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American Morning

Interview with Andy Serwer, "Fortune"

Aired April 03, 2002 - 09:33   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JACK CAFFERTY, CNN ANCHOR: Oil prices hitting a 6 month high. Gasoline prices skyrocketing, up more than 30 percent since February. And last week, nationwide, a Gallon of regular unleaded averaged a buck 37. It was below 99 cents not so long ago at a couple of stations in New Jersey where I live. You could get unleaded regular for 99 cents, but it doesn't seem to be stopping anybody from hitting the road in their RVs and their Winnebagos and their stuff, their internal combustion vehicles.

Andy Serwer, the "Fortune" magazine editor-at-large joins us now to talk about -- I guess the driving season is fast approaching, but these gasoline prices have skyrocketed in the last six, eight weeks, and yet, people are not slowing down a bit.

ANDY SERWER, EDITOR AT LARGE, "FORTUNE": They are not, and there are a couple of reasons for that. The RV market, in particular, Jack is just booming. You know, the Middle East is in flames, the economy is going down the tubes, and what are Americans doing? Buying RVs.

CAFFERTY: You know, I bought stock -- this is how good an investor I am on Wall Street -- I bought stock in Winnebago, two weeks before the 1973 Arab oil embargo.

SERWER: Oops. Listen to this. You should have bought that stock last September. The stock has gone from 20 to 40 this year. It has just been amazing. But, a couple of reasons. Of course, 9/11, people are reticent, reluctant to travel to Europe, to Turkey, to Egypt. They are staying here. National Parks, the reservations up over 40 percent, and gas prices are still down from last year, Jack. They are about seven cents a gallon cheaper than they were at this time last year. You see here, Winnebago has got this incredible -- do the RV comeback there.

American spent about $8.6 billion last year on RVs. Shipments up 11 percent, but more importantly, rentals up 40 percent. Those are the new people just trying to check these babies out. We talked to the people at Winnebago a little bit. They have got an incredible bag log, over 2,000 -- that's the opposite of inventory -- they have got 2,000 of these things that people are trying to buy. The stock, as I said, has doubled. And it costs about 100 bucks to fill it up -- a tank, because you've got about a 75 gallon tank, and you go about 750 miles. When I talked to the people at Winnebago, yesterday, though, Jack, I have got to tell you the spokeswoman there was a little defensive about how many miles per gallon you can get on one of the babies, she said -- listen to this -- she told me, she goes, We don't really know. We're not required to test how many miles a gallon.

I said, Come on. You know how many miles to a gallon.

CAFFERTY: So what did she say, about 10 on average?

SERWER: No, we had to call up some local dealers in the area and they told us it is about 10 miles a gallon. It is still cheaper than flying, and people are taking these things, they are going to the National Parks, and that is the big story this summer. They're just driving those babies all around.

CAFFERTY: No room at the campgrounds.

SERWER: No. If you think you are just going to show up at Yellowstone in July, forget about it. You are not going to be able to get there.

CAFFERTY: All right. Thanks, Andy. Andy Serwer of "Fortune" magazine.

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