“The opportunity to change our industry’s image is tremendous today. There’s never been a better time to change it,” says Keith Holdbrooks, President of Clayton Building Group, in a carefully crafted video, posted further below.
Robotics and automation are playing a role in that image and the Clayton reality, as will be revealed in this report.
In a release to the Daily Business News, Clayton identified themselves as “a national home builder and Manufactured Housing Institute’s 2017 Manufacturer of the Year…”
Besides changing the “industry’s image,” what Clayton is striving to do is carefully advancing their own image too.
As MHProNews has previously reported, Warren Buffett’s “the Moat” strategy promote the concept of a “durable competitive advantage.” Readers can finish this column, and later circle back to the in-depth look at Buffett’s thoughts on the issue linked below, or in the Related Reports at the end. Those reveal what Kevin Clayton, the CEO of Berkshire Hathaway owned Clayton Homes, has said for years about how to get and keep a durable competitive advantage by using and expanding Buffett’s principle of “the Moat.”
The Masthead
Best Warren Buffett, Kevin Clayton, Clayton Homes, Berkshire Hathaway Annual Meeting, Competition, and “the Moat” Video Collection, Jim Clayton, Oakwood Homes, largest manufactured housing builder, largest HUD Code Manufactured Housing producer, largest manufactured home retailer, not mobile home, not trailer house,
Robots and Automation
The soft musical undertones in the video are part of that image crafting, for which Clayton has hired a branding team. Clayton previously told the Daily Business News via a release that “Clayton Homes has selected Made Movement (Made) to handle strategy, digital experience design and advertising for the brand.” The “Have it Made” campaign, some observers say, promotes the Made agency, as well as Clayton.
Clayton’s recent acquisition of yet another site builder – Brohn Homes of Austin, one of Texas’ largest privately-owned homebuilders – are all part of their drive to “world domination,” as Builder put it, in two different articles.
“The key to Clayton’s tech, robotics and automation-fueled offsite-site build business-model bid for world domination of lower-priced new homes,” said Builder, a statement that Clayton’s social media page endorsed by posting it.
“World Domination”
“About five years ago, leadership called on us to do what it took to make [Berkshire Hathaway unit] Clayton a world class company,” says Rick Boyd, director of operations, working out of the enterprise’s Maryville, Tenn.-based headquarters. “We didn’t know what that was. So we had to define what that meant, and that process gave us three pillars of priority: team member experience, customer experience, and leadership.”
It is interesting to note that in their release, Clayton cited Starbucks and Google as their examples of companies to study and emulate.
Google is drawing fire for being monopolistic, if they’re not already an outright monopoly. Those are the positions governmental actions in Europe and the U.S., as well as civil litigation, are underscoring. And although Starbuck’s has a history promoting inclusiveness, their president recently publicly apologized for racially insensitive actions at one of his stores. Sound familiar?
Starbucks, Google and Berkshire’s Clayton each arguably have their own moats, in their respective spaces.
Velvet Monopoly?
While the have it made people are crafting one image, another is emerging too, across the left-right media and political divide.
That image is of Warren Buffett being portrayed by some as the creator of a new forms of ‘company stores’ and ‘company towns.’ In those Buffett towns, Berkshire is:
- earning a few cents a day per households from the sale of Heinz ketchup – with millions of families using their products daily,
- earns a thousand (+/-) dollars or more annually from millions of GEICO policy holders,
- wants you to stop at Dairy Queen for Fan Food ®,
- buy your sweet heart some See’s Candies,
- and hopes to sell you a home – either through their real estate division, or from their growing footprint of conventional or factory-built homes.
Beneath that velvet glove image they are grooming at Clayton, is another story. It is told by retailers like “Kevin Carroll, former owner of a Clayton-affiliated dealership in Indiana, as saying that if he steered customers to a Clayton lender, he got “a kickback” in the form of a discount on his business loans. Carroll later went out of business and sued Clayton for fraud, but the case was dismissed,” per Omaha, a Berkshire owned business.
It was part of a response to the controversial Seattle Times reports about Clayton, which opponents of the Clayton/Berkshire/MHI backed Preserving Access to Manufactured Housing Act used to give a black eye to the essentially the entire industry.
A competitor – a non-MHARR member, that is a MHI member builder – tells MHProNews that Clayton is poised to do even more with robotics.
Because of the new tax law, that senior executive says, Berkshire can pump more money into Clayton. Indeed, “The Tax Cuts and Jobs Act recently signed into law by the President includes multiple provisions increasing depreciation,’ says KTLIP. And if that HUD Code builder executive is correct, putting more into automation and robotics could more rapidly be expensed.
The result?
A new kind of durable “moat” competitive advantage will be gained by Clayton over their competitors over time. Velvet gloves, tossing sharks into the moat’s water, that’s the image that Buffett himself has arguably painted, in his own words.
Will Trump Administration Reforms Fuel More Completion?
But the new tax law and regulatory roll back will work in more than one way.
If there is a change in the makeup of the House and/or Senate after the 2018 midterms, will Democrat Buffett benefit anew? Will his hand-picked politicos once again promote heavier regulations?
As MHProNews has reported, a long time MHI member told the Daily Business News that Clayton and the other big companies have ‘figured out how to get smaller companies to pay for what they want, using the Manufactured Housing Institute.’
That too fits the use of non-profits by Berkshire and Clayton.
Berkshire’s Clayton benefits during heavy or lighter regulations. Are they lifting the industry, as Clayton and their incentivized apologists and paid promoters say? Or are they slowly killing off competitors, via their slow-motion, sharks-in-their-moat strategy dictates?
These are questions that Trump Administration officials will have to answer as they examine concerns over monopoly that are being raised about Berkshire’s manufactured housing (MH) brands, with concerns from voices inside and outside of the MH Industry.
Independent producers, retailers, communities, lenders and others in the factory-built home industry will have to answer these questions about the growing Clayton/Berkshire moat too.
What is certain is that Clayton’s market share has been growing. Yet, per prior reporting, their own percentage of growth in sales year over year is at a slower pace than the industry at large. Is that a kind of indirect proof that their marketing isn’t working quite as planned? Are they a beatable monopoly?
Kovach says the need is to get to the root issues that keep the industry from advancing. While MHI promotes Berkshire’s desires, are they ignoring – or undermining – the kind of work that has proven effective in local markets?
Are They Among the Best Advocates for Manufactured Housing and Manufactured Home Living?
As the affordable housing crisis rages, manufactured housing may top 100,000 new home shipments in 2018. When 8.3 million housing units are needed now, isn’t 100,000 homes a big yawn? “We Provide, You Decide.” © ## (News, analysis, and commentary.)
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Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.
