Country Coach May be Closing

[Coloradobus]

Got this morning
News January 06, 2009





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05Investors, buyers may benefit from Country Coach's woes
Greg Gerber posted on January 05, 2009 11:56
JUNCTION CITY, Ore. — Troubled times for Country Coach could be good news for bargain hunters — both customers looking to get a deal on a new motor home, and investors ready to swoop in and pick up the pieces of a company that still has a strong reputation for building high-quality RVs, a local RV dealer said.

The privately held company notified its 500 employees on Tuesday that it will be forced to permanently shut down by Feb. 28 unless it obtains new financing. Even if it obtains the financing, the company said, it expects to impose “mass layoffs” starting around March 1.

The factory stopped production in November, and was to have resumed work on Monday, but will remain closed until further notice.

Guaranty RV Super Centers in Junction City is a major dealer for Country Coach. General manager Shannon Nill said Friday he’s hopeful the RV maker will be able to get the capital infusion it needs to stay in business.

“They have a few investors, and they’re looking for one more,” he said.

Country Coach’s majority owner is Los Angeles investment banker Bryant Riley. He and a group of investors that included Country Coach’s founder Bob Lee, CEO Jay Howard and his brother, vice president Jim Howard, bought Country Coach in February 2007 from National R.V. Holdings for $38.75 million. Nill said he’s heard from company officials that its value is now around $16 million.

Nill also said he’s heard rumors the company might be drawing interest from Warren Buffett, whose Berkshire Hathaway owns Indiana RV company Forest River and recently bought the RV assets of Coachman Industries.

Even with the company’s troubles, people are still buying Country Coaches, Nill said. Guaranty has sold five in the past week, he said. He said Country Coach is the “top quality brand” in the RV industry, rivaled only by Monaco Coach in Coburg.

Nill said the company’s woes likely will bring out customers looking for deals.

“These people know fully well what the situation is,” he said. “It’s a buyer’s market. People buying Country Coach will pay less than we pay. … They can buy a top-quality product at a depressed price. We’ve got to find homes for these things.”

SOURCE: Register Guard

Posted in: Dealer News

[Coloradobus]

The latest news about Country Coach



Country Coach, Lee Try to Work Out Dispute
RV Business
Friday, January 9, 2009

The 500 employees at the idled Country Coach plant in Junction City, Ore., shouldn’t wait around for the plant to restart, founder and investor Bob Lee told the Register-Guard, Thursday (Jan. 9).

“They should be out looking for a job,” he said in an interview.

Country Coach’s attorney, however, said that the company has every reason to believe it will continue operations.

Lee has been at odds with the company since December when he sued to evict Country Coach from its 60-acre property in Junction City that Lee and his family continue to own.

This is after Lee sold the company he founded to Perris, Calif.-based National RV Inc., watched it lose millions of dollars over 11 years, then helped a clutch of investors re-buy the company, returning to the Junction City campus in 2007 as a hero.

CEO Jay Howard referred to Lee as the “essence of Country Coach” at the time.

The eviction lawsuit is just one more sign of the luxury recreational vehicle maker’s financial woes.

Just over a week ago, Howard sent a letter to employees saying the plant might close permanently if the company could not get new financing, and that massive layoffs are in the works in any case.

Howard did not return calls to the Register-Guard seeking comment for this story.

But, on Thursday, Country Coach attorney Todd R. Johnston provided a written statement saying that the company will remain in its current location and that “Country Coach has every reason to believe that the financing it needs to continue operations will be forthcoming and that the valuable niche it has developed in this market will be preserved.”

Attorney David Wade, who represents Lee, his wife Terry, and his brother Ronald, said the family is prepared to dismiss the eviction lawsuit under a set of terms that Wade declined to disclose.

“Let’s just say that, if it’s performed the landlord will be satisfied, and we’ll dismiss the eviction proceeding — and I expect it to be performed.”

The Lee family brought the lawsuit, court records show, after Country Coach defaulted on the December lease payment on the plant property — located on eight city blocks in Junction City.

Lee said the family was not trying to shut the plant down or require it to move.

“Sometimes you have to use a little force to get the decision you’re looking for,” Lee said. “It was a way to keep the pieces in place. That’s all we we’re doing. It was a way to keep things from being auctioned off. It succeeded, I think.”

Lee said he has no direct say in business decisions, even though he was named “emeritus CEO” when he returned in 2007, after a Los Angeles-based private investment group that he was allied with bought the company.

Lee said he’d worked at other RV enterprises alongside Howard, who the investment group installed as CEO in Junction City.

“Jay and I have worked on three turnarounds and they were all successful except this one. So far, we’re not successful in turning this one around, but the economy has gotten so much worse,” Lee said.

The economic downturn has been brutal on the nation’s RV makers.

The Register-Guard reported that the industry has shipped 50% fewer Class A units — the large, bus-like motorhomes — this year compared to the previous year.

In the past 12 months, 45 of about 2,850 RV dealerships around the country have closed, according to the Recreation Vehicle Dealers Association (RVDA).

Country Coach began a series of layoffs in December 2007, with the work force falling from as many as 1,800 workers to about 500.

Last month, Country Coach doubled its usual holiday idle period to four weeks. The plant had been set to restart on Jan. 5, but, as of Thursday, there was no sign of resumption.

“The finance companies are not working with us much,” Lee said. “There’s no money to buy a new coach; You have a hard time getting a loan, if you’re a buyer. The banks won’t (provide) loans for coaches to the dealers because the dealers can’t afford to do it — so you can’t build any new product and you can’t pay your suppliers.”

Country Coach fell behind on its payments to suppliers, who tried to remain patient so the company could regain its footing, company officials previously said.

“We’re working to get the pieces together so (Country Coach) can get enough money together to pay some of the suppliers who can’t afford to carry it anymore,” Lee said Thursday.

“All the little mom and pop shops in the Junction City, Harrisburg and Monroe area, all those people are in trouble because the RV company is in trouble. The economy today is just upside down.”

Lee said he’s still striving to preserve Country Coach — and that the company’s current nosedive is painful for him to witness.

“The lender is in on some of the things we’re doing; it’s not as much as we’d like. (And) we’re trying to get the investors to come more in, too,” he said. “We’ll work with them until everything is gone — or it’s up and running again.”

[Coloradobus]

Report: CCI Workers Told to Pick up Belongings
RV Business
Friday, January 30, 2009

Employees of struggling RV manufacturer Country Coach Inc. fear the Junction City, Ore.-based company is on the verge of a shutdown, but a company spokesman said he has no information that the company is closing.

According to a report by KVAL, four Country Coach employees and a supervisor said they've been told to remove their personal property from the premises ahead of a shutdown.

Matt Howard, a Country Coach spokesman, confirmed that employees may have been asked to remove personal property from the plant but said he had no information that the company was shutting down.

"Many managers were encouraged over the last couple days to have employees remove their personal items from the property, due to the uncertainty of Country Coach's future," Howard wrote in an e-mail to KVAL News. "It is no secret that Country Coach needs financing to continue, and no such financing has yet been secured. No doubt this communication to pick up their personal items has created this new activity."

"We may close permanently at any moment in the next 30 days, or we may not," Howard wrote. "At this point, nothing is certain. Keep in mind that supervisor level positions have been laid off for more than 60 days in most cases, so I am not confident that they would have accurate updated information. Run what you like, but I am not aware of any definite closure plans."

Last July, Country Coach was one of Lane County's top 10 employers. The company made a series of layoffs in 2008, reducing its work force from about 1,200 to around 500.

[bonhall41]

The industry is definitely struggling. Got an e-mail this morning that Featherlite has a new 2007 XLII double-slide model for $899K. Inventory number is 8912 if anyone is interested. They're heavily discounting all the units they have in stock.

[ajhaig]

Does anyone have more insight into the new coach market?

Are people buying new coaches at a rate that can sustain the remaining converters?

[Coloradobus]

Rumor has it, altho unsubtantiated, Marathon just sold a 4 slider for a measily $$ Million. It listed for $2.2

[garyde]

My feeling is it is no longer a question of 'who' will survive but more a question 'will any Convertors survive'. At it's core, this economic crisis is a bank collapse. The fed is trying to re-inflate the banks, but many of them are so up side down you can't call them banks.
Consumer borrowing is almost dead.

[jack14r]

I looked at a new 2007 Featherlite last summer at a buses & bikers rally and it had a 2005 shell,I heard that at the Tampa super show that new XLIIs were 799K.Since almost no one has purchased a coach recently the converter inventory is getting older,but their holding cost has increased.I don't think that anyone has a clue as to when this situation could improve,I bet that it would be almost impossible to get financing on a new coach.The converters are in a difficult position,price won't sell it and if it does there is little financing out there.Featherlite still has 25+ coaches to sell,I bet that it might take 3 years to clean out their inventory.

[0533]

Well the problem has now spread back to the Mothership at Prevost Car. It is liken to the worker Bees bringing pollen back to the hive for the Queen, no pollen no honey for the queen.

Prevost Car has been laying off staff here in Florida, Volvo has just laid off a bunch of employees and Prevost Car for sure is not building many or any shells for converters.

I was the only motorhome customer at Prevost Car Jax. on Friday, no problem getting people to work on my bus.

I am almost always in a positive mood when it comes to business, have actually had a good Jan. in my business, but am not very excited about much else.

Too much power in too few hands, too much greed in too few hands with too much wealth in the hands of people who simply do not care about how or what the outcome of their actions will bring to the rest of the world, as long as they get theirs. I am a free market person myself, but do not like to see the cards stacked and the game rigged by those who only want complete control over everything. There must be a middle ground

We have seen this with the robber barons in the past, and history always repeats itself, power, greed and corruption creates havoc and despair. There needs to be checks and balance, and a sense of fair play and people who give a sh.. about others.

It is a very strange time we live in now, and I am afraid we have not seen the bottom and will not for sometime in this industry.

PS> My wife made me cancel my order for our 50 million dollar corporate jet this week, we doing our part.

[Yankee802]

Bruce, so you are NOT citi's CEO then!