RV Pioneer Crean Retires at Fleetwood

John C. Crean, the plain-speaking country boy who founded a $1.5-billion recreational vehicle business and became one of Orange County’s most visible philanthropists, retired Tuesday as chairman and chief executive of his Fleetwood Enterprises Inc.

Crean, 72, said he will sell his 14% stake back to Fleetwood for $176.8 million in cash and put half the proceeds into a family charitable trust. He and his wife, Donna, will pay almost $52 million in capital gains taxes.

The Creans are major supporters of Southern California arts and charities and long have contributed half their income to charity.

Glenn F. Kummer, 64, Fleetwood’s president and chief operating officer since 1982, will succeed Crean as company chairman and chief executive while Nelson W. Potter, formerly executive vice president for operations, has been appointed president and chief operating officer.

Crean said he’s been planning his retirement for several years and decided to step down now because he wanted to go “before I stayed on too long. So many heads of corporations did that. Henry Ford is a prime example. If he’d retired 10 years earlier, Ford Motor Co. wouldn’t have fallen behind because of his hard-headedness.”

Motor homes have been a part of Crean’s life since 1929 when his family moved to Compton from North Dakota, taking a year to make the trip in a motorized camping truck his father designed.

Crean said he will remain involved with the company he started in 1950 and built into the nation’s largest manufacturer of RVs and manufactured homes.

He plans to work on new ideas for motor homes and camping trailers in the 6,000 square-foot garage at his four-acre estate in Santa Ana Heights. “That’s what I love to do,” he said. “I’ve never been all that crazy about the upper management stuff.”

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Analysts said the company’s purchase of Crean’s 5.2 million shares of stock, part of a continuing stock buyback program, adds as much as 10 cents a share to Fleetwood’s earnings in its upcoming fiscal 1999.

That word sent the Riverside-based company’s stock soaring Tuesday. Shares closed in New York Stock Exchange trading at $38.69, up $1.75. Since 1996, the company has bought back about 30% of its stock, including a previous purchase from Crean of 2.4 million shares.

Crean agreed to sell his remaining shares at $34 each, a discount of about 14% from Tuesday’s closing price. The reason, said Kummer, is to placate shareholders concerned that the company would be overpaying Crean for his shares.

While Fleetwood remains the market leader in its industry, its market share and stock price had been declining for several years before turning around last fall.

But Crean said the downturn had nothing to do with the timing of his retirement. Nor, he said, did his health. After a recent heart bypass and back surgery, he said, “I’m feeling great.”

Longtime friend and Fleetwood board member Tom Fuentes, who attended a retirement dinner Monday with the Creans at their son Andy’s Villa Nova Restaurant in Newport Beach, said the pair “truly believe that they are here to do good with all they have. They make that their first priority and they will continue to do that,” said Fuentes, chairman of the Orange County Republican Party.

The Creans made one of their biggest splashes in Orange County philanthropies in 1981 when they donated their 93-acre Rancho Capistrano--then valued at $10 million--to the Rev. Robert Schuller’s ministry.

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Crean says simply that retirement “won’t change our lifestyle at all.” He is indulging in one luxury, though. He’s buying a 112-foot yacht because “Donna always wanted a different kind of boat” than the 68-foot deep-sea fishing boat Crean now owns.

In addition to their cash donations to charity, the Creans regularly open their 42,000-square-foot home on the edge of Upper Newport Bay for fund-raising parties for various organizations.

The home, in fact, was built more for fund-raising than for the owners’ personal comfort. The Creans live in a 2,000-square-foot apartment inside the huge house.

One of Crean’s passions for the past five years has been the often-wacky cooking show he and Barbara Venezia created in 1992. “At Home on the Range,” shown on a number of local access cable stations, features a deadpan Crean preparing homemade recipes and often messing up.

Crean, who learned to cook as a child and refined his technique as a cook’s helper in the Merchant Marine during World War II, once added a spider to a salad he was making and another time was caught on camera sheepishly commenting that the cup of water he’d just added to a dish was “supposed to be milk.”

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Industry analysts said Fleetwood has been preparing for Crean’s retirement since early last year, when Potter was moved from his corporate planning post into the number three slot.

Additionally, the heads of Fleetwood’s recreational vehicle and manufactured housing divisions retired in July after long careers with the company, opening up slots for new managers in those units, said Barbara K. Allen, an analyst with New York brokerage Arnhold and S. Bleichroeder Inc.

Analysts say the company’s recent problems were related to an industrywide oversupply of manufactured homes and to increasing competition in the recreational vehicle market and not to internal problems.

But Fleetwood’s manufactured housing operation was plagued by an outdated network of dealers, many of whom were displaying the company’s fancy ready-made houses as if they were travel trailers. Fleetwood has dropped 400 retailers over the last two years, which hurt sales but is expected to benefit the company in the long run.

Fleetwood also has been realigning its management, improving its already top-notch recreational vehicles and cutting prices to bring up market share, Allen said.

The strategy seems to be working--Fleetwood reported record profit of $125 million for its fiscal 1997 and through the first half of its fiscal 1998, which ends April 30, posted $60 million profit on flat sales.

Increased selling expenses because of price cuts have reduced earnings--the company reported $89.9 million profit for the first half last year. But analysts cheered the decision to reduce inventory, and investors have responded by pushing the stock up from a 52-week low of $29.19 on Nov. 7.

“Crean put together a solid, well-run company,” said Michael Jaffe, an analyst with S&P; Equity Group in New York. “Normally the retirement of a founder of his stature might cause worry, but judging by the fact that the stock price went up today, people aren’t that nervous about it.”