Newell finds the high end of the motor coach market a good place to be, Gary Toushek discovers
If the idea of a million-dollar motor home makes you do a double-take, you probably aren’t aware of Newell coaches. Think top-of-the-line comfort in a luxury RV, exterior of aerodynamic design, interior furnished with leather, granite, and marble-the kind of home-on-wheels that you walk into and are probably overwhelmed by.
It started in 1967, when feisty, fussy, outspoken, innovative L.K. Newell traveled from his Oklahoma home to El Monte, CA, to take delivery of a new motor home for his retirement, manufactured by a division of the Streamline Trailer Company, in its day the top luxury item in its class. A few weeks later Newell returned the aluminum-body Streamliner to the factory for alterations; he was not happy with the product. He asked to see the owner, who suggested that if Newell knew so damn much about the whole business, why didn’t he just buy it? He did.
Newell took the company back home to Miami, OK, and made fundamental design changes- from a front-end, gas-powered Madson engine and a single-axel Ford chassis, to a rear-drive German diesel motor with a more solid chassis and tag axels, and “basement” storage for slide-out components, air brakes and suspension, and more. The resulting motor coach was so popular during the gas crisis in the 1970s, Newell’s was the only motor home company in America still operating. Illness caused him to sell in 1973 to local businessman Chuck Goldenberg, who maintained Newell’s standards and eight years later sold to Karl Blade and two partners; in 1987 Blade bought out his partners and remains sole owner.
Today the original building has additions, and is currently in the midst of another expansion that will bring the 115,000-square-feet of manufacturing space to 135,000 (and number of employees to 198); an adjacent building with bays houses the service part of the business. With trade-in coaches parked outside, the entire facility has the appearance of a giant dealership. Vice president of manufacturing Scott Lawson, who just celebrated 23 years with the company, says further expansion is projected in phases over the next decade or so.
The problem, if you can call it that, is that customer orders are booked into October 2006, and the production schedule is quite structured. It takes at least 4,940 hours of manual labor to build each coach, and since every coach is customized-the company has never built two identical coaches-when a particular unit is more customized than another, overtime is needed to complete it on schedule. Currently 40 coaches per year are produced, on a 52-hour schedule with 13 stages, meaning that every 52 working hours, a coach moves from one stage of production to the next, taking a total of about four months to construct one. The plant expansion will mean a 46-hour schedule, producing 44 coaches per year. The company has built 1,160 coaches to date.
Newell is unique in building its coaches from the ground-up-frame, chassis, body, plumbing, electrical, cabinetry, drapery, upholstery, much of the furnishings-and selling to customers factory-direct. “You might think that building each coach uniquely customized clashes with the concept of a production line that moves on a standard schedule,” says Lawson, “but that’s one of our reasons for success. We’ve forced that discipline on ourselves to make sure we can meet that schedule, and it’s why we have fewer man-hours in our coach than a lot of our competitors, who don’t even build from the ground-up.”
He’s involved with several manufacturing groups and organizations in various capacities including officer, president, and chairman; having toured a lot of plants with different approaches to manufacturing, including lean and six sigma and other continuous improvement programs, he can select elements that suit Newell. “I don’t think it’s as important to be on the ‘right’ program, as it is to be committed to something, and one thing very successful for us is the employee suggestion program. Most are specialists in their particular aspect of the coach, and they get to have conversations with the customer.”
In fact, customers often visit while their coach is in production, and sometimes make suggestions themselves. “Toward the goal of producing a coach that the customer is going to be totally satisfied with,” says Lawson, “we’ll often have discussions between our engineering, service, and manufacturing people, with the customer, and we’ll talk about particular concerns in a customization. It not only results in happy customers, it gives us a chance to discover areas of further improvement.”
Employee suggestions that are approved and implemented are recognized and rewarded at monthly meetings, and every suggestion gets a response. “If we don’t approve their idea, they know why, and it gives them a base for perhaps coming up with a better suggestion that might be accepted because it fits the bill,” he says. A profit-and-gain-sharing incentive program offers employees the same goals as management. “We don’t want departments to compete with each other, let’s work together as a team. So there’s a constant incentive to improve work habits, reduce waste, improve the product.”
Customers include sports celebrities, especially golfers and equestrians, with the biggest sector the motor sport industry; check the parking lots at the next major auto racing event you attend, and you’ll undoubtedly see some Newells. Some are owned by retired couples and Fortune 500 company executives, as well as entrepreneurs who work wirelessly from a distance and like to travel in luxury, with the beach outside their window one day, and the golf course the next.
Lawson sees a bright future for Newell, and thinks custom manufacturing will always have a future in America: “As we’re faced with more competition, we need to find niche markets that we can excel in. Build more of what the customer wants, rather than take a cookie cutter approach to manufacturing. Some manufacturers dread customization, they find it difficult and disruptive-but I’ll tell you, having your product pre-sold is certainly better than making something and hoping that someone buys it.”