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Old 01-07-2005, 09:23 AM   #1
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Airstream: The Rebirth of the Silver Bullet

2005 Fast 50, from Fast Company

Airstream: The Rebirth of the Silver Bullet

Richard Riegel
President and CEO, Airstream, Inc
Jackson Center - OH US

What did you accomplish in 2004?
Airstream, Inc., was reborn in 2004 and a new business model, on trial in 03, was validated. No longer relegated to the dustbin of history, the Airstream brand came storming back on the strength of its product offering, a rekindling of interest in authentic American goods, and the growing public awareness that “yes, they still make those things.” 2004 also brought new strategic alliances and resulting business opportunities: BMW/Designworks, Nissan Design America, and Daimler-Chrysler, to name a few. The results: revenues up 57% for the fiscal year ending 7/31, and up more than twofold in the months since.

How did you do it?
Design, Quality and Innovation: Airstream, Inc., was established on these three principles almost 75 years ago, and it has been the rediscovery and reapplication of these principles that has allowed Airstream its recent successes. Far from being outdated, in this age (and industry) these principles have pointed the way to rapid growth. And none too soon: in recent years sales and profitability were greatly diminished due to a stagnant product mix and narrow focus on a shrinking market. Don’t get me wrong, timing has also played a role; the country is experiencing a groundswell of interest in authentic American products (see Harley-Davidson, Mini-Cooper, and the vintage car craze to name just a few) and nothing embodies these qualities better than the shiny, silver Airstream trailer. Presenting a product that draws from our past but has relevance to today’s customer has been an exciting challenge. It has also been a matter of recognizing and celebrating our differences. In an industry defined by cut-rate sameness, a premium brand with an established heritage can really stand out. Combine this with a laser focus on product development, marketing, and dealer development and you have the ingredients for growth. Stir in a few new faces and a bit of organizational shuffling, and pretty soon you’re hitting on all cylinders. But the single biggest contributor to our growth has been the creation, through radical product redesign, of a whole new generation of Airstreamer enthusiasts. To borrow a line, this is not your father’s Airstream trailer.

What were the major obstacles that you faced?
The obstacles have been many: a company culture that was risk-averse and resistant to change, a significantly eroded dealer base, an aging (and shrinking) traditional customer base, rising material and labor costs, capacity constraints, and, at the peak of it all, a devastating fire that all but shut down a critical part of our operation. And, as always, the competition for consumer’s discretionary dollars is fierce, and purchasing an Airstream trailer represents a significant financial commitment. In addition, most shoppers for an RV buy the least expensive brand that meets their need. Convincing them to spend twice as much for a product that, while designed to last for generations, does much of the same thing is no small task.

What was the result?
While the numbers speak for themselves (revenues up 57%, workforce up 39%, dealer base up by 50%, significant warranty reduction, construction of an additional plant initiated to double our manufacturing space), the real accomplishment has been reintroducing the Airstream brand to the American public as a product that’s been around long enough to be hip, but has the content and style to make it relevant today. People have always aspired to own an Airstream, not just because it represents product excellence, but because it represents a way of life that is about freedom, adventure, and camaraderie. Recreating the kind of panache that the Airstream trailer had in the 1950s was a critical part of the equation. Luckily, the trailer is iconic enough that it has been widely used in print and TV ads (Dodge, Toyota), movies (Charlie's Angels, Simone), TV shows (Simple Life II, Made In America), all at no cost to us. Airstream is back on good footing, growing strongly, and aggressively pursuing the opportunities that are due a brand with our history and our heritage.

What are your goals for 2005?
In 2005 our goals are broad: reorganization and realignment of company structure to better focus on our wide range of products, expand our offerings to include lower cost trailers and distinct motorhomes, introduce our products to a waiting market in Europe, implement lean manufacturing techniques in our production processes, build new facilities to support required capacity, and continue to augment our branded and licensed products. Can all this be done while maintaining our focus on design, quality, and innovation? We will, not because we can, but because we must.
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Old 01-07-2005, 09:32 AM   #2
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Interesting...if I read this correctly they plan on expanding the factory?
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Old 01-07-2005, 09:54 AM   #3
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continue to augment our branded and licensed products

Thus the Decal Problem if you use the A word and want them to like you.

because it represents a way of life that is about freedom, adventure, and camaraderie. Ever wonder how many of the executives belong to WBCCI and attend rallies in AS. They sure would be if I was running the place. That's how the kind of panache that the Airstream trailer had in the 1950s got there. Wally created and ran a vertically integrated enterprise. Buy a trailer and you were part of the family.
You cann't understand it if you don't do it.
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Old 01-07-2005, 10:08 AM   #4
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<---- executive in training, now meeting your ownership criteria, just waiting for the invite.
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Old 01-07-2005, 11:01 AM   #5
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Mini-Cooper, Authentic American?
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Old 01-07-2005, 11:29 AM   #6
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Quote:
Originally Posted by bensonortho
Mini-Cooper, Authentic American?
Good catch...flew over that one.
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Old 01-07-2005, 11:30 AM   #7
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This is similar to what Harley-Davidson did in the 80s. They actively pursued their market share by protecting their trademark and prosecuting trademark infringement. They even went so far as to try to trademark the Harley sound.
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Old 01-07-2005, 11:57 AM   #8
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Hopefully, they'll invest some of their revenue in production techniques to eliminate or cut down the known issues. Also, they might hire quality control people to check the units out BEFORE shipping them.

Dennis
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Old 01-07-2005, 12:23 PM   #9
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there is a new plant coming to build the new Classic motorhome.
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Old 01-16-2005, 08:49 AM   #10
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Lean manufacturing

If the factory is just now installig Lean Manufacturing they are really behind,all factories must change with the times or they will go down the tubes, Scott
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Old 01-16-2005, 09:42 AM   #11
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Actually, I'm not certain lean manufacturing gets you much until you have a fairly consistent process that churns out a lot of product. There aren't that many Airstreams made in a year, and they tend to do them in batches based on model. Since the CCDs came out just a couple years ago, and new CCD models wound up taking over a huge chunk of trailer proudction, it would have been hard to keep up without a pretty flexible supply inventory. Which seems to have been extremely difficult for them in any case.

When you watch Airstreams being built, you quickly realize how much of it is hand work. I saw a show a couple weeks ago about the RV industry, and the others appear to be "manufactured" in a more industrial sense, probably because they build so many more. Given the nature of riveted external shells, it would be pretty hard for Airstream to make use of robots and so forth. It would cost millions for tooling to support that, and if you're building only a few hundred of each model per year, you'd never get resultant manufacturing savings that would justify the investment. One alternative would be to standardize on just a few components, but then we wouldn't get the variety and customization we have now.

I'm not saying they can't make improvements, but by analogy, I'd say Airstream production is a lot more like an Aston-Martin or a Morgan operation than it is like a Ford or a Chevy one. They have a niche product that is expensive and unique. They have picky customers who expect a ceratin treatment not usually available from their competitors. Their most obvious specialty is a traditional structure type that was abandoned by their competitors ages ago. All of these things imply a different approach than your common widget factory.

One thing they could look at is a "custom shop." The big US guitar makers, Fender and Gibson, make some products that have to be spot-on duplicates of things they built 60 years ago. Took them both decades to understand that their biggest competition was the guitars they built themsleves years earlier. Every time they introduced "improvements" in the 70s, the customer just got less interested. They both eventually realized this, and offered models that are difficult to distinguisg from the originals. They also created custom shops where you can order a guitar made to exactly the color or neck shape you want - for an enormous price.

Airstream could make their own custom shop. Customers could get on the net, or go to a dealer, and pick from a menu of options (interior color, applaince types, fabrics, etc.). Then the factory would take that spec sheet and build to it. I suspect that they would quickly find out exactly what sells best. That new Safari with the exposed aluminum is a great experiment. Maybe 1/2 the buyers would want that. But until they have a process for finding out, who knows? So the custom shop units would be correct by definition, and the off-the-rack units could be tuned for better sales by using the custom shop information.

I'm hoping maybe they'll read this.
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Old 01-16-2005, 10:58 AM   #12
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Quote:
Originally Posted by AgZep
Airstream could make their own custom shop. Customers could get on the net, or go to a dealer, and pick from a menu of options (interior color, applaince types, fabrics, etc.). Then the factory would take that spec sheet and build to it.
I'll take a Bambi "Wide Body"! The extra 5" will help the bed situation.
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Old 01-16-2005, 11:06 AM   #13
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I agree AG. I know that the web is far underutilized by Airstream and the dealer networks. Some dealers really hit a home run when it comes to the web--- colonialairstream.com and sutton RV on the west coast. It would be way cool to do a build your own type thing and be able to pick fabrics and browse all avail options and get an overall retail cost. Lotst of places do this. The RV industry in general seems a bit behind when it comes to web contact with it's customers.

As for the wide body giving you an extra 5", we had a Bambi and went to the Safari C which has the same back end as the 19' Bambi but 5" inches of bed, I can't say the extra 5" is not helpful, but it still is only 5".
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Old 01-16-2005, 11:38 AM   #14
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Personally, I'd vote for the elimination of anything that might rust or rot. I would have paid extra for some sort of inert, non-water-vulnerable subfloor material for example (might that kill the infamous '05 floor squeak?).

I'd even consider aluminum cabinetry, if such a thing is possible. Probably it is I guess. I've never seen a modern military airplane with much in the way of wood inside (but believe it or not, the floorboards of my '87 Porsche are made out of wood).

I'd also like to see a better way to handle wiring, such as all the A/V feeds for TV, satelite and music. Maybe some kind of electrical channel in the ceiling or something, where you could run your own cables.

There would be plenty of non-engineering ramifications to consider. Of course, Chris Deem would need to protect his personal franchise, so if you ordered a madras pattern fabric with a blue velvet wall covering, he probably wouldn't want you to have a CCD plate on it.
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