Thursday, July 17, 2008
MONACO CUTTING 1400 JOBS IN INDIANA AND SCALING BACK INDIANA OPERATIONS
RV Business
Thursday, July 17, 2008
Monaco Coach Corp. is consolidating its Indiana service and production operations, including the closure of all facilities in Wakarusa, Elkhart and Nappanee.
According to the company, the shutdown is scheduled for around Sept. 17. Production of the majority of motorized units currently manufactured at these locations will be relocated to Monaco's headquarters in Coburg, Ore. Production of two of the models will be relocated to the company's Warsaw, Ind., manufacturing location.
Towable production will also be integrated into Monaco's Warsaw location, formerly the site of R-Vision Inc., which Monaco acquired in November 2005.
"We have implemented several successful initiatives over the past 18 months in an effort to size our business to match declining market demand,” said Kay Toolson, Monaco chairman and CEO. “However, market conditions have continued to deteriorate, and we do not see significant improvements occurring in the near future. Therefore, the company finds it necessary to take further action by implementing a significant capacity reduction.
"We deeply regret the impact that shutting down these operations will have on our employees and their families as well as the communities in which they live and work."
Approximately 1,400 hourly and salaried employees will be impacted by the move, or 33% of the company's total work force. Monaco Coach will still maintain a presence in the Northern Indiana area with approximately 700 employees at its Warsaw, Milford and Goshen operations.
In April the company announced it was cutting 600 jobs, fairly evenly split between its Oregon and Indiana operations.
"We feel this action, while painful, will enable us to continue to provide world-class products and best-in-the-industry customer care," said John Nepute, president. "Both the Coburg and Warsaw manufacturing facilities have experience building these types of models."
"Over the last several quarters, in order to align production with retail demand we have reduced production by taking days and weeks off. The closure of these production facilities in Indiana will decrease our Class A motorized capacity from approximately 180 units per week to 90 and should allow the company to begin working full-time at the remaining plants in the fourth quarter. The new manufacturing footprint should also allow us to reduce the need for discounting at lower sales volumes."
The moves, once completed, are expected to reduce costs by over $12 million per quarter. One-time costs associated with the move will be approximately $7.5 million in the third quarter, including employee compensation expenses. Monaco has created a compensation package for its employees who continue to work through the shutdown and relocation assistance for any employees moving to Oregon.
The company is evaluating the impairment charges that will be taken due to the idling of the Indiana facilities, which have a current book value of $47.9 million.
Thursday, July 17, 2008
Monaco Coach Corp. is consolidating its Indiana service and production operations, including the closure of all facilities in Wakarusa, Elkhart and Nappanee.
According to the company, the shutdown is scheduled for around Sept. 17. Production of the majority of motorized units currently manufactured at these locations will be relocated to Monaco's headquarters in Coburg, Ore. Production of two of the models will be relocated to the company's Warsaw, Ind., manufacturing location.
Towable production will also be integrated into Monaco's Warsaw location, formerly the site of R-Vision Inc., which Monaco acquired in November 2005.
"We have implemented several successful initiatives over the past 18 months in an effort to size our business to match declining market demand,” said Kay Toolson, Monaco chairman and CEO. “However, market conditions have continued to deteriorate, and we do not see significant improvements occurring in the near future. Therefore, the company finds it necessary to take further action by implementing a significant capacity reduction.
"We deeply regret the impact that shutting down these operations will have on our employees and their families as well as the communities in which they live and work."
Approximately 1,400 hourly and salaried employees will be impacted by the move, or 33% of the company's total work force. Monaco Coach will still maintain a presence in the Northern Indiana area with approximately 700 employees at its Warsaw, Milford and Goshen operations.
In April the company announced it was cutting 600 jobs, fairly evenly split between its Oregon and Indiana operations.
"We feel this action, while painful, will enable us to continue to provide world-class products and best-in-the-industry customer care," said John Nepute, president. "Both the Coburg and Warsaw manufacturing facilities have experience building these types of models."
"Over the last several quarters, in order to align production with retail demand we have reduced production by taking days and weeks off. The closure of these production facilities in Indiana will decrease our Class A motorized capacity from approximately 180 units per week to 90 and should allow the company to begin working full-time at the remaining plants in the fourth quarter. The new manufacturing footprint should also allow us to reduce the need for discounting at lower sales volumes."
The moves, once completed, are expected to reduce costs by over $12 million per quarter. One-time costs associated with the move will be approximately $7.5 million in the third quarter, including employee compensation expenses. Monaco has created a compensation package for its employees who continue to work through the shutdown and relocation assistance for any employees moving to Oregon.
The company is evaluating the impairment charges that will be taken due to the idling of the Indiana facilities, which have a current book value of $47.9 million.
