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Old 11-17-2006, 02:59 PM   #1
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Join Date: Sep 2006
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SUN #42
Tom R
A Small Spark Still Flickers...

From BV Rusiness "Online"

Doors Ajar at Sunline, Still Seeking Buyer
Dave Barbulesco
RV Business
Thursday, November 16, 2006

The search for a buyer of longtime towable builder Sunline Coach Co. began in the beginning of 2006, according to Joe Bucara, president and COO of the firm which announced Wednesday (Nov. 15) that it was ceasing production at its Denver, Pa., plant.

“The process has been going on over the past year,” Bucara told RV Business. “We were looking for a buyer intelligently, not desperately.”

As of this week, however, the search has taken on a more desperate tone. Facing the effects of a “significant downdraft” in the towable market in September and October, Sunline officials decided the best course of action was to shut down and liquidate existing inventory, while still keeping their lines in the water for a possible buyer.

“The travel trailer business hasn’t been as robust as last year, but we were still doing fine through August,” he said. “We really saw a drop-off in September in October. It all came down to last Friday – that’s when we told the workers of the shutdown, although we had been cutting back production for several weeks. It became apparent that operationswise and cashwise it just wasn’t feasible to keep the doors open. We realized that a deal would not be consummated in the time frame we needed.”

As a result of the closing, set to be finalized in December, around 150 of Sunline’s 170 workers were laid off. The company, operating with a few supervisory personnel, is in the process of liquidating its finished goods inventory to its dealer body.

“We’re selling units for good prices, not rock bottom,” said Bucara. “With regard to warranty, all the appliances and components are covered by the suppliers. Obviously, our three-year structural warranty won’t be covered if we go out of business, but Sunline is known for top quality products, so that’s viewed as a minimum risk.”

“Spare parts, things of that nature, will be offered at a later date,” he added, noting Sunline leases its manufacturing facility. “Our raw materials will be liquidated as appropriate. Right now, we’re still in discussions with interested buyers. Realistically, we can be completely reinstated within 60 to 90 days. I think there is still a reasonable chance that we’ll find a buyer by the end of the year, but there are certainly no guarantees.”

Bucara was part of an investment group that included Paul Kozloff, Bruce Cobb and John Whitehall, which bought the family-run business in February of 2004. Cobb left the company in March 2005.

Lewis M. Martin, the firm’s chairman and a principal of the firm since its founding in 1964, W. Larry Lawrence Jr., the company’s CEO and part owner since 1978, and John Zimmerman, chairman emeritus who had been involved with Sunline since 1975, had decided to head into retirement, and, at the time of the sale, described the buyers as “hand-picked.” Zimmerman’s son, Dale, stayed on with the firm as executive vice president of production.

“The people at Sunline have been excellent and really have a great work ethic,” Bucara said. “But there was an adjustment period, which is normal in a buyout. We had worked through that and were moving ahead.

“Looking back, Sunline required a fair amount of investment when we bought it, which we did. It just took a while for that investment to work, and ultimately it didn’t happen quickly enough.”

Bucara maintains that the company’s products and cost structure were fine. “It just came down to the fact that the market had diminished,” he said. “The issue became volume.”

Sunline developed several new products in the “mini-slide” area, according to Bucara. “The slides can be incorporated in smaller units,” he said. “They were a perfect fit for the marketplace in light of the shift to smaller, lighter tow vehicles. The problem was these products were not full-fledged yet.”

The company also introduced an Advancer 20 line of disability accessible trailers, which had been approved by the California state parks for use as short-term rental vehicles.

“We believe the Advancer 20 is the only mass-produced, disability accessible trailer,” Bucara said. “I would love to see that project continue. Hopefully, we can work this out. I think this company still has a lot to offer.”

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Old 11-17-2006, 06:47 PM   #2
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Thanks for posting. With all the gloom we have been reading... this spark of hope is uplifting.


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