Friday, December 4, 2015

Modular Factory Round Table Surprised Everyone

Mark December 3rd, 2015 on your calendars. That was the day that 15 modular home factory owners and top management sat down for a Roundtable discussion and finally shared their thoughts about the future of modular single family housing, openly and honestly.

The production from these factories account for 80-90% of all single family modular housing in the Mid Atlantic and New England regions.

You're probably asking what was accomplished at this Round Table? Well, that is a tough question. Both Tom Hardiman, the Executive Director of the MHBA and the facilatator of the Round Table, and I each thought we had a good idea what would be discussed. We were wrong.

The discussions quickly came down to several key points. How do factories market modular housing for both the builder and the entire industry, how to attract new site builders to become modular builders and finally, how to create a real partnership with the existing builder network to ensure both the builder's future that of the entire industry.

Several committees were formed and people agreed to begin immediately on arriving at action plans for each area. The staff of the MHBA will work with the committees to make sure they move forward in preparing the plans.

They also asked me to organize a Modular Builder Round Table for late January. No factory people will be allowed to attend. By then some of the committees should have a brief outline of an action plan and want builders to add to them, modify and finally to join with these key factory people on the committees to prepare the Action Plans. 

I was humbled to have been a part of helping bring these people together and saw a side of our industry I have never seen in my 8 years of writing this blog. Their first thoughts were about the builder and how to help them market and sell the homes built by their factories. For anyone that's been in this industry more than a couple of years, you know this is monumental!

Modular Housing has between 8 - 20% of all non-tract single family housing starts in the New England and the Mid Atlantic regions and this group of factory people want to double, hell no, triple that and with the help of their existing builder base and new modular builders. It will happen.

As soon as I can make all the arrangements for the Builder Round Table in January, I will contact the factory people that attended and ask for their builder list so I can fill the 22 seats on the Round Table.

Not only mark your calendars for this evet but also think about how you can help make modular housing the thing new home buyers will want, no, demand modular as the way to build their new home.


Tom Hardiman said...

Gary, just a quick note to thank you for coordinating the event and inviting me to facilitate it. MHBA won't let the momentum die on this interest from the factories to work together to promote the industry. I was really encouraged that the factories not only agreed to work together, but there was a real acknowledgement that this will take an investment and commitment on everyone's part to work and everyone needs to have some "skin in the game". We will continue to keep you and the industry updated as to our progress as soon as we pull together the details of the committees, etc. Very much looking forward to the builder round table.

William said...

Question to Tom is "why did it take so long for MHBA to get the factories together?"
No wait, it was Gary who coordinated the event.
I just feel that Gary does more for promoting the modular industry than the MHBA. If it was not for his blog site, we never would know about all of the great happenings in our industry.

Thank you Gary for all your hard work and dedication in promoting the modular industry

Stephen said...

I have to agree with William that Gary does one hell of a job promoting the modular industry.

Keep up the good work Gary!!!

Tom Hardiman said...

Stephen and William, I can't tell from just your first name - are you members of MHBA? Whether the answer is yes or no, I'll say this - if you are in the modular home industry, this is your association and you need to be 1) committed to join and support it and 2) committed to make your voice and concerns heard. Do you get our emails? Are you submitting homes for our home of the month? Are you financially contributing to the lobbying efforts currently underway in Connecticut? In Michigan? Did you come to the annual conference we just held in Philly a few months ago? We can set the table, but you have to come and eat!

I'm glad Gary is promoting the industry too, and he often promotes MHBA. And he's sometimes critical of the industry which I completely understand. In the 3 years running MHBA, we've grown this association from near death (2 paying members!) to 75 members including 30 mfg and 30 builders (more than BSC I'd point out). Seems like the industry has been griping about not working together for 30 years and griping about why the market share isn't more than 3% as if the two were not related.

It is waaaay past time for people to stop thinking that the industry is going to grow in market share while half the people are sitting on the sidelines watching.

Harris - Finish Werks said...

I count Gary as a friend to the industry, and personally. I feel the same way about Tom (I'm active in MHBA).

Gary enjoys finding, publishing, and commenting on industry related news and events. He gets paid based on ad placements. Using his large, digital megaphone he can more easily organize factories and builders for in-person meetings.

Tom had (but less so now) the unenviable position of resurrecting MHBA from the ashes. As the managing director of a trade association, he gets paid based on membership. Using his smaller but growing megaphone, and an administrative staff, Tom (along with Board directors) is lobbying for industry interests that Mod Home Builder blog can't possibly. You see, lobbying requires constant, directed, communication and in-person meetings.

I give them both kudos for taking on an uphill battle: promotion and support of a misfit industry. William and Stephen, you can support our industry more effectively this way: JOIN the MHBA and SUBMIT your well-crafted modular homes to Gary. Without either - and preferably both - you are simply cheerleaders without last names.

Please excuse me if my calling it like I see it is perceived as crass or rude. And thanks if you've already joined.

Anonymous said...

I too like what both men are doing for us and I hope this doesn't become a pissing contest. Having met Gary at a breakfast meeting this year, I hope he continues to write great articles.

Anonymous said...

If I was a decision maker at one of these factories and I had a strategy on how to grow my business, would I show up to this gathering and share it with my competition? My answer would be no. Yet, 80-90% of eastern factory output is present. If I had no new ideas, I would probably come to see if I could steal someone else's ideas.

I can't help but see a lack of creativity and leadership in our industry right now.

Coach said...

To Anonymous 10:16AM: There is no contest. It is the MHBA and myself working for the betterment of the modular housing industry. One is the heart and soul and the other is the loud voice crying out.

To Anonymous 1:58PM: The reason for the Factory Round Table was never to divulge company secrets. It was to find a collective way to improve marketing and sales efforts for the industry, the builder and consumer. That was accomplished. With an attitude of only wanting to steal ideas from others rather than helping find answers, it's a good thing you're not a decision maker for any factory. The leaders that did attend have fought long and hard to keep their factories working after the housing recession and to say they lack creativity and leadership is an insult to every single one of them.

I was honored to be part of what the factory leaders and the MHBA are about to do and will help any way I can.

To William and Stephen: Thank you for your kind words. I will continue to strive to keep the blog relevant and useful for everyone in the industry.

Tom Hardiman said...

Wow! to the last anonymous post. Talk about a lack of creativity and leadership! That is EXACTLY the response and mentality that continues to hold this industry back. "Why should I share my best practices with my competitor, I hope he fails." No, you don't. If one modular manufacturer or home builder fails, we all get the black eye. Surely by now we have figured this out! Modular builders gets one shot at a new customer while site built contractors can screw up all day long and still get more opportunities.

LISTEN TO ME: Your competition is not the 3%-5% of market that the other modular guys have. its the 97% that's still out there while you stick your head in the sand and protect your top secret ideas. If you use your candle to light someone else's, your light does not diminish, but the whole room gets a little brighter.

Anonymous said...

It is encouraging that so many factory executives attended and presumably the committee's work will result in a comprehensive plan to help builders market and deliver quality homes with minimal service issues.

I don't know the percentage of housing built by non tract builders but there should be a plan and vision to encourage new millenial builders to replace those that have left the industry since the housing bubble with a true partnership for marketing, sales training, sets, and home completion with a true high performance home for boomers, move-up, and first time buyers.

Josh Margulies said...

I have had the most terrible time posting to this blog. It seems that the phone version does not show a complete screen indicating the field where I have to prove I am not a robot! Gary, I hope you realize this means I must get off the couch, go downstairs set up my desktop and post my comment! What a dreary expenditure of labor. Yet I am glad I discovered this terrible inefficiency.

I read these silly comments suggesting one person was helping the industry more than others. what rubbish! I shall encourage all the pregnant women that I meet not to name their children "anonymous". it would appear, if my research is correct, that the name "anonymous" is ancient sumarian for "moron". if any of us feel compelled to publish something profoundly stupid we should show a little courage And not always blame it on that Sumarian moron, "anonymous."

Tom, boys, so sorry I could not make it down to land him last week. The weather was abysmal and, shit, it's PG County! my intentions are honorable one of these days I must make those meetings and meet Charlie and Ed my intentions are honorable one of these days I must make those meetings and meet Charlie and Ed.

Gary, during those round table meeting with all the manufacturers, did anyone discuss a model home program? Model homes sell homes . A cooperative effort among manufacturers and builders to build modular models is, I think, a powerful but expensive marketing strategy

Anonymous said...

Tract builders use models to entice buyers to their amenity laden communities to sell their lots.

Models require capital expenditures every three years to update and incorporate the latest designs or features plus annual updates in staging. Whose $$ support these costs?

Since most modular builders are scattered lot one off builders I don't believe many can support or are willing to invest in stand alone model homes. Rest assured as a modular builder the next time I can take down a 10 lot subdivison I will consider a staged modular spec to sell the lots.

BTW The ancient Sumerians developed an early form of writing that today allows us anonymous "morons" to post to this site LOL

Josh Margulies said...

no one can speak Sumerian anymore. The sumerians are all gone. No one ever really learned how to read their language no one ever really learn how to decipher the writing. there was the language of the priest and the temple. they never really did get the hang of commerce. For a good commercial language you need phoenician.

I am 34 years in this business. I have set 78 homes. I am now seeing bad times after good times and expect to see the good times Roll right back around. I was 14 years with national builders I think I probably superintended the construction of 10 different models for four different national builders. I remember how the checkbook would simply be thrown away. Modular home builders are small scattered lot builders. I would not suggest you do the same thing as a merchant builder. I will say this with some experience and certainty in the right market in the right place at the right time a model can make you a lot of money. A model can make a lot of people a lot of money. With cooperative efforts I'm combined resources there could be models for select groups of builders. today this could be models for select manufacturers. this would have to be the consequence of a highly cooperative effort. Tom is correct there is 97% of the business that we ain't getting. When you extract numbers for volume or tract built production the Number is far less. do not reject model home programs out of hand. it is unwise.

if you are a modular builder then I would expect that you are or will soon become a member of the association. In which case you should fearlessly use your name on this blog. It is much better to be a well known Phoenician imbecile then an anonymous Sumerian moron. you must trust me on this, I've got a lot of time in.

William said...


I never thought my comments on 12-4-2015 would generate so much feedback. It seems I struck a nerve with some individuals. Sorry, it was not my intent. Just like Donald Trump, I say what others are thinking.

Keep up the good work on all of the modular news in the US and in Europe. Someday, we will all (modular industry) get along have a voice in the building industry.

---William aka Little Bill

John Beddow said...

Thanks to Gary and Tom for hosting the gathering of 15 manufacturers for a marketing conference. I have no idea what solutions you came up with, but I look forward to hearing about them. I have been building residential and commercial modular buildings for over 40 years. My first modular project was a multi-story, multi-family condo project in Florida in 1973 (and it's still being enjoyed by the resident/owners). I have built thousands of single family homes, commercial buildings and large multi-family projects for private developers and the military. The buyers wanted good quality, on-time (faster than if site built) and with good value. If they saved 5-20%, all the better, but this was generally not the primary focus.

What has always held us back is the concept that we had to be significantly cheaper than site built and making this our principal marketing message. Spec for Spec, modular building is not substantially less expensive than site built, except in very high labor cost areas. Modular is generally higher quality construction, especially in the medium to lower priced single family category and most multi-family. Of course, there are other reasons for a builder to consider modular construction: convenience; speed from ground breaking to move-in; low environmental impact, especially in the construction zone; ability for smaller builders to focus on site work and marketing, rather than monitoring many trades in the building construction; and cost control.

We need to stop placing inordinate marketing energy on price. It makes modular buildings appear to be the low end alternative when you cannot afford site built construction. "Choose modular because you want it built right!" should be our message. Our secret weapon is quality control utilizing third party oversight and the factory controlled environment. No site builder has these tools. Our speed comes from overlapping site preparation with building construction, not from reduced quality.