Nervous in Elkhart

[DAISY BOYKIN]

Nervous in the RV industry.


Is the real problem overbuilding?



https://www.msn.com/en-us/news/polit...cid=spartandhp

[retireearly]

There are many small pieces to the puzzle that all point to a downturn. Interest rates are going up, most people are no longer going to be deducting their interest as a second mortgage due to tax law changes, gas prices are trending higher, the trade war seems to have no end in sight, employment costs are way up due to pressure from other sectors, etc.

[Herk7769]

The political spin is just a way of deflecting the blame.

Like bacteria in a petri dish, in a food rich environment, the colony will expand until the food remaining can no longer support the massive colony and it dies almost at once. The colony will begin to die at the center from toxins and move rapidly to the edges until nothing lives, even though there is still food available.

Fuel became cheap and the Boomers were retiring provided food to an industry that thrives on both. Factories could not keep up with the demand and with that came "The Sharks" to feed on the easy money. The influx of near unlimited capital resulted in a boom of manufacturer consolidation (buyouts) and factory expansion.

But the Indiana Colony soon started to die at the core. Almost immediately, the available pool of workers who had the work ethic and talent for managing the farm and factory dried up. Factories began to feed on each other trying to snipe the more talented. The family bonds that kept the workers at a paarticular plant began to fray.

Cities offered bonuses to outsiders to relocate to fill the jobs at the expanded plants. These new employees brought with them the work ethic of pretty much the rest of the country and the family bond that made Indiana's population perfect for the industry began to become less of an asset. Production goals began to replace quality and yet the colony grew. From the edge, everything looked fine; at the center, trouble was brewing.

From the customer's viewpoint, early on things were great. Cheap, lightweight, campers loaded with toys coupled with Senior Park Passes made everything work.

As the industry boomed, things were not looking great after a time. The "Road Experience" was getting toxic as campgrounds, parks, and roads start to convince the new retirees that more fun might had doing something else. Camper quality dropping caused troubles on the side of the road. Inventory management caused a headache due to the bottleneck at dealer delivery. Fields of new campers waited someone to come pick them up and drive them to where they were sold. Your camper could wait months deteriorating waiting for the delivery service.

Now with profits failing to keep up with expenditures, the sharks want someone to blame. Anyone ...

[lcv800]

Doesn't anyone remember 40 or 50 years ago your american made car was a rusted out piece of junk in less than 5 years with less than 50,000 miles? It took competition from foreign companies to force Detroit to turn out quality. Now it's rare to see any car anywhere rusted out and they almost all run mileage into the hundreds of thousands of miles. I think quality builders will ultimately win out. I for one will always be willing to pay for quality.
Rusty

[Ejs4029]

Yep that sums it up......I'm trying to get estimates to have work performed at my home in the Charlotte area of NC...I leave messages and don't get call backs from contractors sometimes waiting weeks just to get someone to come out and give me an estimate they are so busy and are months out from being able to start any new projects because they have so much work now they can't keep up with it...Funny how it's a different story when the bottom starts falling out of the economy...No sympathy from me.

[formerFR]

I worked in the boat building industry, smaller family-style pleasure and ski boats, and it was not only terribly seasonal, summer vs winter, but also depending on the year and the economy.
The RV industry is and has been on a tear since 2012, and you can assume that it might dissipate as time goes by - though when and how much is anyone's assumption or guess.
It's a very susceptible purchase to the economy, just like boats and other 'toys', and to the lending environment, just like homes.

I didn't like the boat industry, for that reason.

[Herk7769]

Originally Posted by lcv800

Doesn't anyone remember 40 or 50 years ago your american made car was a rusted out piece of junk in less than 5 years with less than 50,000 miles? It took competition from foreign companies to force Detroit to turn out quality. Now it's rare to see any car anywhere rusted out and they almost all run mileage into the hundreds of thousands of miles. I think quality builders will ultimately win out. I for one will always be willing to pay for quality.
Rusty

Yep, but those cars ran between 4 and 8 thousand dollars too. Even corrected for inflation we pay double that for today's cars. We get what we are willing to pay for I suppose.


Another pet peeve of mine is the desire to tow huge 5th wheels with their 1/2 ton commuter truck and then complain about how flimsy they are built. Duh … Here's your sign ...

[Splitshaft]

The RV industry’s success or failure is going to rely on demographics more than anything else. Not politics. RV’s are toys, not essentials. As long as baby boomers are retiring with disposable income, RV’s will keep selling. When young families cannot afford an RV, they will buy a tent. There is no shortage of baby boomers retiring in the future. Just because they build it, it does not mean someone will come to buy it.

[cstreu1026]

My first thought is that there are no winners in a trade war. The boom in the RV industry has been fueled by cheap money, cheap fuel, and a stock market on a tear thanks to central banks purchasing equities. We are over due for a recession and when the economy falls its going to be be worse than 2007/2008/2009. The RV industry depends on buyers having discretionary income so when consumers are forced to tighten their belts the RV industry will take an especially hard hit.

[MR.M]

Originally Posted by cstreu1026

My first thought is that there are no winners in a trade war. The boom in the RV industry has been fueled by cheap money, cheap fuel, and a stock market on a tear thanks to central banks purchasing equities. We are over due for a recession and when the economy falls its going to be be worse than 2007/2008/2009. The RV industry depends on buyers having discretionary income so when consumers are forced to tighten their belts the RV industry will take an especially hard hit.

Over due for recession . not sure about that . things are just getting started as it's only been 1.5 years of growth . the previous 8 years were a no growth bust..

[retireearly]

Originally Posted by MR.M

Over due for recession . not sure about that . things are just getting started as it's only been 1.5 years of growth . the previous 8 years were a no growth bust..

Really? Why inject politics into this?

[MR.M]

Originally Posted by retireearly

Really? Why inject politics into this?

Don't believe i said anything about politics . Just stated what has been going on with economy has no bearing on politics

[cstreu1026]

Historically we've gone through a recession every 8-10 years. The Federal Reserve's manipulation of the economy through quantitative easing (buying of stocks by the billions of dollars) and artificially low interest rates have created another bubble economy. Any number of things could be the tipping point including but not limited to consumer debt, commercial real estate, corporate debt, and auto loans. We've also returned to many of the same lending practices that caused the crash in the real estate market 10 years ago. Those that do not learn from history are doomed to repeat it.

[MR.M]

Originally Posted by cstreu1026

Historically we've gone through a recession every 8-10 years. The Federal Reserve's manipulation of the economy through quantitative easing (buying of stocks by the billions of dollars) and artificially low interest rates have created another bubble economy. Any number of things could be the tipping point including but not limited to consumer debt, commercial real estate, corporate debt, and auto loans. We've also returned to many of the same lending practices that caused the crash in the real estate market 10 years ago. Those that do not learn from history are doomed to repeat it.

interest rates are starting to go up . the housing bubble started long before the crash . back when clinton made it so easy to get a loan unsecured . make is so everybody can own a home . we paid the price in 2005 2007 2008 . since we have not been in any kind of boom for 8 to 10 years but only for 1.5 i think we have a ways to go since we are now just getting out of the recession

[cstreu1026]

The cause of the housing collapse goes back to the Carter administration but every administration after that put us further down the path. Rates have been brought up slightly to give the federal reserve room to move them down when the collapse comes but I wouldn’t be surprised to see negative interests rates here as other countries have already gone that route.

The one issue that no one seems to mention as that as rates climb so does the cost of debt service on the more than $20 trillion in national debt. Combine that with increased spending, and a decrease a decrease in tax revenue and we are on a unsustainable course and headed for disaster for more than just the RV industry.

[CC75]

Originally Posted by Herk7769

The political spin is just a way of deflecting the blame.

Like bacteria in a petri dish, in a food rich environment, the colony will expand until the food remaining can no longer support the massive colony and it dies almost at once. The colony will begin to die at the center from toxins and move rapidly to the edges until nothing lives, even though there is still food available.

Fuel became cheap and the Boomers were retiring provided food to an industry that thrives on both. Factories could not keep up with the demand and with that came "The Sharks" to feed on the easy money. The influx of near unlimited capital resulted in a boom of manufacturer consolidation (buyouts) and factory expansion.

But the Indiana Colony soon started to die at the core. Almost immediately, the available pool of workers who had the work ethic and talent for managing the farm and factory dried up. Factories began to feed on each other trying to snipe the more talented. The family bonds that kept the workers at a paarticular plant began to fray.

Cities offered bonuses to outsiders to relocate to fill the jobs at the expanded plants. These new employees brought with them the work ethic of pretty much the rest of the country and the family bond that made Indiana's population perfect for the industry began to become less of an asset. Production goals began to replace quality and yet the colony grew. From the edge, everything looked fine; at the center, trouble was brewing.

From the customer's viewpoint, early on things were great. Cheap, lightweight, campers loaded with toys coupled with Senior Park Passes made everything work.

As the industry boomed, things were not looking great after a time. The "Road Experience" was getting toxic as campgrounds, parks, and roads start to convince the new retirees that more fun might had doing something else. Camper quality dropping caused troubles on the side of the road. Inventory management caused a headache due to the bottleneck at dealer delivery. Fields of new campers waited someone to come pick them up and drive them to where they were sold. Your camper could wait months deteriorating waiting for the delivery service.

Now with profits failing to keep up with expenditures, the sharks want someone to blame. Anyone ...

Wow, what great insight.

[cstreu1026]

Profits not keeping up with expenditures is a problem plaguing many “boom” industries. There are tech companies like Twitter and Snap Chat that are supposedly worth billions but have never turned a profit. Many companies that went all in on fracking are so over leveraged that they struggle to survive.

[MR.M]

Originally Posted by cstreu1026

Profits not keeping up with expenditures is a problem plaguing many “boom” industries. There are tech companies like Twitter and Snap Chat that are supposedly worth billions but have never turned a profit. Many companies that went all in on fracking are so over leveraged that they struggle to survive.

The problem with the fracxking was the low price of oil , but now oil is going up and states like Colorado , Wyoming, Texas , etc are booming and have been for quite a few years with no end in site . Tech companies don't offer much , can't live without oil

[Busboy1]

Originally Posted by Ejs4029

Yep that sums it up......I'm trying to get estimates to have work performed at my home in the Charlotte area of NC...I leave messages and don't get call backs from contractors sometimes waiting weeks just to get someone to come out and give me an estimate they are so busy and are months out from being able to start any new projects because they have so much work now they can't keep up with it...Funny how it's a different story when the bottom starts falling out of the economy...No sympathy from me.

Hey EJS429
I know how you feel. I had a tree fall on my home in Charlotte during Florence in September. I am waiting for the to finish the minor stuff still.

[Pchris]

No it's poor quality off the production line