Lane County May Turn to Green Manufacturing

August 5, 2011 by · Leave a Comment 

The pending loss of 450 jobs at Monaco RV’s plant in Coburg, Ore., strikes yet another blow to Lane County’s frail RV manufacturing industry.

But, according to a report in the Register Guard, Eugene, several people in the industry predict that, as bad as things look now, local RV manufacturing will re-emerge when the national economy recovers.

It will look different, however, from the glory years before the recession when scores of large, gleaming luxury motor coaches came off the assembly lines at Monaco Coach and Marathon Coach in Coburg and at Country Coach in Junction City.

Industry insiders say the area probably will never churn out the volume of high-end, luxury motor coaches it once did. Instead, RVs will be smaller, lighter, more aerodynamic and more fuel efficient, and Lane County could create a new niche as an eco-friendly innovator, they say.

“I don’t expect to see the type of numbers of manufacturing in the high-end that there was in the past; I don’t expect to see that ever return,” said Ron Lee, who early this year resurrected Country Coach — a company founded in 1973 by his brother, Bob Lee — although in a much smaller version.

While running a 22-employee parts, service and consignment sales operation in Junction City, Lee also is trying to raise money to begin limited manufacturing of a 40-foot Country Coach model priced at $550,000 to $700,000. Once the factory has been producing for three years, Lee said, he plans to unveil a diesel/electric hybrid coach.

“That’s a direction we have to go,” Lee said. “Green manufacturing processes and also more fuel-efficient vehicles — that’s something we have to do.”

Others in the industry say developing greener RVs is a natural fit for Lane County.

“We are so big on solar and alternative energy,” said Shannon Nill, general manager of Guaranty RV in Junction City. “I do think Oregon is a hotbed of innovations of this nature, and there’s no reason it can’t apply to RVs — it already is.”

It is still possible today for entrepreneurs to follow in the footsteps of RV pioneers, such as Bob Lee, to bring new products to market, industry insiders said.

“It’s a very entrepreneurial industry — it has been since the ’20s,” said Al Hesselbart, historian for the RV/MH Hall of Fame in Elkhart, Ind.

Indiana produces about 80 percent of the RVs made in the United States today, according to the RV Industry Association.

In Indiana, several start-up companies, including Evergreen RV and Earthbound RV, have emerged from the ashes of the recession and been quite successful, Hesselbart said. Both are “super-green, eco-friendly oriented companies,” he said.

Nill said the hot area for growth in this economy is trailers, smaller motorhomes and pre-owned motorhomes, all of which are cheaper than the large, luxury RVs.

If demand for high-end coaches bounces back, Lane County could meet that demand because the know-how is still here, said Frank Magdlen, a former RV industry analyst. He said he now works in investment banking for reasons unrelated to the demise of Oregon’s RV industry.

“Currently I don’t think there’s very many barriers to entry if you’re going to supply a niche segment,” he said.

“One thing the major manufacturers would tell you is it doesn’t take a lot of capital, so the guy with a barn or excess space can get in the business,” Magdlen said.

“It’s not robotics that puts the stuff together like an automobile, so it remains a labor-intensive business as opposed to capital-intensive,” he said.


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VIDEO #2: Country Coach’s Revival Continues

April 29, 2011 by · Leave a Comment 

Watch today’s Video #2, courtesy of KVAL-TV, Eugene, Ore.

The service bays are full at the resurrected Country Coach in Junction City, Ore., proof for owner Ron Lee that the RV business still has a pulse.

Breathing new life into the ailing industry is one of the jobs of the Oregon RV Alliance, a non-profit marketing group that formed in December.

“I believe it’s going to be a big asset to our business here,” Lee said.

“The goal is, our mission statement is to expose RV owners to the benefits of spending their leisure time here in Oregon,” said Brad Waring, the alliance’s executive director.

So far, 40 RV dealerships, service centers, community festival groups and local winers have joined the alliance – and membership is growing.

“We really are as entrepreneurs collaborating and kind of doubling up all our efforts,” said Danuta Pfeiffer from Pfeiffer Winery.

The idea is to market Lane County as an RV destination for people coming to service their rigs and check out the sights.

“So why not take advantage of that and focus them on us and our location here?” Lee said.

There is an RV rally going on in Harrisburg, attracting visitors and helping a broader segment of the economy beyond just manufacturing.

“This is going to be a resurgence of our part of the RV industry here. What we’re doing is to bring it back.”

“We are really muscling our way into a showcase area for our visitors,” Pfeiffer said.

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Doctors Use Mobile Monaco Health Clinic

July 26, 2010 by · Leave a Comment 

Watch today’s Featured Video courtesy of KVAL-TV, Eugene, Ore., to learn more about the following story.

The future scares Margie ReGester.

“I want to be around for my grandkids,” ReGester said.

She lives on $553 a month. Country Coach laid her off three years ago, and she hasn’t been able to find work since. KVAL News interviewed ReGester when her COBRA ran out in January 2009.

Since then, like 73,000 other people in Oregon’s Lane County, ReGester’s been without insurance.

On Sunday (July 25), ReGester found herself surrounded by RVs once again. She wasn’t an employee. She was a patient.

Cascade Medical Teams rented out Monaco RV’s health clinic in Coburg, Ore., July 24-25. More than 100 volunteers, doctors and nurses treated and diagnosed people without health insurance at no cost.

Cascade Medical Teams usually provides free medical care in Guatemala. They recently decided the need was just as big in their backyard.

“We just felt that we needed to provide some of the expertise we’ve developed in doing the kinds of things we’ve done out of the country here in Lane County,” Cascade Medical Teams Board Member Bruce Mulligan said.

For ReGester, the clinic meant answers.

“Now I know why I’ve been so light-headed and dizzy and having these episodes I’ve been having,” ReGester said.

Without insurance she can’t afford doctors visits or medicine for her high blood pressure. At the clinic, Dr. Richard Barnhart did it all for free. The treatment doesn’t end there. On her way out, ReGester made a follow-up appointment at a low-income clinic. It’s a relief, she said, and it’s making her feel better.

“I’m sure my blood pressure has already gone down,” ReGester said.

The clinic served just under 200 people this weekend. Organizers said they were hoping for more patients. They are planning another free clinic in a few months and want to move it to a more central location.

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Country Coach Asset Auction Starting Today

February 4, 2010 by · Leave a Comment 

Everything must go.

Everything that isn’t bolted down in the sprawling Country Coach Holdings LLC plant in Junction City, Ore., is to be sold at auction today (Feb. 4) and Friday, with proceeds going to satisfy creditors of the bankrupt RV manufacturer, according to The Register-Guard, Eugene, Ore.

Copiers, cabinets and couches. Sanders, saws and routers. Generators, flat-screen televisions and microwave ovens. Enough nuts, bolts, washers and screws to stock a hardware store.

Pallets stacked with company documents, including such intellectual property as blueprints, schematic drawings, parts lists and customer lists are up for bid, as are pickup trucks, minivans, golf carts, and of course, Country Coach’s signature, über-luxury motor homes.

Even the contents of former CEO Jay Howard’s office — including his business books, desk and three safes — are up for bid.

It’s a sobering end for the once high-flying Country Coach, which at its peak employed about 2,000 Lane County area residents.

In all, some 1,600 lots will be sold at auction, to buyers who show up at the plant to bid in person, by phone or via the Internet. As of Wednesday, the auctioneers had registered 335 bidders in-person, and another 150 who intend to bid online, said Rob Beal of Commercial Industrial Auctioneers in Portland, which is conducting the auction in partnership with Hilco Industrial.

(You can follow the auction online at

The big-ticket items are 10 completed motorcoaches, which in ordinary circumstances would have had retail prices ranging from $400,000 to $900,000. In addition, 17 coaches in various stages of completion will be auctioned as well.

Beal wouldn’t hazard a guess at what the auction will yield. Conceivably, a single bidder could submit a bid for everything with an eye toward restarting the business or starting a new company.

“It’s been entertained,” Beal said. “But no one could come up with the cash to keep creditors and the (bankruptcy) trustee happy.”

Country Coach filed for Chapter 11 bankruptcy last winter to gain breathing room from creditors while it attempted to reorganize its finances. The company resumed production with a skeleton crew last April at a rate of one coach per week, but shut down again last fall amid faltering sales. In November, a judge converted the case to a Chapter 7 bankruptcy and ordered the company’s assets liquidated to satisfy creditors — namely Wells Fargo Bank, the company’s main secured creditor.

Prospective bidders include other RV manufacturers, contractors, cabinet shops, welders, fabricators, dealers and individuals like Bob Relyea, a retiree who traveled from Dallas, Texas. Relyea said he’s interested in buying one of the finished coaches, if he can find a bargain, to replace his 2000 Country Coach Magna.

“It doesn’t hurt to come and take a look,” he said.

Dan Russell, a partner in Oregon RV Repair, an RV service center in The Dalles, was checking out parts, many of which are “too fancy” for the vehicles his business deals with.

Ed Read and Pat Mason from Oregon Motorcoach Center, an RV service facility started by Country Coach founder Bob Lee, were checking out parts and materials they may bid on for their business.

Read worked at Country Coach for nearly 32 years and said it was “terribly sad” to see the once-proud company being sold off in pieces.

“I put a lot of my life into this company,” he said. “I never thought it would come down to this.”

Bert Bergman of Port Townsend, Wash., was looking for stuff that could have marine applications that he could resell on his eBay business, Spit in the Ocean.

“Most of the stuff in these land yachts you can use in a boat,” he said.

As he walked through the cavernous paint shop, Bergman said it was sad, in a way, to see an RV maker get liquidated.

“On the other hand, these dinosaurs got to get off the road,” he said. “So maybe we’re just putting the rich out of their misery.”

Virtually the entire sprawling plant, including the executive offices, was open for prospective bidders to walk through. Former CEO Howard’s office contained remnants of his tenure, including three safes, a portrait of Howard and Country Coach founder Bob Lee in happier times, and a framed copy of a 2007 New York Times article about Country Coach and other RV makers, headlined “Housing Crisis? Try mobile McMansions.”

A dozen or so books were stacked in three piles on Howard’s granite-topped desk. Titles included such business bibles as “Good to Great,” “The Way of the Guerilla,” “Guts! Companies that Blow the Doors off Business-as-usual,” and “Letitia Baldridge’s New Complete Guide to Executive Manners.”

At the bottom of one stack was a book that hinted at the stress Howard was under as he fought to keep his company alive over the past year: The Mayo Clinic’s “Five Steps to Controlling High Blood Pressure.”

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RV Decline Major Oregon Newsmaker in 2009

December 28, 2009 by · Leave a Comment 

It’s the economy, stupid.

That may have been the message from the 441 readers who participated in this year’s online poll for the top 10 local stories of 2009, according to The Register-Guard, Eugene, Ore.

Sure, the Rose Bowl-bound University of Oregon football team has provided a delicious diversion from the fiscal anxiety that has bedeviled Lane County residents these past 12 months.

Yes, controversy over when Eugene police should and should not use Taser stun guns has spurred a worthy community debate.

And it’s a good bet 2009 will be associated for a long time with a two-word medical prognosis: “swine flu.”

But for readers who know too well the realities of economic struggle — job loss, home foreclosures, wage freezes — there was really only one choice for the year’s top story: the recession.

It was a story that revealed itself in myriad ways — from record applications for food stamps to a suddenly common corporate coping strategy: putting workers on unpaid furloughs.

For several months, the unemployment rate in Lane County reached heights not known in decades — 12, 13, 14%. It was sometimes easy to forget the human equation in those percentages: It meant that at least one worker in every eight wasn’t working.

By year’s end, economists were declaring that the recession had ended, or was about to end, while acknowledging that the economy wasn’t strong enough — yet — to create many new jobs. Still, many felt there was reason to be optimistic about 2010.

The sour economy surfaced in other ways, too: The struggles of the local recreational vehicle industry in general, and Junction City-based Country Coach in particular, was judged the year’s No. 9 story. By year’s end, Country Coach was effectively defunct, while Monaco Coach Corp., once a high-flying publicly traded company based in Coburg, became a tiny division of a multinational corporation.

By October, 1,400 people in Lane County were working in the RV industry, a fraction of the 4,500 employed four years earlier.

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‘Show of Faith’ Gives Country Coach More Time

November 25, 2009 by · Leave a Comment 

Luxury motorhome maker Country Coach LLC managed to stave off liquidation for a little longer on Tuesday (Nov. 24), according to the company’s top executive. But the company’s future remains as murky as ever, according to The Register-Guard, Eugene, Ore.

An investment group that includes a banker who is both an owner and creditor of the RV maker put up $1 million in earnest money by a court-imposed deadline Tuesday, Country Coach CEO Jay Howard said.

The move buys a little time for investors to negotiate a deal with Wells Fargo, the Junction City, Ore., manufacturer’s main creditor, he said.

In bankruptcy court on Monday, Wells Fargo’s attorney Wilson Mulheim, said Country Coach has consistently defaulted on its loan agreements.

The investors now have until Dec. 3 to hammer out a plan with Wells Fargo to assume the $8.2 million loan the bank made to Country Coach on April 1, Howard said. The cash enabled the company to continue to operate while in Chapter 11 bankruptcy, he said.

No information regarding these developments had been filed with the U.S. Bankruptcy Court by closing time Tuesday.

Howard said County Coach has cleared an important hurdle on its path to recovery.

“It’s a huge step,” he said. “It’s a show of faith in the future of Country Coach and allows us the opportunity with the court to remain in Chapter 11 for some period of time and reorganize our company successfully.”

The move is the latest turn in Country Coach’s lengthy bankruptcy saga.

The same investor that pushed Country Coach into Chapter 11 reorganization bankruptcy in March now is leading the charge to try to prevent the court from converting the case into Chapter 7 liquidation bankruptcy.

That investor is Bryant Riley, a Los Angeles investment banker, who led the investment group that bought Country Coach from National RV Holdings for $50 million in 2007.

One of his companies, Riley Investment Management, or RIM, is a Country Coach creditor.

Howard said an investment group composed of Riley, RIM and businessman Lloyd Miller put up the $1 million on Tuesday.

Howard said Tuesday afternoon that he anticipated that Washington state businessman Roger McCombs also would deposit $1 million in the Wells Fargo escrow account by the Tuesday deadline.

McCombs could not be reached for comment Tuesday, and Howard did not return a call Tuesday evening asking if McCombs had made the deposit.

McCombs has expressed interest in building motorcoaches at the Country Coach plant, as well as mobile medical coaches, using Country Coach’s chassis, and furthering his maglev, or magnetic-levitation, technology, Howard said.

“If the McCombs plan comes to fruition, it could involve thousands of jobs over the next 18 months,” Howard said. “It takes us far beyond motorcoaches.”

Country Coach stopped building coaches in September, Howard said. The company, which employed about 1,600 people just two years ago, now is down to just two employees: Howard and Chief Financial Officer Mark Anderson.

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Country Coach Now Faces Liquidation Unless…

November 24, 2009 by · Leave a Comment 

Junction City, Ore., RV maker Country Coach is heading for liquidation unless a last-gasp bid by an outside investor to settle the company’s debts and bring it out of bankruptcy comes to fruition in short order, according to The Register-Guard, Eugene, Ore.

In U.S. Bankruptcy Court on Monday (Nov. 23), lawyers for the company and its main creditor, Wells Fargo Bank, said Country Coach is out of money and out of options, unless a Washington businessman named Roger McCombs can secure a stay of execution. If McCombs deposits $1 million in earnest money in a Wells Fargo escrow account by this afternoon, he’ll have 10 days to negotiate a deal to pay off the debt to the bank and attempt to breathe new life into the company.

Privately held Country Coach, founded in 1968, has been in Chapter 11 bankruptcy since March, providing it with some breathing room from creditors while it sought to reorganize its finances and business model. But even operating with a vastly smaller work force, the company has been steadily losing money. The company has posted losses of $8.8 million since April, company officials testified.

Wilson Muhlheim, the Eugene attorney for Wells Fargo, said Country Coach has consistently been in default on the terms of its loan agreement. Company officials said they have a negative balance of $450,000 on their line of credit with the bank.

“Now we’re at the end of the road,” Muhlheim said. “There is no deal on the table.”

But Country Coach CEO Jay Howard said there could be a deal. He testified that he’s been talking with McCombs since July, that McCombs toured the Country Coach plant in October, and that he’s serious about making a bid.

McCombs is founder and board chairman of Composite Power Corp. and the patent holder of the company’s composite energy delivery system, according to the company’s website. The company, based in Richland, Wash., with an office in Las Vegas, makes utility poles made from composite materials that are lighter, stronger and cheaper than wooden utility poles, and which don’t have to be treated with carcinogenic chemicals, like wood poles, according to the financial website The Hot Pinks, which follows companies whose stocks are traded over the counter.

“He’s an amazing entrepreneur,” Howard said outside court.

In addition to building motorcoaches at the Country Coach plant, McCombs is interested in building mobile medical coaches, using Country Coach’s chassis, and in utilizing magnetic-levitation technology, or maglev, an area in which he holds a patent, Howard said.

“By Dec. 3 we’ll know if McCombs is in or out,” Howard said. “If not, we have no other sponsor.”

Howard said an earlier proposed deal, involving a Texas company called Recreation Live and other investors, appears dead.

If the McCombs deal doesn’t come together, Country Coach’s Chapter 11 case will be converted to Chapter 7 for the purpose of liquidating the company’s assets, Rad cliffe ruled.

Howard said the company has 10 coaches completed and ready for sale, with a total value ranging from $5 million to $9 million, depending on whether they’re sold at auction or sold retail. The company has another 15 coaches that are in progress.

Howard said the company stopped building coaches in September and just recently laid off the remaining staff. Only Howard and CFO Mark Andersen remain on the job, he said.

Even if McCombs is able to strike a deal with Wells Fargo, he’ll also have to come to terms with Country Coach’s landlord, Lee Joint Venture.

David Wade, the landlord’s attorney, said the Lee group was prepared to begin eviction proceedings unless someone makes good on $160,000 owed in property taxes and $263,000 to repair the roofs of the factory buildings.

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Country Coach Due Back in Bankruptcy Court Oct. 22

September 24, 2009 by · 2 Comments 

Country Coach, the financially ailing Junction City, Ore., RV maker, has yet to file a reorganization plan to get itself out of bankruptcy. And now a judge is demanding that company officials explain why he shouldn’t order that its assets be liquidated, according to The Register-Guard, Eugene, Ore.

A hearing on Country Coach’s Chapter 11 bankruptcy case is set for Oct. 22, at which time company officials will have to convince U.S. Bankruptcy Judge Albert Radcliffe that it has a viable plan for returning to profitability. If not, Radcliffe could order the case converted to a Chapter 7 case, which means its assets would be sold off to satisfy creditors, or he could dismiss the case outright, which would allow creditors to sue to seize the company’s assets.

The hearing could mark a turning point for Country Coach, which filed for bankruptcy protection in March so it could reorganize its finances while getting breathing room from creditors, chief among them California-based Wells Fargo Bank.

Country Coach, a privately held maker of luxury motorcoaches, closed its Junction City plant in November, putting about 500 employees out of work. It resumed production in April, although on a much smaller scale. Company officials have said between 100 and 120 employees have been working at the plant, turning out about one coach per week.

Company spokesman Matt Howard said Wednesday (Sept. 23) the plant has been shut the past two weeks, but the company is planning to reopen Monday. He declined to comment on legal issues.

Since it resumed production in April, Country Coach has posted losses of $6.8 million, according to a financial statement it filed with the court Sept. 15.

Judge Radcliffe initially set an Aug. 31 deadline for Country Coach to file a reorganization plan. That was extended, at the company’s request, to Sept. 15. Radcliffe said he wouldn’t consider further extensions unless Country Coach’s main creditor, Wells Fargo, agreed to extend its financing past Dec. 31. Country Coach lawyer Brandy Sargent said in a motion that Wells Fargo had agreed to extend the financing through Feb. 15 and asked that the deadline for filing a plan be extended to Oct. 15.

Sargent said the company recognizes that “there remains a material risk that it will not be able to proceed to confirmation of its plan,” and she outlined a series of hurdles Country Coach must clear to get its plan confirmed by the court. Those include coming to terms with its landlord, Lee Joint Ventures, with Wells Fargo, and with its would-be partner, Recreation Live LLC.

The U.S. Trustee’s office, meanwhile, objected to the company’s request for another extension. The company has not filed documents supporting its assertion that Wells Fargo has agreed to extend its financing, nor has Wells Fargo filed any documentation indicating that it agreed to an extension, according to a brief filed by Rebecca Kamitsuka, attorney for the U.S. Trustee.

Further, Kamitsuka said, when she asked a Country Coach lawyer for a copy of the loan modification agreement, he faxed her a single-page document, marked as Page 6 of 6, with just a signature page, but without the text of the agreement.

Country Coach, Kamitsuka wrote, “cannot hide the ball on these matters in its fiduciary capacity.”

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Country Coach Delivers First Motorcoach to China

August 26, 2009 by · Leave a Comment 

Luxury motorcoach manufacturer Country Coach today (Aug. 26) announced the successful sale and export of the company’s first motorcoach to China. The motorcoach, a 2009 Allure 470 Veranda, was shipped from the port of Everett, Wash., directly to the port of Dalian in northeastern China.

Company managers are cautiously optimistic about Country Coach’s growth opportunities in the burgeoning China market. 

“While we have been exploring potential inroads into China, in this case the importers sought us out. It is gratifying to know that our quality and innovation are ideally suited to their market needs,” said Jay Howard, Country Coach president and CEO.

The company’s clients in China selected the Allure 470 with the Veranda feature due to the coach’s reliability, spacious floorplan and unique balcony feature. They intend to deliver the motorcoach to regional celebrity clientele, who will use it to live in and interact with their fans from the Veranda.

“The new owners look forward to enjoying China’s natural beauty from the Veranda, as well as the opportunity to visit with their fans while staying above the crowds,” said Jim Howard, senior vice president of sales and service.

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Country Coach Completes Successful Owners’ Rally

August 25, 2009 by · Leave a Comment 

Luxury motorcoach manufacturer Country Coach today (Aug. 25) announced the successful completion of the company’s 23rd Annual West Coast Class Reunion Rally. Held in Albany, Ore., Aug. 19-23, the rally combined learning, fellowship, shopping and adventure.

More than 150 Country Coach motorcoaches, with more than 300 avid coach owners, joined the company for the multi-day event, according to a news release.

Company President and CEO Jay Howard reported positive results from the rally.

“It was encouraging to share time with owners and other stakeholders who have been on our company’s difficult journey with us,” Howard said. “I am grateful that so many chose to visit with us in Albany this year, and that many have purchased a new Country Coach or are considering a purchase in the near future.”

At the time of this release, Country Coach Factory Direct has sold nine motorcoaches in conjunction with the Class Reunion Rally, and consultations are ongoing with additional clients searching for their ideal Country Coach.

Howard added, “We are always pleased and grateful when clients select a Country Coach, and it serves as an affirmation of our dedication to caring for our customers. However the success of this rally is not measured in retail sales alone. Our rally attendees did not drive across the country to Albany, Ore., for free service or any other incentive. Overwhelmingly, attendees came to support Country Coach and each other. It was a great few days, and people left smiling.”

The company, based in Junction City, Ore., is currently exploring locations in the Southeast United States for a pending winter rally.

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Country Coach Finds New Partner in RV Wholesaler

July 20, 2009 by · Leave a Comment 

country-coach-logoLuxury motorcoach manufacturer Country Coach, Junction City, Ore., today (July 20) announced the creation of a partnership with Recreation Live LLC, an RV wholesaling firm. The new partnership has a goal of enhancing the company’s financial strength and collaborating on the establishment of Country Coach factory-direct sales, according to a news release.

The plan will include developing upscale factory-direct stores and service centers in key locations across North America.

Company CEO & President Jay Howard commented on the partnership: “As part of our factory-direct strategy, we continue to pursue better ways to serve our clients. This new partnership with the professionals at Recreation Live enhances our customer care offerings substantially by providing conveniently located and complete factory-direct sales and service.”

Howard also noted that both partners share the goal of establishing three new Country Coach factory-direct sales and service centers within the partnership’s first year. He also stressed that the partnership is an integral part of Country Coach’s reorganization plan, which is subject to court approval. The company intends to present its plan for approval by creditors before the end of the summer.

Dan Inman, president of Recreation Live LLC, an RV wholesaling firm with locations in Pompano Beach, Fla., and Schertz, Texas, shared his company’s readiness to contribute to the new partnership.

“Our shared goal is to complete the Country Coach promise of ‘The World’s Finest ‘by delivering a research, purchase and ownership experience second to none. We are ready to go to work,” said Inman, who spoke briefly with RVBusiness today while  en route to the Family Motor Coach Association (FMCA) Convention in Bowling Green, Ohio.

Jim Howard, Country Coach’s senior vice president of sales and service, emphasized the improved customer care benefits of the new partnership.

“A visitor to any Country Coach factory -irect location, whether in Florida, the Midwest, the Southwest or in Junction City, Ore., will experience a high level of care that extends far beyond the coach purchase. No matter the location, our factory-direct clients will have direct access to expert factory trained specialists and service technicians, as well as enjoying the collective support of the dedicated craftspeople that designed and handcrafted their custom motocoach.”

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Judge OK’s Country Coach Financing Plan

April 14, 2009 by · Leave a Comment 

country-coach-logo3A bankruptcy judge gave final approval Monday (April 13) to a complex financing agreement that gives new life to Country Coach Inc., at least for the next few months.

The new Country Coach is far smaller than the old Country Coach, according to The Register-Guard, Eugene, Ore. Whether the Junction City, Ore., company can survive and emerge from bankruptcy depends on whether it can find enough customers willing to part with $300,000 or more to buy its luxury motorcoaches at a time when the economy remains deeply mired in recession.

U.S. Bankruptcy Judge Albert Radcliffe approved the financing deal between Country Coach and Wells Fargo Bank, which runs through the end of the year. He gave the parties until Aug. 31 to provide an update on how the plan is working.

Jim Howard, a Country Coach vice president, said the news was welcome but not unexpected. Radcliffe had given the deal preliminary approval two weeks ago.

“The bottom line is, it’s a lot better for everybody if we continue than if we don’t,” Howard said.

The company’s Junction City factory resumed production last week, working to finish partially completed coaches at a rate of one per week.

The company’s first 2010 model, a 43-foot-long Inspire 360, was to depart today for “The Rally”  this weekend in Albuquerque, N.M.

About 94 employees were at work Monday, Howard said, close to the number that Country Coach expects to employ for the foreseeable future. At its peak in 2006, the company had about 1,800 workers.

When Country Coach idled its factory in November, about 500 employees were put out of work.

Country Coach entered Chapter 11 bankruptcy in February after Wells Fargo moved aggressively to seize the company’s assets. Country Coach had defaulted on an $8 million loan balance, and the bank sued in an effort to collect on the debt, intending to liquidate the company’s assets.

The bankruptcy filing gave Country Coach some breathing room, including time to negotiate with Wells Fargo. Last month, the two sides agreed on a plan in which Wells Fargo would give the company access to a $3.2 million revolving loan fund to allow it to carry out a plan to sell its coaches directly from the factory, rather than through a dealer network.

Radcliffe approved the deal despite a number of concerns raised by Rebecca Kamitsuka, attorney for the U.S. Trustee’s office. Several of Kamitsuka’s objections involved consumer protection issues.

For example, she said down payments for new coaches should go into escrow, so customers would be able to get their money back if the company were to fail. She said if the company is planning to honor warranties for its new coaches, it should have a warranty reserve fund. And about 238 2006-08 Country Coach models are subject to a recall because they would lose their power steering – perhaps the company should set aside money to pay for that work, she said.

David Levant, attorney for Country Coach, said down payments will be segregated into a separate bank account that Wells Fargo should not have access to if Country Coach defaults. He said Country Coach has budgeted funds to perform warranty work and plans to offer customers third-party warranties. As for the recalls, Country Coach will address those as part of its normal course of business. If the financing plan was not approved, the company would not be able to perform any recall work, he said.

In approving the agreement, Radcliffe said no deal is perfect, and he noted that Douglas Schultz, attorney for the unsecured creditors committee, expressed his support for the plan.

“The court places great weight on the creditors committee’s support,” he said.

Country Coach has about nine completed 2008-09 models ready to be sold, and about 40 coaches in various states of completion that would be sold as 2010 models, Chief Financial Officer Mark Andersen told the court two weeks ago.

Jim Howard expressed optimism that the company will be ready to emerge from bankruptcy by the end of August.

While the market for RVs remains difficult, he said only about half of coach buyers finance their purchases, and usually not for the whole amount. Nationwide, people have been buying an average of 2½ to three Country Coaches a week from dealers during the past four to five months.

To spur sales, Howard and his sales crew have systematically been contacting 6,500 people who already own Country Coach motorhomes. They’re specifically targeting about 800 people who own 2006 models who are most likely to want to trade in for a 2010 model, he said. They’re using e-mail, letters, a revamped website and even a new billboard on Interstate 5 to generate interest, he said.

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Country Coach to Bypass Dealers in New Plan

March 23, 2009 by · Leave a Comment 

Wells Fargo Bank has agreed to loan Country Coach up to $11.5 million so it can build up to 43 coaches during the next 10 months, according to an agreement filed in U.S. Bankruptcy Court in Eugene, Ore. 

Under a new business model agreed to by the bank, the Junction City, Ore. RV maker would sell the coaches directly from its factory, bypassing dealers, according to a document filed by the company’s chief financial officer. Operations would be financed by a strictly supervised $11.5 million revolving loan fund, according to The Register-Guard, Eugene. 

The new loan includes the $8.5 million that Country Coach already owes to Wells Fargo, bank spokesman Tom Unger said. 

The bank had been seeking to seize and sell Country Coach’s assets after the company defaulted on the original loan. 

Because Country Coach is in Chapter 11 bankruptcy, the new plan and the financing must be approved by a judge. A hearing is scheduled at 10 a.m. today (March 23) in U.S. Bankruptcy Court in Eugene. Chapter 11 bankruptcy gives a company protection from creditors while it attempts to re-organize its finances. 

CEO Jay Howard announced March 19 that Country Coach had reached a financing deal with Wells Fargo, but in fact the deal was not yet done until later that day. Company lawyers filed a motion after the close of business that includes a 60-page loan agreement. 

In asking for a hearing today, so soon after filing a 158-page document with the court, Country Coach lawyer Brandy Sargent urged the judge to recognize what she said is the urgent nature of the request. 

“Approval of this motion and the interim order in a form satisfactory to Wells Fargo Bank is, simply, the only way that Country Coach believes it can survive as an enterprise,” she wrote. 

The company has no significant operating funds, no ability to borrow under any other terms, and faces the prospect of Wells Fargo pressing its effort to liquidate the company’s assets if the deal is not approved, she said. 

Country Coach’s factory and its remaining 500 workers have been idle since early December. 

Bank spokesman Unger said because the matter is still pending and negotiations are continuing, Wells Fargo officials would have no comment until and unless the deal wins court approval, he said. 

“This thing is pretty complicated,” Unger said. 

It’s complicated because the agreement involves not just Country Coach and Wells Fargo, but also Riley Investment Management, a company controlled by Los Angeles investment banker Bryant Riley. Riley is the majority owner of Country Coach but he’s also a creditor: Country Coach owes his firm about $15 million, according to court documents. 

Howard said the company plans to start bringing back workers to the Junction City factory as early as today to start working on unfinished coaches that are still on the production line, with production ramping up slowly over the next few weeks. Howard said more than 100 workers would be brought back. One of the workers to be called back said he was told the company planned to run a crew of 62. 

Howard said the company has 15 unfinished coaches on the production line, and another 15 chassis ready to be built. 

According to a proposed budget filed with the court, Country Coach plans to start selling coaches starting this week at a rate of one to two per week, for a total of 43 coaches by the first week of January. 

The budget calls for Country Coach to spend $20.3 million over the 42 weeks, of which $18 million will be for operations and $2.3 million will be for bankruptcy expenses. During that time, the company expects to collect $23.5 million. 

In a separate filing, Country Coach Chief Financial Officer Mark Andersen offered some details of the company’s new business plan. 

By selling directly from its factory, Country Coach eliminates the need to maintain dealer agreements as well as agreements that require the company to buy back coaches dealers can’t sell, he said. 

The company also plans to eliminate obsolete floor plans and streamline its existing model line. Country Coach now offers eight different models, ranging in price from $300,000 to $1.8 million. 

In addition, Country Coach plans to consolidate its manufacturing operations from three plants to one, reduce its footprint of leased facilities by 30% and negotiate a temporary 50% reduction in lease costs for the rest of 2009. 

Shannon Nill, general manager of Guaranty RV in Junction City, which has been selling Country Coach vehicles since the 1970s, said he was pleased to hear that the RV maker and the bank were able to strike a deal that enables the company to resume operations. 

“This news with Country Coach is very good – very good for Oregon, for our community and for Guaranty,” he said. 

If the company resumes production, that increases the value of the 30 or so Country Coach RVs that Guaranty has in stock, he said. 

However, Nill expressed skepticism about the company’s plan to sell coaches directly from its factory, bypassing dealers. 

Factory direct sales by RV makers “generally have not worked out,” he said. “The companies that have tried generally go back to dealerships. But these are different times. If this is what is required for the business to succeed, you can’t rule out that approach.” 

One unknown factor is service, he said. Without a network of dealers to provide service, owners of Country Coach RVs presumably would have to come to Junction City for warranty service. And Nill said he’s not sure what Country Coach would do with trade-ins. 

“There could be a role for Guaranty to purchase trade-ins and market existing used Country Coaches,” he said.

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Country Coach Gains Financing, Set to Reopen

March 19, 2009 by · Leave a Comment 

country-coachLuxury motor coach manufacturer Country Coach LLC said that its principle secured debt holders have come to terms and new reorganization financing will be made available.

With the support of Wells Fargo Bank as the company’s primary secured creditor, and Bryant Riley as the leader of Country Coach’s investor group, the company said it is positioned to resume operations. Country Coach shut down its Junction City, Ore., facility last December.

The company reported that it has many confirmed, in-process motor coach orders to fulfill, allowing a slow and steady production facility reopening over the next several weeks.

“Our loyal employees, customers and suppliers deserve our heart-felt appreciation for their steadfastness in our times of trouble,” said CEO and President Jay Howard. “Ultimately, our biggest debt of gratitude is owed to Wells Fargo Bank, who is providing the financing for the rebirth of Country Coach as they recognize the value of financially supporting American manufacturing in the Pacific Northwest.”

Country Coach noted that efforts by Ron Lee of Lee Joint Ventures, and company founder Bob Lee, along with his wife, Terry, also were key in working out a deal.

Next week, Country Coach plans to present details of its forward-going plan to the court. Also next week, the company will release a comprehensive update to their interactive website, located at Country Coach.

“The continuation of Country Coach as a brand and a viable Oregon manufacturer serves all parties involved,” said Howard. “Motor coaches owned by dealers and retail customers will better retain their value, suppliers who have struggled along with our company can move towards recovery with us and new customers will enjoy an improved ownership experience.”

Howard acknowledged the sacrifices made by Country Coach’s stakeholders, as well as the “devastating financial damage” suffered by the members of the RV industry at large during this unprecedented industry downturn.

“We have never seen times like these,” he said. “With wholesales shipments in our market off more than 75%, it is little wonder that Country Coach and our suppliers and employees have suffered along with many of our manufacturing peers. My heartfelt apologies go out to all who have been impacted by our company’s inability to resist these powerful industry forces. We look forward to better times ahead.”

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Lane County Suppliers Hit by OEM Bankruptcies

March 16, 2009 by · Leave a Comment 

As Country Coach LLC and Monaco Coach Corp. developed into major employers and economic powerhouses during the past 25 years in Lane County, Ore., an intertwined web of independent businesses grew up around them, providing the RV makers with paint, steel, upholstery, electronics and other materials and services required to build the luxurious land yachts.

As reported by the Register-Guard, Eugene, many of these local and regional companies came to rely on the money they made from the RV makers.

And, now that the RV manufacturers have fallen on hard times, many of their suppliers have lost a big chunk of business. A number of them are owed a lot of money — money they worry that they may never see with both Country Coach and Monaco in Chapter 11 bankruptcy proceedings.

But the impact of the near collapse of the RV industry in Lane County hasn’t been the same for all of the companies that previously grew along with the RV makers. Some of them say they’ve diversified enough that they’ve not been hurt too badly by the erosion of RV manufacturing. Others say they have had to lay off workers and scramble to find new business.

“They just hung us out to dry,” said Ken Millard, owner and president of Aries Engineering, which makes heated mats that go under tile floors in high-end motorhomes. “It’s devastating.”

His top three customers were Monaco, Country Coach and Fleetwood — all three of which are in Chapter 11 bankruptcy.

Sales at the company are 10% to 20% of what they were a year ago, he said. He’s had to lay off three of his six employees. While not among the top creditors, Millard figures his company is owed a total of $125,000 by Monaco and Country Coach.

“The loss of sales is tough,” he said. “What’s tougher is the loss of cash. They didn’t just stop ordering mats. They stopped paying for mats they ordered and that were shipped.”

Millard said he’s trying to branch out into the residential market for heated floors, but competition is stiff.

“I’m lucky to still have a company,” he said. “We are working furiously to generate a living revenue.”

The Bill Benetreu Co., a metal fabricator in Springfield, has been doing business with Country Coach since the early 1980s, building steel and aluminium parts such as hinges and brackets and storage bay doors, said Dawn Kosinski, the company’s CFO. Country Coach has been one of the company’s biggest customers, she said.

“We were prepared for a substantial downturn with them,” she said. “We did not anticipate a complete and sudden death of an entire industry.”

According to the Register-Guard, the company is among Country Coach’s top 20 unsecured creditors, with outstanding bills of $200,574, according to documents Country Coach filed last week in U.S. Bankruptcy Court in Eugene.

About two years ago, the firm had 50 employees. Today, it’s down to about 30. In recent months, the company has imposed extended furloughs and gone to alternating work weeks, Kosinski said.

“We’re doing what everyone else is doing and just trying to be as prudent as possible and continue to ride out the economic storm,” Kosinski said. “We do have other industries we serve and we continue to serve those and foster those relationships. We’re trying to look for hot spots in the economy.”

When manufacturers spend money with a supplier, it doesn’t just sit there — it ripples through the economy, in what economists call a multiplier effect. The supplier, in turn, buys goods from other businesses. And it pays employees, who in turn buy groceries, pay rent, buy shoes or make a car payment.

But the opposite also is true. If the supplier loses a major customer, as has happened with the RV industry, and has to lay off employees, those workers don’t have the money to spend, and the economy suffers.

“It’s one of those domino things,” University of Oregon economist Tim Duy said. “One domino falls and the other falls after it. That ensures that the impact from this downturn is not limited to just the jobs at Country Coach or Monaco. It magnifies to the suppliers in the industry.”

TNT Speciality Advertising in Eugene is an example of a company on the periphery of the RV industry, but one that’s been hurt by its decline. The business, which produces promotional and marketing materials, sued Country Coach in November alleging the RV maker never paid for $91,734 worth of polo shirts, caps, travel mugs and other items emblazoned with the Country Coach logo.

“We were greatly affected,” company president Kim O’Brien said. “We’re still in business. We’re not going under, because we were able to absorb that hit over time. But we did have to let go of an office person who had been with us for six years.”

TNT had done business with Country Coach for about four years, and the RV maker represented about 35% of TNT’s business, O’Brien said.

O’Brien, who was working part time, has gone back to full time, and the business is out “beating the pavement” trying to drum up new accounts, she said.

On the other end of the spectrum is Guaranty RV, the Junction City dealer that’s been selling Monaco and Country Coach RVs since the 1970s. The dealer is among the biggest creditors of both Monaco and Country Coach.

Guaranty General Manager Shannon Nill said the rapid fade of the two RV makers is “still a shock.”

“Country Coach unraveled slowly, but no one expected Monaco to do this,” he said.

With the two companies in Chapter 11 and unable to pay bills, “It affects us greatly,” he said. “It hurts our financial capacity to do the things we’d like to do.”

Other, smaller vendors say they see a silver lining in the dark clouds around the RV makers. If people aren’t buying new RVs, that means they’re hanging on to their older models and might be willing to spend money to repair and update them.

The Register-Guard reported that the decline of the RV industry has forced Innovative Coach Works in Junction City, formerly Soundsational, to focus more on the after market, retrofitting older RVs with new electronics, said Matt Rossiter, owner of the Junction City business that specializes in RV electronics.

Country Coach often would hire the shop for custom jobs after the sale of a coach. Rossiter wouldn’t say how much his company is owed by Country Coach, other than it’s “enough to buy a new vehicle.”

While 2008 was a record year, Rossiter said he’s recently been forced to lay off four of his five employees, including family members — the first time in 13 years in business he’s had to let anyone go because of the economy.

He said he and other RV vendors are trying to put together a consortium that would market Junction City as the place to come for after-market service and maintenance.

“Regardless of the manufacturers, this is still the place to get your RV worked on,” he said.

“This is new for everybody. No one has ever seen the manufacturing base so low,” he said. “We’re looking forward to the summer months when people are coming back through.”

Steve Skiller, owner of Countryside Interiors in Junction City, said his business hasn’t been hurt too badly by Country Coach and Monaco’s problems because it already has diversified into after-market service. His business specializes in RV interiors, including reupholstering furniture and installing carpet. At its peak, the business had six employees. Today it has three full-time workers.

“The aftermarket is alive and doing well,” he said, although business is slower than it has been. Like Rossiter, he’s hopeful things will pick up this spring and summer.

“We have a bright outlook for the after market,” he said. “People are going to fix up what they have instead of buying new.”

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