Friday, June 20, 2008

Want a hard Job, try Selling RV's



One of the headlines in the business section today was:
Winnebago Industries Inc. said Friday its third quarter profit skidded 73 percent.
The article goes on to detail how their Sales fell almost 40 percent to $139.7 million from $231.7 million a year ago.

What a SHOCK!
Winnebago is having a difficult time selling $50,000 - $280,000 RVs that get 3 miles per gallon at a time of $4.50 gas and a slow economy.
Truth is, you got to give them credit for getting up out of bed each morning, going down to the dealership and giving it their best shot.
Between the price of gas, Insurance, up-keep, as well as paying the monthly payment. it seems like quite a difficult expense to justify. Add all of the cost associated with a large RV and divide by the number of days used and You could stay in a suite at the Four Seasons for less per night.
That is a difficult sell!

The biggest difficulty for Winnebago is that this is not a temporary problem. The days of $2.00 Gas are gone. I have not read a report that indicates a likelihood that we will even return to $3.00 gas. Also it is hard to design a 38 foot long, 12 foot wide vehicle with a 30,000 lbs gvw, that gets 30 miles per gallon. Fact is, it is difficult to see an economic climate that helps the RV industry any time soon.
Winnebago's are made in Forest City, IA recently announced a strategic decision to idle production at the Company's Charles City Manufacturing Facility, effective August 1, 2008
That manufacturing consolidation will cost 190 people their jobs. It is sad to see good manufacturing jobs disappear; so I wish Winnebago all the luck in the world. By all accounts they build a fine product, and have a name associated with quality. It is difficult to run a business in the best of times, but when world events conspire against you, it is especially hard.

Larry Lubell
Larry@urbanInsuranceAgency.com

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