Winnebago cuts back Class C production

[jimandsue60]

Charles City

Jim

[jimandsue60]

Charles City

Jim

[Mutha]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by jimandsue60:
Winnebago cuts back Class C production
Jim </div></BLOCKQUOTE>

I took this from the article:
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">
Winnebago said that Class A and Class C motor homes, which represent the bulk of motor home sales, are expected to be down by 42 percent this year industry wide. </div></BLOCKQUOTE>

WOW!! 42 percent That is a LOT! I am astonished
that they are predicting that much of a drop from year - ago sales.

Glenn

[ruppr]

Glenn:
This article sezs 42 % since 2004.


FOREST CITY, IA, Jun 02, 2008 (MARKET WIRE via COMTEX News Network) --
Winnebago Industries, Inc. (NYSE: WGO) today announced a strategic
manufacturing consolidation decision that will idle production at the
Company's Charles City Manufacturing Facility (CCMF), effective August 1,
2008. CCMF currently assembles Class C products which will be relocated to
the Company's Forest City facilities throughout the Company's fourth
quarter, ending August 30, 2008. The relocation will not affect the
Company's customers or product offerings.

An estimated 270 salaried and hourly employees at CCMF will be impacted by
the idled facility. The Company has affirmed that it will maintain a
significant presence in the Charles City area, with approximately 190
employees remaining in the Company's Hardwoods Facility and Charles City
Assembly Facility, which produces the Company's new Class B motor homes.

Completed in the spring of 2004, CCMF went into production during a year of
record breaking sales for the Company and the motor home market, when
increased capacity was needed to meet the greater demand resulting from a
robust economy with low interest rates, high consumer confidence and a
favorable environment for discretionary spending.

Market conditions have dramatically changed since 2004. Total Class A and
Class C motor home industry wholesale shipments are estimated by the
Recreation Vehicle Industry Association to be 40,400 for calendar 2008.
That represents a 42 percent decline in shipments when compared to the
69,300 motor homes delivered in calendar 2004. A declining United States
economy, significantly increasing fuel prices, decreasing consumer
confidence and a difficult lending environment have contributed to a
decrease in overall motor home demand, with double digit retail sales
declines for seven of the last eight consecutive months for the industry.

The current conditions have necessitated capacity reductions for the
Company to more closely match market demand. The Company believes these
actions will better position it for a business environment that it expects
will continue to be challenging.

"In order for us to keep production in line with market demand, our
employees in all locations -- Forest City, Charles City and Hampton -- have
been significantly impacted throughout the last several months," said
Winnebago Industries Chairman, CEO and President Bob Olson. "For example,
in our third quarter ended May 31, 2008, production was reduced during 12
of the 13 weeks through either four-day work weeks or shutting down entire
production lines for a week at a time, resulting in an extremely low
capacity utilization rate of less than 35 percent for the quarter. Our CCMF
employees worked very hard to get the plant up and running smoothly since
construction began in 2003 and they have done an extraordinary job for us
since that time. Today I had to tell our 270 CCMF employees they will no
longer have a job because they are a casualty of the economy. As a 38-year
employee who has been through several industry downturns in the past, I
know how devastating this can be for employees. So the decision to idle
CCMF has been particularly painful. Unfortunately, it is necessary so that
we more closely align our capacity with market demand. Winnebago Industries
is certainly not alone with these market challenges. Regrettably, many
manufacturers in the automotive/truck, motorcycle, marine, recreation
vehicle and manufactured housing industries have been forced to idle plants
or permanently close them in response to these significant challenges."

The Company intends to reopen CCMF in the future when the added capacity is
needed. The Company is evaluating if an impairment charge is required in
the fourth fiscal quarter as a result of the idling of the facility, which
currently has a net book value of approximately $9 million. Other
associated costs with the idling of the plant to be recognized in the
fourth quarter, are estimated at $1 - $2 million. The Company will continue
to evaluate the need for additional right-sizing measures in accordance
with market demand.

Winnebago Industries' management met with its CCMF employees today and has
offered employee support through its company sponsored Employee Assistance
Program, and will coordinate support from state, regional and local
agencies in an effort to assist with job placement, training and various
other services and benefits available to dislocated workers.

Olson continued, "While the current economic environment is extremely
challenging, the Company believes it is in a strong financial position with
significant cash and investment balances, no debt, and with the benefit of
a respected brand name known for its quality products. While current demand
for recreation vehicles (RVs) has softened significantly, over the longer
term, the motor home market should benefit from the increased popularity of
RVs, demographic growth in the prime target market of people over age 50
and the broadening age range of people who are buying motor homes."

Best,

[Rocket Heart]

De Ja Vue.......I was in the 70's debacle - different reason same result. Hopefully things will swing back in a few years. If history repeats itself it will.

[becks]

My local news station just ran this news on Winnebago on their 6pm telacast. This economy is starting to affect a large number of people in all walks of life. Lets hope it turns around soon. Good to see Winnebago is helping employees with retraining, etc. We wish them all the best.

[Mutha]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by ruppr:
Glenn: This article sezs 42 % since 2004....Market conditions have dramatically changed since 2004. Total Class A and
Class C motor home industry wholesale shipments are estimated by the
Recreation Vehicle Industry Association to be 40,400 for calendar 2008.
That represents a 42 percent decline in shipments when compared to the
69,300 motor homes delivered in calendar 2004..... </div></BLOCKQUOTE>

Thanks for the correction Bob/Kristi, but even since 2004, a 42% drop in shipments is pretty spectacular! If shipments have declined that much, I wonder how much SALES have declined. Plus you have to think about how many unsold new units from 2004 to now are in inventory on Dealers and Manufacturers lots...pretty scary, if you ask me.

Best to you folks - Glenn

[ruppr]

One would think there would be some real deals on units out there by now, based on the Wini info, which I would be willing to make use of if I wasn't currently so broke buying fuel!

Best,

[ichn2go]

I am in the same group, but its a shame we didn't learn from the 70's.

Everything runs in cycles and this too shall pass altho it may be a different world we live in. Be optomistic and keep smiling.

[Kyle241]

I believe we are on the edge of changes that will affect the RV world in many ways. Gas/oil will go down possibly a little but it will not last and it's only up from there. There is nothing in the near-term, 3-5yrs, that will increase production domestically. Oil sands in Canada, deep water drilling along the shelf will take a long time to produce. Other nations supplying oil (e.g. Saudi Arabia, Iraq, Venezuela, Russia) all have their own interests at heart, they will not do us any favours.
I have considered selling my RV for the past month, first time as I really like the lifestyle and it works for me working on the road. Like many, I think I will wait it out but all of us need to hope/plan to pay the price.

Ch-ch-ch-ch-Changes
(Turn and face the strain)
Ch-ch-Changes
Don't want to be a richer man
Ch-ch-ch-ch-Changes
(Turn and face the strain)
Ch-ch-Changes
Just gonna have to be a different man
Time may change me
But I can't trace time

Kyle

[rollins215]

Eh, look on the brightside: gas will have to hit $8 before it costs you twice as much to travel as it does now. And hey, at current gas prices you can go about 1000 miles per month if you pay as much for gas as you do for your RV payment. If you drive your motorhome 4000 miles this year, it will cost you less than $600 more than it did to drive 4000 miles last year. No offense, but talking about selling our $100k+ motorhomes over $600 in additional cost to do quite a bit of travelling is kind of silly.

[Savannah]

So true Manny but you also need to factor in food, clothing, heating oil, electric etc all have climbed price wise or will start to BUT your income/wages will be about the same if you are lucky enough to remain employed.

Still I am not in favor of selling out cause when times get tough having a "mobile" home is a good thing. Easy to relocate to a place that has what you need at the time.

[Richard 34A]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Savannah:
So true Manny but you also need to factor in food, clothing, heating oil, electric etc all have climbed price wise or will start to BUT your income/wages will be about the same if you are lucky enough to remain employed. </div></BLOCKQUOTE>

And in my area, full hook-up RV parks have gone up in price quite a bit in the last two years or so... I now pay $75 per night at parks that just two years ago I paid $45. My Yorkie that was 'no-charge' is $2 per night; my son that used to be included is now $3 per night. It used to be that RV parks were a great value compared to a motel; motels are frequently less per night than the RV park and we aren't talking a resort-style park either.