Forest River Dynamax Additional Surcharges

[TrailWayz]

Originally Posted by vlamgat

Time to shut down this thread.

When did we become so intolerant to opposing views?

Let people respond to the OP's original post and self-filter the noise in between.

It's not that difficult to skip a disruptive post.

[RnRushin]

I would hold the dealer to the contract. A contract should bind both parties. Would the dealer let you out and refund your deposit because you experienced a financial difficulty? Of course you need to study all of the contract and or get it reviewed to make sure it states what you think it does. I'm in business myself and sometimes have lost money on a job due to underestimating, but I stand by my word.

[dalford]

Originally Posted by bclemens

Not sure I have much to add here.

I do know many dealers have let customers out of the deposit. Why? because as others have said, I only passed on what we needed to make sure I actually got supply, not what we wanted, the remainder to make things "whole" was added to the 2022 price sheets. Dealers know, if you back out, they can sell it for more tomorrow and you'll pay even more than that for a 2022.

It was the first time I had to do that in 20 years and I will be using the knowledge to plan and figure out if there is a way we can avoid something like this in the future....but then again, the term "unprecedented" has been used an unprecedented amount of times in the last year or so.

On the bright side...used values have gone up as fast if not faster.

That highlighted text says it all. It does not make it right or justified to not honor a customers contract. The squeeze is on….

I don’t know what I would do if I did not want to litigate this. Not the lawyering type so I would really have to decide if I have to have this RV. I would probably look into small claims court since it is $3k. Maybe I could get some relief there, don’t know.

If small claims court is out I would probably pay the $3k ransom… shucks the cyber ware jacks are getting a lot more..lol.

[Bill Davis]

I guess we can go on and on about how we don’t like what is happening in the country today. Yes he had a contract that both him and the dealer signed when the economic climate was much different. A lot of things are to blame for the situation we live in today but the dealer is a victim as well as the consumer. I don’t like it but I’ll deal with it.

I make camping reservations a year ahead of time and budget accordingly. I didn’t plan on it costing me a $1.50 a gallon more for fuel now than it was when I made that reservation a year ago. I don’t like it but I’ll pay it or stay home. I don’t blame the truck stops or gas stations. They pay more and pass it along to us. I’ll pay more for grocery’s and I’ll deal with that as well. I won’t blame the grocery store. It goes on and on.

I was a small business owner for most of my career and I can tell you that the dealer is sweating out this economy as much as we the consumer’s are. Yes he could eat the increase but he has the same problem as all of us. He has to eat, support his family, and buy fuel as well.

I would pay it and move on even though I wouldn’t like it. We’ll get past this just as we have in the past. Consider yourself lucky that you ordered when you did. It would cost you a lot more than $3000.00 to order or buy one off the lot now.

Smile, pick up your new camper and enjoy all this country has to offer. There are always bumps in the road, just slow down and ease over them. Good luck to you and safe travels.

[duneviper]

Originally Posted by Bill Davis

I guess we can go on and on about how we don’t like what is happening in the country today. Yes he had a contract that both him and the dealer signed when the economic climate was much different. A lot of things are to blame for the situation we live in today but the dealer is a victim as well as the consumer. I don’t like it but I’ll deal with it.

I make camping reservations a year ahead of time and budget accordingly. I didn’t plan on it costing me a $1.50 a gallon more for fuel now than it was when I made that reservation a year ago. I don’t like it but I’ll pay it or stay home. I don’t blame the truck stops or gas stations. They pay more and pass it along to us. I’ll pay more for grocery’s and I’ll deal with that as well. I won’t blame the grocery store. It goes on and on.

I was a small business owner for most of my career and I can tell you that the dealer is sweating out this economy as much as we the consumer’s are. Yes he could eat the increase but he has the same problem as all of us. He has to eat, support his family, and buy fuel as well.

I would pay it and move on even though I wouldn’t like it. We’ll get past this just as we have in the past. Consider yourself lucky that you ordered when you did. It would cost you a lot more than $3000.00 to order or buy one off the lot now.

Smile, pick up your new camper and enjoy all this country has to offer. There are always bumps in the road, just slow down and ease over them. Good luck to you and safe travels.

Well said sir.......

[JC70]

Originally Posted by Bill Davis

I guess we can go on and on about how we don’t like what is happening in the country today. Yes he had a contract that both him and the dealer signed when the economic climate was much different. A lot of things are to blame for the situation we live in today but the dealer is a victim as well as the consumer. I don’t like it but I’ll deal with it.

I make camping reservations a year ahead of time and budget accordingly. I didn’t plan on it costing me a $1.50 a gallon more for fuel now than it was when I made that reservation a year ago. I don’t like it but I’ll pay it or stay home. I don’t blame the truck stops or gas stations. They pay more and pass it along to us. I’ll pay more for grocery’s and I’ll deal with that as well. I won’t blame the grocery store. It goes on and on.

I was a small business owner for most of my career and I can tell you that the dealer is sweating out this economy as much as we the consumer’s are. Yes he could eat the increase but he has the same problem as all of us. He has to eat, support his family, and buy fuel as well.

I would pay it and move on even though I wouldn’t like it. We’ll get past this just as we have in the past. Consider yourself lucky that you ordered when you did. It would cost you a lot more than $3000.00 to order or buy one off the lot now.

Smile, pick up your new camper and enjoy all this country has to offer. There are always bumps in the road, just slow down and ease over them. Good luck to you and safe travels.

x2

[Mythplaced]

Originally Posted by bclemens

On the bright side...used values have gone up as fast if not faster.

Last week I was offered $45000 more than we paid 2 years ago for our Dynaquest!

We passed because we could not replace it for similar money, and we LOVE our DQ.

[TitanMike]

Originally Posted by Mythplaced

Last week I was offered $45000 more than we paid 2 years ago for our Dynaquest!

We passed because we could not replace it for similar money, and we LOVE our DQ.

Same thing is happening here with houses. Owners are looking the market value of their homes, making plans to sell and bank huge profits, then suddenly realizing they need a place to live. They suddenly realize those "profits" aren't enough to buy them a new home to live in.

Isn't inflation wonderful

[Mythplaced]

Perhaps I'm just a 'curmudgeon, but I believe an "agreement/contract" is both a moral and ethical issue. A handshake should be good enough between individuals of good faith. I think what we are seeing here is a lack of good faith on the D(st)ealership side.

There is no possession, I want badly enough to throw out my ethical standards just to get that "thing". I will not be held hostage to give someone my $$.

This is why I don't buy new vehicles from a "D(st)ealership", and buy lovingly used ones from the original owner. They get a better price than a trade-in, I don't pay for depreciation, and After my own multi-day PDI, I know the coach inside and out.

Were it were up to me (and good that it's not) all would follow the Tesla sales model (web purchase direct from mfg) with delivery at a company delivery/service center.

[nomad297]

Originally Posted by TitanMike

Isn't inflation wonderful

For some, like Forest River, Berkshire Hathaway and Warren Buffett, inflation is, indeed, a wonderful thing.

I think this scenario is a perfect example of demand-pull inflation.

Bruce

[Magnatudes]

[QUOTE= I believe an "agreement/contract" is both a moral and ethical issue. A handshake should be good enough between individuals of good faith. I think what we are seeing here is a lack of good faith on the D(st)ealership side.

This is why I don't buy new vehicles from a "D(st)ealership", and buy lovingly used ones from the original owner. They get a better price than a trade-in, I don't pay for depreciation, and After my own multi-day PDI, I know the coach inside and out.
[/QUOTE]

I agree. Too bad honorable transactions are dissipating.

This whole issue was sparked by line manufacturer that chose to trickle down
their temporary cost increases to their dealers who in turn are passing them down to the consumer. Unfortunately, this was not thought thru completely and the victims are folks that already signed contracts waiting for deliveries. Forest River is profitable enough to absorb just a few of these that were already sold/committed under contract. Premature annunciation with limited corporate involvement and questionable policy. Sad.

[Mythplaced]

Although it's obvious, It needs to be said that this is NOT an FR/Dynamax problem, but an issue with the D(st)ealership honoring a purchase/Sales agreement. This is just plain old bad business by the D.

FR/DM is not 'forcing' the D to void or modify any contract. The D is just trying to weasel out of an agreement that is less profitable than expected. Futures trading is always a risk based enterprise. The D 'bet' the invoice would be the same, but surprize, costs went up. That is the risk the D took by accepting an order with delivery 4-6 months out.

If today I buy October oil at $60, and the price in October is $40 I WILL lose $20 per barrel. IF the price in October is $100 I will make $40 per barrel.

[bclemens]

Originally Posted by Mythplaced

Although it's obvious, It needs to be said that this is NOT an FR/Dynamax problem, but an issue with the D(st)ealership honoring a purchase/Sales agreement. This is just plain old bad business by the D.

FR/DM is not 'forcing' the D to void or modify any contract. The D is just trying to weasel out of an agreement that is less profitable than expected. Futures trading is always a risk based enterprise. The D 'bet' the invoice would be the same, but surprize, costs went up. That is the risk the D took by accepting an order with delivery 4-6 months out.

If today I buy October oil at $60, and the price in October is $40 I WILL lose $20 per barrel. IF the price in October is $100 I will make $40 per barrel.

Well said. People forget that the dealer gets to negotiate each and every sale as each transaction has a unique set of circumstances. They don't have a "fixed" margin, it fluctuates and some are higher than others.

The OEM on the other hand has fixed pricing. There is a margin for error of course, but materials and labor are by far and away the vast majority of the price. So when both are going up exponentially, we had to adjust. Even then, it is not like some "windfall profit" that I keep see people alluding to. Some OEM's "Cut OFF" retail orders. So you have that choice as well...don't let customers order and only choose from stock...that way, no complaints about the surcharge.

Our prices started to rise Sept 2020. We negotiated a tiered rollout so we would take half in Oct, half in Feb with our major suppliers. That would give us the time we needed to adjust with new pricing. Then Nov hit and suppliers said they could not wait until Feb and in fact the increase was now double what they expected and they had to take it NOW. Then other suppliers started to pile in. With shortages already wide spread, the Texas freeze happened in Feb 2021. That disrupted the chemical supply chain which affected plastics, ABS, foam and adhesives. We are still allocated glue to this day as they have not recovered. SO, more chemicals were needed from overseas which means shipping got more expensive. Container shortages were already a thing, but adding more demand has pushed a container cost almost 500%. A container used to cost about $2000. It just peaked up over $10,000....and we are told that Amazon has not even committed to their Christmas shipment yet, which will add further strain.

[LandKKnight]

I know this is nowhere near the same thing, but when I bought my 2018 I5 30FW back at the RV show in Oct of 2017 the interest rates were in the 3s. When it finally showed up in April 2018, the dealer informed me my interest rate would now be 4.5% despite my having signed a contract for an interest rate in the 3s. This would have increased my monthly payment. I told them I was firm on the monthly payment and would only pay the increased interest rate if they came down on the principle so that my payment remained the same. To my surprise and delight, they knocked over $5k off the price. This dealer was willing to eat $5k off his profit. It does happen. There are decent dealerships out there willing to work with you.

[TitanMike]

Originally Posted by bclemens

Well said. People forget that the dealer gets to negotiate each and every sale as each transaction has a unique set of circumstances. They don't have a "fixed" margin, it fluctuates and some are higher than others.

The OEM on the other hand has fixed pricing. There is a margin for error of course, but materials and labor are by far and away the vast majority of the price. So when both are going up exponentially, we had to adjust. Even then, it is not like some "windfall profit" that I keep see people alluding to. Some OEM's "Cut OFF" retail orders. So you have that choice as well...don't let customers order and only choose from stock...that way, no complaints about the surcharge.

Our prices started to rise Sept 2020. We negotiated a tiered rollout so we would take half in Oct, half in Feb with our major suppliers. That would give us the time we needed to adjust with new pricing. Then Nov hit and suppliers said they could not wait until Feb and in fact the increase was now double what they expected and they had to take it NOW. Then other suppliers started to pile in. With shortages already wide spread, the Texas freeze happened in Feb 2021. That disrupted the chemical supply chain which affected plastics, ABS, foam and adhesives. We are still allocated glue to this day as they have not recovered. SO, more chemicals were needed from overseas which means shipping got more expensive. Container shortages were already a thing, but adding more demand has pushed a container cost almost 500%. A container used to cost about $2000. It just peaked up over $10,000....and we are told that Amazon has not even committed to their Christmas shipment yet, which will add further strain.

This is not just happening in your industry.

Just got a message from my Son who deals in garage doors. Much of his product is manufactured locally but raw materials and accessories are coming from offshore.

Eight weeks ago his primary supplier announced that effective immediately there would be an across the board increase of 20%. Yesterday he received another notice, effective immediately, a price increase of 15.9%. These are in addition to the earlier increases that were in the single digits and occurred every 60-90 days since the middle of last year.

In his case he now only honors estimates/quotes for the same day. Even then it's almost impossible to know if he'll even break even on a job as many components have long lead times and who knows what the price will be in the future. In his case he's been lucky as he purchased another company not long ago that had a lot of inventory. When that's gone, what then?


His business certainly isn't the size of the RV industry but it's a sign of not just what has been happening but what is yet to come.

Something tells me that the days of negotiated pricing will change to more "take it or leave it".

[Invisibleman]

I have been reluctant to chime in on this because my dealer and I had no issues when my 21 Force 37TS was delivered. But, from my perspective, the manufacturer's price increases is between them and their dealers. Manufacturing costs fluctuations are nothing new. The relationship of any particular dealer and their customers, and the contracts that were agreed upon are the dealers doing. If a dealer was wise and had a clause to adjust for unforeseen price fluctuations, they have standing to ask for more money, if there "contract" with the customer does not have a clause of this nature, in my opinion, the dealer needs to suck it up. They are free to ask and explain about increases, but legally I doubt they have a valid argument. Seeing that most of the big Texas dealers routinely discount 25% off msrp, one would think the dealer has some wiggle room. And they should be able to negotiate a happy ending to most any contract they have. I was in the contracting business for 40 years. Now and again I took it on the chin. That's called business. In the end, you profit, absorb those losses into the overhead, and learn how to write a better contract. I am surprised this is such a hot topic. It seems pretty basic to me. Look at your contract. That is what a contract is for. I'm chiming out. Just wanted to give my opinion. Oh, and I agree. This thread has been civil, shouldn't be closed, and this is the right place to discuss these types of issues, reasonably, as this thread has been. Take care. I hope all works out for everyone.

[Eddie and Catherine]

Originally Posted by Mythplaced

Although it's obvious, It needs to be said that this is NOT an FR/Dynamax problem, but an issue with the D(st)ealership honoring a purchase/Sales agreement. This is just plain old bad business by the D.

FR/DM is not 'forcing' the D to void or modify any contract. The D is just trying to weasel out of an agreement that is less profitable than expected. Futures trading is always a risk based enterprise. The D 'bet' the invoice would be the same, but surprize, costs went up. That is the risk the D took by accepting an order with delivery 4-6 months out.

If today I buy October oil at $60, and the price in October is $40 I WILL lose $20 per barrel. IF the price in October is $100 I will make $40 per barrel.

Originally Posted by bclemens

Well said. People forget that the dealer gets to negotiate each and every sale as each transaction has a unique set of circumstances. They don't have a "fixed" margin, it fluctuates and some are higher than others.

The OEM on the other hand has fixed pricing. There is a margin for error of course, but materials and labor are by far and away the vast majority of the price. So when both are going up exponentially, we had to adjust. Even then, it is not like some "windfall profit" that I keep see people alluding to. Some OEM's "Cut OFF" retail orders. So you have that choice as well...don't let customers order and only choose from stock...that way, no complaints about the surcharge.

Our prices started to rise Sept 2020. We negotiated a tiered rollout so we would take half in Oct, half in Feb with our major suppliers. That would give us the time we needed to adjust with new pricing. Then Nov hit and suppliers said they could not wait until Feb and in fact the increase was now double what they expected and they had to take it NOW. Then other suppliers started to pile in. With shortages already wide spread, the Texas freeze happened in Feb 2021. That disrupted the chemical supply chain which affected plastics, ABS, foam and adhesives. We are still allocated glue to this day as they have not recovered. SO, more chemicals were needed from overseas which means shipping got more expensive. Container shortages were already a thing, but adding more demand has pushed a container cost almost 500%. A container used to cost about $2000. It just peaked up over $10,000....and we are told that Amazon has not even committed to their Christmas shipment yet, which will add further strain.

I don’t think it could have been said any better by both the above post from Mythplaced and BClemons. The surcharge is to the dealer from FR. The dealer can pass along the surcharge to new customers without contracts but the already contracted orders have a set price in writing. The dealership hedged their bet by writing new contracts and assuming the cost would be the same and lost. The dealer needs to ethically and morally honor the contracts in place.

[NXR]

I make camping reservations a year ahead of time and budget accordingly. I didn’t plan on it costing me a $1.50 a gallon more for fuel now than it was when I made that reservation a year ago. I don’t like it but I’ll pay it or stay home. I don’t blame the truck stops or gas stations. They pay more and pass it along to us. I’ll pay more for grocery’s and I’ll deal with that as well. I won’t blame the grocery store. It goes on and on.

The difference is none of those are legally binding agreements.

I was a small business owner for most of my career and I can tell you that the dealer is sweating out this economy as much as we the consumer’s are. Yes he could eat the increase but he has the same problem as all of us. He has to eat, support his family, and buy fuel as well.

Rhetorical questions:

• Would you feel the same if the dealership was part of a large chain like Lazy Days or Camping World?
  
  
• Would you feel the same if you learned that the dealership applied their normal markup percentage to the FR increase?
  
  
• Would you feel the same if you lived in a personal property tax state and knew that this increase was not a one-and-done and that you would be paying a bit more in taxes every year because of it?
  
  
• Would you feel the same if you found out, as one FR Georgetown GT5 customer recently did, that the reason your rear heat pump does not work is that your motorhome does not have a rear heat pump, just an A/C, and the dealership says "Forest River said they ran out of dual units so all you get is a rear air conditioner."?
  
  FR told the owner they were notified and got a price adjustment but the owner says the very large dealership did not notify her and did not adjust her price and she would not have accepted the unit that way. GT3's only have a rear air conditioner, not GT5's. It's a product differentiator and a price differentiator. That's one reason why we bought a GT5.
  
  
• Would you feel the same if you found out, as one Georgetown customer recently did, that your backup camera does not have audio so you can hear the spotter yet the brochure says you have the new Sony radio/camera head and you do have audio? And FR responds and points you to the fine print in the brochure that says "specs subject to change"?
  
  
• Would you feel the same if you had to pull that $3,000 out of pre-tax retirement funds and now had to pay both federal and state income taxes on it, making it a $3,500 hit?
  
  Or if the unplanned pre-tax withdrawal to cover the price increase actually pushed you over the IRMAA threshold and next year you will be paying more each month for your Medicare premium due to your income increase from the unplanned withdrawal, in addition to the tax hit?

When I worked in specialty chemical manufacturing around the turn of the century our products were almost all petroleum-based. When oil reached $32/barrel it was an existential crisis for the company due to long-term contracts we had entered into, which was an industry norm. We approached customers begging their understanding and asked for contract adjustments.

Some denied the increases and we sucked it up. Some allowed partial increases in exchange for more favorable terms. Some requested we switch some of our purchases to them in exchange for them accepting the pricing increases.

The company got through it but just like now, we had to repeatedly go back to customers for price increases and we would not enter into long-term contracts again without some type of protection clauses.

I guess we can go on and on about how we don’t like what is happening in the country today. Yes he had a contract that both him and the dealer signed when the economic climate was much different. A lot of things are to blame for the situation we live in today but the dealer is a victim as well as the consumer.

Make no mistake about it, dealerships use contracts to protect themselves, not the customer. Contracts are a weapon to be used against the other party when necessary.

If all of a sudden the customer went back to the dealership upon delivery of the RV and said "Sorry, we are now willing to pay $3,000 less than the contract says" how well do you think that would work out? No doubt the dealership would immediately pull out the contract and point to the binding signatures.

This sucks all the way around but it is what it is. Both parties need to live up to their pre-defined obligations.

Ray

[Magnatudes]

How many retail orders were caught up in this situation? The OEM should have added up the proposed price increases affecting already committed contracts, amortize the total cost increase of these committed units as a temporary loss in profit, adjust the price increase for new orders, then notify the world of the unfortunate change. The OEM should not have impacted the retail customers right off the bat and should have acted as a responsible corporate citizen. The dealers had no control over supplier ordering cycles and inventory reserves. That is in the domain of the OEM. So why is the burden on everyone except the OEM for these already committed sales?

Half-baked rollout without corporate creative thinking. $3K is a chunk of change for an average buyer and customer perception is invaluable. Seems like this situation could have been better negotiated between OEM and distribution channels without impacting the customer committed sales that have already laid out a cash down payment months in advance.

I don't think it's corporate greed here, it's lack of thorough corporate involvement/planning from a financial accounting, Strategic Marketing (not Sales) & corporate policy standpoint.

Maybe something like post-sales rebates would be in order to half-patch this up.

[msusslin]

Originally Posted by Bill Davis

I guess we can go on and on about how we don’t like what is happening in the country today. Yes he had a contract that both him and the dealer signed when the economic climate was much different. A lot of things are to blame for the situation we live in today but the dealer is a victim as well as the consumer. I don’t like it but I’ll deal with it.

I make camping reservations a year ahead of time and budget accordingly. I didn’t plan on it costing me a $1.50 a gallon more for fuel now than it was when I made that reservation a year ago. I don’t like it but I’ll pay it or stay home. I don’t blame the truck stops or gas stations. They pay more and pass it along to us. I’ll pay more for grocery’s and I’ll deal with that as well. I won’t blame the grocery store. It goes on and on.

I was a small business owner for most of my career and I can tell you that the dealer is sweating out this economy as much as we the consumer’s are. Yes he could eat the increase but he has the same problem as all of us. He has to eat, support his family, and buy fuel as well.

I would pay it and move on even though I wouldn’t like it. We’ll get past this just as we have in the past. Consider yourself lucky that you ordered when you did. It would cost you a lot more than $3000.00 to order or buy one off the lot now.

Smile, pick up your new camper and enjoy all this country has to offer. There are always bumps in the road, just slow down and ease over them. Good luck to you and safe travels.

Well said.

The Law of Supply and Demand always works.

-Demand up Supply Low equals price increase.
-Demand low Supply high prices go down. Simple stuff really.