NAPPANEE -- Since its founding in March 2000, Terra Group, formerly Nappanee Window, enjoyed the success that came with the growing recreational vehicle industry.
Now the supplier is having to cope with the realities of a cyclical business. Terra Group has restructured its company and laid off an undisclosed number of workers from production and management because of the decline in the RV market.
"It was painful," said Evan Bontrager, president and chief operating officer at Terra. "Eight years of great success and this is the first time we've ever had to lay off."
He did not provide specific numbers of how many workers were let go.
The realignment of operations effected Terra Group's three divisions -- Nappanee RV Components, Nappanee Transit Components and MILL, the aluminum extrusion division -- and all its plants in Goshen and Nappanee as well as facilities in Caldwell, Idaho and Riverside, Calif. Changes were made to the production structure and management groups in order to improve communication and increase efficiency, Bontrager said.
The restructuring is expected to generate "significant savings in costs" over the next 12 months, according to a release from Terra Group.
"The housing credit crisis has severely impacted the RV market and touched every RV component manufacturer in the area," Steve Brenneman, chief executive officer of Terra, said in the release. "We see what is ahead and we're preparing accordingly."
Terra Group has been noted for its commitment to environmentally friendly manufacturing practices and that, said Bontrager, remains "critical to our success." As the supplier implements lean manufacturing practices, recycling materials and reducing waste will become even more important.
The downturn is not stunting the company's research and development. Terra has a "couple of new designs" and "exciting products" it will be introducing, Bontrager said.
Still the slumping RV shipments required the company to react, Bontrager said.
"We lost some good people," he said, noting he does not expect any to be hired back this year.