Baby Boomers Barbara and Bradley Hartkopf just bought a Winnebago, after years of camping and sleeping in tents and towable popup trailers.
The Clear Lake couple looked at all motor homes with a bed, shower and galley.
Bradley Hartkopf, 41, initially said they chose the Minnie Winnie because of its price, quality and level of comfort.
Seconds later, the real reason came out. “My wife liked the furniture’s upholstery and the complementary colors of the carpet and window treatment,” he said.
Iowa-based Winnebago has its fans. But to accommodate Baby Boomers new to the market, the recreational vehicle-maker has more than doubled the money it spends to automate its 2.7 million-square-foot Iowa plant.
The aim: offer buyers more choices and more control over the vehicles, which can rival the price of a comfortable suburban home.
Winnebago’s decision to sink money into technology to boost productivity reflects a manufacturing trend. The challenge is to produce a broadening product line to meet customer demands and enhance quality.
Since 1995, Winnebago has spent about $5 million annually to automate some of its assembly-line processes, up from $2 million per year previously.
“It’s the most we’ve spent on improving the technology in our factory,” said Bruce Hertzke, Winnebago’s president and chief operating officer.
Winnebago, with annual sales approaching $500 million, is the second-largest U.S. recreational vehicle producer, behind Fleetwood Industries, in a $12.4 billion market. In an industry where motor homes are still primarily made by hand, Winnebago is viewed as the technological leader.
At Winnebago, the quest for market share has spawned 16 models and 81 styles. It’s a tall order for the company’s 3,400 assembly-line workers, who must adjust weld and rivet patterns and the placement of vehicle frames for each style.
Using computerized equipment, one worker can produce more motor home parts by flicking switches than several colleagues using hand tools.
Until 1996, three machine operators routed individual pieces of foam used to soundproof and insulate the welded frame and electrical wiring in the sidewalls of the 8,750 Winnebago motor homes the plant made annually.
A slip by one of the routers in this labor-intensive process would have resulted in any number of wiring defects or welding errors because of improperly aligned framing.
“Previously, it was left to someone’s memory,” said Steve Forland, manufacturing engineer for Winnebago.
Winnebago acknowledges that quality had been an issue, though officials won’t elaborate.
In the late 1980s, Winnebago found itself facing a rebound in demand for recreational vehicles after a lengthy lull. Industry sources say quality lapses cost the company money and goodwill.
Warranty costs increased as production mistakes jumped. Flawed products didn’t sit well with customers or Winnebago’s network of 350 dealers, some of whom stopped selling the line.
Today, a touch of a button on a $400,000 computer allows one person to oversee the precision routing of the 60 to 70 panels needed daily to keep up with demand.
Industry observers and Winnebago competitors agree that the 39-year-old manufacturer is unrivaled in putting tens of millions of dollars into manufacturing processes.
Winnebago’s 1996 operating profit margin was 4.3 percent, up from the previous year’s 3.8 percent and more than double the level of 1993. Improved margins are important in an industry facing flat demand for upper-end motor homes.
About 200,000 recreational vehicles sold this year are Class A and C units, which are those built by Winnebago and others; they range in price from $40,000 to $750,000. That number hasn’t changed since 1993, according to Statistical Survey, a Grand Rapids, Mich.-based independent research firm.
To capture market share in a mature industry, Winnebago has taken a page from the old General Store on product lines: the more the better. The company contends a wide variety of models and styles, coupled with the technology to produce them with few defects, lures more first-time buyers looking for just the right design.
Not everyone agrees with Winnebago’s strategy. Guy Nielsen, analyst for Nutmeg Securities, maintains Winnebago should scale back its number of models.
Despite its heavy investment in technology, quality could be at risk when a manufacturer tackles a vast line: “If you offer too many styles, you could be spreading yourself too thin,” Nielsen said.
Almost half of today’s RV owners are age 35 to 54, almost double that of a decade ago.
“Baby Boomers are now the target audience,” said Dan Carney, association spokesman. “And they have come to expect a certain level of quality.”
There are no J.D. Powers-like consumer quality rankings for the recreational vehicle industry. But Carney said he sees Winnebago’s automation as a move to enhance the quality of its vehicles.
Industry executives agree that the recreational vehicle manufacturing process will never be as automated as that for the Big Three automakers.
