For Fleetwood Enterprises Inc., the national housing crisis has been a double whammy.
The Riverside company, which filed for Chapter 11 bankruptcy protection Tuesday, is grappling with sharp declines in demand for its two key products: manufactured houses and the big homes-on-wheels it makes for the recreational vehicle market.
The dual hit has forced Fleetwood to drastically cut its workforce, adding to the economic woes in Riverside County. There is little prospect of a quick turnaround, especially in Fleetwood's flagship RV business.
The bankruptcy filing is a sad turn for a company that has been making recreational vehicles since 1965 and was known for having one of the more colorful chief executives in the industry -- John C. Crean, Fleetwood's founder and sometime TV cooking show host, who died two years ago.
Fleetwood said Tuesday that it was in talks with potential buyers for all or part of its business, and that it would continue to operate while in bankruptcy proceedings.
"The vast majority of our suppliers and dealers should see no disruption in our business," Chief Executive Elden L. Smith said in a statement.
Fleetwood said it was exiting the travel trailer business. As part of that process, it will close three factories and two service centers and eliminate 675 jobs, including 12 at its soon-to-be-shuttered Rialto plant. An additional 65 corporate jobs will be cut, most of them at the company's headquarters, where employment will fall to about 200 people.
The layoffs will reduce Fleetwood's payroll to just more than 3,000 people nationwide -- down 70% from three years ago.
In its filing in U.S. Bankruptcy Court in Riverside, Fleetwood listed total assets of $559.7 million and total liabilities of $623.6 million. Its largest unsecured creditor is Bank of America Corp. Fleetwood had $23 million in cash as of Jan. 25 and said it was in talks with its lenders to secure additional financing.
Fleetwood, along with other RV makers, has been hit by a severe slump in sales caused by several years of high gasoline prices and worsened by the current recession. In addition, the credit crisis has made it tough for Fleetwood customers to get loans. High-end models that cost hundreds of thousands of dollars are gathering dust on dealers' lots.
Industrywide sales of motor homes, trailers and other RVs totaled 237,000 in 2008, down 33% from 2007. The industry is projecting 2009 sales of 130,100 units, which would be the lowest annual sales since 1980.
