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Fleetwood dumps California RV operations
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American Industrial Partners, a private equity firm, looks set to snap up Riverside based Fleetwood Enterprises Inc’s RV Division for a paltry $53 million. Fleetwood filed for Chapter 11 protection on March 10th 2009 due, in large part, to the losses incurred by its Travel Trailer unit; $65.3 million in 2007 and $16.8 million in 2008. The trailer division had already been restructured prior to the filing, but worsening market conditions and the credit crunch proved to be an insurmountable hurdle to recovery. AIP’s bid includes all of Fleetwood’s material and intellectual property assets in Decatur, Indiana. The motorhome manufacturing plants in Riverside, California and Pennsylvania will not remain open.Fleetwood discontinued production of its Mallard, Pioneer, Terry and Wilderness trailers when it shuttered its travel trailer plant on March 9th. On May 28th it sold its military housing operations to CMH Manufacturing (a division of Clayton Homes), part of the Berkshire Hathaway Group, for a consideration of $4.5 million. The only other remaining Fleetwood business is the manufactured housing unit, for which a buyer has not yet been found. Interestingly, Forest River Inc., another unit of Berkshire Hathaway, purchased Coachmen Industries Inc’s RV Division in 2008.
Fleetwood was founded in 1950 and currently employs 2,100 people in 14 plants. Its motorhome brands include American, Discover, Southwind and Tioga. AIP’s bid for Fleetwood will be reduced if it assumes the warranty obligations on Fleetwood’s motorhomes. The bankruptcy court is expected to sign off on the deal on June 24th at which point existing owners will find out if their warranty is worth the paper it’s written on. The current disarray in the RV market gives a huge competitive advantage to Thor Industries Inc whose balance sheet is the strongest of the remaining major RV manufacturers. Thor’s brands include, Airstream, Dutchmen, Damon, Mandalay and Fourwinds.
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