*The RV manufacturer, not the comic book figure with the hammer**.
**Isn’t a super-hero armed with a hammer the worst gimmick ever? I mean, he’s always got to lug this heavy hand tool around everywhere. And once you throw it at someone you have to go get it. Does the villain patiently wait while Thor roots around in long grass looking for his hammer as if it were a lost golf ball? But I digress…
In a summer stunner that nearly rivals last year’s surprise ruling against Forest River for dodging warranty claims (result: multi-million dollar fine), family owned Jayco has announced that it has been bought out by Thor Industries for the princely sum of $576 million. For comparison’s sake, this would be the auto-industry equivalent of General Motors buying Ford.
Buyouts in the RV industry are not rare these days –in fact they’re the norm- but Jayco was founded by Lloyd Bontrager in 1968 and has been family owned and operated ever since. The “family owned” label has featured heavily in their advertisements and marketing. Today there’s a slew of Bontragers heavily involved in the daily operations of what appears to be a very solid business concern.
So what prompted the decision to suddenly up stakes and accept roles as employees instead of owners (the announcement claims the current management will stay in place)? Well, half a billion in cash certainly helped; nobody with the Bontrager name will be looking for work at Dairy Queen anytime soon. But moves like this are rarely just about the money. With annual sales of $1.5 billion and net profits of $70 million, the family wasn’t exactly struggling to pay the cable bill.
Chances are burnout and fatigue played a role; fifty years at the helm is a long haul for any family. It’s also possible things weren’t quite as rosy behind the scenes as they appeared to the general public. An RV market increasingly dominated by mega-builders had to be worrisome to a family owned business (even one as big as Jayco) as they watched competitor after competitor join forces against them and reap the benefits of increased buying power and breadth of product. Perhaps the Bontragers felt there were storm clouds on the horizon and they could either get out while the getting was good or continue to fight a losing war against ever larger rivals. The most likely answer is a combination of the two.
So what does this mean to the RV industry and, more importantly to us, the RV buying public? Well, long term, this may serve notice that the days of the small boutique builder are drawing to a close. This is a bad thing. Many small builders are known for hands-on personal service and excellent quality –two features many buyers are willing to pay extra for. Word of mouth keeps their doors open and they can often compete against the mass produced RVs on the market –to a degree. But now the mass produced builders are gaining strength and dominating the market by sheer force. You can bet that this announcement has prompted many boutique builders to consider their own future and, possibly for the first time, think about their response should a mega builder express an interest in their line: fight on or cash out?
For the foreseeable future, though, RV buyers shouldn’t put much thought in to the merger (the preferred term for buyout). Both Thor and Jayco are Elkhart, Indiana based businesses, so nothing is going overseas and job loss isn’t expected. The buying experience will be largely unchanged at the dealer/customer level and Jayco’s lineup will continue. Thor admits they wanted Jayco to expand their own lineup and they are now able to offer everything from pop-ups to Class A diesel motorhomes. If nothing else, this shows that a very savvy and well-financed Thor believes strongly in the future of the RV industry and, ultimately, the American economy. And that is good news for everyone.
That’s a wrap for this week, folks. Check those tire pressures (and brake lights) before heading out.
The RVReviews.net Team.