Latest / Behind The Village Podcast / The Hidden Impact of Tariffs in RVs & The Story Behind The Hitch House | Tom Stoate

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The Hidden Impact of Tariffs in RVs & The Story Behind The Hitch House | Tom Stoate · Behind The Village Podcast

0:00
It was literally at the 11th hour when, you know,
0:03
the manufacturer's reps were calling the Canadian
0:06
dealers, right? Or like me, I called and said,
0:09
everything that we got in order, stop it. You're
0:13
listening to the Behind the Village podcast.
0:16
Our guest today is Tom Stowett from The Hitchhouse.
0:22
So is that the difference between motorhome versus
0:25
RV? Is just the fact that there's an engine?
0:28
Or is there more of a... RV kind of is an overall
0:32
term that captures motorhomes as well. Motorhomes
0:34
just allows it to delineate specifically what
0:38
we're dealing with, right? But recreational vehicles
0:41
is kind of a catch -all term. There's a lot of
0:43
words used for, I guess, motorhomes. that kind
0:48
of industry. Cause there's camper vans, there
0:50
is like RVs, there is like, you know, that people
0:53
can, I feel like it gets confusing sometimes.
0:56
It does. So there's like RV, the motorhome is
0:59
a smaller segment and then camper vans, a smaller
1:01
segment. So camper van, you know, there's multiple
1:04
different designations of a motorhome. So there's
1:06
the camper van. Then there's ones that they refer
1:09
to as a class C where you have, you're sleeping
1:11
above, um, you have some sleeping above the driver
1:14
and passenger. Class A is more of that bus style
1:17
look, right? Then a Class A will come in a gasoline
1:23
platform, right? Where your engine's in the front.
1:26
And then you can have a diesel pusher, which
1:28
is a diesel platform, air ride suspension, and
1:33
your engine is in the rear, right behind your
1:36
rear axle, right? So that's why they refer to
1:39
it as pusher, right? So you can have a Class
1:41
A gas, Class A diesel pusher. Right. So are we
1:45
right now where we're sitting? Is this a class
1:47
A? This is a class A diesel pusher. It's a Dutch
1:50
star by Newmar Corporation. Nice. Yeah. And what
1:54
kind of. Do you carry all kinds and makes of
1:57
motorhomes? Or do you specialize in specific
1:59
brands? Because you talked about Newmar, right?
2:01
So we carry a variety of different types. So
2:06
the van style right up to the diesel pusher.
2:08
And then we carry multiple manufacturers. We're
2:11
somewhat different than the car industry where
2:13
one store has one brand. So if you're a Ford
2:16
store, you're a Ford store, right? Yeah. and
2:18
Mercedes, etc. So here, Newmar is one line that
2:23
we carry. Thor Motor Coaches another. Thor will
2:29
build a camper van as well, but they build everything
2:32
from a camper van up to a diesel pusher. Newmar
2:38
almost exclusively specializes in Class A motorhomes,
2:42
so gas and diesel. So they have come out with
2:46
a smaller, unique luxury coach, but more, I wouldn't
2:51
call it a camper van, but more of a hybrid, like
2:53
a little larger than a camper van, but not a
2:56
Class C either. So then there's Pleasure Way
3:00
Industries, which is a Canadian corporation out
3:02
of Saskatoon and very, very well built coach
3:06
as well. And then we do carry Winnebago. um just
3:11
anything usually with vans with winnebago and
3:14
coachman which is mostly class c product line
3:17
they have a nice specialization in that wow yeah
3:21
that's pretty interesting and you know for the
3:24
hitchhouse i know because i've been here several
3:26
times but you guys not only have like a really
3:30
large amount of inventory but you have a lot
3:33
of different Like there's multiple buildings.
3:37
There's more, like there's a parts apartment
3:38
right here next to us as well. Like you guys
3:42
do more than just sell motorhomes, it feels like.
3:46
Yeah. Right? Yeah. So when my father -in -law
3:49
started building the dealership, even from the
3:53
very beginning, he looked at that you'll never
3:55
do well in the front end, which he was referring
3:58
to sales, that if you don't have a strong back
4:00
end, which is service, right? So service is kind
4:03
of the, he looked at service. as the foundation,
4:05
right? So, and I'm not going to sit here and
4:08
try to tell you that we're perfect because we're
4:10
not, but we do try very hard. And there's a lot
4:14
of investment that we put back into that because
4:17
we want to make sure that we're putting our best
4:20
foot forward and trying to help people, right?
4:22
So we built the service department for that.
4:25
Along the way, it became pretty clear that you
4:28
need body work for this, right? And there's some
4:31
specialization to that as well. So we... In 2004,
4:36
we had a very small body shop prior to that.
4:38
One bay and that was it. We ended up building
4:42
a body shop department. So we have two preparation
4:47
bays and a full 60 -foot cross -drop paint booth.
4:51
And then, you know, like you said, we have service,
4:54
we have parts, and we have the body shop. We
4:59
also have storage facilities. So people can buy
5:02
their coach here, they can store it here. If
5:05
they're not heading down south during the winter,
5:07
then they can store it here or they can store
5:09
it here year round. It doesn't matter. Our property
5:11
is very secure. That's pretty amazing. And you
5:16
guys also sell used motorhomes as well, right?
5:19
We do. Like most dealers, used can be a very
5:23
strong size of your business, right? But it's
5:27
hard to find. It's hard to get enough volume
5:30
just simply on trades. So my brother -in -law,
5:34
Chris, specializes in buying used motorhomes,
5:37
and he does it all across North America. Not
5:41
so much recently in the U .S., but traditionally
5:45
it's been all across North America. Right. Yeah.
5:49
We've been hearing a lot about tariffs in the
5:52
news since... A while now. For a while, yeah.
5:57
Right? But what does it mean for your industry
5:59
specifically? What are the issues or what's causing?
6:03
Just a little bit of a breakdown so people understand
6:05
when we're talking about tariffs, what is it?
6:10
What does it mean? The very first big one is
6:14
when that product ships across the Canadian border,
6:19
whoever's importing it is subject to a 25%. tariff
6:24
on it, right? Straight up. Like new, used, right?
6:27
On motorized product because that's the reciprocal
6:30
automotive tariff, right? What most people aren't
6:33
thinking about is that regardless of that, you
6:36
know, that coach comes across the border from
6:38
the US, it's hit with a 25 % reciprocal automotive
6:40
tariff, right? But before that, then coaches
6:43
that are going down those lines today will have
6:48
increased inputs, right? Because... There will
6:52
be different accessory parts and that will come
6:54
from other countries. Different parts of the
6:57
world. Yeah. So the fridge, this might come from
7:00
China. Right. Right. The slide motor might come
7:03
from Italy. Right. Something other might come
7:06
from Germany. The motorhome manufacturer imports
7:09
those. They pay the tariff to the U .S. government.
7:13
And now their cost just went up on that part,
7:16
whether it's a baseline 10 % tariff or it's more
7:19
than that. Right. That those inputs are increasing
7:22
the cost of that vehicle in the US as it's being
7:26
produced right now. That doesn't even account
7:28
for steel and aluminum, right? Because all these
7:32
things have steel and aluminum in them. So what
7:34
you're telling me, and if I understand this correctly,
7:37
is that every time a motor home or any motor
7:40
vehicle, I'm assuming, but is being constructed,
7:44
all the different parts and stuff that are, you
7:47
know, within the tariff. things that that um
7:51
that are in place then they their costs are going
7:55
up so ergo constructing a motorhome or constructing
7:58
a new vehicle the price of that is going up and
8:01
then putting giving that or or or buying that
8:05
from the u .s and bringing it to canada is a
8:08
25 tax on it on top of that already right so
8:14
if i'm understanding correctly the amount of
8:17
cost of each and every little thing just yeah
8:22
like it's skyrocket like it's very cumulative
8:25
right but it just it goes up yep yeah exactly
8:28
right so everything that we have right now came
8:32
pre -tariffs right so wasn't hit right so eventually
8:36
this supply will run out right right yeah you
8:40
know so now's the time if you're on the edge
8:44
if you're deciding whether or not you want to
8:47
buy a motorhome yeah yeah well pretty much anything
8:50
because nowadays you see a lot of stores are
8:52
having the same thing right where you you have
8:54
little labels or something basically saying whether
8:57
this has been impacted by a tariff in some way
8:59
shape or form yeah right but eventually as inventory
9:02
of stuff runs out then yeah right no people will
9:07
be saying well we're working hard on removing
9:10
you know, the tariffs between Canada and the
9:12
U .S. or they're working on exemptions. That's
9:14
right. I have myself, like I have to give a thank
9:16
you to Eleanor Hamm, the Executive Director for
9:20
the Recreational Vehicle Dealers Association
9:22
of Canada, because she has been pushing the dealers
9:26
to make submissions to the federal government
9:29
to request an exemption because 90 % of, almost
9:33
90 % of the motorhomes sold in Canada are built
9:37
in the U .S. Right. So there there isn't a there
9:40
isn't a manufacturer in Canada for this style
9:44
of coach that we're sitting in today. Yeah. Right.
9:47
Right. There's there's there is van manufacturers
9:50
still like there's Pleasure Way Industries. Yeah.
9:54
Right. That they there's leisure travel as well.
9:59
And there's road truck. Right. And then there's
10:02
some smaller ones. Right. But these guys do mostly
10:04
just vans are very small, what they call class
10:08
C's. But they're they're small units. They're
10:10
more couples units versus family units. Right.
10:14
Like they don't have the bigger products or it's
10:18
just not manufactured here. Right. So our VDA
10:22
has been working on that. I personally. presented
10:27
a case and dropped it off to our MP local here,
10:30
Doug Shipley, who's been fantastic. With the
10:34
guidance of the RVDA of Canada, I also did an
10:37
email submission and copied Doug Shipley on that
10:42
as well. Doug called me personally to tell me
10:45
he's received everything, it's fine. When Parliament
10:49
reopened, he personally handed our case to the
10:54
Minister of Finance. So he's been a champ helping
10:58
us because he's local. He's been here. He knows
11:01
that the vast majority of the product is not
11:04
built in Canada. It's built in the U .S. So if
11:07
you can't source it here and you can't get it
11:11
from Europe because they do build a Class A,
11:15
but not like what you see here. So there isn't
11:20
a replacement product for it. There shouldn't
11:21
be there. So let's say they... The government
11:24
acts and the Minister of Finance says, okay,
11:26
good, we're going to take it off. These motorhomes,
11:28
new and used, because you can't get these in
11:30
Canada. You still have input problems in the
11:33
U .S. Yeah. Oh, that's true. Right? So if you
11:36
take off the 25%, you could have, it could be
11:40
15, 20, 20, 25 % increased already in cost for
11:44
the inputs going into it because these other
11:47
countries are tariffs and there's tariffs on
11:49
steel and aluminum. Right? So in terms of how
11:51
this affects the consumer. Essentially, it's
11:53
just a much higher cost when you purchase. It's
11:57
not something that you're like, oh, well, it
11:58
doesn't affect me because, you know, for whatever
12:01
reason, you might think it doesn't, but it does
12:04
directly affect the consumer very negatively.
12:08
It absolutely does. And it affects the manufacturers
12:11
directly. The manufacturers are building these
12:15
in the U .S. as well. Of course, yeah. So you
12:18
say that now, but on April... night, they didn't
12:22
understand that. Oh, really? Yeah. I talked to
12:25
several and it was literally at the 11th hour
12:29
when the manufacturer's reps were calling the
12:32
Canadian dealers, right? Or like me, I called
12:36
and said, everything that we got on order, stop
12:38
it. Wow. What do you mean stop it? Well, stop
12:41
it because there's a tariff, right? You guys
12:45
hit us tomorrow with tariffs, the reciprocal
12:47
tariffs will hit, right? It was the 11th hour
12:50
where... It was all of a sudden, it was a realization
12:53
that, holy cow, we're not going to be selling
12:56
stuff to Canada, right? And yet we're a small
12:58
market and everybody knows that compared to the
13:00
U .S. We're behind the side that's Goliath, right?
13:02
Well, the amount of people that are in the U
13:04
.S. versus up here, right? Exactly, right? And
13:07
the distribution of wealth is different as well,
13:09
right? However, at the end of the day, approximately
13:12
13 % of U .S. manufacturers' RVs, motorhomes
13:17
included, come to Canada. That's a pretty sizable
13:21
amount. 13 % is, you know, it's 13%. Yeah. Yeah.
13:27
So at 13%, they can't afford to lose 13 % of
13:31
their motorized sales. Exactly. Right? So, you
13:34
know. What a mess. It's a colossal mess. Yeah.
13:37
Right? Yeah. When you think about how much it
13:39
affects going, like the domino effect, right?
13:42
From, like you said, the inputs from other countries,
13:44
which it affects. the economy and the jobs and
13:48
everything from that country selling it and all
13:50
that import export then and then right like you
13:53
said the imports themselves and the building
13:54
the motorhomes and just the consumer it just
13:57
everybody gets hit yeah well and everybody gets
14:01
hit by manufacturers and dealers we have no choice
14:05
but to pass it along yeah right so all of a sudden
14:08
if you you know we're all motorized so you know
14:12
our starting product because it's you know we
14:14
have vans that they're sitting on mercedes chassis
14:16
it's a very popular platform yeah so new vehicles
14:21
starting are north of a hundred thousand dollars
14:24
right so the the average age of our buyer is
14:28
50 to 55 plus right so they're going like i want
14:34
to travel in my retirement years while i'm still
14:36
healthy yeah right yeah But now that cost has
14:41
just jumped. And if you're retired, right, you're
14:44
watching your dollars much more differently than
14:47
you did when you were sitting with a, when you're
14:49
going to work every day. Yeah. Right. No, it's
14:51
true. Right. Yeah. There's a limit on how much
14:55
you can be spending and for sure. It affects
14:58
it. It affects everything. Right. So. So from
15:02
your perspective, what is it that. people that
15:06
are watching this you know or or listening to
15:09
this what is it that people should be thinking
15:11
about or doing or you know understanding i guess
15:15
so i think we when they're whenever there's um
15:20
turbulence like we're seeing right now people
15:23
hit the pause button right right it's just a
15:26
it's just a knee -jerk reaction it's they do
15:30
right um They have to slow down and think about
15:34
this for a second because that happened at the
15:36
beginning of COVID as well. It did, yeah. Right?
15:38
Yeah. Everybody hit the, there's people put the
15:40
pause button and they were like, no, we're not
15:44
going to buy. And we're like, you know what?
15:46
We understand, but prices are going to go up
15:49
because supply is going to go down and people
15:52
will still want to travel. Right? And that's
15:55
what happened. Right? And prices went up. Right?
15:57
And supply was restricted. Right? So we were
16:00
getting price increases from our manufacturers
16:02
easily once a week, if not more than that. Wow.
16:06
It was crazy, right? And it was just because
16:09
there was so much turbulence, right? The ones
16:11
that bought at the beginning of COVID before
16:15
that supply really impacted, they did the best.
16:19
But there are people that waited and they were
16:21
buying at the height of the piercing structure,
16:25
right? Yeah. What I can say is don't do that.
16:28
Learn from that mistake, right? While there's
16:30
still product on the ground, there's something
16:32
you want to get into, get in before the prices
16:34
go up. Because it's very rare that they go up
16:39
and come back down. They go up and they plateau,
16:42
right? Specifically the inventory that hasn't
16:45
been hit by tariffs yet. Right, exactly. Yeah,
16:47
absolutely. That does make sense though, because
16:50
you're right. You look at anything, and even
16:53
the housing market is similar. People are hoping
16:56
it's going to go back down to a point, let's
16:58
say, pre -pandemic. It's not going to now. It
17:03
may settle. It's settled a bit. It'll settle,
17:05
but it's not going to be what it was. It would
17:08
be similar to these. Yeah, exactly. And I think
17:12
everything that you're talking about, it just
17:14
makes sense from not just a motorhome perspective,
17:18
just from an overall... perspective like whether
17:21
it's buying a vehicle whether it's buying i don't
17:24
know anything that is on the market right now
17:26
that was in inventory just simply before it happened
17:31
right before all the tariffs happened that's
17:34
all finite now like there's only so much of that
17:36
left before now you have to bring in new product
17:39
that has all of that added on yeah and i'd be
17:43
very careful watching the news when they're reporting
17:45
stuff like they say q1 was this and it was showing
17:48
great well Of course, Q1 was showing great because
17:51
like us, like many others, we're like, we got
17:54
to get stuff in here before these tariffs hit.
17:57
Right. So you sucked in as much as you could
18:01
because you knew that after that, it was going
18:04
to drop off or the prices were going to jump.
18:06
Right. And so you see this bulge in Q1 and say,
18:10
oh, look at everything's fine. No, that's. It's
18:15
already changed. The reporting hasn't caught
18:18
up to it yet. Right. Yeah, it's the preparation.
18:21
Yeah. Yeah, I didn't think about that, but that
18:23
makes a lot of sense. Yeah, the bracing. Waiting
18:26
to see what happens. There was a report last
18:28
week, right, that they said that Canada's GDP
18:31
grew at an annualized rate of 2 .2%, which is
18:34
pretty strong. Yeah. For Q1, because, you know,
18:39
U .S. manufacturers were also trying to get everything
18:41
they could from their Canadian suppliers. prior
18:44
to tariffs hitting and vice versa. So of course
18:47
things grew, right? Because people are trying
18:48
to get ahead of that, the people who understood
18:50
that, what was going to happen, right? But there's
18:53
a lot of people out there that didn't understand
18:56
that and now are just realizing it, unfortunately,
18:59
right? Because if you even go back to the free
19:02
trade, it's been in since around the time I graduated
19:06
from university. So there's lots of people that
19:10
are in their 40s. haven't seen the working world
19:13
without free trade. That's true. Right. And some
19:16
in their 50s. Right. Right. So you got senior
19:20
people in companies that have never seen these
19:24
types of tariffs before. Yeah. Right. And don't
19:27
don't have the I guess that experience of the
19:31
what it used to be or what what it was, how difficult
19:34
things were, how, you know, you don't you don't
19:36
realize how much it actually negatively affects.
19:39
The entire scope, right? That was a big movement
19:42
in the late 80s. We were learning it in business
19:45
classes, like globalization is the way to go,
19:47
that there will be centers of excellence in different
19:51
countries because of the labor force, the knowledge,
19:54
the resources, what have you, right? So it won't
19:58
be like in the 50s and 60s and earlier where
20:03
a town was almost self -sufficient because so
20:06
much was built locally. Yeah, it had to be. It
20:08
had to be. It's not that way anymore. That's
20:11
long gone. Or that country was self -sufficient
20:13
because so much was built within the confines
20:15
of the country. That doesn't exist anymore. Well,
20:18
to be able to understand the entirety of how
20:22
the world works, I feel like it's very different
20:26
from anything that, I guess, regular people would
20:29
know. Even if you run a successful business or
20:32
even if you have been... a teacher or been anything
20:36
like that but just setting up and under and like
20:38
being in that system and how all these little
20:42
pieces work and have to work closely together
20:45
right and as soon as something breaks or something
20:48
falls off then everything is thrown into a loop
20:50
like it's such a delicate balance it feels like
20:53
to me anyway yeah right from the outside it feels
20:55
like it's a delicate balance of making sure that
20:58
everything is working properly and knowing what
21:02
how to correct when it's not, because if it isn't
21:06
and you don't address it, then basically dominoes
21:09
just kind of all fall off. And, you know, since
21:13
the tariffs have hit and, you know, talking to
21:17
lots of different people, I'm a little surprised
21:21
that the people, some people that I spoke to
21:25
didn't understand when you have a tariff, who
21:27
pays the tariff. That's right. I was. Yeah, it
21:33
was a bit of an epiphany to me that the the misunderstanding
21:38
of the ultimately who pays the tariff like it's
21:42
very common that do people do think that The
21:46
if you put a tariff on that the stuff coming
21:49
in from that country that that country pays a
21:51
tariff That's more common thought than I thought
21:53
than I realized. Yeah, right. They didn't understand
21:56
it was your own You know, it's the importer paying
21:58
that who's in passing that costs down the supply
22:02
chain, and that supply chain pushes it right
22:04
down to the consumer. I didn't realize how misunderstood
22:09
that process was until this happened. And I think
22:15
that's part of the problem. It's something that
22:19
I never really considered in terms of tariffs.
22:21
And like you said, globalization has been around
22:23
my whole life. I don't know. I knew what they
22:26
were, but not necessarily these effects of them.
22:29
There's a whole generation, multiple generations,
22:34
like you said, of people that don't necessarily
22:35
understand the full scope of what it means. And
22:38
then you have misinformation also being fed to
22:42
the general population. Of course, people are
22:44
going to misunderstand. We'll all get through,
22:49
we'll get through this, right? There's going
22:50
to be some casualties with people. You know,
22:52
I remember my father -in -law telling me when
22:54
the gas crisis was, how expensive gas was, or
22:57
when the interest rates for like Prime was like
23:00
over 20%, right? He survived all through this,
23:04
right? And fortunately, we're pretty lucky because
23:07
we're in a very good position ourselves, but
23:10
there is going to be some casualties out there.
23:12
Uh, you know, across all industries, not just
23:15
the RV industry. Yeah. Right. And it's sad because
23:18
it, uh, it didn't need to happen. Yeah. Right.
23:20
Yeah. But you know, that's right. Cause we, we,
23:24
we do have to have some level of, of hope that
23:26
we'll, we'll get through this. Like, you know,
23:27
Canada has, as with so many countries with so
23:31
many things happening around the world, you know,
23:33
the world just does keep moving. Eventually things
23:36
will pass. Eventually things will, you know.
23:39
resolve or get better or or calm down right find
23:43
a new normal find a new normal exactly exactly
23:45
yeah absolutely the this this bit of the sad
23:49
part is there will be people though that had
23:51
a a goal in mind that this was what they're going
23:54
to do in their retirement and because of this
23:56
they won't do it yeah they won't be right there
23:59
will be it there will be a segment out there
24:01
but the ones that can and are pushing the pause
24:04
button the only thing i can say is like get get
24:06
to the get what you want now before that price
24:10
increases. Can you explain to me for people that
24:15
are, that are trying to understand just the whole
24:17
entire scope of the cost going from us to Canada,
24:23
right? Can you expand on all of those? Sure.
24:28
Here. So, um, the, um, the U S is getting those
24:32
us manufacturers. parts coming in because they're
24:36
bringing them in from other countries are getting
24:39
hit with tariffs, right? So I've recently spoke
24:41
to one of my manufacturers and when we talked
24:44
about this, we had a little bit of a disagreement
24:46
because I had said that, well, you know, we have
24:49
a 25 % tariff. And he tried to correct me and
24:52
tell me it was 21%. So I had to ask him where
24:55
he was getting this 21%. And he said, well, and
24:59
he understood that as parts come in, it's going
25:02
to increase his cost. So he said, arguably could
25:05
be upwards of 21%. So I said to the sales rep
25:10
from the manufacturer, I said, okay, that's only
25:12
one side of the equation. Your inputs are going
25:15
up on yours. So if that $100 ,000 coach is getting,
25:18
call it 20 % increases in inputs, now that $100
25:23
,000 coach is $120 ,000 US. And he goes, right.
25:28
So no problem. Okay, but now that $120 ,000...
25:32
$20 ,000 coach hits the Canadian border, and
25:35
I have to carve a check because I'm the importer
25:37
to the federal government of Canada for another
25:40
25%. So 25 % of $120 ,000 is $30 ,000, right?
25:48
So now that $120 ,000, originally $100 ,000 was
25:54
$120 ,000, is now $150 ,000, right? And that's
25:58
even before we put an exchange on it. foreign
26:00
exchange exchange rate exactly with the exchange
26:03
rate right so you just took a coach there was
26:05
a hundred thousand it comes in it's 150 us that's
26:08
a 50 increase in cost yeah before you hit the
26:12
exchange rate wow which is another accelerant
26:14
yeah right that's insane so all this um instability
26:23
chaos right is weaving its way through right
26:26
otherwise the u .s wouldn't have got downgraded
26:29
That's right. So they went from a AAA, right?
26:33
First time they've been downgraded in, I believe,
26:35
100 years. Wow. So now that increased interest
26:38
rates for the U .S., right? So now borrowing,
26:41
your manufacturer need to borrow or the U .S.
26:45
needs to borrow to fund its operations. They
26:49
pay more in interest. Like this whole thing.
26:53
has a much deeper effect than most people realize.
26:56
And that's where you start seeing that domino
26:58
effect that I kind of was talking about earlier,
27:00
right? Like one thing affects the other and affects
27:03
the next and the next and the next and the next.
27:05
And you don't realize like how much, how connected
27:09
the entire world is, not just economically, but
27:13
just for everything. Like you rely on other countries
27:17
to perform a lot of things that you don't, you
27:20
know, you don't think of, right? Yeah. And when
27:22
you say downgraded, you mentioned AAA. So is
27:25
that a, I guess, a ranking sort of system for
27:29
people that maybe don't know? Yeah, I'm trying
27:31
to think of the organization. But yeah, so their
27:38
debt ranking is, they were AAA, right? AAA is
27:42
the highest. Highest they could get, right? So
27:45
now that's been downgraded. So that means for
27:48
them, the U .S. to borrow. is more costly, which
27:51
means you're in a U .S. manufacturer, it's going
27:53
to be more costly to borrow, but even your U
27:54
.S. government, it's more costly to borrow. So
27:57
they're increasing their own costs by destabilizing
28:01
not only their own economy, but the global economy,
28:04
because dollars are flowing out. The Canadian
28:08
dollar is going up for a reason. It's because
28:10
now the U .S. is looking less attractive and
28:14
Canada is looking more attractive, even though
28:15
they're a much smaller player. small but mighty
28:21
but the whole thing is bad for everybody yeah
28:26
like it's just a bad scenario for everyone involved
28:28
right so so you know tell me a little bit about
28:33
the hitchhouse and how you got like how you came
28:40
to be part of the hitchhouse basically well um
28:43
i'm married properly i guess My father -in -law
28:52
started the dealership in 69. I met my wife at
28:56
Wilfrid Laurier University, right? So anyways,
28:59
you know, fast forward a few years and we were
29:01
both in business. We're both in Toronto. And
29:05
my father -in -law had a series of businesses
29:08
and, you know, there was the recession back in
29:10
the late 80s, early 90s and that dramatic impact
29:14
on a business, an unrelated business that he
29:18
had. guaranteed that business with the Hitch
29:21
House, right? So he had to basically restart
29:24
all again at 50 years old, right? Wow. Yeah.
29:28
So, you know, my wife and I married in 93. He
29:32
had been restarted about a year and a half, maybe
29:35
two years, when he came and asked my wife to
29:40
come back to the Hitch House and help him grow
29:42
it, right? So that was 94. So that went along
29:49
well. He was growing it. And at that time, I
29:52
was looking at getting into my own business as
29:55
well. And I found an opportunity. But what that
29:59
gentleman wanted to sell his business for and
30:01
what I wanted to buy it for were dramatically
30:03
two different things. And we were too far apart
30:06
to come to an agreement. So my father -in -law
30:10
was watching this. And he was a little older
30:13
than I am right now. He came to me and said,
30:16
this is crazy. You want to get into business.
30:18
I want to continue to grow the business. But
30:20
I'm starting to get to a point that, you know,
30:22
the gas in the tank isn't what it used to be.
30:25
So, you know, we joked that he made me the Newfie
30:28
Godfather offer. It's one I couldn't understand.
30:35
So he made us, my wife and I, an offer that he'd
30:41
sell half the dealership to us. And he would
30:46
teach me the business, but he was still the boss
30:48
until it made such time that we'd work it over,
30:51
right? And my brother -in -law at the time was
30:53
like in grade nine, right? It was a dramatic
30:57
age difference, right? So yeah, so that's what
31:01
we ended up doing. And we just continued to grow
31:03
and we focused strictly on the hitchhouse. And
31:06
we had some pretty rapid growth and it worked
31:10
out really well. come you know fast forward to
31:13
2012 and we lost the building we're sitting in
31:17
right now to a massive fire right so we had a
31:19
big rebuild and my father -in -law had also been
31:22
a builder so he he basically did the general
31:26
contracting right managed out man with a project
31:30
manager managed all the trades and and built
31:32
it we were we were on the one year anniversary
31:36
of the fire we had occupancy on the showroom
31:39
Wow. Yeah, it was crazy, right? It was really
31:41
fast. Viva Canada just said it was unbelievable
31:44
speed, right? And then within a few weeks, we
31:47
had... When I mean a few weeks, I mean like three
31:50
weeks. It was not very much longer. We had an
31:53
occupancy on the entire building. And then it
31:55
took us a few months to set everything up the
31:57
way we actually wanted in the building. So when
32:01
that project was over, it actually was a great
32:03
transition for my father -in -law to be out of
32:06
anything at all that was day -to -day, right?
32:08
Because when we had that volume of work, we still
32:11
had to keep the business running. During a rebuild,
32:13
then we were... you know, kind of, um, I wouldn't
32:18
call it crisis mode because the insurance company
32:20
was fantastic with us. Um, but you know, you
32:24
were working out of rented trailers and things
32:26
of that nature. Like we were, it was just, it
32:29
was like a new startup, but you had the experience.
32:35
So you weren't like trying to figure things out.
32:38
So it went, it was fascinating. I only ever want
32:42
to do it just the once though. I'm done. It was
32:47
an interesting experience once. But it was a
32:50
great transition because he had to focus on that
32:52
and everything else had to be managed by my wife,
32:57
myself. And by that time, my brother -in -law
32:59
was now in his early 20s. And he was highly involved
33:05
in the business. So everything transitioned over
33:07
to the management of the business. seamlessly
33:09
at that time and he kind of took a you know a
33:12
10 000 look view at the at the at the business
33:15
and just worked on special projects that um so
33:19
that that's the way things transitioned here
33:22
so yeah and that's pretty that's pretty amazing
33:24
because the hitchhouse is such a like staple
33:27
i guess business and you you know your mom was
33:30
talking about when when she last visited us she
33:32
was she was talking about how like she grew up
33:34
knowing that as soon as you're driving past the
33:36
hitchhouse you were going to be closer really
33:38
because that's where we live right yeah but it
33:40
was that that thing like you just you just learn
33:42
by the the hitchhouse being like that central
33:45
point of like oh we're we're we're near our destination
33:48
like you're you know it's it's such a staple
33:51
like business up the 400 like right the highway
33:55
Well, we're 56 years in the same location. So
33:57
not a bit of wonder that your mom thought that,
34:00
right? Yeah, for sure. But even like my entire
34:03
life, you know, always coming up to the area,
34:05
same thing. Like there's a hitchhouse, there's
34:07
a hitchhouse. Yeah, that's pretty awesome. And
34:11
how does that, you know, since you kind of taken
34:18
over, right? Since you started taking over the
34:21
business, how has it been? growing how's it been
34:25
doing because we are right now 2025 right like
34:28
it's it's been many years right since since 2012
34:32
right yep so how has it been you know like any
34:37
business there's ups and downs and challenges
34:39
right um you know the uh We had steady growth.
34:43
We ended up, you know, expanding the different
34:46
business lines and manufacturers that we carry
34:49
and the depth of product that we carry and the
34:52
services that we offer, right? So that's been
34:55
really, really good. You know, you come along,
34:59
you have peaks and valleys with any business,
35:02
right? So in 2018, 2019, there was a correction
35:07
year there for the RV industry. And we seem to
35:11
be fortunate and weather those pretty well, because
35:14
I guess the continuity of the dealership, that
35:18
helps a lot, right? So we're well known from
35:21
that standpoint, right? So it keeps people coming.
35:25
And because we specialize in strictly motorhomes,
35:27
we do draw from a very large area, right? So
35:30
we look at Ontario as our local market and Canada
35:34
as our broader market, right? So we sell all
35:37
across Canada. So I think that helps stabilize
35:39
us. And, you know, why did you guys decide to
35:44
only focus on motorhomes? Was that like a long
35:46
-term decision from the start, like since the
35:48
start of the Hitch House? No, when my father
35:51
-in -law started, because he was, you know, he
35:53
had come out of the military. He always liked
35:56
selling. He was always selling a car or something,
35:58
right? And he bought a travel trailer and he...
36:05
when he was at West and stationed at West and
36:08
my wife and her sister and her mom, they, they
36:10
did camping at Kirshen. And I'm going to say
36:12
a year or two later, he sold it because that's
36:15
the way my father -in -law was. He's, you know,
36:17
everything was for sale. He sold it for more
36:19
than he bought it for. Right. Yeah. So he, he,
36:22
he was a captain in the military. He was, and
36:27
at the time that he retired, he was in the, the
36:31
airborne regiment. He was one of the first officers
36:35
when the Airborne Regiment was created. He just
36:39
enjoyed selling. The military approached him.
36:43
They wanted to promote him to major. He had to
36:45
go back to school. He was like, I don't want
36:47
to do that. I'm not interested in going to school.
36:51
He was like, but I enjoy selling. I enjoy selling
36:54
RVs. He left and started selling RVs for a company.
37:00
less than a year, he ventured out on his own.
37:02
So he started off small with small trailers and
37:04
campers for the back of trucks and truck caps
37:09
and things of that nature. And he started in
37:11
a little gas station next door to this property,
37:13
right? So yeah, so he started really small. And
37:18
from that time, he had some fairly dramatic growth.
37:22
Within a couple of years, he bought the property
37:24
here that we're on today. built the actual physical
37:29
dealership. And then he got involved in other
37:32
businesses and things of that nature. He owned
37:34
a Ford store at one time. He used partners in
37:37
restaurants. He built subdivisions. So he was,
37:42
in a true sense of the word, an entrepreneur.
37:44
And he got to a point, he was like, he figured
37:48
that anything he touched turned to gold. Right?
37:50
He goes, yeah. And he said, he was very... When
37:54
he was older, he was a lot more, I think, a lot
37:56
more humble about his abilities, right? He said
37:59
he started to believe his own BS, right? And
38:03
he just figured he could do anything. So there
38:05
was some investors approached him to buy a manufacturing
38:09
company over by Ottawa to manufacture prefabricated
38:13
homes, right? And he figured he could do that
38:16
and no problem. So that was where he guaranteed
38:18
that place with this place. And then that recession
38:21
hit. So that place had to close down, sold off.
38:25
He had to regroup here, but he inherited the
38:29
debt from that place. So he had to restart again.
38:32
When he restarted, he went, I think my fastest
38:36
way to grow is to focus on one particular segment
38:42
of the industry and anything with an engine was
38:45
his passion. So he goes, if I'm going to do it,
38:47
I might as well do something that I'm passionate
38:49
about because we're going to grow faster and
38:52
better if i'm all in yeah right and he felt he
38:56
felt that it allowed the the sales team it allowed
39:00
the parts department allowed the service center
39:02
to um to specialize in that and it would be less
39:09
um chaotic to be honest with you right because
39:12
if you do everything from a from a tent trailer
39:15
to a you know a class a diesel pusher there's
39:18
a lot of different parts in the thing isn't it's
39:21
it's difficult to know everything and he figured
39:24
there's enough variety in the motorized that
39:26
i'm going to focus on motorized right so and
39:29
that's what he is so that was when he uh relaunched
39:32
the business in uh i guess it was late 91 early
39:36
92 that's why he decided to do it right here
39:39
with motorized only right but thank you again
39:43
tom for you know having us here and for allowing
39:46
us to you know think about and and understand
39:49
more about tariffs uh because there's there is
39:52
a lot of people that don't see how much impact
39:55
it has or aren't even aware of how much impact
39:57
it's causing all around you know the country
40:01
thank you guys appreciate it thank you for listening
40:06
to the entire episode all the links and info
40:08
you heard in this conversation will be featured
40:10
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40:12
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40:23
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