Recreational Redemption: Elkhart RVs Boom After the Bust

Posted: Updated:
Grand Design recently announced it will invest $10 million to build two new production facilities. Grand Design recently announced it will invest $10 million to build two new production facilities.

The recreational vehicle industry is posting impressive numbers: RV wholesale shipments through August are up 15 percent compared to the first eight months of 2016, says the RV Industry Association (RVIA). And that means booming business in Elkhart, where half of all RVs on the road are manufactured, say local leaders. The president of one manufacturer in the RV Capital of the World says 2017 “will set an all-time industry record in RV shipments.” It’s a tale of redemption for not only the industry, but three entrepreneurs who—after being told they were “insane” and had “terrible timing”—are enjoying the ride.

The ripple effects of the recession in 2008 and 2009 hit like tidal waves in Elkhart County, which gained national notoriety for having the highest unemployment rate in the nation when many RV factories shut down operations.

“It was painful. With such a heavily-concentrated employment base around the RV industry, this whole community and region felt it,” says Grand Design RV President and Chief Executive Officer Don Clark. “It brought us down to our knees. It was the most painful time ever in my 33 years in the business.”

In 2012, when the region was still trying to rebuild post-recession, Clark and brothers Ron and Bill Fenech left a major RV manufacturer to launch “another way of doing business” and formed Middlebury-based Grand Design in Elkhart County.

“Everyone thought we were insane, including my family, and said why in the world would we [start a RV company],” says Clark. “People thought our timing was absolutely terrible.”

Founded in 2013, Grand Design now employs more than 1,000 people at its Middlebury campus. The company is thriving in RV Capital of the World, where expansion announcements for manufacturers and suppliers are frequent.

In August, Grand Design announced it will invest $10 million to build two new production facilities. The same week, Middlebury-based RV manufacturer Jayco Inc. announced the construction of a new 237,000 square-foot production facility, citing “unprecedented growth in the RV industry.” The expansions reflect strong national numbers for the RV industry; RVIA reports monthly shipments for 2017 are consistently up double-digit percentage points compared to 2016.

Clark believes the healthy economy is fueling Elkhart’s RV rebirth.  Because RV customers are typically spending discretionary money, he notes the sector is “directly and quickly affected by the economy.” He shies away from using the word “boom” to describe the recent success, because he believes it implies a temporary uptick.

“I don’t really see anything on the horizon short-term that will disrupt the growth of the RV industry,” says Clark. “Consumer confidence is there, as well as fuel pricing and fuel availability, and the economy is performing nicely and continues to grow. Outside of a black swan event that no one can predict, I’m really, really happy to be in the RV industry.”

Clark also points to a broadening customer base for fueling the strong sales; he says, once perceived as a product for retirees and snow birds, RVs are “becoming cool” to a broader demographic.

“[RVs] are attracting people from all walks of life, and we’re seeing a lot of younger people and first-time buyers come into our business,” says Clark. “And, oftentimes, once they get bit by the RV bug, they become repeat business as they stay in our industry for multiple units.”

From a startup with no shortage of skeptics, Grand Design says it’s now the third-largest producer of travel trailers and fifth wheels in the industry—just one company’s success story among the many that have helped rebuild Elkhart County.

The expansion announcements from Jayco and Grand Design could create 750 jobs in the Elkhart region, where the labor market is already tight, but Clark says this could also benefit the industry.
Clark says, in addition to the strong economy, Grand Design’s distinctive business model is fueling the company’s growth.
  • Perspectives

    • How Telling Your Customers 'No' Can Improve Loyalty

      Business usually try to convert customers into loyalists by giving them what they want. That statement seems obvious... until it's not. Take Milktooth in Indianapolis, for example. The restaurant has become a star of the food scene by telling customers "no." This flies in the face of what most businesses consider to be standard operating procedure. But for Milktooth, saying no is simply good business.

    More

Subscribe

Name:
Company Name:
Email:
Confirm Email:
HTML
INside Edge
Morning Briefing
BigWigs & New Gigs
Life Sciences Indiana
Indiana Connections
INPower
Subscribe
Unsubscribe

Events



  • Most Popular Stories

    • How Telling Your Customers 'No' Can Improve Loyalty

      Business usually try to convert customers into loyalists by giving them what they want. That statement seems obvious... until it's not. Take Milktooth in Indianapolis, for example. The restaurant has become a star of the food scene by telling customers "no." This flies in the face of what most businesses consider to be standard operating procedure. But for Milktooth, saying no is simply good business.

    • Historic Indy Building to Become Hotel

      A nearly 110-year-old building in downtown Indianapolis will soon have new life. Indianapolis-based real estate development firm Loftus Robinson is partnering with Kimpton Hotels & Restaurants in California to transform the former Odd Fellows building into a 130-room hotel with a signature restaurant. Financial terms of the project are not being disclosed, however the developer says the hotel is scheduled to open in early 2020 and create about 150 hotel and restaurant jobs.

    • Lessonly Announces More Growth

      Indianapolis-based Lessonly Inc. says a $2 million investment will create more than 100 jobs by 2020. The training software company says it will initially build on its current operations, but will look to expand its footprint in the city during the next five years. Last month, Lessonly announced an $8 million round of funding. The growth will more than double the current size of the Lessonly team. The new positions are expected to pay...

    • New Hotel Opens in Vincennes

      An $8.5 million hotel is now open in southwest Indiana. The 79-room Hampton Inn by Hilton Vincennes employs 21 associates. Hotel Development Services and Vincennes Hotel Developers LLC owns the property, which is managed by Indianapolis-based General Hotels Corp. General Manager Virgil Rasche says...

    • Second Vigo County School Funds Thief Convicted

      An accomplice in a theft of more than $110,000 from the Vigo County School Corp. has been convicted in federal court. Franklin Fennell, the district's former facilities director, will serve up to 20 years in prison for a scheme involving kick-backs on falsified work invoices. The office of United States Attorney Josh Minkler says Fennell and former Vigo County Sheriff's Department deputy Frank Shahadey worked with a local contractor to create and submit invoices that either included...