RV Leaders Expect Continued Growth

13 May 2014 1:19 PM | KOA Owners Association (Administrator)

Article by Jim Meenan

A panel discussion was held Thursday with some of the leaders in the RV industry at the RV Industry Power Breakfast at the RV/MH Hall of Fame. In a wide-ranging discussion, they talked about the current boom that is going on in the industry and some of the issues that they are now facing in terms of labor, materials and delivery. Participants included: Forest River's Doug Gaeddert, who is also board chairman of the Recreation

Vehicle Industry Association, Thor's Bob Martin, Jayco's Derald Bontrager and three executives from suppliers -- Airxcel's Mel Adams, Lippert Components' Jason Lippert and Patrick's Todd Cleveland. Here are some of the highlights.

Q. What's next for the RV Industry? Amid all the recent success, what's on the horizon?

A. Gaeddert: We are obviously motoring in a really strong direction right now. The immediate future I think looks good. We are in a sweet spot in the industry from all standpoints, whether it be demographics, popularity, a push for more physical activities. As far as challenges, inside the industry, short-term ones are obvious: transportation, labor and material shortages. Long term the challenge to continue to grow it are to satisfy our customers. External factors -- it's going to take something like a crazy situation exploding in Ukraine, or something that puts unnatural pressure on oil prices.

Martin: We have bright days ahead of us because of the demographic. All the opportunities we have of people who are not actually camping yet. They are tent campers. They are taking that next step. We look at that as great opportunities for everybody in this room.

Bontrager: The RV industry is really a mirror of what's happening in our economy. The customers never left us. They sat on the sidelines for a period of time during the recession. That's been a big piece of our rapid growth the last three years. What I see going forward is I think we are going to be in a prolonged period of growth.

Lippert: From our perspective I feel real solid that this industry was hit arguably the hardest in the recession. Being in manufacturing it's a lot tougher than a lot of other businesses in the recession. We all learned a lot of important lessons in the recession.

I think we all feel positive about where the industry is going, and it hasn't felt this good in a long time. But as an industry we are probably well positioned to recover from anything that hits us between the eyes.

Q. Amid the September open houses, what's the future of the trade shows such as Louisville for both the near future and long-term?

A. Bontrager: We also have to remember when we talk about the Louisville show that we are a consolidating industry. We have fewer manufacturers, fewer suppliers, fewer dealers involved in the business. I think the Louisville show provides a lot of value. The open houses have kind of grown a life of their own. It's been good for the industry.

Adams: It's really the only showcase of the North American RV industry and maybe internationally to some degree. As a supplier at that show, it's always a great opportunity to see everyone else in the industry, see all the manufacturers. But I also think it's probably the only place where we are showcasing the industry and attract national media.

Cleveland: The Louisville show is absolutely necessary.

From the supplier side, we continue to support Louisville.

Martin: For us definitely there will be a continued presence for the open house. We are anchored right here. For Thor, it will be bigger than last year. We are doing what the dealers are asking us to do. The dealers really seem to enjoy the time of the year, coming in and seeing new models. It's a great time for them to come by. It's a little bit before Louisville. That way they can get their product in before spring shows. Forest River really started this and it's just grown. I still see a great importance for both.

Gaeddert: It's turned into a somewhat predictable cycle. which has been very healthy for the entire industry, suppliers, dealers, manufacturers, campgrounds, finance companies, etc. (The shows) complement each other extremely well. The demand is there for both of those events. We are going to continue to do what the market wants us to do, in this case, the dealer base wants us to do. It's here to stay for now. It's very good for the industry.

Q. With every-body working who wants to work, where does the industry get employees from locally? Or does the industry just expand elsewhere?

A. Gaeddert: The cool thing is we've gone from a 20 percent rate of unemployment down to 5.8. That's like dropping 150 pounds in a short period of time. It's great news that we are where we are at now. Somebody brought it up earlier, our core work force in this area is the reason companies are focused in concentrating in this area. This area is full of good people that have great skill sets and build high-quality products and deliver high-quality service. Plain and simple, that's why it's here.

As far as moving outside because of the employment issue, I think that's a tough one. If you look back there's 70 to 80 years of culture in this area with this work force. It's pretty tough to go replicate that somewhere. The second thing is the supplier base and the distribution channels. So it's going to be tough. Companies are going to have to separate themselves by being the best place to work, how they take care of folks. We are going to have competition for labor. But at the end of the day, part of the solution is working together and trying to bring that 5.8 down further and become steadier.

Martin: For me, we are based in northern Indiana and Ohio. This is where the supplier base is. It would be really hard to move out of the area. The challenge is to bring more people into the area. You do that by creating a great company that people will want to work at.

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