Thor Industries: Intrapreneurship Initiatives at Recreational Vehicle Leader



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Code :ENT0012

Year :
2004

Industry :Automobiles

Region : USA

Teaching Note:Not Available

Structured Assignment :Not Available

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Recreational Vehicle Industry
A typical RV was designed as temporary living quarters for recreational camping, travel or seasonal use. RVs could be classified into two main categories: motorhomes and towables. Motorhomes could be further classified as Type A, B, and C, according to the size of the vehicle. Towables include folding camping trailers, truck campers, conventional travel trailers, and fifth wheels. There were seventy-five companies selling hundreds of brands. The major players in the RV industry were Thor Industries Inc, Coachmen Industries Inc, Fleetwood Enterprises Inc., and Winnebago Industries Inc. Thor dominated the market with market capitalisation of $1.49 billion. It had earnings per share of $1.454 as compared to $0.79 of industry average .Winnebago Industries had the market capitalisation of $891.66 million and was second to Thor...

THOR Industries
Wade F.B. Thompson and Peter B. Orthwein founded Thor Industries Inc., on August 29th 1980 by acquiring Airstream, the most recognised name in the industry, for $7.5 million. At that time RV industry was going through a rough patch as RV market fell by half in 1979 , a year in which gas prices rose substantially due to gas shortage, and by half again in 1980, a year of credit crunch. However industry steadied in 1981 and started to rebound in 1982. In one year, they turned the company losing $12 million pre-tax into the one making $1 million profit11 . It was due to improvement in quality of products, which in turn reduced warranty costs. Airstream catered to the market for a lighter and lower-cost product...

Management Autonomy
Thor was unlike other RV companies in the United States. Thor had in all 12 people in its corporate headquarters in Jackson Center. Richard “Dicky” Riegel, president of Airstream, commented, “Thor is truly lean as an organization and that stands in pretty stark contrast to Fleetwood,Winnebago, Coachmen and Monaco and other public companies that have hundreds of staff at the corporate level.”17 Thor was so decentralised that its CEO, Wade F.B. Thompson, wasn’t based in Jackson Center. He used to pay occasional visits to headquarters and used to work from its office in Manhattan...

Compensation System
Profit sharing and Pay system at Thor was different from other companies. Each division did not have to share its profits with other sister concerns. The top managers of each of Thor’s divisions used to get 15% of the division’s pretax profit, with no ceilings on the payouts. It was same on the factory floor. Workers were not paid on hourly basis, but their pay was linked to the number of RVs made by them each day. The plants had a fixed percentage of share in sales and each department - plumbing, electrical, cabinetmaking, final finishing, etc. had its share of the pool....

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