Economy puts RV sales in the slow lane

To cut costs while they weather the slump, Winnebago executives say they’re considering a plan to shut down their assembly line on Fridays and trim factory workers back to 32 hours a week. Hertzke says he’s feeling the pain, but the company’s seen – and survived – worse. In 1978, company employed 3,800 workers; after the oil embargo hit, the payroll slid to a few as 700.

“We are a cyclical business,” he said. “We have always said that.  And we will flow up and down along with the economy.”

Ironically, the inspiration to create the company that became Winnebago sprang from economic distress. Fifty years ago, local farmers hit a bad patch, and Forest City was in danger of withering away. John K. Hanson, a local businessman, convinced the town fathers that building “travel trailers” was the answer to their woes. In March 1957, the first trailers – called Aljos - rolled off the line.

In 1959 when he bought the business from its first investors, Hanson's had a vision of an America ready to hit the new interstate highway system. The company soon took on the name of its Iowa county, Winnebago, and in 1966 it released its first self-contained motor home. It sold for a little over $6,500.

In time, Winnebago grew, building new models in ever-expanding facilities. Hertzke thinks even Hanson would be impressed.

“The market since he passed away in 1996 has changed so dramatically,” said Hertzke.  “And we've added so many new lines.  He would just be amazed.  Yet he would say, ‘Go do more.’”

But in the current downturn, they’re doing less on their assembly line - a line unique because it makes almost every component that goes into their motor homes. Despite the slowdown, the company hasn’t compromised on the way it builds its RVs. Winnebago’s president Robert Olson recently provided a tour of how the process begins.

"The first thing that happens is the chassis arrives,” he said. “And we start welding bracketry onto the frame to allow us to put our cab structure and our basement and floor structure onto the chassis itself."

The cabs are dropped, fully constructed, onto the chassis. The chassis then move on to a building known as "Big Bertha" - large enough to hold seven football fields and housing three 900-foot assembly lines.

Flooring is lowered from Bertha's mezzanine, carpeting is laid down and interior spaces are created.  Once the walls are bolted on and the roof is attached, the company’s comprehensive approach becomes clear. All the cabinetry and decorative elements are made in-house.

“We build 90 passenger and drivers seats a day plus 40 lounge chairs and 40 couches," said Olson. "It's just another way that we're able to control our own destiny when it comes to quality."

Winnebago even makes its dashboards, bumpers and shower stalls using a vacu-form process in which plastic is heated up and then sucked tight over a mold.

The last step includes rigorous quality checks.

"Water and motor homes don't make for happy campers,” said Olson. “That's why every product that we build goes through a water test that has a rainfall equivalent of 50 inches an hour. That way we can ensure that our product does not leak."

Though sales are slowing, Winnebago is determined to roll on -- betting that the downturn is only temporary.

“Our average consumer is 55 to 60 years of age,” said Hertzke. “They have their kids through college. They probably have their homes paid for. What they're looking for is saying, ‘How am I going to enjoy the rest of my life?’ You know?  And some people are going to say, ‘I want a motor home.  And I want to travel around the United States.’  And, again, they'll complain just like I complain about $3 gas prices. ... They'll still go.”

The Picconattos had planned to spend the next few years of their lives traveling in their RV as often as possible with their children. But this economy has laid waste to their plans.

“I think that the only thing that we can do is take day trips,” said Al Picconatto.

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