Local RV companies watching auto bailout vote closely

by Troy Kehoe (tkehoe@wsbt.com)

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RV companies and auto bailout

Bill Fenech, President of Damon Coach in Elkhart, points to the RV parts his company receives from Ford and Workhorse, a GM supplier. Even with a reduced bailout of $14 billion being considered by House lawmakers, some RV industry experts fear cuts could still be made in Detroit that would affect supplies for dozens of local companies. (WSBT photo)

By WSBT News1

Story Created: Dec 10, 2008 at 5:46 PM EST

Story Updated: Dec 10, 2008 at 7:43 PM EST

ELKHART — Dozens of local RV companies are watching very closely as Congress weighs in on bailing out the Big Three automakers. Many local RV manufacturers have close ties to GM, Ford and Chrysler, and some worry, if Detroit is forced to downsize, they might be too.

For many of them, Detroit's problems are hitting home.

Many RV makers have been forced to turn to layoffs as sales figures plummet.

"It's slow," said Bill Fenech, President of Damon Coach in Elkhart. "There's no getting around it."

America's auto industry is now feeling the same pinch.

When asked if the two are tied together, Fenech replied, "Yes, but maybe not in the way you think. What we're going to get is our engine, wheels and tires and axles, two main frame rails, rear axles and tires all from Ford or Workhorse, which is a supplier for GM. So, what's happening with the Big 3 is obviously a concern for us."

Even with a reduced bailout of $14 billion being considered by House lawmakers Wednesday night, some RV industry experts fear cuts could still be made in Detroit, including supplies for dozens of local companies.

"A lot of the things we make, key components come from the auto industry," said Greater Elkhart Chamber of Commerce Vice President of Public Policy Kyle Hannon. "Whether you like the bailout or not, the bottom line is, our local economy right now can ill afford questions about their suppliers or what's coming in."

Couple that uncertainty with cautious consumers who are reluctant or unable to secure enough credit to buy RVs or cars, and industry experts say even more uncertainty likely lies ahead.

"There are buyers out there. Demand exists even at this low point. But that lack of credit is huge. That's the number one hurdle for both industries to overcome," said RV Business Magazine Publisher Sherman Goldenberg.

Still, where some see potential for disaster, others see opportunity.

"Maybe we don't currently make the components, or chassis here. It might be cheaper to bring it in right now. But, who knows? Maybe there's an opportunity here in the future for a local company to figure out how to make this component, then [they] will supply to the existing companies. This could be that opportunity," Hannon said.

"I think that's very possible," agreed Fenech. "There are already some companies talking about building gasoline chassis that aren't in business today. People are very creative around here. And when business gets tough, you have to get more creative."

The question now: Can the already struggling RV industry hang on long enough to get to that point, if America's auto industry can't?

Fenech is confident the answer is 'yes.'

At least for now.

"Short term, I think we can get through this. We have chassis here that can get us through, especially at the demand we have now, which is low," he said.

But long term, the future is much less certain, as one struggling industry waits to see if it can still count on another.

"I'm willing to wait and see for a little bit to see what happens in Washington. I'm not losing sleep over this one, yet. I've got other things to lose sleep over!" Fenech said.

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