Fleetwood Enterprises Faces False Advertising Lawsuit

Fleetwood Enterprises Inc. on Thursday was hit with a consumer’s lawsuit accusing it of false advertising for its motor homes, as the company warned of another quarterly loss.

The lawsuit, filed in Los Angeles Superior Court, charges that Fleetwood falsely claims that its motor homes can stop safely while towing a load of 3,500 pounds.

Don Fairley of Long Beach claims in the suit that his Fleetwood motor home can safely tow an automobile or boat weighing 3,500 pounds only when its braking system is supplemented. Without modification, the vehicle can’t stop safely with more than 1,000 pounds in tow, the suit said.

The suit, which seeks class-action status on behalf of an estimated “tens of thousands” of Fleetwood customers, demands that the company reimburse consumers or replace the brakes on their recreational vehicles. The suit also asks for Fleetwood to notify all customers of the alleged braking-capacity limit.

Riverside-based Fleetwood declined to immediately comment, said spokeswoman Kathy Munson.

The suit seeks to represent buyers of both Class C and Class A Fleetwood motor homes. Class C homes are the smallest motor homes, according to the Recreational Vehicle Industry Assn. Class A motor homes are the largest vehicles.

Separately, Fleetwood announced that a drop in sales of manufactured homes would contribute to an unspecified loss for its fiscal first quarter. It expects to break even on an operating basis.

Sales of motor homes and travel trailers should be up 39%, bringing total sales up 8% to $610 million. The year-earlier net loss was $31.1 million, or 95 cents a share.

The company has hired Edward Caudill, an executive at truck maker Paccar Inc., to take over this month as chief executive and president to replace Nelson Potter, who resigned in February after seven quarters of losses.

Fleetwood rival Thor Industries Inc. said sales rose 80% for the fiscal fourth quarter ended July 31 to $402.2 million, while sales for the year gained 51% to $1.25 billion. The gains include the acquisition of Keystone RV Co. in December.

Shares of Fleetwood, which have declined more than 75% this year, fell 10 cents to $4.05 on the New York Stock Exchange.