He was referring to the blossoming practice of making RV loans for at least 125 percent of the value of the RV and extending payments for up to 20 years. In the documents he faxed over to me, it appears this practice is gaining in popularity as several major industry banks are offering the service.

Here’s where he feels it would hurt the industry.  John Smith bought a $21,000 travel trailer in 2005. He wants to trade it in now for a new $42,000 trailer, but still owes $16,000 on the first unit. The factory invoice has a “phony” discount packed into it, so the dealer can immediately write $2,000 off the sticker price of the new unit. The dealership offers $10,000 in trade on the old unit, which is $6,000 less than what the owner owes.

So, the bank rolls the $6,000 into the new loan of $39,000 which includes an extended warranty because, with 15-year payments, who knows what will happen. The dealer is happy because he made money on the sale, money on the extended warranty and a little on the loan, too.  

John Smith is delighted to have a new trailer, delighted to have been able to unload the older unit and delighted that his monthly payments didn’t increase that much. 

Fast forward to 2011, when John wants to trade in his unit for another RV. He still owes much more than the trailer is worth. In fact, unless he comes up with a huge cash down payment, he won’t be able to trade his unit in for eight or nine years — if then.

It appears to me the combination of phony manufacturer discounts, which mask the true value of RVs, and the over extension of credit by lenders could significantly impact the buying cycle for many dealerships.

My source feels the easiest solutions rest with lenders financing only the real or raw cost of a vehicle and requiring more money for down payments. That way the RV industry can ease itself into a correction that prevents buyers from becoming over extended and retains them as active buyers three or four years from now.

Dealers, you tell me, is it more important to have the sale today, or is it more important for dealers to have the ability to sell three to four new units in the 15- to 20-year period covered by a single over-extended loan?

Standing at the microphone was the highly esteemed and award-winning president of the RV Dealers Association, Mike Molino. He was describing the current state of the RV industry and promoting the need for more professionalism and more partnering among industry players. It was refreshing. Then he talked about the biennial consumer satisfaction surveys that showed 30 percent of the buyers of new RVs were dissatisfied in 1999, 2001, 2003 and yet in 2005.

If you recall, this is the survey the industry stopped conducting because the results weren’t getting any better year after year despite the constant talk about doing “something” to make it right. Better to turn down the volume of complaints than pick up a shovel and hammer and do something meaningful to actually resolve the complaints of RV owners.

Molino then described the meeting in Ontario, Calif., in November 2005 at which the RV industry formed five task forces to make it even easier for people to talk about doing “something” to improve the critical issues facing the industry. At that point, it was as though my soul left my body and I was watching the meeting unfold in a surreal sort of way.

“Each task force worked for two years to come up with examples of practices that get good results. They analyzed root causes of the problems and came up with suggestions on things we could do to solve the problems,” said Molino. “These folks came up with good ideas and ways to address these issues. But word is not getting out. Let’s get the word out.”

You have to understand that at EVERY meeting I have been at where a Committee on Excellence Task Force member has been presenting ideas, it was Molino’s own staff that laid out the rules regarding what I could and could not report. For example, at Committee Week in Washington, D.C. last June, task force chairman after chairman, stood up in front of the committee members and outlined a series of exceptional ideas on ways to improve parts delivery, warranty processes, staff training, industry communications and product quality. Yet, the RVDA staff and RVIA staff frequently reminded me that I could not report anything that was spoken, written, mimed, signed, or conveyed through extra sensory perception for fear of “stifling” debate.

Ironically, there was little debate at the meetings. The task force members who took their jobs seriously and drafted the ideas and presented the suggestions were rarely asked a question by the committee, let alone invited to debate a particular point. The task force presenters were simply thanked for their input and assured the full committee would review their recommendations.

I was allowed to report the official board actions of the RVDA and RVIA which was supposed to review each of the recommendations and pass resolutions or policies in support of their implementation. But, when the board minutes were finally released, the content bore little resemblance to the powerful presentations I had witnessed, but couldn’t report to the industry.

So, I agree wholeheartedly with Mr. Molino that word is not getting out. But there is a reason for it. It’s that the industry associations which oversee the five task forces haven’t released a single committee report. I sense that Molino is ready to make that information available for a true industry debate. And to be honest, the task force members who worked so dilligently to research best practicies across multiple industrys and formulate workable solutions to our problems deserve to have their ideas heard.

Consequently, I would like to offer the services of RV Trade Digest. If RVDA or RVIA simply sends me the committee reports, I will have them posted on our Web site and even e-mailed to 8,500 key players in the industry within 60 to 90 minutes of my receiving them.

If the desire of key industry leaders is to get the word out about task force recommendations, then they cannot stifle the industry’s journalists who make a career out of disseminating information.

If we truly desire an industry debate on parts availability, warranty, training, communications and product quality, then give the industry something to debate. Release the task force reports. Today.

The first story I saw was that federal debt in the United States was at a staggering $9 trillion — or $30,000 for every man, woman and child legally living in the country. You can read it by clicking here.

The next story I saw was how our ultra-efficient Congress, ignoring the staggering number above, opted instead to focus on forcing employers of family-oriented businesses, like campgrounds, to hire transgender employees. You can read it by clicking here.

Since the U.S. Constitution requires all spending bills to originate in the House of Representatives, it appears as though our elected leaders have completely and forever lost grip with reality and their constitutional responsibilities.

As the U.S. dollar collapses around the world . . . as we wage war against a group of people who believe they gain entrance to heaven by killing innocent people . . . as our nation continues to be robbed by rising costs of foreign oil because we can’t access oil under our own lands — the U.S. Congress feels it’s more important to convey civil rights protection to a tiny group of people who choose to make sexual activity the focus of their lives.

What was that about fiddlers playing as Rome burned? 

When I asked what it is that causes them to work so hard, I expected to hear about the constant check-ins and check-outs, routine maintenance of the park, and enforcing noise rules. But that wasn’t it at all. That’s the fun part of the job, they say. There are challenges, such as facing Mom and Dad who have just driven four hours to two days cramped up in a car with fighting kids staking claims to their side of the seat and begging to know “are we there, yet?” I’ve been there, done that and got the T-shirt. It’s not a fun way to travel and it adds more stress to the “vacation.”

These people arrive frazzled and on the edge of a nervous breakdown, but the campground owners live for this type of challenge – to help melt away the stress by keeping the kids temporarily occupied so the folks can take a breather. That’s a positive kind of stress that campground owners are accustomed to dealing with and they often find reward in seeing customers come to life after a few hours or days outdoors.

Most of the campground owners I’ve talked with this week have said the biggest challenge for them is in dealing with difficult customers who believe the world, if not universe, revolves around their very lives. Demographics apparently plays a role in determining whether a camper is generally happy and easy-to-please, or hell-bent on fault-finding and complaining. The campground owners have made these observations:

• Baby Boomers are the most demanding customers in the marketplace
• But the Boomers are willing to pay well for quality service
• The more expensive the RV, the more difficult it can be to make customers happy

Several campground owners noted that drivers of big, expensive rigs are rarely happy with their campsites, their neighbors or the amenities of the park. When they complain, they always preface the complaint in the same way:

• “I’m a vice president of such-and-such and own a $335,628.97 motorhome and you want me to park in THAT site?” or
• “I just drove 1,366 miles in my $335,628.97 Type A diesel motorhome, why can’t I have a site this weekend that isn’t anywhere near children?”

By contrast, the owners of folding camping trailers rarely complain, the park owners said. They are grateful for the amenities offered by the park and are often among the friendliest campers in the campground.

I have not heard this type of comparison from RV dealers. But, it fascinates me. I have often wondered why an RV dealer wouldn’t stock motorhomes and opt to focus on towables only. I suspected it was due to the cost of maintaining a floorplan and in repairing RVs with engines. But, perhaps these towable-owner dealers have come to the same conclusion as campground owners – that people who buy expensive motorhomes are difficult to please.

So my question is, from a dealer’s perspective, do customer egos and attitudes change as the buyers move up the line from folding campers to towables to motorhomes?

Also, in the RV industry, can generalizations be made about customer service requirements based on age or income?

I realize that the goal is to treat all customers the same. But, must dealers adjust their tactics and strategies in providing customer service due to the demands and expectations of particular demographic groups?

Please take a minute and let me know. You can remain anonymous.

I received several phone calls Friday afternoon from RV dealers and others in the industry telling me about the “big news.” Digging into the story seemed to confirm many of the details I had heard, if not through outright confirmation, then by carefully worded non-denial denials. The story made sense to me because it seemed to follow the modus operandi of how Affinity Group’s companies seem to treat other firms.

• Campground owners have long realized that if they don’t advertise or reduce the size of their ads in the Woodall’s directories, their site ratings mysteriously fall that year.
• Dealers who submit customer names for camping discounts through Good Sam Club find their own customers solicited by Affinity Group’s other corporate entities.
• Dealers who agree to stock Woodall’s directories in their accessory stores treat customers to many pages of advertising for Camping World and other AGI entities — it’s like putting competitor flyers at the front entrance to the dealership.

So why wouldn’t FreedomRoads strong arm a dealer into selling his location and then retaliate if the dealer turned the company down? Worse things have happened in our competitive, capitalistic marketplace.

Then, an amazing thing happened Saturday morning. Marcus Lemonis himself called my cell phone to discuss the story. Marcus wanted me to have the “facts.” It was an amiable conversation in which he outlined his rationale for closing the store in Clarksville, Ind. He also denied threatening to pull the location in Amsterdam, N.Y., but said he wanted to keep his options open. He outright denied claims that the Katy, Texas, store was closing because it was already attached to a FreedomRoads store, not Holiday World of Houston.

Marcus spent a great deal of time reassuring me that FreedomRoads is not a bad company and that he’s not a bad guy, and I don’t doubt that. But the whole FreedomRoads/Camping World saga does raise some questions.

Marcus claims there is a stone wall — he called it a Chinese wall — separating FreedomRoads from Camping World and both from the Affinity Group. He said they are separate companies operated independently under a common owner. In fact, he cited Berkshire Hathaway as a similar example noting that the megacorporation owns Dairy Queen and Fruit of the Loom.

As independent companies, Marcus claimed there was no exchange of information between FreedomRoads and Camping World and the Affinity Group. My how I wish that was true. It’s hard to imagine completely separate entities being run as independent businesses under the direction of the same two people — Marcus Lemonis and Steve Adams — when FreedomRoads stores are hosting Camping World locations and Camping World RV Sales stores are popping up all over the country.

It seems so much information is exchanged between the three companies that some believe a stone wall really insulates the conglomerate from the industry, but that a white picket fence separates the companies within that wall.

This summer, I spoke with several former FreedomRoads employees and even a dealer who sold out to FreedomRoads. I also spoke with RV dealers who have been approached by FreedomRoads and Camping World. I chatted with an independent RV dealer who leased space to Camping World for a store at the dealership’s locations. If there is one undeniable fact, it’s that proprietary dealer information frequently finds its way to Camping World. And from there it is a short hop, skip and jump to FreedomRoads.

Time after time when independent RV dealers exchange customer names and addresses with any company affiliated with the Affinity Group, the dealers’ customers almost immediately begin receiving Camping World solicitations.

In the past it really didn’t matter to the dealers because, for many, there wasn’t a Camping World in their market. The mailings were more of a nuisance because customers would bring the flyers into their local RV dealership asking if the dealer could match the Camping World price.

But, as more Camping World locations pop up around the country, dealers are now finding themselves face to face with a serious, well-funded competitor selling rolling stock either at FreedomRoads locations or through Camping World RV Sales. The customer names and addresses provided in goodwill to Affinity Group companies for some other benefit, like camping discounts, are now being used to draw those customers away from their dealership of origin.

Some of the bigger names in the RV industry have pretty much had enough of this tactic. A few lawsuits are pending and we’ll keep an eye on those as the cases unfold. Several are claiming that FreedomRoads/CampingWorld/AffinityGroup have breached a contract or non-compete agreement in the way they enter a market or market products. It could get ugly as manufacturers are drawn into the fray over territorial rights.

Gold Medal Camping World dealers who have leased space to the store or, in some instances, designed new facilities to specifically accommodate a Camping World location are learning a tough lesson as Affinity Group’s FreedomRoads subsidiary buys out a nearby dealership and opens up a Camping World store on that site. The dealers who designed and leased the space hoping to draw traffic to their locations are left holding the bag as their customers are enticed to the new location.

As I have said in this space many times before, it’s not that I have anything against Camping World or Freedom Roads or even Affinity Group. Independently, these businesses would be good for the RV industry. Joined together, I think they are dangerous for their ability to control and influence a huge segment of the market.

Yes, Berkshire Hathaway may own Dairy Queen and Fruit of the Loom. But they are two very different companies operating in completely different markets — and you don’t see many Fruit of the Loom displays in Dairy Queen locations, nor do you receive underwear coupons with your Dilly Bar.

If AffinityGroup/FreedomRoads/CampingWorld is serious about creating a stone wall between the companies, it would be nice to see a cement truck in the neighborhood.

I have only had the opportunity to meet him on a handful of occasions, but each time Mr. Riegel has impressed me as being a genuinely nice guy. He seems passionate about what he does, but caring enough about people that he isn’t a ruthless crusader climbing to the top over the backs of others. Apparently, the chieftains at Thor see even better qualities in him as evidenced by his meteoric rise in power and influence at the company.

Before he was 38, Riegel brought Airstream into the 21st Century as its president. At 40, he was tapped to serve as group president over seven other Thor manufacturers and helped lead the company to continued profitability quarter after quarter. His latest promotion shows that, at 41, Riegel is being groomed for greatness in the RV industry.

I’m sure it helps being the son-in-law of Thor Chairman, President and CEO Wade Thompson. But, as a dad of daughters only myself, I suspect Thompson sees something in Riegel that sets his heart at ease in knowing that he can entrust two of his most valuable assets to Riegel’s care — his company and his daughter.

Although I feel uncomfortable calling the leader of a billion dollar company “Dicky,” I’ll simply offer my congratulations to Dick for his remarkable performance and a well-deserved promotion.

Sitting in storage sites along the Gulf Coast are hundreds, if not thousands, of quality temporary shelters produced by the RV industry in the weeks following Hurricane Katrina. Many have never been lived in. But all can be shipped to California by Monday, with a little coordination and planning on behalf of our federal emergency response agency.

We’ll see if FEMA has the guts to do the right thing and send those units to California, or if they will side with the Sierra Club and keep the units locked up tight over fears they’ll “poison” people because of so-called toxic levels of formaldehyde.

By the way, neither FEMA nor the Sierra Club have been able to come through with my offer to spend a week in a FEMA trailer to prove the alleged toxic effects of our products are nothing more than environmentalist whacko hot air.

The staff at Gulf Stream also has its hands full cleaning out tons of debris from fallen buildings, smashed products and the remains of the Franklin enterprise blown onto their property from across the street. Because they are located in the heartland of America where people genuinely care about others, I’m confident the Gulf Stream team will rally around the company and get it back on its feet quickly.

In the other end of the country, ultra-fast-spreading wildfires have already destroyed several RV parks and, likely, RV dealerships. The disaster is advancing so quickly that government officials admit they don’t have an accurate count as to how many homes and businesses have been destroyed. At the very least, the thick smoke blanketing the area is rendering the RVs on dealership lots unsalable.

Fueled by 70 mph winds and extremely dry conditions, the impact of this disaster will be unfolding for days to come. Already, 374 square miles of land has been torched. Nothing can stop it. Witnesses on a 10-lane Interstate highway helplessly watched as 100-foot flames raced up the land, lept over the pavement and scurried up a hill to consume 10 homes in less than 10 minutes.

More than 500,000 people have been forced to flee from the area. It’s unfortunate that many of them likely own RVs, but can’t legally park them in their driveways or yards in order to evacuate themselves, their pets and their neighbors when emergencies like this arise.

These sobering incidents remind us all of the absolute necessity to frequently and consistently back up important data — and store it off site. They also remind us that the government is essentially helpless in truly protecting us from disaster. To rely on them before the fact is foolish and dangerous.

The incidents once again give the RV industry another opportunity to step up to the plate and help those affected by natural disasters. If there is anything we, as an industry, can do to help our fellow business owners recover, I’d like to know what it is. I’ll be happy to use this blog and our forum to post their needs in hopes of marshalling resources quickly to the impacted areas.

We’ve proven over and over again that our industry not only helps its own, but it rushes in to help others as well.

In a publication distributed called the Bull Market Investor Alert, Charter Equities boldly claims “The Recreational Vehicle Industry Continues to Earn Record Revenues” — something that may come to the surprise of many RV manufacturers and suppliers going into the fourth quarter of 2007 scratching their heads and muttering “what happened?” Maybe someone should tell Charter that they are seeking investors in the recreation vehicle industry not in recreational vehicles.

“CEQI could be the hottest stock of the fall,” the publication claims. “Early investors could make huge profits with CEQI.”

Noting that Charter Equities has acquired Saddleback RV, “a $24 million per year Recreational Vehicle Dealership with plans to acquire additional dealerships by 2010 delivering potentially over $150 million per year in additional revenues.”

I certainly wish any company luck in their ability to grow a $24 million RV dealership into a $150 million enterprise in 26 months.

To add credibility to these outrageous claims, the document drops names of truly influential companies like Winnebago Industries, Fleetwood, Monaco and Thor Industries. The firm even manages to tie its own future success story to that of Warren Buffet’s acquisition of Forest River.

The full-color brochure highlights the wonderful accomplishments of many manufacturers and features RVIA-supplied lifestyle quotes from celebrities, sports heros and even Barack Obama. However, the point of Charter Equities apparently is to acquire RV dealerships. Wouldn’t it make more sense to promote the profitability of dealerships than the profitability of manufacturers?

“Are you seeing the potential? CEQI is trading at THIS LOW PRICE and has OVER $24 million per year in revenues. At THIS PRICE can you imagine where this could be in a few years if CEQI has over $150 million per year in revenues? OPPORTUNITY IS KNOCKING! CALL YOUR BROKER AND PICK UP SOME SHARES TODAY!! A $20,000 investment could easily be worth $100,000 in a very short period of time. You could take your profits and buy your own Recreational Vehicle.”

I checked. The stock is trading today at 30 cents per share. So, yes, it would be a good deal.

In the past couple of months, my inbox has overflowed with ridiculous offers from various Chinese companies trading stock for pennies, but poised for immediate growth. I never thought I’d see the same tactics applied to companies in this industry.

For the record, I have attempted to contact Charter Equities several times to meet with them when I’m in Phoenix next month. Apparently, they are too busy scrounging up investors for the Recreational Vehicle Industry and laying the groundwork for HUGE PROFITS to return my call.

In fact, it’s not even “financing” we are talking about; it’s just a signature that indicates if the loan goes bad the SBA will cover up to a certain percentage of the loan amount. Banks like these deals because they don’t absorb 100 percent of the risk. The SBA jumps in to reimburse the bank for something like 40 percent of the loan amount.

The issue came to light when someone forwarded an article to me that appeared on a business Web site about one guy’s attempt to buy an RV dealership. The buyer needed an SBA loan to close the deal.  The dealership posted net profit of $440,000 and the owner was selling the business for only $550,000. It looked like a good opportunity for some entrepreneur. Here’s the catch. The business grossed $13.5 million annually in sales — more than double SBA’s common size standard for a small business.

I’ll admit to being an idiot editor with limited business sense, and when it comes to banks I am pretty sure I will never understand how they arrive at loan decisions. I also recognize that this is a federal agency I’m talking about, not a bank, so all common sense goes out the window. But, if you buy a business with a cash flow of $13.5 million for $550,000, and that business drops $440,000 to the bottom line every year for three years — doesn’t that prove the business is healthy and that the loan is relatively secure? A simple loan calculation shows the payments would be about $80,000 a year which still leaves ample profit for the new business owner to personally use or reinvest into his business.

Few people will disagree that small business is the engine of the American economy. More jobs are created in small business every year than all corporations combined. It is essential that we create an environment that is attractive to entrepreneurs and rewards them for working hard and taking risks. As I see it, the purpose of the Small Business Administration is to help business owners either buy or start small businesses that will create jobs, and thus taxpayers for the federal government. They should be willing to support any reasonable effort to start or buy a business, especially those that are proven successful in creating well-paying jobs.

In the process, the federal government can’t be stupid. They need to be reasonably certain that the business will survive and thrive before they risk taxpayer’s money. I could understand the SBA being nervous if someone were to need a $13.5 million loan when the business only had $440,000 available to pay it off. But this isn’t the case. And why should it matter what the top line of the business is anyway? It’s what he keeps that counts, isn’t it?

The $6.5 million SBA cap is unreasonable and unfairly applied across the board to all retail operations regardless of what it sells. A theater owner selling $8.50 movie tickets and $8 tubs of popcorn would have to serve 393,939 customers before it crossed the $6.5 million threshold. On the other hand, an RV dealer would only need to sell 162 $40,000 RVs before he reaches the same ceiling, not including service, F&I, parts and accessories.

So, if banks won’t lend 100 percent of the money without collateral or some type of federal loan guarantee; and the federal government won’t loan money to buy a reasonably successful dealership because it sells expensive motorhomes, not movie tickets or widgets; what is an RV dealer suppose to do when it’s time to exit the business? 

Ironically, the SBA’s own Web site features a section on exit strategies for small business owners.  One of the articles posted to that site contains this gem:

The process for getting out of business successfully requires the same amount of planning as going into business. While the process should be easier, it is likely to be less enjoyable and more stressful. The best advice for business owners is to think about the future during the early stages of getting into business. Exert managerial influence to ensure that complications and problems which could affect dissolution and net value do not develop into roadblocks. When the time for getting out of business comes, engage the invaluable expertise you will need, and prepare a plan.

So there you have it. The SBA says it takes planning in the early stages of business development to successfully get out of a business. Apparently that means you should plan to only grow so much. Limit your sales, reduce your profitability, don’t sell many $100,000 motorhomes, don’t hire staff to service customers and you’ll be a true “small business” as defined by the federal government.

You might not have many customers, but at least the poor schmuck who will eventually buy your business will qualify for an SBA loan.