RV industry death spiral...

[laknox]

I'm greatly looking forward to this series of articles over the next couple of weeks:

http://rvdailyreport.com/opinion/opinion-the-rv-industry-death-spiral-part-1/comment-page-1/#comment...

Lyle

[thestoloffs]

laknox wrote:
I've said for several years that one of the most basic things that an RV mfr could do would be to stop paying for piece-work and pay straight wages/salaries. Yes, this would cause a drop in production, but it almost certainly would lead to less warranty claims and higher customer satisfaction and increased sales. Profits would increase because supply would be less, therefore there would be less incentive to discount. Some sales would be lost due to higher prices, but these would almost certainly be customers who were marginally able to afford a particular unit to begin with.{snip}

Lyle, I agree with your approach. Here's my "proof":

I have a 2010 Born Free 26' Class C. It was built by a team of 4 people, not an assembly line, who are paid straight wages.

Born Free offers a 3 year bumper-to-bumper warranty on their work. However, the key to their QC is that, during those 3 years, every calendar quarter that no warranty claims are made against my coach -- that team receives a bonus.

So, if they build each coach right the first time, they'll be rewarded for the next 3 years!

OK, I concede that BF is a lower volume manufacturer than the Thor divisions, and that there are far less Class C's built each year than travel trailers.

But, why couldn't they run such a bonus plan for each workgroup on the line?

(BTW, I worked for both Chrysler & GM, so I have some insight on how large volume lines are organized and operated.)

[SoundGuy]

dewey02 wrote:
Edit: I see Gemsworld beat me to the answer. We agree that your basic assumption is incorrect.

You might want to read gemsworld's post again. 😉 Seems you're confusing "quality" with technological advances ... of course product quality has improved as the industry is much more technologically advanced than it was in 1971. As gemsworld said, you're not paying for improvement in quality per se but for these dramatic advancements in technology, the net result of which is a natural improvement in quality ... and the effects of inflation. Tough concept to understand, eh? :S

[dewey02]

SoundGuy wrote:

wing_zealot wrote:
In 1971 I paid $2500 for a brand new basic pickup truck. The same basic truck new today would cost around $40,000. Anyone that thinks quality doesn't cost more is delusional.

Although quality in the automotive sector has improved dramatically since 1971 your argument has little to do with quality improvement and everything to do with inflation, which between 1971 and 2016 has been significant. Is your own income not significantly many more times than it was in 1971? :R

Sorry, you are wrong on this. Using the Dept. of Labor inflation calculator, $2,500 in 1971 would be $14,829.38 in today's dollars if only inflation were factored in. If you can purchase a brand new basic pickup today for that price, please give me the name of the truck dealer! 🙂

Yes, quality today is much higher and the amount of add-ons and gizmos that are now standard is much more. But much of the price increase in pickup trucks is due to this factor, rather than merely inflation.

Here is the link to the Dept. of Labor's inflation calculator, so you can check for yourself. [COLOR=]Link here

Edit: I see Gemsworld beat me to the answer. We agree that your basic assumption is incorrect.

[Community Alumni]

wing_zealot wrote:
In 1971 I paid $2500 for a brand new basic pickup truck. The same basic truck new today would cost around $40,000. Anyone that thinks quality doesn't cost more is delusional.

The equivalent of $2500 in 1971 dollars today is nearly $15K. The cost of a "stripped" 2016 Chevy truck is just over $28K, not $40K. The "stripped" 2016 model comes equipped with standard features that were costly options back in 1971, and with some features that did not even exist back then.

You're paying more for technological advances and features that did exist back in the '70s. The cost of quality is almost free.

[SoundGuy]

wing_zealot wrote:
In 1971 I paid $2500 for a brand new basic pickup truck. The same basic truck new today would cost around $40,000. Anyone that thinks quality doesn't cost more is delusional.

Although quality in the automotive sector has improved dramatically since 1971 your argument has little to do with quality improvement and everything to do with inflation, which between 1971 and 2016 has been significant. Is your own income not significantly many more times than it was in 1971? :R

[mobilefleet]

I disagree with most of this article. There's still very strong demand for rv products and don't see it stopping anytime soon and I'm a part time rv dealer. Folks will still want to buy rvs that are priced in their range, especially entry level ones. The recent integration of jayco into thor won't affect sales, they still operate on their own. My own personal starcraft trailer has a jayco tag on the frame as they have owned them for years. The only potential issue I see that MIGHT do something is reimbursement rates for warranty repairs, but the disgruntled dealers will close or change lines, and then manufacturers will simply open another dealer to replace them, assuming they are even needed in that particular location because if you don't move inventory the manufacturer considers you expendable anyway. Yes, folks grumble, but like Walmart they'll still put up with relative lack of quality and customer service and still come back if the price is right.

[wing_zealot]

In 1971 I paid $2500 for a brand new basic pickup truck. The same basic truck new today would cost around $40,000. Anyone that thinks quality doesn't cost more is delusional.

[SoundGuy]

colliehauler wrote:
Anyone have the sales numbers that show the industry is in a death spiral?

Historically over the last few years sales of recreational vehicles has been growing steadily. RVIA predicts continued growth for 2016 / 2017 but here in Canada the opposite is true, with RV Business Stats showing a significant decline in all areas for the current year to date. I suspect the reason for this stark contrast between US and Canadian sales has nothing to do with perceived quality, or lack thereof, but rather the falling value of the Cdn$ vs the US$ which makes new recreational vehicles significantly more expensive than they were in the past when the Cdn$ was closer to par with the US$.

[dcg9381]

et2 wrote:

And then all that will be left is Thor. The end of the industry.

That's already happening, but it's hardly the end of the industry.
Look, Thor, at least the sub-brand I'm familiar with (Keystone) appears to do exactly what's described in the article:

• Puts dealers between the company and the consumer
• Makes dealers accept what they deem appropriate for repair costs, in exchange for being able to sell their product
• Has no real "nationwide" warranty because dealers don't want to do work that they won't be paid fairly for
• Pays people that assemble the RVs by unit, not by hour or by a measure of post-manufacturing quality

Quality costs. It doesn't immediately help with profit margin, so it's something that can be shaved. And you can control the cost of crappy quality by making the dealer handle most issues.

Why do we put up with it? Because we don't buy RVs like we buy cars - most of us dont get a new unit ❤️ years. And there is no independent tracking of consumer quality. We're sold that more quality means more features even though those RVs rolled off the same assembly line assembled by the same people. Most states have very poor consumer protections, if any at all, around RVs.

[Dick_A]

One of the looming issues I see is the fact that real wages, adjusted for inflation, have not materially changed in over fifteen years. With more trade agreements (TTP, etc.) we are not likely to see things getting any better. Remember when Ross Perot said "with NAFTA you will hear the giant sucking sound of jobs leaving the Country"?

That was the start of the U.S. seeing a reduction in manufacturing and the start of the service economy. The resultant is lower wage jobs and less purchasing power.

Off shore products are cheaper than U.S. produced goods but with less customer purchasing power it becomes more difficult to purchase quality built domestic produced goods.

I see some very ominous and heady winds ahead and most of us remember how fast the industry crashed in2008.

[PA12DRVR]

Us out West wrote:

dewey02 wrote:
If the RV industry goes into a nosedive in the future, it will be the result of parents not passing on the camping tradition to their children, and therefore a lack of demand for trailers.

There is nothing at all to indicate that the RV industry is suffering because of quality control. In fact, sales are booming. As more baby boomers retire, more RVs are sold. Sure it is possible that another huge economic downturn can cause many bankruptcies, especially since mergers have resulted in fewer companies controlling the market.

People come here to complain, but I would venture to say that most of us here are quite pleased with our RVs. I certainly am. I believed I've received good value for my money and have had many excellent camping experiences in my travel trailer. Did it have a few problems? Sure. I fixed them. Part of the ownership experience.

Best post in this thread...thank you.

x2

[laknox]

I've said for several years that one of the most basic things that an RV mfr could do would be to stop paying for piece-work and pay straight wages/salaries. Yes, this would cause a drop in production, but it almost certainly would lead to less warranty claims and higher customer satisfaction and increased sales. Profits would increase because supply would be less, therefore there would be less incentive to discount. Some sales would be lost due to higher prices, but these would almost certainly be customers who were marginally able to afford a particular unit to begin with.

How about tires? Simply replacing the junk that's installed on 99% of RVs at the factory would mean a =huge= increase in customer satisfaction. Does =anyone= dispute this? Does anyone dispute that higher customer satisfaction is highly likely to increase sales/profits?

When there were so many frame issues, how hard would it have been for the mfrs taking delivery of Lippert frames to do an in-house QC check to be sure that the welds were done correctly and either correct them on the spot or reject ones that were beyond a simple fix? How many pictures have been posted here showing really nice-looking welds, that were only welded to one side? Adding 50-100 lbs of steel in a few strategic spots would also have helped alleviate a lot of the frame issues.

This really isn't rocket science...

Lyle

[colliehauler]

Anyone have the sales numbers that show the industry is in a death spiral?

[et2]

fj12ryder wrote:

et2 wrote:

westernrvparkowner wrote:
One of the "reasons" the author of the article quoted believes is symptomatic of the death of the RV industry is the supposed fact that only 3 percent of the workers in the RV industry own RVs. I would assume that would be the case in any luxury business. I doubt many workers at Boeing, or Gulfstream own a Boeing Business Jet or A Gulfstream G650. Doubt many of the line workers at Ferrari own a Testa Rosa. What percentage of Rolex employees were Rolexes? A dubious argument at best.

But you left out the thought, if they owned the junk they knowingly made things would change. Do any of those you mentioned put out junk? If they did they' d be out of business. Besides the aircraft industry is heavily regulated by our government as is the auto industry. The fox is in the hen house with the rv industry. They police themselves.

How many people bought the cars and trucks they made in the 50's and 60's? I would imagine that many of the people working in the factories bought cars, and it didn't really make any difference in the quality of the vehicles. They made cruddy vehicles and it wasn't until the Japanese made the scene that things really changed.

Correct ...

This isn't the 50's or 60's so I can't honestly answer to that. Other than the auto industry has virtually been reformed in the last two decades or so. They were forced by competition who made a affordable "better" car for less money. Along with all the other regulations that have been implemented over that time. They now make something that you reasonable know there is some oversight as to how it was made and regulations they must conform to regulated by the government.

So looking at the RV industry that isn't even close in comparison. When someone makes a "better" product to compete that is affordable, it must change. To much money being made when you can do whatever you can get away with.

One can make all the straw men arguments they want. There are lemon laws for automobiles now. If more people were able to do this with their RV's - the RV industry would go bankrupt within 6 months.

[Us_out_West]

dewey02 wrote:
If the RV industry goes into a nosedive in the future, it will be the result of parents not passing on the camping tradition to their children, and therefore a lack of demand for trailers.

There is nothing at all to indicate that the RV industry is suffering because of quality control. In fact, sales are booming. As more baby boomers retire, more RVs are sold. Sure it is possible that another huge economic downturn can cause many bankruptcies, especially since mergers have resulted in fewer companies controlling the market.

People come here to complain, but I would venture to say that most of us here are quite pleased with our RVs. I certainly am. I believed I've received good value for my money and have had many excellent camping experiences in my travel trailer. Did it have a few problems? Sure. I fixed them. Part of the ownership experience.

Best post in this thread...thank you.