An interview with John Draheim, president and CEO.
By Lazelle Jones
June 2012
It’s no secret the RV industry has experienced substantial change over the past few years. One of the positive stories involves Fleetwood RV, which evolved from the former Fleetwood Enterprises. Recently I chatted with John Draheim, president and CEO of this new company, which today produces motorhomes only.
Q: (Jones) Walk us through what’s happened before, during, and following the creation of the new Fleetwood RV.
A: (Draheim) In 2009 Fleetwood Enterprises filed for bankruptcy. A specialized team was put together to organize the liquidation of Fleetwood Enterprises’ physical assets and intellectual properties. The towable division was separated from the motorized and sold individually, as were the various facilities. Private equity firm AIP, which specializes in the rehabilitation of U.S.-based companies, saw potential for future growth in the motorized RV industry and, more specifically, the opportunities that existed with Fleetwood motorhomes. They purchased this part of the intellectual property, some of the facilities in Indiana and some of the inventory, and named it Fleetwood RV.
Q: Fleetwood RV honored existing motorhome warranties after emerging from bankruptcy. The warranties could have been made null and void by the bankruptcy process, correct?
A: Correct, but we knew that to maintain the current customer base of loyal Fleetwood motorhome enthusiasts, we had to honor the authorized warranty work on all retail customer motorhomes that were still within the stated warranty period. In addition, new unsold motorhomes that were on dealer lots could also be sold with a warranty. In total, the costs associated with shouldering responsibility for existing warranties added significantly to the price AIP paid for the company assets.
A: Describe Fleetwood RV today.
A: The motorhome landscape has changed substantially in the last few years. Despite the dramatic changes, we have been profitable in our first two years, because we’ve been proactive in cutting waste, reorganizing, reconfiguring our production processes, and utilizing the deep resources of our parent company.
The creation of the new Fleetwood RV gave us a huge opportunity to build a new business culture. To begin with, AIP joined their vehicle companies under a new parent company named Allied Specialty Vehicles (ASV). ASV has massive engineering, business management resources, purchasing power, and capital resources that are routinely available to us. We have companies that build fire engines, ambulances, and equipment for ports and airports, and we draw from this engineering, planning, and management expertise as needed.
However, the major culture change has been the concept of lean manufacturing. Everything in the company falls under the purview of lean manufacturing: planning, production, purchasing, warranty servicing, transportation, sales, human resources. The lean journey is ultimately about increasing efficiency by reducing redundancies and waste of any kind, be it from the design of new products to testing the product when it rolls off the line. The lean culture makes us a more nimble, more efficient organization.
A good example is the 2012 Excursion we are sitting in. Historically, it would have taken anywhere from 24 to 60 months to bring to fruition an all-new product such as this. From the day we identified there was an emerging segment for diesel pushers, it took only 90 days to identify and agree upon the kind of coach we would build to hit this price point. From that date, it took only 12 months for our engineers, designers, production managers, and planners to have this prototype roll off the line. That’s 15 months from start to finish. This could not have been imagined in the old days.
What’s been done to streamline the process started with eliminating layers and layers of management that previously would have required interfacing, obtaining input, reaching agreements, and getting department approvals.
Our corporate structure today is very lean. The multiple layers of decision makers once required are gone, and today we respond more quickly than ever to the changing needs of our customers.