Posted on 07/04/2018 12:37:25 AM PDT by 2ndDivisionVet
COBURG — After surviving the Great Recession by downsizing from 400 employees to fewer than 100, Marathon Coach is firmly back in growth mode.
The Coburg-based luxury RV manufacturer plans to build at least 20 new RVs this year, nearly twice as many as it made four years ago and after a few years in the depths of the Great Recession when it built just three or four a year. Even 20 vehicles might seem a low volume. But given that these are ultra-luxury items that retail for up to $2 million apiece, each unit takes months to produce.
Marathon employs about 225 people today, 190 at its Coburg plant and 35 at its sales and service centers in Florida and Texas. And it is looking to boost production and hire 75 workers over the next year, from electricians and cabinet-makers to service technicians and office positions.
“Our business is without a doubt the strongest it has been since the recession,” said Steve Schoellhorn, president and owner of Marathon. “The RV market is strong from top to bottom. It’s been a steady increase.”
Privately held Marathon was always the smallest of Lane County’s “big three” RV makers, which, along with Junction City-based Country Coach and Coburg-based Monaco Coach, employed 4,600 Lane County residents in the mid-2000s, when RV sales nationwide were booming.
Battered by the recession and a staggering drop in demand for costly consumer goods such as RVs, the three companies together employed just 500 by 2013. Monaco and Country Coach had spiraled into bankruptcy. Monaco operations were sold or liquidated and moved to the Mid-West. Elements of the Country Coach business were eventually purchased by Winnebago, which set up RV production in the former Country Coach factory in Junction City.
Marathon, meanwhile, got lean and rode out some historically bad years for the industry: Nationwide sales of RVs fell 58 percent from 2006 to 2009, and stayed below pre-recession levels for seven years, according to data from the Recreational Vehicle Industry Association, which tracks industry trends.
Marathon saw pent-up demand building
But Schoellhorn said he saw pent-up demand in the market back in 2012. So after cutting his workforce and slashing production, Marathon began ramping up again.
Schoellhorn started hiring workers one or two dozen at a time, as he set goals to build 12 new coaches in 2014 and 18 in 2015.
Annual revenue at Marathon grew as well, from $27 million in 2012 to $50 million in 2015.
“We’ll be over $60 million this year,” Schoellhorn said.
The company’s fortunes mirror the industry’s revival. Sales of new RVs rose 77 percent from 2012 through last year, when they topped 500,000 units nationwide for the first time since the RV Industry Association began tracking data. The association’s 2018 forecast predicts another record year, in what RV Industry Association president calls “the longest period of sustained growth the RV industry has seen.”
Besides building 20 or more coaches this year, Schoellhorn projects Marathon will sell about 75 new and used coaches, from pre-owned “starter” RVs as cheap as $200,000, up to $2 million luxury models.
The high and low ends of the market have been equally strong in the last few years, he said. A rise in cheaper RVs’ popularity came as Schoellhorn said he noticed a shift in customers’ travel habits coming out the recession.
Customers buying $2 million coaches can also likely afford an overseas vacation. But more middle-class travelers are choosing domestic over international vacations, he said, making lower-end RVs a strong business.
“There are a lot of people coming in at all levels. Even millennials are buying lower-priced, entry units,” Schoellhorn said. “That’s really exciting. Those people are getting into the lifestyle and enjoying things to do while RVing.”
Despite record projections for the RV industry, Marathon’s goal to build 20 new RVs and reach $60 million in revenue this year is a far cry from its pre-recession peak, when it built 70 a year and brought in roughly $130 million.
Wary of expanding too fast
Schoellhorn said the Great Recession taught him the dangers of expanding too fast. Gas prices are now rising, which could temper some of the industry’s growth if they continue unchecked. Many Marathon vehicles get just seven or eight miles to the gallon — although for someone who can afford a $2 million RV, the cost of gas may not be a worry.
And the effect of escalating trade disputes with Canada could hit Marathon’s bottom line. The company’s RV chassis are made with Canadian steel, which are subject to President Donald Trump’s newly implemented 25-percent tariff on steel imported to the United States.
Schoellhorn said he doesn’t expect the tariffs will have a substantial impact on his business, since the chassis themselves are a manufactured product made of numerous pieces. The impact would be larger if he were importing raw steel, he said.
But it is one of several factors that have Schoellhorn wary of growing Marathon too briskly. He hopes to build 22 coaches next year and hit the 25 to 30 coach range after that.
“We’re fighting really hard to stay lean,” he said, “fighting not to have waste anywhere in our company. We leaned down when we had to, didn’t have a choice. We learned those lessons and now we’re trying to hold onto those concepts and getting back to what makes us more profitable. We want grow, but we want to grow smart.”
Oregon is generally a Blue State. However, President Donald J. Trump is pushing policies that help ALL of us...in the long run, this is the kind of stuff that turns blue States Red.
$2 MILLION for a rolling house? Yikes! That takes some serious discretionary coin.
Decisions, decisions.
Good news continues to roll in. The area where I live is big in the RV business. If people have signs of life they can get hired. Benefits from day one. Competitive wages. Every business has a help-wanted sign out front. It’s like the flip side of the Recession. Amazing.
“$2 MILLION for a rolling house? Yikes! That takes some serious discretionary coin.”
Mrs. L and I have seen some RVs that surely came close. We met one guy who had a custom job with every bell and whistle you could think of. There was a 60inch flat screen TV on the outside of this bad boy, complete with a very high end sound system.
He rolled up, leveled the beast, and hit a couple of buttons, and out it came.
Attached to the back was a custom made trailer with matching paint scheme. Inside were 2 Harley Davidson bikes AND a quad, all with matching paint.
Nicest folks... we kept in touch with them for a while but never met up again.
L
I would term that rig Kidnapper Bait.
We bought a new truck camper with a new truck to go with it this year. According to the sales people at two dealers, the brand we bought, Wolf Creek, is being sold out before being built.
And to think this jackass obama just a few short years ago told the nation America will no longer be great (or whatever the words were). Clinton through obama got the nation spiraling towards Venezuela-land and Trump is reversing this. And the left is just livid over this while they are taking advantage of the economy to buy 2 million dollar campers.
“I would term that rig Kidnapper Bait.”
It was without doubt the most awesome RV we’d ever seen. All the woodwork was custom hurled walnut, very high end appliances, full sound system all over the place, satellite TV dish, the man even had a small but very pricey HAM rig in it.
Did I mention the portable hot tub? He ran a mid-sized trucking company in Alabama and sold it when he retired. Did REALLY well on that, as you can imagine.
It made our rented little Class C rig look like a ghetto parked next to them. But they were incredibly sweet folks. We had dinner together a couple of times and he and I shared a taste for good bourbon and cigars.
Soaking in a hot tub with a tumbler of Kentucky’s best with a good cigar while surrounded by a lovely rural RV Park is not a bad way to spend your time.
Best,
L
sounds wonderful!
I don't know where you are intending on taking that houseboat, but I know for sure that the only pirates I will meet in an RV are the ones running a speed trap.
You couldn’t find a starker contrast than the misery created by the wealth redistributing Communist Obama vs the free market Capitalist Trump with endless jobs now available. All in less than 18 months.
Obama — “Those jobs are gone. They aren’t coming back. What’s he [Trump] gonna do? Wave a magic wand? Huh?”
What an evil pessimistic schmuck he was. Had zero faith in American enterprise and ingenuity. Hated real growth and real progress. God, I STILL hate that man with every fiber in my body.
A neighbor of ours bought a huge travel trailer and a big diesel pickup to tow it for their two year journey around America. After a month, he found even the biggest diesel pickup truck was underpowered for that huge trailer, so he sold it and bought a big-rig tractor. Now he had all the power he needed!
I’d rather have.an expensive sailboat. Just wait until these folks fork out $110k only to find out it costs $120 to fill up every 300 miles.
I’d rather have.an expensive sailboat. Just wait until these folks fork out $110k only to find out it costs $120 to fill up every 300 miles.
Yeah, but if a really bad storm comes along, I can just pull over and not have to worry about sinking.
And try visiting Grand Tetons, Yellowstone, Grand Canyon, Glacier National Park, and Crater Lake in your ‘expensive sailboat.
Absolutely!
You can’t call a tow truck
Off the coast of San Diego!
Try visiting the Caribbean in an RV. It’s very beautiful down there in winter and very few boats. Nice quiet ride. The new maritime GPS radar makes it very safe and no noisy neighbors.
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