RVBusiness, September/October 2019

S E P T E M B E R O C T O B E R 2 0 1 9 RVBusiness 85 board member Graves according to Thors statement is adept at managing decentralized businesses after having formerly served as president of the Brunswick Boat Group and as president and CEO of the Motorsport Aftermarket Group among other companies However plans call for Orthwein to remain an active board member during a fast paced transitional period unlike anything Martin has seen before see page 54 Theres no doubt said Martin For me this is probably the busiest Ive ever been and that Thor Industries has been And a lot of it has accelerated over the last year when you add to our portfolio the Hymer Group a 2 billion company our largest acquisition ever So there are a lot of moving parts and pieces to the company Its a long flight back and forth to Europe which Ive gotten to know very well he added But its also an exciting and busy time for us with a lot of our employees going back and forth and people from Europe flying in Weve got a lot of people sharing ideas looking at synergies and opportunities To shed some light on all this Martin Hermon and Zimmerman took a break in late July for the following edited interview RVB So gentlemen whats your take on the general state of Thor here in the latter half of 2019 Bob Martin Frankly everyones goal over the last year was to really right size dealer inventories For us thats been the biggest topic weve had with everybody monitoring the size and aging of dealer inventories and really coming back from a year and a half ago when inventories were very high And I think as we sit here today weve all done a good job of helping dealers balance their inventories and theyve come down to a level that is appropriate as we head into the fall and our big Open House coming up in September So we feel pretty good about where were at We could debate our inventories whats too much whats too little keeping in mind that the weather played a role in all this depending on the region And overall retails down a little bit RVB All things considered thats a pretty positive report Martin Yes and for us this has been kind of a year to regroup re gather and refocus on product quality and innovation Now we realize that youve got your upsand downs in the industry for whatever reasons but we still see the long term prospects of the industry and Thor as very positive So I think were in a good spot as we go into fall although there are still some unknowns that no one can really predict as those inventories remain the No 1 debate in the industry right now And while youll hear dealers with different opinions we feel that inventories have come down drastically throughout the spring and summer and that theyre appropriate as we head into the fall So we feel pretty good and our teams are all in go mode for Open House working to get dealers to the Open House to see all of the new products that weve now come up with RVB Matt and Chris your thoughts Matt Zimmerman I think Bob said it best I think we are in a much healthier place than we once were And we really track two things at our company dealer lot inventories and our retail sales versus our internal wholesale shipment numbers and I can tell you that we are in a healthy place as an organization We also watch our entire industry shipments compared to retail numbers that Statistical Surveys reports and I can tell you that if you do the math youre going to probably see that were somewhere in the neighborhood of a 90 day supply on hand in the towable segments specifically which is very healthy So I think we are in a much healthier place than we were last year Then factor in the unknowns that Bob mentioned and the fact that no one knows what the fall and the winter hold for retail But if retail stays on par with what weve been seeing already six and a half months into this year as far as being slightly down year over year were at that point where we could actually start facing an over correction a situation where theres not enough supply Chris Hermon If sales are fairly strong and we dont have enough inventory right here to sell them it winds up contributing to a backlog And thats s o m e t h i n g were starting to see on some of our brands and some of our companies not all but some where were starting to get in the summer periods where we cant actually deliver a certain model Thats just the start of it but we are feeling that swing and that shift heading into the fall In some cases its a good thing that we dont have so much inventory out there right Zimmerman As Bob had mentioned I think the macro economics are still really strong Fuel prices are in line Recent job reports were very healthy And then the Federal Reserve cut the federal funds rate by a quarter percentage point in late July the first reduction in more than a decade People are working and they have discretionary income And bigger than that theres a demand for the RV lifestyle right now among new consumers You put all that together and it sets us up really nicely for the long term For our industry everything points to a positive outcome So as Bob said I think were in a good place RVB Your take on the recent restructuring of this senior management team in which all three of you are integrally involved Martin A lot of it starts with the Hymer acquisition once again Im finding a lot of my time is being pulled to Europe because the integration is very important And with that our strong suit here is being close to the customer dealers and retail customers and I was being pulled further and further away I felt the need for two strong managers to come from within Thor so we took the companies and set up the two RV groups with Matt and Chris and had the companies roll underneath them They still have in their respective areas the companies they managed before and they each added a couple more companies to that I see them managing much like I did But Thor has changed a lot in the last five years Its a different size and so you have to evolve So for us to keep managing in a way that keeps a sharp eye on things where management is close to daily operations which is paramount Chris and Matt will be there to help Many times Im on a different time zone and Im harder to reach while sometimes they division managers need answers this is where we picked two of our top people to really come in and help from a corporate level Theyll spend a lot of time in the companies just as Ive done over the years And I think highly of these two or I wouldnt have been a proponent of making this move I think itll just help all of the companies and I think people are pretty excited about it A lot of its all tied into Europe as well because I also want these guys to learn from and work with the European groups Weve already had several group dinners and there are more coming up where we just share ideas But Chris Hermon Bob Martin