Clayton Homes Founder Jim Clayton Discusses the Manufactured Housing Industry —– and More



Jim Clayton, the legendary founder of Clayton Homes recently sat down with and for a most fascinating discussion with host L.A. Tony Kovach.

Clayton Homes started in 1966, has grown to having the distinction of not only being the largest producer of manufactured homes in the world, but also now has become the largest home builder in the nation. Clayton Homes has become a vertically integrated company that builds, sells, finances, and insures manufactured homes and modular homes in 49 states.

Clayton Homes current President and CEO is Kevin Clayton, son of the founder. Clayton Homes was acquired by Warren Buffet’s Berkshire Hathaway in 2003. Jim Clayton’s recounting of how that acquisition came about is just one of the fascinating discussions in this wide ranging interview with a true icon of the manufactured housing industry.

{video transcript}
Tony: L.A. “Tony” Kovach here for in association with and we are with Mr. Jim Clayton, the legend in our industry, and with Clayton bank. So, welcome Jim!

Jim: It’s a pleasure to be here, the way you carry on there!

Tony: Well Jim, as you know we’ve talked about doing this for a while, and I’m certainly glad to have this opportunity to sit down with you. We’re at the Tunica Manufactured Home Show. What are your thoughts on the show so far, Jim?

Jim: Oh, it’s really exciting! The homes are beautiful, but, what I really noticed is, the gloom and doom of recent trade shows just one or two years ago, it’s all gone!

Tony: We’re back to enthusiasm, aren’t we?

Jim: We are! As the numbers increase, they’re better this year than last year.

Tony: Yup!

Jim: We think they’re gonna be better next year, than this year, and that really motivates the entrepreneur.

Tony: It does.

Jim: One of the things I really love about our industry is it’s infested with entrepreneurs!

Tony: You know we’re one of the last bastions of the mom and pop business that can come in and make it great.

Jim: Which has made America great.

Tony: Exactly right. Speaking of that I want to mention your book, “First to Dream” and I remember reading some comments by Dolly Parton, and she made the statement in the book that your story is like the rainbow at the end of every dream. Maybe you could share a few thoughts on your background, and how you got into the manufactured housing industry and some of those details.

Jim: Well, Dolly’s a great friend and an amazing person. As you talk about a superstar entrepreneur then, Dolly does all of that, she is all of that, just happened to be her business is entertaining. And she mastered her business through hard work, creativity, taking care of others while they took care of her, starting at the bottom, afraid of failure, and working really hard to make sure that she doesn’t fail… I just told my story.

Tony: And, go ahead.

Jim: I love Dolly and I love entrepreneurs. I’ve had the honor, pleasure of working with a number of them. I’ve had people leave me and think that maybe the relationship the great friendship I think they thought that. I hope they thought that. Believe they thought that was over. I’d put my hand on their shoulder and say, “there’s room for me in your life in the future.”

Tony: Wow

Jim: And then we end up partnering on something and I’m proud to say not all of them now, but many of those people that I just described there have gone on to build some really exciting businesses.

Tony: You know as you’re talking about some of those exciting businesses, right now through Clayton bank, you’re actually facilitating entrepreneurs and facilitating things like Scott Roberts and some of his projects, aren’t you?

Jim: You mentioned Scott Roberts, what a guy! And I just love his mother, and his sister and brother. I wish I could’ve known his father. I’m a pilot, and a good pilot, I’ve been flying 61 years. Scott’s dad, he died a decade ago but he was a pilot and a mobile home park operator, manufactured home manufacturing communities would’ve loved to have known him but Scott is a wonderful entrepreneur, and pilot.

Tony: I didn’t know Scott was a pilot.

Jim: An avid pilot and a good pilot and I’m proud to say is a wonderful partner of mine. He’s a client of Clayton bank and then he’s a personal he’s allowed me to invest in his Texas communities.

Tony: You know, it to me it’s kind of an interesting story and one of the things that you and I talked about back in october when we were at that conference in Chicago, was a comment that you had made about in the communities world, we really kind of cover the gamut, we’ve got everything from the entry level to the Zuma Beach in Malibu, don’t we?

Jim: From just ultimate resorts all the way to the tiny little apartment that may be government subsidized and everything in between. The service that our industry provides, and that’s just one example, is a very important component of housing. I never thought about going to college, came off the farm, at memphis gas and water. And they assigned me to the radio department, so I could climb up on top of the powerline trucks and replace the tubes and the two way radio systems, and from there an intern coming out of Georgia Tech, I wanted to be like him. He was really smart, and had an electrical engineering degree, and was going to be a manager for the company, and I never thought about going to college and ask him how you do it. And he mentored me, and so I wanted to be an electrical engineer I thought that’s what I should do, you’ve been around me enough to know now that I don’t need to be engineering all day I need to be selling, interfacing with people. I went Memphis state for four quarters, in pre-engineering and transferred to University of Tennessee, and got my electrical engineering degree, and worked my way through school, in television. So you know, as I look at the cameras here…

Tony: You see the evolution.

Jim: I see the guys I wanted to get up and help them, now we have this small equipment, and we’d have had to have 3 trucks in 1955 bringing enough equipment in to tape this, so you know, so it’s amazing, technology what it does for us. But as I said I met Dolly along the way at the television station where I worked my way through school and I was motivated to see her career and all through the years.

Tony: What an entertainer she’s been.

Jim: And how she’s managed it and how hard she’s worked and she like me got a taste of some success and you study motivation and you learn if you have 3 hots and cot you’re okay. But Dolly, I think like me, wanted pretty good 3 hots.

Tony: She didn’t want to settle as Zig Ziggler used to say.

Jim: I’m a fan of Zig Zigglers too. And likewise we’d like to sleep in maybe a better bed than where we grew up on a farm.

Tony: So you were talking about technology a minute ago and I want to remember to circle back to a great story you told about how the cameras used to be in those days. But, you know as you look at our industry which has certainly been through quite an evolution, in your mind what do you see that our industry can, and should, and ought to be doing, to better present our message, and to better tap into technology today because you certainly have an appreciation for that.

Jim: Well there’s two sides to that coin and let’s just take the assembly processes of a home.
A home in a factory should be built pretty much like a home out on the hillside. That is, that the materials, you build them out of basically the same materials, they really are increasingly the same. And so you need to use mechanics, and electronics, technology, computers to the extent that you can but there’s a certain amount of hands on work that is required in both cases. And we take a lot of labor out in the manufacturing process and we shield ourselves from the cost and damage and increased cost that weather contributes to the site built process. So we have a number of advantages in the manufactured housing business and we have some disadvantages too in that there have been some people back in the early days that would cheat in the manufactured housing business.

Tony: The pre-HUD Code days.

Jim: Especially during that, but that’s true of any other manufacturing process, they’ve had that in the country, and we have more and more government regulations, partially driven by some

Tony: response to those things.

Jim: Exactly. So, you have to have some hands on work and labor and expertise and attention in factory process. And then as long as our industry is cyclical due to seasonality, and then due to economic peaks and valleys, and I used to make talks in the industry and every time I’d have fun saying “folks I’ve been in the industry now 6 years, 7 times.” And then I would talk about what the down cycles are like and then what the peaks are like and how we think differently at each time and I would watch my friends and I guess I did this in the first couple of cycles of my industry which fortunately of my career in the industry. And I think that there were a couple times early on in the cycles that I could’ve been hurt and was crippled a bit but got through them fortunately okay, but I would watch others get euphoric in the peaks

Tony: Not thinking about the valleys that are coming.

Jim: They didn’t know, or forgot, or thought it couldn’t happen to them, or thought it was not going to happen this time. But if it’s happened in the past what’s going to keep it from happening this time.

Tony: And success isn’t it largely, you used the word replicate, I would use the word duplicate, but success is always about systems. And if you can create a system that you can duplicate. So it’s things like customer relationship management, things like image branding, that’s been something that I see your eyes are twinkling, these are things that speak to your heart and mind, don’t they?

Jim: Absolutely. Banking is so process driven.

Tony: And so is selling homes.

Jim: It really is. Keeping it simple.

Tony: So do you have some closing thoughts for our vast audience?

Jim: In systems and processes I think that I wouldn’t have been able to think about, make recommendations, participate in decisions, studies and process development, systems development as well as I’ve been fortunate to these things I’ve been lucky enough to be a part of, had I not been a pilot,

Tony: Because you could get back and forth fast.

Jim: No no, that too I could have gone back and forth other ways, you see in flying, you use systems, really really use systems, to the extent you don’t, you may not make it. And in dealing with weather and dealing with traffic and dealing with highly regulated and so you do report in and use the right script and it’s standardized and so to the extent that you can duplicate, replicate systems and processes and you can’t even hardly find anywhere, medical profession? And aviation there are others, that’s two really really good examples of where systems and processes, duplication replication, standardization, is really present, and to the extent it’s not bad things happen.

Tony: You know that’s an excellent point and so when you have standardized processes customer service is improved, warranty delivery is improved, the whole buying experience and and ownership experience is better then too.

Jim: What’s the expectations of this flight? What’s the expectations of this home delivery installation? What’s the expectation of this product presentation? What’s the expectations of this closing? What’s the expectation of this financing process? If we can do that, refine it, as well as we do that flight, wonderful things happen.

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