Rumors Fly, Factories Die

Update 9/29/12: Cheri and her family are being released from their obligation to buy from Taylored Building Solutions so that they can move forward and purchase their new home from another modular factory. Tom Schott, one of the principles of Taylored released the assignment of funds bit no word as yet as to whether Cheri will ever see a penny of the $12,000 that she is out.

Over the past few years a good number of modular home factories have closed their doors forever.
Some of these closures were expected and some took many by surprise. There are
many other factories that are working in bankruptcy while a few have emerged
from it and are still operating. Champion, Palm Harbor
and Excel are some of the factories still operating and going strong.

But what happens when a modular home factory is rumored to
be in trouble? What happens to their builders, employees and homeowners?
Recently Taylored Building Solutions has been caught in that situation and
their competitors, builders and especially their customers are waiting to hear
what is going to happen next.

The president of a top modular home factory had this to say
about what really happens:

To say that the modular industry is in a unique position
when a plant closes and people loose deposits is not fair. It does happen in
the stick built world, but the effects are localized and rarely reported as
wide spread. So if a site builder goes out and takes the customer’s deposit
with them when doing so, the competition in the immediate area are usually the
only ones talking.

 When it happens in the modular housing industry, everybody
and their brother talks about it. We live to watch one of our competitors go
down and we feed off the negativity of their doing so to bolster our own
businesses. The effect is just the opposite of what we would think it is.

 Remember, the people you wrote about in your article are in Vermont, so when it was
reported on your site, most of the other states builders already knew about it.
Situations like this help to further mistrust what should be a thriving
industry.

 The consumers think that they don’t want to get into
something like those folks in Vermont.
Lenders start thinking that a building technology that should help to finish a
house faster and give them equity against the loan they made sooner, start
thinking about failures instead of all the successes. And Builders get shell
shocked, in most cases they lose their deposits, which usually represents their
profit and they wind up honoring a contract with little or no profit potential
and with no shelter against a loss should something go wrong.

 Take a look at how Haven decided to go out. They set a dead
line for new contracts that would be honored, made certain all of their subs
and suppliers got paid and took care of their people while doing so. So there
are good people in the industry.

A sales manager with years of experience in our industry had this to say about a trend within our industry:

Unfortunately the problem is indicative of the industry.
Here you have company that has failed (Sun) before and just reopens under a
different name (Taylored). Same people running the company but possibly
different investors. What do they say about doing the same thing over and over
again and expecting a different result? This has happened all too many times in
our industry. It hurts the folks who are fighting to keep their heads above
water and run a trustworthy business. It’s undeniable that every company has
their problems but the constant retreading of failed management is dooming our
industry. 

Will this happen again in our industry? Yes. Will it continue to happen
in the site built industry? Yes.

Even big companies have their share of problems. 24/7 Wall Street is
predicting that American Airlines, Talbots, RIM (Blackberry), Pacific Sunwear,
Suzuki America, Avon and even the Oakland Raiders of the NFL may not be
around at the close of 2013.