Newmar as a publicly traded company, how is it affecting them?

[Neal]

We've seen a different Newmar of late, quality very different from years ago. Ads on Facebook and RV Trader drawing a line in the sand as a "pre-covid build". The pandemic is one thing with supply chain issues but another side effect we may not yet have realized is Newmar is now under the pressures to produce being under Winnebago. Is this driving Newmar to make different decisions regarding how coaches are produced? Are they pressured to get them down the line and delivered in order to show production and sales numbers? Prior to being under Winnebago, Newmar wouldn't have this pressure and would take the time to build a quality coach, less pressure on the workforce to produce, and do things right. My feeling is what we're seeing is not just a result of the pandemic supply chain but a more corporate impact of being part of a publicly traded company.

 

[scottramer]

Owning a 2019 London Aire I would say the quality issues started long before Winne came along, maybe starting 2015-2016 time frame.

 

[Rich W.]

I really think a lot of the problems are a result of the increasing complexity of coaches. My ’16 Ventana is less complex than a new one, and Ventana being at the low end of the line is less complex than the luxury coaches. The result is simple systems, individual components and controls, less integration of systems, and fewer non-owner serviceable components such as all the KIB stuff, and there is a lot of that as you go up the line. And thats nothing new - digital controls have been a problem for Newmar for 15 years.

Sourcing decisions have also erroded trust in the brand. Failing upholstery isnt a Newmar build quality or construction issue, its a third party supplier problem - still Newmar’s responsibility (probably an attempt at cost cutting) but it doesnt reflect on the people at the factories building the coaches. Same thing with windows. This was a result of Lippert buying Hehr. Newmar couldn’t have predicted that, had no control over it, and got stuck with a lot of window failures and a black eye on their reputation.

But I don't see many complaints about chassis construction, walls, slides, roofs, cabinets, plumbing, flooring, plumbing etc., although they could certainly spend some more time on the appearance of their wiring harnesses. But I think actual construction, while not without faults, is still about the best of any production class A coach builder. It’s decisions, and pressure to increase volume (management issues) that will continue to degrade the overall customer satisfaction and company reputation. Just look at what happened to Dynamax when Forest River acquired grabbed brand. Two or three years of company assurances that nothing would change and then the end of an era.

So time will tell, but its clear the days of privately held RV manufacturers are ending and while there are some benefits of economy of scale, any positive results of that nature are more likely to benefit the share holders than the consumers.

 

[sheridany]

You also have to take into consideration that over 90% of Winnebago outstanding shares are owned by institutions like blackrock which owns over 15%. Those institutions care about one thing. Making money. Their own share prices are influenced by how well they spend their capital on investments and make a profit as a corporation so it’s all about the money versus a family owned business usually has a different motive like serving customers and building a quality product.

 

[Jireh Financial]

Every company, regardless of size, knows that quality and reputation lead directly to sales and sales lead to profit. Remember, profit is not a 4 letter word. In some cases, a smaller company has overhead that can go away when a takeover happens. Departments like Accounting, HR, Purchasing, Trucking (shipping) and many others can be done more efficiently on larger scale. With materials and labor costing more, savings in any area can matter.
Another advantage of a deeper pocket are things like purchasing equipment, updating tools and upgrades to facilities. These things all cost money and having a bigger pool to dip into can help.
Time will tell how any acquisition plays out. MY OPINION - I don't believe that bigger ownership automatically means inferior product.
(see above where I said opinion)
Thank you,
Ken

 

[Rd1]

Owning a 2019 London Aire I would say the quality issues started long before Winne came along, maybe starting 2015-2016 time frame.

Actually, I think it goes even further back than 2015. (I had a new 2014 unit long ago).

A couple of points often overlooked.

1-There is a distinct difference (ie quality) from the Mahlon Newmar to the Miller Newmar and then the WG Newmar. WG for now, may just be an extension of miller newmar.

Mahlon built the company with his own hands. He worked on the floor among his workers. If you have built a business, you understand what that means. If I **recall** correctly, Mahlon worked at Holiday Rambler before purchasing a small unknown camper(towable) company which became newmar. Miller inherited the company. In fact, if you were around newmar during miller's years, you may have had noticed a card board cut of his head hanging over every department. “Perhaps” that was the extend of his involvement!! (or may be someone knows the reasons for that!!!).

I have come to know a few of the old timers who had worked with Mahlon back in HR. The 2008 was very rough. If I *recall* they had to let go of some 100 people. These employees are mainly amish/mennonite people. They are like 'extended' family. “Perhaps” that became the catalyst for the idea of selling the business not long after 2008. If you had been involved with selling a business, it is not something you plan in a year or two.

2- When talking about quality, it doesn't mean the whole thing is crap. Though, some truly are. If yours is all good, count your blessing. Some of the old employees from Mahlon years, are still there. The knowledge, is still there. However, when the numbers(quantity) becomes the priority, quality is compromised. That could mean, when they have to rush units out, they just decide to let service deal with the short comings later on, as warranty (do you know how far service is backed up for warranty work?). Or perhaps when there is new employee on the production line, they just don't get trained and evaluated to the same standards as mahlon newmar did. Have you ever looked at older newmars? If they are maintained well enough, they are much better quality than some of the newer ones. I actually met one of mahlon's sibling a few years back at a campground in Ohio. He had an older (early 200s?) MADP It was absolutely solid. I thought perhaps because he is related, his MADP was exceptional. However, He complained, he does not get any special treatments at newmar.

From the ball joint issue, the front axle low weight, HWH FWS (2016-2017), passive FL tag (16, 17), fake leather seat (how many years?), windows falling(?), just to name a FEW!!!! These issues and others (many others) WERE FULLY KNOWN To miller and his team. However, they were ignored just to make the numbers. When selling a business, numbers do the talking.

These are some of the issues that lead to lack of quality, some worse than others.

A couple more points;

I don't mean no disrespect to any one, however, for me, who is not very verse in every aspect of a MH, yes they can be complex. However, they are not COMPLEX to people who have been doing this for half a century!!!! not only that, they have also been at the fore front of new innovations, perhaps more so during Mahlon years.

The previous generation (boomers parents, G parents) sent men to the moon and back, literally in a tin can! Let me remind folks, the smart phone most of us have, has more computing power than what they had in that tin can, trying to find their way in the darkness for some 200K miles!! (remember, no GPS) Making a MH after 50 years of experience is not a question of complexity. It is more of a dollars and cents. Of course, integrity, for some people has a higher value. IMO, the name newmar and quality is often confused with the original Mahlon Newmar. Now, one can argue, newmar is much better than any other. This is no excuse, for what it can and should be.

Now then to the last point and the finance issue. This take over thing is an absolute crap. For every one, except the finance (bank) people. From the 80s take overs, acquisitions, mergers, buyouts, and all thru the 90's shipping jobs overseas and becoming a finance economy is an absolute crap. Again, No disrespect to anyone, I understand nowadays finance is the way of making money, unlike yesteryear's of creating/building functional and worthwhile products. Though, the returns may have been smaller than the finance economy for the investors class. However, the production economy benefited a much larger segment of the socity. If you have any doubts, just look at the $30T debt, which is on all of us. Just the household/consumer debt went UP by $1T over the last 2 yrs. Some finance economy!!!!!. And last, for those who understand the ever increasing debt issue and the dollar reserve currency, even that era is approaching its natural dead end.

 

[flyboy013]

Every company, regardless of size, knows that quality and reputation lead directly to sales and sales lead to profit. Remember, profit is not a 4 letter word. In some cases, a smaller company has overhead that can go away when a takeover happens. Departments like Accounting, HR, Purchasing, Trucking (shipping) and many others can be done more efficiently on larger scale.

I agree that reputation is very important for future sales / growth. And you are right, profit is not a bad word. Businesses exist to make money. I built a small company (50 employees) and after 12 years sold it to a much larger company. While the departments you mentioned did get rolled up under the larger company, we still had the same people in our "subsidiary" performing these function, but now they had to interact with the larger company's system which added much more bureaucracy. The overhead and G&A rates of the larger company were MUCH higher than what we had before being purchased.

I haven't kept up with the increased prices for Newmar coaches. While I understand that COVID, supply chain issues, and inflation have had their impacts, I also think the added bureaucracy has added to the price increases.

 

[J&JD]

When all is said & done, Newmar and most others sell everything they can produce. Go figure.

 

[AbdRahim]

To put it simply, the motivation of the large company is generally increased profit. So, they can increase profit by buying a company, already generating a high profit, increase the price of each unit produced by the acquisition, or reduce the cost of building each unit. They could also simply sell more units. Unfortunately, of these scenarios, increase profit to the company at the expense of the customer. Add to this a market where demand is greater than supply and you have the perfect storm for the customer getting lower quality and poorer service. Let’s hope there is enough integrity at Newmar to produce a better product than WG and prove by outselling and out servicing them, that they will be allowed uphold the Newmar reputation for quality and service - even improve upon it.

 

[Old Bubblehead]

I had a recent chat with Brett D about what his numbers were showing, and Newmar quality has improved over the last year. I believe what your postulate and also some of the steps taken once they were shown independent performance data are contributing. As data becomes more transparent around warranty claims and resolution performance, things could get even more interesting.