RIVERSIDE, Calif. -- For years the fortunes of Fleetwood were clear. It was among the few Riverside County companies among the Fortune 500. Not anymore.
The RV maker's stock is worth about a dime per share, and its market capitalization has dipped to $7.6 million, too low for the New York Stock Exchange, which will drop the company from its exchange Monday.
"It's just sad," said Andrew Crean, son of the company's late founder, John Crean, who brought Fleetwood to Riverside in 1963 for cheap land and cheaper housing for his employees.
Crean, who sat on the board of directors before resigning in the late 1990s, said it wouldn't be long until Fleetwood is no more or bought for next to nothing. He said the only thing of value is the company's network of dealers and its recognizable brands.
When Crean's father moved the company to Riverside in 1963, other RV manufacturers followed, migrating to the Inland region with thousands of jobs in tow. The company boasted having more than 2,000 local workers of about 21,000 nationwide and record earnings of $124.8 million in 1997. In the same year, Fleetwood accounted for more than one quarter of the total RV market.
Now, the Riverside-based company is No. 897 in Fortune magazine's list of the nation's top 1,000 companies based on sales. The company said it's aiming to cut costs by outsourcing some administrators and moving others, and focusing on its more profitable products and divisions.
"The point is that we know our costs and margins and will focus our efforts, at every level of the company, where they can be the most effective in generating cash and profits," Chief Executive Officer Elden Smith said in a statement.
It recently converted $100 million in debt that was due into new bonds due in three years and announced in November it would close several factories, affecting 750 workers.
"Our focus isn't where we're ranked," said Andy Griffiths, the company's chief financial officer. "It's not as relevant to our business as current market conditions."
The RV maker has been attempting a financial turnaround since 2005 with the return of retired CEO Smith, but rising gas prices made the idea of filling a 75-gallon motor home tank laughable. But Smith inherited unmanageable debt after a spending spree by former executives.
"At that point it was pretty much too late," Crean said, who resigned from the board in the late 1990s and sold his shares in 1998.
Nearly half a billion dollars that John Crean built up in cash reserves for bad times had been spent on an aggressive expansion strategy to open Fleetwood retail stores nationwide, pitting the company against its own dealers for sales, a strategy both Creans disagreed with, he said.
Then the company faced what is so far a yearlong recession and a skittish credit market. If dealers sell one RV, they aren't replacing it with a new one.
In November, the company announced it would close eight plants nationwide including a recently opened plant in Mexicali, Mexico, and lay off 760 workers. With 18 factories remaining, including its Riverside headquarters, the company is evaluating every job and every employee -- about 5,500 remaining.
"We are pretty thoroughly scrutinizing every position we have in the company," said Kathy Munson, the company's director of investor relations.
SOURCE: Press-Enterprise