Saturday, May 22, 2010

EXCEL HOMES LEAVES $100,000 CONTEST WINNER WITH NOTHING!

Jay Adamski, a builder for more than 30 years entered a contest run by Excel Homes last year and when he won he was taken to the Liverpool, PA plant for a tour, wined and dined by former CEO Steve Scharnhorst and told that everything was in place for Excel to provide a modular home worth $100,000.

EXCEL 180[2] Jay Adamski, on left, being congratulated by former CEO Steve Scharnhorst

The Adamskis, who’ve spent about $25,000 on the project, are ready to start their triplex in Cecil Township near Pittsburgh, PA. 

But last week, the couple received a letter from Jay Kedia, the company’s vice president of business development.

On May 3, Camp Hill-based Excel was acquired by H.I.G. Capital, a private investment firm, the letter said.  Obligations held by the former company, Excel Homes LLC, would not be honored by the new company, Excel Homes Group LLC.

“I don’t understand it,” Jay Adamski said. “How can they get out of [honoring an obligation] by adding the word ‘group’ to their name and have that be OK?”

Several calls to Kedia and Samuel Stahl, the Michigan lawyer handling obligations for the former company, were not returned Friday.

After the couple signed documentation and toured Excel’s Liverpool facility in February 2009, they spent the spring mulling project options and looking at blueprints, Kim Adamski said.

By fall, they’d decided on the triplex and moved forward with securing all the needed permits. They decided to wait through what turned out to be one of the worst winters in memory before beginning the project.

When spring arrived, they demolished a storage shed business they’d run at the edge of their property to make way for the town houses.

As recently as a few weeks ago, the couple said they were in contact with representatives from the company about finishing touches for the town houses.

Finally, on April 28, Kim Adamski said she cut a $10,000 check that was to guarantee delivery of all of the construction components.   “I had the date, May 10, circled on my calendar and wrote,  ‘”apartments arrive,’” she said.

At no time, the couple said, were they told they were in danger of losing the prize or violating any of the terms or conditions set out by Excel.

When they got the letter, they put a stop payment order on the check, she said.

On a related matter, don’t call any of Excel Homes, LLC vendors about being paid for overdue invoices.  You might not like what you hear.  Modular Home Builder has learned that all of them were stiffed and no information is available as of today if any of them will ever be paid.

22 comments:

Gald I left Excel said...

This is what happens when someone that doesn't know the modular home business is put in charge. Steve Scharnhorst didn't even know what the difference between a mod and a trailer was when he took over Excel. Now its gone and owns a lot of money to everybody including the contest winner.
How can a company continue to build houses when they should be bankrupt?
I am so glad I stopped buying my houses from them 2 years ago when I met Mr Scharnhorst. I had a bad feeling about him.
Now they have another CEO that knows nothing about modular housing. This is going to be another disaster. Why would any builder want to stay with them?

Anonymous said...

Here is the puzzling part. The mods were to be delivered on May 10 so they should have already been on the production line. It sounds to me like Excel NEVER intended to fulfil their commitment to the contest winners.
I think this is news that will forever haunt Excel. Any builder who makes a deposit for a house is NEVER GUARANTEED they will get their delivery. If I was a modular builder I would forever steer clear of Excel and make sure I told everyone within earshot of how bad they are and not to trust them.
COACH.....I think you also need to rethink your relationship with Excel. I know you have been close to them favoring them with PR and such, but now is the time to demonstrate your independence and end a posting like the original with an editorial comment AGAINST Excels actions.

Coach said...

Anonymous,
I have only heard about the negative things about Excel over the past 2 weeks. I was a big fan of Avis America and Excel the past couple of years but I think the jury is out on this new entity.

As for giving them PR. They are one of the few factories that sent me news about projects and new building techniques.

I have asked a lot of the factories to send me their PR but only a couple have responded including Signature Homes and a couple of others. So if you if see more articles about them than others, that is the reason.

And only a few builders have sent me PR even when I contact them and they say they will. I guess nobody wants to stand out from the crowd.

Anonymous said...

Coach, you can tell the manufacturers who EAT UP PR. Scharnhorst was a PR hog was is the owner of Signature. Both love to get their smiling face in print, Internet or wherever they can so long AS IT IS FREE! How many ads have you see for either of these companies for which they pay?
I am hoping Excel gets what they deserve for the $100,000 giveaway scam. Mr. Adamski should also report this to the Commonwealth of PA State Department. This state department is responsible for corporation filings and professional licenses. They need to know about Excel's public promotion of their giveaway and how they now are not honoring the commitment they made. Hopefully Mr. Adamski's attorney will notify the Commonwealth.

Coach said...

To Anonymous 2:
Signature is not the only one to send me news of their company. Nationwide Homes, Design Homes, Icon Legacy, Ritz Craft, ProBuilt, Eco Off-Site, Genesis and others have shared info with Modular Home Builder, but none has sent me press releases like Excel.

Vic DePhillips is not only the owner of Signature Homes, he is one of the leading voices in our industry trying to promote it. I can name at least a dozen other owners and managers that are just as eager as Vic to get the word out about modular homes including Warren Buffet.

If you have any pull with a factory I haven't mentioned in the blog, let them know to send their news to me and I'll publish it. But you know what? They won't.

As for Excel getting what they deserve, I couldn't "disagree" more. Their employees and builders will suffer if they "get what they deserve". The contest winner was robbed and I think the "new" Excel should step up and make it right.

Anonymous said...

Oh, their builders will suffer - like the contest winner! If builders buying Excel are smart they will discontinue doing business with them. There are a sufficient number of quality modular business in the Commonwealth of PA that can serve builders needs on a fair and honest basis. Who can trust the new owners of Excel if they pull a fast one like they are doing with their contest. What does this tell you about HIG? Are they honorable? I don't think so.
As for your heartwarming comments about Vic - who are you trying to kid. Everyone who knows him understands he is a PR hog! Plus, you should know better than to use his name in the same sentence with Warren Buffet.

Anonymous said...

I have been an Excel builder for a few years now after leaving another mod comapny. My salesman is very good and has a eral grasp of what I want. Excel is probably beter than the majority of factories selling modulars.
I've been doing this for over 7 years and the detail of the order form is great compared to some of the ones I've seen.
I wish the nes Excel the best becasue it has been the best for me so far.

Anonymous said...

I'be been a long term customer of Excel and based on the recent buyout, the new President and now the backbreaking cancellation of the $100,000 promotion I will go to another modular company for my modulars. BYE BYE EXCEL!

Anonymous said...

Builders change their name and walk away from obligations to customers all the time. Its funny how they scream when it happens to them.

Next time, read the contract - thats what a builder told me when he changed names, took my deposit and left me with a half-built house.

Anonymous said...

As someone with a few years in the mod industry, I never tell anyone who to buy from when they want to consider a mod. I very reluctantly recommended a couple of comapnies to a colleague figuring that they were some of the better manufacturers in their area. They chose Avis and it’s been a very disappointing nightmare ever since. It also re-confirmed why I WON'T RECOMEND ANYONE! Their home was one of the last off the Avis line before it closed and the combination of the builder's woes and Excel's demise, made for an aggravating process for the customer and a huge black eye for the industry. The customer recently told me that there is still a tremendous amount of work to be resolved over 1 year later and that they were going to write a letter to Excel's management to let them know they are disappointed! It definitely appears that it will be a feudal effort! This industry is another example of a culture that is its own worst enemy. It is full of manufacturers that look only at what they can market next versus truly delivering a product that is based on heart and soul of giving the customer the best product they can. It is an industry that has all of the potential for tremendous success if it can embrace a true “customer service” mentality that extends to the end user versus a product that is someone else’s problem once it leaves the factory! It is one of the reasons I avoid getting re-involved with the industry as much as I believe in it. P.S. Excel isn’t the only company that is being run by MBA folks with no industry experience after a takeover where annihilating the existing staff, diss'ing vendors and ignoring the builder network is the first action in a strategy to “change the modular world”…All American…Crest Homes…Sun Modular…Haven Custom Homes…

Anonymous said...

Last anonymous, I think you are trying to link one issue that is not relavant to the issue of Excel cancelling a BIG DEAL PROMO they used. Their $100,000 promotion brought them a great deal of attention and I dare say gave them new customers. While I feel sorry for customers bilked by uncrupulous homebuilders, to link their dastardly deeds with the EXCEL SCAM is not what the blogs written here are all about.

Coach said...

I agree wholeheartedly with the last person. This is not a forum for bashing modular housing companies. There are enough problems in the entire housing industry to keep lawyers busy for decades.

Has everyone forgot about the Chinese drywall used by site builders to keep costs down and now have to spend hundreds of millions to correct?

I have yet to find one modular plant that used it so enough with the finger pointing about shoddy workmanship.

This article is about Excel Homes canceling the $100,000 contest after a winner was picked and he spent over $25,000 in fees. Let's try and stay on point folks.

Anonymous said...

Is Excel under new ownership? If so are we on a witch hunt or just seeking an opportunity to hurt the industry as a whole. The public will view this as; "If Excel can stumble than so can any other company". We need to be careful in this feeding frenzy as not to bite each other. "Coach", I can't help but notice that you are bit eager to condemn almost to the point of showing a little contempt toward Excel. Is there a connection that we don't know about?

Coach said...

I worked for Excel for a short time but if you've read my past articles, I've always tried to give Excel good props. In fact, a lot of good news is coming from Excel since the sale to HIG but I really wish they could find a way to help the contest winner.

I guess I'm getting a little disillusioned by our industry in general. We have great product to offer builders but we just can't seem to get it right.

If we don't take a more proactive approach to promoting and marketing our industry, we will be doomed to be the 4-7% or less that we have now. We also need to do a better job of working with the builder and the end consumer

Anonymous said...

Coach, I think the postings on your blog regarding the EXCEL scam, as one anonymous poster called it, shows both builders are fed up with how they are treated by the modular industry, specifically those in PA. I have been involved in the industry for many, many years and I can tell you that I have found many of the PA manufacturers were spawned from other operations and they have so much imbreeding in them they either not willing or physically/financially not able to break from the past.
One poster listed some companies he lumped in with Excel. Funny All American is there an HIG fund recipient. Crest was doomed for failure before being purchased by Clayton. Sun was also doomed as part of the company out of Indiana who owned them. None of that management team has modular experience but those MBA guys the poster wrote about. And Haven owned and managed by people with absolutely no experience and knowledge of the modular industry. I think these few companies reflect what happens to good companies when purchased and managed by people with no industry experience, just with money.
I am sure there are more of these companies that can be added to the list. Perhaps if blog posters would voice their opinions when dealing with modular companies it would help to get them to change.

Anonymous said...

Coach, I think this has been one of your most popular postings. Now this is what our industry needs - interaction, give and take and some honest assessments on the industry.
Keep up the good blog.

Anonymous said...

I have nothing against the Adamskis. I hope they get some sort of concession. But if they do, why can't Excel's unpaid vendors be compensated in some way. After 14+ years in this business, both in the factories and working for a supplier, I see the pattern does not change. When time are tough the better vendors work with the factories, extending invoices due dates past terms, creating alternative payment plans, or some other means to keep the flow of goods going between the supplier and the factory. When times are good, God forbid you backorder something to a customer. They backcharge you for installing the backorder off the line. Factory executives have very short, selfish memories. What really pisses me off is that any material left in the Excel plant after the sale to HIG, that was not paid for by the previous owners, is now being installed in an HIG Excel home. So the new Excel is benefiting from "free" material.

Anonymous said...

The last Anonymous posting has a great deal of truth IF the sale was a sale of the Excel assets vs a sale of the entire company. However, HIG are big boys having been through this many times and what makes things attractive for them is relieving themselves of the debts of the company being purchased. However, in PA they fail to realize one thing - the number of places for them to buy materials. Vendors have HIG by the proverbial short hairs in they can withhold selling new materials to Excel unless outstanding debts are paid. This is not a bankruptcy where Excel debts are wiped out. HIG must buy new materials to build new orders. As a vendor I would make sure any new purchases by Excel would include provisions to pay off the old debt!
And good luck to Jay Adamski. Put it to Excel or at the least cost them plenty in bad PR so everyone, not just those reading this blog, will know of their underhanded, two-faced dealings.

Nightmare in Stone said...

My husband and I bought an Excel home 6 yrs ago. The builder took our money and left the home unfinished. We called Excel and they kept telling they can't help us, call the builder. They wouldn't help us. The house is still not finished and it took us 4 yrs to get a C of O. The siding is falling off. The first winter the roof tiles flew off. The moldings don't fit right and the ceiling has nail heads coming through in the living room. A lot of other problems. I could write a book of all the problems. Our dream house for retirement turned into a nightmare.

Anonymous said...

" This also happened to my brother and I when we both chose to buy from the factory authorized Excel dealer we were left with unfinished houses and lots of damage as well as faulty windows. When we called Excel they said it wasn't their problem and to deal with the dealer. So I stopped payment and the bank was with me 100%.Then Mr Rhinehardt calls me and wants to know what the problems are after stating to us that it wasn't his problem. Well I guess holding back 170,000 makes it their problem?
Terrible company, no customer service. I would never recommend a modular to anyone.

Anonymous said...

Having been a Builder for many years, the economic problems of the last 14 years encouraged me to expand my operations to include Modular homes. I've seen a lot over the last 40+ years, and it isn't any surprise what happened to the $100,000 home winner. In the modular industry failures, bankruptcies, poor management, buyouts, takeovers, etc. have been common, almost rampant since the early days of the industry. Venture Capitalists have made it a target for generating cash flow and quick profits. Its very like "Flipping Houses". The VC's target a company, buy it or take it over, and install some tough bean counters, and attorneys who are tasked with one thing: to make as much profit as they can possibly squeeze out of that investment or unit (factory). Quality is not the point, building profit is. Image, advertising, winning "hearts & minds", and all the standard tricks are employed to bump up margins, sales, and company value so that they return the best possible results for the investment group, and then sell, or "flip" the whole thing for a profit...the bigger the better, and then, with their experience and money in hand, take on other projects to do one thing; make more money, and as much as they can with as little exposure as they can. Always have the strongest, smartest, most appropriately experienced Law Firm you can afford help you with the process of buying or building any home, modular or otherwise. Believe me or not, buying a modular home without a "Legal Army" on your team is very much like wrapping raw meat around yourself and walking into a cave full of hungry bears, and believing "everything will be ok!" Trouble is Pushed downhill in this industry, and the consumer is at the bottom. When the avalanche happens, guess who is buried at the bottom? Its not the Factory, and its likely not the Builder. The consumer must spend time and money doing Due Diligence for the whole process. Home Design, features, location, materials used, finishing, landscaping, etc. are only a small part of the process, and is generally the easiest...believe it or not. The toughest and most difficult part is protecting yourself, your money, your time, your future. So many times I've heard of people who paid for important elements; like 2 inch ring-shank nails for sub-flooring, 3 inch ring shank nails for wall studs, 1 1/2" inch screws for drywall, Treated & Rated plywood for bathrooms and kitchens, and the list goes on, but all "missed" at the factory who used their standard materials instead (hoping the consumer would never know?), and then the customer is faced with a major and extremely expensive, time consuming series of problems.
Again, this is just One problem that occurs, there are many more potential problems. First and foremost, get yourself a very industry experienced, tough law firm and have them review the contract, make suggestions, and be available if and when things go poorly. They should be able to represent you both to the Factory and if your Builder doesn't perform some aspect of his responsibilities properly. Best advice: Find a highly respected, rated, and experienced local contractor to build your home...and still get the Law Firm!
Its tragic how the home building industry has lost so much of its talent, and focus on quality workmanship, but its a real threat anytime you build anything these days.

Jesus Aguilera said...

To anonymous please get spell check I do not understand how someone can say they work for a company or do any kind of job but still can't learn to correct their own spelling while trying to defend whatever point they are trying to make.