Thursday, June 04, 2009
NAVISTAR INTERNATIONAL NOW OWNS MONACO'S ASSETS (BUT NOT IT'S LIABILITIES)
Navistar International Corp. announced today (June 4) that it has completed the purchase of certain assets of Monaco Coach Corp. for approximately $47 million.
The new company, named Monaco RV LLC, will be a wholly owned affiliate of Warrenville, Ill.-based Navistar Inc., Navistar’s principal operating company, and will be headquartered in Coburg, Ore.
“Navistar’s entry into the RV business through the purchase of certain Monaco Coach assets fits into our strategy of leveraging our assets to expand our diesel business, serve the end customer through robust parts and service and will complement our Workhorse chassis business,” said Jack Allen, president of Navistar’s North American Truck Group. “The Monaco brand is a market leader with a strong reputation and Navistar is pleased to add it to our portfolio of leading brands and businesses.”
“Providing the RV market with the right vehicles at the right time will be Monaco RV’s first order of business,” Allen continued. “Our management teams will spend these first few weeks ramping up the business at a pace commensurate with demand.”
Monaco RV LLC will be much leaner than the old Monaco Coach Corp., which was also based in Coburg. The new company will reportedly hit the ground running by making a number of key moves in the coming days, according to Monaco RV spokesmen:
The new business is under the direction of former Chairman and CEO Kay Toolson, who will report to Allen. Among the other returning Monaco executives is Mike Snell, now senior vice president of sales and product development, Charlie Kimball, now senior vice president of operations, and Richard Bond, senior vice president and general counsel. Pat Carroll, (product development), John Healey (purchasing), Garth Herring, (parts and service) and April Klein (customer service) are also part of the Monaco RV team, as is Marty Garriott, who will return to run the Oregon operations, and Irv Yoder, who’s back to oversee Indiana operations.
Former Monaco President John Nepute and former CFO Marty Daley will join Navistar in other corporate roles, but will not be a part of Monaco RV.
“We are going to produce models and brands that are in the most demand by our dealer body, but fewer than before,” Snell said. “Our plan is to begin producing at a low rate at all of our facilities based on a smaller group of dealers and the business model we are adapting to.”
Monaco spokesmen have also confirmed the following:
Snell and his sales staff will begin visiting key dealers in coming weeks.
Towable operations will be ramped up more quickly than motorized to take advantage of the key June-to-September buying season.
The former towable-building R-Vision plants in Warsaw, Ind., about a half hour south of Wakarusa, will be leased for approximately 90 days or until work-in-process units can be completed there. Then, those operations will be moved up to Wakarusa in Elkhart County.
Navistar reports that it has also acquired Monaco’s Bison equine trailer operation in Milford in the purchase.
Slated for sale by Monaco Coach Corp. in its Chapter 11 case are idled facilities that were not acquired by Navistar, including a fiberglass plant in Hines, Ore.; a chassis plant in Harrisburg, Ore.; the Nappanee Wood Products plant in Nappanee, Ind.; two buildings at the former Hively Avenue operations in Elkhart; a towable manufacturing plant on Mishawaka Road in Elkhart; the R-Vision complex in Warsaw; and the Roadmaster cargo trailer business in Goshen. The proceeds of those sales go to satisfy creditors of Monaco Coach, although it is presently unknown what percentage of these proceeds will be available to satisfy Monaco Coach Corp.’s general unsecured creditors, including dealers, vendors and customers who submitted unpaid warranty claims. Meanwhile, Monaco’s resorts were auctioned off late last month, and the $16.3 million in proceeds was also applied to the debts owed to creditors.
Kay Toolson, CEO for Monaco RV, said, “The last few months have been very difficult, with many hurdles to overcome to complete the sale to Navistar. This result is the best possible outcome for our communities, employees, dealers, customers, suppliers and the entire RV industry. We are pleased and excited to be a part of Navistar.”
Plans call for Monaco RV LLC to have a significant presence at this winter’s National RV Trade Show in Louisville, Ky. However, again, Monaco’s new business model clearly calls for a leaner operation in terms of physical plant capacity, employment and dealer rosters, Snell maintained. “The challenge we will have is, a lot of dealers and people on the outside will see this as the same Monaco, and it’s not,” said Snell.
Snell said that under Navistar’s plan, Monaco RV is expected to be a self-sustaining and profitable business under Navistar’s ownership.
Although the new company is not liable for any product sold by Monaco Coach Corp. prior to the purchase by Navistar, Snell indicates that customer service representatives will be available to aid RV owners in obtaining service and support for their vehicles. Owners with questions should call (877) 4MONACO for assistance.
Wednesday, June 03, 2009
FLEETWOOD SELLING IT'S INDIANA MOTOR HOME DIVISION TO AMERICAN INDUSTRIAL PARTNERS CAPITAL FUND OF NEW YORK
Fleetwood Enterprises Inc. reported Tuesday (June 2) that it has signed an asset purchase agreement to sell its motorhome business to American Industrial Partners Capital Fund IV LP (AIP) of New York.
The Riverside, Calif.-based RV and manufactured housing builder is operating under Chapter 11 bankruptcy and has been actively looking for buyers of its various business units.
AIP is a middle market private equity firm which makes control investments in leading North American-based industrial businesses. Last week, the U.S. Bankruptcy Court approved sales procedures for an auction to explore whether any higher or more qualified bids could be obtained, according to a news release.
AIP’s $53 million bid is subject to reduction for the assumption of certain liabilities not to exceed $18 million, including warranty obligations on Fleetwood motorized products. The price is also subject to an adjustment for the amount of current assets purchased at the time the transaction closes.
Under the bidding procedures, any competing bidders must submit qualifying bids by June 18, and if the company receives qualifying bids, the court will hold an auction on June 22. The court hearing to finalize the sale is tentatively scheduled for June 24.
The offer from AIP includes two motorhome manufacturing facilities, two motorhome service facilities and Fleetwood’s Gold Shield supply subsidiary, all located in Decatur, Ind. It also includes intellectual property for Fleetwood’s existing motorhome brands and certain machinery and equipment , but does not include the company’s motorhome manufacturing facilities in Riverside and Paxinos, Pa., or its travel trailer plants, brands, and intellectual property.
“We are pleased to have signed an agreement to sell our motor home operation. AIP is a very capable and qualified organization,” said Elden L. Smith, Fleetwood president and CEO. “Since the sale process under Chapter 11 enables other bidders to come forward, we cannot say for certain what the outcome will be. We do expect, however, that the final purchaser will seek to take advantage of the Fleetwood name and legacy, as well as endeavor to preserve as many jobs as possible.”