More Plant Shutdowns

[mbulriss]

> I saw that Harley has laid off some staff and their sales are down.
> We should not take all of this lightly. I wonder how the high end RV
> mfrs. are doing

Bruce -

I knew Harley was feeling the pain when I received an offer of 1.05%
financing early in the year to 'celebrate' their 105th anniversary.
Yeah, right....

As youwell know, there's a huge lead-lag factor in the general
consumer economy - and the reporting on the same. I'm in the
electronics manufacturing game and I saw the economy changing
dramatically mid-year last year. Fortunately (for me), we run
counter-cyclical to the consumer industry. We deal in jails and
prisons. The economy starts dropping, crime goes up, our business
goes up.

You are right in stating that "We should not take all of this
lightly". As you and I have both pointed out, the worst is yet to
come in the 'sub-prime' mortgage debacle.

I can't speak for BB, but according to a friend in the Prevost game,
so far he still claims their business stays constant regardless of the
general economy. Something about inelasticity of demand for the
well-heeled, versus the general elasticity of demand for the overall
consumer market, such as when discussing fuel prices.

In any event, for those with money, there will be some spectacular
buying opportunities (on most anything) in the near future. The
question is whether they are wise buying opportunities. Without going
into the value of the dollar, and when is the bottom really the
bottom, I fear that anyone with a BB is quite "upside down" right now,
regardless of how well they bought into it!

As someone recently posted, very astutely, that's why they are called
Recreational Vehicles and we should enjoy them as such!

Mike Bulriss
1991 WB40 "Texas Minivan"
San Antonio, TX

--- In WanderlodgeForum@yahoogroups.com, "birdshill123"
wrote:
>
> It seems like RV plants are either closing or severely cutting back
> production. The scary part is how fast this is happening. Country
> Coach has laid off a few hundred workers. Alfa is in a state of limbo
> and if the posts on the Alfa forum are any indication they will be
> out of business very quickly.( maybe SEE YA was aan appropriate name)
> The really bad news is as follows:
>
>
>
> DES MOINES, Iowa - Motor home manufacturer Winnebago Industries Inc.
> said it will shut down most of its production lines for a week
> beginning Monday, the result of a continued slowdown in sales.
>
> Low consumer confidence in the economy and interest rates are the two
> primary factors that affect business, company spokeswoman Sheila
> Davis said Friday.
>
> Although The Federal Reserve has aggressively cut interest rates in
> recent months, the reduction has not largely reached consumers yet,
> Davis said.
>
> The curtailment of production at the company's factories in Forest
> City, Charles City and Hampton will affect a majority of the ompany's
> 3,000 workers.
>
>
> A production line in Charles City will stay on the job during the
> week and office workers will remain.
>
> "We take a look at our schedules based on the level we're seeing in
> the retail market and the wholesale market to our dealers," Davis
> said. "We evaluate that on a daily basis and want to make sure we
> keep our inventories in line."
>
> The company typically only shuts down production for a week around
> Christmas and a week in late July.
>
> In March, Winnebago reported that second-quarter profits fell nearly
> 67 percent as consumer confidence helped drag down sales of
> recreational vehicles.
>
> Net income fell to $2.5 million, or 9 cents a share, for the three
> months ended March 1, down from $7.5 million, or 24 cents a share a
> year ago. Sales fell 17.5 percent to $164.2 million from $199 million
> for the same period a year ago.
>
> On Friday shares were trading 2.2 percent higher, or 35 cents, at
> $15.79. Shares have traded in the past 52 weeks between $14.96 and
> $34.44.
>
> The Forest City-based company said in March it had cut employment by
> 9 percent, or about 300 people during the quarter to bring production
> in line with slowing sales.
>
> President Bob Olson told industry analysts that sales were down
> across the industry in the double digits for each month since the
> beginning of the year.
>
> He told analysts that the usual spring uptick in sales likely will be
> muted because of concerns over the economy. Olson said he hoped to
> see a turnaround by November.
>
> END OF ARTICLE
>
> Some of the other mfrs. that closed were smaller mfrs. with shakey
> management. Winnie is probably an exception. An experienced and
> usually well run company. If they cannot sell units who can?? I saw
> that Harley has laid off some staff and their sales are down. We
> should not take all of this lightly. I wonder how the high end RV
> mfrs. are doing: Foretravel, Newell and of course the most important
> of all BB???? I also wonder what is happening with other million
> dollar toys such as yachts?
>
> Bruce
> 1988 FC35
>