Members of the Coachmen RV management team are (front row from left) Bob Dumm, Freedom Express TT GM; Michael Terlep, Coachmen RV President; and Sandy Marschke, Support Plants. In the back row (from left) are Don Medd , fifth-wheel GM, Gar Warlick, Viking RV GM, Dave Miller, Class A GM; John Babcock, Catalina travel trailer GM; and Mike Bear, Class C GM.

Members of the Coachmen RV management team are (front row from left) Bob Dumm, Freedom Express TT GM; Michael Terlep, Coachmen RV President; and Sandy Marschke, Support Plants. In the back row (from left) are Don Medd , fifth-wheel GM, Gar Warlick, Viking RV GM, Dave Miller, Class A GM; John Babcock, Catalina travel trailer GM; and Mike Bear, Class C GM.

Elkhart, Ind.-based Forest River Inc., a subsidiary of Berkshire Hathaway Inc., in December of 2008 paid $42 million for the RV operations of Coachmen Industries Inc., a full line RV manufacturer based in the small neighboring Hoosier community of Middlebury. It was no minor news event in or out of the RV curcuit because Coachmen, founded in the mid-1960s by the Corson brothers, had become a public company and one of the leading names in the American RV business. But financial difficulties befell Coachmen four years ago even before the industry fell on hard times. Under the leadership and direction of Elkhart, Ind., native Mike Terlep, a 25-year veteran of the RV industry who had headed Coachmen’s RV operations prior to the purchase, the streamlined, 750-employee Coachmen RV division of Forest River has made considerable strides. According to Statistical Surveys Inc. (SSI), Coachmen RV gained market share in travel trailers, fifth-wheels, camping trailers and Class A motorhomes through November 2009 — a 15.5% gain in overall market share year to date. Terlep, the 47-year-old president of the new Coachmen RV, which has 11 acres under roof in eight manufacturing and three support plants at its home facility, explained the transition in an interview with RVBUSINESS.com Web Editor Steve Bibler.

RVB: So, Mike, how things are going for the new Coachmen at this point?

Terlep: We are streamlined and simple and far quicker to market. Our focus is on the product, the customer and sales. And just as we frequently look into the review mirror in driving a car, we are keeping abreast of the competitive landscape. The new Coachmen is gaining market share and, yes, we are once again profitable. We’ve been profitable the last nine months and we generated a profit for 2009.

RVB: But Coachmen’s RV business generated big losses while part of the former Coachmen Industries Inc. How do you explain this turnaround?

Terlep: You eliminate all the commotion, the waste, the excess. You streamline the process, eliminate the processes you don’t need and you get to the market on a timely basis with a great product.

RVB: Would you call this a seamless transition or were there bumps along the way?

Terlep: I’d love to say it was seamless. The Forest River organization has a lot of great people in it and we had a lot of help from a lot of great people. So, I think the integration was about as seamless as you could have orchestrated with the merger as large as it was. We had a few bumps in some areas. But in the eyes of the (RV) owners, the dealers, the suppliers and employees, I think it went remarkably well. I believe anybody you talk to would reinforce that.

RVB: Tell us about your management team.

Terlep: The management team is made up of a diverse, dynamic, talented and motivated group of individuals that have one thing in mind: winning. There is tremendous chemistry in our team and we enjoy working together. We are having fun and we are putting W’s in the win-loss columns. Our management team is empowered and very focused.

RVB: How much carry-over exists in your team from “Old Coachmen” to “New Coachmen?”

Terlep: Quite a bit, especially in the plants. In the management team and sales team there is a blend of those that had been with Coachmen and some new blood. I believe that through the transition and integration of Coachmen into Forest River we rebuilt a team of “all stars,” the best of the best. There are six divisions within the new Coachmen, each headed by a general manager with a dedicated plant, sales team, and each operates under its own profit and loss. There are no vice presidents in our divisions. No layers, only doers. Dave Miller heads Class A’s, Mike Bear the Class C’s, Don Medd the fifth-wheels, Bob Dumm the laminated travel trailers, John Babcock the conventional travel trailers and Gar Warlick the folding camping trailers. Sandy Marschke oversees our support plants. They report to me and I report to Mr. Liegl (CEO Pete Liegl).

RVB: We’re told that there are fewer product lines today bearing the Coachmen brand name. Why is that?

Terlep: We streamlined and rationalized our product offerings. Any product line that could not stand on its own was eliminated. Any product that was not generating the results at retail that our dealers and we need and expect was eliminated. We have limited the number of floorplans within each product line with the view of improved product turns at the dealer level. It is difficult to generate three to four turns a year if you have 40 floorplans to choose from.

We placed a moratorium on the number of floorplans each division can generate. If they want to bring another floorplan to market, they need to eliminate a weaker floorplan. This reduces lead times on products, improves turns, improves quality by increasing repetition in our plants and keeps the best product in the market.

Every product line underwent vast improvements to elevate its competitive position in the market and we introduced six new product lines targeting what we believed to be the largest market segments and growth opportunities of the market: the Catalina travel trailer, Freedom Express travel trailer, Apex travel trailer, Brookstone fifth-wheel, North Ridge fifth-wheel and Encounter Class A.

The carry-over product lines that have been vastly redesigned include the Chaparral fifth-wheel, the Freelander, Leprechaun, Concord and Prism Class C’s, the Mirada, Cross Country and Pathfinder Class A’s and, of course, our Viking and Clipper camping trailers. We are experiencing market share gains in all of our products and fully expect and intend on building upon these gains throughout 2010.

RVB: How did dealers respond at your first Louisville Show?

Terlep: Excellent. We wrote business and signed a lot of new dealers.

RVB: What changes has your dealer body undergone in the past year?

Terlep: Our dealer body remains the lifeline of our company and our success. We can only be as successful as our dealers are, so we want to make them as successful as we can selling our products. The make-up of our dealer body, just like all distribution bases, has changed through the recent recession due to attrition. We continue to value many long tenured relationships with dealers that have been with Coachmen for as many as 40-plus years and we have added a number of new dealers to the Coachmen dealer body that have brought new energy and volume to our company.”

RVB: If you could capsulize it into a few words, what is your philosophy at the new Coachmen?

Terlep: The philosophy of Coachmen is really quite simple – perform! Generate results! Win!! As for business principles, they remain the same as those on which Coachmen was founded: Our word is our bond. Practice the golden rule. And business goes where it is invited and stays where it is well cared for. Coachmen is managed as a stand-alone division of Forest River. There is no effort to cross-promote or align or not align with Forest River dealers. We believe the best product at the best dealership will win in the marketplace. This is what keeps Forest River so strong.

RVB: Although the Coachmen RV business is still part of a publicly held company, you’re much lower on the food chain as a unit off a larger company, Berkshire Hathaway Inc. Does that change in any way your accountability to shareholders.

Terlep: The accountability of Coachmen to perform is just as prevalent now as it was under old Coachmen. There was never an absence of accountability. However, under the current structure we are able to focus our energies on running the business, and we have far fewer distractions that accompanied being higher up on the food chain, as you put it.

There are many stakeholders in the game and they all have expectations of us. We need to meet the expectations of all stakeholders starting with Berkshire Hathaway and Forest River Inc. all the way through to the end consumer. In any event, the goal is to quiet the critics and generate results. Under Forest River Inc. and the leadership of Mr. Liegl, I believe that we are doing just that.

The business model of Forest River has permitted us to simplify and focus our energies on the key fundamentals of the business.

Let me be clear on one point: old Coachmen was a great company and grew to be an industry leader over a very long 46-year history, much longer than the average life of a company and certainly much longer than the average life of a publicly held company. It was time for a change and the change was a good change for Coachmen — the brand, the dealers and the consumer — and I believe that the addition of Coachmen to Forest River has provided the value that Mr. Liegl saw in the opportunity. Coachmen is a great brand that has been in a sense, reborn. But let’s not forget that the equity and value in the Coachmen name lies both in its history and in its future.