Monday, January 16, 2012

BLU HOMES CLOSES EAST COAST PRODUCTION LINE

Blu Homes, the unique systems built home company founded on the home plans of the now defunct Michelle Kaufmann Designs modular factory is itself closing one of its two plants.

The Blu Homes factory in a former aircraft plant at 330 Chestnut St, East Longmeadow, MA, had about 40 workers, including carpenters, electricians, plumbers and metal fabricators. They assembled sections of Blu’s modern-style homes then used the factory’s huge 250-ton crane to lift the home sections onto truck for shipment to building lots across the Northeast. Some workers will be offered opportunities to continue working at the Vallejo, CA location, 3,000 miles away.


Blu Homes factory in Vallejo, California

Sales for their folding homes have shifted to the West Coast. With demand there it makes more sense to build the homes in their new Vallejo, California factory rather than ship them across the country. That makes sense considering how much it costs to ship cross country.

What doesn't make sense is that they will continue to have a sales office and staff on the East Coast which means shipping back to the east will be cost prohibitive.  Looks like another West Coast modular company just can't make it in the East.  I could have told them that.

Related stories:
Blu Homes 3D Configurator
Blu Homes opens West Coast factory

14 comments:

Anonymous said...

So Blu Homes is going back to the west coast. the east coast is a tough market to break into for modular housing.
Goodbye Blu Homes and good riddance.

Anonymous said...

i love how everyone simply assumes that the closure of the factory was due to poor market support.

it was not. sales are split pretty evenly between the coasts. the decision was driven by an extremely uncooperative landlord and a substandard facility which they refused to support or improve. simple as that. we'll have another factory on the east coast but more centrally located (like Philly) and a more partnership oriented landlord.

the Blu biz model is alive and well and exceeding expectations in a zero growth economy.

Anonymous said...

Blu Homes never said anything about the factory being substandard. Moving from MA to PA doesn't make their homes any better.

Anonymous said...

no their presser didn't say anything about that. but i can tell you, from the inside, the factory and its owner sucked and was the reason.

William said...

Well, well, well. And just a week or so ago what a glowing article on this blog about Blu Homes and their self touted design software. From reading that post one would think that Blu Homes was invincible. Maybe now we know where they got the money for the software and debuting it at the CES show in Las Vegas.
One must come to the conclusion the problem is not the market but Blu Homes ownership/management.
How long can ownership continue to tolerate the money Blu Homes has wasted? From this blog I recall announcements of money being raised by Blu Homes. Third party investors must be squirming in their seats as they must be getting hot.

Anonymous said...

Coach, if that really is a picture of their California factory, how much worse could the east coast plant look?
I agree with William, the investors must be looking at each other and wondering WTF.

Anonymous said...

Blu homes is just fine, juts getting out of a bad facility. but haters always hate and will always believe the worst no matter what.

Coach said...

If the anonymous writer has some insight into the inner workings of Blu Homes, please let us know (and sign your name).

I am a Blu Homes fan and hope that if the real reason they closed their MA factory is to find a better location, that would be great.

However, their unique style of homes will always be a hard sell in the east. Just look at all the Architects contributing similar styles to Haven Homes. None of them have been very successful building more than one or two with Haven.

I wish Blu Homes continued success.

Anonymous said...

I do in fact have inside information as I work there and have for the past year and a half. i will remain anonymous for obvious reasons.

the reason the ELM shut down was that it was poorly sited originally, the landlord was uninterested in providing improvements that the city needed and it just became too costly to operate especially in light of the exact opposite situation in Vallejo. That owner put in 5 mill to upgrade the facility, it has twice the capacity of ELM and the site is really perfectly located to serve the entire west coast. It is is a superior facility in almost every way.

We have not abandoned the east coast. we'll return within 18 months but like the Vallejo site which is situated in the middle of the west coast, we'll most likely site the new facility in the middle of the east coast. We'll see. But it is not because of lack of east coast sales. Our sales are split roughly 40/60, east to west. and all areas are growing.

We are learning and growing and making huge strides. We are trying to do something that no one else is doing, so there will be growing pains and mistakes but money is not being 'wasted' any more than any other start up wastes money.

Blu is doing fine and investors are happy and intimately informed of inner workings.

Anonymous said...

Isn't Vallejo pretty close to Zeta Communities' operation? Seems like these two companies will undercut a relatively good idea for the industry so that only one (or none) survives.

Also, I can't believe any investor would put 5M into any of these operations. Can't we all count the number of Blu's and Zeta's projects on one hand. Those are expensive projects for investors to "eat."

I think the incumbents will sit back and wait for the idea to take hold then sweep in and take over. Atleast that's what I would do.

Anonymous said...

the market is bigger than your imagination and growing despite an essentially zero growth economy. once this economy starts grwoing at 2.5 to 3%, watch out.

the market is big enough for Blu and Zeta and probably 20 others to thrive with out stepping on each others toes. For one, each offers very different end products.

Anonymous said...

I'm sure the business plan shows infinite amount of growth.

The largest subset of buyers out there can buy a house way below market value, so your market is niche greenies or techies. The problem with that is there are a lot of competition from home builders that can feature add you out of a sale -- especially when they team up with an architect.

In my opinion, the "Michelle K" style mods don't have a great track record making it in the business world -- the press loves the ideas though. Everyone love a good story -- especially epic tragedies.

And just for an adder -- I'm not sure you'll ever see housing pick back up like it did even in a growing economy. I think america is past that model of economic growth. But there are a lot of people holding out for it to return.

Anonymous said...

it is not simply that the plan shows growth, it is that the actual sales goals exceed the plan. every quarter.

i totally agree that the US housing market will not recover the the bubble era of a few years ago and that is as it should be. but the market will recover and show growth and all we are trying to do is sell 500 homes per year. a rather modest amount when taken as part of the greater context.

so don't worry about us. or wish us harm. we are a single American manufacturer simply trying to make a good quality home as efficiently as possible according to the ideas we have. doesn't mean it is the best home ever or the best style for everyone. but i think it is certainly possible for us to sell 500 homes per year, even at a 3% growth economy that we should be experiencing in the next two years.

if you are an American, you should be cheering us on. even if you are a competitor. even if you don't like our products. because, if we have success, it means a lot of others will or can also be successful. it means our economy is recovering and getting healthy again.

the market is big enough for many ideas and many approaches.

Anonymous said...

Is Blu toast? I heard their west coast plant is now closed too. Is this correct?