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Fueled by revamped product line and demographic trends, motor home manufacturer enjoying record success; a new prospect every 7.5 seconds

The state of Iowa is known for its tremendous agricultural bounty. But what some consider the "65 most productive acres in Iowa" has nothing to do with the ag business.

Instead, the parcel that is home to Winnebago Industries produces what could fairly be described as the amalgamation of the American dream of home ownership and the passion of the road--a line of gasoline- and diesel-powered motor homes.

Winnebago, which occupies 250 acres in Forest City, Iowa, (with 65 acres under roof) is one of the leading motor home manufacturers in the world, employing 3450 people in a town with a population of 4500. For model year 2000, it will offer 60 vehicle models, having either replaced or revamped its entire line since 1997.

That, along with some rather favorable demographic trends, has resulted in record sales in each of the last two fiscal years. Revenues for 1999 were $667.7 million, a 27 percent increase over 1998's $525.1 million. And with the Baby Boom generation now reaching retirement age, it appears as though the trend will continue.

"The industry is extremely strong right now," said Bruce D. Hertzke, chairman, CEO and president of Winnebago. "There have been studies that show that 350,000 people per month are reaching the age of 50, our prime target market segment. It's estimated that this age group will continue to increase through the year 2030." Hertzke cited additional studies indicating that someone turns 50 every 7.5 seconds.

Winnebago Industries was established 42 years ago as an effort to stem the outward migration from Forest City. John K. Hanson and a group of investors enticed Modernistic Industries out of California in 1958 and began manufacturing travel trailers. A year later, Hanson and his investors purchased the operation. In 1961 the company's name changed to Winnebago Industries, after the county and the river that runs through it. The rest, as they say, is history.

Winnebago manufactures motor homes under four brand names -- Winnebago, Rialta, Itasca and the Ultimate series. Prices for the vehicles range from $45,000 for entry-level vehicles to as high as $250,000 for luxury models.

"The segment of our industry that is growing the fastest is the diesel segment," said Hertzke. "Chassis suppliers have been actively introducing new diesel platforms, some of which are lower in cost, making diesel motor homes more affordable for a greater number of our consumers.

"We see indications within the industry that diesel is 25 to 30 percent of the industry. In the mid-1990s we only offered two or three diesel models. In 2000, the number we have is 11."


To keep up with the changing tastes of its clientele, Winnebago has significantly revamped its product line over the last two years, and most recently, it unveiled two new vehicle lines for 2000, the Winnebago Journey and Itasca Horizon.

The Journey vehicle is powered by a Cummins ISB 5.9 L turbocharged diesel rated 275 hp at 2500 rpm. Built on a Freightliner X-Line, RDX chassis with a GVWR of 24,850 lb., it incorporates an Allison four-speed MT643 automatic transmission with T-handle shift control, I-beam front axle and Meritor RS-15-120 rear axle.

The Itasca Horizon is also powered by a Cummins ISB 5.9 L turbocharged diesel rated 275 hp at 2500 rpm, with a turbo charged Caterpillar 3126 diesel rated 300 hp at 2200 rpm optional. The Horizon is also built on a Freightliner RDX chassis with an I-beam front suspension and a Meritor RS-17-145 axle in the rear, but the GVWR is 26,350 lb. The transmission is a six-speed Allison electronic MD-3060 World transmission.

Sporting a base retail price of $223,400, the Ultimate Freedom is the top vehicle Winnebago's lineup. The Ultimate Freedom is powered by an inline, six-cylinder Cummins ISC 8.3 L turbocharged/aftercooled engine rated 350 hp at 2000 rpm, teamed with an Allison six-speed MD-3066 World transmission. The cooling system features a side-mounted radiator with hydraulically driven fan.

The chassis is a Spartan Mountain Master GT with a GVWR of 31,000 lb. The coach is built around an Ulti-Bay chassis design that eliminates the need traditional rail construction in the mid-section of the coach, leaving more room for storage compartments.

Front axle and suspension on the Ultimate Freedom is a Spartan/Granning system with a track width of 81.93 in., while a Mentor RS-19-145 axle is used in the rear.

The length of the motor vehicle is 38 ft. 11 in. It has an exterior height of 12 ft. 4 in. and interior height is 6 ft. 8 in. Exterior width is 8 ft. 5.5 in. and interior width is 8 ft. 0.5 in. The vehicle features a 109 gal. fresh water tank with heater, a 25 gal. fuel tank and a 30 gal. LP tank.

The Ultimate Freedom is available in two different floor plans, the 38KD and the 4OJD. Standard amenities for both models include ceramic tiled floors in the bathroom and dining area and carpeting throughout the unit, Corian countertops, leather furniture, refrigerator/freezer with ice maker, a Bose deluxe sound system, a Sony 10-disc CD player, a 25 in. television, a 19 in. television, VCR and thermostat controlled central air conditioner. Options for those demanding more luxury, include a built-in central vacuum system, built-in dishwasher and washer/dryer combination.

In addition to its traditional vehicle lineup, Winnebago produces approximately 150 specialized vehicles per year. "We've done ATM machine vehicles, a dental clinic, schoolhouses, rescue units, police units, portable S.W.A.T. units, jailhouses and more," said Hertzke.

A separate division, equipped with its own engineering, sales and development staffs, has its own building facilities that can customize vehicles per the customer's request.

Diverse Powertrains

Winnebago uses a variety of engines in its motor homes. On the gasoline side, the company typically specifies Ford, Chevrolet and Volkswagen engines, spanning a range from 255 to 310 hp.

On the diesel side, Cummins and Caterpillar engines from 275 to 350 hp are most commonly selected, though Navistar's 7.3 L diesel is also available in selected Class C models.

Like most other motor home manufacturers, Winnebago buys its chassis from outside suppliers. Diesel vehicles are built on Freightliner or Spartan chassis, and a limited number of Class C Ford chassis. Gasoline vehicles are built on chassis from Ford, Chevrolet, Workhorse Custom Chassis or Volkswagen. The chassis arrive with the engine and powertrain already installed.

"All of our pushers have air suspension and air brakes," said Bob Kuefler, manager, chassis engineering. "All of the air systems have a dryer and heated moisture extractors. They are heated, so the operator doesn't have to worry about freeze-up in winter. There is a secondary fuel/water separator. Some of the engines have a primary fuel/water separator, but they are still using the second one.

"The air suspension has the capability to dump the air from the air springs to lower the unit," Kuefler added. "A lower unit is more friendly for entry and exit. This also allows the leveling system to better accommodate extremely unlevel ground."

The leveling system is standard on all Class A models with a slide-out room. A 12 V electric motor drives the hydraulic pump that operates the system and the same pump actuates the slide mechanism for the slide-out room. Both the leveling system and slide-pump are supplied by HWH.

Onan 7.5 kW diesel generators are standard with the Ultimate Freedom series and are optional for the Winnebago Chieftain diesel pusher, Winnebago Journey, Itasca Horizon and Ultimate Advantage models. For smaller vehicles, a 4kW Onan generator is available.

"The diesel generator runs off the same fuel tank as the motor home," said Tim Thill, product development. "It's a 50 amp service unit.

"We buy the unit already enclosed in an insulated, sound-deadening compartment. All we do to put it in the coach is hook up the wires, the fuel hose and install it to our brackets."

Winnebago Industries has a requirement that the generators run and operate at capacity at 100[degrees]-110[degrees]F. According to Thill, the UL or RVIA requirement is 80[degrees]F.

Facilities and Capabilities

Winnebago builds the majority of its own components within the company's network of plants located throughout Iowa. There are several divisions within the company that each produce a specific series of products.

"Vertical integration began very early in Winnebago Industries' history," said Hertzke. "With vertical integration we are able to control the quality, design and delivery time of these components. For instance, Winnebago Industries is able to design a holding tank to fit a particular location instead of designing the motor home around what's available on the outside market.

"As we move forward, we will continue to manufacture the majority of our component parts. However, we will outsource more of them in order to increase motor home production capabilities in a growing market. We will continue to work closely with our outside vendors to assist them with design and quality standards for our motor home components.

Creative Aluminum Products Co. (Capco), a wholly owned subsidiary of Winnebago, converts billets of aluminum into extrusions that are used to make windows, ladders, screen doors and other assembly items.

Winnebago's rotational molding facility provides polyethylene components. Products include holding tanks, water tanks, luggage compartments, heat ducts and wheel wells. Additionally, a variety of products are also produced for OEM customers.

Winnebago's plastics facility processes more than 2.3 million lb. of material per year into thermoformed components such as shower stalls, dashboards and tail light housings. The Stitchcraft division is responsible for providing all soft goods for production, including chairs, sofas, cushions, draperies, carpeting, bedspreads, foam mattresses and trim panels, etc.

A sawmill and cabinet shop supplies all wood components to the assembly lines and support groups for production.

Steel components used throughout the motor homes are manufactured at Winnebago's metal stamp facility. A fiberglass facility in Hampton, Iowa, generates more than 950 fiberglass components per week, which includes grills, roof caps, wheel well trim pieces and other pieces.

The chassis facility manufactures cab assemblies and modifies chassis to vehicle specifications. For example, the Freightliner XC and Spartan Mountain Master GT chassis used for the Ultimate series arrives at 113 in. wheelbase, with the front and back bolted together. "We take out the bolts, pull the chassis apart and build the middle section," said Kuefler.

The chassis prep building has three assembly lines available. A chassis facility in Charles City, Iowa, manufactures the chassis for the Ultimate Freedom and Ultimate Advantage motor homes.

The motor home production facility in Forest City contains three moving assembly lines, each approximately 900 ft. long. The facility is divided into two areas, with one dedicated to panel lamination of the coach panels and the other dedicated to the assembly of the vehicles.

"Right now we have 3000 orders on hand and our production is about 90 days sold out," said Hertzke. "We have been in a sold out position for about the last nine months."

Winnebago Industries keeps a three to four week chassis supply on hand. Start to finish, according to Hertzke, when a unit starts production, it takes about 4.5 days to reach completion. "That all depends on the type of unit," added Hertzke. "If it gets a complete paint job, it takes longer because we factor in drying times. Some units require only decals, we can get those out a little faster."

Upon completion, each motor home must pass a water test. The vehicle is subjected to five minutes of concentrated water spray from 160 spray heads that deliver water at a rainfall rate of 50 in. per hour. There are spray heads on the underside to simulate driving in the rain.

"We'll grab three units at random each week and run them through the water test overnight," said Mike Plath, manufacturing engineer.

"We are utilizing more of our capacity and are able to make more earnings off of our money," said Hertzke. "Our facility here (Forest City) is totally paid for. We have a very strong balance sheet. As Winnebago Industries continues to go forward, we can continue to invest in technology and enhance manufacturing performances and in the development and design of new products."

The Future

"The demographics indicate that we should have the opportunity to continue to grow for several years," added Hertzke. "We've worked very hard to keep the Winnebago name synonymous with the RV industry and we'll continue very strong and aggressive marketing programs to keep the Winnebago name in front of people."

One such program is brand licensing. "We brand license the Winnebago name to Choo Choo Customs Group Inc., so the custom van segment of the industry includes a Winnebago," said Hertzke. "We license our name for a park model home with Chariot Eagle. We also brand license with Avid Outdoors, who makes tents and sleeping bags. With Avid, we want to make sure that younger campers, who are not able to afford a motor home yet, still have exposure to the Winnebago name.

"We are going to continue to grow our motor home lines as well, focusing on the motorized segment of the recreational vehicle market. In order to accommodate this growth, we have four expansion programs going on right now. We have a customer service expansion program. We have an expansion program in Charles City, Iowa, to manufacture our Ultimate Advantage and Ultimate Freedom motor homes there. We have a new building being built in Hampton, Iowa, to expand that fabrication facility. We are also modifying one of our buildings here in Forest City for some additional production capacity.

"The customer today is much more demanding. Expectations are a lot higher. The motor homes we built several years ago are not acceptable by today's standards. The new 2000 motor home lines from Winnebago Industries were the most thoroughly researched products in our company's history.

"We will continue to develop products that will allow us to grow, where the Winnebago name is synonymous with the recreational vehicle industry."
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Author:Haight, Brent
Publication:Diesel Progress North American Edition
Geographic Code:1USA
Date:Feb 1, 2000
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