More Plant Shutdowns

[Pete Masterson]

I was first interested in RVing in the late 60s (though I didn't have the income to afford it then)... this was not long before the 1973 oil crisis -- and fuel prices shot up and RV driving/ownership plummeted. Many RV manufacturers went out of business. This was repeated in 1979, although that oil crisis was not as severe. Each crisis was accompanied by claims that "life as we know it has ended..."

We are again in a oil -price- crisis accompanied by a financial services meltdown due to sub prime loan "problems" related to the real estate market collapse. 

Of course consumer confidence in the economy has tanked. A substantial portion of our population has seen their home values drop -- in some areas, including where I live, significantly. Many people had been using equity financing to use their homes as a 'bank account' -- but that is cut off when housing prices drop reducing the equity in homes as the margin between mortgage balance and market value is pinched.

During each past oil crisis, RV manufacturer's sales tanked. Many of the financially weaker companies went bankrupt (or just closed their doors). Even the mighty WInnebago was sorely tested according to a history I recently read in one of the RV magazines.

However, each economic recession was eventually put behind us. Each recession was followed by robust economic times. Indeed, by the early 00s, adjusted for inflation, fuel costs were at one of their lowest levels relative to family income since the 60s.

Since I've seen that "life as we know it" does not necessarily end during oil price crisis or economic recession, I'm fairly certain that the US economy will weather the current situation and an improved economy will evolve in a few months (with its share of interim pain, no doubt). 

Over half the increase in oil prices is attributed to the reduced value of the dollar relative to other currencies. A weak dollar is caused by several factors, including erroneous thinking on the part of politicians (of all political parties) that think it "helps" make US produced goods more competitive on the world market. A weak dollar does, initially, give a small boost to US exports, but every time this course has been followed, it eventually ignites serious inflation at home and ultimately wipes out any advantage our exporters may have achieved and wreaks havoc with consumers and wage earners as they struggle with inflation.

What all this means is that we'll all have to hunker down and ride out the financial storm. Eventually, it will pass. We hope that our favorite companies can ride it out as well and survive into better times ahead. Economic recessions always have rather uneven impacts, so it's hard to predict who'll be the survivors. 

As for me, I'm probably going to (try to) drive a little slower to use a little less fuel....

Pete Masterson

'95 Blue Bird Wanderlodge WBDA 42

El Sobrante CA

"aeonix1@mac.com"

On Apr 18, 2008, at 7:11 PM, 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. 

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