BonnaVilla reports solid, but most challenging year.
The past fiscal year at BonnaVilla Homes felt like one, long, stressful roller-coaster ride thanks to a global pandemic, but at the end of the day plant manager Dan Fitzgerald said it ended up being a solid year for one of Aurora’s largest employers.
Though the housing manufacturing plant on the west edge of town was never forced to shut down, COVID caused all sorts of ripple effects, the likes of which Fitzgerald said he has never seen throughout his 50-plus years in the business.
“I tell people it felt like seven or eight years all wrapped into one building cycle,” Fitzgerald said of a fiscal year that ended March 30, 2021. “When COVID hit we saw orders really, really slow down, almost stop, so at that point we made the decision to work some reduced hours in May, June and July.”
The front door was actually locked for a time to help protect employees from catching or spreading the virus, with staff and only essential vendors allowed inside. The company signed up for the federal government’s short-term compensation program, helping bridge the gap until fall, when orders started coming in and floors began rolling through the plant.
“In August it picked back up and that was a normal part of the year, with orders flowing in at a good rate, but not an excessive rate where we couldn’t keep up,” Fitzgerald recalled. “Supplies were good, material prices were okay and then in what I call the third quarter things went crazy.”
With suppliers across the country fighting COVID-related impacts of their own, materials were still available, but at drastically higher prices.
“We’ve seen a 225 percent increase in MDO from this time last year and lumber is up 175 to 200 percent,” Fitzgerald reported, “and there is nothing that would tell me prices are not going to continue to rise. Demand is still there, though supplies are low, and people seem willing to pay.”
Fitzgerald said many people assume supply issues are all linked to the pandemic, but in fact he said the extreme cold spell in Texas was a major factor as well. With an estimated 80 percent of the resin used in the US manufactured in Texas, when plants there took a cold-weather hit it made the bonding agent used in a wide variety of building materials hard to get, and therefore very expensive.
“And then you have appliances (included in finished BonnaVilla models), where availability is not good, to say the least,” he continued. “Some of that comes out of Mexico. So, when you factor all of that together, it’s just a crazy, crazy world right now in our business.”
Some of the challenges faced at the Grant Street facility reflect a statewide trend in terms of labor availability. Fitzgerald said BonnaVilla currently has 175 full-time employees, though there is a constant search to add 9-15 more.
“Ideally, I’d probably like to be at about 190,” he said. “We are constantly looking for people, but thank God we have just a great nucleus of people who have been here 10 to 15 years. They are just priceless.”
Some office and administrative staff members were able to work remotely from home for a time, including Fitzgerald himself, though the manufacturing process itself obviously requires boots on the ground at the plant.
“Someone made the comment the other day that in a lot of ways this helped us learn how to do business remotely,” he said. “That’s a household term now, certainly for our sales people. They normally travel two weeks out of the month and we’ve not traveled normally since last April.”
With traditional events cancelled or scaled down, including the Nebraska State Fair, Husker Harvest Days and builder shows which all went virtual, BonnaVilla faced some unprecedented challenges this past year trying to market and sell its product. Sales reps have been grounded, for the most part, and even when COVID protocol started to loosen, the reality is that the rules of engagement are different in every state.
Colorado, where pandemic restrictions remain much tighter than Nebraska, remains the company’s hottest market, representing some 55 percent of all sales. Fitzgerald said demand has been good as well in Montana, North and South Dakota.
“Kansas is seeing a little uptick, so I think it’s everywhere,” he observed. “As long as interest rates stay good we’ll see demand stay there, but if they take off …”
As of now it’s safe, and accurate, to say business is booming at BonnaVilla Homes, with approximately 50 floors a month rolling through the plant, shaping into a variety of end products.
“As far as demand, we’re booking into 2022,” Fitzgerald noted. “Prices are up, but people are willing to pay the price and three or four of the manufacturers I talked to said everybody’s got orders, so orders are not the issue.”
As for what kinds of models the 50-plus floors end up in each month, that too has seen changes this last year, and even before that.
“We always like to take a look at the mix, analyzing multi-family versus single-family,” he said. “The demand for multi-family duplexes, for five-plexus, has been steadily increasing over the last three or four years. I guess there is a little bit more demand for rentals, and we’ve also seen some demand back for single-section homes which we’ve not seen in the last 10 years.”
Adjusting to changing market demands, especially with all the other variables in play, has been stressful and demanding for BonnaVilla’s management and staff, though on that note Fitzgerald said there has been a silver lining.
“Through it all I couldn’t be more proud of the way our staff has handled things,” he said. “There was some grinding of teeth, but I think maybe that’s what a crisis does is bring people together a little bit more with understanding.
“So, at the end of the year, I would say we had a pretty damn good year, given everything that was thrown at us,” he concluded, quite matter of factly. “Were our numbers as good as the year before, no, but who would have ever thought in April and May when we didn’t have the orders, and then when materials and prices did what they did, that we would end the year the way we did? It’s just unprecedented.”