ELKHART — Two of the industry’s largest manufacturers, Winnebago Industries and Thor Industries, announced plans Monday to temporarily suspend RV production to help prevent the spread of coronavirus.
“As the coronavirus pandemic continues to evolve, Thor remains focused on the safety of its employees, their families, and all of the communities in which we operate. The concern for the safety of our people is always paramount, but the situation of today is unique and calls for action,” said Bob Martin, president and CEO of Thor Industries.
Thor is the largest employer in Elkhart County. Its subsidiaries include Keystone RV and Jayco.
About 32,000 people in Elkhart County work in the industry, according to the RV Industry Association. That includes those in manufacturing, sales, service, campgrounds and travel.
Thor announced the temporary suspension of all of its production in North America after several state governments, including Indiana and Ohio, where Thor has a substantial number of production facilities, declared statewide emergencies requiring residents to stay at home except for limited circumstances.
Additionally, a substantial portion of the production in Europe is temporarily suspended, Martin said.
“While circumstances have obviously changed, and we could not have anticipated current conditions and the impact on the RV industry and our Company, our variable cost model and the flexibility it provides to reduce, or ramp up, production quickly as market conditions change are a key benefit to Thor as we, our employees, dealers and customers all adapt to the new challenges the pandemic is creating. We will continue to monitor the COVID-19 situation closely, including the work of the CDC, World Health Organization, and other government agencies, and will update our actions and policies as appropriate,” Martin said.
He pointed out that 2020 had started strongly for the RV industry, and he remains optimistic.
“We believe the long-term RV market will be robust once again, and when that time comes, we will take advantage of our flexible business model to quickly resume production to meet dealer orders. As we look to the future, when we are past the coronavirus pandemic, we remain optimistic about the long-term outlook for both Thor and the RV industry,” Martin said.
The shutdown for Thor and its subsidiaries was scheduled to begin at the close of business Monday and last at least two weeks.
Thor did not say whether employees will receive pay or be covered by benefits during the shutdown.
Winnebago said most production activities at the company’s Winnebago, Grand Design RV, Newmar and Chris-Craft facilities would be suspended.
Winnebago made the announcement before Indiana Gov. Eric Holcomb announced the stay-at-home order, which will take effect on Wednesday. The order does not allow Hoosiers to go to work unless they are employed by an “essential business.”
Each of Winnebago’s subsidiaries will suspend production starting this week. Based on existing conditions, the manufacturing suspension is anticipated to last through April 12, the company said.
Suspending manufacturing is supposed to lower the probability of coronavirus exposure to employees and adjust future production output relative to a fast-changing demand landscape for the company’s products.
Winnebago Industries and its subsidiaries will remain open and perform essential activities for its dealers and end customers, including remote retail support for dealers, along with technical care, warranty administration and parts fulfillment, a press release said.
“As this global situation continues to rapidly evolve, our top priority is the health and well-being of our employees, business partners, customers and communities,” Winnebago Industries president and CEO Michael Happe said. “We are also seeing demand for our products shift dramatically as the nation takes appropriate action to curb the spread of the coronavirus. This decision is not an easy one, but we are confident it is in the best interests of all our stakeholders. During this time, we will remain flexible with operations that can provide products related to the support of mobile health care, command centers and other logistical needs that local, state and federal resources may require during this crisis.”
To support employees and their families affected by the temporary production suspension, the company is providing base pay and benefits for the first two weeks.
“As we take precautionary measures in the best interest of both our employees’ health and our long-term business prospects, we remain confident in the strength of our balance sheet and in our cash position to allow us to provide the appropriate pay and benefits to our employees and weather a period of business interruption from this health crisis,” Happe said.
Reece would not say whether the base pay and benefits could be extended if the temporary shutdown lasts longer than two weeks.
On Friday, Winnebago said it had taken some steps, like suspending factory tours and implementing social distancing, to prevent the spread of coronavirus. At that point, no RV companies suggested that they would disrupt manufacturing over the virus.
Winnebago has about 3,200 employees in the county.
RV Industry Association spokesperson Monika Geraci said keeping production going is crucial both to employees and to the public sector, to which the industry is donating RVs that can be used for handling the pandemic.
“It is important that the businesses are able to stay open, which obviously keeps people employed in Elkhart in particular,” Geraci said.
Geraci and the RVIA made the same point on Monday.
The list of essential businesses that can stay open does include some manufacturing, but only for critical products and industries. The RVIA said on Monday that it is working with policymakers to recognize how imperative it is that RV businesses are classified as essential, allowing the industry to stay open.
Especially dealerships and campgrounds are essential, the RVIA argued, because they play a role in the fight against COVID-19.
“RVs are uniquely able to be used as mobile staging units, testing facilities, command centers, sleeping units, mobile medical clinics, bathroom trailers, laundry facilities, and more. RV dealerships must be able to perform critical maintenance and repairs for consumers who are currently RVing and provide liquified petroleum gas refills for heat and refrigeration. Moreover, there are RV mobile medical clinics already on the road now that may need service,” the RVIA said.
Additionally, RV parks and campgrounds play a vital role in providing temporary housing and support for essential workers, including traveling medical personnel on the front lines of this pandemic. RV parks and campgrounds are also providing life-essential products and services, including food, water, propane, electrical, and laundry to those on the front lines and other essential businesses, the RVIA argued.