Country Coach: ‘We’re Roughly on Schedule’
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 Inc.
“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.