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I certainly do not claim to be a pundit on this issue but I am curious as to how anyone, save maybe a few of the insiders at CC including Bryant Riley, has full and complete knowledge of this entire bankruptcy issue and their business plan for emergence. A newspaper reporters take on the matter is certainly less than sage!
Jon you stated that nothing has changed since they went into the toilet, well what was is that put them into the can? The product, customer service, labor costs, raw materials costs, debt service, weak consumer market and demand, lack of available credit both on the wholesale and retail level, perhaps high fuel prices? Those are the exact issues that are impacting far too many businesses in the country! To this I give you Monoco Coach, a number of smaller RV builders, numerous Prevost Convertors and yes, even our beloved Prevost, owned by Volvo which is in turn controlled by Ford....many are now gone, the rest are all in jeopardy.
Now, as to why I suggest that Country Coach will survive has much to do with the "parting out" of Monoco, the largest employer in the area. The Central Oregon economy, Eugene/Junction City being pivotal to this, is in a shambles. The past couple of decades has made the area the West Coast equivalent to Indiana, home to many RV Manufacturing facilities, vendors and suppliers. The unemployment rate is amongst the highest in the country, housing prices have been devastated. I do believe that the State of Oregon is assisting or will soon be providing help to CC through tax incentives, labor incentives. Wells Fargo probably holds the first deeds of trust on more than just a few homes in the area, making their investment in CC minor in the grand scheme of things.
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The underlying issues in my opinion is that the consumer said that enough is enough. Overpriced plastic coaches that did not match up to their selling prices in quality, performance, and service.
Monaco drove me to Prevost. (Two of my favorite shop tools came as an unintended courtesy from Monaco, I had a rattle under my shower, found a wonderful 8lb. hammer and really nice chisel and enough tile pieces of tile to fill a waste basket) I almost purchased a 2008 CC before I decided on a Prevost, but just could not warm up to the same old same old with the construction quality, the dealer network, the service and especially the ride, maybe CC is better at all of this, but the way plastic coach prices were climbing was nuts in my opinion, at the end of the day each was a package of plastic, wood and a pile of rusty screws waiting to come apart.
The consumers will not put up with this and will turn away, and have done so, it is not just the economy (big factor) it is poor quality for such a high priced depreciating asset that drove these companies down.
Yes, poor management is at the heart, pushing the crap downstream and force feeding it to the public, never looking inside the plant for the problem, blaming dealers, consumers and the economy for their problems.
Nobody wants to say they are at fault, especially at the top, but the folks in Coburg were always looking at Marathon as the benchmark for their success and had forgotten the quality aspect in their plan.
One of the best motorhomes that I ever owned was a 1986 36' Beaver. I ordered it new and picked it up at the factory, the best overall experience I ever had with motorhome ownership. That 1986 Beaver never ever gave me one day of headaches, nothing, it drove nicely, well constructed, the skin was nicely made, smooth, the cabinets were all solid wood, really nice coach. I miss that one. Now they are part of the past.
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Bruce,
Agreed on the pricing/quality issue. I will add that in early 1999 I purchased a new Intrigue from CC, with all of the whistles and bells for a shade more than 170 thousand by contrast, today, a new, like Intrigue retails at a bit under 600k. Same coach, couple of more holes and a few more "trick" gadgets but basically the same! I realize we have a a bit of inflation but absolutely nothing when compared to the rampant price increases on these vehicles.
Until the Monoco debacle I didn't see much hope for CC however, they appear to be the last man standing and as such I expect to see a substantial amount of assistance from both public and private sources; no its not because they are a good group of managers and build a spectacular product rather the impact that another failure would have on an already very ill Oregon economy.
John
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All across the economy there is a de-leverging of credit (ie; cut off) on going. Basically, its screwing everyone in housing, and this in turn the entire country.
There was a large over inflation in home prices which in turn ratchet up equity and equity loans. This fueled consumers and their purchasing power.
Th RV industry grew and flourished because of easy credit and an aging boomer generation.
Now, they will have to develop a new strategy going forward.
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John,
CC was in trouble before the crunch. They had stopped producing conversions for a while. It had changed hands.
Everytime a business changes hands, especially if the new owners are "money men" as opposed to manufacturers it takes a small hit in the shorts.
It is possible for CC to survive if the creditors walk away from what they are entitled to. It will not be the first time a business has gone deep into debt and then bullied the creditors, both secured and unsecured into accepting a few cents on the dollar. If a business can do that and end up with assets that can be fully utilized for production, but at very little cost the cash flow should be excellent and the future very rosy indeed.
Today debt service is likely killing businesses, especially those that failed to recognize that following the good times (when managements get fat and spend money like they have it) are usually bad times. I am not privy to the CC numbers so I have no idea how lean and mean their production was, how well they controlled overhead, and how efficient they were as a company, but given the fact that the customers who were buying their product are in as much a world of hurt as the companies that produce the product I cannot see a turnaround soon enough to infuse the company with the new cash flow it so desperately requires.
Add to that the uncertainty almost all of us feel about the tax climate in years to come I suspect those companies that do survive this mess are going to be such strong competitors that only the best of the best companies will survive. I won't even spend the money to repaint the chipped nose bowl on my plane, that's how tough times are. I sure cannot afford a plastic shield for my bus, much less another bus.