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During its 35-year history, Jayco Inc. developed one of the best reputations for corporate integrity product quality in the RV industry. But the Middlebury, Ind.-based company struggled the last two years, staying basically in the same place while competitors Keystone RV Co., now a unit of Thor Industries Inc., and Forest River Inc. gobbled up huge amounts of retail market share at the expense of Jayco and some other towable RV builders.
But Jayco President and COO Derald Bontrager told the company’s dealers last month that he believes the company, which his father founded in 1968, has made the changes needed to face the new challenges.
“We’re excited about our new, aggressively priced product line, offering distinct and clear-cut market segmentation, backed up by price points that make sense,” Bontrager said during Jayco’s national dealer meeting in Orlando, where its 2004 models were introduced. “I am proud to say that I believe our entire organization is now ready to answer the call. Today (July 21) marks the beginning of a new age for Jayco and for you (dealers) as our business partners.
“There can be little doubt that we have navigated through some tough waters in recent times, with the waters stirred up by a changing industry and Jayco’s struggles to change along with it,” Bontrager said. “At the same time, we must frankly admit that there were a few key areas that pushed us off-track. First of all, we over-expanded, projecting sales and market share increases that just didn’t materialize.
“We also experienced some unsuccessful new product introductions, the most prominent being our Class A (motorhome) launch,” he continued. “And then there was the issue of our overhead structures and price competition, which perhaps formed the basis for many of our problems. I recently wrote an article for our employee newsletter, in which I compared Jayco to a ship that was off course. At the time I declared that it was time to adjust our sails.
“In today’s marketplace, it is necessary to trim our sails, becoming leaner, tougher, smarter, and yes, maybe a bit meaner,” Bontrager said. “Today, we need to take a long, hard look at where we stand against the competition and how we react to a changing marketplace.”
The decision, made earlier this year, to halt Class A motorhome production “was a painful decision – it is never easy to admit failures,” Bontrager said. “But we realized that we needed to step back and re-group and we tried to do it in a way that didn’t harshly penalize dealers while allowing us to keep the ship moving on a steady path.
“Secondly, we centralized our manufacturing operations, mothballing the Class A plant and consolidating our LaGrange (Ind.) operations into our Middlebury complex,” he said. “This was accomplished with little or no disruption to production and, even with the consolidation, we have adequate capacity to meet your (dealer inventory) needs.
“Thirdly, we implemented some major internal reorganizations, which resulted in significant reduction in overhead and discretionary spending. Our primary goal was to revitalize our products, alter our manufacturing techniques, and cut overhead without – and I want to emphasize this – without sacrificing our level of commitment to quality and service.”
However, Bontrager admitted, “In some areas we cut too deep!”
One area cut too deeply was Jayco’s After Market Service (AMS) operation. “With the recent cuts, AMS became an operation that couldn’t even answer the phone in a timely manner!” he said. “We know that this is unacceptable and we have moved to correct the situation by adding back staff members into jobs that will directly handle your needs.
”We have also made the decision to go back to geographic territories for the service representatives. And I give you my personal word that we will get on top of the telephone situation quickly and effectively. We will give you (dealers) the service you expect and deserve!
“On the production side, I am pleased to report to you that we have reorganized our operations into smaller, more focused, product teams that monitor and control the entire manufacturing process,” Bontrager said. “We believe that move alone will make a huge difference in our efficiencies and responsiveness to the market.”
Jayco’s model year 2004 line-up “sends a message to the industry that Jayco is back and ready to go to the next level,” Bontrager believes. “We are again conducting business in a manner that ensures we can not only attain, but also maintain, our ‘right product, right price and right time’ formula for success.
“Even though we have maintained a steady pace with regard to sales, we are certainly not satisfied,” Bontrager said. “We are certainly not complacent. We still have a lot of work to do, and are very aware that the coming year represents a pivotal juncture for Jayco.”