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RV Industry Leader: It appears ‘that the worst is finally over’

Category: uncategorized
Source: The Elkhart Truth
Publish Date: Wednesday, December 2, 2009
Summary: After a year of continually being used to illustrate the depth and pain of the recent economic recession, the RV industry gladly declared Tuesday morning that the gloomy days are over and the recovery has begun.

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LOUISVILLE, Ky. -- After a year of continually being used to illustrate the depth and pain of the recent economic recession, the RV industry gladly declared Tuesday morning that the gloomy days are over and the recovery has begun.

The 47th Annual National RV Trade Show opened at the Kentucky Exposition Center with a breakfast of bacon and eggs and series of presentations by the officials from the Recreation Vehicle Industry Association. As a rock band thumped out "Let the Sunshine In," RVIA President Richard Coon danced onto the stage and told the crowd of dealers, manufacturers and suppliers, "it does appear that the worst is finally over ..."

An indication of the blow the recession did land on the industry, the show itself is much smaller this year. The show occupied the entire exposition center in 2008, but this year the 72 manufacturers and 210 suppliers fit comfortably into just two wings. However, the RVIA noted pre-registrations increased 15 percent over last year, which puts preliminary attendance totals at 8,500.

Speaking after the breakfast, Coon said the bankruptcies of industry giants Fleetwood Enterprises and Monaco Coach Corp. proved that no matter how good an RV maker may be, it is vulnerable to the whims of the economy. Still, despite the struggles during the past two years, the industry will probably forget what this downturn taught.

"(As) I think through every recession," Coon said, "I'm always amazed at the lessons each of those recessions teach all of us and yet, those thoughts as things get better and better, kind of fade in the background."

Still, Coon is looking for the industry to follow historic patterns and make a steady climb out of this slump, in part because of the growing baby boomer market and pent-up demand. In fact, the worry now is the industry will accelerate too quickly and manufacturers will not be able to fill consumer orders.

This will leave a lot of disappointed customers, Coon said. When buyers walk into dealerships in the spring, they may be told they will have to wait perhaps six or even 10 weeks before one is available.

"Every recession we've had, it's been difficult for the manufacturers coming out of those recessions to produce enough product to meet the needs," Coon said.

The RVIA president does not see the quality of the units diminishing as makers strive to meet increasing demand from the marketplace, but he noted suppliers are facing an inability to meet manufacturers' needs for parts and components.

Recessions this long and deep are devastating to the supply chain, Coon said. Companies will need time to rehire workers, order the raw material and then build the product.

While the squeeze on the supply chain along with the questions surrounding the financial institutions' desire to approve consumer loans could slow the rebound, Coon believes the industry will come back.

"If you lose 60 percent of the travel trailer industry, 75 percent of the motorized industry and survive, that says something about the resiliency of the whole industry," he said.

Elkhart County suffered among the most when wholesale shipments in the industry dropped. Thousands of workers lost their jobs and businesses closed. Yet Coon urged the workers to keep their confidence that the industry will boom again.

"I can assure you that ... the management of manufacturers has had tremendous, gut wrenching difficulties trying to figure out how to keep their employees working," Coon said. "That is so hard. I know it's hard on the employees. It is harder on the management. They understand what their employees go through. ... None of them, none of them want to lay off employees. It's bad business."

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