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WIKI ANALYSIS
Drew Industries (NYSE: DW) makes and sells parts that are used in the construction of recreational vehicles and manufactured homes. The recreational vehicles consist mostly of trailers and fifth-wheel RVs rather than self-propelled RVs. In the case of both the RVs and the manufactured homes, Drew tends to make the structural and key components rather than the internal furnishing. This includes the steel chasis; vinyl doors, windows, and screens; axles; and towing accessories.[1] For the full year 2010, Drew's total revenue was $573M and its net income was $28M.[2]
The manufacturing of the parts that Drew Industries makes tend to be fairly large and to be fairly labor intensive. The size and weight forces the production facilities to be located relatively close to the consumer. As a result, all of Drew's manufacturing facilities are located in the United States. A continued rise in the cost of labor in the US would force Drew to either incur greater labor costs or move its facilities abroad and incur greater shipping costs. As a result, the a rise in labor costs may make Drew's products less competitive.[3]
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