More Plant Shutdowns

[Ron Thompson]

Pete,

I agree with you that our economy will weather this storm, however, we are in a completely different situation this time. China, India, and Asia were not the power houses they are becoming and we had not given away so much of our manufacturing base. Those overseas companies are not going to give up what they now have at all. Their competetion at the Oil Companies market place is going to ensure that we are going to have high prices from now on.

With our manufacturing base gone, what will we have left to sell, hamburgers?

I know that diesel prices are certainly going to curb my travel. I have a 2005 Dodge Ram 2500 Cummins diesel and it cost me over a hundred dollars just to fill its tank. At $4.14 per gallon of diesel, it costs me $1242.00 to fill this 1995 WLWB 42 footer. And at 6 miles to the gallon if I baby it along I can get down the road about 1800 miles. However, if I am in mountains or just hills
that mileage goes down quickly to about 4 miles to the gallon.

Heartbreaking....

Ron Thompson

Pete Masterson wrote:

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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