Deal on wheels.

• Position: The mobile home industry

How can a mobile-home manufacturer in Greensboro make a strong turnaround while its competitor in Winston-Salem is going up in flames?

That's a question that the number crunchers at Prudential Insurance Co. have millions of reasons to ask, because the giant New Jersey-based insurer has financed both companies.

The bottom line seems to be that Guilford County's Oakwood Homes (OH-NYSE) knew how to use its piece of the rock better than Forsyth County's Manufactured Homes. It also steered clear of the creative accounting that got Man-H, as it's often called, in trouble.

Oakwood reported 11 consecutive years of higher earnings before a disastrous expansion into Texas sent profits plummeting in 1987. After an $8.2 million write-off, Oakwood is out of the Lone Star State, where it gained one-fifth of its business five years ago.

Its past success made the turnaround more difficult, says Oakwood CEO Nicholas St. George, a former investment banker who has run the company since 1979. "A lot of our people had an albatross around their neck because they were thinking, 'Why do we need to change after we had set records for 11 straight years?'"

But St. George demanded change, leading to an exodus of more than a dozen Oakwood managers. "We're not talking about mild courses of action," he says. "These were gut-wrenching things that had to be done."

In the midst of the worst industry slump in 20 years, however, Oakwood turned itself around by expanding into doublewide mobile homes after focusing historically on single-section units. It also hired new executives to head up sales and finance and managed to cut costs while boosting productivity.

Those operating improvements are meaningless, however, unless people have credit to buy mobile homes. Banks generally avoid such lending -- if you wonder why, just ask First Union National Bank about its experience with defunct Conner Homes of Newport. But after a year of negotiating, St. George cut a deal in 1990 with Prudential to provide $85 million in financing, collateralized by Oakwood's receivables. The agreement was renewed this year.

"An access to capital ... has been a major reason why Oakwood has prospered in an industry that has seen financing sources dwindle," according to John Diffendal, an analyst at J.C. Bradford & Co. in Nashville, Tenn.

That Prudential was interested in Oakwood, given its problems with troubled Man-H, surprises even St. George. "You've got to remember that at the same time we were...