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Yesterday’s (July 5) news that International Truck and Engine Corp., operating company of Navistar International Corp., had signed an agreement to purchase the Workhorse Custom Chassis LLC and Uptime Parts LLC subsidiaries of GVW Holdings Corp. – the suburban Chicago-based leader in gas motorhome chassis sales – came as a surprise to most in the industry.
The acquisition agreement was signed July 1 and will be completed over the next 30 to 90 days, according to a GVW Holdings release.
Workhorse, a 400-employee company located in Union City, Ind., is a major manufacturer of chassis for Class A motorhomes, buses and walk-in trucks. Uptime Parts, located in West Chicago, Ill., and Reno, Nev., supplies replacement and aftermarket parts for the RV, truck and bus markets Workhorse serves. International builds International-brand commercial trucks, mid-range diesel engines and IC brand school buses and is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets.
Again, the news was startling in some corners of the industry not only because of the timing of the announcement, coming as it did immediately after the Fourth of July holiday, but also because Workhorse had so quickly grown to become a household word within the recreational vehicle business since it was established in 1999 upon the purchase from General Motors Corp. of rights to produce the venerable P-series gas motorhome chassis.
“Six years ago there were plenty of bets against Workhorse in terms of our success,” Workhorse President Dave Olsen reminded those attending a June 1 publicity event in Union City at which the company feted its 100,000th gas motorhome chassis. “We were an unknown company in a big industry taking over a struggling division of General Motors. We chose to compete with Ford Motor Co. – a formidable company. We were starting a new plant. We committed to the industry and shipped just 45 days after breaking ground. We made a commitment. It’s been an amazing story. We have come a long ways.”
Olsen said Workhorse at that time had inherited a 17% share of the gas chassis market, along with a commercial product line for a market in which GM had always considered a small niche. “Today,” he added, “we command 67% of the RV businesss, and we approach 45% of the commercial (delivery truck) business.”
With the debut this summer of new W16 and W18 platforms – supplementing the company’s heavier W20, W22 and W24 rails and replacing the last of the company’s original GM-designed P-Series – the company’s entire portfolio of motorhome chassis has been designed by Workhorse engineers specificially for motorhomes. Yet, the GM link has continued, as all rails are still powered by 340-hp “Big Block” GM Vortec 8100 engines.
As the July 5 press release stated, however, few changes are expected for Workhorse, which is to continue operating as a stand-alone unit in the same markets with existing staff. Indeed, the joint release states, Workhorse and Uptime Parts “will continue to operate with the entrepreneurial spirit that has driven their success to date, but with the assets and capabilities of a $9.6 billion company behind them.”
“International hopes to continue to fuel the passion and determination that Workhorse and Uptime Parts has demonstrated,” Tom Cellitti, vice president and general manager for International’s medium vehicle center, noted in the release. “Their success in their chosen markets has been nothing short of remarkable.”
Cellitti was unavailable for comment.
Andrew Taitz, chairman and CEO of GVW, which is retaining its remaining portfolio of companies, including Autocar and Union City Body Company (UCBC), reiterated in a Wednesday morning (July 6) interview with RV Business that long-haul prospects for the Workhorse brand are brighter today than ever.
“There should be positives because of Workhorse’s approach to engineering,” said Taitz, who will no longer be involved with Workhorse following completion of the sale. “We integrate existing components to provide the base platform for the RV. Now we (Workhorse) have access to all of International’s parts bins as well as purchasing power. Not only that, but International is the largest diesel engine manufacturer in the world. So, the company will have access to their technology.”
“In general,” he added, “they’re (International) not going to mess with everything that works. What they were most impressed with was the business model, which they may want to look at and maybe apply in their own company – how we got to market, how we develop products, taking care of the end customer first and so forth.”
As for the industry’s reaction thus far, it’s been “only positive,” said Taitz. “The other significant impact will be for the RV dealers,” he said, “because they’ll have access to a lot more parts from Workhorse distribution to take care of the RV market.”
Regarding the future of the company’s R-series diesel chassis, Taitz said GVW’s Autocar unit will continue to build it as a sub-assembler for Workhorse, which, he says, will still try to establish a strong market position for it in the motorhome field.
“This should mean a big jump in opportunity for the R-Series because of access of parts and components from International, which should make it more cost competitive,” said Taitz. “It should also improve access to the diesel technology, which should be a real plus as the diesel sector expects a very negative impact with (new more stringent federal regulations coming up in) ’07, both in terms of price and cooling requirements.
“My impression is that many of the (motorhome-building) OEM’s have not fully faced up to it from a marketing and cost point of view,” he added. “Navistar, being a specialist in diesel, ought to help in this respect.”