With reports that the federal government will purchase as many as 70,000 travel trailers to house homeless victims of Hurricane Katrina, Recreation Vehicle Industry Association (RVIA) President David J. Humphreys contends that no accurate number has yet emerged.
“The government is confused about what they are buying and where they are buying it,” Humphreys told RV Business. “There is no pattern to any of it. We know there is tremendous demand and we are doing our best to sort out the confusion.”
Humphreys said the Katrina disaster will have both long- and short-term effects on the RV industry, but, “It’s really just a guess at what those will be at this point,” he said.
Humphreys predicted that a shortage of towable RVs could emerge in the wake of Katrina as the federal government and businesses buy up the existing towable inventory and less expensive minimotorhomes.
“My understanding is they are buying everything that’s already built that’s under $20,000,” Humphreys said.
Over the short term, that will take care of the inventory build-up that, according to some industry insiders, has contributed to a softness in wholesale shipments this year.
On the backside, however, “We may very well have a period of shortage afterward while we build the inventories back up,” Humphreys said. Humphreys said he expects fuel prices – the national average for which topped $3 a gallon for the first time this week – to return to their pre-hurricane levels relatively soon.
“I personally think the energy impact is going to be relatively short term,” Humphreys said, noting that some Gulf of Mexico refineries shut down by Hurricane Katrina already were back in production.
Richard Florea, president of Dutchmen Manufacturing Inc., Goshen, Ind., said the company’s wholesale inventory has been depleted and dealers in the southeast are reordering barebones FEMA-type units to be distributed to the homeless.
The vast majority of Dutchmen’s short-term production will be directed to Gulf Coast dealers, Florea said. “We are trying to maintain flexibility for other retail customers, but we’ve notified our dealers that for the near term we will be manufacturing products that the Gulf region of the country is crying out for.”
Dutchmen, he said, will accelerate the opening of a new production facility in Goshen and ramp up production by 20% by the end of September while hiring between 200 and 250 new employees by the first of the year.
“If the number 70,000 is correct,” Florea said, “the whole towable industry last year sold just over 200,000 – that’s a third of last year’s production.”
Derald Bontrager, president and COO of Jayco Inc., also said the Middlebury, Ind., company would increase production by about 20% on three manufacturing lines capable of building small towables, but didn’t intend to hire new workers.
“We have seen hundreds and hundreds of orders over the last two days, primarily family-type floorplans with bunkhouses,” Bontrager said.
Bontrager said production-line units were being supplied to FEMA through Jayco dealers. “But this goes way beyond FEMA. It’s insurance companies and businesses and private individuals buying coaches too,” he added.
“In the short term, this is going to be a shot in the arm in typically slow fall and winter seasons because we can react very quickly.”