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Old 05-06-2008, 07:30 AM   #1
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Winnebago's new leader remains bullish

FOREST CITY " Bob Olson doesn't have any illusions about the challenges facing the company he "took over" Monday.

Winnebago Industries' new chairman of the board and CEO is blunt when he says the Forest City-based RV manufacturer is facing a myriad of issues ranging from plunging consumer confidence to high gas prices to uncertainty caused by the perceived national housing crisis to the upcoming presidential election.

Yet, Olson remains bullish when it comes to the long-term future of the company he will lead now that former Chairman of the Board and CEO Bruce Hertzke has officially retired.

"We have money in the bank, we have an excellent inventory-control program and we make the best motor homes," Olson said. "I've seen us go through downturns before, and just like before, we will come out of it."

The torch was officially passed from Hertzke to Olson on Monday, ending what Winnebago officials say has been an almost three-year transition process. Olson is taking over a company that is still turning a profit but has seen income drop in recent months because of a slow marketplace. This past winter, the company laid off about 200 employees and it shut down production for a week last month.

Olson, like Hertzke before him, is quick to point out that Winnebago has gone through more traumatic times in which it lost money and conducted much larger layoffs than it did in January.

Yet, he said this downturn has been different than the others because of the wide range of challenges in the marketplace.

Olson said what makes it frustrating is that he believes many of the challenges facing his company are psychological.

Take gas prices, for example. Olson used the WIT Grand National Rally as an example of how little the rising price of fuel affects RV owners. He said the jump in gas prices in the past year means a WIT member from San Antonio who drives a diesel-powered Winnebago would pay about $86 more in fuel costs to attend the rally this year.

"If you look at the big picture, you can spend more for one night on the town," Olson said, "but it's that perception that we have to overcome."

"If things don't change from an economy standpoint, we have to do things for the health of the company," he said. "We have to reduce our cost structure or find ways to generate revenue."

That means Olson can make no promises when it comes to the possibility of more shutdowns or even layoffs
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Old 05-06-2008, 07:30 AM   #2
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Winnebago's new leader remains bullish

FOREST CITY " Bob Olson doesn't have any illusions about the challenges facing the company he "took over" Monday.

Winnebago Industries' new chairman of the board and CEO is blunt when he says the Forest City-based RV manufacturer is facing a myriad of issues ranging from plunging consumer confidence to high gas prices to uncertainty caused by the perceived national housing crisis to the upcoming presidential election.

Yet, Olson remains bullish when it comes to the long-term future of the company he will lead now that former Chairman of the Board and CEO Bruce Hertzke has officially retired.

"We have money in the bank, we have an excellent inventory-control program and we make the best motor homes," Olson said. "I've seen us go through downturns before, and just like before, we will come out of it."

The torch was officially passed from Hertzke to Olson on Monday, ending what Winnebago officials say has been an almost three-year transition process. Olson is taking over a company that is still turning a profit but has seen income drop in recent months because of a slow marketplace. This past winter, the company laid off about 200 employees and it shut down production for a week last month.

Olson, like Hertzke before him, is quick to point out that Winnebago has gone through more traumatic times in which it lost money and conducted much larger layoffs than it did in January.

Yet, he said this downturn has been different than the others because of the wide range of challenges in the marketplace.

Olson said what makes it frustrating is that he believes many of the challenges facing his company are psychological.

Take gas prices, for example. Olson used the WIT Grand National Rally as an example of how little the rising price of fuel affects RV owners. He said the jump in gas prices in the past year means a WIT member from San Antonio who drives a diesel-powered Winnebago would pay about $86 more in fuel costs to attend the rally this year.

"If you look at the big picture, you can spend more for one night on the town," Olson said, "but it's that perception that we have to overcome."

"If things don't change from an economy standpoint, we have to do things for the health of the company," he said. "We have to reduce our cost structure or find ways to generate revenue."

That means Olson can make no promises when it comes to the possibility of more shutdowns or even layoffs
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Old 05-06-2008, 12:32 PM   #3
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<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Take gas prices, for example. Olson used the WIT Grand National Rally as an example of how little the rising price of fuel affects RV owners. He said the jump in gas prices in the past year means a WIT member from San Antonio who drives a diesel-powered Winnebago would pay about $86 more in fuel costs to attend the rally this year. </div></BLOCKQUOTE>

He must be using a different calculator than I have. Mine shows 1153 miles from San Antonio to Forest City. At a conservative 8.0 MPG, that's 144 gallons @ $4.25 per gallon. Equals $605.32. At last years average of $3.07 per gallon for diesel, the same trip would cost $442.08 - a difference of $163.24! And, that is only 1 way - gotta get back home, right?!

Having said that, I'll be there. It's what we do. RVing is our thing - we don't smoke, drink or gamble - we spend our $$ on RVing!

But, I keep track of what it costs!
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Old 05-07-2008, 04:40 AM   #4
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It seems to me all of these RV manufacturers could improve the bottom line simply by doing it right the first time. So much money is spent correcting mistakes or omissions on the initial run. If they have a supplier that is problem repeater, get rid of him, as in "Atwood".
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Old 05-07-2008, 06:49 AM   #5
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At this point it's useless rhetoric because it's way beyond their control. This is a war in which there will be no shots fired.....they already have us captive. We desparetly need something to barter with and so far we haven't come up with anything the OPEC countries need.

I'll go on as long as I can but i hate this feeling of hopelessness.
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Old 05-07-2008, 07:47 AM   #6
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Some may call this crass, but the opec nations need food, water and medical supplies. The US is the largest supplier of these items to opec. We need to start using some of "our" natural resources as a stick and have separate pricing for opec nations. (I know free market economies and all may not allow that to work without hurting us but......)

In the coming years, water is going to be extremely valuable and we have lots of that too.

I also don't understand why we can't do what France did and reduce their dependency on foreign oil by getting 90% of the energy needs met by nuclear power. Build nuclear plants, allow oil exploration in the US again and build a few new refineries and we will see the price of oil drop and drop fast once the plans are announced by our government to have a huge push in these resources.
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Old 05-07-2008, 08:23 AM   #7
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He really missed it. I live in Houston,Tx and my round trip to the ralley is 2,770 round trip the way we go. I paided around $2.70 a gallon on my last trip. I averaged 8.5. So you can do the math. I got it up to 9.5 now and I have done all I can to improve milage. If things done change my the end of the year our RV days may end.
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Old 05-07-2008, 10:23 AM   #8
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Rocket Heart: My sentiments exactly. We have been invaded quietly, exactly as Krushev predicted many years ago. In the name of excessive and quick profit, we allowed it to happen. I say we, (most of us little people had little or no knowledge of it). If we had, it might not have made a difference. We allow our government to run amuck without stringent checks and balances.
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Old 05-07-2008, 10:44 AM   #9
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<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Rocket Heart:
At this point it's useless rhetoric because it's way beyond their control. This is a war in which there will be no shots fired.....they already have us captive. We desparetly need something to barter with and so far we haven't come up with anything the OPEC countries need. </div></BLOCKQUOTE>
As a nation, we could easily find ourselves in the same situation as Japan in 1940. What did they do when their supplies of oil and steel were cut off? Just something to think about...

Rusty
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Old 05-07-2008, 11:00 AM   #10
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<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Homer:
Rocket Heart: My sentiments exactly. We have been invaded quietly, exactly as Krushev predicted many years ago. In the name of excessive and quick profit, we allowed it to happen. I say we, (most of us little people had little or no knowledge of it). If we had, it might not have made a difference. We allow our government to run amuck without stringent checks and balances. </div></BLOCKQUOTE>

Thank's Homer - I am no genius but I saw this coming years ago. What made us strong before and after WWII was our industry. That started leaving in the 70's Iwas an Industrial Steel Sales Rep and I saw first hand the demise of the "rust belt". Michigan and most of Northern Ohio are mere shells of what they once were.

Anyone want to read an eye opening book read Lee Iacoca's - he was dead on in predicting all this. It's hard to take back what you give to much of - we know must try to compete on a global market that we are not competitive in.

I pray that we can get leaders in industry to see this and take appropriate action.
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Old 05-07-2008, 04:35 PM   #11
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Rusty: We may have approached that point now. It is unthinkable in this day and age of WMD's. We have no deterrent any more, short of WMD's. I guess we better return to this thread to the world of RV'g.
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Old 05-07-2008, 05:17 PM   #12
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<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">As a nation, we could easily find ourselves in the same situation as Japan in 1940. What did they do when their supplies of oil and steel were cut off? Just something to think about... </div></BLOCKQUOTE>

We have enough oil in this country under the ground, on top of the ground, and off-shore. And we can make our own steel. The environmentalists and 535 other people see fit to make us pay what we are now paying, and will pay in the future. It's our own fault, not anyone else's.

<STRIKE>Drill</STRIKE> RV soon and often.

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Old 05-08-2008, 06:15 AM   #13
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<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Thudman:
We have enough oil in this country under the ground, on top of the ground, and off-shore. And we can make our own steel. </div></BLOCKQUOTE>
I've been in various technical and technical management positions for the last 35 years for a company that manufactures large engines and compressors, primarily for oil and natural gas markets. Therefore, I have some visibility into both the oil and iron/steel sectors of American industry.

Our company operated two foundries in our division when I came to work in 1973. Both are now closed down and the properties sold and redeveloped. We also operated three manufacturing plants in Ohio and Pennsylvania that had the capability to machine crankshafts, bases, blocks, etc. for engines that were 60+ feet long and weighed over 350,000 lbs.

During World War II, our company's foundry and manufacturing capabilities were used to manufacture war materiel. These capabilities don't exist today, and as manufacturing companies go, we're not alone. There's one forge shop left today in the United States who can forge a crankshaft for a large engine such as the superlongstroke 2-cycles that would be used during wartime in transport ships, and their backlog is over a year. Few foundries remain in the U.S. who can handle large, specialized pours.

Over 60% of our crude oil is imported. If a significant percentage of that were shut off, there isn't enough reserve capacity in the U.S. to offset it in the short term. Undeveloped fields are another matter - one doesn't flip a switch and start producing. It would be years before we could have wells, producing platforms, pipelines, etc. in place to begin production from an undeveloped offshore oil field.

I notice your background is aviation. As compared to World War II, are the few remaining U.S. aircraft manufacturers internally self-sufficient? Where are components being sourced for, let's say, the Boeing 787? International suppliers, right?

Rusty
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Old 05-08-2008, 11:17 AM   #14
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<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Where are components being sourced for, let's say, the Boeing 787? International suppliers, right? </div></BLOCKQUOTE>

You are correct; we are in a Global economy now. Hardly the case in War II (near isolation). But my point is that we are not using the resources available to us---using NEW technology to drill, for example. The 535 have us by the short hairs and are too busy arguing.

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Old 05-08-2008, 11:52 AM   #15
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I guess the question on my mind. "Is global economy the best policy for us in the U.S.A."? Sure things change, but do we have to give up so much. Remember when "Made in the U.S.A.", was a badge of honor and quality. Our labor cost are not the highest in the world any more. Outsourcing comes primarily because we do not have the capability to manufacturer that part any more. We need to step back and look at our situation carefully. Our citizens are the ones suffering.
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Old 05-09-2008, 12:55 PM   #16
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We just returned from our 2008 version of our trip of a life time. We traveled 9200 miles consuming 1300 gallons of gas (Itasca 33V). The way I look at it (and I know this is rationalization) assuming I paid and extra 1$ per gallon for gas over last year and was gone for 90 days that is about $14.50 extra per day. We boondocked a lot, utilized Passport America's half price book, and ate out a lots less. I figured that we saved the extra money incurred from increased gas prices. What worries me even more is the depreciation we must have taken on the coach. If the new ones are not selling, the used ones aren't either. We plan of keeping this coach for a long time, but if something like health comes up and we need to sell, we will all be taking bath on our coaches I think.
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Old 05-09-2008, 03:12 PM   #17
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Linsay Richards: Quote: "What worries me even more is the depreciation we must have taken on the coach. If the new ones are not selling, the used ones aren't either. We plan of keeping this coach for a long time, but if something like health comes up and we need to sell, we will all be taking bath on our coaches I think".
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Unfortunately this is an accurate assumption, but for the most part always has been. Gas prices only exacerbated this situation. Motor homes generally are not appreciating investments.
When I muse about selling mine, my friends ask if I wouldn't rather sell the Brooklyn bridge.





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Old 05-09-2008, 05:20 PM   #18
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<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">I wouldn't rather sell the Brooklyn bridge. </div></BLOCKQUOTE>

Might be hard to sell now. Rev. Al Sharpton is demonstrating on it now.
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Old 05-09-2008, 05:40 PM   #19
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I thought Rev Al was in the slammer!

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Old 05-10-2008, 09:14 AM   #20
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<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Lindsay Richards:
What worries me even more is the depreciation we must have taken on the coach. </div></BLOCKQUOTE>

FWIW, my financial planner currently has my 2005 Suncruiser 38R depreciating at $1000 a month, which may be a little low.

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