Jayco Inc.

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Jayco Inc.

P.O. Box 460
Middlebury, Indiana 46540
U.S.A.
(219) 825-5861
Fax: (219) 825-7354

Private Company
Incorporated: 1967
Employees: 1,287
Sales: $205 million
SICs: 3716 Motor Homes

Jayco, Inc. is a leading manufacturer of recreation vehicles (RVs), including travel trailers, truck campers, and motor-homes, and is the second largest producer of towable RVs in the world. The company also performs van conversions and is active in Australia through an affiliated company, Jayco Caravan Manufacturing, Inc. Jayco grew rapidly during the late 1980s and early 1990s, more than tripling in size.

Jayco is the progeny of inventor and entrepreneur Lloyd J. Bontrager. Bontrager was working for a recreational vehicle manufacturer in northern Indiana in the mid-1960s. The burgeoning RV industry was growing rapidly at the time as America’s baby-boom families took to the highways with campers in tow. The innovative Bontrager had made important contributions to his employer, including the development of new camping trailers and the creation of the company’s sewing department. He had also set up and managed an RV manufacturing plant for the company. Importantly, Bontrager invented a lifter system for fold-down camping trailers that made the campers much easier to pop up and close.

Despite his success at the company, Bontrager was frustrated. He believed that he could build a better trailer if given the freedom to do so by his employer. At the urging of his wife, Bertha, Lloyd decided to strike out on his own. He began experimenting with new fold-down trailer designs at his family farm in the northern Indiana town of Middlebury. Working out of two chicken houses and a barn, Bontrager managed to develop and patent a lifter system for fold-down trailers that was much easier to use than any other mechanism on the market. He quit his job late in 1967 and started his own company, Jayco Inc., a name he derived from his own middle name. Bontrager was joined in the venture by two partners: Clarence Lambright, who was put in charge of purchasing, and Bud Copsey, an investor. Bertha Bontrager did the bookkeeping, and Lloyd’s sons helped with design and production.

Bontrager hired Glen Riegsecker early in 1968 as his first salaried employee at a wage of $2 per hour. Riegsecker helped to transform the barn and chicken houses into assembly-line RV production facilities. In those buildings, the Bontragers developed three prototype campers; the JayEagle, Jay Hawk, and JayRobin. Orders began rolling in for the innovative fold-down campers, which could be pulled behind a vehicle and easily popped up at a campsite. The fledgling company managed to sell, primarily through local dealers, 132 fold-down campers in its first year of operation. By the end of 1968 the company had a work force of 15 and was beginning to outgrow its farm production plant.

Early in 1969 Bontrager hired his neighbor, Allen Yoder, Jr., to become the company’s national sales manager. Yoder was working as a mortgage lender at a local bank at the time but was enthused about the opportunity to join the growing Jayco. With Yoder exploiting the spiraling nationwide demand for campers, Jayco’s output soared during 1969 and 1970. Jayco left its farm factory in 1969 and moved to a newly constructed plant nearby. Then, in 1970, the company added another plant in Harper, Kansas, to serve Jayco’s surging customer base in the western United States. Incredibly, Jayco shipped more than 2,000 of its easy-to-use, high-quality, fold-down campers in 1970 to both U.S. and Canadian dealers. To keep workers inspired, Lloyd and Bertha promised an all-you-can-eat chicken dinner for the entire staff every time that the company met its production quotas; that effort gave birth to the annual company family picnic, replete with food, games, and a greased pig contest.

Besides its successful fold-down camper line, Jayco also experimented with other projects during its first few years. Among them was the short-lived Camp-n-Cruise, a fold-down style camper built on a pontoon boat. A more successful innovation was the Jay Thrush, an extension to the Jay product line and the largest Jayco camper. Subsequently, Jayco introduced the hefty JayKing, which was the first fold-down camper ever to offer full-height countertops and a three-cubic-foot refrigerator.

Just as important to the company’s success as its new products, however, was its management style. Bontrager placed a special emphasis on developing good relations with his dealers, and even began inviting them to the company’s picnics. He also believed that all of the employees should work together with the trust and respect shared by a family.

Jayco bought out another camper manufacturer in 1971, which helped it to produce 3,500 campers that year. Jayco’s sales continued to increase in 1972 and 1973. Meanwhile, the energetic Bontrager became involved in other pursuits. He became an avid pilot, for example, and was hospitalized for several months following a nearly fatal crash. Prior to the crash, the Bontragers ventured to Australia to meet a friend, Charles Motely, who had started an RV business there. They struck a deal with Motley that lead to a partnership lasting into the 1990s. Within a year Jayco was shipping components to Motley’s plant in Australia. While Bontrager was in the hospital, moreover, Yoder and other Jayco employees developed the Sportster, a slide-in camper designed to fit a pick-up truck bed. Also in 1972, Jayco bought the Pioneer Boat Company and began manufacturing fishing boats.

Among Jayco’s most successful products during the early 1970s was the JayWren travel trailer, its first camper that was not a fold-down. The trailer was unique in that it was only seven feet high—small enough to fit in a standard garage—yet still allowed plenty of head room for the average consumer. As with other Jayco products, Lloyd Bontrager played an important role in the hands-on development of the JayWren. The introduction of the JayWren, combined with fat sales gains for other Jayco products, pushed the company’s shipments to $11 million during 1972. Jayco brought out its first mini-motorhome early in 1973 and later that year introduced the first fold-down camper with dual axles. Jayco also expanded into Canada when it purchased Ontario-based Aero Leisure Products. By the end of 1973 Jayco was supplying a network of 235 dealers in Canada and the United States.

Jayco’s success during the late 1960s and early 1970s was largely a result of its management philosophy, which fostered innovation, quality, and service. But it was also a corollary of the red-hot North American RV fad, which resulted in annual RV sales of more than 500,000 annually by 1993. Thus, when the energy crises of the mid-1970s dawned, Jayco and many other RV manufacturers suffered. Indeed, by 1974 the U.S. RV industry was shipping little more than half the number units ordered one year earlier. Jayco was forced to shutter its Kansas and Canadian plants and to temporarily discontinue production of minimotorhomes. Work force reductions and cost-cutting measures were enacted as part of an effort to keep the company afloat.

As they would in future recessions, Jayco managers refused to acknowledge the energy crunch as a setback. Instead, they used the slowdown as an opportunity to diversify into other markets. Jayco increased its boat-building activity, for example, and built and sold some experimental products. But the company also continued to invent new fold-down camper products. It started selling the Flipper in 1975, for example, which was effectively a sideways (vertical) fold-down, designed to be pulled behind subcompact cars; the product failed to gain acceptance in the marketplace, however, and was discontinued in 1976. Jayco also started building campers for full-size truck beds, which would particularly appeal to the hunting market.

The energy crunch subsided in 1977 and 1978, and Jayco’s revenues climbed back to early 1970s levels. Jayco resumed the manufacture of mini-motorhomes, and new production facilities were added to allow Jayco to produce its own cushions, drapes, seats, tents, and other parts and accessories for its campers. Lloyd Bontrager’s son, Wilbur, began assuming a greater leadership role in the company during that period. Like his father, he made contributions to product design. In 1977, for instance, he helped develop a domed roof for fold-down campers that would shed water and proved stronger than conventional roofs. He also helped to develop overhead cabinets for campers.

The respite from the mid-1970s downturn was fleeting. A second energy crunch hit the RV industry in 1979 and through the early 1980s. Total industry shipments plunged to a ten-year low of just 181,400. Jayco’s shipments plummeted by about 50 percent and many of its competitors threw in the towel. Jayco itself exited some of its markets, including the mini-motorhome segment. It was able to survive, though, by focusing on its traditional core business of fold-down trailers. In that slice of the industry, Jayco managed to boost its status during the late 1970s to become the third largest manufacturer of fold-downs in the country. Jayco also managed to gain by penetrating the European market in a partnership with British-based Conway Campers, which produced the tent-like camping product called the Conway Cottage Camper. Importantly, Jayco developed a line of light-weight economy travel trailers—the Featherlite I and II—that were designed with fuel efficiency in mind.

Jayco was rewarded after the early 1980s slowdown by surging RV markets and significantly reduced industry competition. Jayco became determined to capitalize on the recovery by becoming more marketing-oriented with efforts to learn exactly what customers wanted. To that end, Jayco introduced a new line of travel and fold-down campers targeted at the budget-conscious consumer. These campers were referred to as the ‘J’ line (and, later, the Jay Series). Jayco also innovated new products, some of which eventually failed, including a four-wheeled travel trailer that resembled a motorhome without a cab, and the Jay Tiki fold-down camper from which part of the living area flipped out of the trailer and onto the ground. Finally, Jayco began to cull customer loyalty during the mid-1980s with its “Safari Club” for Jayco RV owners.

By 1985 Jayco had not only left the recession behind but was enjoying its greatest growth spurt ever. Indeed, sales of Jayco’s diversified product line were skyrocketing throughout North America. Unfortunately, the optimism that permeated the company’s work force was quelled by a tragic accident. On Easter Sunday of that year, Lloyd Bontrager, sons Wendell and Marcus, and a research and development worker named Nelson Hershberger were killed when the plane Lloyd was piloting went down in a storm. Bontrager’s wishes for Jayco were summed up in a letter he addressed to employees shortly before his death: “Here at Jayco we try to provide a pleasant Christian atmosphere where we can all work together in harmony. We believe we are all God’s children, and as such we deserve mutual respect, honor, and fair treatment. This is as true for our dealers and customers as it is for those of us who work in the offices or the manufacturing plants.”

One month after Bontrager’s death, Jayco’s board appointed Al Yoder, Jr., to serve as president of the still privately held company; Bertha Bontrager became chairman of the board. The 57-year-old Yoder had been a key contributor to Jayco since he joined the company in 1969. He was also very active as a leader in major RV industry associations and had helped to develop the first television program devoted entirely to the RV lifestyle. Jayco continued to prosper. In fact, its growth pace quickened for a number of reasons. Among other trends benefiting the industry, fuel prices were low, baby boomers were beginning to buy campers to take their kids camping, and outdoor activities were becoming more popular.

As demand increased, Jayco’s financial performance improved. Those gains were largely the result of initiatives pushed by Yoder. For example, Yoder commenced an aggressive drive to improve quality, which included informing workers about all other phases of production with which they were not personally involved. He also oversaw the complete redesign of many Jayco products to appeal more to baby-boom consumers. In addition, Jayco launched a lauded advertising campaign that utilized artwork styled after Norman Rockwell’s paintings. Jayco also introduced several new products, including a large trailer that sported a stand-up bedroom as well as a streamlined front end.

Jayco’s sales boomed during the mid-1980s. Indeed, by 1987— Jayco’s 20th anniversary—the company was the fourth largest manufacturer of towable RVs in the United States. Besides its core fold-down, travel trailers, and motorhomes, Jayco offered van conversions and pop-up and hardwall truck campers. Those products were sold through a network of 260 dealers in every state (except Hawaii), most Canadian provinces, Puerto Rico, and Japan. By that time, the Jayco “family” had grown to more than 600 employees. During the 1980s, moreover, Jayco realized unprecedented growth. The number of units shipped bolted to a high of 223,000 in 1988 as the company’s work force surpassed 700 and the dealer network swelled to about 300.

The RV industry suffered from another downturn during the late 1980s and early 1990s, though it was not as serious as previous slowdowns. Again, Yoder refused to recognize the downturn as a negative, claiming that a recession was a mind set that was worsened by the media dwelling on it and by businesses that were scared to move forward. Supporting that assertion, in 1990, Yoder, in the midst of the U.S. recession, initiated a two-stage expansion program. Following that plan, Jayco purchased new manufacturing facilities in Middlebury and nearby LaGrange. That effort nearly doubled the company’s total acreage to more than 100, about 500,000 square feet of which was covered by manufacturing facilities. As production capacity increased, the recession waned. Indeed, after recording $142 million in sales in 1992, Jayco’s revenues rose 42 percent in 1993 to $202 million.

In April 1993 the 65-year-old Yoder announced his retirement from Jayco. After 25 years of service he was stepping down to pursue other interests; he was very active in the Mennonite Church, for example, and was also involved in other business interests including a small furniture company. Yoder was succeeded as president by Bernard G. Lambright, while Wilbur Bontrager remained at the company as chairman of the board. Jayco continued to post healthy gains in 1994. By 1995, in fact, Jayco’s work force had grown to 1,300 and Jayco had become the second largest manufacturer of towable products in the nation.