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A contingent of local, state and federal officials was welcomed by management at Jayco Inc. Tuesday (Oct. 18) as the manufacturer further cemented, and forged new relationships in the political ranks during an open house at its Middlebury, Ind., complex.
“It was a great opportunity for us to cull relationships and to bring some awareness to those officials who had not been to our facility, or even Elkhart County, before,” said Wilbur Bontrager, Jayco chairman and CEO, noting the idea was spawned from his involvement in ‘Advocacy Day,’ an event held during the Recreation Vehicle Industry Association’s annual meeting in Washington, D.C. “There are different tiers of issues that need to be addressed at each level of government. It’s important for us to have contacts with the people who are involved in decisions that affect our industry.”
He added, “The open house, which was purely a social event, also allowed the people from different areas of government to interact and network.”
Sen. Marvin Riegsecker, R-Goshen, said one of his duties is to “nurture and advocate” the RV industry with his peers in Indianapolis.
“Some of my colleagues are still unaware of the economic impact this industry has on the state,” he said. “Fifty-three percent of the work force in Elkhart County is in manufacturing, which is higher than the state and national averages.”
Riegsecker expressed concern over the elimination of a sales tax exemption for out-of-state RV buyers enacted by Hoosier lawmakers last year. Indiana dealers fought the change, arguing their businesses had been severely impacted, and lawmakers partially restored the exemption during the 2005 session.
“It’s an issue that concerns me,” he said. “I still don’t think we have found out all the ramifications.”
The event also reinforced Jayco’s longstanding relationships with local government officials. “It was reassuring to see first-hand a business that is committed to our community,” said Terry Rodino, a member of the Elkhart County Board of Commissioners, noting Jayco was one of the county’s largest employers with an Indiana work force of around 1,850 workers.
The open house, attended by 14 government representatives and officials, was highlighted by a tour of Jayco’s manufacturing facilities. It was opportune timing as the builder is currently operating at peak production levels due to a weighty backlog and an influx of orders to supply temporary housing for Hurricane Katrina victims.
“Our retail activity has been strong, excluding any impact from Katrina,” said Jim Jacobs, vice president of sales and marketing. “Our backlog extends into January and we have orders on into April.”
Derald Bontrager, president and COO, emphasized that Jayco had not entered into contract with the Federal Emergency Management Agency (FEMA), but had upped its production by around 25% to fulfill orders from its dealer network.
“The units we are supplying to dealers for the hurricane relief efforts did increase pressures on our margins,” he said. “But it also increased our volume, which helps pay our overhead and in that regard was good for our bottom line.”
But Bontrager acknowledged that while Jayco is in the midst of a record year, the industry as a whole was facing some challenges as gas costs and interest rates continue to rise while consumer confidence wanes.
“I think that once the consumer senses there is a settling with regard to interest rates and gas prices, they will adjust and continue buying RVs,” he said. “We’re viewing this as a short-term situation.”
He added, “We are anticipating slower retail sales in all segments through the winter months. Right now, we are forecasting our sales over the next 12 months to be flat, similar to what we experienced the last 12 months.”