Let’s begin this report with a clarification of the headline. The term white hats and black hats are metaphorical for ‘good guys’ and ‘bad guys.’ We know professionals in our industry who literally wear black hats. That should not be construed as a slam on any of those who literally wear a black hat.
That said, ‘white hat’ and ‘black hat’ are a symbolic case of ‘if the behavioral shoe fits, wear it.’
Furthermore, within firms one might deem to be a black hat operator, there are good people working for them. People may find themselves working at a company, association, or nonprofit with problematic professional ethics for a variety of reasons. Some may have a difficult time leaving or otherwise navigating an escape.
Now, let’s define for purposes of this analysis the black hats.
For this discussion, a black hat company is one that periodically causes negative headlines or other forms of blowback for the manufactured housing industry.
They may or may not be engaging in problematic practices at all times and places. But they do so often enough we’re the public and/or media impression regarding manufactured housing is a poor one.
Examples of such black hats?
Using the objectively negative media barometer, here’s what Google searches suggest as some.
- Clayton Homes
- Nathan Smith – SSK Communities
- Frank Rolfe RV Horizons/Mobile Home University
- As you watch this video by the activist group MHAction targeting Frank Rolfe and his colleague’s “Mobile Home University” boot camp, keep in mind that MHAction has reportedly had dark money funding from Warren Buffett. Not to defend or attack Rolfe and his partners, but keep in mind, that this kind of protest could be organized against whomever they want to target. These types of protests have attracted negative media coverage.
- Havenpark Capital, a more recent edition for headlines that arguably spark industry blowback…
- Cavco, on their SEC travails
There are others, but that is enough to make the point.
Then look at the MHI Executive Committee composition.
Once more, put yourself as an outsider looking in. How would you see MHI? White Hat, or Black Hat? Then, for a contrast, take a peek at the Manufactured Housing Association for Regulatory Reform (MHARR). Fewer headlines, but no black eyes.
Why Does MHI Have White Hat and Black Hat Companies?
That said, the question must be asked. What role or function do white hat companies play at arguably black hat dominated MHI?
Here is what years of evidence arguably boils down to:
- The industry’s smaller firms are caught up – intentionally or not – in the narratives spun by the MHAction white paper, or the John Oliver viral, satirical video, etc. After all, why would Buffett be funding MHAction, if not for a reason like that? Buffett’s not a masochist. Keep in mind what Kevin Clayton said in the video linked here. “Warren” would be okay with Clayton losing money for 5 years, so long as they are growing their moat. Kevin Clayton said it, why not take it at face value?
Take Buffett at his word, he wants sharks, piranha, and alligators in the waters of his Clayton’s castle moat.
With that vantagepoint, here’s what the evidence trail, ‘follow the money’ and some deductive reasoning suggest.
- Smaller companies at MHI are the buffet for Buffett and their Big Boy allies.
- Smaller or modest with firms with a better reputation give cover to MHI’s black hat firms.
- Small companies are helping pay for what the bigger companies want to do.
Keep in mind that when MHI produced those ‘story telling’ videos a couple of years ago, only a handful of firms were represented. Unless you were one of those, how did you or your firm benefit from that spending? That’s just one example out of many possible.
Keep in mind too that just as taxes and regulatory hurdles are barriers to entry, maintenance, or exit, so too is public perception of your product or service. Rephrased, the value of your business is depressed by the blowback caused by the black hat operators.
Within that context, consider what Alan Amy said.
A top gent at one of the industry’s rising star firms said at to us as we toured Tunica words to this effect. ‘You guys (MHProNews) lay out the facts and evidence step-by-step in a logical manner that makes it easy to follow. I’m just glad that you’re taking aim at Clayton and company, and aren’t taking aim at us [i.e. his company].’
Black hat behavior arguably by high-profile companies makes it harder for white hats to do business. But never forget, there are ways to jujitsu that, as we reported on a prior Sunday. ICYMI, see that linked here.
With no further adieu, it is time to dive into the headline news from the week that was.
What’s New on MHLivingNews
What’s New from MHARR
What’s New on the Daily Business News on MHProNews
- National Academy of Sciences Praise for Industrialized Housing Projects, Research, Profitable Manufactured Housing Lessons Learned
- White House, CNBC, Larry Kudlow Unpack Today’s Economic Report, Plus Manufactured Home Stock Updates
- Bipartisan Praise for Manufactured Housing, What’s Next
- Rising Oil, Fuel Costs, and Manufactured Housing – plus Manufactured Home Stock Updates
- FEMA Opens Its First Manufactured Home Community In Disaster Response
- Manipulating Manufactured Housing Pros – Caterwauling Mudslinger, Just Write a Check, Pay Cash, Use Plastic, and Shut You Up
- Deer Valley Homebuilders Release w/Video Underscores Surprising Clayton Homes, Berkshire Hathaway Connections
TEASER Alert: News Tip – Exclusive Report planned Monday morning.
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Thanks for checking in. That’s this Sunday’s fact-checked take on “News through the lens of manufactured homes, and factory-built housing” © where “We Provide, You Decide.” © ## (News, analysis, and commentary.)
LCI Industries, Patrick, UFPI and LP all supply manufactured housing.
AMG, CG and TAVFX have investments in manufactured housing related businesses.
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Submitted by Soheyla Kovach to the Daily Business News for MHProNews.com.