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Country Coach: ‘We’re Roughly on Schedule’

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May 5, 2009 by   2 Comments

Four weeks after resuming production and adopting a new factory-direct business plan, Junction City, Ore.-based Country Coach Holdings LLC has sold two coaches and taken deposits on several others, a company spokesman said Monday (May 4).

“We’re roughly on schedule,” Matt Howard told The Register-Guard, Eugene. “We feel encouraged by the momentum.”

As part of an agreement with creditor Wells Fargo Bank, Country Coach is planning to sell about one coach per week. Country Coach officials spoke last Friday with representatives from Wells Fargo, and the company continues to feel positive about its conversations with the bank, he said.

Tom Unger, a Wells Fargo spokesman, said Monday that it was too early in the process for bank officials to express an opinion about Country Coach’s production and sales.

Country Coach, a privately held recreational vehicle maker, is in Chapter 11 bankruptcy, a legal process intended to give distressed companies time to reorganize their finances while getting breathing room from creditors.

The factory ceased production in mid-November, putting about 500 employees out of work. Under a deal reached with Wells Fargo, Country Coach resumed production April 6, albeit on a far smaller scale. About 100 workers are completing coaches at a rate of about one a week.

Under its new business model, Country Coach is attempting to sell its coaches direct from the factory, rather than through a dealer network as it has in the past. Whether the company can survive and emerge from bankruptcy depends on whether it can find enough customers willing to part with $300,000 or more for a luxury item at a time when the economy remains mired in recession.

The biggest challenge facing the company, Howard said, is a market that’s been flooded with discounted coaches as a result of the bankruptcies of rival RV makers Monaco Coach Corp. and Fleetwood Enterprises Inccountry-coach-logo.

“There’s so much inventory on the market that we need to make sure the value proposition of Country Coach is abundantly clear and we are not just another commodity,” he said.

The company delivered two coaches last week from the factory, one to a couple from California, the other to a couple from Alberta, Howard said. Neither had owned a Country Coach before, and both bought 2009 Magna 630s, one of Country Coach’s high-end models that retails for more than $600,000.

In addition, Country Coach has taken one deposit equal to more than half the value of the coach, plus several other smaller deposits, he said.

Howard announced the sales last week on Twitter, the micro-blogging, social networking site. Howard has been posting short messages to Twitter periodically for several weeks as an experiment. Country Coach has about 50 “followers” on Twitter.

“It takes minimal resources for us to do it,” he said.

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Comments

2 Responses to “Country Coach: ‘We’re Roughly on Schedule’”

  1. Confused on May 5th, 2009 1:03 pm

    I’m confused with Mr. Howards comment in regards to Country Coach LLC’s biggest challenge; has he already forgotten that Country Coach, Inc. also went bankrupt and they left all of their dealers hanging with large inventory levels and have still today not paid any of the existing warranty claims for customers and dealers prior to filing Chapter 11.

    The Howards seem to have short memories, but I do not think their previous dealers or customers will.

  2. wayne on May 6th, 2009 10:41 am

    It is time for the Country Coach dealers to show some guts and defend their franchise rights regarding cc decision to illegally drop their dealers. Ca. and other states have strong franchise laws that will at the very least justify a claim in the bankrupcy. At the very least they could get a seat at the table of creditors.

    They should not waste any of their time waiting for any help from RVDA. RVDA spends most of their time worrying about their next “photo Op” with RVIA. Because of the non-adversarial stance of the “dealer ” association the RV companies have committed the economic murder of their dealer body and remain unchallenged for doing it. There are plenty of viable causes of action available to the dealers to pursue with the help of a viable,willing association, ie. fraud, breach of good faith and fair dealing, breach of fiduciary duty just to name a few.

    The companies also had a duty to disclose the hidden terms of their repurchase agreements with the lenders….. time to reorganize guys!!!!

    I”m sure everyone remembers how the Howards handled the closing of their dealership in Oregon…If not, ask the state tax departments of both Wash and Oregon.

    Wayne

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