Pump up the volume.

• Author: Scheer, Lisa
• Position: Nicholas St. George's management of Oakwood Homes Corp. - Cover Story

The CEO of the nation's largest manufactured-housing retailer knows only one mode: full blast.

Nicholas St. George never met a macho metaphor he didn't like. "We must have pit-bull tenacity," the CEO of Oakwood Homes Corp. tells employees in a company newsletter. "There are parallels between running a business and coaching a team," he expounds in an interview. And to St. George, Oakwood isn't simply growing toward his goal of $1 billion in revenues by the year 2000, it's "muscle building."

It might sound as if the 56-year-old former investment banker is auditioning for a part in a David Mamet play, but St. George's pep talks have paid off. Soft-spoken and self-effacing in person, he has pushed Greensboro-based Oakwood from niche player to national power in the scrappy mobile-home business.

Sales have grown from $42 million when St. George came on board in 1979 to $506 million in the fiscal year that ended in September. With 13 manufacturing plants and 176 company-owned sales lots stretching across 22 states, Oakwood is now the largest manufactured-housing retailer in the country. All this gives Oakwood a 6% chunk of the Balkanized, $9.4 billion (estimated 1994 retail sales) mobile-home industry, up from less than 1% in 1979.

In manufacturing output, Oakwood trails in seventh place behind behemoths such as Riverside, Calif.-based Fleetwood Enterprises (No. 1 with $993 million of mobile-home revenues in 1993). But in a business notorious for thin net margins, Oakwood's are an enviable 7%. Its stock, which seven years ago was trading at $3 a share (split-adjusted), hit $29.74 in '94 and ended the year at $24.38 on the New York Stock Exchange.

The growth is all the more impressive given the vagaries of a business that is extremely susceptible to economic downturns and the tight-fisted spending of its so-called "Ford and Chevrolet" customers. Last year, the industry shipped 254,276 mobile homes, down 14% from its peak in 1983. In other words, the pie sometimes gets smaller. The way St. George's company makes its money in this lean, mean world is by gobbling up competitors' slices. "We have been and are gearing ourselves to survive in a declining market," he explains.

St. George seems to have divined a formula to keep Oakwood eating in lean times. "Become a low-cost producer and a high-value provider of product," he preaches, evoking the impressive success of Wal-Mart, the high-volume, low-cost retail chain, as a model. Oakwood also stays fit on rich operating profits from its in-house finance unit, which services an $840 million loan portfolio. When mobile-home sales flatten out, the company still throws off cash from its interest spread and real-estate operations in mobile-home parks.

"Muscle building" goes beyond pumping up revenues to trimming fat. Obsessed with cutting costs, St. George exhorts employees to rack their brains for ways to cut expenses, warning them not to take job security for granted.

John Gough, vice president of product design, illustrates the lengths management will go to prove its aggressiveness. In the late '80s, he tacked color posters of snarling, drooling pit bull terriers on office doors. To emphasize Oakwood's new-found ferocity, he planted newspapers, dog bowls and fake dog turds in stairwells. ("They were so real-looking," a former employee recalls, "they almost smelled.") People who performed admirably were rewarded with dog bones.

So why are all the teeth bared? Oakwood suffered a near-death experience in the late '80s when the mobile-home industry went through a prolonged, violent shakeout and one of the company's key markets, Texas, tanked. Casualties were heavy: Half of the 200 mobile-home companies in business in 1978 are no longer around. The crisis is long past, but the atmosphere of martial law continues. St. George argues that his relentless focus on Oakwood's survival is a clear-eyed response to realities lurking outside the door.

While some insiders are galled by the changes forced upon the company ("It's gone from a company of people to a company of numbers," one former top executive says), others sing St. George's praises. "Nick's incredibly visionary," says Fred Townsend, director of market research and analysis. "He took the bull by the horns," another Oakwood executive says. Friends as well as industry analysts say he saved the company and characterize him as brilliant and extremely focused. Some also point to his tremendous ego.

Says Jim...