XPCamper goes out of business, files for bankruptcy?

[rruff]

I don’t have the answers all I seem to have are the questions.

The answer is simple. We need wage and benefit boosting laws for the low-end. Not the high end like we currently have! In the US union membership was high enough to set the playing field. Non union workers usually made more than union because companies really wanted to avoid dealing with union BS. I did hate the way unions operated in this country (in most it is way more civil and efficient), but look what happens when they are gone. Median wages have been stagnant for 40 years (maybe 10-20% gain in that time). In the prior 40 (when unions were strong), real median wages increased nearly 300%! Most people just compare how they are doing to the people around them and think they are doing alright. They don't realize how f'ed our wealth/income distribution has become.

But as a small business owner I think this is beside the point. Low labor rates certainly aren't hurting your business. You have a great deal of competition and it's tough. Many elements need to come together. You need great design skills, fab and manufacturing, people management, finance, marketing, etc. Not to mention a sizable hunk of cash at the outset to get established. In XPCamper's case, Mark seemed to be good at design and fab, and good at dealing with customers (unfortunately a lot of it was BS and con), but atrocious at running a sustainable operation. Didn't have enough investment to start, then did stupid stuff like digging an ever bigger hole... like that would ever turn out well. Wouldn't the first step be to get sustainable with his first camper model rather than constantly expanding and developing new ones? Let demand and profit fuel expansion? But I get it... design and development was the part he really *liked*; not running a business. He needed someone in control of the finances to tell him *NO*.

 

[luthj]

Part of the issue in North America, is that consumers have a somewhat unrealistic expectation for the cost of goods. The USA has 300 million consumers, all under the same government, standards, and within the same borders. For a long time this meant it was the single largest (by $$ spent) consumer market in the world. This allowed companies to produce goods at an enormous scale. Economies of scale, both on production, and sales, means that these goods were really cheap. Many of these goods could also be sold in other countries as well.

Now step into the niche, semi-custom, or hobbyist sub-markets. Outdoors, overlanding, and related, do not enjoy world wide membership, at least on any large scale. Europe comes close, but its not a huge market on its own. Now we have specialty made goods (vehicles, gear, tools, etc). Many are similar to broad market options (such as Roof top tents, etc). This similarity makes a consumer think, why can't I just buy a RTT for $100 from Wal-Mart, just like a regular tent?

Well, semi-custom (low production volume) combined with limited worldwide market, means more expensive, surprise!

 

[Martyn]

But as a small business owner I think this is beside the point. Low labor rates certainly aren't hurting your business.

low labor rates certainly help the bottom line, the issue is that we need skilled employees to perform the complex tasks involved in builds, and holding onto these employees is difficult when they can transfer their skills over to other industries that pay more and offer benefits. Training employees is only cost effective if you can hang on to them and amortize the cost of their training over the lifetime of their employment. Hiring skilled employees is difficult as there just are not a lot of them in the labor market and if you lose one they leave a big hole in the skill set of a company.

Which gets us back to paying employees well and offering solid benefits.

 

[vintageracer]

The solution iS REPLACE PEOPLE WITH MACHINES!

No Union, No benefits, No vacation, NO BS, Machine shows up and WORKS much more often than a living person, Machines not drunk or hungover at work, No cell phone breaks, No family issues, No need to leave early or show up late, No traffic issues getting to work, No SS payments, No workers comp, No equal opportunity issues, I can depreciate their value over time on yearly taxes, No hormonal issues, Can work 24 hours straight if needed, No overtime pay, Can transfer them to another location or division without asking them for permission, No expected yearly pay increase. No more maintenance problems than with babysitting a living employee. I could go on and on!

Hey there just might be something to this machine thing.

My new research project for after the Holidays!

Be careful what you wish for as your opinion of your worth just might price you right out of a job in the eyes of your employer when they look at issues involved keeping YOU in the job you perform versus the cost of automation of the job you perform within their business !

 

[Martyn]

The solution iS REPLACE PEOPLE WITH MACHINES!

No Union, No benefits, No vacation, NO BS, Machine shows up and WORKS much more often than a living person, Machines not drunk or hungover at work, No cell phone breaks, No family issues, No need to leave early or show up late, No traffic issues getting to work, No SS payments, No workers comp, No equal opportunity issues, I can depreciate their value over time on yearly taxes, No hormonal issues, Can work 24 hours straight if needed, No overtime pay, Can transfer them to another location or division without asking them for permission, No expected yearly pay increase. No more maintenance problems than with babysitting a living employee. I could go on and on!

Hey there just might be something to this machine thing.

My new research project for after the Holidays!

Be careful what you wish for as your opinion of your worth just might price you right out of a job in the eyes of your employer when they look at issues involved keeping YOU in the job you perform versus the cost of automation of the job you perform within their business !

Very interesting perspective, a little depressing but interesting. I have heard this before, I think I’ve heard it every decade since the 80’s, but with every improvement in automation it becomes a little more realistic. You have to ask yourself if everything is automated what would people do and how would wealth be distributed if it wasn’t based on your labor and skills.

 

[luthj]

At this point, if your job can be replaced by a machine completely, then you probably aren't in the skilled trades or higher.

The thing about better pay and benefits, is that then tend to trickle upwards, creating more people with the income to buy luxury items. Like overland/expedition campers for example.

 

[rruff]

low labor rates certainly help the bottom line, the issue is that we need skilled employees to perform the complex tasks involved in builds, and holding onto these employees is difficult when they can transfer their skills over to other industries that pay more and offer benefits.

Your competitors will be in the same boat though. If you need to pay more, then that's what you do. This is the only force that "naturally" increases wages. Scarcity of talent.

Well, semi-custom (low production volume) combined with limited worldwide market, means more expensive, surprise!

Absolutely! But that doesn't make it a bad business to be in. Just different parameters compared to POS trailer companies.

Be careful what you wish for as your opinion of your worth just might price you right out of a job in the eyes of your employer when they look at issues involved keeping YOU in the job you perform versus the cost of automation of the job you perform within their business !

You know what happened a hundred years ago when automation was really ramping up? We all got richer. No problem with employment; people just moved into different industries, and since everyone's wages were increasing they had plenty of money to spend on new industries. The biggest "worry" was how long it would be before the automation was so advanced that people didn't have to work anymore.

Somehow now the "solution" is for people who work for a living to keep getting poorer... a race to the bottom. Unless AI tech stalls pretty soon everybody is going to have hard time justifying a decent wage. We can all live well without needing to work much if at all... or face extermination (isn't that what you do with useless vermin?) by the owners of everything. Which way do you think we are headed?

 

[spressomon]

I know diddly about AI and the upcoming revolution to have machines do everything. But it kinda reminds of 25-years ago when the computer revolution...was going to eliminate paper, etc. Paper use actually went up (OK, we've probably seen the top of that bell curve...). Never mind the IT dept budget that every corp has or has to pay for outsourced IT services. So, yes AI will surely work but it will too have associated costs. There ain't no free lunch.

 

[Victorian]

I noticed many years ago how my trade (furniture making) was slowly "dumming down". When I went to trade school we had a lot of focus on design, engineering, machine set ups and of course working with wood. I worked in this trade for 25 years, partly in Germany and in Canada. The last 10 years I noticed a very rapid decline in the need for real craftsman. I managed several shops for others and within a year all of them where "just" building boxes for spec kitchens. Booorrriing ! I left the trade and realized that true craftsman are still needed but the majority of work can be done by fresh out of school kids. I was tired of working with those kids that didn't give a rats bum.... We where actually lucky if they showed up for work the next day...
This happened all over the world, where companies have increased difficulty finding skilled workers or customers that are willing to pay for such craft. Therefore companies have to get innovative to survive.

 

[pugslyyy]

I like the way the discussion has gone today. I love designing and building cool things, and having customers that want to buy really cool products makes that possible.

The good news is that there are plenty of people out there willing to pay good money for stuff done really well - but you have to find them and then treat them appropriately.

The ratio of the annual capacity of the higher end domestic overland camper manufacturers (the EarthCruisers, EarthRoamers, GXV, etc., of the world) is minuscule compared to the pool of potential purchasers.

 

[utherjorge]

About automation...I don't really think for a second that this will do anything bad. Never mind machines on the line breaking, or needing reflashes, or whatever. There will always be a market for hand-crafted things...but will there be any craftsmen?

 

[craig333]

I'm not too worried about automation. We just did a 15 million dollar equipment install. The factory techs can barely make it work. Going to be a while before machines don't need humans keeping an eye on them.

 

[rruff]

About automation...I don't really think for a second that this will do anything bad. Never mind machines on the line breaking, or needing reflashes, or whatever. There will always be a market for hand-crafted things...but will there be any craftsmen?

If there is truly a *demand* for craftsmen, then there will *be* craftsmen.

Automation can be good or bad depending on how it's managed. When the gains of higher productivity were shared by everyone it was undeniably good for any but a staunch luddite. For the last 40 years (particularly in the US) the gains have accumulated at the top of the income spectrum and little at the middle, and the bottom has actually declined. The "hole" left by relatively reduced consumer buying power (if wages are flat who do you sell the higher production to?) has been filled by increasing fiscal and private debt, and running a perpetual trade deficit. I don't believe that's sustainable, but it's lasted longer than I thought possible, so who knows.

This can become a serious problem if AI becomes more advanced. The lower-skilled/talent people are already scrambling for peanuts in most markets. What happens if for a substantial segment of the population, there is literally nothing they could do that would justify paying $7.50/hr? In other words most owners can choose automated solutions that more efficient. Of course, if you are making $50/hr it's even harder to justify your wage. And if AI gets increasingly advanced there won't be many niches where humans have an advantage. Maybe none.

This would be utopia for a billionaires that are properly positioned, but suck for everyone else... unless there is some aggressive and intelligent "spreading the wealth". The billionaires won't want that though, and they seem to be getting their way...

 

[rruff]

I'm not too worried about automation. We just did a 15 million dollar equipment install. The factory techs can barely make it work. Going to be a while before machines don't need humans keeping an eye on them.

A simple fact can help with perspective. Investments in automation always reduce aggregate man-hrs of work, else cost wouldn't be reduced and they wouldn't happen. In other words, automation destroys jobs, always. This isn't a bad thing. Actually it's the only way prosperity improves in a sustainable fashion. But those jobs lost must be replaced by increasing demand in new fields, and that demand is driven by consumer buying power. Billionaires accumulating assets does not create jobs.

 

[Martyn]

But, you might not have to worry too much about that...in Arizona the mandate is for the minimum wage to go up to something like $12.00 an hours in another week ($13\hr in Flagstaff). A similar path is being followed in quite a few other western states (don’t know about the rest of the US).

Of course, despite the added pay scale, all of those ever present tip jars still remain sitting out by the cash registers on the countertops of places where you’re still basically serving yourself.

Even at $12 or $13 an hour doesn’t cut it, people are still living paycheck to paycheck. With rents at and over $1.00 per square ft, food, fuel, and a couple of beers it’s all gone. If you have a medical issue it can sink you even if you have insurance, which most do not. It’s just not sustainable in my opinion.