Bob Lee buys Western Recreation

[Stretch]

Like a lot of you, I have suspected something was amiss at WRV for some time. Sounds like they really ran out of cash and are/were close to BK. WRV is certainly not alone. The price of fuel has really hurt most of the RV industry.
Not seeing anything significantly new and different come out of WRV for a while should have been a real tip off to all of us of their lack of R&D funds. A 41 and 45 ft tag axle chassis for a really high end coach has been long over due.
I too feel Mr. Lee should move the company in the right direction. Lets hope Monomoy puts lots of cash into the business to insure his success.
My guess is that Ron Doyle wont be around longer than it takes Lee and Fish to figure out how the company works. Ron will be viewed by Monomoy as who was at the helm when WRV failed.
Lots to talk about at Quartzsite!!

[Dale777]

Another news article:
The Register-Guard, Eugene, OR

2006 Alpine Coach 36FDTS

[gjstacy]

Thank you to everybody that has posted the press release and press articles so that we all have the real story rather than continued rumors...including Danny in the separate thread.

[Jim&MaryJo]

Thanks again Dale!

That article offered more insight; that even Country Coach with its brand/quality strength, has not sustained consistent financial performance.

The following Reuters analysts report offers their view of the industry, indicating innovation (efficient Class Cs and motorcycle/ATV designs) are contributing to the few rising big RV player stocks.

I gotta wonder how volatile the "RV moto-market" is, since in my view the buyers are the under-50 crowd (at least ATVs & dirtbikes), potentially harder hit by economic down-turns related to the housing industry. Weekend Warrior's recent purchase of NAtional's facility in Perris, CA may prove to be presumptuous. My recent visits to a large motorsports repo auction operation have seen more activity, perhaps a leading indicator.

http://yahoo.reuters.com/news/articlehybrid.aspx?storyI...ype=comktNews&rpc=44

National's latest quarterly report does not isolate Country Coach's performance, but does reveal their "go big" 2007 strategy (16 $1M coaches and other model upgrades).

http://www.nrvh.com/ir/press/display.cfm?item_id=929638

I gotta wonder whether this was supported by Bob Lee. The R&D for 16 $1M coaches in a ~$400M company seems to present questionable potential, especially compared with other big players, who seem to do better with innovation and volume with lower priced units.

SO what's a RV maker to do? Go big? Go dirt? Go cheap? Go fuel efficient? Chase model innovation? Changing course is risky and the allure of remote potential can blind the value of existing distinctions.

I submit that we Alpine owners love our coaches for existing distinctions (and many despise the attendant deficiencies).

Three areas of distinctions/deficiencies come to mind, each with potential to build upon or fix:

-the chassis is exceptional; it is simple, cheaper to build than comparable contenders (CC semi-monocoque/IFS), provides comparable ride and superior handling, IMHO. This is a distinction and advantage.

-the dealer network sucks and factory dealer support and build/integration quality are direct contributors to these problems. Discounts and de-valuation are indirect consequences, among other negative outcomes.

-feature innovation (e.g. multiplexing, silverleaf, AV, Hydo-hot, etc, etc,) has very mixed results. We want great features, but we want them delivered tested and functional as the "bullet-proof" strategy employed with the chassis. Introducing new problems with new features is hard to avoid (especially with increasingly "hi-tech" features), but with focus and improvement, the benefits to the Alpine's reputation and dealer/customer satisfaction are hard to dispute. It's not enough to choose the best/latest hi-tech components, they must be integrated with acumen.

Let the other guys chase model innovations and fickle markets. The course to chart for Alpine is its own backyard.

IMHO and forgive me for being so outspoken.

[lundy]

Jim, I think you are right on. Bob Lee has a known reputation in the RV field but how much control will he have in turning the business around. Most investment groups have a goal of receiving a return on investment. They may not have the incentive of investing in research and developement. Are they in there for the long haul? I would have been more comfortable with a merger with someone in the industry. Hopefully they will communicate with owners, their intentions to improve both the product and service.

[Jim&MaryJo]

Thanks Lundy,

I share your sentiment.

Bob Lee's appointment as Chairman places him in a role traditionally focused on more strategic issues (like further acquistions Von Burg alluded); the CEO handles day-to-day operations.

But a Chairman can strangle operations with a short budget.

And Monomoy as majority shareholders effectively control the Chairman through voting power. Monomoy's with its own corporate structure and investors may be the final controlling factor.

While it may be transitory, I hope Ron Doyle stays and with Bob Lee, a formidable team arises to balance the interests between WRV and Monomoy. And, like you, I hope those interests are long term. An "industry insider buyer" would have made that more likely.

The recent press releases and Monomoy's "character" alludes to a fallowing industry consolidation strategy. This is starting to sound like the history of Matt Perlot and Safari...

[VAGABONDMAN]

Hi Jim,

I noticed the BMW Roundel on your steering wheel and just wanted to say I wholeheartedly approve. I have always said my rig drives like my BMW ( used to own a 2001 DINAN 5), so maybe we should have some Roundels placed in more strategic locations.

[Wingding]

Ok,
after taking this all in for the last three days, this is how I see it....

Obviously, WRV was in financial trouble.

The group buying WRV is interested in profit.

This is their one and only interest.

There is no "passion" involved in profit.

Groups/Partners such as this are geared for quick profitable turnaround's ultimately ending in the sale of the company.
Now "Quick" in the corporate world is time undefined....anotherwords, anyone's guess..

Personally, I am quite alarmed and do not see this as a good thing....
But I begrugingly prefer it to a ultimate collapse into financial disaster by WRV.

Monomoy is NOT looking long term...A windfall profit sellout to "whoever" will occur sooner or later in the hopes of MCP...

It does not matter who. This is not a private company with passionate owners with their personal name attached to it...
This is basically about 4 incredibly rich people that look at companies like WRV - Hess- Awrey- ect-ect as pawns in a chess game.The ultimate goal is to promote them to higher value and cash in.
Neither of these 4 could care less what happens after the sale.... Only before....

I am sorry to sound a bite pessimistic. But it really is no secret what Private equity groups or "partners" are all about.

Basically, we are entering a perilous journey and really have no idea where and when and by whom will eventually buy this company off the hands of MCP.....

I for one, cannot look at this as a good thing. R and D... I don't think so....Minimal at best...

Only time will tell and I hope you all will be able to say I was full of ______. For I will be the happier for it!

[Jim&MaryJo]

Hi Frank,

that was my personal and presumptuous embellishment of what I perceive to be an Alpine distinction.

Glad you approve.

[Jim&MaryJo]

Good points Wingding; a "reality check" in the face of wishful thinking is prudent.

However, while Monomoy lacks passion for WRV's endeavor, they certainly value passion inspired by the WRV management and instilled in the people of WRV, which contributes to --as you say -- "in the ultimate goal to promote them to higher value". I don't expect passion from Monomoy. It need only reside in WRV.

This could have several outcomes, some negative; but what Monomoy seeks could be very consistent with what's good for WRV.

I admit I'm optimistic, but I am more focused on WRV as a corporate entity, than Monomoy as a shareholder. They may well sell off and if so, I hope they make a profit, because it may mean that WRV used their money to become a better and more valuable company.

I've been thinking about another scenario that interests me more than Monomoy. They've made statements concerning further acquisitions, Country Coach is an obvious target.

Bob Lee's pursuit of and penchant for Country Coach ("CC") could be bad for WRV. His passion for CC could negatively influence what's best for WRV. Yes, of course, he's a seasoned business person. But, he started CC with 2 people and admirably grew it. Business and emotion can fall into conflict.

One perspective is that the Alpine's market is shrinking and it's on a direct course to compete with CC. I think Alpine can do it by providing greater value, along with other improvements.

But, in this scenario, what will Bob Lee do? If CC were acquired, would he favor CC? If CC were not acquired, would he have the passion to compete against them?

[EngineerMike]

"Equity" firms, sometimes called "vulture capital," are like Venture Capital firms. They start a fund, collect investable money that is locked up for usually not less than 3 and not more than 5 years, after which investments are "unwound," i.e. sold off. Its sort of like A.D.D. of the rich. Nobody is in it for the long haul. However, some capitalists are in it for the game, which includes building something real. Making a fun company is the central theme in Silicon Valley, because a) we're all really just kids at heart, and b) SV has figured out that if it isn't fun, the really smart kids will play elsewhere and that's where the money will be made. Question today is whether MMY is composed of capitalists seeking fun of the game, or just some schmucks looking to rearrange a few deck chairs to their advantage.
With that said, nothing is good for business if it isn't chartably good for customers. Some things could be good financially for WRV's balance sheet and neutral for customers; perhaps selling off & leasing back wholly owned real estate? We may see some stuff of that flavor.
The real canaries in this coal mine, IMO, will be guys like Mike Glazier who know the product, know the customer, and whole heartedly want to do a splendid job. Therein resides the institutional knowledge, and the guts of the operation. If those guys & gals fly the coop, then customers are screwed. Employees seem to be the fall guys in most of these equity squeezings, sad to say.
Unfortunately for the time being, all the happy, romantic talk means zip (not unlike the similarly romantic spewings of our recently realigned congress), and the real deal will be revealed over time.

[Stretch]

Engineer mike:

I couldn't have said it better if I Had full use of a Funk & Wagnall. Only time will tell. Hope to meet you at Quartzsite.

[gjstacy]

Hi All,

Just wanted to let you all know about some conversations I had this morning. As many of you know and the rest of you can tell by our signature line below, John & I have a 2007 on order that got caught up in all of this hooplah. While I feel pretty confident that things will be in good shape by this time next year, I was feeling concerned about the near term and the quality of the people that would be building our coach when production was moving forward again.

So, I had two conversations this morning...one with Ron Doyle and a second with Burk Morgan. Here is the gist of our conversations:

1. The plant was never completely closed, as wrongly reported by the Yakima Herald. Some workers were laid off, but many were kept and reassigned to other jobs but for shortened 18 hour weeks in an open plant with a slower production line.

2. The state of Washington provides a benefit that pays workers for the difference between an 18 hour work week and a 40 hour work week, giving these people full pay. This allowed WRV to retain most of its best people.

3. Those that were laid off have now been recalled, and WRV is confident that all of their valuable and skilled workers are ready to tackle the production line when it is again fully operational in a few more days.

4. They have already hired a few new people to staff the customer service area, and are looking for more qualified servicing people. Their goal is to have customer service personel fully trained and operational within 75 days, with a service center that will make us all happy.

5. Because of Bob Lee's involvement (and since he is an investor in Monomoy), they believe that there will be R&D dollars allotted to pursue innovations to the product line.

6. Watch for a follow-up press conference of sorts with Ron Doyle talking more about what has happened in the last month.

Ron and Burk both gave me their personal assurances that we will have a quality coach when we go pick it up at the end of February. By the way, this is being posted with their knowledge and concurrence. I will keep you all posted.

The result of all of this is that John and I intend to continue to be big supporters of WRV and Alpine Coach until it is proven to us that they no longer deserve our loyalty.

[MacandSandy]

Anyone heard any more about the deal.