Editor’s note: This year marks the 10th anniversary of what has come to be called Elkhart Open House Week, which Forest River started singlehandedly. In recognition of the milestone anniversary, company CEO Pete Liegl and top executives Doug Gaeddert, Don Gunden, Jeff Rank and Mike Terlep recently agreed to a sit-down interview with RV PRO to talk about how and why the event got its start, to offer their thoughts on how the event has matured, and to share a few insights on what the year ahead holds for Forest River.
Forest River founder and CEO Pete Liegl is the first to admit he never imaged Elkhart Open House Week would evolve into the event it’s become today.
When he and his top managers first came up with the idea for a dealer event in 2008, their goal was relatively modest: Host an event in a casual environment in which company representatives could sit down with their dealer partners to listen to one another’s challenges and needs, express Forest River’s appreciation for their dealers’ business, and emphasize the RV maker’s financial strength.
For photos from this article and more stories, check out the September '17 issue of RV PRO.
“We were trying to be pro-active and make sure we were aware of what was happening out there and be better partners,” Liegl says. “In fact, I think our first theme of that was: ‘Pick Your Partner.’ We let them know we were financially strong; that we’re going to be here and do what
it takes to help them be successful.”
Highlighting Forest River’s financial durability was particularly important in late 2008, when the Great Recession battered the U.S. economy and caused consumer demand for new RVs to drop off a veritable cliff, forcing more than a few RV makers to shutter their doors.
Although Liegl says he doesn’t recall any specific goals for orders written for that first event, he says it exceeded his expectations.
Subsequent events, which Forest River dubbed the “Expo,” drew ever-greater dealer participation. In 2011, the RV maker moved the Expo from its starting place on the grounds adjacent to its Elkhart headquarters to its newly acquired Dynamax facilities on County Road 6 in northern Elkhart, where it has remained.
By then, the event had become too big for other RV makers to ignore. More than a few competitors rented vacant land along County Road 6, where they parked RVs and pitched tents in fields. The event has only grown in size and scope from there.
Liegl Initially Frowns on ‘Squatters’
Liegl says once Forest River’s Expo took hold “everybody sort of chimed in and we had a lot of, squatters, is what I call them. You know, they’re right down the street trying to draw off of what we created.”
A question about whether he would have done anything different in retrospect draws a big laugh from Liegl and his group general managers, Doug Gaeddert, Don Gunden, Jeff Rank and Mike Terlep, who all serve on Forest River’s Executive Finance Committee. It appears to be an inside joke, but no explanation is offered.
Upon further reflection, Liegl offers added insight.
“I guess it was a help to us,” he says. “By that, when dealers would come in and see the competition set up in the weeds down the road from us, they weren’t very impressed with their operation compared to ours. I don’t know how else to say, but that’s it.”
Today, nearly every major RV maker in Elkhart County (as well as a few from other states) host a dealer event in September that coincides with Forest River’s Expo, and Open House Week total sales now exceed more than $1 billion – likely making it the industry’s biggest single sales event.
With the passage of time, Liegl has mellowed somewhat on his critique of competitors hosting their own events coinciding with the Expo.
“Well, I’m not saying I have feelings about them today as squatters, but when you look at when we began and there were people right down the street and they’re popping up a little tent, it’s not very impressive,” he says. “Today, it’s much more organized, so I guess it’s an event that’s here to stay. It’s been successful and it’s been successful for primarily everybody.”
Expectations for Expo No. 10
Looking ahead to this year’s upcoming Expo, Liegl predicts it will be the best ever for Forest River.
“The economy’s good. When you look at what we’re doing as a company in every area – whether it be the RV, the boats, the buses, the cargo trailers – everything is up. We’re producing more, selling more. Things are good,” he says. “So obviously, we have a trend already this year set, we can extrapolate and say the Open House will probably be better than last year.”
Through mid-July, Forest River registrations for this year’s Open House were up 10 percent from this time last year, according to Terlep, general manager over the Coachmen divisions. That would put the number of dealer personnel in excess of 5,000 people.
Contrary to popular belief, Forest River doesn’t set a formal goal for orders at Open House, according to Don Gunden, general manager over the Flagstaff, Puma, Palomino and Rockwood divisions.
Liegl adds, “We’re not setting a target to see how many sales we can get. That’s not the purpose of the Open House. Again, going back to Day 1: The purpose of the Open House is to develop a rapport with dealers and have the dealers develop a rapport with Forest River and meet everybody here … so they can understand our problems and we can understand their problems and we can have a better relationship. So, orders are nice, but that’s not the purpose of the Open House at all.”
Forest River’s other general managers echo that theme, noting the company is now working with the second and third generations of dealer partners.
“It’s not just the business written, because it’s not,” says Gaeddert, who oversees several Forest River towables’ divisions.
“Look what happens when you’ve got mom, dad, kids and they’re bonding with six or seven people from Forest River, people they’ve never met before, and that relationship becomes a real-time relationship, rather than just a salesperson and person who does the buying. It’s so much more, so much deeper. We end up with a lot of ‘rope-type’ (multiple) relationships.”
“The orders (placed) are a function of us doing a lot of things really well: delivering great product, the dealers enhancing their relationship, making sure we’re really on the front lines and close to these guys,” adds Rank, who oversees the Prime Time divisions. “If we do all these little things, the orders become a function of it. I don’t go there with the explicit goal of hitting a particular number. I go there with the goal of executing all these little things and building that relationship.”
Beyond placing orders and strengthening the dealer-RV maker bonds, a big feature of Forest River’s Expo has been the live entertainment. Last year, in celebration of Forest River’s 20th anniversary, the RV maker showcased Grammy-nominated performers Trace Adkins and the rock group Daughtry.
So, what does Forest River have planned for its 10th anniversary Expo?
Thus far, Liegl and his team aren’t tipping their hand on special events, so as to keep some suspense as long as possible.
‘Right Time’ for New Products
Meanwhile, Liegl expounds on why Open House will “absolutely” remain a fixture for Forest River and the RV industry in general.
“It’s exactly the right time for new products to be introduced,” he says. “A dealer can get products in his slower time of the year. He has them for his springtime, he can get product in, understand it, understand the manufacturer, new programs and be aware of the product he might take on or new products and be ready for his selling season. Even though Louisville is good yet, a product showing is better than Louisville as far as dealers are concerned taking on new product.”
Liegl downplays what some see as a detrimental effect Open House Week has had on the RV Industry Association’s National RV Trade Show in Louisville.
“Some people might describe it that way, but it has a very positive effect on the total industry. With product showing in Louisville, dealers do more with the RV industry than they would without” the Open House, he contends.
“The value of the Expo is far reaching,” adds Terlep. “It’s more than just the orders generated. The timing is huge, as Pete suggested, because it allows dealers to get out and see those newer models and have that product for early shows and plan their inventories more strategically. It also levels out what used to be an ebb and flow of cyclicality in the industry in production. We keep our plants running consistently throughout the fall and winter months, which helps with quality. It also helps with training and team building. … Having product at the early shows means dealers don’t have holes in their inventory. The impact on the local community has been absolutely phenomenal as well.”
Rank says Open House “has been the most impactful single event in this industry in the last 10 years.”
On a related topic, Liegl says he wishes suppliers could play a larger role in the Open House events, but that Elkhart lacks a large enough facility for everyone in one location to properly display their products. Rank says he believes suppliers have adapted well to the lack of a suitable central facility and have found ways to display their products on a de-centralized basis.
Sustained Industry Growth
The RV industry has been on a sustained, uninterrupted growth streak since 2010, giving the industry eight years of year-over-year growth. Forest River has followed or exceeded industry trends, as its annual sales approach $6 billion. A precise figure is never revealed.
Gunden attributes the successes to a great sales force and in part to the impact of Go RVing on a new demographic of buyers.
Rank says today’s Millennial shoppers “are more likely to value experiences than ever before. All of us close to this industry already know what these customers are finding out: The RV experience is an awesome one. More and more people are experiencing it and liking it.”
Gaeddert expands on Rank’s point.
“The industry doesn’t brand itself as individual companies. We are successful because we brand and promote a lifestyle very effectively as a whole. We hit the Millennials right in the sweet spot with the experiential aspects of this lifestyle. … It’s a good place to be and bodes very well for the future.”
Adds Terlep, “As the demographics have changed, we’ve had to adapt our products to be better suited for the changing customer. And along with that, customer satisfaction is of paramount priority today compared to 20 years ago. Customer satisfaction is our first priority and will continue to be our first priority, as well as the improvement in quality and amenities of our product to meet the changing demographics of the customers we are attracting.”
Liegl has been silent for several minutes to let his managers make their points when he rejoins the discussion.
“I hate to say this, but I haven’t spent much time worrying whether the RV industry will do good or bad in the future. I go on the assumption that we’ll always do good and I’m speaking here as a company and also as an industry. It’s here to stay and the economy might cause some ups and downs in the numbers sold and the amount people can afford, but I’m not worried about anything in the future. Maybe I’m not looking at it right.”
Gunden says the RV industry is better able to adapt the next time that “inevitable hiccup” befalls the industry.
“Even if there is a hiccup, we at Forest River have always been able to do as good as the average bear or better than the average bear out there,” Liegl says.
The Competition
During the interview, Liegl seldom mentions Forest River’s chief competitor, Thor Industries. The two giants have jockeyed back and forth in this century for the top sales spot. Thor supplanted Forest River as the No. 1 North American RV builder thanks to a series of acquisitions in recent years. Thor’s $576 million purchase of Middlebury-based Jayco in 2016 cemented its position as the industry’s largest RV manufacturer.
Thor’s market share through May in towables exceeded 48 percent, while its motorized share stood at about 42 percent.
So, how does this competition drive Forest River?
“Everybody likes to be No. 1 because No. 1 gets accolades and flowers,” says Liegl. “We aren’t doing it for the number. We’re looking at whom our competition is and what we need to do in the future to improve our position. Our No. 1 goal is to run a decent company and make a decent profit and take care of employees and the customers we have. Just being No. 1 is nice, but not that important.”
Acquisitions & Expansions
While Thor has grown through notable acquisitions since the Great Recession, Forest River’s growth has mostly been organic.
Its last RV acquisition came in 2011, when it bought Dynamax Corp., a builder of luxury C and Super C motorhomes.
However, Forest River has been active this year, acquiring specialty vehicle manufacturer Turtle Top and bus builder Battisti Customs. It also launched its Berkshire Bus division late last year.
“We’d be open to anything, but I don’t think there are any acquisitions out there that would interest us,” Liegl explains. “There are very few companies left – Thor bought ’em all.”
“If we do the right things the right way long enough, we can pass those guys (Thor) again,” Gaeddert touts.” It’s certainly not out of the question.”
“But again, that’s not our goal, to be No. 1,” Liegl adds. “We want to be a good RV manufacturer with a good rapport with our dealers and customers.”
Compared with Thor, Forest River is much more diversified in its range of recreational product offerings. It owns No. 1 rankings in North America for the manufacture of cargo trailers and shuttle buses and the No. 4 ranking for pontoon boats.
While other RV makers have divested non-core assets, Liegl says Forest River is committed to its cargo trailer, shuttle bus and pontoon boat divisions.
“We plan on keeping them. They are very profitable – extremely profitable, because of the people that are running them,” he says. “When you look at the individuals running the bus, cargo trailers and pontoon businesses, (David Wright, Lawton Tinley and Tom McCuddy, respectively) they are very knowledgeable about what they’re doing. They are extremely profitable to the whole corporation.”
Meanwhile, Forest River has been active in expansions this year. The RV maker bought a 25-acre property in Sheridan, Ore., bringing its plant total to six in Oregon and 10 on the West Coast. The new facility will house production of the Surveyor and R-pod lines.
The RV maker also is investing $6.7 million in a 450,000-square-foot facility in LaGrange, Ind. The expansion will help meet backlogged demand for its Cherokee fifth wheel and travel trailer lines.
Forest River also has added production capacity at its Coachmen complex in Middlebury, Ind. Similarly, some Class A motorhome production has been moved out of a fifth wheel plant to next to the corporate headquarters to improve efficiency.
All told, Forest River has more than 12 million square feet under roof scattered among about 90 manufacturing facilities.
For a company of its sheer size and a business that’s doing so much lately, Forest River maintains a remarkably low public profile. For that reason, it has often been called “the quiet RV company,” a term Liegl steadfastly affirms.
“Yes, we always have been,” he says. “It’s important we talk to the media periodically, but to talk and let them know about all the small, little things we are doing is insignificant.”
Gaeddert adds, “The whale that blows its spout gets the harpoon” – meaning that a self-promoting, blustery RV maker can be a target and one that doesn’t always survive.
A Typical Day & The Days Ahead
Liegl says he still often puts in a full 8-to-5 day, but the content of those days is open to debate. He would have one believe that a typical day means, “I sit here, put my feet up on the desk, look out the window and wait for the phone to ring.”
His general managers all laugh.
“That’s what I do. You think I’m joking? That’s about the truth,” he says. “It’s a beautiful view out there. Why would I have to do something else?”
He says he leans heavily on his key managers to run the company.
“It’s all about having good people,” he insists.
“It’s primarily our team that made Forest River – not Pete Liegl. I was in the right spot at the right time,” he says. “It’s the efforts these other people in the room made it that way, and the other three division managers in pontoons, buses and cargo trailers. It’s the people – nothing more. You’re only as good as your people, and we have some damn good people.”
When asked how much longer he plans to work before retiring, Liegl, age 73, at first jokes that he has 30 more years left to work. But then he gets serious and says the company’s succession plan is reviewed on a regular basis.
“If something happened to me, who would replace me?” he asks rhetorically. The same holds true for the rest of the management team: Who would replace them? he asks.
That raises a rhetorical question from Liegl: “Who are we training? That’s an extremely important point for our managers, to have them covered. Sometimes the unexpected happens and it’s not up to us to decide that. Accidents happen.”
That begs the question to Liegl: “Is your successor in this room now?”
“I don’t know for sure,” he says, and the discussion is over.
As for his legacy, Liegl says he would like to be remembered this way: “We tried to get the best product at the best price and that we took care of the customer. Customer satisfaction is our No. 1 priority, and by that I mean, giving the value we say is there.”