Clayton Homes Annual Report Reviews Truth Hiding in Plain Sight

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Original images of homes and Kevin Clayton are from Clayton’s 2018 annual report, and are provided under fair use guidelines for media. Use of these images should not be construed as an endorsement in any sense.

If you listen, as we as an industry trade publisher have, to a range of inputs about Clayton Homes’ retail operations, you will find a full scope of comments and perspectives. Those third-party inputs range from praise, to disappointment, and worse. How can someone objectively sort through that dichotomy?  This report will examine various sources, including Clayton, Warren Buffett, Berkshire Hathaway, and others in search of objective reality.

 

Because of Manufactured Home Living News (MHLivingNews), as Kevin Clayton and others in the Berkshire Hathaway orbit have learned first-hand, we get comments direct from the home buying public and manufactured home owners, including those who have purchased or shopped Clayton. We don’t have eyes everywhere, but the public and professionals have eyes. They are sources of information and perspectives. The screen capture below is one of several tips and reports provided by sources, ranging from the general public, to Clayton owners – as in the example below – to federal sources, or sources inside of the industry.  To see that message full size, click the screen captured image below to download. 

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To see this email to Kevin Clayton, MHI, HUD, and others and others full size, click to download.

In 2017 and 2018, Clayton Homes published their own annual report, apart from what Berkshire produces. It both opaque and revealing.  For example, Clayton’s annual report does not specifically state how many HUD Code manufactured homes, how many modular homes, and how many tiny houses (built to ANSI or whatever code) they have produced in 2018. Are they concerned that charges of monopolization of the HUD Code market might increase if those specific number were known?

 

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To see this screen capture graphic full sized, please click to download, then open.

But Clayton’s Annual Reports includes facts that tell insightful experts and manufactured housing consultants more than the Knoxville metro based firm may realize.

 

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To see this full size, download and open.

Let’s look at two examples and illustrate it with five videos.

  • Two videos are by Clayton Homes about Clayton. They are examples of their version of ‘storytelling.’
  • Then, there is a video posted in this report from an unhappy Clayton customer.
  • Another video posted is from a former team member, and it is tied to a controversy that Democratic lawmakers and others have asked the federal government to investigate; and such investigations are reportedly underway.  Of course, Clayton issued a denial to mainstream media of any wrongdoing. 
  • Finally, one video shared herein is a third-party report about one of several scandals associated with Clayton.  

Before we do those, let’s look next at what Warren Buffett, Berkshire Hathaway’s chairman, has said about the unit that he pushed to acquire in 2003. Recall that Kevin Clayton said in a video interview posted near the end of the article linked here that Buffett described the battle to acquire Clayton as one of the ugliest that Berkshire Hathaway had ever been involved in.  Keep that in mind, because it speaks to how valuable Buffett believes manufactured housing is.

  • As noted in a screen capture above, Buffett has said that Clayton is ‘best in class’ in manufactured housing. If it was, then why isn’t it selling many times more homes than it currently is during an affordable housing crisis?  That claim will be examined from evidence provided in this report by Clayton themselves and others.
  • Buffet has also said the following.

 

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Given the amount of unfavorable press Clayton has generated since they were acquired by Berkshire in 2003, do those comments seem odd? Now let’s dig deeper.

Clayton asserts in their annual report that they want a great experience for team members and for customers. Really?

   If so, then why did Clayton – with Buffett’s backup – and the Manufactured Housing Institute press the Government Sponsored Enterprises (GSEs) of Fannie Mae and Freddie Mac into lending on what they’re calling “a new class” of much higher priced manufactured homes?

   If Clayton cares about customers and their team, why not press the GSEs or the Federal Housing Finance Agency (FHFA) into lending on all HUD Code manufactured homes, as the Housing and Economic Recovery Act (HERA) of 2008 mandated? Why give them instead only higher cost lending options, that has repeatedly generated negative press from the Seattle Times, Democratic lawmakers, and others?

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Disclosure: MHARR is and MHI has been a sponsor of our website. But that’s out in the open, MHARR has banner ads here. Our coverage has been based upon our LLC’s own research and work, without favor. We probed via reports MHI and MHI backed companies while they were still sponsors.  The same has occurred with MHARR. 

That the reality as opposed to the image projected by Clayton bothers some team members is exemplified by this mainstream news video posted below.

 

 

 Don’t Clayton’s deeds speak louder than Clayton’s words?

  • How hard is it for them to say, fully enforce existing federal laws that are favorable to manufactured housing and the general public?
  • How hard would it be for Clayton to tell their purported puppet association, MHI, to get them to do all that is necessary to get good federal laws enforced? Doesn’t MHI show numerous photo ops with high level federal officials and lawmakers? Isn’t it MHI that claims clout?
  • But instead, why has there been a pattern of behavior of MHI and Berkshire brands in MHVille claiming one thing, but doing another?

For instance. If Clayton and Berkshire Hathaway lending units wanted to see Fannie and Freddie do more chattel lending (personal property, home only loans), then why did 21st Mortgage Corporation and Vanderbilt Mortgage and Finance (VMF) both decline giving data to the GSEs that other manufactured home lenders reportedly provided?  An excuse offered by the GSEs is that Berkshire lenders in manufactured housing did not provide the data they needed in order to enter robustly into manufactured home personal property lending.  Or what about the apparent conflict of interest of Fannie and Freddie both sponsoring MHI events, while MHI claims to be pushing those GSEs into doing more lending?

 

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MHI award winner Marty Lavin advises, “Follow the Money” and “Pay More Attention to What People Do Than What They Say.” The GSEs are praising manufactured home quality, but then created a special class of manufactured homes, with Clayton Homes and other key MHI member input, that is aimed at funneling that lending, per informed sources.

The objective truth smells differently than the perfumed Omaha-Knoxville-Arlington scent, doesn’t it? 

 

 

Here – above and below – are two pro-Clayton videos, by Clayton Homes. 

 

 

Customer Satisfaction

What follows should not be construed as implying that Clayton necessarily wants a percentage of unhappy customers.  

 

 

But consider for a moment the screen capture from part of their 2018 annual report. While they appear proud of their “Net Promoter Score” or NPS, there are clearly a significant number that did not give them that clear thumbs up.  Consider the thumbnail analysis on the screen capture of their NPS below.

 

ClaytonHomesNetPromoterScore2018=59.66PercentAnFgradeManufacturedHomeProNews

 

What develops from an objective reading of their own material, combined with third-party insights like those shown, is quite different than the freshly-pressed-shirt image that the company and its CEO strive to project.  MHProNews will unpack more from Clayton’s own annual report in the days ahead.  It is part of the true state of the manufactured housing industry.  These reports shed light on why the industry is underperforming. 

 

I-Report News Tips and comments

To send MH News, Tips, links, documents, facts, comments, or other factory-built housing related suggestion

The video above is a bonus interview that helps outside investigators looking in better grasp the why behind the what. That’s a wrap on our third installment today of manufactured housing Industry News, Tips, and Views Pros Can Use,” © where “We Provide, You Decide.” © ## (News, analysis, and commentary.)

SoheylaKovachDailyBusinessNewsMHProNewsMHLivingNewsSubmitted by Soheyla Kovach for MHProNews.com.
Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com. Connect with us on LinkedIn here and here.

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