Fleetwood Enterprises Inc. President and CEO Elden L. Smith is not what you would consider a flamboyant type of individual, even when he’s singing the praises of his beloved company. Of course, he’ll readily tell you about the general progress he feels has been forged lately at Fleetwood, a Southern California firm to which he returned after an early retirement in March of 2005 as president and CEO to exact a turnaround strategy.
But those familiar with his style over the years – both as a former chairman of the Recreation Vehicle Industry Association (RVIA) and head of Fleetwood’s RV Group – know that Smith is not one to toot his own horn, so to speak, in any sort of egocentric way. So, the message you come away with after an interview these days is that, while there are plenty of good things to say about Fleetwood, there’s still a lot of work to be done.
Indeed, while year-to-date production backlogs were substantial at the close of the company’s first fiscal quarter, ending July 30, Fleetwood’s RV Group posted a 1Q operating loss of $13.3 million. And as recently as mid-August, as part of its cost-cutting strategy, Smith and his management team had announced the layoffs of 160, including 38 managers and staff at its home office in Riverside.
Taking all that into account, Smith was rather upbeat regarding Fleetwood’s future during a recent luncheon interview with RV Business publisher Sherman Goldenberg at the firm’s 2006 National Dealer Meeting, Aug. 27-29 at Caesar’s Palace in Las Vegas, Nev.

RVB: So, can we assume that what we are hearing here in the presentations at your dealer meeting are the culmination of what you have gathered since walking back into the office at Fleetwood in 2005?
What you are seeing is basically just the start. First of all, to keep from throwing the organization into total turmoil, you’ve got to know where you are. So, there was a fair amount of time spent on determining where and how decisions were being made and how it worked. Then, (we started) working with the different organizations (within the company) to determine how we can accomplish what we want, which is a quicker response in terms of getting product out into the field. A lot of it can be determined very quickly by eliminating levels of managers, places, positions or people that decisions have to go through. Once you’ve done that, you have to identify the people who can best carry it out.
RVB: Decentralization, we’re told, is one of the goals.
Yes, it’s about empowering the people who are in a position to pull in input from your customers and taking it directly to product development, to manufacturing, to service, to marketing to whatever part of the organization needs to take some action. Before, in a more centralized organization, that input would come into a lower level and go up to the higher level, then down again. You know, it’s a lot like the old parlor game where you whisper something in one person’s ear, and it goes around all the ears, and by the time it gets back to you, it’s completely different than what you intended. This way, our sales people are empowered to basically work with their management and directly with manufacturing, product development and service. They work out their priorities together.
RVB: One result of your approach is obviously a flattening of your management team.
In the first month and a half, we cut the number of corporate officers from 24 to 11.
RVB: One of the issues that emerged over the last few years regarding Fleetwood was dealer relationships. Was the reintroduction of the dealer meeting an effort to help shore up those relationships?
It was a shortcoming, and this was actually a second step. The first step (in reconnecting with dealers) was focusing our sales people on individual product so they could go out and spend time with the dealer and the dealer’s personnel and talk more knowledgeably about our product and our competitors’ products. That happened for most of the groups in the early spring. Had we had this meeting with the old sales organization two or three years ago, you’d have the sales people that carried 22 product lines talking to all of these dealers. Now, we not only have them split regionally, we have them split up by product lines so they have much closer relationships with the dealers already. Then you work your way through the rest of the organization. …I’m very pleased with the things I have been hearing. We’re better and getting better every day.
The big thing to remember here is that we are just beginning. We have barely started. We’ve got the organization in place. We’ve turned out a lot of new product and new features. Some of them will be successful, some of them won’t. But we are prepared now, and our turnaround time on changes in features is far better than it was before.
RVB: Are you satisfied with the progress to date?
I’m very satisfied with the progress we’ve made to this point. What we’ve done everybody recognizes is just a start. There is a great deal of enthusiasm both inside the company and outside on the part of dealers and suppliers. Our associates feel they are having greater influence and can be more effective and that we are seeing results from what we’ve done. It’s been a relatively short time when you really look at it.
RVB: What do you see in the marketplace in general for next year?
I think it could be a better year. Beyond gas prices, though, I think you’ve also got consumer confidence, rising interest rates. You have a lot more factors in this soft period than just fuel prices and uncertainty. I don’t think improvement in any one of those is going to restore us to a normal market. We are going to have to see cumulative improvement in all of those factors.
RVB: Is rebuilding Fleetwood’s stable of strong brand names an essential part of your game plan?
No, the name doesn’t sell product. You can look back at the history of this industry when, for instance, Winnebago – the most recognized name in the industry – went through a terrible time in 1980 because they didn’t have the product. If you look at the problems we’ve had over the last five or six years, where we’ve had the product, it’s worked fine. Where we haven’t had the product, it hasn’t worked. Look at the top-selling travel trailer brands today. Just go down the list. Eight or nine years ago, none of them were known. Name makes zero difference. These people (consumers) buy product. They buy floorplans, features and, to some degree, price.
RVB: Do you think the loyal members of the Bounder Club would agree?
There’s no doubt that the Bounder Club and the American Coach Club help you. But look at how many manufacturers in the history of this industry have had outstanding owners clubs and are no longer around? Your club will give you a core that if you are doing the job right, is a tremendous springboard for further success. But a club can’t save a bad product.
RVB: One of the biggest changes in the industry in recent years is the emergence of varied retail distribution channels such as REDEX, Route 66, FreedomRoads and Good Sam Authorized dealers. Do you think that these types of entities will continue to grow?
Because most of those are so new on the scene, I think it’s a little early to say that that’s the way that everything is going to go. There is no doubt that several of them have been very successful. But, for the most part, if you look at what they do, they are still buying regionally, dealer by dealer. And the products themselves that they are looking to get are the best selling products, almost regardless of who makes them.
Now, I don’t know if, from a manufacturers standpoint, this has changed the landscape to a great degree. I do think the dealers and manufacturers are more financially solid and that they manage their business much better than they did 10 or 20 years ago. It used to be when people went through a softness in the market that we’ve seen the last year or so, you would see dealer and manufacturer failures. We are not seeing that. It’s a credit to the professionalism of both the dealers and the manufacturers in the industry.
We need to watch the different distribution channels that develop and the different alignments and partnerships that develop and go from there. Again, if you’ve got the best product, it’s pretty hard for anybody to ignore you. That’s been proven over and over and over again.
RVB: Having come back out of retirement from Washington State’s Whidbey Island only 16 months ago, you’ve thrown yourself back in to the fray, business-wise. Do you have any regrets at this point?
Smith: I now call my retirement a long vacation – affectionately. And I can tell you that I’m very happy, personally. There is not anything I’d rather be doing right now, and I’ve gone from spending seven months on Widby Island and the rest of the time in the desert. I was very, very busy all that time pursing family interests. But there is nowhere I would rather be and nothing that I would rather be doing right now than this. I feel great about the people I am working with, inside and outside the company. We are making tremendous progress. And it’s a very exciting place to be.