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Amazon invades RV manufacturing capital: Will RV workforce jump ship?

The tight employment market in the RV manufacturing capital of the world is about to get a bit tighter.

Mega online retailer Amazon has announced plans to build a huge e-commerce fulfillment center in Elkhart County, Indiana, the home of 80 percent of the nation’s RV manufacturing plants. RV manufacturers are already having a problem finding qualified workers to build their products. Will Amazon make the situation worse?

Why Indiana?

Luring Amazon to Northern Indiana is apparently an attempt to diversify the local economy, which is by far dependent on the fortunes of RV manufacturing. During the last recession in 2008-2009, the county had the nation’s worst unemployment rate of about 20 percent. Then-President Obama visited the county several times for public appearances to raise the profile of the unemployment crisis. The high unemployment rate was blamed on cuts in the RV industry and the fact that the area was a “one-company town.”

But now, Elkhart County has one of the lowest unemployment rates in the nation, at just 2.8 percent, and RV manufacturers are struggling to find enough workers (qualified or not) to put together their RV products.

More jobs = more strain on workforce

The new Amazon facility would bring in at least 1,000 new jobs to the area, putting even more strain on the local workforce.

Chris Stager, CEO of the Elkhart Economic Development Corporation, said building diverse local businesses has been a goal of his group since experiencing the downside of dependence on a single industry.

“We’re trying to be very respectful of the RV industry because it’s our legacy here, and we’re proud of it. But we do have to diversify and continue focusing on those kinds of things as well,” said Stager in an interview with Inside Indiana Business.

The new Amazon facility will include an 800,000-square-foot e-commerce fulfillment center and a 180,000-square-foot delivery facility. The Amazon facility is slated to open in 2023.

According to Chain Store Age, Amazon workers in fulfillment and transportation receive an average starting wage of more than $18 per hour, and up to $22.50 per hour in some locations. The positions are also eligible for Amazon’s new Career Choice program, in which the company will pay full college tuition for its frontline employees as part of a larger $1.2 billion investment to expand education and skills training for its U.S. workforce.

Can RV manufacturers compete for the precious few qualified workers in the area? If so, will higher wages force them to raise their wholesale RV costs to dealers, further inflating retail prices to consumers?

What this could mean is that RV manufacturers will be hard-pressed to keep their assembly lines rolling at peak levels with trained workers. Elkhart County is already having trouble luring new workers to the area due to housing shortages.

##RVT1021b

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Ray
11 days ago

Let me understand this. The RV industry, an industry that builds cheap housing at a reckless rate cannot attract workers due to a housing shortage? Could they not offer their own products to incentivize perspective workers? Or could it be they do not want to buy their own crap.

Kathleen Evans
14 days ago

If the R.V. industry could offer housing. I could bring them 3 workers. They would live together. They are brothers

Khone
14 days ago

I doubt that would be a problem. Considering that amazon can’t match The pay and hours. Most rv workers are grossing 1500-2500 working less than 40hrs.

Leonard D Rempel
15 days ago

After spending 30 years in the hospitality business, which is also a predominately low wage environment I believe I have some chops to add my two cents in on this conversation.
First of all, let’s stop blaming the workers! They are in a relatively low skilled, low paid position so why would they put their sweat and unfailing loyalty into someone who does not value them? Why does anyone think there is such massive turnover in these industries? Yes, pay them more and train them more. This will help to make them feel proud to say they work for “XYZ RV company.” IF you pay them more and train them more, they will likely stay employed with you longer , becoming better brand ambassadors and produce a better quality RV. Will the consumer need to pay more? Of course we will!

This race to the bottom with low wages, low quality, and low prices has driven North America’s manufacturing to the cheapest countries on earth. We ultimately get what we deserve. Politicians too!

Peter
14 days ago

Ditto to everything you said.

Robert H.
14 days ago

Could not agree more. Thor is recording record PROFITS, but have their workers received higher wages, better health care benefits, more vacation time, increased paternity leave (if any at all!), any increased benefits? Bet not!
Capitalism is a great system. It engenders efficiency, innovation, and economic growth. But when these benefits are not passed down to the very workers that make it all possible, then there is no reason to continue working for or being loyal to those companies that are not loyal to their own employees. It’s as simple as that.

Jesse Crouse
13 days ago
Reply to  Robert H.

My family ran the same business for 103 years. Thru 2 World Wars. Korea, Vietnam, a great depression and numerous economic downturns it was our employees who helped keep the business going. Your employees are the front line of your business. Remember that.

Mike
16 days ago

Amazon is opening a major fulfillment center in upstate NY as I write this. They announced jobs at $17 per hour but have been unable to achieve the staffing levels they need and now have jumped the rate a couple of bucks. I was speaking to one of their core staff that moved into the area and she told me staff turnover is a major concern when staffing a new facility as they generally see almost 40% turnover in the first year but it stabilizes at less than 20% after that. Most of the turnover is based on folks not realizing that they expect you to work for your money. Now, if you want to make money at Amazon, be an IT expert with distribution system experience or be an industrial electrician with machine control and robotic experience. You can make a very comfortable living there.

John C
16 days ago

If what is being turned out in Indiana and elsewhere is the work of “skilled employees” then I say to these employees: please go to Amazon (where you can do less damage.)

Bill H.
16 days ago
Reply to  John C

John C., I was thinking the same thing but slightly differently. One of the problems the RV manufacturers have is that many of their employees are drug users, and attendance is a big problem with drug users. Now imagine those same drug users go to work for Amazon and suddenly Amazon has problems with having all of their employees on the job and working. Suddenly same day or overnight delivery becomes an issue. Amazon is not going to let that happen and those employees will be gone and back doing shoddy work for the RV manufacturers in the blink of an eye.

John D.
16 days ago
Reply to  Bill H.

Bill, This is not true! If so, prove it. Stop spreading lies.

Jake
14 days ago
Reply to  Bill H.

How do you know they are “drug users”? Maybe they don’t show up because they are underpaid and underappreciated.

Ron T.
16 days ago

The RV manufacturers are their own worst enemy for putting all their eggs (manufacturing plants) in one basket (Elkhart County). That quickly depletes the supply of quality employees and lowers the quality of the product. So the county is right in trying to diversify its industrial and employment base. It’s up to the RV manufacturers to do the same and diversify geographically which will ease their employee woes and improve the quality of their products.

The RV industry is similar to where the automotive industry was for many decades putting style (tail fins and other cosmetic changes=floor plans and gadgets) over substance (reliable engineering and technology). I was told in my only graduate level business management course that the Honda Corporation has a 500 year plan. Short-sighted focus on profits will lose to that every time.

Bill T
15 days ago
Reply to  Ron T.

Well said Ron.

Bill In Texas
16 days ago

The RV manufacturers need to adopt better training for workers and not let junk go out the door. Each worker needs to inspect the work of the previous stage of what comes to them. This is basic quality manufacturing. Amazon will instill the same discipline and the shoddy worker won’t last there. America knows better than what is going on right now and as consumers we should hold them accountable. The RVIA should insert themselves as well. It isn’t that hard to build quality into the product. It takes determination of everyone involved to stay the course and stop before a bad product goes out the door.

wanderer
16 days ago

It makes me want to cry, to think of that giant behemoth coming to that area, which does not need a big batch of low-quality jobs. Shipshewana and the Amish community are such a great area, full of local businesses and entrepreneurs, and people, both Amish and ‘regular’, living life their own way, close to the land. Amazon and it’s high-speed-max-output demands should go elsewhere, or stay in places they’re already established.

Bill T
16 days ago
Reply to  wanderer

The Shipshewana and the Amish community are such a great area but it’s a small employment community and in the end a lot of people need to eat and make a living for themselves and their families. I am by no means a supporter of the giant faceless corporations but economic stability for folks is a must in any area. If companies like Amazon can provide long term optional employment opportunities and economic stability for the region then that is a good thing.

wanderer
16 days ago
Reply to  Bill T

Unemployment stands at 2.8% there, no one is starving because there aren’t enough McJobs there. And if hard times come to the place, the giant corporations are the first ones to run for the door and leave the workforce high and dry, so much for stability.

Bob P
16 days ago
Reply to  wanderer

As much as I revel in the “good ole days”, progress goes on. Its obvious this area needs a shot in the arm (and not the kind that leaves you high). Maybe this will instill the rest of the manufacturers to get in line and pay a decent wage and benefits. The fact that they quit drug testing may be why the quality has suffered. As far as the price of RVs going up, if buyers refuse to pay those inflated prices they’ll come down. The reason the prices are where they’re at now is because buyers have more dollars than SENSE. I refuse to buy new because of prices, lack of quality, and also the only place you can get work done under warranty is where you bought it. When the RV industry gets like the auto industry where if you bought the brand any dealer that sells that brand must work on it for the customer no matter where you are in a timely manner.

Bill T
16 days ago

The lack of quality workers and workmanship is already apparent in an industry that resides on its bottom line of this “boom and bust” industry. Good for Amazon and Elkhart County to want to diversify and bring a multi-based economy to the region. The “one horse town” will have to up its game and hopefully better quality will be a byproduct of this change. Better training and pay for your employees and supervisors and managers with their sights a little less on quantity and more on quality would make the industry more sustainable for the long haul rather than the “feast or famine” it is now.

Daycruiser
16 days ago

It would be interesting to see how Amazon deals with the Amish work day, since many Amish work in the RV industry starting work very early in the morning so they can get off early enough to work their farms and other related tasks. Will Amazon accommodate these traditional work schedules for the Amish in Elkhart County? Who will fill the jobs in the later hours of the work day? Amazon may not only hurt the RV plants themselves but also the supply chains to the RV plants by pulling non-Amish workers from them as well.

Bob P
16 days ago
Reply to  Daycruiser

Probably the RV industry will have all the Amish and Amazon will have the non-Amish, which will improve the quality in RVs!

Rebuttal
15 days ago
Reply to  Bob P

[First (very rude) paragraph bleeped by Diane.]

I will concede there are a few Amish exclusive manufacturers that are top notch but they don’t produce very much. And Americans want cheap, not quality.

Now let’s discuss this quality issue that’s plaguing my county. Here’s what nobody stops to think about….. the rv industry has treated the workforce here as very replaceable, good times and bad. We’re always under pressure to produce. Every rv plant for decades has been a rat race. No job security. Safety is a joke. And they’ll fire you as fast as they hired you.

Nothing is different now other than scale.

JIm C
16 days ago

Amazon is also building big plants near Fort Wayne, not a long drive from Elkhart as well. Shrinking the idea.. if folks live between these two cities, of needing to work in the RV department as well.. They would choose one place or the other. RV manufacturing will indeed suffer, from the lack of Qualified workers.

Bob P
16 days ago
Reply to  JIm C

That’s what training programs are for, do you think they take someone off the street, hand them a staple gun and say build an RV? They have to know where to put the staples. Although some of the quality I’ve seen lately would indicate different.