A QUICK glance at the Cherokee Nation's Official Homepage (www.cherokee.org) finds the statement, “It was a spirit of survival and perseverance that carried the Cherokee to Indian Territory on the Trail of Tears.” In today's turbulent world of livestock and equestrian trailer manufacturing, this embodiment of the Cherokee spirit is alive and well at Cherokee Industries in Oklahoma City, Oklahoma.
When Tom Welchel found himself embroiled in the same economic downturn that racked many of the oil producing western states in the 80s, he called upon the spirit exhibited by the Cherokee people and found a way to survive the turmoil. Having just passed the mid-century mark, and with limited capital for investment in a new business, Welchel decided to take his chances by building ranch beds for the local ranchers in the area.
According to Wanda Welchel, Tom's wife and vice-president of Cherokee Industries, the company really started when Tom obtained a welding machine that allowed him to weld on aluminum materials.
“By 1992, Tom had formed Cherokee Industries and had committed himself to the trailer manufacturing business,” she says. “He chose the name Cherokee because of our ancestry and our appreciation of the cultural heritage of the American Cherokee Indians.” Wanda is listed on the Cherokee ancestral role. Tom's family heritage also has ties to the Cherokee Nation.Survival on the Trail
A major part of Cherokee Industries' survival and growth is successful marketing activities. The company has tailored the marketing efforts at making Cherokee a brand name that the working equestrian managers and cowboys would use. And they have been successful at that plan.
“We have done a lot of promotional touring with the product,” says Tom. “If we are going to reach our customer base, we have to be at the places where they are going to be. That means a lot of shows and rodeos.”
Company visibility at shows is extremely important, especially in the premium, living quarter's equestrian market that is a prime market for all trailer manufacturers. “When buyers look at a livestock trailer, it's a bottom-line purchase,” Tom says. “But when they buy an equestrian trailer with a living quarters area, they want to purchase a durable product that can be customized to their particular taste.”
The buyer for an equestrian product might not go to several dealers to check out the newest product options. Unlike over-the-road commercial trailer buyers, equestrian trailer buyers don't purchase new trailers every year or so. Many equestrian buyers will not have the opportunity to build up the long-term relationships with their dealers that the over-the-road purchaser has.
“Those types of buyers might not go to several dealers and search for what they want. But they will pack up the family and go to the Quarter Horse Congress for three or four days.” Tom adds, “It's extremely important for us to be in front of an audience of such an event.”
Tom's marketing plan is to capture maximum visibility from being at the top attended shows. “In 2000, we did the American Quarter Horse (Youth and World) Show, Quarter Horse Congress, National Barrel Horse Association, and the National Finals Rodeo. We also do quite a few of the regional shows with the help of our dealer network. We plan on continuing and building our visibility at these types of quality events.”
Another branch of the marketing plan is to make certain that the trailer is chosen by the leading experts in the business as their trailer of choice. “We have a lot of professional and working cowboys that use our trailer,” says Tom. “You'll see cowboys such as Roy Cooper (eight-time World Rodeo Champion and 19-time NFR qualifier), Chris Neal, and Phil Chapman use our trailers. The world class quarter horse trainer Don Murphy also uses our product.”
Tom says that much of the enjoyment from operating Cherokee has been the chance to customize trailers to fit the demands of the industry professionals. “I've had other businesses, but with this business I have control from the product's inception to its final sale to the end-user, in many cases. Wanda and I enjoy being a part of that process.”
Many of the working cowboys and professionals use the Cherokee product because of their personal relationships with Tom. “I see these people at the same shows and rodeos year after year, and they know they can visit with us at the plant when they are in Oklahoma. Many of these folks spend a lot of time in the Oklahoma area, so we are right here to service their needs if they have a problem.”
When asked about the desire to start Cherokee Industries, Tom says that it was more than surviving a poor Oklahoma economy that put him on the path of owning his own manufacturing business. A major part of his success is because he grew up on a farm and he appreciates the horseman's lifestyle. He also wanted to build a business during the prime of his life.
“When the poor economy rolled through Oklahoma,” says Tom, “I just wasn't ready to stop working and retire. In fact, I knew I was a long way from it.”
Wanda says that Tom had always wanted to be in a business where he had control of the product from the manufacturing phase all the way through the distribution phase.
“Tom owned a wholesale tire distribution business. He sold tires that fit all types of vehicles from small utility trailers to very large agricultural and construction tractors. But he wanted more ability to create the product that he was marketing. Obviously the tire business doesn't lend itself to that dream very well, but that's what the trailer manufacturing business is all about.
“After liquidating the tire distributorship, Tom pulled up the window shade one morning and said he wanted to build livestock trailers,” says Wanda. “I knew right then that we would have a battle for survival on our hands. Tom knew quite a bit about running a business and marketing products. But the actual manufacturing side of the trailer business would be an area where we didn't have a great depth of knowledge.”
Tom started the process by manufacturing steel flatbed trailers. He listened to his customers and taught himself to build exactly what they wanted. The business grew while the market for utility flatbeds moved ahead with Oklahoma's rejuvenating economy. Tom's goal during that period was to formulate a business plan that would grow the business at a reasonable rate within his capital constraints and allow him to start manufacturing a full line of aluminum stock trailers as soon as possible.
Tom and Wanda believed that the capital constraints on the organization could be used to their advantage if they looked at the situation in a positive manner. They moved the business ahead cautiously, with a careful eye towards each expenditure or planned expansion. “We had to build the business up slowly. We didn't want to expand beyond our ability to have a positive cash flow or to put us in a situation where debt would become an even greater issue.”
Today, both Tom and Wanda look at the early struggles of Cherokee Industries as a foundation building experience. “We decided that our overall key to survival was to separate ourselves from our competition by designing our products to have longevity and durability, as opposed to exclusively competing on a price-only basis,” says Wanda. “Tom's goal from the first day was to build the type of product that would allow us to stand out in the equestrian trailer marketplace.”
In the early days of Cherokee Industries, the Welchels used a small facility in Oklahoma City. “The 22,000-sq-ft building was much too small for us to get any production volume going,” says Wanda. “We needed to do something about that facility because it just wasn't designed to be a true manufacturing environment.”
Cherokee's management had formulated a blueprint for what ultimately would be a successful game plan, but they were missing a facility capable of implementing the full manufacturing plan. Cherokee needed to find a facility large enough for them to manufacture the full line of trailers, in a significant volume.Cherokee Finds a Home
That opportunity came in the form of a business liquidation. “The American Trailer Manufacturing Company was quitting business here in Oklahoma City,” says Tom. I went down there and bought the first aluminum extrusions that allowed us to build several trailers. After that, I knew we could build a quality product at a price our targeted customers could afford.”
Barrett Trailers had a plant located on Interstate-44, just south of Oklahoma City. “When Wanda and I were driving home one evening in 1994, she saw a new sign that had been placed on the property facility,” says Tom.
Tom called for information and soon afterwards, serious negotiations began between the Welchel and the Barrett families.
The facility has in excess of 44,000 square feet of manufacturing floor space available for Cherokee's operation. The Barrett family allowed Cherokee to take possession of the property while the transaction was in the closing process.
Tom felt he needed expert help in the construction and quality control issues that he knew he would face once he started full plant production of the model line. He received help from two interesting sources. It arrived from his neighborhood university and his wife.
“I needed strong engineering and quality control skills to really start designing the trailers that I wanted in the model line,” says Tom. “When you need help like that, you can turn to the University of Oklahoma in Norman.”
The first stop for Tom was to enlist the help of the university's graduate engineering department. His instructions were simple and to the point — create the strongest and most durable trailers possible. Be innovative, and then explain the advantage of deviating from how it's always been done before.Doctoral Candidates
Contracted graduate engineers who were working on their doctorate degrees jumped at the chance to perform stress analysis and design work on the trailer models that Tom wanted to manufacture.
Engineering of the product continues to be stressed at Cherokee. “The company hired Charlie McBay about 3 ½ years ago as its chief engineer. In addition to Charlie, we have Steve Lucas who's been with us for about 2 ½ years, and who has been an asset in our engineering and design layout efforts.”
McBay has spent the last 25 years in the trailer building business. In an odd twist of career circumstances, McBay actually occupies the same office space as he did when he worked for Barrett Trailers.
“We are also adding new software to the engineering department to help them in their efforts at designing the product,” says Wanda. “We have added a computer engineering package to McBay's arsenal that allows solid modeling to take place. The computer will actually “join” a group of components together to display the end result. For example, one of the uses with this modeling tool is to review the fit between aluminum extrusions. This helps in determining where extrusions aren't fitting exactly as they were originally envisioned.”
Tom says he realized that he still needed more help on the actual manufacturing processes. That help came in the form of his wife's past experience with AT&T. At the time her husband was starting Cherokee, Wanda had just retired from AT&T with 30 years of experience in the manufacturing and testing of large capacity switching and exchange equipment.
“I needed someone who could monitor our manufacturing techniques and implement a full quality control system,” Tom says. “Wanda came in and put the whole thing together.”
Tom says that Wanda not only brings some expertise in material sourcing and manufacturing practices but also in the testing of electrical circuitry for the trailers. Tom and Wanda believe that the electrical system is one of the strongest parts of a Cherokee trailer.
“When you put a trailer together and build a living quarters into it, you have to have a system designed for that purpose,” says Wanda. “I saw that same type of zero-to-full-service load requirements when I was involved with AT&T. We had to test the systems to insure that they could go from almost no-load to full capacity.”
“The giant switching units that Wanda used to work with were put into a heat bath of 120° F,” Tom says. To understand how circuitry reacts under those conditions is extremely helpful in trailer manufacturing because of the extreme solar heat that the trailers are subjected to.”
“Right now, we are manufacturing horse, stock, cargo, and specialty trailers,” says Tom. “We are expanding the model line to include new options for our trailers. Another area that we are always looking at is the relationship between our suppliers and what they can offer to us, which will allow us to offer something new to our customers.”
“Tom has correspondingly made strong improvements to our marketing side of the business,” says Wanda. “A lot of those marketing improvements focus on providing both our dealers and our end users with up-to-date information about the products.”Synergy
Tom Welchel believes that the relationship between marketing and manufacturing has to be constantly nurtured and strengthened. “It's obvious that it doesn't do any good to have one without the other; however, I feel that information has to flow very rapidly between the two entities if you are going to remain a successful manufacturer. It's the synergism between the two efforts that really builds a business.”
Tom and Wanda both agree they have a synergistic effect on each other. According to Tom, “That's been a key to our success. Each of us in this company has a job to perform. And each of those jobs has to be successful if another person is to succeed with their side of the operation. The Cherokee people have a long history of working together as a team. That's our heritage and our history. We live that here at Cherokee.”