Seemingly popular Class B motorhome manufacturer RoadTrek (a division of the German based Erwin Hymer Company) has been in the news a lot lately, but for all the wrong reasons. Hymer/RoadTrek was slated to be sold to Thor, who sent some accountants to Hymer offices in both Germany and Canada to sift through the financials –a typical due diligence routine in a situation like this. Unfortunately, what they found at RoadTrek’s plant in Canada didn’t add up. On the surface, records clearly implied sales were good –excellent, even- but many of the vehicle identification numbers didn’t correspond to any registered motorhome in either Canada or the US. To make a long story short, it appears that Hymer/ RoadTrek cooked the books to imply a much healthier market share than reality would allow. Reports suggest 1,700 fictitious sales exceeding $100 million.
Who knew what -and when?
Hymer headquarters in Germany maintain they were blindsided by the news, but court documents claim that “the financial irregularities appear to be long standing and pervasive”. If Hymer’s head office really was unaware, then they are guilty of negligence or, at the very least, lack of oversight. Considering that the rest of the audit revealed no signs of trickery elsewhere, and that Thor proceeded with the purchase -minus the North American arm- implies Hymer really was hoodwinked by one of their own. If Thor felt the issue was pervasive, or that the head office had been complicit in some way, they wouldn’t have proceeded with even a revised purchase offer.
Pulling the wool over the eyes of an office a continent and an ocean away is one thing, doing it to an experienced accounting team sitting in your conference room is another. The news from Germany that a forensics accounting team from Thor would be coming in to review the financials must have been received with horror at the North American headquarters of Hymer/RoadTrek. Whoever orchestrated the deception had to know it wouldn’t hold up to even a cursory examination –and they were right. It only took the bean counters a few hours to discover enough evidence to have Thor backpedaling from their original offer. One assumes the international phone lines between U.S. based Thor, Hymer/RoadTrek Canada, and Hymer Europe were cooking that afternoon. Whatever was found was damning (and apparently undeniable) enough that Hymer immediately sacked the executive team of the North American factory and laid off hundreds of startled (and presumably completely uninvolved) workers.
If we had to speculate, we would say that Hymer/RoadTrek was hemorrhaging money and in a moment of desperation opted to do some clever accounting to keep the head office in Germany in the dark. How they ever expected to keep this deception under wraps for any length of time can only be answered by those behind the caper.
What now?
This week things went from bad to worse with the news that the Hymer/ RoadTrek plant was being placed in receivership with more than $300 million in liabilities. Those remaining employees that weren’t laid off in the initial sweep (Hymer/RoadTrek had 850 workers as recently as January of this year) were let go and the plant has now been officially shuttered.
This has been a swift reversal for a company that just received a Bronze (3rdPlace) in Motorhome Magazine’s most recent Readers’ Choice Awards(Class B category). Not only have we recommended RoadTrek over the years, Hymer had been in the process of introducing their version of RVs to North America for 2019 with a very expensive marketing push. We’ve received report requests for both companies as recently as January of this year.
As of this morning it appears that the RoadTrek website has now gone offline, which is probably best for everyone. Any existing stock at the factory is presumably in the hands of the Canadian court system and may languish for months or years while the various lawsuits are played out. What’s less clear is the fate of any remaining stock on dealers’ lots. If the dealers have paid for the vehicles, they are free to sell them –presumably at significant discounts. If they haven’t paid in full, the Canadian court system may consider the vehicles to be a remaining asset of Hymer and attempt to claw them back. How that would work with a border in the middle will probably result in a tsunami of bureaucratic paperwork for everyone involved.
Turning lemons in to lemonade
While any warranty provided by RoadTrek will obviously not be worth the paper it’s printed on now, the chassis warranty (frame and engine) shouldstill be covered by the company that built those items (i.e. Mercedes). With this in mind, it’s possible there could be some very good deals for RoadTrek motorhomes in the next few months. Assuming that dealers will be forced to sell at a loss and Mercedes will still provide their published warranty coverage, a simple extended warranty from a company like WholesaleWarranties.com could replace the non-existent factory warranty -mention “RVReviews.net” when you get a quote from WholesaleWarranties.com and they’ll give you an additional discount.
Buying an Orphan RV can be the deal of a lifetime or a complete nightmare. It’s a gamble, but for those doing some research beforehand, the odds can be skewed to your advantage. The following steps will help:
- Do some research online and determine what dealers were selling Roadtrek or Hymer RVs BEFORE the scandal hit the news.
- See what sort of price you can negotiate now –AFTER the company has closed their doors.
- Demand written proof that the chassis warranty will still be honored by Mercedes.
- Get a quote from WholesaleWarranties.com to replace the factory warranty that is now defunct. Add this cost to your negotiated RV price.
- Lump it all together and see how that price compares to a Class B from another reputable and still active manufacturer (Winnebago or Leisure Travel would be good).
- If the savings are significant –as in, “Wow! That’s a huge savings!!”- an Orphan RV from RoadTrek (or Hymer) may be worth a punt.
- If the savings are merely decent, it’s not worth the trouble. Move on.