dealers cannot buy at O.E.M. level. When we wish to get an RV’er back on the road in a hurry and use a very similar part, or the same part we purchased from one of the “parts distributors”, we get our warranty cut back with an excuse of “price too high”. Then there’s the quality of labor issue which is another story completely. There is a reason that automobile manufacturers switched to “robotics”……Q.C. The RV buying sector has many choices……time shares, condos, home improvements such as pools, etc. As a dealer, I’m re-concentrating my focus on the RV builders that build a product we don’t have to rebuild and then do battle with the builder merely to get our warranty expenses properly re-imbursed. Is it possible not all of the sales decline is due to the economy? Respectfully, Bill Miller, Courtesy RV, Inc.
January 29th, 2008 at 7:24 pm
I have to wonder if we aren’t talking ourselves into a recession even when there isn’t one. Sure sales are down a bit but that is down from record years…you might say things are normal. Layoffs in this industry are nothing new. They have been occuring for as long as I can remember. A comment about shows…I hated them! A lot of work and cost to virtually give product away at low gross and listen to all the dealers lie about how well they did. Ugh. I cut out the small shows but went big at McCormick in Chicago. We took a lot of units but did consentrate even more on “setting the stage”…a lot of window dressing and props to make our display something to remember as well as our name. Fences, horses, bajo player, lots of cowboy stuff to compliment our name which was Great Southwest RV and Marine. They remembered us. We were located on an interstate as well so the drive by was tremendous. I thought of that show as advertising more than a sales opportunity.
January 29th, 2008 at 6:51 pm
Dana,
I to feel for the folks who are loosing their jobs in the RV manufacturing community and their numerous suppliers. However for you to suggest that these folks can just walk into a dealers service area pickup a VOM or a manometer and begin troubleshooting a cooktop/ furnace/refrigerator/inverter, etc. is, I believe a little misleading. It takes many people to build an RV and it takes many people to manufacture an RV appliance for installation in a new RV or into a used RV.Just because someone helped to assemble a product does not mean they understand the theory of its operation or how to logically troubleshoot and repair a known symptom/problem. A “Certified RV Tech” has taken many years to learn the ins and outs of succesful,timely total system RV troubleshooting and repair. I hope this down turn is short and everyone gets back to work or begins down the road of training to hopefully enhance their career goals.
January 29th, 2008 at 4:30 pm
So far, the past few months have been unseasonally slow. December saw an unxpected up-tick for us, but we still lost money like we usually do. The deals are harder to come by and the custmers more difficult to close. The credit challenged people are always a let down because they leave the sales person depressed.
However, I think allot of the outlook for this year falls on our attitudes. If we think it is going to be a off year, it will. If we approach it as a sharpening of our skills kind of enviornment, then maybe we can make lemonaide out of it all. I am hearing that some dealers are doing well in South Carolina, Florida, Texas and Canada. If true, I think it is great! But, up here where all the layoffs have happened in the Rv Industry (Oregon is home to Country Coach, Monaco, Host, Eagle Cap, and more) there is a sense that this year is going to be tough. Not that we won’t sell products, it’s just that our expenses keep rising and that bottom line keeps falling.
As a dealer, I made the decision (rightly or not) to skip our local Eugene Rv Show this year. It comes up the end of February into March. What I am doing instead, is to blast my advertising at the same time and get people to come into my place, too. Doesn’t cost anybody anything, and our deals are going to be better. The reason I decided to do this is I got so darn tired of spending huge amounts of money, taking my people away from the mothership, and selling everything too cheap to make any sense to me. The promoter thinks I am nuts, and maybe he is right. But I for one, am tired of beating myself up over the shows and not coming home with much to show for it. I would love to hear how the rest of you feel about this? It takes a show dog kind of staff to make shows work for me. I don’t have those kind of people working for me and to hire “guns” just does not reflect the kind of dealership we are. I’ve tried that, too. Time will tell if this is right or wrong. All I can do is head into this season with the best advertising plan, trained people and products that look and are great. We’ll see.