By Marilyn Odendahl, Truth Staff
modendahl@etruth.com
COBURG, Ore. -- Less than a month after it filed Chapter 11 bankruptcy, Monaco Coach Corp. has found a suitor for its recreational vehicle business.
The company has signed a nonbinding letter of intent with Navistar Inc., in which the Illinois-based manufacturer would acquire certain assets and assume certain liabilities primarily associated with Monaco's RV manufacturing business.
Thursday evening Craig Wanichek, spokesman for Monaco, said Navistar is moving to buy Monaco's core RV business, which includes the motorhome and towable divisions. He also confirmed Navistar was the "major public company" that Monaco referred to in court documents filed Monday.
Monaco told the court an interested party had sent a letter of intent to purchase substantially all the assets of the RV business for $50 million.
"We look forward to working with Navistar to complete this transaction and ultimately become a part of one of the nation's most respected companies," stated Kay Toolson, Monaco chairman and chief executive officer, in a release. "This is a great opportunity for our employees, dealers, suppliers and the communities in which we operate. We look forward to continuing the Monaco Coach brands and our legacy of producing quality and innovative recreational vehicles for our owners."
Monaco and Navistar said a definitive asset purchase agreement could be signed in April.
Since January 2007, Monaco and Navistar have been building chassis together as a part of the joint venture operation Custom Chassis Products in Elkhart, Ind.
Monaco Coach has struggled as the economy has stalled. In September, it closed manufacturing operations in Wakarusa and Nappanee in Elkhart County, laying off about 1,000 workers. On March 2, Monaco announced it was permanently laying off the 1,900 workers who had been on furlough at its Indiana and Oregon plants. On March 5, the company filed for bankruptcy.
Navistar manufactures heavy vehicles, including International brand commercial and military vehicles, as well as chassis and diesel engines. It also provides truck and diesel engine parts. Another affiliate offers financing services.
At the end of its fiscal year on Oct. 31, 2008, Navistar reported revenue of $14.7 billion and a net income of $134 million.
"If we are able to reach an agreement, the purchase of certain Monaco assets would fit our strategy of leveraging our assets to expand our diesel business, serve the end customer and would also complement our Workhorse custom chassis business," stated Jack Allen, president of Navistar's North American truck group, in a release.