By Marilyn Odendahl, Truth Staff
modendahl@etruth.com
COBURG, Ore. -- Crushed by falling revenues and growing profit losses, recreational vehicle giant Monaco Coach went on life support Monday.
The manufacturer announced it was terminating most of its workforce while it continues to try to find additional financing or a buyer. In Indiana, the announcement will impact 575 workers at plants in Warsaw, Goshen and Milford as well as another 2,000 employees in Oregon.
"We just needed to reduce our expenses as we get through these unprecedented times," said Craig Wanichek, spokesman for Monaco. "We regret the impact this decision has had on our employees and the communities where we have plants. Obviously it was an extremely difficult decision."
Like many recreational vehicle makers, Monaco has been battered by high fuel prices, frozen credit markets and declining consumer confidence. The weakening market forced the company to close plants in Wakarusa and Nappanee, Ind., in September 2008 and move towable production to its facility in Warsaw and most of the motorhome construction to Oregon.
For the Goshen and Warsaw communities, Monaco was not a major employer but these latest cuts will hurt, leaders said. The December unemployment figures put Elkhart County as the highest in Indiana with a 15.3 percent jobless rate and Kosciusko as ninth with 11 percent.
"If you lose even one job, it's a setback," said Goshen Mayor Allan Kauffman. "I am very disappointed to hear this about Monaco Coach."
Monaco made cargo trailers at its Roadmaster plant in Goshen and horse trailers at the Bison facility in Milford.
The company's joint venture with Navistar International Corp. to build chassis in Elkhart is not affected by Monday's announcement, Wanichek said.
In Kosciusko County, Monaco was considered a good company to work for, said Joy McCarthy-Sessing, president of the Warsaw/Kosciusko County Chamber of Commerce and Kosciusko Development Inc.
The company had put its workers in Indiana and Oregon on furlough since mid-December. However, McCarthy-Sessing said, the Warsaw community did not expect the operation to close because it was making lightweight towables and has received incentives that obligate it to remain in the state.
Wakarusa resident Debra Pletcher was surprised when she was temporarily laid off Dec. 12 and had been fearing that permanent termination of her employment was next. She was told by a manager Monday that her office position was among those eliminated.
"I loved my job," Pletcher said. "It was very challenging and very fast-paced. I expected to retire from there."
Pletcher had worked for Monaco for 26 years, mostly at the Wakarusa plant. She considered herself lucky to be one of the few who was transferred as a part of the consolidation to Warsaw. Now she is making plans to return to her office one more time to collect her personal items.
By ending the employment of most of its workers, Monaco will not have to continue paying unemployment taxes and health insurance. The company has about 145 employees remaining, Wanichek said, declining to specify whether any corporate executives were part of Monday's cuts.
Monaco has been working "extremely diligently," Wanichek said, to find a buyer or arrange additional financing. In November, the manufacturer was able to secure $80 million in new financing from several financial institutions and Bank of America along with a $39.3 million loan from Ableco Finance LLC.
Still, Monaco's slide continued and by January it was in danger of being delisted by the New York Stock Exchange.
For the third quarter of 2008, Monaco posted net sales of $166.3 million, down 48.4 percent from the $322.4 million recorded in the third quarter of 2007. Gross profit also fell to $782,000 during the third quarter from $36.2 million for the same period last year.
The company is nearing a March 16 deadline to file its 2008 annual report with the U.S. Securities and Exchange Commission. Wanichek declined to say whether Monaco meet that deadline or will have to request an extension.