Winnebago Banking on Lane County to Help it Grow

by: Sheri Buri McDonald (www.registerguard.com)

The iconic motor home manufacturer Winnebago Industries is spreading to Oregon after hunkering down at its Midwest headquarters in the Great Recession.

With no long-term debt and plenty of cash, Winne­bago weathered the recession “like a well-built storm shelter,” said Scott Degnan, vice president of sales and product management.

Faced with plummeting sales, Winnebago slashed costs and laid off thousands of workers. But in some ways, Degnan said, the company has emerged from the recession stronger than it was before.

“We’re producing more motor homes now than we were in the past — with fewer employees,” he said. “That’s helped our company come out of the recession profitably.”

Now for the first time in decades, Winnebago is embarking on a major expansion outside the Midwest, offering hope to Lane County’s once robust RV manufacturing industry.

Winnebago, with about 3,000 employees, recently bought most of Country Coach’s former motor home manufacturing plant in Junction City.

The company plans to spend $15 million to $20 million to buy, renovate and equip the plant to shift ­production of Winne­bago’s ­largest diesel-­powered motor homes to Junction City from its headquarters in Forest City, Iowa.

The move will put production of Winne­bago’s biggest rigs in a facility tailor-made for them and enable the company to tap a deep pool of thousands of former RV workers thrown out of work when Country Coach and Monaco Coach in Coburg closed local operations.

The Oregon expansion will free space in Forest City, where Winnebago will boost production of its smaller gas-powered motor homes, Degnan said.

Winnebago’s Iowa facilities weren’t designed for building 45-foot-long motor homes. Juggling production of large motor homes with smaller gas-powered models strained the ­company and its employees, he said.

“To improve our efficiency and continue our growth for over three years we needed to get the diesels out of here,” Degnan said. “That’s why we chose to pull the diesels out of Forest City and into Junction City into a facility that is accustomed to building these big, complicated machines.”

Local hiring
Pleased with the quality of labor here, Winne­bago has hired about 40 people in Junction City. It plans to hire up to 200 people as it revs up production over the next 18 months, Degnan said.

“There’s a lot of craftsmanship that goes into building these homes on wheels and to find a labor force with those skills was very attractive to us,” he said.

About 30 of the recently hired employees had worked in Country Coach’s service center on the site. Winnebago plans to continue the service center for Country Coach and Winne­bago RVs.

The Junction City jobs are expected to pay near or more than Lane County’s $38,000 average annual wage. Winnebago will receive numerous state and local job creation and training incentives.

Once the Junction City factory begins churning out Winnebago diesel motor homes, which sell for $275,000 to $400,000, Winnebago plans to reintroduce high-end Country Coach motor homes, which will sell for $700,000 to $800,000, Degnan said.

The date of Country Coach’s return hasn’t been set, and it probably won’t happen this year, he said.

But Winnebago is eager to offer a full range of products, from entry-level travel trailers to very expensive luxury coaches, Degnan said.

“It completes the entire cycle of motor home ownership; we’re excited to get there,” he said. “We hope to get there sooner rather than later, but we want to make sure we get it right. (Country Coach) motor homes have a ­distinct following and a high level of expectation of superiority and reliability.”

Country Coaches last came off the assembly line in 2009. Electronics and entertainment systems have advanced ­dramatically since then, so those components probably will be the biggest change in the new ­Country Coaches, Degnan said.

“What won’t change is the DNA of what Country Coach was, and that DNA was a superior chassis with a superior ride and suspension and the highest quality ­interiors available in the industry,” he said.

One of the main reasons Winnebago wants to revive the Country Coach brand is its “fabulous reputation,” Degnan said.

An estimated 8,000 to 10,000 Country Coach motor homes still are on the road, he said. Their owners are “a very loyal, passionate group, and we’d love to bring them into the greater Winne­bago family and be able to produce a luxury motor home to the level they are accustomed to.”

Broad economic effects
Local RV industry sources say they couldn’t be happier with Winne­bago’s decision to build in Oregon and rekindle the Country Coach brand.

“The Junction City community, the RV community is thrilled with Winnebago coming into town,” said Bradley Waring, executive director of the nonprofit Oregon RV Alliance. “We all feel there couldn’t be a better match to take on the Country Coach brand and hopefully return it to some of its former glory.”

Waring said that RV employment in Lane County probably won’t return to its 2005 peak of 4,600 jobs. But he views Winnebago’s arrival as a vote of confidence in the local RV industry.

“Winnebago probably is the most recognized name in the RV industry,” Waring said. “To have them ­basically endorse or assert that the I-5 corridor of the Lane County area is prime for manufacturing recreational vehicles … (has created) excitement at every level — RV parks, RV sales and service centers, any place that would expect to see RV travelers.”

Waring said there’s much more to Winne­bago’s announcement than just the 200 people the company might employ. “There’s the multiplier effect, the supplier effect and the leisure and travel guests effect,” he said.

It’s expected that Winnebago will offer factory tours in Junction City, and may host some rallies of Winnebago owners in Oregon, rather than the Midwest, Waring said. “Dozens and dozens of Winnebago folks will be coming to the West Coast instead of Iowa to see Winne­bagos being manufactured,” he said.

Customers picking up new motor homes or stopping by for factory warranty work or service will spend hundreds of dollars locally on gas and outfitting their rigs with parts and accessories at local retailers, Waring said. “It’s definitely the greatest thing to happen to the RV industry on the West Coast since the recession,” he said.

Winnebago makes many of its own parts, which it will ship to Oregon from its Midwest plants, but it also will build relationships with West Coast suppliers, Degnan said.

Shannon Nill, president of Guaranty RV Super Centers in Junction City, said Winne­bago’s move to Junction City “will dignify every business that hung in there through the downturn. They’re going to be rewarded for believing in the RV industry.”

The 34-acre parcel that Winnebago bought includes 14 vacant acres available for growth.

“We don’t see a need short-term, but it’s nice to know we could expand our footprint, if needed,” Degnan said.

Before setting its sights westward, Winne­bago added Midwest satellite factories near its Forest City headquarters, where it has expanded over the years.

The firm now has nearly 2 million square feet under roof, making it the world’s largest motor home factory. For comparison, that’s twice the square footage of the former Hynix computer chip plant in west Eugene.

In November 2013, Winnebago opened a motor home factory in Lake Mills, Iowa. In April 2015, Winnebago bought four buildings and 30 acres in Middlebury, Ind., where it assembles towable RVs. In May 2015, the company bought a building and 9 acres in Waverly, Iowa, where it makes wire harnesses. Winnebago also owns facilities in Charles City, Iowa, where it make cabinetry and countertops, among other things.

This month, Winne­bago is bringing on former Toro Co. executive Michael Happe as president and CEO. It plans to expand corporate offices in the Minneapolis-­­St. Paul area, while keeping some administrative jobs in Forest City.

Winnebago is growing amid a revival in the overall RV industry.

“The outlook is very strong,” Degnan said. “We set the bar in the industry for quality and reliability for parts and service. This West Coast expansion is just going to continue the legacy of Winnebago and the strength of our brand.”

To read the original article, go to Winnebago banking on Lane County to help it grow