Type: Public Company
Address: 419 West Pike Street, P.O. Box 629, Jackson Center, Ohio, 45334-0629, U.S.A.
Telephone: (937) 596-6849
Fax: (937) 596-6539
Web: http://www.thorindustries.com
Employees: 7,000
Sales: $2.86 billion (2007)
Stock Exchanges: New York
Ticker Symbol: THO
Incorporated: 1980 as Thor Industries, Inc.
NAIC: 336214 Travel Trailer and Camper Manufacturing; 336213 Motor Home Manufacturing; 336111 Automobile Manufacturing; 336211 Motor Vehicle Body Manufacturing
SIC: 3792 Travel Trailers & Campers; 3716 Motor Homes; 3711 Motor Vehicles & Car Bodies; 3713 Truck & Bus Bodies
Thor Industries, Inc., is the largest manufacturer of recreation vehicles in the world. It is also a leading maker of small to midsize buses. Since buying Airstream in 1980, it has accumulated a score of towable trailer brands, including Dutchmen, Komfort, Tahoe, Wanderer, and Skamper. Motorized RV lines include Daymon RV, Four Winds, and Canada's General Coach. Thor sells commercial buses under the El Dorado National name, and produces smaller ones via Goshen Coach and Champion Bus. Built through a stream of acquisitions, Thor typically leaves a great deal of independence to its subsidiaries, motivating management and workers alike with a compensation program heavy on incentives. Most of its production is based in Indiana; a California travel trailer plant was launched from scratch in 1996.
Wally Byam Invents the Airstream
Thor was founded in 1980 with the purchase of Airstream, a legendary maker of aluminum trailers that had set the standard for quality in the recreational vehicle (RV) industry for half a century. These distinctive, silver, bullet-shaped trailers were immensely popular travel vehicles in the late 1940s and throughout the 1950s, becoming famous for their unique design and durability. Airstreams would later be exhibited at both the Smithsonian Institution and the Henry Ford museum, and early models would be highly prized by collectors. More than 60 percent of all Airstreams ever built were still rolling along the nation's highways and back roads in the 21st century.
The Airstream was the creation of one man: Wally Byam. Born in Oregon on the Fourth of July in 1896, Byam was a prototypical American wanderer and inventor. As a boy, he traveled through the Northwest with his grandfather, who led a mule train in Oregon. As a teenager, he worked as a shepherd, living in a small donkey cart, outfitted with only the most basic equipment and tools. After high school, seeking adventure, Byam signed on with the merchant marine, where, in three years, he graduated from cabin boy to ship's mate. He then worked his way through Stanford University, graduating in 1923 with a law degree.
Opting not to practice law, Byam entered the booming advertising business of the late 1920s. He first worked as a copywriter for the Los Angeles Times and then became owner of his own ad agency. Later, he started a number of magazines, one of which published an article on how to build a travel trailer. When readers wrote to complain that their homemade trailer projects had failed, Byam tested the directions himself and found that they were, indeed, defective. So, he decided to build a trailer according to his own plans.
His first attempts were primitive. One was a plywood platform built on top of a Ford Model T chassis. Another was a cramped plywood box that was, Byam wrote in his book Trailer Travel Here and Abroad, "little more than a bed you could crawl into, a shelf to hold a water bottle, a flashlight and some camping equipment." Nonetheless, the trailer attracted attention, and Byam began to receive requests to build similar models for others.
When Byam wrote an article in Popular Mechanics describing how to build his new, improved plywood trailer for less than $100, many readers responded with orders for the $5 plans he offered. Meanwhile, he had turned over his Los Angeles backyard to building made-to-order trailers for customers who often arrived to lend a hand in the construction process. Byam's tiny home-based business survived the stock market crash of 1929, and by 1930 he had abandoned magazine publishing to build travel trailers full time.
Continuing to modify the basic design, Byam began to introduce a more aerodynamic look to his trailers and to adopt aircraft construction methods in order to lessen wind resistance. In 1934, he christened his ovoid-shaped trailers "Airstream," because "that's the way they travel, like a stream of air." According to Bryan Burkhardt and David Hunt in Airstream: The History of the Land Yacht, "the single most important designer in determining the final shape of what would become the classic Airstream Clipper" was William Hawley Bowlus, whose vehicle designs and travel trailer company Byam took over in a 1935 bankruptcy auction. In 1936, the Airstream Trailer Company introduced the famous Clipper model, named after the Pan Am Clipper, the first transatlantic plane to carry people in numbers. With the capacity to sleep four, the bullet-shaped Clipper had a shiny, riveted aluminum body, carried its own water supply, featured an enclosed galley, and was fitted with electric lights. Even with a $1,200 price tag--very expensive during the Depression--the meticulously constructed Airstream was a winner. Of more than 300 travel trailer companies in operation in 1936, Byam's company was the only one to survive.
The company closed its doors during World War II since aluminum was critical to the war, and tires and gasoline were strictly rationed. Byam spent the war working in the engineering departments of aircraft companies, and he put that experience to good use at war's end. By 1948, he had built a new manufacturing facility in Van Nuys, California, to meet the surging demand for Airstreams by returning servicemen and their young families. In 1952, the company leased a facility in Jackson Center, Ohio, to build Airstreams for the Midwest and Eastern markets, and soon thereafter, the California factory was moved to larger quarters in Santa Fe Springs.
Over the next decade, until his death in 1962, Byam continued to refine the Airstream design, and his company prospered. Putting into practice his mission "to refine and perfect our product by continuous travel-testing of the highways and byways of the world," he led a group of Airstream drivers through remote areas of Central America in 1951. This was the first of many such caravans that he and other Airstream enthusiasts made to Africa, Europe, the Soviet Union, China, Australia, New Zealand, and more. Intrepid travelers, organized as the Wally Byam Caravan Club International, would continue to explore the world in their Airstreams through the 1990s.
Conglomerate Ownership: 1967-80
Airstream's reputation for quality solidified the company's existence, and the company continued to thrive following the death of its founder in 1962. Its design excellence placed it at the forefront anywhere trailers were required, and the vehicle proved easily adaptable to government and military needs. Specially equipped Airstream trailers, for example, were set up around the vast White Sands missile range to provide a temporary office for President John F. Kennedy when he visited the site. When astronauts Neil Armstrong, Mike Collins, and Ed Aldrin returned from the first lunar landing in 1969, they were quarantined in a specially designed Airstream Mobile Quarantine Facility aboard the U.S.S. Hornet. An Airstream carried the crew of the space shuttle Discovery to their launch vehicle for their historic nine-day mission; in fact, every shuttle astronaut since has ridden in an Airstream.
In 1967, Airstream was acquired by Beatrice Foods, as part of that company's aggressive acquisition strategy into a bevy of nonfood interests. Beatrice made Airstream a division, allowing it, however, to operate autonomously. Airstream continued to produce high-quality vehicles, and in 1979, introduced its first motor home. Featuring riveted aluminum construction, like its trailer counterpart, and pioneering a new level of aerodynamic efficiency, the motor home soon became a popular addition to the Airstream line.
However, the gasoline crisis of the 1970s and the resulting economic downturn hit Airstream hard. The company reportedly lost $12 million on sales of $22 million in 1979, and similar losses continued in 1980. Moreover, parent Beatrice was struggling to manage its vast holdings and remain profitable. A new CEO in 1980, James Dutt, began selling noncore companies, and those that could not provide Beatrice with at least a 20 percent return on net assets. Airstream was among those to go.
1980: Thor Takes Over
When Wade F. B. Thompson and Peter B. Orthwein purchased Airstream in 1980, they had been involved in the recreational vehicle business for only three years. In 1977, the two entrepreneurs had combined their marketing and financial expertise to purchase HI-LO Trailer, a small player in the industry. Under their leadership, HI-LO prospered, and the two looked around for a bigger opportunity. Airstream was an obvious target.
Combining the first two letters of their last names, Thompson and Orthwein formed Thor Industries, Inc., in order to acquire Airstream. The acquisition of the legendary recreational vehicle and motor home manufacturer and the formation of the new company occurred simultaneously on August 29, 1980. The two new owners acted immediately to reverse the downward trend of Airstream's fortunes. They moved to improve quality, reduce costs, strengthen dealer relationships, and enhance their famous product. Within a year, sales had increased to $26 million, and they had achieved net income before taxes of $1 million, a $13 million turnaround.
With Airstream again a profitable enterprise, Thompson and Orthwein searched for another likely acquisition. In 1982, they purchased the recreational vehicle operations of Commodore Corporation. Known in Canada as General Coach, this new addition to the Thor line manufactured travel trailers and motor homes in British Columbia and Ontario. Under Thor, General Coach would build Citation and Corsair travel trailers, fifth wheels, motor homes, and truck campers, and maintain one of the highest customer satisfaction indexes and lowest warranty costs of any North American recreational vehicle manufacturer.
In 1984, Thor went public, and in 1986 it gained listing on the New York Stock Exchange. That year, Forbes magazine ranked Thor sixth out of 200 best small companies in America. In 1987, Money magazine named Airstream travel trailers one of 99 "best-made products" in the United States.
Growth and Expansion
On September 8, 1988, Thor entered the small- and midsize bus industry with the acquisition of El Dorado, a company based in Salina, Kansas. Under Thor, El Dorado would more than quadruple its sales, all from internal growth, to become the largest manufacturer of small buses in the United States. The Thor acquisition of National Coach, a bankrupt builder of midsize buses, followed in 1991. Under Thor, National would become its parent's most profitable bus operation. Finally, in 1998, Thor added Champion to its bus-manufacturing group.
Meanwhile, Thompson and Orthwein continued to make strategic acquisitions on the recreational vehicle side. Dutchmen, purchased in 1991, became Thor's largest towable company and a major profit center. Motor home manufacturer Four Winds International, acquired in 1992, became Thor's largest company by the start of the 21st century. Four Winds was a major supplier to most of the large recreational vehicle rental operations throughout the United States and Canada. CruiseAmerica, the largest of these operators, agreed to make Four Winds its primary supplier after Thor provided financing so that CruiseAmerica's former owners could repurchase their company. As a result of that transaction, Thor expected sales of some $30 million to CruiseAmerica in 2001.
In 1995, Thor introduced the lightweight Aerolite, a laminated, aerodynamic European-style travel trailer. Sold at an affordable price, the Aerolite proved ideal for towing behind smaller cars as well as minivans and sport-utility vehicles. Sales of this model in 2000 hit all-time records. Thor California started up in 1995 with the introduction of two new lines of travel trailers and fifth wheel vehicles, called Tahoe and Wanderer. In less than five years, Tahoe or Wanderer had become the best-selling vehicle of its kind in Colorado, Arizona, Nevada, New Mexico, and Alberta, Canada.
If Thor executives had succeeded, another major addition would have taken place in 2000. That year, the company made two strong attempts to purchase Coachmen Industries Inc., a major motor home and modular home manufacturer. Had the deal gone through, it would have made Thor the second largest motor home builder in the United States. In April 2000, however, Coachmen's board rejected Thor's April 17 bid of $289.6 million in a cash and stock transaction. According to Thor's 2000 annual report, "Although this offer was a substantial premium above Coachmen's price and we made it clear we wished to complete a friendly transaction, our proposal was rejected by Coachmen's board of directors and withdrawn by us."
Acquisitions aside, Thor was also cultivating a sense of civic responsibility as part of its corporate culture. Specifically, Thor took the lead in raising the awareness level of prostate cancer and in encouraging its early detection. Its "Drive against Prostate Cancer," inspired by the company's chairman, president, and CEO, Wade Thompson, a cancer survivor, offered free screening to more than 8,000 men and raised significant funds for cancer research. The New York Stock Exchange recognized Thor's public service initiative by offering company executives the opportunity to ring the stock market's closing bell on June 16, 2000.
Consolidation After 2001
As it entered 2001, Thor believed that the $8 billion recreational vehicle industry, which included about 75 manufacturers, would continue to consolidate. Thompson and Orthwein, who retained control of the company, planned to continue to seek acquisition opportunities in recreational vehicles, buses, and related industries.
Some industry observers agreed with Thor executives that, as baby boomers moved into their 50s and 60s (the target recreational vehicle demographic), sales would enjoy significant growth. They pointed out that, between 2000 and 2005, four million people, or 11,000 potential new buyers each day, would turn 50. Other analysts, however, observed an industry-wide decrease in demand for recreational vehicles in 2000, due to higher interest rates, lower consumer confidence levels, and rising gasoline prices, as a cause for concern, at least in the short run.
Meanwhile, the company's bus business was on track to continued success. In the growing $700 million midsize bus industry, Thor had an estimated 35 percent market share and was larger than its next three competitors combined. Major bus customers included rental car companies, who used the buses to ferry customers around airports; New Jersey Transit; the Los Angeles Department of Transportation; Cal Trans; and Marriott Hotels. Believing that fuel cells were the power of the future, Thor announced in 2000 that the company would build the world's first commercially viable fuel-cell-powered, zero-emissions transit buses, in an exclusive alliance with International Fuel Cells (IFC), Inc., a United Technologies company, and ISE Research. (IFC's fuel cells had powered every NASA space shuttle mission.) The first fuel-cell-powered bus was scheduled to be built in California in 2001. Thor had exclusive rights for the use of IFC's fuel cells in the complete drive system, called ThunderPower, for all North American midsized buses.
Thor typically left the management of acquired companies in place after acquisitions. In 2001, however, it merged Aero Coach Inc. with its Dutchmen Manufacturing Inc. subsidiary. Thor made its largest acquisition to date in November of the year: its total revenues jumped 50 percent with the addition of Keystone, making Thor a $1 billion enterprise for the first time.
Keystone had been formed in 1995 by former Coachmen Industries Inc. executives. It soon grew to prominence in the fifth wheel/travel trailer segment of the RV market. Revenues were nearly $250 million in 2000 and growth showed no signs of abating. Keystone had many brands (Outback, Springdale, Montana, Sprinter, Mountaineer, Bobcat, Cougar, Challenger, Everest, and Laredo) and 14 factories. Construction started on two more plants the year after the acquisition. Keystone's acceleration continued after the takeover: it became a $1 billion company in its own right by 2004, CEO Wade Thompson told the Wall Street Transcript.
The terrorist attacks of September 11, 2001, on the United States affected the industry in a couple of ways, Thompson explained to RV Business. Since more Americans felt reluctant to travel overseas, many turned to RVs for their vacations. Slack in the tourism industry led to the first drop in Thor's sales of transit buses in ten years.
Thor extended its involvement in the Class A part of the RV industry by buying Damon Motor Corp. for $46 million in September 2003. Class A motor homes were the largest type, making up a small but relatively lucrative segment of the industry. However, since they were the most expensive RVs, their sales tended to react first to bad economic news. Damon was the seventh largest Class A manufacturer and was growing at a double-digit clip, grabbing a 5 percent market share before it was bought out by Thor.
Before the Damon acquisition, Thor had about a 3 percent share of the Class A market, according to RV Business. Since these vehicles accounted for a small share of its business, Thor had relatively little exposure to the category's big drop in sales that accompanied the rise in gas prices to historic highs after the war in Iraq. In 2004 CEO Wade Thompson told the Wall Street Transcript that he was more concerned about the possibility of a recession or a hike in interest rates. He noted that unlike many other industries, RVs had not yet seen a threat from offshore imports.
Thor's revenues exceeded $2 billion in the fiscal year ended July 31, 2004. RVs accounted for 90 percent of the total; three-quarters of the RV sales came from towables. The company continued to act as an industry consolidator. Thor bought DS Corporation (doing business as CrossRoads RV), an Indiana manufacturer of travel trailers and fifth wheels, in 2004. Thor expanded its involvement outside of its core RV business through the 2005 acquisition of Goshen Coach, a leading manufacturer of small to midsize buses. Thor paid about $10 million for the company.
Those bullish on the company's future prospects continued to cite the aging of the baby boomers, as retirees made up the bulk of RV purchasers. The age 35- to 55-year-old demographic was also growing and Thor was trying to develop products to appeal to younger generations, such as trailers light enough to be towed by passenger cars and versatile enough to be used for storage or hauling gear when they were not out camping.
Principal Subsidiaries
Airstream, Inc.; Citair, Inc.; Citair, Inc.; DS Corporation dba CrossRoads RV; Damon Corporation; Dutchmen Manufacturing, Inc.; Four Winds International, Inc.; Thor California, Inc.; Komfort Corp.; Keystone RV Company; ElDorado National California, Inc.; ElDorado National Kansas, Inc.; Champion Bus, Inc.; General Coach America, Inc.; Goshen Coach, Inc.; Thor Tech, Inc.; T.H.O.R. Insurance Company Ltd. (Bermuda).
Principal Divisions
Airstream; Four Winds; Dutchmen; CrossRoads; Citair; Keystone; Komfort; Thor California; Damon Motor Coach; Breckenridge; General Coach America; El Dorado National; Champion Bus; Goshen Coach.
Principal Operating Units
Recreation Vehicles; Buses.
Principal Competitors
Coachmen Industries, Inc.; Fleetwood Enterprises, Inc.; Winnebago Industries Inc.; Monaco Coach Corporation.
Further Reading
Ashley, Bob, "Thor California Taps Hot Western Market," RV Business, October 2004, pp. 47-48.
Burkhardt, Bryan, and David Hunt, Airstream: The History of the Land Yacht, San Francisco: Chronicle Books, 2000.
Byam, Wally, Trailer Travel Here and Abroad: The New Way to Adventurous Living, New York: McKay, 1960.
"Company Interview: Wade F.B. Thompson; Thor Industries, Inc.," Wall Street Transcript, November 15, 2004.
Fahey, Jonathan, "Lord of the Rigs," Forbes Global, March 29, 2004, p. 40.
Goldenberg, Sherman, "Thompson: Taking the Consolidation Track," RV Business, November 2003, pp. 39-46.
Innis, Jack, "A Legend in Its Own Time," Trailer Life, February 1998, pp. 52-60.
Kachadourian, Gail, "Coachmen Rejects Thor's Takeover Bid," Automotive News, May 8, 2000, p. 24.
Kelleher, James B., "RV Shares Face an Uphill Climb," National Post's Financial Post & FP Investing (Canada), November 29, 2006, p. FP12.
Kurowski, Jeff, "Consolidation: Thor Buys Damon in $46 Million Deal," RV Business, October 2003, pp. 7, 38.
------, "Dutchmen Eyes Opportunities, Returns to Entrepreneurial Roots," RV Business, October 2002, pp. 22, 23, 44.
------, "Thor Aims to Be Industry 'Consolidator'; Industry 'Ripe' for Mergers," RV Business, July 2002, pp. 7, 47.
------, "Thor Assumes No. 1 Towable Slot with Keystone Buy," RV Business, December 2001, pp. 9, 115.
------, "Thor Combines Towable Firms Aero and Dutchmen," RV Business, December 2001, pp. 38, 113.
Lazo, Shirley A., "Hit the Road--RVs Are So Hot, They're Cool; And Market Leader Thor Industries, Which Just Doubled Its Quarterly Payout, Has the Numbers to Prove It," Barron's, June 9, 2003, p. 36.
Robson, Toby, "King of the Road: Tenacity Buys a Fortune," Dominion Post (Wellington, New Zealand), April 17, 2004, Bus. Sec., p. 1.
Santiago, Chiori, "House Trailers Have Come a Long Way, Baby," Smithsonian, June 1998, pp. 76-85.
Setton, Dolly, "Demographic Play," Forbes, August 9, 1999, p. 136.
Thomas, Martha, "Updating the Airstream; Nissan and Thor Industries Partner to Produce the BaseCamp," Architectural Digest, June 2006, p. 252.
White, Roger B., Home on the Road: The Motor Home in America, Washington, D.C.: Smithsonian Institution Press, 2000.
— Margery M. Heffron; Updated by Frederick C. Ingram
International Directory of Company Histories. Copyright © 2006 by The Gale Group, Inc. All rights reserved.
