EDITORIAL

Positive Signs and Positive Attitudes

I wouldn't try to convince anyone that the past few months for the industry hasn't had the earmarks of a recession. Year 2000 started off with a bang but by April there were some faint signs of the oncoming downturn. By May 2000 sales were keeping pace with the booming sales of 1999 ­ the best in 20 years.

But in June the bottom seemed to fall out of the motorhome market and companies like Fleetwood and others were hit hard in the pocketbook. In the meantime, most other types of RVs were holding their own ­ until August and September. Then the decline was steady and across the board. According to RVIA's December and year-end shipment figures, in December every market segment except fifth-wheels reported lower numbers than December 1999. Fifth-wheels were up 3%; however, motorhomes and folding camping trailers were down almost 15% respectively.

When it was all said and done year 2000 was down 23.2% from 1999, but as it turned out it wasn't all that bad mainly because of the strong market in the first few months of the year, and raw shipment figures tell us that with 300,100 RVs shipped, it was the second best year in 20 years.

But that's not the whole story. By year's end almost every segment of the industry was feeling the pinch of waning sales during the last half of 2000. RV manufacturers were apprehensive and dealers were cautious ­ and component suppliers' orders for their products were in the dumpster.

As 2001 started, national news agencies were reporting thousands of layoffs at major companies and there were a lot of talking heads forecasting economic doom and gloom ­ which continues into mid-February when this editorial was written.

Looking for some positive signs, everyone was interested in reports from the early RV shows around the country and business in general at the retail level.

In the past few days, RV News has spoken with about 30 dealers in about every geographic region and the news appears to be good.

Marilyn Wallace, owner of Sunbird RV in New Jersey told RV News that January 2001 was the best in the company's long history.

Kim Bradshaw, F&I manager at Stalkups RV in Wyoming told RV News, "Yes, business has come back real strong ­ thank goodness. November and December (2000) were pretty dismal."

Our associate editor Bob Zagami covered the Boston Show in New England, and every dealer he talked to after the show was pleased with the consumer turnout and encouraged by the sales they made both during the show and in the weeks following.

RVIA also talked to a lot of dealers and report very positive feelings about the first month of 2001.

So where does that leave us? Is the recession over? I cannot forecast accurately the answers to these questions because it would be pretty much like trying to predict the weather. A lot of factors go into the equation including what's happening in national and global politics.

However, with that said, I think we should take to heart RVIA president David Humphreys' analysis based on his experience of good and bad times in the RV industry over the past 30 years. Humphreys noted that historically, the RV industry is among the first market segments to feel the crunch of an economic downturn. He also said that the RV industry is one of the first industries to feel the turnaround when the crisis is over.

Could the strong sales in January and positive attitudes of consumers, be signs of an economic recovery? Like Humphreys, RV News is encouraged.

But whether or not those of us in the RV industry have a good, and maybe even a great year, depends on more than an economic recovery. Yes, that's part of the formula, but it also depends on whether or not the industry decision makers have a positive or negative attitude about the prospects for 2001.

In other words, if they have a positive attitude they will forecast production that will keep the pipeline filled with the products consumers want to buy. If, on the other hand, they have a negative attitude or run too cautious, the industry may suffer at all levels because the products just won't be there to sell.

Whether the past few months technically qualify as a recession will be for economists and politicians to decide. But if your job depends on selling RV products and you couldn't sell any during the past few months, and therefore didn't earn enough to pay the mortgage or buy the Christmas gifts you wanted for family and friends, it's really a mute point ­ it was a recession, at least to you and your family.

The point here is, let's not continue the economic downturn by poor planning if in fact the downturn is coming to an end.

As Newmar owner Malon Miller is noted for saying, "You can't sell from an empty wagon."

While I would never encourage a dealer or manufacturer to risk everything they have built in a lifetime by gambling on the economic woes subsiding, I would suggest it is worth some risk to keep a positive attitude.

In other words, prepare and plan for good year and you're more apt to have one than if you prepare and plan for a bad year.

Let's prepare to do some business!

RVN