Navistar’s Osborne: Innovation is the Real Key
Seated on a couch in a Holiday Rambler Trip Class A motorhome at the Elkhart County 4-H Fairgrounds in Goshen, Ind., William L. “Bill” Osborne, the incoming head of Monaco RV LLC, seemed at ease – considering all that was going on around him during the Holiday Rambler Recreational Vehicle Club Chapter 419 annual rally and the fact that he’d only been named to the job three days prior.
The rally, which took place April 30-May 5, drew 280 member coaches. Just as important for Osborne, who on July 1 officially succeeds Monaco President Kay L. Toolson in overseeing the Coburg, Ore.-based RV builder as vice president of custom products for Navistar Inc.’s Truck Group in Warrenville, Ill., is that he got a chance to mix with scores of Monaco and Holiday Rambler coach owners in a relaxed atmosphere.
And that’s a real plus for Osborne, who’s based at Navistar’s Chicago-area corporate facilities and whose new responsibilities also include Workhorse Custom Chassis, because he’s convinced that product innovation is the key to winning favor among North America’s towable and motorized dealers and consumers. And he knows that cutting-edge innovation depends heavily on input from consumers, who aren’t generally timid about telling RV builders how they feel about floorplans and design.
Fact is, Osborne, whose company had purchased Monaco out of Chapter 11 bankruptcy two years ago, seemed ready to roll up his sleeves and get down to the work of designing, building and selling RVs in a commercial sector that’s not all that different in certain ways from the auto and truck industry he came from.
A mechanical engineering graduate of Kettering University with an M.B.A. from the University of Chicago, Osborne, 51, spent more than 30 years at Chrysler, General Motors and Ford Motor Co., most of it in product development and manufacturing. After serving as president and CEO of Ford of Canada and president and CEO of Ford of Australia, he worked as president and CEO of Federal Signal and, later, as a Navistar director – a seat he gave up in order to accept his new position.
Osborne, for his part, seems acutely aware of the fact that he’s replacing a virtual industry legend in July shortly after Monaco’s June 20-22 Dealer Congress in Grapevine, Texas. Indeed, the retiring Toolson is a respected industry executive who made a name for himself at Kings Highway Mobile Industries, Executive Industries and Oregon’s Monaco Coach Corp. before assuming the presidency of Monaco RV LLC after its buyout by Navistar.
Osborne says Toolson, who built Monaco Coach from a $17 million specialty RV builder into a $1.4-billion-a-year public company before it hit tough times in the recession, will be doing some special projects for Navistar and will remain a viable factor for Navistar’s management team. “He’ll be on my speed dial,” says Osborne, whose remarks are as follows:
RVB: Glancing at your resume, Bill, you appear to be a product-oriented guy, which could be a good thing for Navistar’s Monaco unit.
Osborne: “Yeah, I’ve developed products. I launched the 2004 F150 (Ford pickup). That was probably the biggest product program that I had, and I spent a lot of time in the truck business at Ford. So, I know a little bit about commercial trucks and a little bit about the RV industry because I had Ford’s strip chassis for motorhomes under my responsibility while I was there.
RVB: You’re stepping into a position that essentially succeeds Kay Toolson, a veteran industry figure, even though the title and responsibilities are a little different.
Osborne: Yes, Kay was specifically focused on Monaco RV, and I obviously have the Workhorse brand under my responsibility. But clearly, the bigger of the two units is the RV business, and that’s where I’ll be spending a lot of my time.
RVB: What’s your perception of this industry in general and the Monaco brand in particular now under the Navistar umbrella, a couple of years after the Great Recession took the predecessor company down?
Osborne: “Well, the industry is a pretty strong industry, and I’m talking in terms of brand loyalty, in terms of passionate customers. I mean I’ve never seen an industry where the customers are so passionate about their brands, you know? And part of the ownership experience is not just the product itself, but the affiliation of owners. That is a huge, huge difference between most consumer product-based companies.
So, it’s an industry where you’ve got to be very, very responsive to customers. You know, for one thing, it’s a big purchase for most people. And you can’t put a product out there and sort of leave people with it. I mean, you’ve got to be with them throughout the entire ownership and service experience, and you’ve got to listen to them because they’re very passionate about the products.
I mean, sitting here at this rally, I got great product feedback from owners about every little feature of the coach. This kind of passion is what you rely on as a manufacturer to make your product better.
RVB: We hear that you sat in on some owner seminars?
Osborne: Yeah, we had an ownership group meeting. We had a men-only meeting and a women-only meeting, and they were both very eye opening. And, again, the passion for the brand is something that is huge, and that is something that we want to capitalize on. And the best way to do that is to get closer to customers. We talked a lot about how we can bring customers into our design process so they can help us make the product a lot better.
The thing I liked was that the feedback we got was probably feedback we should have had while we were designing the coach. And that’s what we plan to do is bring the customers into our process and get their voice a lot earlier so that we could really make a coach that meets their needs.
RVB: We assume that your automotive background will play into your hands in the RV business?
Osborne: What’s clear to me is that, if you look at the history of the RV industry, a lot of the companies were very entrepreneurial. You know, they’re operations run by individual founders, and they grew and developed over time. And so a lot of these small companies didn’t have the process and structure that you need to build good quality (products) time after time.
At the same time, the RV industry doesn’t have captive dealer networks. So, you can’t control the service and ownership experience like you can in the auto industry.
So, one of the things I think I can bring to this company from 31 years in the auto industry is a knowledge of quality systems, how to design for service and how to engineer systems so that it all works well together. I want to bring some of those disciplines, lean manufacturing, quality control, into our business and raise the standards and raise the customer’s expectation of quality and what they should expect from a coach.
And I think with Navistar’s resources, we can do that. Navistar’s a great company. It’s a $15 billion company with experts in design and lean manufacturing. We can use all that expertise to distinguish ourselves in the industry. And that’s something that I think bodes well for our future. I think that we’ll raise the standards of quality in the industry.”
RVB: Are you prepared to address product directions at this point and where would you like to see things go in the future in terms of product design?
Osborne: Well, I don’t want to reveal anything that would be useful to competitors, but I can tell you that I think one of the most important things to be successful in this industry is innovation – that what drives new sales and ownership is for people to see new features and functions that they haven’t seen before.
And so I believe that it’s going to be important for both the Holiday Rambler and Monaco brand to be known for a constant stream of innovation – to create new features and new products that excite people and make them want to trade up for a new coach.
RVB: Is this downsize Vesta Class A emblematic of the kinds of products we’re going to see from Monaco in the future?
Osborne: Well, we heard that today when we talked with a number of our customers. You know, we asked them specifically if they were planning to trade down in terms of length. And a huge number of them said “yes,” that they’re using their motorhomes differently now, that they’re getting a little bit older and don’t need as much space. Fuel economy is obviously becoming a lot more important to them.
Over the long haul, our plan is to be there where our customers are going. I always rely on that Wayne Gretzy quote: You know, “don’t skate to where the puck is. Skate to where the puck’s going to be.” There’s a lot we can draw from these conversations.
RVB: So, while total industry motorhome shipments as a percent of the whole have slipped some in recent years, you clearly see Monaco as one of the long-term players in the motorized category, right?
Osborne: We have to be. You know, I came here to help grow the motorcoach business, and we have very strong brands in Holiday Rambler and Monaco, and we plan to invest in both of those brands. Both brands will have a full product lineup. Both brands will have marketing support from the company, and both brands will build at excellent quality levels. And we think that’s kind of the recipe for success in the industry. Developing a strong service network and getting close to customers are also going to be, you know, how we distinguish ourselves.
RVB: This, it seems, is the kind of approach that dealers, traditionally, would approve of.
Osborne: Well, when you don’t have captive dealers, what’s important is to have killer product because that’s what pulls sales through the dealers, right? So, that’s why we talk about a constant stream of innovation. Nothing pulls sales through the dealer channel like a killer product that people just can’t resist. If people come in and ask for a Holiday Rambler or a Monaco, that’s what’s going to drive dealers to stock up. In an industry where you don’t have captive dealers, it’s all about killer product.
RVB: And you’ll be managing Monaco, a company with key plants in Oregon and Indiana, from the west Chicago suburbs?
Osborne: Yes. Working out the corporate headquarters will enable me to be a strong voice for Monaco within the corporation. You know, the big competitive advantage that we have is we have the resources and expertise of a Fortune 500 company that we can draw on, and my goal is to make sure that we bring all those resources to bear to make our company successful. That being said, I’m going to be out talking to customers. I’m going to be out in the operations. I’m not going to be doing the job from Chicago. But my goal is to make sure that I bring forth all of the resources that Navistar has.