When Pete Liegl talks, people listen – not only the 10,000 employees of Forest River Inc. for which he serves as president and CEO, but also the rest of the industry and those outside it in northern Indiana and elsewhere whose livelihoods are often affected by the ebbs and flows of the nation’s RV arena.
And when Liegl was interviewed earlier this week, the staff of RVBUSINESS.com was also listening as he addressed the results of 2014 and a few big picture topics regarding the year ahead. Bottom line, he confided, Forest River last year generally exceeded the sales growth of an industry that was running 10.2% ahead of 2013 through November on the heels of 32 consecutive quarterly gains.
Indeed, 2014 was a good year for Elkhart, Ind.-based Forest River, a Berkshire Hathaway Inc. subsidiary, especially when considering its pace of plant expansion.
“Very definitely – fantastic,” said Liegl, who had just returned from a weeklong holiday vacation. “We had a good year. Obviously, like anything else, it could be better, but we had a very good year. Forest River moved into Skyline plants in Hemet, Calif., and Elkhart County. We bought a total of six plants in Georgia, Oregon and the Elkhart area over the last six months, giving us, quite honestly, an additional 680,000 square feet of production space.
“I’m just mentioning the last six months because I know we bought other stuff prior to that, including a large former Pace American facility up by the Indiana Toll Road near Middlebury.”
He added, “And we bought a lot of acreage – another 490 acres — for expansion in the last six months that wasn’t located in one main campus, but was spread out in places like White Pigeon (Mich.), and Middlebury and Goshen (Ind.), including former Skyline plants on County Road 15 in Elkhart. That does not include the land at the other six facilities we bought – just the vacant land we picked up over the past six months here for future expansion. Now it looks as if we’re going to have to put up another three buildings this year on top of that in Goshen and probably White Pigeon.”
The main focus of current expansion efforts is to accommodate production of towable-type RVs, but Forest River, which currently occupies a 35.27% share of the overall U.S. RV market, is also posting strong growth in motorized RVs.
“No doubt about it, towables are a big factor for much of this expansion,” said Liegl. “But while we’re experiencing phenomenal growth in motorhomes, we were blessed with adequate facilities to build them in, including our Dyanamax and Sunseeker plants, along with others. Yet, we’ll be needing another new motorhome plant just for our gas Class A’s. But because we’re conservative, we don’t want to bite off more than we can chew. Once we get these filled up and productive, then we’ll move on. Until that time, we’ve got some work to do here.”
Liegl, on another topic, said things are going well with the novel Forest River/Thor Community Foundation announced in November, an unusual new charitable program jointly funded by the industry’s two largest manufacturers — Forest River and Thor Industries Inc. — to provide grants of up to $20,000 to qualifying employees from either company who are experiencing critical personal crises.
“I think things are good and that there’s been six or seven deals that have been put together to help out people in both companies,” said Liegl, adding that those in need at either firm are to first contact their respective human resources departments, which, in turn, review incoming requests and make recommendations so that the foundation’s board can approve or disapprove those requests.
The two companies, rivals in so many ways, donate to a joint fund. “They (the grants) could all go to Forest River or Thor based upon the needs of the individuals — whoever they are – but most likely a person in crisis for any one of a variety of reasons, such as their house burned down or somebody gets in a hell of a car accident. The funds are jointly held and the payments are based upon the requests and the need of an individual from either company.”
Most in this business sector – or any other industry for that matter – have never seen anything quite like this program, which, most agree, exhibits a rare and selfless concern for the well being of others. “I think it does, too,” said Liegl, “and I think it’s something a little unique, something that instead of giving it all to some national charity, we’re trying to keep it right in our community and help those people who work for Thor or Forest River. I mean, it’s taking care of your neighbor, you know?”
What, then, is Liegl’s prognosis for the year ahead?
“I think it’s going to be like 2014, but better – just a tad bit better,” he observed. “I think as a total industry, we might see a 5% or 6% increase. I mean, that’s very acceptable, but it’s not a huge increase. And I’m going to say it’s going to be a little better than 2014 and probably in the 5% area on the total industry. But I can guarantee you one thing: I’m not going to settle for 5% at Forest River. We’re setting the bar higher than that, and I think we will (exceed those forecasts).”
As for those plummeting gas prices, Liegl, like a lot of industry veterans, doesn’t consider a low per-gallon gas price a trip to Valhalla in terms of RV sales, not when it typically might save a consumer no more than $1,200 a year. “A $1,200-a-year savings for a typical consumer isn’t going to make that big of a difference,” Liegl told RVBUSINESS.com. “I mean, it will help, but it’s a small part of the cost of the whole package. At the same time, even a marginal savings can improve consumer confidence. I do believe that.
“You know, I think reduced gas prices do more to help the guy who is driving back and forth to work every day. He’s getting relatively poor gas mileage on a big vehicle or a pickup truck and putting 15,000 to 20,000 miles a year on his vehicle. At least that’s what I do on mine. I mean, I put far more than 20,000 miles a year on my SUV. I’m just saying that I think the reduced gas prices will affect the working guy much more than it does on the potential RV consumer.”