Hoodoo
2010-01-24 03:29:01 UTC
RV maker Glendale falls prey to high gasoline prices, loonie
GREG KEENAN
AUTO INDUSTRY REPORTER
Globe and Mail
Thursday, Jan. 21, 2010 3:22AM EST
http://www.theglobeandmail.com/report-on-business/rv-maker-glendale-falls-prey-to-high-gasoline-prices-loonie/article1437219/
High gas prices and the soaring Canadian dollar have wiped out Glendale
International Corp., a manufacturer of recreational vehicles and
trailers that has filed for bankruptcy.
Glendale, which makes Travelaire Canada trailers and other structures
for oil patch customers in Red Deer, Alta., and Glendale RVs at a plant
in Strathroy, Ont., filed voluntarily for bankruptcy yesterday - just
three months after saying it thought the worst was over for the battered
RV sector.
"Over the past few months, the corporation has undertaken an extensive
review as well as engaged outside consultants to assist in reviewing all
available options and strategies which it could pursue to rebuild the
recreational vehicle division, its primary business," chief executive
officer Ed Hanna said in a statement.
But the recreational vehicle business and the energy sector do not
appear to be close to a "significant rebound" in the near term, Mr.
Hanna said.
Officials of the International Association of Machinists and Aerospace
Workers in Strathroy and the United Steelworkers of America, which
represents workers in Red Deer, were still seeking information from the
company yesterday. There are about 100 workers at the Strathroy plant
and about 60 in Red Deer.
"It's a bit of a shock," said Martin Milhomens, president of local 2373
of the IAMAW.
The Strathroy plant has been shut down since Nov. 13, Mr. Milhomens
said. Until that time, workers were assembling two RVs a day in a
one-shift operation.
Nick Stewart, president of local 1-207 of the USW noted that financial
results from Glendale indicated the company had plenty of working
capital and cash on hand.
The most recent financial statements, for the three months ended Aug.
28, 2009, showed the company was debt-free.
It had working capital of $11.5-million, including $2.4-million in cash.
"The decline in the RV industry appears to have levelled off," Mr. Hanna
said in a news release accompanying those financial results.
Mr. Milhomens said his union local provided the company with $3.69 worth
of wage and benefit cuts during contract negotiations last fall. A cut
of about $3 an hour cut wages to about $16 an hour, he said.
Eleonore Hamm, president of the Recreation Vehicle Dealers Association
of Canada, which represents RV dealers, also said the market appeared to
be turning the corner after a slump that coincided with the credit
crisis in the second half of 2008.
"Dealers had quite a bit of inventory on their lots last year," Ms. Hamm
said. "They spent a lot of time clearing out their inventory, which
meant manufacturing was hit harder because the product was not being
ordered from the manufacturers."
That echoed comments by Winnebago Industries Inc., of Forest City, Iowa,
one of the largest U.S. motor home manufacturers, which said in its
first-quarter 2010 results in November that the worst was over and that
its order backlog had soared by 350 per cent from the first quarter of
fiscal 2009.
GREG KEENAN
AUTO INDUSTRY REPORTER
Globe and Mail
Thursday, Jan. 21, 2010 3:22AM EST
http://www.theglobeandmail.com/report-on-business/rv-maker-glendale-falls-prey-to-high-gasoline-prices-loonie/article1437219/
High gas prices and the soaring Canadian dollar have wiped out Glendale
International Corp., a manufacturer of recreational vehicles and
trailers that has filed for bankruptcy.
Glendale, which makes Travelaire Canada trailers and other structures
for oil patch customers in Red Deer, Alta., and Glendale RVs at a plant
in Strathroy, Ont., filed voluntarily for bankruptcy yesterday - just
three months after saying it thought the worst was over for the battered
RV sector.
"Over the past few months, the corporation has undertaken an extensive
review as well as engaged outside consultants to assist in reviewing all
available options and strategies which it could pursue to rebuild the
recreational vehicle division, its primary business," chief executive
officer Ed Hanna said in a statement.
But the recreational vehicle business and the energy sector do not
appear to be close to a "significant rebound" in the near term, Mr.
Hanna said.
Officials of the International Association of Machinists and Aerospace
Workers in Strathroy and the United Steelworkers of America, which
represents workers in Red Deer, were still seeking information from the
company yesterday. There are about 100 workers at the Strathroy plant
and about 60 in Red Deer.
"It's a bit of a shock," said Martin Milhomens, president of local 2373
of the IAMAW.
The Strathroy plant has been shut down since Nov. 13, Mr. Milhomens
said. Until that time, workers were assembling two RVs a day in a
one-shift operation.
Nick Stewart, president of local 1-207 of the USW noted that financial
results from Glendale indicated the company had plenty of working
capital and cash on hand.
The most recent financial statements, for the three months ended Aug.
28, 2009, showed the company was debt-free.
It had working capital of $11.5-million, including $2.4-million in cash.
"The decline in the RV industry appears to have levelled off," Mr. Hanna
said in a news release accompanying those financial results.
Mr. Milhomens said his union local provided the company with $3.69 worth
of wage and benefit cuts during contract negotiations last fall. A cut
of about $3 an hour cut wages to about $16 an hour, he said.
Eleonore Hamm, president of the Recreation Vehicle Dealers Association
of Canada, which represents RV dealers, also said the market appeared to
be turning the corner after a slump that coincided with the credit
crisis in the second half of 2008.
"Dealers had quite a bit of inventory on their lots last year," Ms. Hamm
said. "They spent a lot of time clearing out their inventory, which
meant manufacturing was hit harder because the product was not being
ordered from the manufacturers."
That echoed comments by Winnebago Industries Inc., of Forest City, Iowa,
one of the largest U.S. motor home manufacturers, which said in its
first-quarter 2010 results in November that the worst was over and that
its order backlog had soared by 350 per cent from the first quarter of
fiscal 2009.
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