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Coon Impressed with Way Industry Worked Together During His Tenure

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Richard Coon has seen firsthand how hard times can bring out the best in people, and he knows the RV industry is no exception.

Earlier this month at the RV Industry Association Annual Meeting, Coon announced his retirement as president of the Association after nearly a decade in office. Coon stepped into the position in January 2006, succeeding long-time president David Humphreys.

The two years following were among the best, according to shipment data, in the history of the RV industry, but they were also some of the most trying, Coon said.

The industry faced a large class-action lawsuit stemming from the presence of formaldehyde in trailers the government bought to house people displaced from homes after Hurricane Katrina.

And in 2008, during the financial banking crisis, Coon was forced to cut the Association’s staff by 30 percent. The crisis worsened as lenders tightened purse strings, and Coon was faced with further gutting the Association.

It was during these trials, Coon said, that the RV industry began to band together, fighting for its survival, in an unprecedented way, and in recent years.

Navigating the post-Katrina lawsuits, overseeing the Association in its strongest and its most tested years, are among the accomplishments and trials Coon discussed as he reflected on his tenure in a recent exclusive interview.

RVP: What was a challenge you faced during your tenure?

RC: We were hit with Katrina shortly after I started, and Katrina, to make a long story short, the government had put out purchasing requisitions for 30-foot-size travel trailers across the United States. So they bought up everything they could at dealer locations and also ordered 50,000 to 60,000 units from manufacturers to have living quarters for people who had lost their homes. … So Katrina was an interesting challenge from a manufacturing standpoint to meet that need, and I thought the industry did a great job in a matter of six to nine months of marketing or supplying the government 120,000 or 130,000 pieces of equipment.

RVP: There was also a lawsuit in that time, right?

RC: Right, you had a person in the New Orleans area that belonged to the Sierra Club that started screaming bloody murder that the trailers they were receiving were toxic because they had so much formaldehyde and people were getting sick, and that caused all kinds of problems and put the industry into a real spin.

It cost manufacturers, and probably some dealers, millions of dollars in a class-action suit that the lawyers picked up on. So that was probably one of the biggest challenges I faced in the 10 years that I’ve been there, was trying to keep this tag that we received as “toxic trailers” out of the press and away from our standard members that own RVs.

And as it turned out, of the lawsuits that filed and went to court, there wasn’t one of them that proved that the trailers were toxic.

In all fairness, too, I think it put the industry’s eye on the subject and of course the industry moved very quickly to get all the formaldehyde out of the product as fast as possible, so that it wasn’t a problem. So I think that in the end, today’s product has very little formaldehyde in it – you can’t eliminate it all, but it meets the federal and California standards, which are very low.

RVP: What have you learned about RVIA and its members during your tenure?

RC: One thing is that RVIA is a pretty seasoned organization. We’ve been through a lot of different things and have a lot of history and know-how on how to handle problems when they come up and deal with them, and how to rally the industry together on issues like formaldehyde, and turn problems into our favor.

Another thing is that it’s pretty interesting how the members – the manufacturer members and the suppliers – will all work together for the betterment of the whole industry, and that’s pretty unique.

For example, you can’t go to the car industry today and get Chrysler or Ford or General Motors to get in a room together and work out an issue that they’re all facing together. They’ve just never been willing to do those kinds of things like our industry does, so it’s pretty unique.

RVP: How did you and the industry respond during the Great Recession?

RC: (During the recession) nobody was lending money, and that dried up the industry and it just tumbled from there. It went down as far as somewhere around 50 percent on the travel trailer side of the business and somewhere in the area of 75 percent in the motorhome side of the business.

So, if you’re in business, you’re a supplier or manufacturer, those are very difficult times. You can’t cut your costs fast enough, so a number of people went out of business.

In our case at RVIA, I had to cut 30 percent of the employees that were here, and I had to go to the board and ask them to raise the seal prices – at that time RVIA was receiving about $4 per seal to help support the organization. I told them that if they wanted us to continue with the services we provide – even though I had cut 30 percent of the people (working at RVIA) – we still had to raise the seal price to $35 apiece.

They were very willing to do that, which was a testimony to me about how the members really did value the RVIA and the services we provide. Otherwise, I would have had to gut the organization a lot more.

That was a pretty interesting time, but I think we convinced the members it was well worth it, and I think today they feel like it was well worth it.

The other thing that we did through that recession, which was a smart move in my opinion, was that we kept advertising the industry to the public.

Go RVing didn’t go away, in other words. Even though our numbers went way down, we kept in front of people with Go RVing, unlike the marine industry which chose to cut its Go Boating advertising down to nothing. I truly believe we were able to recover quicker because we were still in the public eye and still were a viable candidate for discretionary dollars, whereas the boating industry kind of dropped out of sight.

RVP: Were there other factors that played into the strong recovery of the RV industry?

RC: I think one other one that played a bigger role other than the ad spending was that the marine guys kept on building, so they had a glut of inventory in the market, where the RV guys cut it off. The wholesale side dropped very quickly and they stopped building and cut back a lot sooner than the marine guys did, and I think that’s one reason they suffered – because of the amount of inventory that’s been out there.

RVP: Was there anything you’d hoped to accomplish that you weren’t able to?

RC: My background was working with Onan and Cummins. Besides running an Onan division, I also ran Onan’s worldwide parts operation. So I always felt bad that I didn’t take an opportunity to try to bring some of the things that I know how to do to improve the parts systems that manufacturers and suppliers have – suggestions I could have made to help them deliver parts better throughout the system.

RVP: Can you think of any specific examples where you could have leveraged your background to help the industry?

RC: The companies I worked for, which were both the Ford Motor Co. and Cummins and Onan, when they develop a new product, you can’t bring the product to market, you can’t offer it for sale unless the back-end – meaning the aftermarket – is in place.

As well as in Cummins’ case, they would ship the spare parts for that new product to the dealer automatically. They didn’t ask a dealer for a purchase order, they shipped it to them and charged them. They saw it as their responsibility to carry those parts right out of the chute so that if something happened and somebody brought in a brand new unit, there’s parts in the market or out in the field to fix it.

What they did do was tell them that if they hadn’t moved those parts in two to three years, they’d take them back so that the dealer didn’t get stuck with them.

Those kinds of systems like that do not exist in the RV industry, or that kind of mentality does not exist in the RV industry.

RVP: What role will you play in selecting and grooming your successor?

RC: I’ve supplied names of people that I know that work for me internally that are interested in the job. I’ve given them a few names of people on the outside that I think might be interested in the job, if they want to look outside. And of course they’re doing their own search, and they’re going to wait a couple weeks (since the announcement) to see what bubbles up.

Once they have those, they’ll start whittling them down to who they think is capable, and I’m sure they’ll talk to me about who they see as their top candidates and ask my opinion, but that’s probably the extent – they’ll have to decide that.

They’ve got good guys on that committee with a lot of experience so I’m sure they’ll come up with the right answer and the right person.

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