Lippert Aggressively Expanding
Success in business is often due to a rare combination of traits: The dispassionate search for facts of a scientist, the intuition of a psychic and the nerves of a gambler.
Frequently, there’s also a willingness to zig when everyone else is zagging.
That’s certainly the story of Lippert Components Inc. (LCI) since Jason Lippert took over the family business as CEO in 2003, and even before. It was 1998 when Lippert made its first chassis for the RV industry after more than four decades in the manufactured housing market. Today, the bulk of the company’s output is for RVs.
More importantly, at a time when many businesses are hanging on by their teeth, Lippert has used the past two years to acquire several other RV-related firms whose products fit well with its expanding line – as well as growing its own manufacturing capabilities.
Already a success with its OEM customers, today, Lippert Components is poised to further broaden its horizons by taking some of its products, such as a new line of awnings, to the aftermarket.
The Lippert Components of today looks only vaguely like the little company that started in 1956, or bears only a modest resemblance – through its RV chassis – to where it was at the turn of the century.
Jarod Lippert, director of marketing for the company, explains that the business was launched by his grandfather, Larry Lippert, after he returned from serving in World War II.
“We started as a small fabrication company in rural Michigan,” Jarod Lippert says. “We were in roofing and some other things. And, he had some partners in the manufactured housing industry.”
When Larry Lippert’s son, Douglas Lippert, took over as CEO in 1977, the company was still exclusively serving the manufactured housing industry. In the 1980s, Lippert Components expanded its line into chassis for manufactured housing and in 20 years grew the company’s sales from $5 million to $100 million.
It wasn’t until the 1990s – and the arrival of a third generation of Lipperts into the company’s workforce – that things really began to change, though.
“That was when Skyline asked us to start building RV chassis in Texas and Pennsylvania,” says Jarod Lippert. “In the late ‘90s, my brother Jason also oversaw the production of the first RV chassis for us. We needed to diversify, and Jason had established some very good relationships with our manufacturing partners in the RV industry.”
Perhaps the most telling statistic about Lippert Components is that some 90 percent of the company’s business was still in the manufactured housing market as recently as 2000. Today, that same meaty slice of the pie represents the RV industry. Jarod Lippert says the remaining 10 percent of the business is about evenly split between manufactured housing and specialty trailers, including cargo, horse, marine and utility trailers.
Some of that change has come about because of a downturn in the manufactured housing industry during the past 15 years. However, much of the turnaround at Lippert Components has been the result of Jason Lippert’s vision for the company.
“Jason has been very aggressive in his idea of what he wanted the company to be,” says his brother. “He wanted to be not just in the manufactured housing industry, but he wanted to be in the RV industry as well. It made sense for what we were doing at the time, and since our specialty was chassis engineering, getting into RV chassis was a very logical path for us to take.”
Both Larry and Douglas Lippert are now retired, but Jarod Lippert says both are extremely proud of where Jason Lippert has taken the business.
“They both get dizzy at the products we produce today.”
Good to Grow
Along with Lippert’s move and expansion into the RV industry, a second key ingredient of the company’s current success occurred in 1997, when the firm’s assets were acquired by the White Plains, N.Y.-based Drew Industries.
Jarod Lippert describes the acquisition as a win-win situation for the two companies. A publicly traded entity, Drew already owned Kinro Manufacturing, a maker of windows and doors for the RV and manufactured housing industries, and was looking for diversification, as well as to strengthen its presence in the RV market.
“Drew also allows us a couple things,” he says. “They allow us to grow as we see fit, and they’ve given us access to capital, as well as a great record of balance sheet and cash flow management. That’s allowed us to make our 23 acquisitions and grow as we’ve needed to. It’s been a great relationship over the past 14 years.”
That access to capital has allowed Lippert to acquire several companies over the past two years, beginning in 2010 with the acquisition of a patent-pending design from Level Up for a six-point leveling system for towable RVs; and the acquisition of Schwintek, manufacturer of an industry changing in-wall slide-out, as well as lightweight aluminum leveling systems.
The company also licensed the right to manufacture and sell the patent-pending RVLOCK™, a remotely-operated locking system for towable RV entry doors.
During 2011, the company also acquired Home-Style, a manufacturer of a full line of upholstered furniture and mattresses for the Northwest RV market; certain assets and business of M-Tec, a manufacturer of components for RVs and mobile office units; the Dexter Chassis Group, further expanding Lippert’s towable chassis line; Starquest Products, makers of windows and doors for truck caps and horse trailers; and a license from Texas Innovators LLC for the rights to sell and manufacture an innovative slide-out boot and slide-out quarter topper products for both OEMs and the aftermarket.
|Lippert Components has been on an acquisitions streak since 2010, whenit acquired the Level Up six-point leveling system.|
“We have two objectives with these acquisitions,” says Jarod Lippert. “One is organic growth – we’re acquiring companies and adding product lines so we can add to our existing offerings things that make sense to our clients. And, we also are looking for products that we already have the resources to do in-house.”
Many companies would be daunted at the thought of integrating so many new people into their existing operations, but it’s an area where Lippert Components excels. Although some companies plan on acquisitions taking from 18-36 months to integrate, in some cases, the Lippert experience has taken only a matter of weeks.
|The company has bolstered its aftermarket offerings with the launch of its Mobile Outfitters division and its Correct Track alignment system (pictured at left).|
The reason behind its success: Its people.
“We have a very, very strong team of individuals who understand the acquisition and integration process, and we have a very strong team of systems people who understand systems,” Jarod Lippert says. “We’ve used our world-class IT department and business systems to our advantage over the last decade to integrate these companies and do it as seamlessly and as painlessly as possible. There are always some pains in something like this, but I think we’re very good at what we do.”
Adding to the challenge is an ongoing commitment that dates back to the early days of Lippert Components to maintain a family feeling within this rapidly growing company.
“It’s up to many, many different individuals to keep that going,” says Jarod Lippert. “Whether it’s through plant and office functions or on-going e-mail updates, we do our best to make sure everyone feels included in the growth process and in being what we are. It isn’t easy, but it’s mainly a matter of keeping all 4,200 employees up to speed and making sure they know where we’re headed as a company.”
Adding Awnings to the Mix
As the calendar moves toward 2012, the signpost ahead for Lippert Components says simply: More growth.
In an August announcement, the company surprised some industry insiders by revealing plans to expand in the already competitive RV awning market.
|Lippert announced plans in August to enter the competitive awnings business.|
Andy Murray, vice president of RV sales for both LCI and Kinro, says the awnings are a response to customer demand – an important consideration in all Lippert Components’ growth.
“We saw an overwhelming request from our customer base; they feel there’s room for another player in the market,” says Murray. “At the same time, we felt we could add value to our customers by bringing out the product. And, any time we look at launching a product line, we’re not going to do it unless we feel we can be very cost competitive while bringing in features and advantages that don’t already exist in the product.”
In the case of the new awning line, those features include an upgraded material (1,000 by 1,000 fabric grain versus the standard 500 by 500 fabric grain) and simple operation complete with an easy access manual override.
Another important feature will be essentially one-handed rain dumping capability. Murray calls it “set-it-and-forget-it technology.” And, he sees the slide-out boot acquired from Texas Innovators acting as a complementary product for the new awning line.
The company is already working with wholesale distributors to get some of its products in the hands of dealers and distributors through the aftermarket division, the Mobile Outfitters.
The centerpiece of the aftermarket program is the company’s Correct Track alignment system, which is designed to properly align trailer axles, reducing blowouts and increasing gas mileage and tire performance in the process.
“The idea is to get people into the dealerships to get a certified Correct Track Laser Alignment check,” Jarod Lippert explains. “With each safety check the trailer owner gets a laser alignment inspection to make sure their axles are aligned, a tire-and-treadwear measurement, air pressure check and a suspension components inspection, all summarized in a written report.”
The program also gives dealers access to other Lippert products, such as the Centerpoint and Equa-Flex suspension systems, Ground Control Electronic Leveling Systems and Level Up Lite leveling systems, and Never Fail bushings.
“This is different than what we’ve done in the past,” says Lippert. “We’re using consumer-focused packaging and it’s going to sit in the dealer’s store, and we find that exciting.”
He adds that the Mobile Outfitters campaign is the largest marketing effort the company has done to date, but it’s certainly only a beginning. Other LCI products the company is eyeing for the aftermarket include mattresses and furniture, steps, jacks and stabilizing systems.
“There’s really no limit to our product offerings in the aftermarket,” Jarod Lippert states. “Whatever we make, we can sell there.”
At the same time, the company will continue to move forward expanding its core products. That includes last June’s opening of an aluminum extrusion plant in Elkhart, Ind., that will add 180 jobs.
Based on current history, it’s a good bet that Lippert Components will be an even larger business five years from now. Jarod Lippert says the firm remains committed to acquiring core businesses that have good people and make sense to its overall operation, while providing good solutions for its customers.
|Lippert Components has greatly expanded its product offerings in recent years to include such items as bedding.|
Nor is he surprised that LCI is thriving – even in a down economy.
“Our consumers love the RV lifestyle, and even in the darkest of times a couple years ago, people were still buying RVs,” Jarod Lippert concludes. “The mobile lifestyle is something a large group of people enjoy thoroughly, and we enjoy making innovative products for that lifestyle.”