First Glance – Fleetwood Starts Comeback

Fleetwood Enterprises went bankrupt, but Fleetwood motorhomes are being produced once again, and Fleetwood RV, the new company that acquired the brand, has begun its existence by reaching back into Fleetwood’s history for inspiration.

As you will see in this issue’s preview of new RVs, the first new motorhome from Fleetwood RV is the 2010 Bounder Classic, designed to follow the formula established by Fleetwood  Enterprises founder John Crean, who believed in building solid RVs with wide appeal at reasonable prices.

It was the Bounder that drove Fleetwood Enterprises  to spectacular success in the 1980s. At one time one of every 10 new motorhomes sold was a Bounder. But as Fleetwood expanded over the years, employing 21,000 workers at its peak, it amassed a huge amount of debt. Weakened, it could not survive  the current recession and drastic drop in sales. Fleetwood Enterprises entered bankruptcy in March, closed its trailer manufacturing plants and sold one to the owners of Northwood Manufacturing, sold its manufactured housing business to Cavco, and sold its motorhome business to American Industrial Partners Capital Fund IV.

American Industrial Partners, a private equity firm, established Fleetwood RV, and brought in two former executives of Fleetwood Enterprises to run the new company:  Chuck Wilkinson as CEO and John Draheim as president.

Recapturing Focus
Draheim said one of the mistakes made by Fleetwood was straying from Crean’s value-oriented approach, letting the prices of its motorhomes creep up too high. The new Bounder Classic, a gas Class A motorhome with floor plans ranging from 30 to 35 feet, has a suggested retail price near $100,000, well below the $130,000 price tag on recent versions of the Bounder.

The new company is returning to the principles that guided Fleetwood in its heyday. “We want to go back to our core values,” Draheim said.

However, the company is not abandoning any segment of the motorhome market. It will continue to build everything from small Class C motorhomes to large Class A luxury coaches. “We’re going to continue to be a full-line, motorhome manufacturer,” said Draheim.

The number of brands within the Fleetwood family will be pared by about 40 percent to meet market conditions.  Motorhome sales industrywide have fallen from a high of 61,000 several years ago to an estimated 16,000 to 18,000 this year.

The new Fleetwood will also have fewer dealers. The recession has weeded out some of the weaker ones, and Fleetwood RV is being selective in those it signs up.

Busy Beginning
Fleetwood RV was created in July and we caught up with Draheim at the beginning of September. “It’s the seventh week of the new company,” he said, “but it feels like seven months.”

The company has had to hire a work force, organize production, get licensed to do business in every state, and work out new arrangements with lenders and dealers.

Fleetwood Enterprises was headquartered in Riverside, California, but  Fleetwood RV is concentrated  in Decatur, Indiana. The new company purchased Fleetwood motorhome manufacturing plants and  service facilities in Decatur along with its Gold Shield subsidiary, which supplies fiberglass products to the RV industry and other manufacturers.

Fleetwood RV elected not to buy facilities in Riverside, but is leasing the plant there to wind up production of 2009 motorhomes. That work is expected to be finished by Thanksgiving.

Fleetwood RV began September with 750 employees, including production workers and administrative staff, and expects to employ 900 by November.

Draheim said he thinks the motorhome market will rebound as the country pulls out of the recession, but he’s not expecting anything more than single digit sales growth in 2010.

He said that despite the bankruptcy of Fleetwood Enterprises, the Fleetwood brand has been able to hold its share of the market.  That may have been helped by Fleetwood RV’s decision to honor warranties on Fleetwood products, though as a new company it could have decided otherwise.  “It was the responsible thing to do,” Draheim said.

Big Brands
Fleetwood Enterprises and Monaco Coach Corporation together represented nearly a third of the motorhome market when they went into bankruptcy this year, but both brands quickly emerged under new ownership.  (Monaco is now in the hands of Navistar International,  maker of International trucks and the Workhorse chassis.) The survival of the brands has surprised some competitors.

In a recent  interview with Associated Press, Robert Olson, CEO of Winnebago Industries, noted that his company has been financially prudent, weathering the recession without  going into debt,  and yet may not have gained any advantage over  its competitors that went bankrupt.

“One of the things that’s a little disheartening to us is that you can file for bankruptcy and get a clean slate,” Olson said. “You get to start over. So, now we’ve got two competitors we thought were about down and out who get to come back and will probably be stronger than ever.”

Draheim said it is certainly true that Fleetwood is coming back strong, and he thinks the motorhome business will come back, too, as the economy improves.

“There will be a recovery,” Draheim said, “and we’re going to lead it.” n

Write to Mike Ward, editor at RV Life magazine, 18717 76th Avenue West, Suite B, Lynnwood, WA 98037 or e-mail editor@rvlife.com.  Find First Glance online at rvlife.com.

Mike Ward