Airstream customers include Hollywood types such as Jimmy Fallon and Matthew McConaughey. But it’s not just a celebrity aura that has propelled Airstream RVs to a record-setting sales increase of 24 percent year over year and to a staggering gain of 218 percent over the last five years.
Other CEOs could learn from how Airstream chief Bob Wheeler and Bob Martin, CEO of parent Thor Industries, aren’t sitting on Airstream’s considerable laurels. They’re doubling down as the company booms, introducing innovations inside the classic aluminum-clad, silver-bullet Airstream shape; diversifying the company’s product line to attract more millennials; and vastly expanding capacity by building a plant expansion at its headquarters in Jackson Center, Ohio.
The new facility will support advanced research and development and enhanced quality as well as boosting output. Airstream already has been busting at the seams of the existing plant as the number of employees has grown to about 1,000 from fewer than 300 six years ago. Dealers are clamoring for more Airstreams to sell.
“The big driver for this is new capacity, because we are well behind market demand,” Wheeler told Chief Executive. “We also need the space to promote even higher product quality – the absolute coin of the realm here – and worker safety. We’re too packed in as it is – that leads to injuries and damage to products.
“With more layout flexibility in the new plant, we can have higher efficiency and design more to lean-manufacturing principles.”
A unique demand for the new facility is that it accommodates the process in which aluminum panels are hand-riveted onto the Airstream chassis at the count of about 3,000 per trailer. “We can improve a number of aspects of the production process without losing what’s core and magic about the product itself and [without] messing with the DNA of the brand itself.”
Airstream also is tapping with promise into the growing trend of American manufacturers showing off their legacies in new or improved facilities. The construction project includes a visitor’s center and museum to house a company collection of old models that dates back to 1931. Already, Airstream conducts weekday tours of the existing plant that attract dozens of people daily.
“We know as a brand that we appeal to people who love Americana brands and that are made in America, and we know with the right facility we can increase that draw,” Wheeler said.
Yet, Wheeler allowed, the expansion “wasn’t a decision we entered into lightly.” As an iconic and upscale brand leading a resurgence by Thor and the entire U.S. recreational-vehicle industry – which was flat on its back a decade ago – Airstream was “trying to read the economic tea leaves and consumer confidence.”
Wheeler remains wary of the potential impact of tariffs and trade tensions despite President Trump’s new agreement on the North American Free Trade Agreement. In that regard, Wheeler and Martin are poster CEOs for Trump’s made-in-America movement.
“We are made in America and we do everything we can to source domestically, so any impact [of tariffs] isn’t as dramatic as it might be,” Wheeler said. “But we’re watching for pricing changes … We know that ultimately tariffs across every category lead to higher prices, but we’re a premium enough product – and priced as such – that we don’t anticipate a marginal increase in pricing would impact customers’ decisions to buy.”
Meanwhile, he said, Airstream is “doing everything we can in the supply chain to mitigate” any impact of the trade wars, including competitive bidding for certain components and a search for new sources of supply where the company sees price pressures. For instance, Wheeler said, Airstream is “very restricted” in the sourcing for its crucial aluminum sheets “but steel and copper, we have lots of options on. So, like a lot of companies, we’re scrambling to see where we can maintain and improve quality without having to take a significant price hit.”
Read more: Thor CEO Bob Martin Shares Lessons From The RV Industry’s Comeback