Saving a Small Town
Like many other farm towns across the country, Forest City, Iowa (pop. 2,900) was dying. The region's corn and hog farms were too small to be tilled profitably, and its greatest exports were people. Youngsters grew up and moved to nearby Minneapolis -- and beyond -- to find work, leaving their parents behind to rock in the sun and talk over old times.
That was 13 years ago. Then the town's elders decided to fight the out-migration by bringing industry to Forest City. Today Winnebago Industries, the company a town created, has become the largest manufacturer of recreational vehicles in the U.S. Last month Winnebago, which is named for the surrounding county, placed a $30 million order with the Dodge Truck Division for chassis and engines to build $120 million worth of motor homes --self-propelled dwellings that combine the mobility of a car with some of the comforts of home. Such vehicles have grown increasingly popular among affluent U.S. families as a convenient means to travel; go camping, take weekend outings and even long vacations.* Winnebago's sales have roughly doubled in each of the past four years. The company's revenues reached $33 million in the last fiscal year and are expected to top $67 million this year. Earnings increased 100% last year, to $2,400,000.
High-Priced Toys. Although the company is called "Winnebago-a-Grow-Grow" by its corn-country boosters, its success did not come easily. The Forest City Development Committee, appointed by the town to woo industry, raised $50,000 by selling stock locally. With those funds, the committee refurbished an old pumpkin cannery and began making so-called camper coaches: portable dwellings that can be mounted on pickup trucks. The venture failed, and the factory was forced to close. Finally, John K. Hanson, a Forest City furniture-store owner, bought up the stock at a reduced price and reopened the plant. In 1964, misfortune struck again when a fire gutted the old building. Undaunted, Hanson borrowed $360,000 from the Small Business Administration and put up a larger and more efficient plant that enabled him to adopt assembly-line techniques. "We build a little house on wheels," says Hanson. "But we build it like they build autos."
Soon Hanson spotted the demand among campers for extra convenience and decided to concentrate production on bigger motor homes. It was a timely switch. His line of six motor homes now accounts for 80% of the company's sales. The smallest models, about 17 ft. long--or two feet shorter than a full-sized station wagon--sell for $6,500. The 27-ft. model sleeps six, has a bedroom and kitchen and is priced at $11,210. Last year Winnebago made some 4,000 of the 18,000 motor homes sold in the U.S., and Hanson expects the market for these "high-priced toys" to grow by at least 20% each year.
No Quitting. Both Hanson and Forest City have prospered. The once somnolent Main Street is bustling and not one shop is vacant. The town has a new airport, several supermarkets and no unemployment. Winnebago plans to add 600 more employees to its 1,400-man work force by next summer. The population has risen to more than 4,000.
As for Hanson, his original $10,000 investment in Winnebago has made him a multimillionaire. Anyone who spent $12.50 to buy a share of the public company's common stock in 1965 now has, after numerous splits and dividends, stock worth $2,250. Hanson's holdings have a value of more than $90 million. Despite his wealth, Hanson still lives in the same modest red brick house that he has occupied for 25 years. One goal has eluded him: retirement at 55. Hanson is 56, and he says that running Winnebago is just too enjoyable to give up.
* "Motor homes" differ from "mobile homes." The latter, despite their name, are usually placed in one spot and seldom move.
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