By Marilyn Odendahl, Truth Staff
modendahl@etruth.com
MILLERSBURG -- One year ago, a recreational vehicle company publicizing plans to increase production and hire more employees would have been fairly ordinary.
Coming at a time when several other RV makers are shedding workers and building fewer units, however, the announcement not only gets a second look, it raises fresh questions about the condition of the industry.
The sky is not falling, say those in the business, but times are tough and the year ahead will be challenging. Some manufacturers already have closed their doors and more may follow as consumers, feeling the pinch of a slowing economy, shy away from buying large discretionary items like RVs.
"It's a shame, too," said Don Emahiser, vice president of sales and marketing at Carriage Inc. "Our business is supposed to be fun, and I don't think anybody is having a lot of fun lately."
A maker of travel trailers and fifth wheels, Carriage has announced its intention to ramp up the production of Carriage and Domani brands and add more employees in the early spring. Underscoring the uncertainty of the times, however, Emahiser tempers the news by reiterating these are just plans and no definite dates for increasing production and hiring have been set.
He believes the industry is suffering from too much capacity. Manufacturers kept expanding and building units as the number of shipments reached record-breaking levels for three straight years.
Now with 2007 shipment totals nearly 40,000 less than the year before and 2008 expectations the lowest in five years, the RV industry's contraction is becoming painful.
While some companies struggle with their bottom line, RV makers like Carriage and Damon Motor Coach, which will move into a new market with the introduction this summer of its Class C motorhome, are growing.
The unevenness could be the result of several factors, said Mark Bowersox, director of recreational vehicles at the Recreation Vehicle Indiana Council, from having a product that appeals to customers to managing the production schedule and workforce so that during a slowdown, cuts are either needless or very small.
Three RV retail shows in the Hoosier state during January reflect the current state of the industry. The show in South Bend posted a 15 percent increase in attendance and strong sales while the Indianapolis show saw a 15 percent drop in the gates and tough sales, Bowersox said. Meanwhile opening day attendance was flat at the 48th Annual Fort Wayne RV & Camping Show.
The atmosphere is making RV companies cautious even when the news is good. Keystone RV Co. posted its best January retail sales in its 12-year history, but company president and chief executive officer Ron Fenech is preparing for a "challenging environment in the next six months."
He emphasized that the market, while not robust, is solid. For the industry, Fenech said, the blow of the economic downturn has been cushioned by a growing number of baby boomers coming to the RV market and the Go RVing campaign stirring great interest in the RV lifestyle.
"It's going to be a very competitive marketplace," Fenech said. "Our industry has more capacity than buyers at this point."
Consequently, RV makers will continue to struggle, which is bad for the entire industry. Layoffs and closures, Emahiser said, paint the industry as unstable, which could deter investors and possibly prolong the troubles.