The CEO of American icon Airstream explains why the company decided to stay in Ohio and how it decided to build a new factory for 21st-century growth

Mar 30, 2020 | News

Matthew DeBord
Business Insider

 

  • Bob Wheeler is CEO of Airstream, the 86-year-old maker of iconic, silvery trailers.
  • Wheeler took over in 2005. The company recently completed construction of a new, 725,000-square-foot factory in Ohio.
  • Wheeler talked to Business Insider about why Airstream resisted the temptation to move — and how the company is dealing with current challenged and future opportunities.

 

“It’s big shakes,” said Bob Wheeler, CEO of Airstream, the iconic American manufacturer of shimmering, retro-cool trailers.

Wheeler was referring to the company’s new 725,000 square-foot factory, a short drive from Airstream’s old plant, around since 1970.

“We expanded about five years ago, but we outgrew that space,” Wheeler said. “It was too crowded, people were working on top of each other.”

Wheeler and his team developed a plan to improve the situation, based on business needs, but some critical issues related to location arose.

“Sixty percent of the recreational vehicles we make are sold west of the Rockies,” he said. The question was whether Airstream should leave its longtime home in Jackson Center, Ohio, or stay put.

Wheeler and the company chose the staying-put option.

“The number one resource we can’t reliably create someplace else is the workforce,” he said. “We didn’t have the confidence that we could find people who understand our heritage.”

Ohio was pleased with Airstream’s plan

That’s a classic Bob Wheeler insight. Few business leaders find themselves in his unique position: steward of a beloved brand that has no desire to rest on its reputation, but is instead aiming for growth in the 21st century. The closest parallel might be Matt Levatich, CEO of Harley-Davidson, who is trying to keep an equally iconic American brand relevant by launching an all-electric motorcycle and expanding into markets outside the US.

Wheeler might have an easier job. Airstream hasn’t yet fallen into President Donald Trump’s sights, and it’s products are made in America by Americans, for Americans.

“Ohio was very pleased that we decided to expand our footprint,” he said, noting that the state kicked in some tax credits to help mitigate the cost of the new plant. In return, Ohio gets a stable workforce at Airstream, with employees making an average of $50,000 annually.

In Wheeler’s world, however, wins share space with new challenges.

“When we drafted up the plan, the market was a lot hotter,” he said of a period several years back.

According to Wheeler, that wasn’t a disaster. “A step back is OK, as long as it’s not a slide,” he said. “A dramatic swing would be 20-to-25%. He added that dealer confidence is strong, suggesting that “everything is stacking up well” for 2020.

The results should be driven by Airstream’s famous Silver Bullet trailers. But the company has introduced new products in recent years, some of which have shown promise — and some of which have introduced problems.

“Basecamp is right on track,” Wheeler said of a new, small trailer marketed to younger customers who participate in an outdoor-adventure lifestyle. “We feel really good about that product.”

The challenges of Nest

But another small trailer, Nest, has “been more of a challenge,” Wheeler said. Made from fiberglass, the design was acquired by Airstream before its originator had ever tried to sell it.

“It attracted enormous interest,” Wheeler said. But at dealerships, it didn’t meet the company’s immediate expectations. Part of that was the construction. Wheeler explained that potential buyers thought it might be less expensive than aluminum, Airstream’s traditional material. But it wasn’t.

“We might move it to a different price point,” Wheeler said, giving it a distinctive “story to tell,” but pointing out that Nest is “every bit as functional and high-quality” as other Airstream trailers. The company underestimated the startup difficulties of the new product, however. “We had to make a lot of changes,” Wheeler said.

Again, classic Wheeler. He oversaw the Nest deal, and he’s taking responsibility for making it work. It’s evidence of how Airstream’s vision for its next century relies as much on pragmatism as it does on tradition.

 

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