Recreational Vehicle industry in a bind

Gov. Mitch Daniels’ request for a $10.4 million national emergency grant to support displaced RV workers was approved two weeks ago after an economic downturn and rising gas prices have left many RV employees in Indiana jobless.
The money – which is an addition to a previous $3 million grant – will be used to pay for training and educating permanently dislodged workers for high-demand jobs. The grant will also fund services such as child care and transportation for those who are eligible, according to a press release.
Elkhart County, Ind., which has earned the nickname “RV capital of the world,” has been hit hard.
SunnyBrook, a manufacturer in Middlebury, Ind., laid off employees earlier this year. To keep the current staff occupied, it has cut production to three days a week, said Elvie Frey, the company’s president and CEO.
The RV industry is very different from other industries. Companies purchase materials weeks in advance and coordinate production according to what dealers want to purchase, Frey said.
Dealers have different needs depending on geographic regions, so companies do not build an RV only in hopes somebody will buy it – especially during this time when orders from dealers are dropping.
“Dealers have not been replacing their inventory as fast as they have been selling it because of the uncertainty in the market,” Frey said.
It costs dealers more to keep inventory on their lot, said Keith Weirich, director of human resources at Newmar Corporation in Nappanee, Ind.
The industry slowdown has affected Newmar more than anticipated, and many former employees will take advantage of the training programs, Weirich said. He said he hopes there will be a need for RV workers in the future and that many will return to Newmar.
In July 2008, the RV industry pushed the unemployment rate in Elkhart, Ind., to the fifth highest in the state, according to statistics released by the Indiana Department of Workforce Development.
Setbacks have stung dealers as well as manufacturers. Although the work force at a dealership is much smaller, workers are paid on commission and cannot make a living when sales plummet, said Stacy Carter, sales manager at Great Lakes RV Center.
Carter predicted Great Lakes will regain strength by spring 2009, once the election is done and gas prices have stabilized.
Great Lakes barely squeezed by this past month, however. Many dealers have begun to sell their merchandise on the Internet for next-to-nothing prices, resulting in low profit margins, Carter said.
“If you want to move them, you have to match the price,” Carter said.