Fleetwood Enterprises, Inc.

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Fleetwood Enterprises, Inc.

3125 Myers Street
Riverside, California 92523
U.S.A.
(714) 351-3500
Fax: (714) 351-3931

Public Company
Incorporated: 1950 as Coach Specialties Company
Employees: 12,000
Sales: $1.55 billion
Stock Exchanges: New York Pacific

Fleetwood Enterprises is the world’s largest manufacturer of travel trailers, motor homes, folding trailers, and manufactured housing. The company’s travel trailers are currently marketed under the names Avion, Prowler, Terry, and Wilderness. Fleetwood’s line of motor homes are sold under the names Jamboree, Bounder, Flair, Pace Arrow, South wind, Tioga, and Limited. The company’s folding trailer division, acquired in December 1989, manufactures products under the Coleman name. Manufactured housing is sold under the corporate name, Fleetwood. All four product lines are marketed through a network of more than 3,600 dealers in the United States and Canada. Fleetwood offers financing to its recreational vehicle dealers and to their customers through Fleet-wood Credit Corporation. The company supplies its dealers from 45 production facilities located in 16 states in the United States and Canada.

Fleetwood was founded by the company’s current chairman and CEO John C. Crean in a greenhouse in southern California in 1950. Under the name Coach Specialties Company, he and his wife manufactured and sold a new and improved line of window blinds for travel trailers. At the same time, Crean built a travel trailer for his own use. One of his window-blind customers, a trailer dealer, was so impressed by the trailer’s construction that a deal was struck for Crean to assemble trailer units with materials supplied to him by the dealer. Production was to be in quantities large enough to make sure the dealer could keep pace with his seasonal orders. As the summer travel-trailer season came to a close, Crean continued his new enterprise but opted to build mobile homes instead of trailers. Mobile homes, currently referred to as manufactured housing, provided a more stable market for growth because of increasing demand for inexpensive housing in southern California. The name Fleetwood was chosen from a line of automobiles. By 1954 the company had outgrown its greenhouse to become a thriving enterprise with three production plants.

The growth of the manufactured home market was caused by the product’s moderate price. The cost of a quality manufactured home runs about one-third that of on-site constructed home, in each case excluding land. Off-site production eliminates the use of many different contractors, construction is not affected by weather, and less time is required for construction because every component arrives at the assembly point ready to use. Manufactured homes are trucked in sections to the homesite, where they are assembled in a matter of days, instead of the normal on-site construction times that can stretch into weeks and months.

In 1957 the company changed its name from Coach Specialties Company and reincorporated as Fleetwood Enterprises. During the 1950s the manufactured housing industry had split into two distinct markets. Fleetwood had its feet firmly planted in the mobile home market, and because of its healthy growth had accumulated a large cash surplus. The other market, the recreational vehicle (RV) market, John Crean saw offered good opportunities. In 1964 Fleetwood acquired Terry Coach Industries, Inc., and Terry Coach Manufacturing, Inc. This was a time when an ever-increasing number of U.S. outdoor enthusiasts wanted to travel. The company’s line of travel trailers included sleeping, eating, and bathroom facilities. As the size and weight of these units grew, Fleetwood designed and built a line of fifth-wheel travel trailers, a model that is exclusively built to be towed by larger pick-up trucks. As sales grew and the market expanded, the company continued to open new production plants to meet increasing sales. In 1965 Fleetwood became a public company. By 1990 the company operated 12 travel trailer plants in the United States and Canada.

As the RV market boomed, Fleetwood continued to diversify with the acquisition of Pace-Arrow, Inc., a motor home manufacturer. The acquisition was a logical extension of the company’s travel trailer business. Motor homes are similar to travel trailers in construction and use. The interior looks the same as a travel trailer except that the motor home provides an area for the driver. The entire unit is constructed on a purchased truck chassis. The product line offers two types, both of which are self-contained. Type A motor homes are full-size units, having sleeping room for four to eight people and are typically equipped with air conditioning, on-board power generators, and stereo systems. In 1990 Type A units typically sold for $50,000 to $80,000. Type C units are smaller, built on cut-away van chassis, and usually accommodate fewer people. In 1990 Type C units sold for $25,000 to $50,000. At a time when inexpensive gasoline and the U.S. public’s wanderlust fueled the RV market, Fleetwood was marketing a diverse product line, the prices of which accommodated a wide range of buyers’ budgets. The company rounded out its product line with the acquisition, for cash, of Avion Coach Corporation in 1976. Avion augmented the company’s line of trailers with its expensive, luxury class models. In 1977, the company incorporated in the state of Delaware keeping the same name.

The 1970s was a period of rapid growth and expansion for Fleetwood. As the decade ended, the revolution in Iran, skyrocketing gasoline costs, and the buying public’s fear of a recession, along with rising interest rates created an across-the-board slump in sales. Two-thirds of the Fleetwood’s product line were vehicles that were intended for use on U.S. highways. Gasoline shortages, which in some states resulted in day-to-day rationing along with the spiraling costs of fuel shook the RV market to its foundations. Many manufacturers were forced out of business as RV retailers began closing their doors and defaulting on their bank financed inventories. The ensuing recession brought with it escalating interest rates, making mortgages for all types of housing and for financing RVs prohibitive. The company, for the first time since the early 1950s, found itself in a situation calling for drastic cutbacks in production and staffing.

The year 1980 was difficult for Fleetwood. It was forced to close nine of its production plants. The cutbacks closed three travel trailer plants, three motor home facilities, and three manufactured housing plants. Fleetwood had to consider massive worker layoffs.

Fleetwood was forced to take a hard look at its entire structure during these hard times. It developed a tightly focused management policy, employing regionalized management within its housing group, which permitted the company to react more quickly to market trends. Housing design and development has been spread to five areas: west coast, central, southeast, mid-Atlantic, and Florida. Each plant facility began operation as a separate profit center with day-to-day decisions made locally. Fleetwood slowly rode out the recession, and in 1982 Fleetwood’s motor home division was projecting sales of 40,000 units in 1983.

The rapid growth and expansion Fleetwood had experienced in the 1980s had not been without legal and regulatory problems. The company is subject to provisions of the Housing and Community Development Act of 1974. These provisions, which are regulated by the U.S. Department of Housing and Urban Development (HUD), resulted in an action by the department against Fleetwood in 1985 claiming potential safety defects in 4,000 mobile homes made by the company during the years 1981 through 1984. Fleetwood was ordered to notify the owners of the mobile homes in question about possible defects in the units’ walls, floors, and beams. The problems did prompt HUD to initiate an investigation into engineering techniques used by other mobile home manufacturers.

The four-year-old dispute came to a head in February 1988, resulting in a U.S. Justice Department complaint filed against Fleetwood in Wilmington, Delaware, seeking civil penalties in excess of $20 million. The complaint alleged the existence of certain standards violations in manufactured homes produced by several of Fleetwood’s subsidiaries. On February 9, 1989, Fleetwood entered into a settlement agreement with HUD and the Justice Department. The settlement resulted in the dismissal of government charges against Fleet-wood in exchange for a settlement payment.

Fleetwood, along with other companies in the manufactured housing industry were the target of a class-action suit filed in Delaware in 1985. The complaint alleged that veterans who had purchased mobile homes had paid excessive prices and finance charges as a result of illegal rebates that were falsely certified to the Veterans Administration by the manufacturers. In 1990, the court certified a class of plaintiffs consisting of certain veterans who purchased mobile homes from Fleetwood dating back as far as April of 1981. Two of the company’s subsidiaries pleaded guilty to six counts of filing false certifications in 1987, resulting in approximately $650,000 in fines and civil settlements. In 1990, the company was still vigorously defending itself from further legal actions.

Fleetwood Credit Corporation (FCC) was established in 1986. The finance company’s objective was to become the major source of both wholesale and retail financing of Fleet-wood’s RV products on a nationwide basis. Using $25 million of its own funds, the company hired Robert B. Baker, former head of Nissan Motor Acceptance Corporation to head the project. FCC began operations by servicing just twelve Orange County, California, dealers. In the early 1990s the company had lending operations in southern and northern California, Oregon, Indiana, Massachusetts, Georgia, New Jersey, and Texas. Fleetwood Credit showed a net income of $2.9 million in 1990, a 56% increase over the previous year.

In 1989 Fleetwood acquired the Coleman Company’s folding trailer business. The Coleman product line ranged in retail price from $2,000 to $10,000, and in 1989 it accounted for more than 30% of the folding trailer market. With the acquisition of this line, Fleetwood had products for most consumers’ budgets. The company has also introduced new lower-priced trailer models in response to changing market conditions. Its eye on the future, the company in 1990 purchased a 75-acre parcel in southern California to develop as a site-built housing tract.

Principal Subsidiaries

Fleetwood Homes of California, Inc.; Fleetwood Homes of Florida, Inc.; Fleetwood Homes of Georgia, Inc.; Fleetwood Homes of Idaho, Inc.; Fleetwood Homes of Indiana, Inc.; Fleetwood Homes of Mississippi, Inc.; Fleetwood Homes of North Carolina, Inc.; Fleetwood Homes of Oregon, Inc.; Fleetwood Homes of Pennsylvania, Inc.; Fleetwood Homes of Tennessee, Inc.; Fleetwood Homes of Texas, Inc.; Fleetwood Homes of Virginia, Inc.; Fleet-wood Homes of Washington, Inc.; Westfield Manufactured Homes, Inc.; Fleetwood Travel Trailers of California, Inc.; Fleetwood Travel Trailers of Indiana, Inc.; Fleetwood Travel Trailers of Maryland, Inc.; Fleetwood Travel Trailers of Nebraska, Inc.; Fleetwood Travel Trailers of Ohio, Inc.; Fleet-wood Travel Trailers of Oregon, Inc.; Fleetwood Travel Trailers of Texas, Inc.; Fleetwood Travel Trailers of Virginia, Inc.; Fleetwood Motor Homes of California, Inc.; Fleetwood Motor Homes of Indiana, Inc.; Fleetwood Motor Homes of Pennsylvania, Inc.; Fleetwood Folding Trailers, Inc.; Buckingham Development Company; C.V. Aluminum, Inc.; Continental Lumber Products, Inc.; FEI Corp.; Fleetwood Credit Corp.; Fleetwood Foreign Sales Corp. (U.S. Virgin Islands); Fleetwood Holidays, Inc.; Fleetwood Insurance Services, Inc.; Fleetwood International, Inc.; Gibralter Insurance Company, Ltd. (Bermuda); Gold Shield Fiberglass, Inc.; Gold Shield Fiberglass of Indiana, Inc.; GSF Installation Company; Hauser Lake Lumber Operation, Inc.; Housing Supply, Inc.