Is Earthbound’s Future in Doubt?

Marion, Indiana-based Earthbound Recreational Vehicles LLC shut down production at its factory about six weeks ago. Previously, the factory had been running “smaller” production for three months with 15 employees, reduced from around 50 earlier in the year, according to Earthbound President Charles Hoefer.

The City of Marion backed a $2 million bond with county economic development income tax (CEDIT) money to support its startup in 2010.

The company never met expectations to hire around 180 employees to produce 400 or more RVs a year.

Officials at dealerships across the country say they are concerned about the future of Earthbound Recreational Vehicles, according to a report by the Indiana Economic Digest.

Shifts in the company’s business strategy have left some dealers with long-standing ties to the company and its owners feeling left in the dark.

“We were always hoping to be a part of their success, but right now I feel that we are in limbo,” said Bill Mirrielees, general manager of Howard RV Center in Wilmington, North Carolina.

Hoefer said the company was focused on lining up everything for its new business model and “confidently” projected that production would begin again by mid-November. He said the company will start work on both new and old models at that point.

“We’ll be building for probably four months straight before we take another order,” he said. “It’ll be very low key as we move it forward. We look at this as the nature of being start up. We’re excited and just looking forward to the new line.”

(Credit: earthboundrv.com)

Indiana Economic Digest reported that Hoefer said the company has been focused on lining up international distribution in China and Europe for another 100 units of the new line for the past few weeks. He said the company will probably use just 12 dealers in the U.S. in the future.

“We’re going to be scaling the network back,” he said. “It will essentially be a lot more limited high distribution network.”

Hoefer said the company has kept a number of its “closer” dealers as part of the process. However, some current and former dealers said they have not been kept informed of changes in business strategy. In addition, they said old orders and warranty claims have been left unfulfilled.

Mirrielees said his dealership still has product orders from April and May that have yet to be built, as well as outstanding warranty claims. He said one retail order has been cancelled and its deposit refunded and there has been no commitment on when the others can be built.

“Not that we’ve canceled them, they can’t tell if they would be built even this year,” he said. “I would hope that they get back up and running soon. I hope they are able to catch up on the unpaid warranty claims.”

He said he hoped the company would “turn this thing around” because the company has created an “outstanding” niche in the marketplace.

Earthbound vehicle owner Bob Garlits has been waiting for factory repairs to be finished on his trailer for around four months. He drove from Ohio last week to pick up personal items from the trailer, which he was told would be finished by the middle of this month.

“They wouldn’t show it to us,” he said. “The last time we were over there we went on the factory floor and everything.”

2011-V2 Earthbound Montreal Interior (Eco-Leather Valance Package). (Credit: earthboundrv.com)

It has been a massive development effort for the last five months and it’s gone longer than expected, according to Hoefer. With an $84,900 starting price, the new “boutique” and customizable 2012 product line is a higher price point than prior offerings.

The retooled line required engineering changes into the product and finalizing distribution networks to sell the trailers in China, Australia, and Europe.

New customizable options and additional “green” features include a special antimicrobial self-cleaning outer coating and a “floppy” solar panel that can completely power the coach. Hoefer said the new line offers at least 70 changes to design and options.

With all the options, a 2012 Earthbound coach can cost as much as $190,000.

Less than 200 RVs are slated for 2012, with around half reserved for North American customers. Hoefer said since each trailer will take more than 500 man-hours to complete, the company is anticipating going back to 50 workers around Christmas and adding the same amount next year.

Worth Pondering…

We didn’t set out to create another brand of RV… we set out to invent an all new style of modern travel.

—C. David Hoefer, Earthbound RV

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