Saturday, July 22, 2006

 

WORKHORSE CHASSIS SOLD TO INTERNATIONAL TRUCK AND ENGINE

RV NEWS
CHICAGO – GVW Holdings Corporation (GVW) today announced it has signed an agreement to sell its subsidiaries Workhorse Custom Chassis, LLC and Uptime Parts, LLC to International Truck and Engine Corporation (NYSE:NAV). The acquisition agreement was signed July 1 and will be completed over the next 60 to 90 days.

Workhorse, located in Union City, Ind., is a major manufacturer of chassis for Class A motor homes, buses and walk-in trucks. Uptime Parts, located in West Chicago, Ill., and Reno, Nev., supplies replacement and aftermarket parts for the RV, truck and bus markets Workhorse serves.

International produces International® brand commercial trucks, mid-range diesel engines and IC brand school buses and is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets.

GVW will retain its remaining portfolio of companies, which includes Autocar and Union City Body Company (UCBC). “We intend to focus on growing these companies with the same innovation and imagination that has made Workhorse so successful,” said Andrew Taitz, chairman and CEO of GVW Holdings. “The GVW business model has always been to create value in specialized niche automotive markets, and this transaction will allow GVW Holdings to offer more resources in support of that vision at Autocar and UCBC.”

“In addition, Autocar and UCBC will continue to be close partners with Workhorse and International,” said Taitz. “In fact, we are planning for Autocar to continue to assemble the Workhorse R Series diesel chassis and for UCBC to be a partner for integrated step-vans.”

International will provide management oversight, strategy and administration for Workhorse and Uptime Parts, but both will operate as independent and wholly owned subsidiaries of International. They will retain their present management structure and there are no plans to reorganize, reduce or relocate facilities or staff. Workhorse products will continue to be sold through Workhorse certified up-fitters and dealers and marketed under the Workhorse brand.

International’s scale and overall capabilities will provide opportunities to cut material costs, build on Workhorse’s premium product offering, as well as other efficiencies that may be integrated into Workhorse’s operations. Otherwise, Workhorse and Uptime Parts will continue to operate with the entrepreneurial spirit that has driven their success to date, but with the assets and capabilities of a $9.6 billion company behind them. “International hopes to continue to fuel the passion and determination that Workhorse and Uptime Parts has demonstrated,” said Tom Calletti, vice president and general manager for International’s medium duty truck division. “Their success in their chosen markets has been nothing short of remarkable.”

Discussions with International grew out of Workhorse’s desire to integrate International’s VT 275 V6 diesel engine for Workhorse’s new W42 commercial chassis for walk-in trucks. International saw Workhorse as a unique business model that would complement its existing products and markets. International does not currently compete with Workhorse in any market and this provides an opportunity to expand its reach into the RV and the Class 2 to 5 commercial markets.

 

RECALL

Make / Models : Model/Build Years:
COUNTRY COACH / COUNTRY COACH 2006
Manufacturer : COUNTRY COACH INC
NHTSA CAMPAIGN ID Number : 06V262000 Mfg's Report Date : JUN 30, 2006
Component: TIRES
Potential Number Of Units Affected :
Summary:
ON CERTAIN MOTOR HOMES, THE TOYO 275/70R M102Z TIRES ARE DEFECTIVE AND COULD FAIL UNEXPECTEDLY.
Consequence:
THIS COULD CAUSE A LOSS OF VEHICLE CONTROL INCREASING THE RISK OF A CRASH.
Remedy:
DEALERS WILL REPLACE THESE TIRES. THE RECALL IS EXPECTED TO BEGIN ON OR BEFORE JULY 30, 2006. OWNERS MAY CONTACT COUNTRY COACH AT 1-800-547-8015.
Notes:
CUSTOMERS MAY ALSO CONTACT THE NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION'S VEHICLE SAFETY HOTLINE AT 1-888-327-4236 (TTY 1-800-424-9153), OR GO TO HTTP://WWW.SAFERCAR.GOV.

 

RECALL

Make / Models : Model/Build Years:
FOUR WINDS / HURRICANE 2006
FOUR WINDS / MAGELLAN 2006-2007
FOUR WINDS / WINDSPORT 2006-2007
Manufacturer : FOUR WINDS INTERNATIONAL
NHTSA CAMPAIGN ID Number : 06V256000 Mfg's Report Date : JUL 05, 2006
Component: SUSPENSION
Potential Number Of Units Affected : 70
Summary:
CERTAIN CHASSIS MAY HAVE BEEN EQUIPPED WITH INCORRECT STEERING INTERMEDIATE SHAFTS. THE SPLINE CAN STRIP WHILE THE STEERING WHEEL IS BEING TURNED.
Consequence:
THIS STEERING CONDITION COULD RESULT IN A LOSS OF STEERING CONTROL, INCREASING THE RISK OF A CRASH.
Remedy:
WORKHORSE IS CONDUCTING THIS RECALL (PLEASE SEE 06V148). THEY WILL INSPECT AND, IF NECESSARY, REPLACE THE STEERING INTERMEDIATE SHAFT FREE OF CHARGE. OWNERS MAY CONTACT WORKHORSE AT 1-877-294-6773 OR FOUR WINDS AT 1-937-492-1271.
Notes:
CUSTOMERS MAY ALSO CONTACT THE NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION’S VEHICLE SAFETY HOTLINE AT 1-888-327-4236 (TTY 1-800-424-9153), OR GO TO HTTP://WWW.SAFERCAR.GOV.

 

RECALL

Make / Models : Model/Build Years:
R-VISION / TRAIL-AIRE 2006-2007
Manufacturer : R-VISION
NHTSA CAMPAIGN ID Number : 06V248000 Mfg's Report Date : JUN 30, 2006
Component: STEERING
Potential Number Of Units Affected : 10
Summary:
CERTAIN CHASSIS MAY HAVE BEEN EQUIPPED WITH INCORRECT STEERING INTERMEDIATE SHAFTS. THE SPLINE CAN STRIP WHILE THE STEERING WHEEL IS BEING TURNED.
Consequence:
THIS STEERING CONDITION COULD RESULT IN A LOSS OF STEERING CONTROL, INCREASING THE RISK OF A CRASH.
Remedy:
WORKHORSE IS CONDUCTING THIS RECALL (PLEASE SEE 06V148). WORKHORSE WILL INSPECT AND, IF NECESSARY, REPLACE THE STEERING INTERMEDIATE SHAFT FREE OF CHARGE. OWNERS MAY CONTACT WORKHORSE AT 1-877-294-6773 OR R-VISION AT 574-268-2111.
Notes:
CUSTOMERS MAY ALSO CONTACT THE NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION’S VEHICLE SAFETY HOTLINE AT 1-888-327-4236 (TTY 1-800-424-9153), OR GO TO HTTP://WWW.SAFERCAR.GOV.

Friday, July 21, 2006

 

RECALL

Make / Models : Model/Build Years:
PREVOST / H45 2006
PREVOST / X3 2006
Manufacturer : PREVOST CARS, INC.
NHTSA CAMPAIGN ID Number : 06V243000 Mfg's Report Date : JUL 04, 2006
Component: PARKING BRAKE:CONVENTIONAL:AIR
Potential Number Of Units Affected : 9
Summary:
ON CERTAIN MOTOR COACHES EQUIPPED WITH BENDIX SR-7 BRAKE VALVES, THE CHECK VALVE INSIDE THE VALVE CAVITY MAY NOT PROPERLY SET, CAUSING INTERNAL AIR LEAKAGE. IF THE CHECK VALVE DOES NOT PROPERLY SEAT, THE RESULTING LEAKAGE CAN CAUSE A DELAY IN THE APPLICATION OF THE SPRING BRAKES TO PARK THE VEHICLE AFTER THE OPERATOR PULLS THE DASH VALVE BUTTON.
Consequence:
THE DELAYED PARKING BRAKE APPLICATION CAN OCCUR WITHOUT WARNING, LEADING TO UNINTENDED VEHICLE ROLLAWAY INCREASING THE RISK OF A CRASH.
Remedy:
DEALERS WILL INSPECT THE VALVES AND REPLACE IT FREE OF CHARGE. THE MANUFACTURER HAS NOT YET PROVIDED AN OWNER NOTIFICATION SCHEDULE. OWNERS MAY CONTACT PREVOST AT 418-831-2046.
Notes:
CUSTOMERS CAN ALSO CONTACT THE NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION’S VEHICLE SAFETY HOTLINE AT 1-888-327-4236 (TTY 1-800-424-9153), OR GO TO HTTP://WWW.SAFERCAR.GOV.

 

RECALL

Make / Models : Model/Build Years:
TRIPLE E RV / EMPRESS 2005-2006
Manufacturer : TRIPLE E RECREATIONAL VEHICLES
NHTSA CAMPAIGN ID Number : 06V264000 Mfg's Report Date : JUL 17, 2006
Component: STEERING
Potential Number Of Units Affected : 4
Summary:
ON CERTAIN MOTOR HOMES, THE STEERING BOLT WHICH ATTACHES THE STEERING ROD TO THE DIRECTIONAL STEERING CASE MAY BE MISSING.
Consequence:
MISSING BOLTS MAY CAUSE THE DRIVER TO LOOSE STEERING CONTROL INCREASING THE RISK OF A CRASH.
Remedy:
A DEALER OR A QUALFIED SERVICE CENTER WILL INSPECT AND, IF NECESSARY, INSTALL THE APPROPRIATE BOLT AND NUTS. THE RECALL IS EXPECTED TO BEGIN DURING JULY 2006. OWNERS MAY CONTACT TRIPLE E RECREATIONAL AT 1-877-992-9906.
Notes:
TRIPLE E RECALL NO. CA 6242-06. CUSTOMERS MAY ALSO CONTACT THE NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION’S VEHICLE SAFETY HOTLINE AT 1-888-327-4236 (TTY 1-800-424-9153), OR GO TO HTTP://WWW.SAFERCAR.GOV.

 

NOW WHAT IS FEMA UP TO?

RV Business
Friday, July 21, 2006

The travel trailers and mobile homes that more than 10,000 Jackson County, Miss., residents have called home over the past 10 months are now up for sale.

According to a report in the Mississippi Press, Federal Emergency Management Agency (FEMA) spokesman Eugene Breazany said that “qualified” residents can purchase the units outright purchase or through auction. The sales are handled by FEMA, as the government agency attempts to help storm victims return to pre-Katrina conditions.

Breazany said travel trailer and mobile home occupants could qualify to purchase their unit if they lived in a mobile home prior to the disaster. "If they did not have a pre-disaster condition, they would not be allowed to purchase that particular unit," Brea-zany said.

This purchase option is not open to the general public. The second alternative, an auction by the General Services Administration, is open to the general public.

"We started contacting persons June 12 who are living in units and letting them know these units would be available for sale to them," said Breazany.

Recertification teams visit trailer residents monthly to work with them on long-term housing plans.

"It is during these discussions that we are offering them the opportunity to purchase the units. There is no phone number or other point of contact to request a purchase, other than the recertification process," Breazany said.

Breazany said FEMA's sales program is beginning with applicants living in commercial trailer parks and on private sites.

"Units are only sold to occupants for a home. Alternate housing is not available. If there is some other place they can possibly live, we wouldn't be selling the units to them," said Breazany .

"It is an opportunity for those people who have no other options to actually purchase these," he added.

Candidates must meet a number of requirements, including having a suitable site that meets all codes, zoning ordinances and flood plain management regulations.

 

CHINOOK ASSETS AUCTIONED OFF

RV Business
Friday, July 21, 2006

More than 100 people showed up for an opportunity to bid on everything from upholstery to machinery at the defunct Trail Wagons/Chinook RV plant in Yakima, Wash.

The Yakima Herald Republic reported that the bidders included owners seeking parts for their RVs and others who bought manufacturing equipment for RV businesses, said Ron Hannon, an auctioneer for James G. Murphy Inc., the firm which ran the auction for Trail Wagons.

"They are getting bargains," he said.

Julie Murphy, CFO of the auctioning firm, said she did not know what Trail Wagons would do with the auction's proceeds.

Company founder Gary Lukehardt could not be reached for comment Thursday.

The auction marks the latest chapter of the demise of Trail Wagons, which once provided more than 160 jobs and had a loyal clientele before it started downsizing early last year.

The company defaulted on a $3.6 million bank loan June 2005. In October, a court gave its approval for Inverness Partners of Bend, Ore., to take control of the Chinook Business Park, the site of Trail Wagons facility.

Inverness Partners took control on behalf of LaSalle Bank National Association, the holder of the mortgage certificates.

LaSalle Bank purchased the property for $2.9 million in March.

Most recently, Lukehardt was sued by Ford Credit, a commercial lending division of the Ford Motor Co., for $872,975 plus interest for failing to pay back a loan that financed truck-chassis purchases.

Monday, July 17, 2006

 

STAG-PARKWAY ACQUIRED BY GREENBRIAR EQUITY GROUP

RV Business
Monday, July 17, 2006

Greenbriar Equity Group LLC today (July 17) announced it has acquired a majority stake in Stag-Parkway Inc., a leading U.S. full-line aftermarket supplier of recreational vehicle parts and accessories.

Greenbriar, based in Rye, N.Y., acquired its interest from Stan Sunshine, Stag president and CEO. Greenbriar said Sunshine will retain a substantial interest in the business and continue to serve as CEO while the entire Stag management team will remain intact. Terms of the deal were not disclosed.

Headquartered in Atlanta, Ga., Stag sources from over 500 suppliers and services a customer base of over 2,000 RV dealers and independent service locations. In May, Stag acquired Middlebury, Ind.-based Development Training Inc. (DTI), the leading provider of aftermarket service parts to RV dealers

Greenbriar Equity Group LLC is focused exclusively on making private equity investments in the global transportation industry, including companies in freight and passenger transport, commercial aerospace, automotive, logistics, and related sectors.

“We are delighted to have Greenbriar as a partner and investor,” said Sunshine. “I have been impressed with the operating expertise and investment approach of the Greenbriar team. Working together, we will continue the growth of the business, while achieving our mission of delivering profitable business solutions to the RV industry in partnership with our employees, suppliers and customers.”

“Stan Sunshine has established Stag as a critical distribution link in the RV industry,” said Jill Raker, managing director of Greenbriar Equity Group. “We are excited to work with Stan and his management team. They have already built a tremendous franchise and we expect together to continue enhancing Stag’s leadership position in the RV parts and accessories industry.”

 

AMERICA IS THE LAND OF LAWSUITS

RV Business
Monday, July 17, 2006

Amid the destruction and toxic soup left behind by the hurricanes of 2005 that ravaged the Gulf Coast, stories of chronic physical illnesses are not surprising.

But, according to an in-depth story in the July 16 edition of the Elkhart Truth, increasingly the stories are coming from those living in the recreational vehicles provided by the Federal Emergency Management Agency (FEMA) after the natural disasters.

Many are now claiming the formaldehyde in the wood products used to build and furnish the RVs is contaminating the air inside the FEMA trailers and making the occupants sick.

The Mississippi Chapter of The Sierra Club has been testing trailers in the Magnolia State, along with Louisiana and Alabama. A class-action lawsuit has been filed against FEMA and a handful of RV manufacturers, including four Indiana builders – Nappanee's Gulf Stream Coach Inc., Middlebury's Pilgrim International Inc., Shipshewana's KZRV LP, Topeka's Starcraft RV Inc., – along with Monaco Coach Corp., Coburg, Ore. and Riverside, Calif.-based Fleetwood Enterprises Inc. and Fleetwood Canada, Ltd. The lawsuit also leaves open the possibility that other RV manufacturers who sold units directly to FEMA will also be named as defendants.

"These smell bad," Becky Gillette, co-chair of The Sierra's Club's Mississippi Chapter, said of the FEMA trailers. "A lot of people don't know that smell's harmful to them."

How harmful – and even whether formaldehyde is harmful – is the subject of debate. Formaldehyde is present in many products and even found naturally in the human body.

"If somebody tells you, 'I've been exposed to formaldehyde,' you say, 'Yes, of course you have,'" said Ken Weaver, a partner on a reduced basis at the Baker & Daniels law firm.

Sitting in his firm's conference room, Richard Paulen, partner at the Barnes & Thornburg law firm, noted that formaldehyde is in the carpet, the table and even in permanent-press clothes.

"The problem is that we can't live without formaldehyde and do what we want to do," he said.

Weaver and Paulen are members of the Recreation Vehicle Industry Association's (RVIA) lawyers committee and have had extensive careers handling legal issues for the RV and manufactured housing industries. In addition, Weaver served on the lawyers committee for the Manufactured Housing Institute, including a 14-year stint as chairman.

Formaldehyde is present in the air of stick-built homes and offices buildings but because RVs are more tightly built, the air turns over less and the chemical substance can accumulate to a greater degree inside the units. The solution, said Weaver, is to open the doors and windows of the RV to let the air circulate and dissipate the formaldehyde.

Still, the conditions in the South may be coming together to create what Paulen termed the "perfect storm." Heat and humidity, of which the Gulf Region has plenty, will cause wood products in the recently built RVs to emit even more formaldehyde which, coupled with the units being shut tight to keep out the heat, may make the chemical substance especially pungent and cause residents' throats to burn and eyes to water.

"Does it make these units bad? I don't think so," Paulen said.

According to the Truth, Gillette said the Sierra Club has tested 44 trailers in the Gulf region and 40 have registered more than 0.1 parts per million. The Occupational Safety and Health Administration (OSHA) lists airborne concentrations of formaldehyde above 0.1 ppm as having the potential to cause irritation to the nose and throat.

Kathleen Covington, who moved her family into a travel trailer parked next to her home in Coden, Ala., is complaining of several symptoms. She said that her asthma returned after a five-year absence while her 8-year-old started having nosebleeds. She said her 5-year-old battled a bout with pneumonia before contracting bacterial strep throat.

Although the doctors treating her and her family have not diagnosed formaldehyde as the reason for their illnesses, Covington became convinced after seeing a news report on local television.

"When I hear about the formaldehyde thing, I think this is why we're sick and irritated," said Covington.

Others like Covington who believe they are suffering from the formaldehyde in their FEMA trailers have been calling the Lake Charles, La., law office of Bice, Palermo & Veron LLC. The result is a complaint filed in U.S. District Court against the federal government and travel trailer vendors to FEMA.

"We think the claims are without merit and we will vigorously and tenaciously defend our position," said Monaco spokesman Craig Wanichek.

Fleetwood Enterprises declined to comment, saying it was too early in the litigation process to respond.

The other RV manufacturers named in the suit did not return calls seeking comment.

Although the manufactured housing industry was hit with a series of formaldehyde lawsuits in the 1970s and 1980s, this is the first such lawsuit filed against the RV industry, Weaver said.

"(Formaldehyde) is a clear and present danger to the RV industry because they have to spend a lot of money on these lawsuits," Weaver said. "I don't think it's a health risk. I think it's a serious economic risk to the industry."

The Truth reported that the suit was filed on behalf of a group of individual plaintiffs by the law offices of Bice, Palermo & Veron, Sean Kevin Trundy and Nexsen Pruett. The suit claims the plaintiffs have "all spent significant time" in FEMA trailers, have "all been exposed to dangerously high concentrations of formaldehyde fumes" and since Hurricane Katrina blew ashore in August 2005, "have had no choice but to accept their plight."

One of the plaintiffs' attorneys, J. Rock Palermo, was adamant he and his legal colleagues did not take the case for its potential fat contingency fees.

"We didn't create this issue," he said. "The issue has been verified by the Sierra Club and other independent scientific people so certainly people are free to criticize but the problem was not created by lawyers."

Palermo said the goal of the lawsuit is to "simply find a way to get people living in a high-formaldehyde trailer into more suitable housing" and to provide medical monitoring of the plaintiffs for any long-term health problems.

A call to plaintiff attorney Sean Trundy was not returned.

The next event in the progression of the formaldehyde lawsuit will be for a judge to rule whether the plaintiffs collectively form a class, which will determine whether the plaintiffs can file a single complaint or if they must file separate ones.

Weaver and Paulen have differing viewpoints on how the case will play out. Weaver believes if the judge disqualifies the class, the case will be dead because the lawyers won't want to expend the time and money filing individual claims. Paulen predicts the effort would continue as individual cases.

If the case gets to the courtroom, Paulen said it will be a battle of experts arguing about the relationship between formaldehyde and the plaintiffs' health problems. The difficulty will be proving formaldehyde is the culprit and not, for example, second-hand tobacco smoke or the toxins floating in the air from the burning of the debris left behind by the hurricane.

"It's a complex set of facts that all these folks are going to have to deal with in this litigation," Paulen said.

Also, Paulen foresees RV companies turning on their suppliers.

"Part of the defense in any action like this is find somebody else to blame," Paulen said. "And there will be plenty of finger pointing if this action goes forward."

Weaver does not believe RV makers will sue their suppliers since such action would be an admission and help the plaintiffs. The RV companies, however, may ask their materials suppliers for assistance in defending against the legal action.

Weaver and Paulen agreed that regardless of what happens, the lawsuit will be a financial drain on the RV industry.

According to the Truth, Weaver said the lawsuit probably will not result in RV workers losing their jobs or RV companies going out of business. However, the cost of mounting a defense will be passed onto the consumers in the form of higher-priced units.

Covington is not a plaintiff in the lawsuit. She is focusing on finding laborers to help her husband rebuild their family home and on working part time at a bait shop. The wariness in her voice is easily heard along with the respiratory congestion.

"It never ends," she said. "It's just never ending."

Sunday, July 16, 2006

 

RECALL

Make / Models : Model/Build Years:
SPRINTER / 2500 2006

SPRINTER / 3500 2006

Manufacturer : DAIMLERCHRYSLER MANUFACTURING INTL

NHTSA CAMPAIGN ID Number : 06V238000 Mfg's Report Date : JUN 28, 2006
Component: SERVICE BRAKES, AIR
Potential Number Of Units Affected : 235
Summary:
ON CERTAIN TRUCKS BUILT ON DODGE AND FREIGHTLINER CHASSIS, THE BRAKE FLUID USED WAS CONTAMINATED WITH COOLANT. DUE TO THE HIGH WATER CONTENT THE BOILING POINT OF THE SUBJECT BRAKE FLUID IS REDUCED.
Consequence:
THIS MAY AFFECT THE PROPER FUNCTION OF THE BRAKE SYSTEM DURING HARD BRAKING SITUATIONS AND MAY LEAD TO AN INCREASING BRAKE DISTANCE WHICH COULD RESULT IN A CRASH.
Remedy:
DEALERS WILL FLUSH AND REPLACE THE BRAKE FLUID FREE OF CHARGE. THE MANUFACTURER HAS NOT YET PROVIDED AN OWNER NOTIFICATION SCHEDULE. OWNERS MAY CONTACT DAIMLERCHRYSLER AT 1-704-655-1000.
Notes:
CUSTOMERS CAN ALSO CONTACT THE NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION’S VEHICLE SAFETY HOTLINE AT 1-888-327-4236 (TTY 1-800-424-9153), OR GO TO HTTP://WWW.SAFERCAR.GOV.

 

RECALL

Make / Models : Model/Build Years:
MCI / 102EL3 2001-2005

MCI / D 2003-2006

MCI / D4000 2003-2006

MCI / D4500 2003-2006

MCI / DL3 2003-2006

MCI / E4500 2001-2005

MCI / J4500 2001-2005

Manufacturer : MOTOR COACH INDUSTRIES, INC

NHTSA CAMPAIGN ID Number : 06V241000 Mfg's Report Date : JUN 29, 2006
Component: VISIBILITY:DEFROSTER/DEFOGGER SYSTEM
Potential Number Of Units Affected : 1768
Summary:
ON CERTAIN MOTOR COACHES EQUIPPED WITH A SLIDE SWITCH TO CONTROL THE DEFROSTER BLOWER SPEED, THERE IS A SPEED CONTROLLER FOR EACH OF THE TWO DEFROSTER FAN MOTORS. THE SPEED CONTROLLER MAY FAIL CAUSING THE FAN MOTOR TO OPERATE CONTINUOUSLY IN THE "HIGH" SPEED MODE, AND THE CARRIER SLIDE SWITCH MAY FAIL TO REDUCE OR OTHERWISE CONTROL THE FAN MOTOR SPEED.
Consequence:
THE SPEED CONTROLLER MAY OVERHEAT AND RESULT IN A THERMAL EVENT.
Remedy:
DEALERS WILL REPLACE THE DEFROSTER SPEED CONTROLLER FREE OF CHARGE. THE RECALL IS EXPECTED TO BEGIN ON JULY 17, 2006. OWNERS MAY CONTACT MOTOR COACH AT 1-800-241-2947.
Notes:
CUSTOMERS CAN ALSO CONTACT THE NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION’S VEHICLE SAFETY HOTLINE AT 1-888-327-4236 (TTY 1-800-424-9153), OR GO TO HTTP://WWW.SAFERCAR.GOV.

 

MORE PROBLEMS FOR NATIONAL RV

RV Business
Friday, July 14, 2006

National RV Holdings Inc., Perris, Calif., announced Friday (July 14) that the use of defective sidewall material on around 70 motorhomes built by subsidiary National RV Inc. (NRV) will impact the company's second-quarter earnings by over $5 million and yield a net loss for the period.

The firm, also parent to Country Coach Inc., Junction City, Ore., has filed a suit against the sidewall supplier, Channahon, Ill.-based Crane Composites Inc. and its parent Crane Co., to recover all associated damages. The company noted that none of the affected units were manufactured by Country Coach.

In a statement, National RV Holdings also announced that it expects to record a reserve of $1 million to $1.5 million dollars in the second quarter to address a concern it has about tires used on some of its highline coaches built between 1995 and 2000. The company is seeking to recover most of those costs from the tire manufacturer.

National RV Holdings said it repaired and sold most of the fiberglass sidewall material just three months after discovering a serious defect in the units. Costs to complete and ship the remaining units will affect the company's July and third-quarter results and the impact to cash flows in the short term is believed to exceed $13 million.

“The temporary impact to cash flows of this supplier issue, an issue which we believe has been experienced by other manufacturers of recreational vehicles, has been significant to NRV,” stated CEO Brad Albrechtsen. “However, the extent of the problem has been contained as all but three of the affected units will be repaired and shipped by the end of this month.

"We were successful in catching all but a handful of units before they shipped and have retrieved and repaired the few motorhomes that did leave the factory. We have since changed the supplier of this material."

National RV Holdings also said that in response to the 18% decline in overall industry Class A shipments, NRV has reduced production from 40-45 units per week down to 35 per week, and has adjusted personnel and other costs accordingly. However, sales of Country Coach highline products remain largely unaffected by the general industry decline and it plans to increase production from approximately 16 units per week to 20 during the third quarter as it rolls out its two new products.

In addition, the company is in the process of exploring financing opportunities to replace a significant portion of the existing working capital line of credit with long-term debt, increasing financial flexibility. National RV Holdings expects to report its results for the second quarter the second week of August.

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