/ Katrina Recovery

10:57 AM EDT on Tuesday, September 20, 2005

By BILL POOVEY / Associated Press

WHITE PINE, Tenn. – Manufacturers are gearing up to produce cities of mobile homes for Hurricane Katrina victims, but 10 days after the federal government received their proposals to address the housing emergency, the companies are still waiting for a response.

WADE PAYNE/AP Employees work on one of many manufactured homes being built for FEMA at the Clayton Homes plant in White Pine, Tenn. Manufacturers are gearing up to produce cities of mobile homes for Hurricane Katrina victims, but 10 days after the federal government received the companies' proposals to address the housing emergency, the companies still are waiting for a response.

"A lot of people are waiting," said Phyllis Knight, executive vice president and chief financial officer for Champion Enterprises Inc., a mobile home manufacturer based in Auburn Hills, Mich.

The Federal Emergency Management Agency set a Sept. 9 deadline for mobile home makers to submit bids. But FEMA spokesman Butch Kinerney said there has been a delay because the agency's parent, the Department of Homeland Security, has yet to approve a housing plan.

"We want to be good stewards of taxpayer dollars," he said on Friday. "I know they (manufacturers) are standing by and getting a little frustrated. We want to make sure we are spending the money the right way. It doesn't mean people are going to go without."

He said the manufacturers would get responses to the bids early this week. As of Monday, bidders still waiting for a response included the largest manufacturer of mobile homes, Clayton Homes Inc., based in Maryville, Tenn.; and Riverside, Calif.-based Fleetwood Enterprises Inc.

Knight said there was a discussion with FEMA over the weekend, but the agency's slow response was delaying production, although she predicted the lost time could be made up.

FEMA spokeswoman Nicol Andrews said Monday the agency was "awarding contracts as quickly as possible." She did not have a specific timetable for the bid responses or details on how many were being ordered.

Soon after the hurricane struck, FEMA officials said they ordered 125,000 mobile homes and travel trailers in a rush, and manufacturers starting shipping off those they had already made.

"We've got plenty of housing units on the road, in the pipeline right now, but we are going to need more," Kinerney said in a Friday telephone interview from Washington.

But manufacturers say they're still waiting to hear whether they should move ahead with production of those homes.

Clayton, the nation's largest manufacturer, said it rounded up 1,800 from retail lots across the country and sent them to a staging area in Texarkana, Texas.

Producing enough to accommodate the masses of Katrina refugees is a daunting task for a mobile home industry currently building about 135,000 units a year.

FEMA estimates 200,000 households have been displaced by Katrina – far more than the 15,000 households that needed shelter last year after the Florida hurricanes.

With the mobile home industry struggling for several years, mainly from customer lending problems that have seen production drop from more than 400,000 units a year, a spokesman said it was too early to predict the impact of Katrina.

"It's an opportunity for the industry to show it can build quality houses at affordable costs," said Thayer Long of the Manufactured Housing Institute in Arlington, Va.

Clayton spokesman Chris Nicely said his company bid to provide 3,000 more homes. He declined to give specifics on bid pricing. He said the company expected to make a profit, but did not increase costs to reflect higher fuel prices.

The company's one-, two- and three-bedroom models typically cost from about $25,000 to $35,000 each. Clayton makes 500 to 650 mobile homes a week and could immediately boost production by another 300, Nicely said.

"We have the ability to meet a considerable amount of increased demand over the next several months, and even years," Nicely said.

Manager Ken Cobb said Clayton's White Pine factory, about 40 miles northeast of Knoxville, typically builds 28 homes a week and was ready to boost production to about 40. He said additional workers would be hired, overtime approved and some Saturday production added to answer the disaster demand.

Long, whose institute's 40 manufacturing members represent about 85 percent of the industry, said they hoped to provide "not only temporary housing and shelter ... but down the road how we can play a role in building the permanent housing."

Fleetwood Homes had sold all its inventory to retailers before Katrina struck the Gulf Coast, but the company should be able to boost manufacturing to a peak level "pretty much immediately," company spokeswoman Joanne Foist said.

"That's what we're pretty much bracing for," she said. "The big thing with them is not just price but how quick we can deliver."

Foist said the company's plants in Kentucky, Texas, Tennessee, Georgia and Florida could make 450 mobile homes a week. The increased production would likely mean additional hours for employees, and possibly hiring, she said.

While Nicely said material supplies were not yet a problem for Clayton, shortages of wood, steel and other materials dating back to hurricanes in Florida last year have been exacerbated by Katrina, driving production costs higher.

"We've seen our wood panel price increase in the last two weeks along the range of 12 (percent) to 21 percent," Foist said. "Steel has increased as much as $135 per chassis."

Fleetwood also expects Katrina-related shortages of shingles and all petroleum-based products, such as vinyl and PVC plumbing.

Champion Enterprises, which works with independent retailers, contractors and developers to build homes to order, would gear up production to meet FEMA requests, Knight said. "We can make 250 homes a week. If FEMA said yes to our proposal, we could ramp up tomorrow."

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Associated Press writers Olivia Munoz in Detroit, Alex Veiga in Los Angeles and Duncan Mansfield in Knoxville, Tenn. and Randy Schmid in Washington contributed to this report.

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On the Net:

Manufactured Housing Institute: http://www.manufacturedhousing.org

Federal Emergency Management Agency: http://www.fema.gov

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