Navistar RV Report
I just finished listening to a large Navistar RV conference call hosted by Bill Osborne, president of Navistar RV. I was invited by email to attend this call some weeks ago. The purpose of the call was to quote: “discuss the direction the company is headed, put the story straight about industry rumors and answer any questions our owners have about the company.”
The call was directed to current owners and after an opening statement there was a brief question and answer period. This was a one way discussion. Questions had to be submitted in advance. I did not submit one. If I had it would have been one specific to my coach and chassis and those types of questions were not answered during the call. Any questions submitted and not answered would be responded to by e-mail later.
There were 350 participates and 180 questions asked. As soon as I heard that, I thought that there was no way they could all be answered and that was the case. The questions were grouped by category and answered as such. However, before I get to that let me give a synopsis of Mr. Osborne’s statement which included information about not only Navistar RV but Navistar International, the parent company as well.
The rumors of Navistar, the parent company, going bankrupt or being sold are completely false. They have a new top management team in place, are currently meeting tailpipe emission standards, have signed a new agreement with Cummins for large bore engines for commercial vehicles. Most importantly they have over 1.5 billion dollars in cash on hand and are in the position to become profitable again this year.
However Navistar is going to focus on the commercial truck business and to that end they will give consideration to any valuable offer for the RV side of the house. In other words they are looking seriously at selling Navistar RV. They are not looking at bankrupting the RV side of the house, dumping warranties and selling off the assets. That describes what the pre-bankrupt Monaco did, not what Navistar wants to do. They want to make Navistar RV, which includes the Monaco, Holiday Rambler and R-Vision lines a profitable, high quality product company.
After the statement were the question responses. As I said they grouped the questions and answered accordingly.
The first group had to do with quality control.
When Navistar bought the old Monaco Company, they had a plan to turn it around. Mr. Osborne reports they are half way to meeting that goal. They introduced some new products at the recent Louisville dealer show including a new Dynasty coach and a new Vacationer. These products had great success along with the towables. Orders from dealers were up 69 percent for towables and 31 percent for motorized rvs.
Navistar RV has three parts to their turnaround strategy
- Provide high quality product to their customers.
- Provide products that are innovative to the industry.
- Provide good customer service (during warranty period and aftermarket.)
To that end Navistar RV has initiated a comprehensive technician training program, has moved techs from the closed Oregon facility to Wakarusa. They have initiated a quality control program at their factories which includes bonuses for workers who stop defects from going out the door. This takes some time due to the fact that dealers have a 300 day inventory on their lots and so a lot of coaches are still being sold that were made before the new programs went into effect.
New dealers and service facilities include what are called tier 2 facilities (dealers who don’t carry the product but will service) are being signed now.
Platinum service plan is now being implemented and the first platinum dealer is Alliance Coach.
Second group of questions dealt with Navistar RV's market exposure including dealers and products.
New dealers are being signed. They are not located in all states and that has been a problem for service, but is being worked on. Products are being improved. New ones will be offered. The Monaco Signature series will be making a return. There is a possibility of a re-launch of the Safari and Beaver lines now that Navistar has the ability to find high bore engines for larger coaches. The Trip and Vista coaches, as of today, are being discontinued. The orders for those coaches have been disappointing and it is painfully obvious the market will not support that line any longer, (if it ever did, in my opinion).
Next set of questions dealt with EPA emissions.
All Maxxforce engines meet current EPA tailpipe emission standards either directly or through credits. All engines will be SCR in the future.
There was a question about parts availability for older coaches. Navistar RV is committed to providing part support directly when possible. It is sometimes difficult because some part suppliers have gone out of business but alternative channels will be provided.
Mr Osborne also addressed the reason that Navistar RV did not honor warranties for coaches sold by the pre-bankrupt Monaco.
This is how I understood it.
He explained that they were not allowed to pick up those warranties by judgment of the bankruptcy court. Each bankruptcy is an individual case and some RV companies that went bankrupt and were purchased along with those obligations. That did not happen in this case. Monaco ran out of operating cash. They did not own any debt to suppliers or financial institutions. Their liabilities were payroll and warranties and the court relieved them of both.
That ended the question period of the call. The call ended with Mr Osborne once again assuring us owners of the company’s commitment to quality and great customer service. He appreciated our participation, informed us that he hoped to do this again in the future. He also told us the call would be available on the Navistar website soon.
Gramps.
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