By Marilyn Odendahl, Truth Staff
modendahl@etruth.com
COBURG, Ore. -- During a Wednesday conference call with investors, Monaco Coach Corp. officials left open the possibility the joint venture chassis-building operation may remain in Elkhart despite earlier statements the facility would be closed and moved to Oregon as part of the company's restructuring.
The recreational vehicle manufacturer is facing a market that Kay Toolson, chairman and chief executive officer, said he had not seen since 1979 and 1980. For the second quarter of 2008, Monaco posted an operating loss of $15.1 million and for the opening six months of this year, a net loss of $18.2 million.
Toolson characterized the recently announced closings of the facilities in Elkhart, Nappanee and Wakarusa as "drastic" and "painful" but said "it was necessary for us to take very decisive steps to make sure we could be profitable ..."
In total, the realignment of Elkhart County production will displace 1,430 workers at the three locations. This reduction along with the 600 workers laid off in April has cut the company's employee head count by 40 percent since the end of the first quarter, according to Monaco President John Nepute.
Custom Chassis Product, the joint venture with International Truck and Engine, a subsidiary of Navistar, was started in January 2007 and is housed in the building on South Nappanee Street in Elkhart. Monaco initially said that plant would be shuttered and production would move to Oregon.
However, Nepute told investors Monaco is working with the joint venture partners to determine the future of the plant.
"At this point," Nepute said, "it's unclear whether or not it will be moving out to Oregon or still have it remaining in Elkhart although it appears maybe it will be a combination of the two."
International did not provide further details.
"They're a great joint venture partner and we enjoy working with them," Roy Wiley, spokesman, said of Monaco.
In Elkhart County, Monaco will be idling about 2 million square feet of manufacturing space and, Nepute said, the company is nearing a decision on what to do with the plants. Likely Monaco will not want to sell off all the facilities but rather keep some capacity "that we could then fire back up when the market turns."
The properties are being appraised and other parties are interested in them.
"There's a variety of uses for those manufacturing facilities, could be all the way from warehousing to the manufacturing of other products," Toolson said, noting Monaco is working with state officials to find other companies that would be willing to start operations in the buildings and provide jobs for some of the displaced employees.
Toolson was optimistic the RV market will return and Monaco will emerge from these difficult times as a strong participant.
"We are also redoubling our efforts to come out with new fuel-efficient, lighter-weight products, both on the towable and motorized side of our business," the chairman said. "We are convinced that while there will always be a significant market for the larger current Class A motorcoaches and RVs that have traditionally been built in the past, there'll be a stronger market demand for new lighter-weight, more fuel-efficient products in the future. It is our intention to be on the forefront of leading this new market."