Winnebago Industries lost $8.6 million in the last quarter as motor home sales tumbled. Winnebago C.E.O. Bob Olson says sales fell 77% during the first two months of the company’s third quarter.
"With the economic conditions that we are in right now, it makes it difficult for anybody in this industry to be profitable," Olson says. "…We did not make money and that is our ultimate goal…but in unprecedented times like we are in right now, our main focus is to manage the balance sheet so we keep a good cash flow and can support our business via that way."
The recreational vehicle industry saw sales start to slump when gas prices hit record highs and with tightening credit, it’s tougher for consumers to finance the purchase of a motor home. Winnebago’s C.E.O. says his company did a good job in planning ahead for this recession.
"There’s been several companies that have physically gone out of business in our industry. We have four more right now that are under bankruptcy protection and…three of those are pretty big names in our industry…Coachmen, Monaco and Fleetwood," Olson says. "…We took steps early on in this whole recession process. You know, it’s been a year and a half ago since we started downsizing our corporation."
Last week, Winnebago executives announced the company’s fiberglass manufacturing facility in Hampton would close, putting 40 employees out of work. Olson says it was a tough decision.
"Any time you have to make a decision like that it is gut-wrenching," Olson says. "…These folks were part of our team for 25 years and to have go down and tell them that, you know, we are no longer going to have that facility in place is a very difficult thing to do and, you know, our hearts go out to those employees."
Olson argues the recreational vehicle industry may recover faster than other sectors of the economy. "It could be a slow, long runway to recovery," Olson says. "But on the other hand it could be one of these things that because you’ve got people that have not bought units for several months now, you’ve got other people that have been in this lifestyle and upgraded when we had our boom year of 2004 and they’re ready to trade and buy new, you could see this thing take off much faster than the general economy is."
Winnebago has the biggest market share of any R.V. manufacturer, marketing products under the Winnebago, Itasca and Era brands. The company’s first motor home was manufactured in Forest City back in 1966.
(photo from Winnebago website)