FOREST CITY,IA-One of the biggest industries in North Iowa is seeing a bit of a downturn.Winnebago Industries says their profits dipped dramatically this quarter.
But other areas of this industry are actually thriving.
Winnebago sales may be getting hit hard, but the RV rental business is doing pretty well.
Local Winnebago retailers say like Winnebago Industries sales have been sluggish, but they have been able to supplement that with the rental side of things.
It appeared that business was back on track for Forest City based Winnebago Industries.
But with the price of many of our daily necessities going up, company profits are beginning to shrink.
Winnebago President Bob Olson says, "we were profitable, but we did not meet street expectations."
Profit for the fiscal third quarter is down nearly 80 percent.
Olson believes it's due to softer demand for motor homes, rising raw material costs and an inventory accounting expense.
Olson says, "but things are getting tough in the economy. We felt that coming out of 2010 things were picking up. We thought we we're well on our way to recovery which would have been not only good for Winnebago, but the RV industry."
Olson says because almost everything is more expensive these days, folks aren't investing in some of the recreational items.
Olson says, "it's going to be a wait and see attitude now to see just how long this slowing of the recovery is because I’m confident that we're going to come out of this again. It's just one of those bumps in the road that we weren't anticipating."
The sales side of this business may be feeling the pinch of a downturn in the economy, but the other side, RV rentals is actually booming this time of year."
Lichtsinn Motors owner Ron Lichtsinn says, "you know the rental side is really strong. We're actually booked out through labor day for the entire summer."
Lichtsinn says business is so good they are looking to add to their fleet.
He says they do get a little spill over from folks who really aren't in a place to buy right now, but still want the advantages of taking an RV trip.
Litchtsinn says, "they do tend to be stronger when overall sales are slightly down."
He says the stability from rentals is nice when the RV business as a whole has been kind of a rollercoaster.
The good news at Winnebago is they haven't had to lay anyone off.
But they did have to take some of the overtime away.
They hoping that will be the worst of this situation.
Winnebago's president says even though it wasn't as high at the company would have liked, this is the fifth quarter in a row they have been profitable.
