IndyStar blasts RV industry big-time

Kate Mercer photo

Okay, class. Today we have a pop quiz–but don’t panic! There’s only one question, and the answer is multiple-choice, so you have at least a 25% chance of getting it right:

What do you get when an industry pressures an inadequately staffed and poorly-trained workforce into increasing output by almost 50%?

a) A lot of shoddy product.

b) A lot of sick and injured workers.

c) Record industry profits.

d) All of the above.

If you answered d), congratulations! You’ve just described Elkhart, Indiana, which is to recreational vehicles what Detroit once was to automobiles. Four out of every five RVs in the U.S. roll out of Elkhart, an area dominated by three major players the way Detroit was once dominated by Ford, Chrysler and GM: Thor Industries, Forest River and Winnebago Industries. Unlike Detroit, however, Elkhart is union-free in a so-called “right-to-work” state. And unlike Detroit in past decades, Elkhart has been ravaged by the Covid-19 coronavirus.

The result, as documented October 19 by the Indianapolis Star in a damning 15,000-word, four-part, multi-media series, is an industry riddled with broken bodies and a record number of recalled RVs, even as the major manufacturers all have been posting unsurpassed revenues and profit margins. Covid drove an unexpected surge in demand for RVs, much of it from first-time buyers who were looking for a safe way to travel. But Covid also decimated the ranks of RV factory workers, even as they were being pushed to increase production by almost 50%.

Two results were inevitable. One was a volley of Covid-19 complaints to the underfunded, undermanned and industry-friendly Indiana Occupational Safety and Health Administration, which responded not with inspections but with requests to employers to submit documents “proving” they were following Covid-19 safety protocols. Indeed, IOSHA’s response was so perfunctory that it physically inspected only 44 of more than 6,000 Covid-related complaints state-wide–the worst inspection rate in the U.S.–including just two in Elkhart County, neither involving major RV makers. The county eventually recorded nearly 700 Covid deaths.

But as the Star also found, problems in the RV plants had been brewing long before the epidemic, which the virus only exacerbated. “Workers told Indy Star about injuries from lax safety rules and the fast pace, drug use, unfair pay structures, a disciplinary system that punishes workers for taking sick time, a lack of training, and quality issues with products that leave factories,” the Star reported. “Several RV workers said they and others inside the factories needed daily uppers such as energy drinks, Ritalin or Adderall–even methamphetamine–to keep up with the pace.”

The other predictable result was that as the work pace picked up–one Winnebago employee said he went from working on 16 RVs a day to 36 during the pandemic–the products coming off the line were increasingly substandard. Ron Burdge, an Ohio attorney who has been suing RV manufacturers for years over defective products, told the Star that RV quality had been declining for at least 15 years prior to the pandemic, but took a nosedive once it hit. Record-setting recall numbers bear him out. Companies owned by Thor Industries recalled more than 156,000 RVs this year alone, while Forest River–a subsidiary of Berkshire Hathaway–recalled nearly 200,000 and Winnebago Industries recalled more than 125,000.

“All are among the highest for each company in the last five years,” the Star reported. “Among the problems that led to recalls: gas leaks, various electrical issues, increased propane pressure and poorly installed awnings.” One example it offered of the life-threatening dangers unwitting RV buyers have been accepting: an Oregon family that purchased a 40-foot Heartland Road Warrior for more than $100,000, only to have it burst into flame in Montana on the return trip home, totaling it and the tow vehicle. The cause appears to have been faulty wiring in the fifth-wheel’s electrical panel, yet as the Star observed, RV workers don’t need a license or certification to do electrical work.

Industry response to the Star’s findings, grim as they are, thus far consists either of stonewalling or of denying there is a problem in the first place. Thor Industries responded to the newspaper’s requests for comment by claiming the quality of its units had actually improved, even as it was making more of them, as evidenced by a lower level of warranty claims–without acknowledging not just this year’s 156,000 recalls, but the 371,384 recalls it had in 2021. Forest River, meanwhile, didn’t respond at all to the Star’s requests for comment, while Winnebago declined to answer the newspaper’s questions about quality issues.

The industry overall seems to be hoping the Star’s blockbuster series will sink out of sight. RV PRO, an online site “for the RV professional,” ran a terse and nonspecific news item about the series on the day it was published, much of it devoted to quoting an equally nonspecific response from the RV Industry Association, the trade association for RV manufacturers. Lamenting that it had been answering the Star’s questions for nearly a year, “emphasizing the high priority the RV industry places on workplace safety and the safety of our products,” the RVIA insisted that “protecting the safety of these valued employees is of paramount importance to our industry.”

RVIA’s own website, however, has none of that. Indeed, at this writing, the RVIA website makes no mention at all of the IndyStar story and its withering critique.

Putting an ironic frosting on the cake, so to speak, it must be noted that Winnebago Industries held a previously scheduled earnings call at 10 a.m. October 19, even as the Star’s report was being published online. Business was gangbusters, financial investors and analysts were told: fourth-quarter net revenues were up 14%, year over year, for a gross profit of $210.4 million. Net revenues for the year were $5 billion, for a record gross margin of 18.7%.

No questions were asked–and no information was given–about workforce or production issues. Chief financial officer Bryan Hughes, however, did offer the observation that “the company and our culture are successful because all our employees care deeply about our end customers, strategic business partners and each other.”

[The full Indianapolis Star series can be accessed here, but readers should note that virtually all of it is behind a paywall–non-subscribers will instead be shown a graphic novel that capsulizes some of the reporting, followed by an invitation to subscribe. The good news is that an introductory subscription can be had for just $1, with subsequent cancellation always an option.]

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Taking the ‘vehicle’ out of RVs

“RV” is shorthand for “recreational vehicle,” a point strongly emphasized by trade groups like the RV Industry Association–which represents RV manufacturers–any time someone begins confusing RVs with housing. Sure, a travel trailer or park model may look an awful lot like a single-wide house trailer, but they’re built to different standards and no one, for example, should expect to live year-round in an RV. “RV housing?” No such thing, regardless of what it might look like.

But once you’ve declared yourself to be either fish or fowl, you can end up in some pretty strange contortions trying to straddle the divide. Take the Recreation Vehicle Dealers Association, for example, which is embarrassing itself these days by claiming that the vehicles its members sell are, well, not just vehicles. Yes, the automobile industry sells vehicles, but those wheeled conveyances rolling down the nation’s highways are “standardized.” In the RV industry, on the other hand, “it is customary to prepare a vehicle before a customer is able to use the RV.”

See the difference? RVs are non-standard. They deserve non-standard regulatory treatment. Special treatment.

What’s got the RVDA all twisted up like that is a proposed new rule from the Federal Trade Commission that seeks to better protect consumers from being ripped off by unscrupulous dealers. Specifically, “the proposed rule would prohibit motor vehicle dealers from making certain misrepresentations in the course of selling, leasing or arranging financing for motor vehicles.” Any RV buyer who has found himself with a 20-year loan for a rolling box that will have a resale value approaching zero in half that time will applaud the sentiment.

While the RVDA may insist that a Class B Sprinter RV is nothing at all like a Sprinter cargo van, both can be subject to the same high pressure sales tactics that the FTC wants to clamp down on: vaguely explained additional charges, deceptive pricing, reams of paperwork that serve as a graveyard of land mines for the rushed buyer. If adopted, the new rule “would significantly alter the way motor vehicles are sold, marketed and financed in the U.S.,” the RVDA laments on its website, “by adding additional disclosures on pricing, vehicle add-ons and onerous new recordkeeping requirements.” The horror, the horror!

Curiously, the RVDA website also states that the association on Sept. 12 had filed formal comments “highly critical” of the proposed rule, asserting that the proposal would “increase sales transaction times for customers and add to the cost of the RVs.” But while the RVDA thereby poses as a champion of the little guy, the supposed filing is nowhere to be found on the FTC’s very comprehensive online repository of comments. Indeed, of the 26,356 comments the FTC had received as of today, apparently only one came from the RVDA: an Aug. 2 request that the FTC extend its Sept. 12 deadline for comments. The FTC declined.

Anyone around this industry for any amount of time knows there’s a huge need to rein in the flim-flam artists–which is not to say that every RV dealer is a con man, but that there’s no easy way to separate the white hats from the black. Government oversight would go a long way toward leveling the playing field, in an industry that is selling the second-most–and sometimes the most–expensive things most people will ever buy. Moreover, adoption of this rule or something quite like it might set the stage for the next glaringly obvious regulatory need: a crack-down on the industry’s deplorable track record on after-sale warranties and repairs, so that newly sold RVs don’t spend their first year in and out of service bays.

Meanwhile, fish or fowl? If RVIA wants to assert that RVs are not housing, while the RVDA is similarly adamant that they’re not vehicles–at least in the conventional sense–then maybe it’s time for a whole new classification with a whole new set of rules. Perhaps RVs are modern society’s chimera, a fire-breathing female monster with a lion’s head, a goat’s body, and a serpent’s tail. But even a chimera needs rules to live by, for the protection of the rest of us.

SEPT. 18 UPDATE: Turns out that the RVDA submission to the FTC, although dated Sept. 12, took four days to make it into the online databank. To learn more about it, see the post that follows this one, probably late Sept. 18.

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Manchin, scorpions do what they do

Just a bit more than five weeks ago, the RV Industry Association demonstrated either its hypocrisy or its gullibility by presenting its “National Legislative Award” to Senator Joe Manchin of West Virginia. The association justified this astonishing misstep by claiming that Manchin “recognizes that investments in outdoor recreation are vital to our economic, emotional and societal well-being,” those “investments” devoted largely to the “recreation” half of the “outdoor recreation” dyad.

The “outdoor” half? Not so much.

Indeed, as I posted June 10, Manchin arguably is the one person most directly responsible for torpedoing this country’s efforts to combat global warming and the calamitous climate change it is causing. That he would undermine any efforts at breaking our fealty to carbon-based energy sources is only to be expected, given the significant extent to which Manchin’s political and personal fortunes are tied to coal, gas and oil interests. No one playing with a scorpion should be surprised when it stings.

What is surprising is the cringe-inducing meekness with which the Democrats have tiptoed around Manchin’s constantly shifting rationale for being an obstructionist, avoiding confrontation for fear of giving offense, meekly giving up on one proposed initiative after another in a vain attempt to win an acquiescence that was never forthcoming.

Two days ago, Manchin abruptly made official what any objective observer would have concluded several months ago: he will not support any funding for climate or energy programs, nor support raising taxes on wealthy Americans and corporations to pay for such programs. As “explained” by a spokeswoman, “Senator Manchin believes it’s time for leaders to put political agendas aside, re-evaluate and adjust to the economic realities the country faces to avoid taking steps that add fuel to the inflation fire.”

Instead, thanks to a man who represents a state of 1.8 million people in a country of 320 million who overwhelmingly support climate change policies, we’ll continue adding real fuel to the fire in the sky.

Texas is baking in a record heat wave that incidentally is producing the worst smog pollution in at least a decade, which makes “outdoor recreation” an oxymoron. The entire western expanse of the country is a tinder box, producing not only a bumper crop of wildland fires but further depleting already record-low water supplies in a process called aridification, a/k/a drought on steroids. And it’s not just the U.S. Glaciers are collapsing in Italy and Kyrgyzstan, Britain has issued its first-ever heat red alert for this coming Monday and Tuesday, and wildfires are breaking out across southern Europe, forcing thousands to evacuate.

Dealing with a crisis of such proportions is not a “political agenda,” as Manchin’s spokeswoman would have it–it’s a matter of life and death. That a member of what’s mistakenly been called “the world’s greatest deliberative body” should ignore such a self-evident reality is tragic. That the RVIA and similar self-serving organizations would act as his cheerleaders is contemptible.

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RVIA honors the fox in the henhouse

Just in case anyone was wondering about the RV Industry Association’s priorities, all questions were dispelled yesterday, when it bestowed its “National Legislative Award” on Senator Joe Manchin of West Virginia. RVIA president Craig Kirby justified the trade group’s misfeasance by asserting that Manchin “recognizes that investments in outdoor recreation are vital to our economic, emotional and societal well-being” before adding, in an apparent non sequitur, that Manchin’s “home state sports stunning public lands that bring tourists from around the nation.”

While Manchin bears no responsibility for West Virginia’s stunning public lands, he very much shares responsibility for their ongoing degradation from coal mining. Despite being the chairman of the Senate Energy and Natural Resources Committee, Manchin continues to rake in the Senate’s largest campaign contributions from oil, gas and coal industries, and has a long history of serving their interests. He also has profited for decades from his stake in Enersystems, a supplier of “coal” to a highly polluting power plant near Fairmont, WV.

(Why the quotation marks around “coal”? Because the stuff Enersystems shovels into the Grant Town Power Plant is just one step above peat, a highly polluting mix of low grade coal, clay and rock contemptuously dismissed in the trade as “gob,” short for “garbage of bituminous.”)

But Manchin’s self-serving position in the Senate goes far, far beyond how he makes his money. It’s fair to say that no one person has done more to derail this country’s already fractious efforts at dealing with global warming than Manchin, who single-handedly blocked the Biden administration’s Build Back Better Act and its $550 billion in proposed climate spending, much of it to phase out fossil fuels over the next decade. Yet despite his glaring conflicts of interest, the West Virginian justified his obstructionism by claiming a higher purpose, insisting that the nation would be better off if climate legislation had bipartisan support–and so he, Joe Manchin, would turn his energies toward winning that Republican buy-in.

And so there matters stood–the Build Back Better Act in suspended animation–for weeks on end, as the rest of the Democratic party tip-toed around Manchin and Manchin supposedly showed them how this legislating thing is supposed to work. Hands across the aisle and all that, even though the GOP has long made it abundantly clear that the only hand it’s going to show has its middle finger extended. Then again, that wasn’t really the issue, anyway.

It therefore came as no surprise that yesterday–yes, the same day that RVIA gave Manchin its “National Legislative Award”–was also the day that the Washington Times reported that the so-called bipartisan talks were finished. Six weeks and no deal. The Democrats’ self-imposed Memorial Day deadline to get some action on Build Back Better come and gone, with nothing to show for it. The chair of the Senate Energy and Natural Resources Committee had run out the clock, and even though the Democrats are now scrambling for a renewed effort and hoping they can get something done by August 1, they still have not come up with a way to get around the obdurate gob man.

Don’t expect RVIA to weigh in on that issue, however. It’s just happy that Manchin has been supporting much-needed maintenance on public lands–you know, roads and campgrounds for the RVs its members are manufacturing. For RVIA, “outdoor recreation” starts and ends with the wheels. The carbon dioxide-laced air we breathe, the forest fires caused by global warming, the increasingly turbulent moisture-laden atmosphere that produces cataclysmic rains, the years of drought that have sucked the West dry–all the consequences of fossil fuel burning that Manchin continues to protect are for someone else to worry about.

“Economic, emotional and societal well-being”? RVIA, you’ve got to be kidding.

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