RoadTrek/Erwin Hymer Group

[rangersfan]

Really not good news for all local employees of the Erwin Hymer Group.

Especially with the impending sale excluding the local organization due to these financial irregularities. Some reports have been saying that prior to the layoff last week over 1000 people were employed locally. 

https://kitchener.ctvnews.ca/mobile/seve...-1.4262365

[tomh009]

Really not good news for all local employees of the Erwin Hymer Group.

Especially with the impending sale excluding the local organization due to these financial irregularities. Some reports have been saying that prior to the layoff last week over 1000 people were employed locally. 

https://kitchener.ctvnews.ca/mobile/seve...-1.4262365

I do believe it's 1000 in North America, the local number is substantially smaller.

It appears that the misbehaviour of a few managers may leave the entire North American operation in the cold, unless Thor is willing to pick that up at a reduced price once the financial mess is sorted out. And in that case, they won't be starting from a strong position, as they won't have a European partner any more.

No charges have been laid yet, but I will not be surprised to see that happen.

[tomh009]

Really not good news for all local employees of the Erwin Hymer Group.

Especially with the impending sale excluding the local organization due to these financial irregularities. Some reports have been saying that prior to the layoff last week over 1000 people were employed locally. 

https://kitchener.ctvnews.ca/mobile/seve...-1.4262365

https://kitchener.ctvnews.ca/production-...-1.4273977
"Multiple employees at Erwin Hymer have confirmed that production has stopped at the RV manufacturer in Cambridge.

CTV was told there was a meeting on Tuesday morning at the facility and that employees are no longer allowed to touch the vehicles because they have already been sold."

The acquisition of Erwin Hymer Group (excluding the North American operations, which is primarily Cambridge) closed a week ago. The above comments imply (to me) that EHG owners may have a buyer for the North American operations, including inventory and assets, but that the buyer is not buying the company as a going concern.

[rangersfan]

Terrible Erwin Hymer Group has terminated all local employees effective immediately. It looks like they are not getting severance pay, I feel terrible for the workers.

https://kitchener.ctvnews.ca/mobile/empl...-1.4299298

[tomh009]

Terrible Erwin Hymer Group has terminated all local employees effective immediately. It looks like they are not getting severance pay, I feel terrible for the workers.

https://kitchener.ctvnews.ca/mobile/empl...-1.4299298

I'm not sure yet "the company" is to blame; it appears that fraud was committed some of its senior managers, which caused the collapse of the acquisition, and subsequently the collapse of the left-behind Erwin Hymer North America. What exactly happened will probably not be found out until there is a criminal investigation.

Hopefully they can succeed in the restructuring and salvage at least part of the business and some of the jobs.

[Spokes]

And if there are criminal charges, that opens the door for civil cases, although to what extent, I don't know

[tomh009]

Former Roadtrek owner confident buyer will emerge for brand
https://www.therecord.com/news-story/919...for-brand/

“I am quite hopeful that someone will see a fantastic opportunity,” Jeff Hanemaayer, former owner of Roadtrek, said.

[rangersfan]

The amount of liabilities against the group ~300 million make that less appealing to potential buyers I would think. What about patents and processes you would have thought Erwin Hymer would own all of that?

[tomh009]

The most valuable bits will be the RoadTrek brand, the manufacturing tooling and equipment, and the in-process inventory. They will likely sell these to someone, but the creditors will end up with pennies on the dollar.

[MacBerry]

The most valuable bits will be the RoadTrek brand, the manufacturing tooling and equipment, and the in-process inventory. They will likely sell these to someone, but the creditors will end up with pennies on the dollar.

The employees will end up with less than pennies as Canada's bankruptcy laws do not protect employees or their pensions. 

It has been at least 30+ years for change to Canada's bankruptcy laws which would place employees before creditors and yet government after government does nothing.

[ijmorlan]

The problem is a lot of bankruptcies should be processed as fraud perpetrated by the managers.

When one puts money on deposit at a store, one does not consider that one is loaning money to store; instead one expects that they are holding it in trust in a safe place. Similarly, pensions are supposed to be held in trust for the employees. Any shortfall resulting from comingling deposit money or pension money with regular business operations should be considered to be fraud by the responsible managers.

Note that what I am proposing is very different from re-arranging the priority of various creditor groups. I’m saying that only people who actually understand their loan to the company to be a loan should be regular creditors, who run the risk of losing their loan. This means banks, bondholders, etc. People who are relying on the company to hold their money for them should be able to trust that the company must act in their fiduciary interest, on pain of the appropriate individuals going to prison.

[tomh009]

The most valuable bits will be the RoadTrek brand, the manufacturing tooling and equipment, and the in-process inventory. They will likely sell these to someone, but the creditors will end up with pennies on the dollar.

The employees will end up with less than pennies as Canada's bankruptcy laws do not protect employees or their pensions. 

It has been at least 30+ years for change to Canada's bankruptcy laws which would place employees before creditors and yet government after government does nothing.

First in line is CRA, who will recover any unpaid taxes before anyone else gets paid. Second, though, are the employees, who will receive any unpaid wages, vacation and severance pay before any secured (or unsecured creditors) are paid.

Here is a good summary:
https://www.gdlaw.ca/blog/2016/08/credit...irst.shtml

[tomh009]

The most valuable bits will be the RoadTrek brand, the manufacturing tooling and equipment, and the in-process inventory. They will likely sell these to someone, but the creditors will end up with pennies on the dollar.

The employees will end up with less than pennies as Canada's bankruptcy laws do not protect employees or their pensions. 

It has been at least 30+ years for change to Canada's bankruptcy laws which would place employees before creditors and yet government after government does nothing.

First in line is CRA, who will recover any unpaid taxes before anyone else gets paid. Second, though, are the employees, who will receive any unpaid wages, vacation and severance pay before any secured (or unsecured creditors) are paid. (Pension plans are not protected in the same way, but then few companies these days have defined-benefit pension plans.)

Here is a good summary:
https://www.gdlaw.ca/blog/2016/08/credit...irst.shtml

[tomh009]

So this chapter is coming to a close, with a receivership auction next week:
https://infinityassets.com/erwin-hymer-g...ation.html

There is a long and detailed article in the Record about how the company ended up in this situation, although even after that, I'm not clear on (1) where all that money actually went, and (2) how it is possible that the EHG parent company did not spot any of this prior to selling the North American operations.
https://www.therecord.com/news-story/949...h-america/

As some good news (or at least mitigating the bad news) the RoadTrek brand has been purchased by Rapido SAS, a French competitor of EHG, which will also be taking over one of the four RoadTrek/EHG facilities. Relating to the purchase earlier in the year, the Rapido press release said

Pursuant to the letter of intent, Rapido has agreed to purchase substantially all of the assets of EHGNA relating to Roadtrek. Rapido has the intention of assuming the lease of one of the existing manufacturing and assembly facilities. Subject to ongoing due diligence and the execution of a definitive purchase agreement, Rapido plans to re-establish and reinvigorate the Roadtrek business.

Rapido's President Pierre Rousseau noted, "Roadtrek is a well established leading brand in the B Class segment of the RV market. Our priority will be to re-establish operations and further develop this famous brand in North America." In doing so, Rapido expects to hire a workforce that could grow eventually to more than 200 employees.

The "new" RoadTrek will be operating from 20 Tyler St in Cambridge.