Few products say ‘American’ more than the otherworldly curves of the silver Airstream trailer. Since the first one left the factory in the 1930s, it’s become part of the country’s design pantheon, along with the Coca Cola bottle, Converse sneakers, and Levi’s denim jeans.
But like most businesses, Airstream, a division of Thor Industries, went through a rough patch during the financial crisis of 2008. “We took a very hard hit,” says Airstream’s CEO Bob Wheeler. “The market shrunk by 60 percent and our situation was pretty typical.”
The Airstream International Signature Series RV. Top Image: NASA turned a modified Airstream unit into a mobile quarantine facility for Apollo 11 astronauts after they returned from the moon. (Left to right) Neil A. Armstrong, commander; Michael Collins, command module pilot; Edwin E. (“Buzz”) Aldrin Jr., lunar module pilot, and President Richard Nixon. Photo Credit: Airstream and NASA
Airstream RVs, which can cost upwards of $70,000, are usually made to order. “Our business is very much based on dealer confidence,” Wheeler says. When discretionary spending disappeared, things started to looked dire.
But the wheels did not come off. Many Airstream dealers rely on GE Capital for inventory financing and the financial unit stuck by their side. “They are the oxygen to the industry,” Wheeler says. “They were an invaluable resource when the recession struck. They stayed while others left the business.”
Airstream’s production line in 1934.
Airstream pulled through the economic pot hole and its business has been booming since. Orders were up 50 percent last year and another 36 percent so far this year. The company has nearly tripled its workforce since 2008, from 158 to 460 employees. “We’ve had a fantastic run, no matter how you slice it,” he says.
Wheeler’s experience reflects the latest findings of the Middle Market Indicator, a survey of 1,000 executives like Wheeler from the 200,000 U.S. businesses with annual sales between $10 million and $1 billion. The results for the second quarter of 2014 show that the segment is bullish about its future growth prospects. “The U.S. middle market appears to have shrugged off the weak first quarter GDP results,” says Thomas A. Stewart, executive director of the National Center for the Middle Market, which published the results today.
An Airstream caravan. Photo Credit: Airstream
The executives’s confidence in the U.S. economy reached 68 percent during the second quarter, the highest point since the indicator launched in 2011.
The segment’s revenue grew 6.6 percent over the last 12 months, and more than two thirds of the surveyed companies expect their revenues to keep climbing over the next year. S&P 500 companies expanded their revenues by just 3.4 percent during the same period.
The Airstream International Signature Series RV from the inside. Photo Credit: Airstream
Job growth for mid-market firms is looking promising as well. Employment within the sector increased by 3.2 percent over the past 12 months, adding an estimated 750,000 jobs. If mid-market companies deliver on projected job growth of 3.3 percent, the sector will create 59 percent of all new jobs in 2014. (Take a look at our infographics for details.)
The National Center for the Middle Market was founded as a partnership between Ohio State University’s Fisher College of Business and GE Capital in 2011. Along with producing the quarterly MMI reports, the Center also funds research in areas such as globalization and innovation.