A Once-Great U.S. Manufacturer Destroying Itself

In our award-winning book, The Distribution Trap, Timothy Wilkinson and myself went to great lengths to praise David Oreck, the founder of the vacuum cleaner company that bears his name.

For decades, while his major competitors went through bankruptcies, painful acquisitions, and the outsourcing of production from the U.S., Mr. Oreck stayed true to his principles and built one of the best companies in America.

By controlling the sales and distribution of his innovations through a direct marketing strategy, bulwarked by a network of exclusive franchises, Oreck was able to build a loyal following of customers who would pay "that little extra" for an American-made product of high-quality.

As the rest of the industry was running to Bentonville to cut huge-volume deals with "China Mart", as Mr. Oreck called them during a visit to the University of Akron in 2004, he consistently shunned the big-boxes.

It paid off. Oreck was able to consistently deliver high-value and profits, all the while still manufacturing here in America.

But now things have changed.

Mr. Oreck is long since retired and a new generation of leadership is putting the company on course for its eventual demise.

Today you can buy Oreck vacuum cleaners at Target.

The attached picture below, taken a few days ago at a local Target store, shows how the once awesome Oreck brand is just one among many others: a commodity and nothing else.

Even worse, the company announced last month a new "partnership" with Wal-Mart.

For anyone with any sense at all, a "partnership" with Wal-Mart really means loss of control; lower and lower costs; a cheapening of product quality; a diminishing of brand integrity; and, ultimately, the off-shoring of U.S. manufacturing jobs.

Listen to how Mr. Fred Whyte, President of STIHL, a company that stays away from the big boxes, describes what will eventually happen to the Oreck brand and its products.

What a shame