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Business

Vacuum cleaner czar credits success to tenacity

| Friday, April 26, 2002

David Oreck says he is baffled by bagless vacuum cleaners.

"Why would anyone even want one," he said of the machines, which have made a comeback. "They are like what my mother used in the 1920s."

Indeed, the owner of the company that manufactures the well-known 8-pound Oreck XL vacuum, who spoke Thursday at the University of Pittsburgh's Institute For Entrepreneurial Excellence, may be right. After all, his name is synonymous with vacuum cleaners — thanks to a heavy advertising campaign — and he has made a fortune from them.

In a matter of years beginning in the early 1960s, Oreck transformed a faltering division of RCA Whirlpool into a successful manufacturer and retailer of vacuum cleaners.

A Minnesotan who served in the Air Corps in the Pacific during World War II, Oreck became head of RCA Wholesale Distributions in New York after returning. Another RCA unit made vacuum cleaners but failed to make its upright vacuum models successful.

In 1963, he started Oreck Corp. by acquiring the faltering RCA vacuum business. Within two years, the company, whose sales of uprights had been in last place, moved to first place.

Today, privately held Oreck Corp. is based in New Orleans and manufactures its products in Long Beach, Miss. It generates about $260 million in sales each year and employs about 1,500 people. The company has revamped the original Oreck vacuum cleaners many times over four decades. And it also sells air purifiers and cleaners. It operates 600 Oreck stores throughout the United States, both as franchises and company-owned stores. There are four in the Pittsburgh area.

Consumers can order Oreck vacuum cleaners through department stores, but they are not sold in such establishments.

"Retail stores have no service any more, and I do not want the Oreck vacuum cleaners to be sold without any service," Oreck said.

It is service and customer satisfaction that have made Oreck a recognized brand name, he says. The company is well known for its 30-day free trial period.

Oreck, along with his son Tom, still runs the company. But now, Oreck, who is 77, spends considerable time traveling, mainly talking to students. The University of Pittsburgh is the 20th school he has visited this year

"Its tiring to travel so much," he said. "But it is also gratifying."

He is a licensed pilot and is also a fan of Harley Davidson motorcycles.

Invariably, at talks like yesterday's, Oreck is asked to explain his success. Success, he says, may look easy with hindsight. "It has not always been that easy at all."

"One time, my accountant said, 'Get out of that business,' " Oreck said. If he had failed, Oreck said he would have been considered stubborn. "But because I succeeded, people give me credit for being tenacious."

Oreck is proud that all of the company's manufacturing is done in the United States and says he is skeptical of the erosion of this country's industrial base.

"Our standard of living will fall if we farm out every manufacturing job to other countries," he said.

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