Fleetwood Industries Inc. will not renew an exclusive agreement with Spartan Chassis to provide platforms for the Riverside, Calif., manufacturer’s entry-level Providence, Excursion and Revolution diesel pusher motorhomes.
The announcement by the chassis manufacturer, a subsidiary of publicly owned Spartan Motors Inc., Charlotte, Mich., came a day after Fleetwood named retired Senior Vice President Elden L. Smith to be president and CEO, succeeding Edward B. Caudill who stepped down.
Last week Fleetwood reported a net loss of $54.7 million for its third quarter that ended in January.
“We could not meet the price demands for these entry-level chassis, and as a result, a portion of our RV chassis business with Fleetwood will end,” said Richard Schalter, Spartan Chassis president. He estimated that the business represented approximately 10.7% of Spartan’s consolidated net sales for 2004.
Schalter said the arrangement with Fleetwood will end during Spartan’s third quarter, which begins July 1. Spartan began providing chassis equipped with Caterpillar C-series diesel engines for the three brands last August in an exclusive arrangement that was hailed by Caudill.
The chassis manufacturer said it will continue to supply chassis for Fleetwood’s high-end American Coach brands, and expected to achieve a target of better than 20% return on invested capital for 2005.
“We are taking immediate steps to realign our cost structure to ensure we minimize the impact to our earnings when these Fleetwood models conclude,” Schalter said.