Clayton Homes Explained

Clayton Homes
Type:Subsidiary
Founder:Jim Clayton
Location:5000 Clayton Road
Location City:Maryville, Tennessee
Location Country:United States
Area Served:United States
Key People:Kevin T. Clayton
(President & CEO)
Industry:Construction
Manufacturing
Financial services
Products:Manufactured homes
Parent:Berkshire Hathaway

Clayton Homes (or Clayton) is the largest builder of manufactured housing and modular homes in the United States.[1] It is a wholly owned subsidiary of Warren Buffett's Berkshire Hathaway.[2]

Clayton Homes' corporate headquarters are in Maryville, Tennessee.[3] Its subsidiaries include Clayton Home Building Group,[4] Clayton Properties Group,[5] Vanderbilt Mortgage, 21st Mortgage,[6] and insurance company HomeFirst Agency.[7]

History

Clayton Homes was founded in 1956 by Jim Clayton.[8] [9] The business began by refurbishing and reselling used mobile homes.[10] In 1966, Jim Clayton opened a Clayton Homes store location in Knoxville, Tennessee, on Clinton Highway.[11] Clayton Homes established its own mortgage company in 1974 and added a manufacturing division in 1975. The company went public in 1983, trading on the New York Stock Exchange.[12] [13] Each year from 1989 through 1992, Clayton Homes was named on the Forbes list of the best small companies in America.[14] Kevin Clayton, Jim Clayton's son, took over the company in 1999. Kevin Clayton had joined Clayton Homes in the 1980s and held several leadership roles in the company and its subsidiaries before becoming CEO.[15]

In 2002, Clayton Homes earned a revenue of $1.2 billion. It was acquired by Berkshire Hathaway in 2003 for $1.7 billion.[16] [17] [18] Cerberus Capital Management also expressed interest in bidding for the company.[19] [20] The certificate of merger was filed in Delaware, and Clayton Homes stock was removed from the New York Stock Exchange.[21] [22] In 2007, Clayton Homes' revenue was $3.66 billion.[23] Clayton Homes sold its land-lease communities business to Denver-based Yes Companies LLC in 2008. The deal involved 65 properties in 11 states.[24] [25] The i-house brand was introduced in May 2008 as a green, energy efficient home.[26] By 2009, Clayton Homes had sold over 1.5 million homes.[27] In 2009, Clayton Homes launched the eHome as a more affordable version of the i-house.[28]

Clayton Homes was involved in a lawsuit in 2011 with FEMA after providing portable classrooms as part of Hurricane Katrina relief which were found to contain formaldehyde. Afterwards, one of 12 prefabricated shelters provided to Haiti through the Clinton Foundation after the 2010 earthquake was found to have a formaldehyde level of 250 ppb, "a very high level" according to a scientist specializing in indoor pollutants at Lawrence Berkeley National Laboratory.[29] A news story in 2015 claimed that Clayton Homes unfairly targets and exploits minority home buyers.[30] Clayton Homes was further criticized for its alleged use of corrupt business practices. The company has denied discriminating against its customers or its workers.[31] [32] Warren Buffett, the CEO of Berkshire Hathaway, defended Clayton against predatory lending claims in an interview saying: "We have 300,000 loans on the books and in the last 3 years I've not received one letter of complaint from anybody."[33] [34]

In 2015, Clayton Homes worked with Oak Ridge National Laboratory and the architectural firm Skidmore, Owings & Merrill to produce a 3D printed house and car which share a single energy unit.[35] [36] Clayton Homes expanded into the traditional home building market with the acquisition of Georgia-based homebuilder Chafin Communities in 2015,[37] and Tennessee-based Goodall Homes in 2016.[38] [39] Clayton Homes acquired River Birch Homes, based in Hackleburg, Alabama, in April 2016. The following month, Clayton Homes hosted its first Birmingham-based home show. The show had 492 attendees and featured 27 homes from 27 facilities.[40] That same month, Clayton Homes announced that it would partner with nonprofit Next Step to build a modular duplex in Waco, Texas on a lot owned by NeighborWorks Waco in order to create affordable housing in the Greater Waco area.[41]

In 2016, Clayton Homes was recognized as number 292 on Forbes' list of America's Best Employers.[42] The company introduced a line of tiny homes during fall 2016 with the debut of its "Low Country" prototype in North Carolina.[43] The designer series received media acclaim from USA Today, The Post and Courier, among others.[44] [45]

On July 10, 2017, Clayton Properties Group announced the purchase of home building operator Harris Doyle Homes, which is based in Birmingham, Alabama.[46] Known for its manufactured housing, Clayton Homes is expanding into the site-built, $250,000-and-under housing market, as reported in July 2017. Since October 2015, Clayton Homes has acquired homebuilders in Atlanta, Nashville, Kansas City, Denver, and Birmingham.[47] In 2019, Clayton Homes also worked with Colorado-based advertising agency Made to create the "Prefabulous" series to promote its manufactured housing and attempt to fight the view that off-site built homes are "low-end and one-size-fits-all".[48] [49] As of 2021, Clayton Properties Group, a subsidiary of Clayton Homes, is ranked number eight in size on Builder Magazine’s Top 100 list of home builders in the US with a gross revenue of  $2.98 billion.[50]

Operations

Clayton Homes produces homes under the brand names of Buccaneer Homes,[51] Cavalier Homes, Clayton Homes, Crest Homes,[52] Giles Industries,[53] Golden West Homes,[54] Karsten Company,[55] Marlette Homes,[56] Norris Homes, Schult Homes, and Southern Energy Homes. Clayton Homes also owns retail brands Oakwood Homes,[57] TruValue Homes[58] and Luv Homes.[59] [60] In 2016, Clayton acquired G&I Homes,[61] a family-run company based in New York.[62]

As of 2019, Clayton Homes has 40 home building facilities and more than 350 retail outlets located across the United States. At these facilities, retail locations and distribution centers, the company employs 16,000 people.[63] Clayton Homes produces about 50,000 homes per year at its facilities, which is about half of the industry's total. The off-site built home is then transported to its final location in sections to be assembled on a foundation.[64] Clayton Homes has taken a number of sustainability measures at it facilities including preventing 200short ton of waste from going to a landfill from its facility in Bean Station, Tennessee, in 2020 by recycling metal, cardboard, wire, and plastic. The Bean Station facility also saved 40000USgal of water annually – a 50% reduction – through implementation of water conservation upgrades.[65]

Philanthropy

In 2015, Clayton Homes released the Patriot home model and partnered with the Hope for the Warriors veterans assistance group. Clayton Home Building Group gave a check for $33,600 to the organization in January.[66] [67] Hope For The Warriors works with veterans from all branches of the military as well as post 9/11 active duty, National Guard, and reserve service members.[68] [69] In May 2016, Clayton presented a $100,000 check to the organization.[70]

In 2019, Clayton Home Building Group became a founding sponsor of the Warrior's Compass Suite program by Hope for the Warriors to help veterans transition from US military service to civilian employment. Clayton Home Building Group committed to donating $300,000 to support the program.[71]

Clayton Homes also partners with Family Promise to donate several homes per year to families who have experienced homelessness.[72] In 2021, Clayton Homes donated $450,000 and 3 off-site built homes to be used to prevent family homelessness.[73]

Notes and References

  1. Web site: Clayton Homes' i-house Combines Energy Efficiency and Modular Affordability. Schwartz. Ariel. May 4, 2009. Fast Company. June 3, 2016.
  2. Web site: Buffett Wins Battle to Buy Clayton Homes. Sorkin. Andrew Ross. July 31, 2003. The New York Times. June 3, 2016.
  3. Web site:
    1. 292 Clayton Homes
    . Forbes. June 3, 2016.
  4. Web site: Fisher. Kelly. April 24, 2019. East Tennessee home-building company to invest $14 million in Sumner location, establish more than 100 jobs. August 14, 2021. The Tennessean. en-US.
  5. Web site: Harshberger. Caleb. June 4, 2020. Warren Buffett's homebuilding unit buys hundreds of acres in Durham. August 14, 2021. Business Journals.
  6. Web site: Call for Federal Investigation Into Report of Racially Discriminatory Predatory Lending. January 22, 2016. Muhammad. Dedrick. Huffington Post. June 3, 2016.
  7. News: Financing Manufactured Homes. Prevost. Lisa. October 16, 2014. The New York Times. July 11, 2017. en-US. 0362-4331.
  8. Web site: Williams. Chambers. April 11, 2016. Clayton Homes buys Alabama manufactured-housing company. live. June 7, 2016. Knoxville News Sentinel. https://web.archive.org/web/20160414035251/http://www.knoxnews.com:80/business/clayton-homes-buys-alabama-manufactured-housing-company-30370334-a344-01f5-e053-0100007f4ecc-375295821.html . April 14, 2016 .
  9. Web site: March 1, 2021. Warren Buffett praises East Tennessee entrepreneurs behind two of his businesses. live. August 14, 2021. Chattanooga Times Free Press. https://web.archive.org/web/20210302013054/https://www.timesfreepress.com/news/business/aroundregion/story/2021/mar/01/buffett-praises-east-tennessee-entrepreneurs/542479/ . March 2, 2021 .
  10. Web site: Wood. Tom. April 9, 2021. Knoxville partners race in to bolster Music City Grand Prix. live. August 14, 2021. The Nashville Ledger. en. https://web.archive.org/web/20210408140513/http://www.tnledger.com/editorial/Article.aspx?id=140671 . April 8, 2021 .
  11. Web site: Gaines. Jim. February 27, 2017. Buffett: Clayton Homes to keep growing. live. August 14, 2021. Knoxville News Sentinel. en-US. https://web.archive.org/web/20201130175626/https://www.knoxnews.com/story/money/business/2017/02/27/buffett-clayton-homes-keep-growing/98480894/ . November 30, 2020 .
  12. Web site: Small Company Initial Public Offerings: June 1983. Inc.. June 7, 2016.
  13. Kentucky New Era. February 15, 1991. Trailer park 'king' makes big business after humble beginnings in Tennessee. Mansfield. Duncan.
  14. Web site: Ocwen Would Do Well to Follow the Lessons of Berkshire's Clayton Homes. Cunningham. Lawrence A.. December 24, 2014. The New York Times. June 7, 2016.
  15. Web site: McManus. John. May 13, 2019. Clayton Homes Earns 2019 Builder of the Year Award. live. August 14, 2021. Builder Magazine. https://web.archive.org/web/20190716210003/https://www.builderonline.com/builder-100/strategy/clayton-homes-earns-2019-builder-of-the-year-award_o . July 16, 2019 .
  16. Web site: Reingold. Jennifer. January 1, 2004. The Ballad of Clayton Homes. live. June 7, 2016. Fast Company. https://web.archive.org/web/20120918024324/http://www.fastcompany.com/48214/ballad-clayton-homes . September 18, 2012 .
  17. Web site: Buffett Wins Battle to Buy Clayton Homes. Sorkin. Andrew Ross. July 31, 2003. The New York Times. June 7, 2016.
  18. Web site: Berkshire Hathaway Agrees To Acquire Clayton Homes. April 2, 2003. Wall Street Journal. June 7, 2016.
  19. Web site: Belated suitor woos Clayton Homes. July 11, 2003. USA Today. September 4, 2016.
  20. Web site: Buffett Wins Battle to Buy Clayton Homes. Sorkin. Andrew Ross. July 31, 2003. The New York Times. September 4, 2016.
  21. Web site: Clayton Homes Shareholder Alleges Executive Fraud in Berkshire Hathaway Sale. https://web.archive.org/web/20161008194231/https://www.highbeam.com/doc/1G1-119690083.html. dead. October 8, 2016. August 27, 2003. Nolen. Amy. The Knoxville News Sentinel. September 4, 2016.
  22. Web site: Clayton Homes Declares Merger with Berkshire Hathaway, Stops Trading Stock. https://web.archive.org/web/20161008194138/https://www.highbeam.com/doc/1G1-106445429.html. dead. October 8, 2016. Nolen. Amy. August 8, 2003. Knight Ridder Tribune. September 4, 2016.
  23. Web site: Buffett gives Clayton Homes a high five. Nolan. Amy. March 17, 2008. Orlando News Setinel. September 4, 2016.
  24. Web site: Clayton completes sale of housing communities. Silence. Michael. February 26, 2008. Knoxville News Sentinel. June 7, 2016.
  25. Web site: Clayton Homes to Focus on Subdivision Development. Caulfield. John. March 7, 2008. Builder Online. June 7, 2016.
  26. Web site: Reynolds. Glenn. January 15, 2009. Clayton's I-House: Prefab Green Homes Get Affordable. live. January 5, 2013. Popular Mechanics. en-US. https://web.archive.org/web/20100527040531/http://www.popularmechanics.com:80/technology/engineering/architecture/4299495 . May 27, 2010 .
  27. Web site: Clayton Homes joins prefab green building boom with $45,000 eHome. Koch. Wendy. December 9, 2009. USA Today. June 7, 2016.
  28. Web site: Clayton Homes joins prefab green building boom with $45,000 eHome. Koch. Wendy. December 9, 2009. USA Today. September 4, 2016.
  29. News: Macdonald. Isabel. Doucet. Isabeau. July 11, 2011. The Shelters That Clinton Built. en-US. August 14, 2021. 0027-8378.
  30. Web site: Wagner. Daniel. Baker. Mike. April 3, 2015. Warren Buffett's mobile home empire preys on the poor. live. August 14, 2021. Center for Public Integrity. en-us. https://web.archive.org/web/20191215032107/https://publicintegrity.org/inequality-poverty-opportunity/warren-buffetts-mobile-home-empire-preys-on-the-poor . December 15, 2019 .
  31. Web site: Stempel. Jonathan. February 27, 2016. Buffett defends Clayton Homes after critics fault its lending. June 7, 2016. Reuters.
  32. Web site: February 27, 2016. Buffett Defends 3G and Clayton Homes as Berkshire Profit Grows. June 7, 2016. Fortune.
  33. Web site: David. Javier E.. May 2, 2015. Warren Buffett defends Clayton Homes against claims of predatory lending. June 7, 2016. CNBC.
  34. News: Das. Anupreeta. May 2, 2015. Warren Buffett Defends Clayton Homes. en-US. Wall Street Journal. subscription. August 14, 2021. 0099-9660.
  35. Web site: ORNL & Clayton Homes are 3D printing a home & car that share energy with one another. Krassenstein. Brian. August 2015. 3D Print. June 7, 2016.
  36. Web site: ORNL unveils integrated 3D printed house and car that produce and share clean energy. September 23, 2015. 3Ders. June 7, 2016.
  37. Web site: Buffett-owned company buys Georgia homebuilder for $50 million. Hudson. Phil W.. November 2, 2015. Atlanta Business Chronicle. June 7, 2016.
  38. Web site: Home Building Investment, Buffett-Style. McManus. John. May 2, 2016. Builder Online. June 7, 2016.
  39. Web site: Warren Buffett's company buys Gallatin's Goodall Homes. Ward. Getahn. April 29, 2016. The Tennessean. June 7, 2016.
  40. Web site: Clayton Homes marks 60 years, new directions. Marcum . Ed. June 1, 2016. Knoxville News Sentinel. September 4, 2016.
  41. Web site: Clayton Homes, NeighborWorks Waco join forces for affordable housing. Copeland. Mike. April 18, 2016. Waco Tribune. September 4, 2016.
  42. Web site:
    1. 292 Clayton Homes
    . Dill. Kathryn. Forbes. September 4, 2016.
  43. Web site: Clayton home building group unveils tiny home designer series. September 22, 2016.
  44. Web site: Home building group unveils tiny home designer series. . September 22, 2016.
  45. Web site: Clayton Homes takes a turn from manufactured housing to introduce its own line of 'tiny homes,' including a model with Charleston ties. September 12, 2016. September 22, 2016.
  46. News: Alabama Shakes: Clayton Buys Birmingham's Harris Doyle Homes. July 10, 2017. Builder. July 11, 2017. en.
  47. News: Jordon. Steve. August 2, 2017. Berkshire's Clayton Homes division expanding into $250,000-and-under housing market. Omaha World-Herald. September 30, 2021.
  48. Web site: Stanley. T. L.. February 13, 2019. Can a Prefab Home Actually Be Stylish? This Upbeat Ad Hopes to Make the Case. live. September 30, 2021. Ad Week. en-US. https://web.archive.org/web/20190214122409/https://www.adweek.com/creativity/can-a-prefab-home-actually-be-stylish-this-upbeat-ad-hopes-to-make-the-case/ . February 14, 2019 .
  49. Web site: February 2019. Clayton Homes: Prefabulous by Made. live. September 30, 2021. The Drum. https://web.archive.org/web/20190221022837/https://www.thedrum.com/creative-works/project/made-clayton-homes-prefabulous . February 21, 2019 .
  50. Web site: 2021. The Top 100. live. September 30, 2021. Builder Magazine. https://web.archive.org/web/20210430083828/https://www.builderonline.com/builder-100/builder-100-list/2021/ . April 30, 2021 .
  51. Web site: Buccaneer Homes. www.buccaneerhomebuilders.net. July 11, 2017.
  52. Web site: Crest Homes Manufactured Homes, Modular Homes, Mobile Home. Homes. Crest. www.cresthomes.com. July 11, 2017.
  53. Web site: Giles Industries. gilesindustries.com. July 11, 2017.
  54. Web site: Golden West Homes Manufactured Homes, Modular Homes, Mobile Home. Homes. Golden West. www.goldenwesthomes.com. July 11, 2017.
  55. Web site: Karsten Homes Manufactured Homes, Modular Homes, Mobile Home. Homes. Karsten. www.karstenhomes.com. July 11, 2017.
  56. Web site: Marlette Homes Manufactured Homes, Modular Homes, Mobile Home. Homes. Marlette. www.marlettehomes.com. July 11, 2017.
  57. Web site: New Oakwood Homes - Builder in Colorado and Utah. oakwoodhomesco.com. en-US. July 11, 2017.
  58. Web site: Tru Value Homes of Alexandria, AL Mobile, Modular & Manufactured Homes. truvaluealexandria.com. en. July 11, 2017.
  59. Mike Baker and Daniel Wagner, Minorities exploited by Warren Buffett’s mobile-home empire The Seattle Times / BuzzFeed News, December 26, 2015.
  60. Web site: Our Modular and Manufactured Home Brands. Clayton Homes. June 3, 2016.
  61. Web site: G&I Homes, Your Confidence Builder. G&I Homes. en. July 11, 2017.
  62. Web site: Clayton acquired New York home retailer. Marcum. Ed. February 9, 2016. Knoxville News Sentinel. September 4, 2016.
  63. Web site: McManus. John. May 13, 2019. Clayton Homes Earns 2019 Builder of the Year Award. live. September 30, 2021. Builder Magazine. https://web.archive.org/web/20190716210003/https://www.builderonline.com/builder-100/strategy/clayton-homes-earns-2019-builder-of-the-year-award_o . July 16, 2019 .
  64. Web site: Scott. Amy. February 22, 2019. More houses are rolling off the assembly line. live. September 30, 2021. Marketplace. en-US. https://web.archive.org/web/20190620023607/https://www.marketplace.org/2019/02/22/inside-a-modern-manufactured-house/ . June 20, 2019 .
  65. Web site: December 15, 2020. TDEC Welcomes Clayton Homes of Bean Station Into Green Star Partnership. live. September 30, 2021. Tennessee Department of Environment & Conservation. en. https://web.archive.org/web/20201215220405/https://www.tn.gov/environment/news/2020/12/15/tdec-welcomes-clayton-homes-of-bean-station-into-green-star-partnership.html . December 15, 2020 .
  66. Web site: Jordon. Steve. May 1, 2016. Clayton Homes home had a 'sold' sign even before the meeting. live. September 4, 2016. Omaha World-Herald. https://web.archive.org/web/20181030041700/https://www.omaha.com/money/clayton-homes-home-had-a-sold-sign-even-before-the/article_8c51ef14-526b-5125-a20b-415277d38c88.html . October 30, 2018 .
  67. Web site: February 16, 2016. DeVore Homes participates in large contribution to nonprofit military support group. live. August 14, 2021. Osceola-Sentinel Tribune. en. https://web.archive.org/web/20160915192406/http://www.osceolaiowa.com/2016/02/10/devore-homes-participates-in-large-contribution-to-nonprofit-military-support-group/a1rqm8b/ . September 15, 2016 .
  68. Web site: DeVore Homes participates in large contribution to nonprofit military support group. February 16, 2016. Osceola Sentinel Tribune. September 4, 2016.
  69. Web site: Homes Plus participates in contribution to military support group. February 1, 2016. The News Star. September 4, 2016.
  70. Web site: Clayton Homes Inaugurates Birmingham Home Show. May 12, 2016. Silver. Matthew. Daily Business News. September 4, 2016.
  71. Web site: January 11, 2019. Clayton Home Building supports Warriors. live. August 14, 2021. The Nashville Ledger. https://web.archive.org/web/20210814224649/http://www.tnledger.com/Knoxville/editorial/ArticleEmail.aspx?id=113557 . August 14, 2021 .
  72. Web site: Tucker. Melanie. December 14, 2020. Clayton donates new house to Blount Family Promise. live. August 14, 2021. The Daily Times. en. https://web.archive.org/web/20201219084938/https://www.thedailytimes.com/news/clayton-donates-new-house-to-blount-family-promise/article_a9e4f721-9ce0-537a-8f0d-385d7c0dad72.html . December 19, 2020 .
  73. Web site: Moore. Hannah. May 14, 2021. Family Promise receives $450,000 and 3 homes to be used to prevent homelessness. live. August 14, 2021. WATE ABC6. en-US. https://web.archive.org/web/20210514231609/https://www.wate.com/news/family-promise-receives-450000-and-3-homes-to-be-used-to-prevent-homelessness/ . May 14, 2021 .

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