Based on Hunterbrook Media’s reporting, Hunterbrook Capital is short Winnebago Industries (NYSE: $WGO) and LCI Industries (NYSE: $LCII) at the time of publication. Positions may change at any time. Hunterbrook Media has partnered with litigation firms exploring a potential class action lawsuit based on our reporting. If you have experienced frame failure, we invite you to share your story by emailing ideas@hntrbrk.com. See full disclosures below.
“I want to directly address the misinformation that has been disseminated on social media regarding excessive frame flex across the industry,” said Michael Happe, chief executive officer of the iconic RV maker Winnebago Industries Inc. (NYSE: $WGO), during a June 2024 earnings call.
“Our commitment to customers is absolute and we continue to stand behind every product we build,” he added, waving off accusations swirling online about a possible structural problem that some argue could make Winnebago’s most popular recreational vehicles unsafe — and worthless.
The alleged issue is a defect that occurs when an RV’s frame, designed to be flexible enough to absorb road shocks, bends beyond its intended limits and separates from the trailer’s body. Left untreated, the towable could end up totaled.
Yet, even as Winnebago publicly dismissed allegations that its RVs were defective and unsafe, behind closed doors, it was censoring online discussions of frame failure and pressuring customers into signing agreements not to publicly criticize the company or its brands. In return, Winnebago was allegedly offering to buy back their broken trailer homes.
In early 2024, Greg Carson, an outspoken YouTuber, meticulously documented what he said were problems with his 2022 Grand Design Solitude fifth wheel Grand Design makes two types of towable RVs: fifth wheels and travel trailers. Fifth wheels are generally larger and more expensive than other trailers. caused by excessive frame flex in a now-deleted video on his YouTube channel. “My shelving, my floors in the cabinets, the dividing walls, were imploding,” he said in a video interview with another RV YouTuber posted in March, which shows clips from his deleted video.
About a month later, Carson dropped a bombshell.
Appearing in a video interview with attorney Larry Forman, Carson said he had signed a nondisclosure agreement with Grand Design in March in exchange for a buyout of his defective RV. The Solitude, which had cost him about $147,000, had been his “dream camper” that was going to take him into his retirement years, Carson said.
The NDA that Carson claimed he had signed required him “not to disparage, defame or otherwise criticize the manufacturers or dealership” and to “remove current social media content” that did so.
In exchange, Grand Design apparently paid off the remaining $92,389.51 balance on Carson’s RV loan — a small price to defend the reputation of Winnebago’s best-selling towable RV brand, which the company had acquired for about $500 million in 2016.
Grand Design made up an estimated 84% of Winnebago’s delivery of towable units and an estimated 35% of Winnebago’s total revenue in the last fiscal year, according to Hunterbrook’s analysis of company filings and publicly available industry statistics.
While Winnebago does not break down its revenue by brand in its financial disclosures, Hunterbrook was able to estimate the share of Winnebago’s total revenues attributable to the Grand Design brand based on the industry RV shipment datasets published by the RV Industry Association and market share data published by Statistical Surveys Inc. Two key assumptions underlie Hunterbrook’s estimates: (1) that SSI’s market share data based on registration is a reasonable reflection of the RV companies’ share of total shipments as reported by the RVIA; and (2) the prices of Grand Design towable RVs are comparable to those of other Winnebago towables. In reality, Grand Design towables are generally sold at higher prices than those of other Winnebago brands, making this a conservative estimate. Furthermore, while our calculations using registration data estimate Grand Design’s share of Winnebago’s total fifth wheels units delivered in fiscal year 2023 to be around 97%, Winnebago in fact has stated in its annual statement that Grand Designs make up 100% of all Winnebago fifth wheels, further suggesting our estimates may err on the lower side.
Carson said he regretted signing the NDA. “I didn’t know what an NDA was,” he told Forman, adding he believed the company wanted to “shut us up” and “silence us forever.”
“An NDA does nothing but protect the person or the organization that is doing wrong … It silences you, the person who has been a victim.”
Almost immediately after being bought out of his Solitude, Carson purchased another Grand Design model — a 2024 Reflection that Winnebago had promised wouldn’t have the same issues — according to a video deleted from YouTube but saved by a source who shared it with Hunterbrook. One of the ways Hunterbrook Media found this story was via a pitch from an anonymous source, who had been following the RV industry for a long period and told us they were short Winnebago. The article includes some of the research shared by the anonymous source — all of which was based on publicly available data and was subjected to Hunterbrook Media’s rigorous fact-checking and corroboration. If you want to watch the deleted video, email ideas@hntrbrk.com for the link.
In the video, Carson claimed he quickly learned that RV also suffered from frame-related issues.
Asked for comment, Carson said in an email to Hunterbrook: “My issues with Grand Design have been resolved.” It’s the same line he used in a May 18 video announcing his decision to buy a new RV from a different company, leading some in the RV community to believe he had signed yet another NDA.
Members of the Grand Design owners’ community claim there are many others who have signed NDAs, desperate to offload a grounded RV that’s worth less than the money owed on it. The practice is so commonplace that when a member of an owners’ forum or a YouTuber suddenly goes quiet, people just assume they signed an NDA.
Winnebago may not be the only RV company using NDAs to quiet customer complaints online, either, with YouTubers and owners on members’ forums claiming other RV companies have also required them.
Winnebago confirmed to Hunterbrook its settlement agreements typically contain a “confidentiality provision” and a “non-disparagement provision,” but called this “very standard for a settlement agreement.”
While some RV owners have been silenced, others are banding together. Pete and Lisa West, owners of a 2022 Grand Design Momentum fifth wheel, have become unexpected leaders in a growing movement of disgruntled RV owners.
The Wests told Hunterbrook their journey into full-time RVing began — like many others during the pandemic — with dreams of freedom and adventure on the open road.
But just months after buying the RV, which cost them $119,000, Pete and Lisa began noticing troubling signs of frame failure that echoed a growing chorus of complaints from other Grand Design owners.
“We are not the worst case scenario. We’re a light, light, light, light, light scenario,” Lisa West told Hunterbrook. Pete said he believed their status as social media influencers may have resulted in better service from the company. After getting their RV fixed at the Grand Design service center in Indiana, Pete said, he and Lisa stayed an extra three weeks at a nearby campground to help other Grand Design RV owners coming through to get their frames fixed. “We had to coach them through this, because Grand Design was giving them a lot of runaround,” Pete said.
In March of 2024, the Wests started a Facebook group dedicated to owners of Grand Design RVs experiencing major issues. “I could not just sit back and watch so many people be treated so poorly by Grand Design, including placing blame on customers for everything, just to cover up the frame failure issues,” Pete West told Hunterbrook in an email.
The group has rapidly grown to over 5,500 members, with more than 10 posts a day and about 100 new members joining each week. It has become a hub for RV owners to share their experiences without censorship, offer support, and collectively push for accountability from Winnebago and Grand Design. Members exchange tips on identifying frame flex issues, navigating the often-frustrating warranty claim process, and documenting their interactions with the company.
The Wests’ Facebook group is just one part of a larger online movement that has sprung up around frame failure. There are now more than 30 YouTube channels — with millions of subscribers — discussing frame flex problems, and the focus seems to be on Grand Design RV. Subscribers were counted by pulling the most viewed videos on YouTube on “frame flex” from 2023 to 2024, and totaling the number of subscribers to each channel as of July 17th, 2024.
“I am pretty close to a thousand people who’s reached out to me about some sort of frame problem with their fifth wheel. And the vast majority of you are Grand Design Solitude and Grand Design Momentum owners,” said John Livingston, who said he’s spent 15 years in the RV industry, in a March podcast.
This surge in online activism defies Winnebago’s efforts to control the narrative. Members of owners’ groups have accused Winnebago of actively censoring posts about frame flex on forums the company manages and using its network of “Lifestyle Ambassadors” to promote positive messaging while downplaying concerns online.
“Frame issues are very rare, with less than 1% of fifth wheels … having a problem. A very small fraction of a small subset of fifth wheels out there,” Chad and Tara Florian, two of Grand Design’s Lifestyle Ambassadors, said in a written statement posted on their website. “But, as tends to happen on social media, a few loud voices (and those who pile on) tend to make the issue seem more widespread than it is.”
“Having ambassadors to share how great Grand Designs is and their units are, and turning your back on the customers that have bought into your brand and this lifestyle is disheartening, to say the least,” said Kevin Watson, a YouTuber who chronicled his family’s foray into full-time RVing before it was cut short by frame failure.
The stories told by customers who refused to be silenced have a common thread, based on interviews with eight different Grand Design RV owners, as well as hours of videos and hundreds of posts viewed by Hunterbrook: Customers bought their dream campers for a premium price, based on Grand Design’s stellar reputation for quality and customer service, only to discover costly frame issues soon after their purchase, derailing their dreams of life on the road.
But what’s even more frustrating for many has been dealing with a company that seems more interested in silencing complaints and deflecting blame than in helping or even acknowledging the extent of the problems.
Some have given the company a new label: “Grand Deception.”
Ronald Burdge, a consumer law attorney who has been helping RV owners for four decades, told Hunterbrook that NDAs prohibiting consumers from talking about safety issues are not only legally unenforceable, they also hurt the public by preventing the next potential victim from learning about the hazard.
Given the unfairness of NDAs to the public, state attorneys general or the public could sue a company for “unfair, deceptive, or abusive acts or practices,” Burdge pointed out. Each state — including Grand Design’s home base of Indiana — has its own version of the federal UDAAP law, Burdge said, although “Indiana’s version of it is one of the worst in the country.”
Winnebago recently extended its three-year structural warranty to five years to specifically cover the frame. In its statement to Hunterbrook, Winnebago called this warranty extension “an industry first” and “the strongest statement we can make regarding our confidence in our products.”
But many customers aren’t satisfied, saying they still have to jump through hoops to get their claims covered. Burdge said, “RV warranties are filled with loopholes and logjams that are not intended to help the consumer.”
“Unless the stars and moons align perfectly, they’re gonna deny your claim,” Gary Schnatterly, a Grand Design owner who has struggled with various broken parts since 2018, told Hunterbrook. “They will come up with, you know, different things to make it look like it was the owner’s fault.”
A growing number of customers who feel they did not receive adequate warranty coverage are suing. Customers have filed at least 15 lawsuits against Grand Design since 2023 — doubled from the previous two years — for its alleged violation of the Magnuson-Moss Warranty Act, a federal law that requires good faith and fair dealing in consumer product warranty provisions.
“You just want to get the darn thing fixed so you can get back on the road and enjoy the life they told you you were going to have with this RV,” Burdge said, referring to Grand Design customers warring with Winnebago to get their frame issues fixed.
He believes this could be a class action lawsuit waiting to happen.
“Even if they end up avoiding liability, they’re going to end up spending time and effort and money fighting and arguing about all of this, and that is not a smart move.” He added, “The stockholders will get hurt, the company will get hurt, and consumers will get hurt.”
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Customers Say the Scale and Impact of the Frame Flex Issue Far Exceed Company Claims
RV ownership is not for the faint of heart. Customers go in knowing things are going to break, from water pipes to electric circuits to appliances.
“We knew that it was always going to be something wrong. They kind of beat that into you,” Lisa West said. “So we were already in that mindset.”
Frame failure, however, can cause structural damage that costs tens of thousands of dollars to address. It also potentially compromises the safety of passengers and others on the road, according to Grand Design owners and RV experts Hunterbrook interviewed.
The problems can seem small on the surface. Loose bolts. Creaky floors. Maybe a different feel to the way the RV is towed. But the symptoms often indicate a major structural failure, such as broken steel frames, a compromised hitch, and the detachment of the RV living spaces from the frame. Without being fixed, frame failure could lead to the RV being deemed unroadworthy, or totaled.
Travel and lodging fees during these repairs — which can be a significant burden, especially for people who live in RVs full-time — are not covered by the warranty, although sometimes Winnebago covers the expenses out of “goodwill,” according to owners on social media and Hunterbrook’s review of the warranty.
Owners also frequently grouse about a significant wait time, with authorized dealers and the Grand Design service center often requiring them to wait months on end before they can take in the RV — and additional months to diagnose and fix the problems. Serious frame failure is often beyond the capacity of even authorized dealerships to handle, owners say, requiring the RV to go to Winnebago’s service center for Grand Design in Indiana. And repairs sometimes have to be repeated because the initial attempts turn out to be faulty, leaving full-time RVers homeless for extended periods.
Patricia Gigliotti-Kline hasn’t been able to repair her Grand Design RV because it would mean forgoing a home. “Trying to take it to a dealership and leaving it there is not an option for us,” she told Hunterbrook.
According to a survey conducted by the RV Industry Association, an RV manufacturers trade group, 43% of full-time RVers are retired, and 72% have an income of under $65,000 a year.
AJ Elliott, owner of a 2021 Grand Design Momentum that began showing multiple signs of frame failure in 2023, told Hunterbrook he had to send his RV back to the Grand Design service center because the initial repairs were “absolutely unacceptable.” The company took the repairs more seriously the second time, because “I took the front end apart and I embarrassed them on YouTube,” said Elliott, who said he has several years of experience in welding and manufacturing.
“It all panned out. But at the same time, too, is that what it takes?”
Handy owners are taking the matter into their own hands. Marc Smelser, an experienced welder who said he has owned 15 RVs, found frame issues in his 2022 Grand Design Momentum nine months after purchasing it. He told Hunterbrook, “This Grand Design RV that I bought — the most expensive one I ever bought — I have done more stuff on it, had to fix more stuff than all the others combined.”
“And that’s not including the frame failure I’m in the middle of fixing right now.”
In an email to Hunterbrook, Don Crowley, a design engineer for a major steel manufacturer, said he spent $46,275.24 out of pocket to fix what he called a “catastrophic failure” in his 2018 Grand Design Momentum, discovered just four months after a visit to the Grand Design service center for frame repairs.
Crowley said Winnebago told him to bring the RV to back to Indiana, but he refused, saying the rig had been declared unsafe to tow by the company’s own technician (Winnebago had allegedly sent a mobile team to inspect the RV after Crowley agreed to take down his social media posts about his RV’s severe problems). Winnebago offered him $1,000 “good faith” money to pay for a welder or lodging, Crowley said.
Winnebago continues to publicly downplay customer concerns. In the June 20 earnings call, CEO Happe said the frame flex issue affected only “less than 1% of all RVs” ever produced by Grand Design.
The company has partly backtracked on that number. At an August rally of Grand Design owners, the company’s president, Don Clark, said excessive frame flex affected “about 1%,” according to audio recorded by an owner in attendance and forwarded to Hunterbrook.
In its statement to Hunterbrook, the company said: “The data and our position have not changed,” claiming that “a small number of larger Grand Design Solitude and Momentum fifth wheels have experienced excessive frame flex” and noting that “travel trailers are not impacted by this issue.”
Independent RV specialists told Hunterbrook that frame failure issues are likely far more prevalent than Winnebago acknowledges. Dustin Simpson, who owns a large RV repair shop in northern California, said there are many more people who have a frame problem than realize it.
He said that “out of every 10 Grand Design RVs” that come into the shop, seven have an I-beam crack. Regarding the company’s “1%” claim, he said, “If they were to make this a recall,” and ask owners to take their RVs to the dealership to see if they have this problem, “that number’s going to just shoot right up.”
R Royce Henry, who owns numerous RV repair shops in California, similarly said the number one issue they see with Grand Design RVs in his shops is frame failure.
Alan Bergkamp, a certified welder and retired structural stress analysis engineer with 50 years of experience in the industry, said he once decided to do his own survey on some of the Grand Design RVs he encountered at campsites while on a road trip.
Of the 10 or so he inspected, every single one had a broken frame.
None of the owners knew about the problem, he said. One of the RVs had only traveled “from the Panhandle of Texas to Rock Springs, Wyoming” — a distance that would have put about 660 miles on the new trailer.
Ramp-Up in Production May Have Led to Decline in Quality Across Industry
Problems with excessive frame flex are not new or unique to Grand Design models.
Just one company, LCI Industries (NYSE: $LCII), through its wholly owned subsidiary Lippert Components Inc., is often cited as supplying a large portion of the RV frames manufactured in the U.S. And RV owners and experts have long accused the RV industry — concentrated in a little-known county of Elkhart, Indiana, dubbed the “RV Capital” — of hiding behind a powerful lobby and a lax regulatory environment in Indiana to produce cheap, low-quality products without being held accountable.
Quality and safety concerns have only grown since the pandemic, when the industry scrambled to meet an unprecedented surge in demand. The RVIA called 2021 “the best year on record,” with a record-breaking number of shipments as Americans looked to avoid crowds, replacing air travel and hotels with more social-distance-friendly RVs. Winnebago’s deliveries of and revenue from towable RVs grew by 59% and 64% respectively, year on year, in fiscal year 2021, according to its annual statement.
But the pandemic had also led to what the industry association described as “shipping delays, material shortages and a tighter workforce.” One Winnebago employee said in a 2022 IndyStar investigation that he’d gone “from working on 16 RVs a day to 36 during the pandemic.” Complaints about the quality of RV models built during those years became so common that the RVs were nicknamed “COVID trailers,” the IndyStar reported.
A Hunterbrook analysis of complaints filed with the National Highway Transportation Safety Administration containing the word “frame” shows the Administration has received the highest number of complaints on Grand Design towables with model years 2020 to 2022.
An informal, unscientific survey conducted by Pete and Lisa West with members of their Facebook group also showed a sharp increase in reported frame failures for model years starting in 2020.
“The OEMs made a bad mistake. They overbuilt, and they screwed themselves,” Bill Fenech, who cofounded Grand Design in 2012 with his brother, Ron Fenech, and Don Clark and sold it to Winnebago four years later, said in a March 2023 interview. “OEMs” — or original equipment manufacturers — refers to RV manufacturers.
At the time it was acquired by Winnebago in 2016, Grand Design boasted of having earned a reputation for quality control and customer service, including its signature 198-point pre-delivery inspection. “It’s very difficult for a large manufacturer now to implement those processes,” Clark said about the meticulous inspection process in a 2015 video. By 2023, under Winnebago, Grand Design was manufacturing on average over five times more RVs annually than it had pre-acquisition. By April 2016, the company had produced 20,000 RVs to date, averaging about 5,000 RVs per year since the company launched in January 2012. In FY2023, Winnebago sold an estimated 26,192 Grand Design RVs, based on Hunterbrook’s analysis of RVIA and SSI data.
Owners and Experts Say Grand Design’s Largest RVs Advertised as Intended for Full-Time Use the Most Likely to Experience Failure
By many accounts, the most-affected RVs appear to be the super-large fifth wheels preferred by full-time RVers — encouraged by Grand Design’s own marketing that advertised them as having the space and amenities for full-time RVing. Experts Hunterbrook spoke with say these RVs are just not built for that kind of use.
Elliott said he and his wife Kayla chose to pay significantly more for Grand Design than another model they were considering because “they were advertised as full-time built, they were full-time appropriate, full-time warrantied.”
Bergkamp, who made the point several times that frame failure is an industry-wide problem, told Hunterbrook that RVs like the Momentum had grown “longer” and “heavier,” and Winnebago — like other manufacturers — “never spent the money on engineering” to handle the increased load. “They didn’t grow the frame design because it would have dug into margin and to profit,” Bergkamp opined. “Takes a lot more money to redesign and … they just didn’t plan on people like these full-timers to pull the amount of miles.”
“Every single 310 GKR will fail, if you pull it down the road enough … I promise you,” he said, referring to the Grand Design Solitude model he owns. That series, at a little over 34 feet, is the smallest of all Solitude models, with the biggest ones at over 44 feet — longer than a standard shipping container on a semitruck.
Winnebago targeted millennials by appealing to their interest in tiny-home living and remote freelancing, according to the Des Moines Register. Grand Design’s Solitude is marketed as the “most spacious Extended Stay Fifth Wheel ever built,” with taller ceilings and bigger cabinets.
Simpson also said he’s seeing more frame failures in Grand Designs than other units because “people are using them more for more rigorous traveling and full timing.” He explained that Grand Design sold these RVs as “a full-time unit that you and your family can live in, you can work out of it,” with promotional videos showing people towing it to the mountains, oceans, deserts — anywhere. “So they were kind of overselling.”
“I feel like they sold a lifestyle of being able to … use these larger rigs as homes,” Deena, owner of a 2023 Grand Design Momentum with serious frame failure, said in an interview with a YouTube influencer. “And I don’t know if the rigs were built to sustain that, or if they tried to jam as much into them as possible to sell and market that idea.”
Winnebago has since scaled back promoting these RVs for full-time living. Hunterbrook found that a webpage had recently been removed from Grand Design’s website advertising its RVs as “The Cure for Full-Time Living.”
Simpson, like others Hunterbrook interviewed and reviewed online, also pins part of the blame for the faulty frames on Lippert.
“During the COVID year they built double the amount of frames that they would normally build, and I feel like they didn’t train their people well or didn’t inspect them well,” he said. “We would see stuff that’s not welded right, not structurally built right.”
Simpson said everyone’s been “hyper-focused” on Grand Design, but “sooner or later, all these other companies will be just as much out there as Grand Design.” He explained, “When you buy all the same products, you’re just assembling the same product. So it’s just a different color, decals, paint job.”
In its statement to Hunterbrook, Winnebago made a similar point. “This is not an issue that is exclusive to Grand Design RV,” said the spokesperson, adding that Lippert’s frames are “used widely across the industry by multiple RV manufacturers.”
For its part, Lippert has shifted the blame to the RV manufacturers, saying that the frames are made to the specifications provided by companies like Winnebago.
“We don’t dictate to our RV manufacturer partners how to build the structure on top of it,” a Lippert engineer said in a video interview released in March. He also said — without pointing fingers at any manufacturer — that some of them don’t consult with Lippert if they decide to make changes to the RV floorplan after they’ve received the frame from Lippert.
Bergkamp told Hunterbrook that without seeing the actual contract between Grand Design and Lippert, it is impossible to tell who is to blame. “My judgment is, neither company’s doing their due diligence, and they’re getting caught.”
Ultimately, it’s the RV manufacturer like Winnebago that bears the responsibility, Bergkamp concluded, because “their name is on the product.” Responsibility “finally funnels up to Grand Design or Jayco,” he argued, but “these other companies are kind of hiding behind this whole Grand Design issue.”
In a recent earnings call, Lippert CEO Jason Lippert dismissed the frame failure controversy as “insignificant” and “hardly worth mentioning.” He also pinpointed the issue as “chatter around Grand Design,” adding that the problem was “especially” relevant “on heavier units of say 15,000 to 21,000 pounds. You see, these are just giant houses moving down the road.”
But Lippert said he was “100% confident Grand Design is taking care of its customers.” LCI Industries (Lippert), Thor Industries Inc, and Berkshire Hathaway (owner of Forest River Inc) did not respond to Hunterbrook’s request for comment.
Grand Design Accused of Shirking Responsibility, While Calls for a Recall Intensify
With the frame controversy blowing up on social media, Grand Design has been taking steps to appease customers since earlier this year.
In March 2024, the company issued a technical service bulletin regarding excessive frame flex. TSBs are notices issued by manufacturers for safety issues they don’t consider serious enough to warrant a recall. They are sometimes nicknamed “secret warranties” because they are distributed only to service technicians and dealers.
Unlike recalls, TSBs do not obligate the company to notify consumers or pay for the repairs outside of the warranty. Grand Design’s TSB also only covers just two of its towable lines — Solitude and Momentum — leaving owners of Reflection models with frame issues angry over the exclusion.
Winnebago also posted on Grand Design’s FAQ section some information on excessive frame flex with a disclaimer saying, “This communication is for informational purposes only.” It describes the problem as affecting a “small number” of certain Grand Design RVs and lists several issues that could cause it, many of which — road impacts, collisions, load distribution, etc. — shift blame to the customer. Buried at the bottom is another potential contributor to the problem: “manufacturing variations.”
The most significant step the company has taken so far was the extension in May 2024 of its three-year limited structural warranty to five years just for the frame. In July, following complaints over a warranty policy that only covered the first owners of the RV, the company also announced that the warranty can be transferred to subsequent owners. “We heard you, and we acted,” said Don Clark, a cofounder of Grand Design who now serves as president of the division at Winnebago.
But the warranty only helps those who find out about their frame defects in time — and report them within 20 days.
“It is despicable,” said Burdge, referring to companies like Winnebago’s approach of “simply saying ‘We will take care of it when it gets to our doorstep,’” without giving them enough time — “and if it’s too late, ‘Well, that’s too bad, we’ll close the door in their face.’”
What Winnebago has not done — and what many believe the company should do — is recall all the RVs that may be affected by frame failure.
“Because of the serious nature, the significant risk that exists, the wise thing to do would be to do a recall,” Burdge told Hunterbrook. “Or at the very least, send a letter to all owners … alerting the owners that they are aware of the problem, they are concerned about it, and they are going to deal with it.”
Both Simpson and R Royce Henry, independent RV inspectors and repair shop owners, also said they believed a recall is overdue.
“This is a really major issue,” Henry said. “If you looked at the percentage of failures on these [RVs] versus, say, an automotive. I’ve got a Jeep where they just had a recall on the fuel pump. And it’s a nationwide recall. And it’s a smaller percentage of the amount of RVs that are breaking.”
Simpson sees the warranty extension as the company’s effort to avoid a much costlier recall. “That way they can just quietly address the people that are, you know, having an issue,” he told Hunterbrook. “Imagine how many millions of dollars that’s gonna cost just to make a recall. To contact everybody.” He also said Winnebago would have to train the dealers, who are currently not equipped to inspect and repair frame flex issues.
Vehicle and RV manufacturers are obligated to report safety issues to the NHTSA. Recalls are usually conducted voluntarily by manufacturers, but the NHTSA can also initiate recalls based on consumer complaints and its own investigation. (Winnebago, like most other vehicle manufacturers, has been subject to multiple recalls in recent years — but no recall focused on frame failure.) Manufacturers often conduct a recall “because of the economic consequences of NHTSA doing its own investigation and concluding that they should have done so,” Burdge told Hunterbrook.
“NHTSA, it’s basically an open book on what they want to do if they find out the manufacturer should have issued a recall and has not. They can do quite literally almost anything they choose to do.”
Hunterbrook is not aware of any official investigation on frame flex by the NHTSA. But Pete West told Hunterbrook that NHTSA officials have been actively reaching out to Grand Design owners, including himself, for information on the frame issue. West encourages members of his Facebook group to file complaints with the NHTSA, telling them that’s the only way they can force the company to do a recall, but he’s also expressed frustration with the agency’s slow response.
In an email to the agency forwarded to Hunterbrook, West asked: “Does it take for someone to die before NHTSA will do anything about the overall problem?”
The NHTSA has not yet responded to Hunterbrook’s request for comment or for any internal documents that can be shared under the Freedom of Information Act relating to a possible investigation on Grand Design.
There are currently 125 complaints filed with the NHTSA on Grand Design models from 2020 to 2023, including 91 that specifically mention the word “frame.” That’s significantly higher than key competitors like Thor, which has nearly five times the market share of Grand Design, but only 20 frame-related complaints for its comparable towable RV Jayco and 29 for its Keystone brand. Several of the Grand Design complaints mention that frame flex has caused their RV doors to fling open, launching their possessions onto the highway and endangering other drivers — a key safety concern for the NHTSA.
Even those who find frame problems before the warranty runs out are being met with a litany of excuses why their repairs won’t be covered, including some of the most commonly cited ones: that their frame flex is “within specs” or that their problems were caused by too much weight or a lack of maintenance — even when independent inspectors have indicated otherwise.
Despite Happe’s claim that the company is “collaborating directly with impacted customers to resolve any concerns” in each reported case of frame flex, many owners seem to feel differently. An informal survey conducted by the Wests with members of the Facebook group — which is biased toward owners who have problems with their RVs — showed Grand Design owners were twice as likely to say they disagreed (37 respondents) with Happe’s statement than not (16 respondents).
The reasons for disagreement included the company’s refusal to provide coverage by insisting the problems are nonexistent or just “cosmetic,” covering parts but not labor, requiring owners to bring the RV to the service center in Indiana as the only option, and not covering lodging for owners during repairs.
Customers and legal experts have also identified loopholes in the warranty routinely used by the company to deny claims. The warranty’s provisions include: requiring owners to report problems within a certain number of days; limiting coverage to defects in components that were manufactured by Grand Design; and only covering labor provided directly by Grand Design or its authorized agents. The list goes on.
Grand Design owners are increasingly turning to lawsuits to demand their rights under the Magnuson-Moss Warranty Act, with the number of lawsuits filed since 2023 more than double the total filed in the previous two years.
“The legal implications for the company can be catastrophic,” Burdge told Hunterbrook, “if they don’t curtail the problem and deal with both the legal and moral implications.”
Meanwhile, Happe assured investors in June that the company’s newly expanded warranties would not meaningfully increase costs.
Grand Design May Be Losing Market Share as Inventory Pile-Up Far Outpaces Peers
America’s love affair with RVs didn’t start with the pandemic. Lucille Ball made a towable her canvas in the 1954 movie “The Long, Long Trailer.” But COVID-19 led to the largest boom in the industry’s recent history, against a backdrop of claustrophobia-inducing lockdowns.
As orders exploded, Winnebago significantly expanded the Grand Design facilities at its main campus in Indiana, with plans to add 700 new workers by the end of 2023.
“We wouldn’t be making that kind of investment in our infrastructure, if we thought that this was just a mere short-term bubble. It’s not,” Clark said in a 2021 video interview.
Just two years later, Winnebago’s revenues from towable RVs dropped almost 46%, reflecting a slump in RV sales across the industry as COVID concerns waned and people returned to their pre-pandemic lifestyles. High interest rates have also made RV purchases unaffordable for some buyers.
But Grand Design RV sales have fallen faster than those of its key competitors. According to Hunterbrook’s analysis of the monthly RV registration data published by Statistical Surveys Inc., Grand Design’s market share for both travel trailers and fifth wheels fell by 20% and 13%, respectively, from August 2023 to July 2024.
A Hunterbrook examination of inventory at six of the top RV dealerships in the U.S. suggests that, as of mid-September, Grand Design’s share of inventory was more than double its market share. That ratio stands in contrast to Winnebago’s competitors Thor and Forest River, each of which had a smaller share of inventory at these dealerships than of the market as a whole.
Zooming in on Lazydays Holdings, Inc. (NASDAQ: $GORV), one of the biggest dealers that sell Grand Design RVs, shows that its purchase of Winnebago RVs as a percentage of its total purchases has fallen a bit year on year, according to its latest quarterly filing, with Thor gaining market share:
Dealers have already begun offering steep discounts on Grand Design units.
Hunterbrook’s search for RVs on Lazydays’s website in mid-September showed 35% of brand new Grand Design towables in its inventory were on clearance, marked down by as much as 47% — a steeper discount than on the other RVs that Hunterbrook checked on the site. The most discounted RV we found was a 2023 Grand Design Solitude 280RK R, which Lazydays marked down by an additional $4,000 in the few weeks between when Hunterbrook first checked its price and the publication of this article.
In comparison, 17% of Forest River and 25% of Keystone towables in stock at Lazydays were on clearance. The contrast didn’t appear to be as stark at other dealerships: Camping Word and Blue Compass.
Lazydays has been reporting worse-than-expected quarterly results since aggressively expanding nationally last year, leading to mounting concerns about its financial position. Both its CEO and CFO resigned earlier this month, and its stock price has declined 77% since the beginning of the year. Winnebago, which is Lazydays’ second-largest supplier, typically has an obligation to repurchase unsold units from the lenders that financed the dealerships’ purchase, according to Winnebago’s financial disclosures.
Lazydays did not respond to Hunterbrook’s request for comment.
In an emailed statement to Hunterbrook, Winnebago chalked up this discrepancy between its market share and inventory to the fact that its high-end models are disproportionately stocked at the largest dealerships. Winnebago also asserted that, across all dealerships, its share of inventory is less than its market share. Winnebago also cited “higher interest rates and other macro factors” as a potential reason for Grand Design’s declining market share, during a time when consumers may be seeking lower priced brands.
This drying up of demand hasn’t stopped Winnebago from investing in Grand Design. Earlier this year, the company announced a new, motorized line of Grand Design RVs, scheduled to debut in late 2024.
But Grand Design owners are growing less and less confident, with the frame failure already affecting trade-in value amid the negative publicity.
Kevin Frazer, owner and founder of a major RV dealer called Cheyenne Camping Center, said in a May YouTube interview that there has been a “flurry of people wanting to trade in very recent models of Winnebago fifth wheels,” but he has told his sales crew not to take any of them.
Why?
“Fear of litigation.”
Warranty Claims Skyrocket — And Company Appears to Have Under Provisioned
As frame flex issues continue to plague Grand Design RVs, Winnebago is facing a dramatic surge in warranty claims. This increase isn’t just a customer service problem — it’s a financial issue that the company has highlighted as a significant risk. According to Winnebago’s FY 2023 10K, “A significant increase in dealership labor rates, the cost of parts, or the frequency of claims could have a material adverse impact on our operating results for the period or periods in which such claims or additional costs materialize.”
Between 2017 and 2023, Winnebago’s warranty costs rose by a staggering 278%. Most of the claims were from Grand Design RVs. In the most recent fiscal year, total warranty claims — at $98 million — were 3.26% of revenue — the highest level seen since 2017.
These figures do not appear to include the company’s buyouts and repairs done as “goodwill” outside of the warranty — such as the $92,389.51 payoff to Carson — the costs of which appear to be omitted from Winnebago’s reserves and financial projections.
But while Winnebago is spending far more on repairs and replacements for its RVs than it has in the past, its profit margins aren’t reflecting these numbers — yet.
This is because, when Winnebago sells a product with a warranty, like most other companies, it doesn’t just wait for claims to come in and then pay them. Instead, it sets aside money in advance to cover expected future claims. This is called “provisioning” for warranty expenses, and the money set aside is known as the “warranty reserve” or “warranty liability balance.”
Historically, Winnebago has been conservative in its approach to warranty provisioning: Between 2017 and 2021, the company typically set aside 107.7% to 143.3% of the amount it paid out in claims each year. In other words, Winnebago was preparing for future claims by reserving more money than it was currently spending on warranties.
However, Hunterbrook’s analysis of Winnebago’s recent financial statements reveals a concerning shift. In fiscal year 2023, Winnebago’s warranty provision dropped to just 1.92% of revenue. This is significantly lower than the 2.04% to 2.63% range seen in previous years. And as a result, the company’s warranty reserve now covers only 82.6% of the claims paid in the most recent quarter.
What does this mean in practical terms? Winnebago is setting aside less money to cover future warranty claims, even as those claims are increasing dramatically.
If Winnebago had maintained its fiscal year 2022 provisioning rate of 2.40% in 2023, the company would have set aside an additional $16.8 million for warranty expenses. That’s about 6.0% of the company’s pretax earnings.
In essence, by reducing its warranty provisions, Winnebago may be overstating its current profitability. More importantly, it may be under-preparing for future warranty expenses, which could lead to significant financial strain if claim rates continue to rise — especially in light of Winnebago’s decision to extend its warranty to five years.
“We are fact-based in any select comments we make to our shareholders about this issue,” the company told Hunterbrook in a statement responding to questions about how it has characterized the frame flex issue. “Winnebago Industries has decades of history in working diligently to create safe products and acting responsibly if a product safety issue is proven to be present on our products; we will always strive to do so, and this case is no exception.”
Grand Design Leadership Team Fled Winnebago for a Start-Up RV Company That Has Become a Formidable Competitor
Since 2021, there has been an exodus of talent and leadership from Grand Design to Brinkley RV, a new RV company founded in 2022 by Grand Design’s founder Ron Fenech, as well as two former Grand Design general managers Nate Goldenberg and Micah Staley, whom Ron Fenech called “two of the best product guys in our industry.”
Bill Fenech, Ron’s brother who cofounded Grand Design, waited until his retirement from Winnebago as the president of Barletta Pontoon Boats — another company that Bill founded and sold to Winnebago in 2021 for $255 million — to join as a co-owner of Brinkeley the following month.
Staley had overseen product development and sales of Grand Design fifth wheels, and Goldenberg spearheaded design, including developing multiple patents valuable enough that Grand Design sued competitors Jayco and Keystone — both owned by Thor — for patent infringement in 2021.
Other senior Grand Design executives who have decamped for Brinkley include former Vice President Cam Boyer, now Brinkley’s CFO/COO; former Finance Manager John Schmidlin, now Brinkley’s CFO; and former production manager Mike Bontrager, now Brinkley’s director of operations. In all, Hunterbrook identified at least 20 Grand Design employees who have left Winnebago for Brinkley since 2022.
Missing from the list is Don Clark, who in September 2023 signed another five-year contract with Winnebago, which included a 20% base salary increase and other short-term benefits. However, just months before, in July 2023, Clark sold 40% of his Winnebago stock, cashing out about $21 million. Winnebago told Hunterbrook it would not “comment on an employee’s personal stock transactions,” but emphasized “that Mr. Clark remains in compliance with our stock ownership guidelines.”
Insider selling is sometimes viewed by investors as a sign of the leadership’s weakened confidence in its company.
In the meantime, Brinkley is gaining ground as Grand Design’s rival.
Since it began production in 2022, Brinkley has rapidly risen in popularity, competing directly with Grand Design’s towable lines and promising to deliver on what many owners complain is now lacking from Grand Design products: quality and customer service.
Google word search trends show Brinkley has been catching up to Grand Design as a popular search term. Perhaps even more tellingly, the terms “brinkley” and “brinkley RV” have risen as the most-searched related brand names by people searching for “grand design”:
“My wife and I had been thinking seriously about buying Brinkley,” Schnatterly told Hunterbrook — but he would need to offload his current Grand Design RV to afford it. And the chances of that are not looking good.
“The value for a trade-in,” he said, “is gonna be nothing.”
Authors
Jenny Ahn joined Hunterbrook after serving many years as a senior analyst in the US government. She is a seasoned geopolitical expert with a particular focus on the Asia-Pacific and has diverse overseas experience. She has an MA in International Affairs from Yale and a BS in International Relations from Stanford.
Michelle Cera is a sociologist specializing in digital ethnography and pedagogy. She is a Ph.D. Candidate in Sociology from New York University, building on her Bachelor of Arts degree with Highest Honors from the University of California, Berkeley. Currently serving as a Workshop Coordinator at NYU’s Anthropology and Sociology Departments, Michelle fosters interdisciplinary collaboration and advances innovative research methodologies.
Wendy Nardi was the fact-checker on this article. She joined Hunterbrook after working as a developmental and copy editor for academic publishers, government agencies, Fortune 500 companies, and international scholars. She has been a researcher and writer for documentary series and a regular contributor to The Boston Globe. Her other publications range from magazine features to fiction in literary journals. She has an MA in Philosophy from Columbia University and a BA in English from the University of Virginia.
Nick Gibbons, a Hunterbrook Media advisor, also contributed reporting. His experience includes a blend of qualitative and quantitative investment roles at Two Sigma, Norges Bank Investment Management, and Citadel. He began his career in forensic accounting at independent equities research provider Gradient Analytics. He is an Adjunct Assistant Professor of Accounting at NYU Stern School of Business, a Certified Fraud Examiner (CFE), and Master Analyst in Financial Forensics (MAFF).
Editor
Jim Impoco is the award-winning former editor-in-chief of Newsweek who returned the publication to print in 2014. Before that, he was executive editor at Thomson Reuters Digital, Sunday Business Editor at The New York Times, and Assistant Managing Editor at Fortune. Jim, who started his journalism career as a Tokyo-based reporter for The Associated Press and U.S. News & World Report, has a Master’s in Chinese and Japanese History from the University of California at Berkeley.
Hunterbrook Media publishes investigative and global reporting — with no ads or paywalls. When articles do not include Material Non-Public Information (MNPI), or “insider info,” they may be provided to our affiliate Hunterbrook Capital, an investment firm which may take financial positions based on our reporting. Subscribe here. Learn more here.
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