Excel Update from Bryan

[ExcelRVGuy]

I received an email asking me to post an update about our current position in the industry. As we all know, the RV industry is being hit hard right now by the energy crunch, the pre-election uncertainty, and the home lending crisis. Certified RV Industry financial analyst, Craig Kennison, describes the current conditions for the industry as "Brutal!"

In the past year we have lost important manufacturers such as King of the Road, Travel Supreme, Weekend Warrior, Western RV (Alpenlite), National RV, and others. Many dealers have shuttered the doors, as well as a multitude of industry suppliers.

Virtually every business associated with recreational vehicles, as well as the boating industry, has been forced to pull in their horns and move into a defensive mode. The motorized sector has been hit especially hard. Monaco just laid off 1,400 employees. Country Coach cut all executive salaries as well as laid off production employees, and Winnebago closed their Charles City, IA plant, laying off over 250 employees.

Of course, Peterson Industries is not immune to the current climate. We have been forced to make many unpleasant decisions since the beginning of the year. I do feel that we've done a good job of keeping our ear to the ground and reading the signs. We saw signs of a softening market beginning last August. Our National Dealer Show didn't produce the "normal" order backlog. Then in November, the National RV Dealer Show in Louisville, KY confirmed our observation that the dealers were beginning to tighten their belts.

We began 2009 with a workforce of approximately 130. In February, we still had quite an order backlog, but we decided it was time to implement our business defense plan. We cut employee hours from a 45 hour work week to 40 hours, as well as did a small amount of "house cleaning". We also began cutting our workforce through attrition, i.e. when an employee would quit, we didn't re-fill their position.

With a light order backlog, another defensive step we took was to move our annual plant vacation ahead about a month, into June. This was done in order to let sales catch up with production a bit. Since even in a good year, June, July, and the first 1/2 of August are typically our slowest months, we knew that continuing with our current workforce of around 115 employees was an unlikely option.

Upon return from vacation, we decided that the best thing for the fiscal health of Peterson Industries was to get our workforce "right-sized" for the amount of volume that we feel we will see for the next 12 months. Rather than pick fruit from the tree, and pick fruit from the tree, until eventually, the tree dies, we knew it was best to calculate the size of workforce we will need and get there as soon as possible. On July 10, we laid off 40 employees, leaving us with approximately 75. This should be as deep as we have to cut and the remaining 75 employees are still working 40 hour weeks.

NOW FOR THE GOOD NEWS!

We feel these measures, along with numerous "behind the scenes" initiatives are positioning us to take advantage of the unfortunate demise of many of our competitors.

Oil prices are coming down. The phones have begun ringing again, and our family memebers are beginning to stir around, thinking about making their fall purchases before heading south. For most of our family members, your - living "month to month" years - are well behind you. Enjoying the harvest of your many years of hard work is far more exciting than sitting around worrying about the economy. Last I looked, the sky is not falling. And, we have some pretty good incentives going on to buy sooner rather than later.

I do belive there are way too many RV manufacturers and dealers for the size of our industry. What we are seeing going on is a fairly normal 15 - 20 year cycle of "business purge" that NEEDS to take place.

So, keep in mind that any time there is negativity in the air, the rumors will begin to circulate. I am glad I was asked to address this issue on the Excel forum. I've been kind of busy lately and sometimes, because I know what's going on and have plenty of confidence about things, I forget that some of you may be sitting there wondering.

Peterson Industries has been in business for well over 40 years and has been through several of these downturns. We are financially healthy. Also, even though we cut staff in every department in the organization, we DID NOT cut a single person from customer service. We left our Customer Service Department untouched. I hope that shows our commitment to providing our family members with the support you need.

You can rest assured that Vaughn Peterson has spent his entire career positioning this company to withstand these kinds of downturns that inevitably happen. And maybe, just maybe, some of his wisdom has rubbed off on the rest of us around here.

We look forward to seeing everyone at the Excel Family Reunion, May 27 through 31, 2009. FULL SPEED AHEAD!

Thanks,

Bryan Tillett
President

[LarryGodby]

Bryan,

Thank you so much for the update. That is why Peterson Industries is heads above the competition.

I still work in corporate America and I have seen it to many times when layoffs are coming, upper level management is not to be found and will hardly mention it later that it did occur.

I know it must have been very hard for you to do that and I know you will feel like part of your family is missing. Rich DeVos wrote a book years ago called Compassionate Capitalism and I think you exhibit its meaning.

You, the employees and former employees are in our thoughts and prayers.

Let us dig in and make 2008 a great year for RVing.

[redwing1]

Bryan, I am very pleased that you chose to post the company's position on this public forum. As Excel owners I feel we all have a vested interest in the health of Peterson Ind. and this is a very good way to keep everyone informed. I feel each of us out here are ambassadors for the Excel, why else would we spend countless hours washing, polishing, maintaining showing off and generally giving a Excel sales pitch to anyone who is willing to listen! No company can afford to hire a remote sales force as effective as our Excel family!

Keep up the good work.

[ChiefJohn]

I not going to try and match the eloquence of Sir. Godby -- I echo his comments and also appreciate your taking the time to share (on a public forum) the status of PI. Although PI is privately vested, we (Excel owners) think of ourselves as 'shareholders'. Members of an extended family -- I guess that makes Vaughan the patriarch of our clan

[rockintom]

Bryan,

What Sir Larry Godby said! Thanks for sharing, as I think that is stand up, my friend.

All the best, hang in there and we'll see you at the family reunion! Don't forget you owe me lunch!

[LarryGodby]

OMG Bryan is going to have to get a gallon of that STUFF for you.

I don't know about this Sir stuff the only one I know is SirKnowItAll

[Still Working "NOT"]

Thanks Bryan for the update.

I know that anytime you can have some of the employees leave through attrition or on their own it is much better for employee moral. As for cutting hours, another smart move. It is much better to keep working with a few less hours then to loose a job.

I went through all of the cut back of employees with at&t 2001 through 2005. As a Local Union President I was called every name in the book by those effected and I was not the employer. My job was to help them fine a job somewhere within the company, even if it meant a cut in the hourly wage. This was not a pleasent time in my life.

I do feel for those that PI had to let go since times are getting tougher for all of us. My thoughts and prayers are with them. Sometimes this bad situation is a blessing in disguise. Hopefully it will be for all involved.

[HB Phil]

Thank you for telling it like it is. I feel very sorry for the employees that lost thier jobs. I've never been to place with more friendly folks than the people of the Smith Center area. Consequently, it's a shame to hear such nice folks are suffering the loss of their jobs.

I am a very satisfied Excel customer. The solid, high quality of Excels rigs, the great responsiveness of Excel Service, plus, Management's care and involvement with customers, generally striving for excellence in every area, demonstrate to me the strong fundamental integrity of Excel/Peterson Industries as a whole.

I believe this integrity is Excel's main strength. People will always desire, and pay for, top quality. As long as Excel continues to deliver top quality, I believe Excel will always have that customer base of folks seeking the very best.

My prayers will be with those who have suffered the loss of their jobs that they can move on and get back to work quickly.

[Workshop]

Bryan thanks for sharing your thoughts with us. Can't say I can add to what has already been said and the feelings that were expressed toward Peterson Industries, its employees and the community at large. As an Excel owner and ˜Family' member we can only pray and hope for the best outcome for everyone involved.

Being in the housing industry, on the small build and repair side, the industry has been dealing with downsizing and the housing market for some time. Some business has closed their doors and others are doing well. But things have changed and always evolving and sometimes not all for the bad.

Best of luck to all at SC!

Chris

[MonacoMama]

Quote:

Originally posted by ExcelRVGuy: Hello folks. Many of you have emailed me asking you to let you know how things are going at Peterson Industries. As you probably already know, things are quite slow. To cliche a phrase from radio... The hits just keep comin! · First we had the high fuel prices · Then we had tightening credit · Stock market volatility has been an issue · Then the election came along · We are facing wholesale financing issues between dealers and financial companies. · Now the holiday season is upon us Peterson Industries had a nice surge of retail business in October and early November. Now things are quieting down again. We feel that the remainder of November, December, and the first ½ of January will be unusually slow, then we’ll see a gradual increase in orders resulting from our spring shows. Beginning tomorrow, we will be having a 3 week staggered production shut-down. The frame plant will be the first to stop, and as the coach they finish progresses through the assembly process, other departments will follow. Then in three weeks, the frame plant employees will be the first to come back, etc. The service center will share in the hiatus but will stagger their employees. Jack is in charge of making sure our customers are not affected. By closing for three weeks, this will allow us to show at the National RVIA trade show in Louisville, KY, December 2 - 4. This year’s show will prove to be quite unique. We have already lost 6 DIRECT competitors as well as many who do not compete directly with us except by tying up our dealer’s floorplan monies, thus keeping them from stocking more of our product. In the past year, manufacturers such as Alpha, Western Rec (Alpenlite), King of the Road, Travel Supreme, Teton, and Weekend Warrior have all went out of business. Now NuWa recently confirmed they are discontinuing production and are adopting a “wait-and-see” attitude as to whether they will resume again at some point in the future. All reports say that the Louisville show will be “make it or break it” for many more manufacturers and suppliers alike. Our theme for this year’s show is “Still Standing Tall After 43 Years!” We want dealers to know that Peterson Industries has prepared ourselves to weather storms like this. Of course, we’re feeling the effects of the consumers keeping your wallets in your pockets, but the message we are sending to dealers and consumers is that WE PLAN ON BEING HERE! I believe that we are positioned in the best segment of the market possible. Many of you have done quite well throughout your lives and are interested in enjoying the fruits of your labor by having fun with your spouse. You don’t mind spending money to fulfill those lifelong promises you made to each other but you want to be sure you’re getting the most value for your money. As I’ve stated many times, that is our commitment to you.... To give you the BEST value for your investment. We can’t promise to always do everything right and to build a perfect coach, but we do promise to always do the right things and strive for that perfect coach. When we fall short, we stand behind you. It appears that with the elections over, the fuel prices coming down, and the credit markets beginning to stabilize, things aren’t as bad as we sometimes build up in our minds. Perhaps now would be a good time to go purchase that new Excel and start building some memories. Thanks for caring Bryan, Vaughn, Curtis, and all of us at Excel

moved to Feature Topic

[Money Bags]

Bryan, We haven’t heard from you in awhile, how about an update on PI and the reunion too!

[MonacoMama]

It looks like Bryan is busy with PI (and we are all glad he is )but this seems to be a dead thread so I am "unsticking" it...
MonacoMama

[ExcelRVGuy]

Quick Update: We are currently employeeing 70 of the best workers we have ever had at Peterson Industries. Our fit and finish, design, floorplans, and employee cooperation all seem to be at an all time high.

We are currently building 3 units per week, trying to get to 4 per week. Our current order backlog takes into mid December. YEAY!!!!!!

[ageynkagey]

Bryan
Being a new owner of an Excel, I am pleased to see the positive action taken in order to right-size, and keep the company in good shape. The news that there are orders in the books to take you in to December certainly justifies the actions taken, and - -speaks highly of the quality of the coaches Peterson manufactures.
We will be there on Oct 5 for some warranty work and look forward to possibly meeting some of the people 'behind the scenes'.
Regards,
Alex Garvin