The Salina Journal from Salina, Kansas • Page 22

Business The Salina Journal Sunday, October 7,1984 Page 22 Motor home company continues to flourish By JUDITH WEBER Staff Writer MINNEAPOLIS Twenty-five years ago, it was an alfalfa field. Today, the 27-acre site west of Minneapolis serves as the corporate headquarters for ElDorado Motor a manufacturer of motor homes and mini-buses, which reported more than $53 million in sales last year. The corporation's history began in 1960, when a group of Minneapolis businessmen became a franchised manufacturer for a West Coast pick-up camper company. The company began with 6,000 square feet of operating space and 10 employees. The corporation now contains 160,000 square feet of manufacturing, warehousing and office space, and employs about 500.

Sixty-five percent of the employees live in Ottawa County, and 35 percent in Saline County. The first years of operation became a community project, said Bob Stewart, president of ElDo- rado. At one time, he said, the company had 70 local stockholders. Stewart began as a general manager of the company in 1960. In 1964, the Minneapolis company bought the West Coast franchiser.

in 1965, both companies were sold to an Ohio recreational vehicle manufacturing firm. During the next 13 years, ElDorado had several owners, Stewart said. The company became a manufac- tjirer of motor homes in the early 1.970s. In 1978, Stewart acquired the local company from its last "foreign" owner, a conglomerate in Minneapolis, for $1,620,000 and the assumption of certain liabilities of El Dorado Industries Inc. In June 1978, the company was incorporated as El Dorado R.V.

(recreational vehicle) Inc. Four years ago, the company began manufacturing commercial mini-buses. The name of the company was changed to ElDorado Motor Corp. in September 1983 to reflect the complete product line offered. EMC went public in January this year, when more than 20 percent of the company was sold with an initial offering of 550,000 shares of Common stock.

EMC is ranked as the seventh largest motor home company in the U.S., and is perhaps, the largest manufacturer of mini-buses, Stewart said. The motor home and bus divisions are operated as two separate busi- nesses, he said. "They complement each other," Stewart said, "and the construction is similar, but they are two entirely different markets." Seventy percent of the business involves motor homes, and 30 percent is comprised of the small transit bus industry. EMC manufactures two lines of motor homes and mini motor homes: The ElDorado line, and the economical Encor line. The Class A and motorized recreational vehicles range in size from 20 to 35 feet in length.

The price range varies from $20,000 to $50,000. There are 14 models of motor homes, which come in a variety of colors and options. Over the years, the fuel economy of motor homes has been improved, Stewart said, so that the larger models of today are more economical to drive than the smaller vehicles of the past. The redesigned, slanted windshields on the latest models make them easier to drive at 55 mph than at 35 mph, he said. The front is slanted 26 degrees to the side and 40 degrees toward the back.

Many customers are buying their third or fourth motor home, Stewart said. "Some poeple have adopted a motor home lifestyle." The age of the average buyer is 50, and about half of the purchases are not financed, he said. The mini-transit buses, which carry 12 to 29 passengers, are manufactured under the brand name Falcon. There is a backlog of 100 buses on order at all times, Stewart said. Each bus looks different, he said, because they are painted according to specification.

Buses for use at schools can be painted in the school's colors. Corporations across the country use EMC's mini- and mid-sized buses for motor pools and tours. EMC buses are used by Hertz Rent- A-Car, General Dynamics, Holiday Inn, Boeing Airplane Exxon Best Western, Harvard University and the University of California. Churches, hospitals and ski resorts also use the mini-buses, Stewart said, and they were used at the Los Angeles Summer Olympics. The mini-motor homes and buses begin as chopped vans, and the larger motor homes begin as rail chassis.

The chopped vans and chassis are delivered from Detroit. The nine buildings on the 27-acre site include an upholstery shop, welding shop, door shop and cabinet shop. There is also a central ware- Business briefs Dooley APIC5 elects officers The Salina Area Chapter of American Production and Inventory Control Society recently became char- tiered and elected its 198445 board (if directors. The officers are: president, Joe Dooley, Sa- liiia; vice president membership, Pon Cook, Ellsworth; vice president education, Ron Devolder, Ellsworth; vice president publicity, Steve Roe, Salina; vice president programs, Jolene Wait, Clay Center; secretary, Pam Toney, Salina; treasurer, Alison Preston, Brookville; awards, Alyce Pthughoeft, Ellsworth. The objectives of APICS are to develop professional efficiency in production and inventory management, to disseminate general and technical information on improved techiniques and new developments, and to further develop the professional body of knowledge through the organized resources of the profession.

The Salina Chapter meets the second Wednesday of the month, September through May, at 7 p.m. Auxiliary sets meeting The Salina Homebuilders Auxiliary will be host for a state task force meeting Thursday at the Ramada Inn. The meeting will begin at 9:30 a.m. with registration. The program of speakers will be headed by the National Auxiliary president, Emily DeShazo, Eagle, Idaho.

i DeShazo joined the auxiliary as a member-at-large I and helped to I charter the south-1 west Idaho chapter of the group. She served the local auxiliary as DeShazo secretary, vice president and president. She was chosen Idaho State Auxiliary member of the year in 1979. Her national auxiliary activities include serving on the legislative, resolutions and budget and finance committees. DeShazo had served as national legislative chairman, treasurer, vice president and president elect.

Janet Stubbs, executive director of the Kansas Homebuilders Association, will speak on political involvement. Sen. Ben Vidrickson and Rep. Larry Turnquist also will speak. Business conference set The Salina Area Chamber of Commerce and Marymount College are co-sponsoring a Business Economic Outlook Conference Nov.

8 in the Fine Arts Building at Marymount from 6:45 to 10:45 a.m. The conference will focus on a 1985 forecast of local, state and national business and economic conditions, and provide information regarding resources available to assist the Salina business community. The keynote speaker will be Randolph Pohlman of Kansas State University. Cost is $15 a person. Reservations can be made at Marymount College.

Registration deadline is Nov. 1. County retail sales up Retail sales in Saline County through July of this year are up more than $7.5 million compared to the same period a year ago. Sales have totaled $217,892,290 as compared to $210,829,782 in 1983. Figures are based on a three percent state sales tax.

Bar offers deli menu The Paramount Bar, 219 N. Santa Fe, is expanding its services to include a deli-style sandwich menu for lunch and dinner. The deli will be open from 11 a.m. to 2 p.m. and from 6 to 11 p.m.

Monday through Saturday. Foods, including homemade chili, will be prepared fresh daily. Paul Haley, Delphos, installs part of a luggage rack on a motor home on an assembly line at ElDorado Motor Corp. Scott Wllllomt house which contains $20 million in raw materials, including some foreign products, such as two types of refrigerators that are only manufactured in Sweden and Switzerland. The motor homes and buses are constructed on assembly lines, and 10 inspectors scrutinize the work.

It takes about two weeks to go from chassis to finished product, Stewart said. The current operating schedule calls for 32 motor homes and 16 buses to be completed a week, he said. Stewart hopes to raise that to 45 motor homes and 18 buses a week. Capital expenditures of more than a million dollars during fiscal 1984 have enabled EMC to double its production capacity. Stewart plans to hire about 100 additional employees in the next six months.

In addition, four new marketing positions have been created: Two in the Western region which operates from Carlsbad, and one each in the Central and Eastern regions which have offices in Minneapolis. In December 1983, EMC introduced a retail sales training clinic for its dealer network. The corporation has 135 franchised motor home dealers, and 35 bus dealers. EMC is executing plans to expand the motor home dealer network from its 135 locations to all of the 300 major market areas. Long term goals include trying to improve EMC's motor home market position from seventh to fourth.

In 1983, the fourth largest builder retailed 500 more units than EMC. ElDorado experienced an increase of 126 percent in motor home registrations in 1983. The industry as a whole only reported an increase of 48 percent. EMC motor home sales increased 102 percent in fiscal 1984 (which ended June 30), and bus sales increased 69 percent. The $53.3 million in 1984 sales was a 71 percent Bob Stewart has been with the company since 1960.

increase over fiscal 1983. In its 25 year history, EMC has had two tough years, Stewart said. They correspond to the years that the nation experienced serious energy problems, 1974 and 1979. "We don't see that Stewart said. He projects that 1985 sales will show a 40 percent increase.

Competition propels law firm merger trend By The New York Times Finley, Kumble, the fastest-growing firm in the nation, already has more than half its lawyers in its California, Florida and Washington, D.C., offices. Similarly, Jones, Day, Reavis Pogue very much a local Cleveland firm a decade ago now has more than half its lawyers spread through its branch offices in Texas, Washington, D.C., and California. "Our objective has been to have offices in all the major financial centers," said Blair White, the managing partner of Chicago's Sidley Austin, the nation's third- largest firm, "so while we don't have any immediate plans to go into new cities, there are a number of places that that could logically take us." Sidley's New York office, which opened two years ago with one lawyer, now has 11 and plans for twice that many. A third of Sidley's 449 lawyers work outside the Chicago office. For Weil, Gotshal, with only a small branch in Miami and a slightly larger one in Washington, the prospect of getting into the California market by merging with Irell Manella seemed a natural.

"We looked around and said, 'Everybody's going and they looked around and said, 'Everybody's going and we've been friendly with them for 30 years, so we began to talk about getting Ira Millstein, a managing partner of Weil, Gotshal, said. "We haven't talked about the plumbing yet, we haven't talked about governance, we've just had touchy-feely discussions about whether it's a good idea." But, as Millstein says, merging two law firms is not simple. "All the partners on both ends have to feel comfortable," he have 63 partners, and they have 47 partners. That's a lot of people to put together." "And California practice is a very different kind of thing," he continued. "They are religious about taking their vacations; we don't take many.

They have sabbaticals; we would love to, but we don't. They have profit-sharing for their senior associates; we don't. Associates there make partner after six years; here, it's seven and a half. We really have no idea how to work out the structural differences." Propelling the trend is increased competition for the most desirable corporate clients: Most big corporations have in-house law departments to handle routine work, and a large pool of law firms is eager to capture the work that remains. Many firms are increasingly reluctant to refer clients to lawyers in other cities, as they traditionally did, for fear that they will lose them.

"The competition is clearly a factor," said Peter P. Mullen, the executive partner of New York's Skadden, Arps, Slate, Meagher Flom, the nation's fourth-biggest firm, which this spring started a Chicago office with six partners who defected from Chicago's Mayer, Brown Platt. "And the mobility of lawyers is clearly an enabling factor. If you couldn't get good lawyers to move, you couldn't open new offices." Most firms that are going national have found that the best way to establish a presence in a new city is by acquiring a core group, or a whole law firm, of prominent local lawyers. Not having lawyers who understand the local scene can be a particular disadvantage in certain fields, especially litigation.

"You sometimes need a local guy who will know the judges," Millstein said. "Not know them in a ticket-fixing sense, but know what the judges are interested in, know the local mores, know what you can argue and what you can't." Kumble says he learned the same lesson from his firm's mistakes in setting up its Miami office, which came apart twice before the current staff fell into place. "We learned that when opening an office in a new city, it is a very bad idea to take people from the home office and send them to a new location," he said. "They're not identified with the community, they do not know the local customs, and I think, though no one said it to me, that you are perceived as carpetbaggers." Some of the more traditional firms shudder at what they see as a sort of "franchise" operation which the better-known firm provides its name and little else but these days, even the most white- shoe senior partners are sounding more defensive than offended when they criticize the Finley, Kumble model of growth. To be sure, there are built-in obstacles to creating a national practice through mergers and acquisitions.

Chief among them is the increased potential for conflicts of interest. Kirkland Ellis, a Chicago firm that early on built a strong Washington office, lost half of it when the Chicago office's ties to Ameritech conflicted with the Washington office's communications practice. And then there is money. Lawyers only favor a merger if it will increase their income and in order to increase everyone's income, the merger must either raise the profit margin or' draw a lot of new business. Most multi-city firms pool the profits from different offices, which, they say, helps create a cohesive firm.

"Everyone is encouraged to work together for the benefit of the finn if they will have a share in all the profits," Kumble said. "For example, under our system, it would be very advantageous to me to develop a piece of business in Los Angeles even if I will never handle that business personally." Maybe so, but if the firm's overall profits falter, those who believe they can make more money elsewhere will be tempted to abandon ship. The most obvious danger of a. merger, of course, is that the marriage will not be happy, and that after a while, one side or the other will conclude that it was better off on its own. This is something that the Weil, Gotshal-Irell Manella lawyers are clearly worried about.

"If we were to agree to form a single firm tomorrow, and that didn't work out, there would be enormous difficulties in unentangl- ing them," said Werner Wolfen, one of five Irell Manella partners vis-' iting Weil, Gotshal last week. Said Millstein: "I think the rea- son there hasn't been a merger this big is that no one knows how to do it." Gas regulators possible hazard In cooperation with the U. S. Consumer Product Safety Commission, RegO Chicago, announced the voluntary recall of RegO Model 210 LP-Gas (bottled gas) regulators because of a possible hazard. Consumers having an LP-Gas fueled hot water heater, cooking appliance, furnace, outdoor grill or who own or use a recreational vehicle, mobile home, standard mini- compact or low profile motor travel trailer, park trailer, fifth wheel trailer, truck camper or van conversion having an LP-Gas hot water heater, cooking appliance or furnace should examine the regulator.

If it is a RegO Model 210, cori- sumers should dose the shut-off valve of the LP-Gas supply container and contact their local LP-Gas dealer for immediate replacement of the regulator (consult the yellow pages for number and location of local dealer or supplier). Consumers are cautioned not to remove and replace the regulator themselves, and the LP-Gas supply should not be turned on until after regulator replacement. The RegO Model 210 will be replaced by a RegO Model 302V9P at no cost to the consumer. Information concerning the recall is also available to consumers by calling CPSC's toll-free hotline at 80W38-CPSC..