Airstream Rebuilding To Match Image
Airstream Rebuilding To Match Image
Jun. 07, 1986
JACKSON CENTER, Ohio (AP) _ Long revered for its sleek aluminum travel trailers, Airstream Inc. was hit hard by the energy crisis of the 1970s. But it is rebuilding now - and trying to reach out to new markets.
''At one period of time, Airstream got very complacent, very smug,'' said Gerard N. Letourneau, the company's president since 1980. ''Even though they had the quality image, I believe they lost the idea of what quality was all about.''
The image is a slice of Americana, Airstream ''silver bullet'' trailers gliding along the nation's highways, as much mobile homes as recreational vehicles to their owners.
Airstream is a subsidiary of Thor Industries, which sold $98 million worth of recreational vehicle last year. Letourneau estimates Airstream contributed about half of that.
Letourneau says the unavailability of gasoline in the 1970s, not soaring fuel prices, devastated Airstream. He laid off 1,100 of Airstream's 1,500 workers and closed nine plants, leaving only the Jackson Center factory, where workers average 20 years of seniority.
The company is now ''plugging along at about 100 units a month,'' still building travel trailers with hardwood interiors, cedar closets and built-in microwaves, Letourneau said.
The figure includes production of the year-old Argosy line, which is aimed at a slightly less affluent market. There also are a few motor homes built each month.
That compares with industry giant Fleetwood, which produced 20,000 trailers last year in an industry that had total production of about 385,000 units.
What Airstream does not have in volume, it makes up with price. Owning a share of the image costs an average $100,000 for a motor home; the industry average is $63,100. A travel trailer starts around $25,000 and ranges to about $42,000, about three times the industry average.
''Very few (competitors) shoot at that segment of the market,'' said Tom Corson, chairman of Coachman Industries in Elkhart, Ind.
It helps if you have a captive market, and Airstream spends a lot of time and money developing that.
It is called the Wally Byam Caravan Club International, named after the company's founder who realized many people who bought recreational vehicles did not know what to do with them.
He created the club - membership requires buying an Airstream - 28 years ago, and it now has 18,000 members and holds annual caravans and rallies around the world. Last year, a caravan to China drew international attention.
''Could we exist without the club? I've never discussed that. The idea has always been that I need you and you need me,'' Letourneau said.
He estimates about 55 percent of the Airstreams are sold to members of the club, and for each model sold, Airstream contributes between $200 and $400 to the organization.
A typical Airstream buyer is more than 50 years old, has owned at least one other RV, probably bought the first Airstream used and usually pays cash, Letourneau said.
An owner also can spend the equivalent cost of a new unit refitting a trailer after a decade.
''There's some who come in and have had it for a long time, and we think they're ready for a new one. But they like the one they have and just want to change out the interior,'' said Lois Metz, who has been figuring out customers' bills at the Wally Byam Store and service center since 1968.
It is not hard to drop $2,500 on just changing a twin bed to a double, she said, because everything has to be hand-fitted.
And for the owner who does not have everything, the store can easily provide everything from $19 mud flaps to $162 hickory writing tables. Those parts and service provide much of Airstream's sales volume, Letourneau said.
''We all moan and groan about them, but I think they all like them,'' said Onnie Pelto of Warren, Ohio, who was having his trailer serviced.
He and his wife, Eleanor, said they bought a used Airstream about 10 years ago. They are members of the caravan club and travel to Florida for about three months every year.
''It's better than just sitting at home,'' Mrs. Pelto said.
Letourneau says he expects the current resurgence in sales of lower-priced recreational vehicles to include Airstream in three or four years and continued success with the Argosy line could mean as much as a 15 percent employment increase.
But the action now is in recreational vehicles priced under $15,000, and Letourneau is thinking of expanding Airstream's line to include ''stick and staple'' models.
''They've got to be very careful,'' said Barry Vogel, an analyst with the Moore and Schley investment firm. ''They'll be competing with more competitors and I don't know if they know how to do that as well.''
Letourneau says he knows the danger of tarnishing the solid-gold image, but handled carefully - perhaps even with a separate manufacturing plant - he thinks it can be transferred to a full line of RVs.
End Adv Weekend Editions June 7-8