RVIA-RVDA Arbitration Plan One Step
Closer
Dealer-Manufacturer Sales Agreement at Center of
Plan
RVDA and RVIA have been working on a program, proposed by
RVIA, to be used to resolve business disputes between dealers and manufacturers.
In June, RVIA's board of directors formally endorsed the
use of the program and RVDA expects that it will likely be incorporated into many dealer
agreements in the near future.
RVDA's legal counsel, Brock Landry, worked closely with
RVIA to develop this new dispute resolution program, and has issued an information sheet
to RVDA members outlining the program and pointing out some of the pros and cons of the
plan.
Landry said, "Briefly, the program encourages
dealers and manufacturers to use an independent third party mediator to assist in the
quick and amicable resolution of a dispute. If parties cannot reach a mediated agreement,
the dispute proceeds to mandatory, binding arbitration, which is conducted by a single,
independent arbitrator."
According to Landry, the program holds benefits for all
parties. He pointed out to RVDA members that mediation and arbitration are, in most cases,
less expensive and time consuming than litigation. He said, "Using these alternatives
also works to preserve the parties' business relationship more so than traditional
adversarial methods.
"RVDA wholly supports the use of
mediation/arbitration as a means to resolve disputes that may arise between dealers and
manufacturers. However, dealer members should know that in agreeing to these procedures,
they may be giving up certain rights specified in state law. Dealers should carefully
evaluate their situation to determine the best course of action."
He further told dealers, that they should remember that
the basis for any dispute resolution process is still the sales agreement they hold with
the manufacturer. He said, "The quality of the agreement affects the quality of the
decision -regardless of the process used."
In Landry's analysis of the proposal he listed the
following benefits:
* Faster resolution of disputes
* Less costly and simpler process to settle disputes. (Big companies cannot spend a
smaller adversary into submission) * Limited Discovery. Depositions and document
production can be extraordinarily expensive. No discovery in mediation. There is a
presumption against discovery in arbitration.
* Can be less adversarial than court, especially
mediation, thereby better preserving a valuable business relationship.
* Petition will receive attention from senior
executive within the company who may not be aware of dispute, and, as a result, may lead
to immediate resolution of the dispute.
While Landry sees a lot of positive aspects for dealers
to adopt the plan, he pointed out certain trade offs that dealers should consider:
* No right to a jury trial. (A small business person
submitting a claim against a large manufacturer often has a great deal of appeal to a
local jury.)
* In some states, dealers will be giving up the right
to have their case heard before boards and commissions that have been established to
implement the dealer franchise laws.
* Simplified procedures could make it difficult to
explain complex cases, such as terminations.
Landry reiterated that perhaps the most important point
to be taken from this discussion is that the sales agreement between the dealer and
manufacturer still serves as the basis for any dispute resolution process - whether it's
litigation, arbitration, or mediation.
He said, "The sales agreement provides the raw
materials with which the judge/jury, arbitrator, or mediator works to resolve the problem
at hand. Logically, then, the quality of the sales agreement will have a direct impact on
the outcome.
"Without a quality agreement, one that fairly
addresses the four T's (Territory, Transfer of ownership, Termination after due process,
and WarranTy), it is unlikely that a reasonable, equitable solution can be reached."
Caller Survey Shows Go Rving Campaign
Boosting Business
The RV industry's Go RVing national advertising campaign
is impacting its target audience of first-time buyers, prompting them to visit RV
dealerships and retail shows, according to a recent survey of callers to the campaign's
toll-free number (1-888-GO RVing).
More than 95 percent of non RV-owning callers surveyed in
May said that, after viewing the first-time buyer fulfillment video, they would like to
travel in an RV. Thirty-eight percent of respondents who do not currently own an RV have
already taken the next step toward ownership by visiting one of the Go RVing dealers
listed in the package provided to all callers. Another 29 percent plan to visit one of
these dealers within the year.
RV retail shows are proving a popular stop for potential
buyers as well, according to the survey. Sixty-seven percent of non-owners said they plan
to attend an RV retail show to learn more about the market; another 17 percent have
already been to one.
The Go RVing caller survey results were tabulated by
Robert Hitlin Research Associates, Inc. in Fairfax, VA. About half of callers responding
were aged 31 to 49. The Go RVing Coalition identified this audience as a prime target for
the campaign, launched in 1997.
RVIA Board Elections Underway
RVIA members are electing six board of director members
from a slate of 12 candidates during the association's elections taking place this month.
Those running include Bob Froschauer, president of
Centurion Vehicles, and Dan Lukehart, president of Trail Wagons, Inc., for a Conversion
Vehicle seat and Larry Lawrence, president and CEO of Sunline Coach Co., and Norman
Frohreich, president and CEO of Shadow Cruiser Corp., for a Towable seat.
In elections for Supplier seats, Carl Pfalzgraf, vice
president of sales and marketing of Atwood Mobile Products, and Bob Guzinsky, director of
sales and marketing of Amerimax Building Products, are seeking one seat. Gregg Fore,
president of Dicor Corp., and Bob Mater, president of Reese Products, are vying for the
other.
Two At Large seats will also be filled. Page Robertson,
president of Monaco Coach Corp., and Guy Veni, executive vice president of the The CIT
Group, are in one race with Dick Parks, senior vice president of the RV group for
Fleetwood Enterprises, and William Rex, president of Rexhall Industries, in the other.
The RVIA board of directors has the highest level of
authority in the organizational structure. It is responsible for association affairs on a
broad policy basis, including making decisions affecting RVIA's fiscal structure, resource
allocations and other financial matters.
All terms are for three years and will begin on Oct. 1,
1998.
Camping World to Open Store in Virginia
The 28th Camping World supercenter opened August 1 in Manassas, VA, a suburb of
Washington, D.C. Located on 10 acres, Camping World and Reines RV Center will occupy the
new 51,300 sq. ft. building.
Camping World and Reines RV Center share a common
entrance, a first for Camping World in its 32-year history. The shopping mall concept
allows customers the ability to purchase their recreation vehicles (RVs), RV accessories
and supplies and have their coaches serviced all in one location.
Tad Donnelly, president of Camping World, said,
"We're excited about our entrance into the Washington D.C./northern Virginia market.
The area is rich in Civil War history; an ideal destination for RVers." The Manassas
National Battle-field is near the complex.
In addition to a large retail space, Camping World will
have five service bays for installation and service needs. A common concourse area and
lounge is located between Camping World and Reines RV. The complex contains ample parking
with a few camping spaces available for overnight requirements of RVers.
Fleetwood On Buying Frenzy in
Manufactured Housing Retail Market;
Acquires Jasper Homes and Classic City Homes, Inc.
Fleetwood Enterprises, Inc. (NYSE: FLE), has acquired
leading manufactured housing retailers Jasper Homes, Inc., headquartered in Jasper, GA,
and Classic City Homes, Inc., headquartered in Athens, GA. Terms of the transactions were
not disclosed.
These acquisitions are the latest in a series of
transactions initiated by Fleetwood in pursuit of its growth strategy in the manufactured
housing retail business. The company has also acquired Better Homes, Inc., America's Best
Homes, Inc. and Central Homes, Inc., which extended its retailing presence into Kansas,
Oklahoma, North Carolina, South Carolina, Oregon and Georgia. Through these combined
acquisitions, Fleetwood has added 35 retail sites to its retailing business.
In February, Fleetwood announced plans to acquire
HomeUSA, Inc., the nation's leading independent national retailer of manufactured homes
with proforma revenues of more than $200 million in 1997. That acquisition was expected to
be completed this month.
National RV Holdings, Inc.
Declares 3 for 2 Stock Split
National R.V. Holdings, Inc. (Nasdaq: NRVH) announced
that it declared a three for two stock split in the form of a stock dividend to holders of
record on July 10, 1998.
The payment date for the shares was July 24, 1998. The
company will paid cash for any fractional shares which would otherwise be required to be
issued. As of June 30, 1998, the company had 6,620,326 shares of Common Stock issued and
outstanding and will have 9,930,489 shares of Common Stock issued and outstanding as a
result of the split.
RV Loans Remain Good Investment
for Financial Community
The total dollar value of RV loans continues to climb,
jumping more than 7 percent in 1997 to $12.6 billion, according to a new survey of RV
lenders released by RVIA's Finance Committee.
RVIA finance committee chairman Jim Pope, vice president
of Green Tree Financial Servicing Corp, said, "Lenders' continued positive
experiences with RV portfolios keeps the RV financial market as healthy as the
manufacturing and sales areas. This survey has become a benchmark to which lenders compare
other portfolios. It solidifies the commitment of financial institutions who are already
involved in the RV industry and provides new lenders a historical look at the performance
of RV loans."
Finance firms held nearly half of the total of RV loans
outstanding in 1997. Commercial banks accounted for 46 percent of RV lending activity
followed by savings and loan associations (3.25 percent) and credit unions (2.8 percent).
Low Rate of Delinquencies
As reported by RVIA survey respondents, 1997 RV loan
delinquencies were 2.04 percent. Repossessions averaged 0.71 percent with an average 69.5
percent dollar recovery.
RV loans consistently recorded lower delinquency ratings
than the weighted average of consumer loans regularly charted by the American Bankers
Association in 1996.
Borrower Demographics:
The survey also provides a demographic analysis of RV
borrowers. The majority of motorhome buyers/borrowers have a gross family income of more
than $50,000 (81.4 percent), have lived in their home for more than 10 years (57.1
percent) and are between 35 and 54 years of age (61.1 percent). Nine out of ten motorhome
borrowers are married.
Towable RV borrowers have similar characteristics and a
gross family income between $25,000 and $50,000 (87.1 percent).
RVIA's 18th annual survey of RV financing documents the
scope of lending activity at banks, savings and loans, finance companies and credit unions
during 1997. It presents a detailed analysis of the three types of RV loans -- direct,
indirect and wholesale.
The survey is a useful tool for financial institutions to
compare their RV portfolio experiences with other lenders. A total of 275 financial
institutions representing 9,980 locations responded to the survey.
Rexhall Strengthens Ties With Arizona
Dealer
Rexhall Industries Inc. (Nasdaq:REXL) announced that it
has set a new record for a one-day single dealer order of more than $4 million from RV
SuperCenter in Mesa, AZ.
Vince Meo, chief executive officer, RV SuperCenter, said,
"RV SuperCenter's vision is to set a new and higher standard in the RV industry. We
welcome the increase in the Rexhall product line starting in July 1998; this will continue
through the end of the year.''
RV SuperCenter currently has dealerships in Mesa,
Flagstaff, Yuma and Quartzsite, along with plans for expansion throughout the state of
Arizona. RV SuperCenter has been a Rexhall dealer since December 1996.
Washington State Enacts
Motorhome-Specific Lemon Law
The state of Washington has enacted a motorhome-specific
lemon law bill that was backed by RVIA.
The law allows consumers to aggregate chassis, coach, and
component manufacturer days out of service. It also increases the days of out of service
to trigger the lemon law from 30 to 60 days with a requirement that the consumer notify
the chassis, coach and component manufacturers after the unit has been out of service for
30 or more days. This allows the manufacturers an opportunity to coordinate and complete
any repairs of the vehicle's non-conformities.
The consumer is required to notify the chassis, coach and
component manufacturers of a nonconformity after the third repair attempt -- or first
attempt has failed in the case of a serious safety defect -- and give the manufacturer 30
days for a final repair attempt.
Under the law, manufacturers are required to pay the cost
of transporting the vehicle to the repair facility for the final repair attempt if the
vehicle is unsafe to drive due to a serious safety defect or if the repair facility is
more than 100 miles from the motorhome location.
The new law applies to motorhomes acquired after June 30,
1998. Although it does not require mediation of lemon law disputes, Washington plans on
encouraging parties to use the state's dispute resolution program.
NBC Today Show Features RV Segment
A five-minute live segment on the July 6 NBC Today show
reported to nine million viewers on the growing popularity of RVs, particularly among
50-plus buyers using frequent travel for stress relief.
RVIA media spokespersons Sandy MacGregor and Marilyn
Abraham were interviewed outside their motorhome at a campground in Santa Fe, New Mexico,
on their life-changing decision to quit high-stress jobs to travel the country in an RV.
RVIA president Dave Humphreys then toured a motorhome
parked outside the show's Manhattan studio and provided general information about the RV
market
"Wow, it is amazing. I can see how you can spend
months out of the year in one of these," said reporter Ann Curry as Humphreys pointed
out the amenities found on the motorhome.
Rexhall's Central Production Strategy
Pays Dividends
Executives at Rexhall Industries Inc. (Nasdaq:REX)
believe that its restructuring process is proceeding along so well that the company is
looking toward further expansion in new slide-out models.
Anthony J. Partipilo, chief financial officer, said,
"The new centralized production strategy that was part of the restructuring process
is moving so swiftly that we are now making new engineering and manufacturing adjustments
at a much earlier time than we anticipated.''
Bill Rex, president and CEO, said, "These efforts
have already produced positive results. We have hit new production and sales highs for the
California plant in two out of the three months of the second quarter.''
Rex reiterated the company's aggressive long-range goal
of building a more streamlined and profitable Rexhall for the future. The reported income
from continuing operations is expected to be in the range of 25 cents to 28 cents per
share for the second quarter ended June 30, 1998 on outstanding shares of 3,021,863.
Winnebago's Stock Reaches 11 Year High
The common stock of Winnebago Industries, Inc. (NYSE:
WGO) hit an 11 year high on July 9, 1998, closing at 14.125. The stock activity was
precipitated by the company's common stock receiving a buy rating by Robert Olstein,
Olstein Financial Alert Fund, during CNBC "The Squawk Box'' television show. The
company's stock rose .937 with volume of 228,100 shares traded, the highest stock price
since April of 1987.
The stock subsequently rose to 15 3/8 but at presstime
was trading in the 12 to 12 1/2 range.
Hertzke Featured on CNBC
Bruce Hertzke, Winnebago Industries (NYSE: WGO) chairman
and chief executive officer, was interviewed last month by host Mark Haines on CNBC's
"Squawk Box'' financial news television program. The appearance was prompted by the
company's 1998 performance; its stock soaring to reach an 11 year high, closing at 14.4375
on July 10, 1998; and Robert Olstein's (Olstein Financial Alert Fund) "buy'' rating
communicated on the show's July 9 program.
Hertzke said, "This is a very exciting time for
Winnebago because baby-boomers have begun to reach our prime 50 plus age market segment
and many are discovering the benefits of the recreation vehicle lifestyle.''
FRVTA Offers To Reimburse
Florida Trouble Shooter Clinic Fee
The Florida RV Trade Association (FRVTA) instituted a
program to encourage attendance at RVIA's Trouble Shooter Clinic held in Tampa this month.
The association offered to reimburse member dealers the $275 registration fee to send one
RV service technician to the Trouble Shooter Clinic.
FRVTA executive director Lance Wilson said, "Our
board of directors has identified RV technician training as its number one priority. RVIA
Trouble Shooter Clinics are a beneficial training program, and we wanted our member
dealers to take full advantage of the Tampa session."
Bruce Hopkins, RVIA's vice president of standards and
education, said, "We applaud FRVTA for recognizing the value of continuing education
for the RV service technician. This is a great approach to promote participation in the
Trouble Shooter program."
National RV Sets Sales and Earnings Records
National R.V. Holdings, Inc. (Nasdaq: NRVH), continues to
set records for sales and earnings. For the second quarter ended June 30, 1998 Wayne
Mertes, president and CEO, reported National RV's second quarter operating results showed
an increase of 31.3 percent in sales and an astounding 84.9 percent increase in earnings
over the same period last year. Net sales for the second quarter 1998 increased to $90.9
million from $69.2 million in 1997, and net income increased to $5.8 million from $3.1
million for the second quarter 1997. Diluted earnings per share were $0.76 compared to
$0.46 in the second quarter of 1997.
Wayne Mertes said, "Both demand and backlog for both
Country Coach and National RV products continues to be strong. We are pleased at the 11.1
percent operating margin in the second quarter as higher sales levels continue to increase
our margins.''
RV Industry Commissions J.D. Power
Consumer Satisfaction Study
J.D. Power & Associates, a global leader in market
research, will launch the first-ever proprietary consumer satisfaction research study of
the recreation vehicle (RV) industry this September.
The study is being designed to offer RV manufacturers,
dealers and campground operators the consumer feedback they need to provide the highest
quality of products and services possible as industry growth accelerates under the
influence of the highly successful Go RVing national advertising campaign initiated in
1997.
The J.D. Power research -- unanimously approved by the Go
RVing Coalition's Committee on Excellence at its June 9 meeting and endorsed by the
Recrea-tion Vehicle Industry Associa-tion, Recreation Vehicle Dealers Association and
National Associ-ation of RV Parks and Camp-grounds -- will provide an over-view of RV
consumer satisfaction by quality of vehicle, dealership and campground experiences.
It will focus on approximately 30,000 owners of 1997
model year motorhomes and towables (travel trailers, folding camping trailers and truck
campers) via a mail survey throughout Septem-ber and October 1998.
"This will help us identify and elevate the level of
consumer satisfaction within every segment of our industry," said Jim Sheldon, chief
operating officer of Monaco Coach Corp's Indiana operation. "We want to ensure that
our industry's growth continues to accelerate well into the next century by giving
consu-mers even more of the quality and convenience that make their RV experiences
special.''
The research comes on the heels of a 20-year record in
first-quarter RV shipments and high levels of industry optimism fueled largely by a
growing baby boomer market for RV travel -- the prime target of the Go RVing campaign. A
1997 University of Michigan demographics study confirms that trend, showing RV ownership
is up 2% among aging boomers over the last four years.
Results from the J.D. Power research are expected in
Janu-ary 1999. Since this initiative will be undertaken on behalf of the RV industry as a
whole, no individual company rankings will be published or made available to the public.
Industry participants in the study will receive confidential reports on their products,
but will not be permitted to use that information for marketing or advertising purposes.
