Word of accelerating costs of lumber products is a matter reported by mainstream news. Sources like the National Association of Home Builders (NAHB) or this quote from Poynter on August 21, 2020 make the point: “The price of lumber has staged a staggering increase in recent months, rising roughly 80% since mid-April to an average price above $600 per thousand board feet. … COVID-19 infections and precautions earlier this year shut down lumber mills, creating a shortage in supplies, particularly in pressure-treated wood.” But how a Skyline Champion factory in Worthington, Minnesota – Highland Manufacturing – has dealt with that issue sparked independent retailers to contact MHProNews to call out the purported excessive hikes, pricing injustice on previously ordered homes, and claims of foul play involved.
In several exclusive tips to MHProNews, independent retailers contacted us by phone and email. The following email was sent as evidence of their concerns. Skyline Champion media relations professional Sarah Janowicz as well as President and CEO Mark Yost were asked about this email and the allegations raised by their company’s independents as well as by rival HUD Code producers.
The message from MHProNews to Janowicz read as follows. It includes insights from competitors as well as from Skyline Champion independent retails or “dealers.”
=== started of quoted message thread ===
Please be aware of the following forward prior to replying to our inquiry.
———- Forwarded message ———
Please see important information in the attached document.
Champion Home Builders Inc.
Accounts Payable / Sales Admin
1660 Rowe Avenue
Worthington, MN 56187
==== end of forwarded message, see attachment ====
We’ve been contacted by several sources including, but not limited to, your customers and competitors. As you may recall, we are the manufactured home industry’s largest and most-read trade media (see below).
Our understanding of this issue is that more than one of your competitors does not have this type of policy. Pulling from one of those messages on this topic, a rival brand said the following.
“We have always price protected RSO’s and will continue even if we lose money doing it. If we catch a retailer claiming units are RSO’s that aren’t there dealer status will be in jeopardy. Stock models have always delivered at the current price when invoiced. Cavco and Champion quit price protecting RSO’s in the last two weeks…I have also heard Cav and CHB are backing up if threatened with lawsuits for unilaterally changing their contract.”
Needless to say, at least some of your retailers are less than happy about this development. MHProNews been provided with copies of orders that well predate this Skyline-Champion memo that is attached.
Against that backdrop, here are our questions. You know the drill, please type your reply following each of the questions for our mutual accuracy in reporting.
- Is this an error at the local plant level? Or is this a corporate wide policy?
- If some Skyline Champion customers who have pushed back against this have indeed been given a break, how is that fair to your other retailers or communities?
- Has Skyline Champion in fact unilaterally changed the agreement with their independent retailers, as one source suggested?
We plan a report in the near term. Your on-the-record response is valued. There are some BCC’s to document this inquiry. Please advise, and thank you.
=== end of inquiry to Skyline Champion’s PR person, Sarah Janowicz ===
Industry readers and interested parties should download that message to Skyline Champion retailers, which is once more linked here as a download.
A similar message as the one above to Janowicz to was also sent to Skyline Champion President and CEO Mark Yost. Several reported receiving the bcc of these emails, with some indicating that they forwarded that email above to industry colleagues.
Rephrased, there is no doubt that Janowicz and Yost both received the message, as numerous others reported getting it.
As of the time of this report, both Yost and Janowicz have declined reply. Meaning, Skyline Champion is silent on the allegations of unfair business practices that may have unilaterally skirted aspects of their “dealer agreements” with independent retailers of their products.
Among the reports from independents, backed up with other documentation provided to MHProNews to confirm their claims, was examples of units ordered weeks ahead of the lumber price hikes that were nevertheless hit with lumber surcharges that at times topped $10,000 on a single factory-built home.
As a retailer put it, when Skyline Champion knew of the rising price environment, why didn’t they plan sufficiently in advance to meet the needs of their retail base? Why did they instead punish their independent retailers who were ordering homes well in advance of these more recent price hikes?
Advice to Independents?
A self-described angry and frustrated Skyline Champion retailer told MHProNews about other examples of what their location has endured from suppliers of factory-built housing.
The message that follows was sent to that party in reply.
“…The question is, is it [allegations of wrongdoing by producers of HUD Code homes] mere happenstance? Or is it a stratagem designed to slowly eliminate independents?
I don’t know how much you read on our sites, but if you read the pro-MHI sites, almost all you get is praise of them and the big boys.
Years ago, I was an independent like you. Sold out before all this hit. But I’ve not forgotten the lessons.
It’s a great industry, but IMHO, corruption is undermining the [independent] guys like you.
Thus the need for a post-production Association for retailers and independent communities. Much profit opportunity if that were to occur.
Keep in touch, let me know what you hear and do.
As there are claims that Skyline Champion was “backing up” when “threatened with lawsuits for unilaterally changing their contract,” it remains to be seen what will occur as a result of these claims of heavy-handed treatment by publicly traded SKY from ‘their’ independent retailers.
Additional Facts, MHProNews Analysis and Commentary
What ought to be recalled in this context is that Skyline Champion (SKY) – which owns a retail subsidiary, Titan Homes – has purportedly threatened to drive out a rival independent in a different part of the country.
In an email exchange earlier today, MHProNews asked an independent retailer in a different part of the U.S. the following. “What I recall, correct me if I am wrong, is that someone in Titan retail management – you say, Mike Quinn? – threatened to drive your nearby location out of business by undercutting you guys on pricing. You called them out on it publicly. Do I have that right?”
“That’s correct. I prefer off the record,” stated the source via email in that same topic/message thread said previously to MHProNews, “Good morning Tony, it was Mike Quinn and he was their regional VP, but they terminated him recently.”
Additionally, Skyline Champion is on record saying in published investor relations statements and presentations that their top priority is increased market consolidation.
In a prior, related claim about fellow MHI member, Clayton Homes, the Texas-based “Mobile Home Militia” said via Facebook that “Clayton [Homes] has convinced hundreds of independents they are your business partner, but make no mistake, they are your largest competitor.”
“The greatest trick the Devil ever pulled was convincing the world he didn’t exist.”
As if to underscore that comment, is this distinctive quote from Kevin Clayton.
That Clayton quote is from a video interview and the associated transcript of Kevin Clayton’s comments both found at this link below.
Summing up, there is prima facie evidence of several top brands in manufactured housing – routinely members of the Manufactured Housing Institute (MHI) which they reportedly dominate in various ways – behaving in a manner that could be described as violations of antitrust laws.
Given that some of these statements from corporate officials – such as that email from Skyline Champion to their retailers, cited above – are using what the law refers to as “the wires” or at other times via U.S. Mail, if violations of the law are occurring, then there are reasons why various aspects of RICO or other federal and state laws may also be involved too.
No media outlet in or out of manufactured housing has studied these issues and reported on them more over the course of several years to the same degree that MHProNews has done.
MHProNews plans to monitor and report on whatever is next on this or other such issues as is deemed appropriate.
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By L.A. “Tony” Kovach – for MHProNews.com.
Tony earned a journalism scholarship and earned numerous awards in history and in manufactured housing.
For example, he earned the prestigious Lottinville Award in history from the University of Oklahoma, where he studied history and business management. He’s a managing member and co-founder of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.
This article reflects the LLC’s and/or the writer’s position, and may or may not reflect the views of sponsors or supporters.
Connect on LinkedIn: http://www.linkedin.com/in/latonykovach
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