The Grand Design Story

A video from Grand Design dropped into my feed this morning. The caption? The Grand Design Story – Nothing Less Than Customers For Life.

Some of you that follow the RV industry are likely aware that Winnebago acquired Grand Design in 2016. Winnebago recently acquired Newmar, the company that manufactured our motorcoach. I was interested to see how Grand Design may have changed since the Winnebago acquisition.

This was part of the press release back then:

Winnebago Industries, Inc. (NYSE: WGO) today announced that it has entered into a definitive agreement to acquire Grand Design Recreational Vehicle Company (“Grand Design”), a manufacturer of towable recreation vehicles (RVs), for approximately $500 million in cash and newly issued Winnebago shares.

Founded in 2012 by Don Clark, Ron Fenech and Bill Fenech, a management team with over 80 years of combined leadership experience in the RV industry, Grand Design is a fast-growing manufacturer in the towables segment with rapidly expanding market share. The Company generated $428 million in revenue over the last twelve months ending August of 2016, representing a compound annual growth rate of over 80% since 2013, and a top tier EBITDA margin of 14%.

And, four years later, Don Clark is still leading the Grand Design business for Winnebago.

He makes his case as to why you would want to buy a fifth wheel or travel trailer from Grand Design.

A few things in the video surprised me. Grand Design is the third largest producer of towable products (fifth wheels and travel trailers). Grand Design has 1,600 employees, a much larger team than I would have expected. If you take a close look at the video, you will see that Grand Design still builds RVs in the traditional way, by hand with people pushing the product from one section of the production facility to another.

Like Newmar, Grand Design is located in Indiana. They have roughly 400,000 square feet of manufacturing on 67 acres in a small rural community called Middlebury. Middlebury has a population of 3,500 people or so nestled in the heart of Amish country.

No surprise that many of Grand Design’s employees are Amish. Like this fellow working on some Grand Design cabinetry.

At about 3 minutes into the video, Don talks extensively about Grand Design’s quality practices. In essence, they do a comprehensive pre-delivery inspection prior to releasing the unit. This is something that they suggest is unique about their approach. Many RV manufacturers leave the PDI to the dealers. Apparently some dealers may not be all that thorough with the PDI work.

I was interested in learning a bit more about Grand Design and how they might have changed under Winnebago over the past four years. They seem to still operate in a largely autonomous fashion, building out their product as before, and focused on improving the customer experience.

Hopefully the same will be true for Newmar.

2 replies
  1. John Madill
    John Madill says:

    You’ll recall from your days in systems development that you cannot inspect quality in. By that point you’re merely confirming the quality of what’s been built and possibly correcting flaws discovered.

    Reply
    • Richard
      Richard says:

      Hi John,

      So many issues with RVs! A few manufacturers are beginning to focus more on improving the delivery experience. The service experience for many RVers can be quite awful in the first few months and years of ownership — a byproduct of poor quality practices. Lack of a decent PDI makes that experience even worse.

      The good old days of systems development. Seems so long ago now 🙂 🙂

      Reply

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