Forest River, a Berkshire Hathaway Company, with its six bus brands — Battisti Customs, Berkshire Coach, Elkhart Coach, Glaval Bus, Starcraft Bus, and StarTrans Bus — offers a full line of transit and shuttle buses and tour coaches that fit almost any application.
METRO spoke to David Wright, president of Forest River’s bus divisions, about some of the keys to the company’s success, and what challenges they are facing.
What do you feel are the company’s strengths?
Whether it is Glaval, Starcraft, StarTrans, or any of our brands, we feel we have a product that meets the needs of a majority of the industry. From a smaller product built on a Ford Transit right up to a Freightliner chassis, or whether somebody is looking to haul eight or 45 people, we have those product bases covered. We feel with our different bus divisions, and certainly with the dealers we have, we are getting great coverage. Obviously, as the market goes through changes, we will also have to adjust with it, but right now we feel we have a pretty wide product variety in the sweet spots, if you will. We can’t do everything for everybody, but we feel we have really good product diversity where the meat of the market is.
Was building that diversity part of the reasoning behind the Battisti Customs addition?
Absolutely. Battisti was huge for us, because although it’s not a high volume business, it covers a very specific sector of the industry that our dealers were telling us needed coverage. And, the variety and expertise that they bring to the table is very important. Again, it is a little different than Forest River’s typical M.O., which is volume in the sweet spot of the market, but we feel it’s important to offer a complete product portfolio to our dealers, and in turn, to their end users. From limo vehicles to gaming units to prison bus units, really whatever you’re looking for in a Sprinter- or Transit-type model, Battisti can do all of those things, so it was a great combination. And, they have a reputation for quality in our industry, so our dealer feedback has been positive and the business they are doing is very strong. We are happy with the acquisition.
Starcraft was named Ford’s top pool account for the 12th consecutive year; what is the importance of that honor?
It’s big on a couple levels. One, it’s something we were chasing since the early 2000s. When I joined the company around that time, we wanted to make it a focus. And although volume certainly isn’t everything, we thought it was a good thing to set our sights on.
In addition, we’re competitive just like everybody else. So, when we first got the award it was a huge deal, and from there, we did what we needed to do to make sure we kept it. In our industry, where we don’t have R.L. Polk data or vehicle registrations to easily track sales year-over-year against the industry, knowing how you rank with Ford is a big deal. From a customer standpoint, the fact that we are number one with Ford in volume doesn’t mean anything to them. But what it means for us that they don’t see is the more business we do and the more volume we have, the more we can continually drive our costs down and get better economies of scale, which ultimately means a better price and value for the customer.
What is Forest River’s biggest challenge right now and what are you doing to overcome it?
I’d say we have two. The first would be attracting and retaining quality employees. In Elkhart County, with the great growth in the RV market, the bus market, and even the boat market, there is tremendous demand for skilled workers. Saying that, we do have a tremendous team with nearly a thousand employees in our bus divsions, alone. But, attracting and retaining quality skilled employees from production to sales to engineering, is a continuing challenge. And although it’s really magnified here in Elkhart County where unemployment is low, I would say that challenge is pretty common across the country for many industries. We have found to maintain employees, it’s not just about wages anymore, it’s about how we treat the employee, the hours they work, and all those sorts of things, so we’ve continually tried to step up our game and seem to be having some success on that front.
The other challenge, which is new for us over the last six to nine months, is we are seeing significant increases in material costs. Our suppliers are no different than those in the automotive field, in the sense that when they see a rise in the cost of steel, aluminum, and other materials from their suppliers, they have no choice but to pass the higher cost on to us. We are seeing more pricing pressure on the supplier side in the cost to build a unit than we have in quite some time. We are working with our dealers and end users to navigate through these issues, but it’s definitely more substantial than I’ve seen in the last five to 10 years, for sure.
What is your perspective on the current bus industry? Are you seeing growth in particular segments that you serve?
From FTA-funded state and local agencies to hotel, travel, and tourism to the church bus market and senior care industries, Forest River is seeing growth across the board. I would say by far the strongest growth right now is in the senior care market, if we are looking at percentages, which makes sense with the shifting demographics and everything.
What are Forest River’s plans for both the short- and long-term?
We will be introducing product updates on some of our brands across the Forest River Bus line at BusCon in October.
[Additionally] one thing we’ve talked about this year is that we are going to get in front of almost 10,000 customers, in terms of producing almost 10,000 buses across our bus divisions, so we are really focusing on the customer service aspect of it, in terms of being both customer and dealer-centric. We have really focused on beefing up our customer service, our parts departments, and our responsiveness to the customer. If a vehicle does go down, we have to be quick to get it back up and operating. Whether it’s short-term or long-term, there is pressure in the marketplace because customers have higher expectations and we have to make sure we are keeping pace, or doing better than expectations. So, our focus 100 percent, right now, is taking care of the dealer, which is ultimately taking care of the end user. We feel that if we do a good job with that and stay focused on our customer, business will take care of itself.
How does the company cultivate and maintain its relationships with its dealer network?
Dealers are absolutely the most critical part in the process for us. Obviously, we can’t do anything without the end user, and the end user and the customer have to be taken care of, but our customer many times is our dealer. Dealers have a lot of choices of where they want to purchase a bus from, so we have to do a great job taking care of them so that we are the company that gives them a quality, durable, and safe bus. But, we also have to be the easiest company to do business with as well. Whether it’s ordering a new bus, or being responsive when service is necessary, all those things are crucial. Likewise, we have to partner with the best dealers. If we do a great job and we don’t have a good responsive dealer, then it’s going to fall flat, the end user is going to see that, and it’s going to reflect poorly on us.
Because of that, we have really cut down on the number of dealers we have, but our business continues to increase. Our feeling is that we have to partner with the best dealers that are committed to the same things as us, so we can take care of that customer now and in the future. So, when we look at dealers, we look at dealers that aren’t just looking to sell a bus one at a time, but who want to have a relationship with us long-term. Because from our standpoint, the cost of taking care of a customer is much less than the cost of acquiring a new customer.