Late last year, the sales representatives at Oregon-based RV Corral sold about eight recreational vehicles over a single weekend. Not bad when times are as tough as they are.
But, as reported by the Register-Guard, when push came to shove, only two or three customers were able to get financing for the new rigs, according to Jerry McCall, a co-owner of the 22-year-old business that has lots in Eugene and in Coburg.
“It’s real frustrating for the customer,” he said — not to mention to sales reps who miss out on the commission.
That’s why McCall and others in the local RV industry are supporting an effort by Oregon’s congressional delegation to get federal officials to help loosen up credit for RV dealers and buyers.
In a letter sent Friday (Jan. 9) to Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, the lawmakers ask that a loan fund established to make credit more readily available to auto buyers and auto dealers be opened up to include consumers trying to buy RVs and to RV dealers.
Doing so would help the industry rebound and protect more than 150,000 domestic manufacturing jobs, said the letter, written by U.S. Rep. Peter DeFazio and signed by the entire delegation. Already, the nationwide credit crunch has cost the RV industry 80,000 jobs, the letter states.
“In Oregon and across the United States, the recreational vehicle industry has been devastated by the lack of available credit despite the many potential customers with excellent credit scores ready to purchase these American-made products,” the letter said. “This is a common sense proposal that will protect good paying domestic jobs at little cost to taxpayers.”
The move mirrors efforts by two Indiana congressmen in December as Hoosier Democrat Joe Donnelly and Republican Mark Souder also sent letters to Paulson and Bernanke. Both the Recreation Vehicle Industry Association (RVIA) and Recreation Vehicle Dealers Association (RVDA) have been spearheading an industrywide initiative to improve credit conditions through lobbying efforts.
The Register-Guard reported that at issue is the Term Asset-Backed Securities Loan Facility, established by the Federal Reserve in November. Initially, it was intended to extend credit to consumers for credit card loans, student loans and auto loans. In December, the Federal Reserve permitted the fund to be used by auto dealers so they could stock inventory in their showrooms.
Expanding it to include RVs would pose little risk to taxpayers because RV buyers tend to be older and wealthier, so default rates on RVs is half the default rate on autos, the lawmakers said.
About 3,000 people work in the RV industry in southwest Oregon, according to the letter. Lane County has three RV manufacturers, one of which, Country Coach Inc. in Junction City, has said it will close by the end of February unless it can obtain new financing. The industry here also includes dealers, who sell the vehicles, and numerous vendors who do business with the manufacturers.
The proposal to make credit more readily available to RV buyers and dealers was wholeheartedly endorsed by local RV industry officials Friday.
Craig Wanichek, spokesman for Monaco Coach Corp. in Coburg, said opening up the loan fund to the RV industry “would be a good first step” to help struggling RV makers and dealers.
“It’s significant for our industry to somehow free up credit to our dealers and the retail consumer,” he said. “It wouldn’t bring everything back to normal but any incremental help is needed.”
“This is a very appropriate use of these funds,” said Shannon Nill, general manager of Guaranty RV Supercenters in Junction City. “We are excited to know this might extend the life of some of the manufacturers that are currently on the ropes.”
Guaranty’s customer relations manager, Jolene Loudon, organized about 50 employees to call Oregon’s congressional delegation and encourage members to sign on to DeFazio’s letter.
“We just wanted to encourage those folks to sign on to DeFazio’s letter because of the importance of the issue and knowing consumer credit hasn’t improved as much as we like,” she said.
McCall at the RV Corral said his lender, Bank of America, has continued to provide financing for inventory. But other dealers who rely on other lenders have found credit hard to come by, he said.
He said he welcomed the effort to get more credit for RV buyers and dealers, but added, “It’s probably too little too late for some of the companies.”