Saturday, Mar 07, 2015 at 19:45
There's nothing surer than the fact that the caravan market is going to go through a huge shakeout over the next couple of years.
Fleetwood will more than likely abandon caravan manufacture - or go over to having many major components pre-fabbed overseas and then assembled here.
The RV market is maturing, the number of caravans available (new and used) and the number of caravan manufacturers has never been so large - and it's unsustainable in the current markets - both RV and mining/exploration/business sales.
A mate who is a machinery inspector just came back from Hedland and
Karratha and he said every single yard in both towns is chock-a-block full of plant, equipment, machinery, vans, you name it.
It's all been stood down, there's very little new work on offer, and everything is for sale - if they can find buyers. The buyers are few and far between.
Middle nephew runs about 60 Cats, he reckons the mining and earthmoving business is tougher than it has been since the early 2000's.
Not only has the new work dried up, the companies now want everyone to work for nothing.
In the last few years, they rang up just desperately requesting machines. No argument about hourly or monthly hire rates, they just wanted to know if they could get a machine and then paid top prices. If something wore out or broke, the nephew just sent them an inflated bill for it, and they paid, no questions asked. Talk about a licence to print money.
Now they are ringing up and requesting the nephew meet a (low) hourly or monthly rate, which is generally around cost. He tells them to get stuffed, he won't work for the rates that many others are now working for. He's selecting other areas of work that are closer to
home, and that pay reasonable rates. He's more worried about business bankruptcies than ever before, and thus is much harder on creditors.
In reality, we are just back to the regular economic conditions where the tough innovate, keep margins down, cut costs and survive, in a highly competitive environment.
Fleetwood have unfortunately forgotten what reality is like, they have had around 12 yrs of the biggest economic boom that Australia has had since the goldrush years of 1892-1914, when the State exploded with money and economic activity, in an identical manner to the boom we have just had.
It's times like the current situation that bring out the good managers and the
well-run companies.
Anyone can make money when economic activity is at fever pitch and hirers and buyers don't care what they pay, as long as they can get it.
Cheers, Ron.
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