Monaco will close in Indiana

[jack14r]

It has been reported that Monaco will close all manufacturing and service locations in Indiana by September.Their other manufacturing locations out west will remain open.

[BrianE]

That's sad to hear in that many of the Royale folks are still employed there. Could this be a possible opportunity for some smart feller???

[sawdust_128]

http://www.portfolio.com/news-markets/national-news/ap/2008/07/17/monaco-coach-closing-3-rv-plants-employing-1400



Monaco Coach closing 3 RV plants employing 1,400

Jul 17 2008 6:37PM EDT



Monaco Coach Corp. said Thursday it will close three northern Indiana factories and eliminate 1,400 jobs, or about a third of its work force, because of the slumping economy and the shrinking market for recreational vehicles.
Coburg, Ore.-based Monaco said it expected to close the plants in Wakarusa, Elkhart and Nappanee by Sept. 17. In a letter to employees, Chairman and CEO Kay Toolson and President John Nepute also said the company will fire some of its administrative staff and cut executives' salaries.
The cuts come as Monaco and other RV makers struggle through an industry slump that has seen shipments of top-of-the-line Class A motor homes fall by nearly a third to 32,900 in 2007 from 46,300 in 2004, according to the Recreational Vehicle Industry Association.
"As a result of record high fuel prices, declining consumer confidence and challenging consumer credit markets, Class A shipments have continued to weaken in 2008, down an additional 40 percent from 2007," the maker of Monaco, Holiday Rambler, Safari, Beaver, McKenzie and R-Vision motor homes and trailers said in announcing the cuts.
Nepute said the plant closings will cut Monaco's Class A production capacity in half to 90 units per week.
Toolson and Nepute, in their joint letter to employees, urged them to write congressional representatives and ask them to support legislation to strengthen the economy.
"We believe there is more our government can do to facilitate a recovery in our nation's economy. Our government leaders should be taking steps toward making our country energy self-reliant again through drilling for oil, building refineries and encouraging greater use of alternate energy sources," the letter said.
Company spokesman Craig Wanichek said the industry can act as a harbinger of changes in the economy.
"Downturns in retail sales of Class A motor homes in the past have led into recessions," Wanichek said.
Iowa-based Winnebago Industries Inc. reported last month that its profits for the nine months ended May 31 fell 42 percent from the comparable period a year earlier, while sales dropped 18 percent to $519.1 million from $632.5 million.
Monaco in April laid off about 300 workers in Wakarusa, nearby Warsaw and Elkhart, and previously laid off 200 others, mostly in Wakarusa. Newmar Corp., after cutting 118 jobs in Nappanee in January, said July 2 it would eliminate an unspecified number of other jobs. Fleetwood Enterprises Inc. last month laid off 301 workers at its plant in Decatur, Ind., about 75 miles away.
In Elkhart County, where the three Monaco plants are located, the unemployment rate grew from 4.6 percent in 2007 to 5.9 percent in May. The RV industry employs about 27,000 people there and had $7.8 billion in sales last year, said Dorinda Heiden, president of the Economic Development Corp. of Elkhart County.
"You never know the full impact of an announcement like this," Heiden said.
Monaco currently employs 4,300 workers, mostly in Oregon and Indiana. It will keep open Indiana plants in Warsaw, Milford and Goshen that will employ about 700 workers. It has Oregon plants in Coburg, Burns, Springfield and Harrisburg. Hourly production workers earned $25,000 to $35,000 per year, Wanichek said.
Most production of motorized units now made in the idled Indiana factories will move to Oregon, but work on two models will move to the company's plant in nearby Warsaw. Monaco also will consolidate its production of trailers in Warsaw.
Monaco lost $8.5 million, or 28 cents per share, on sales of $252.4 million during the first quarter of 2008, compared with profits of $1.5 million, or 5 cents per share, on sales of $322.2 million a year earlier. During 2007, it earned $12.3 million, or 41 cents per share, on revenues of $1.3 billion. It's due to release second quarter results July 30.
The company said it expects severance costs and other expenses related to the cuts to total $7.5 million during the third quarter. It said the cuts should reduce operating costs by more than $12 million per quarter.
Monaco shares fell 34 cents, or 11 percent, to $2.74 Thursday, down about 69 percent from the beginning of this year.
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http://www.monaco-online.com
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[Jon Wehrenberg]

Brian hit that nail on the head.

There have been a lot of people that need qualified help in servicing and maintaining these coaches. While Royale did not have super sophisticated systems its conversions used the same type components and devices found in ours and they clearly were familiar with the Prevost chassis.

If there are going to be some good people out of a job it is a business opportunity available. They will have to learn more than just Royales however. And they will have to learn how to cope with no business in the winter months

[phorner]

Jon and Brian are absolutely right. There certainly appears to be a serious lack of qualified service facilities, and this may be an opportunity for skilled technicians to fill that void.

What about a co-op, formed to provide this service? Perhaps it could operate like the energy co-ops and provide service for the "members". The benefits might be reduced costs and better service.

I don't mind paying a reasonable rate for work performed that is satisfactory and quality that can be trusted.

[phorner]

Also, along the original thread, it's my understanding that Monaco, which now owns Safari, has ceased making any more Safari coaches. The have some 75 or so coaches out on lots now and will not produce any more until they are sold.

That being said, I find it hard to believe that Monaco will continue the Safari line after the remaining coaches are gone. There is probably not enough consumer demand for this niche and it may be easier (and cheaper) to just try to push another Monaco product rather than continue the brand.