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Lane County Looks to Wood Products Industry

August 8, 2011 by · Leave a Comment 

Navistar International Inc.’s decision to move 450 jobs to Indiana from its Monaco RV motor coach plant in Coburg, Ore., will reduce employment in Lane County’s transportation equipment manufacturing sector by half.

As reported by the Register Guard, Eugene, that’s terrible news for a local economy that has grown numb from similar blows. Even before Navistar’s announcement Tuesday (Aug. 2), employment in the sector, mostly recreational vehicle manufacturing, had fallen 80% from its peak in 2005. Such a steep decline makes the notoriously volatile wood products industry look like an island of stability in Lane County’s manufacturing economy.

Lane County’s RV makers employed 4,600 workers in 2005, according to the Oregon Employment Department, having added more than 1,000 jobs in just two years. Eugene and Springfield had become bedroom communities for Coburg and Junction City, the industry’s leading production points.

Jobs in the RV plants paid an average of 22% less than those in sawmills and plywood mills, but the RV makers were on the verge of surpassing the mills as Lane County’s leading source of manufacturing employment. Monaco Coach Corp., Country Coach Inc. and Marathon Coach Inc. — the big three RV companies — filled local suppliers’ order books, and their workers’ paychecks helped sustain grocers, dentists, movie theaters and car dealers.

Then the bottom fell out. A credit crunch, a deep economic downturn and high gas prices all came at once.

The Register Guard reported that employment hit bottom in March 2009, when just 500 people were employed in the transportation equipment manufacturing sector. A gradual recovery had took hold since then, with employment in the sector averaging 900 in the first six months of this year. But the news about Monaco promises to bring local RV industry employment to a new low. A return to the boom days before the Great Recession is a distant dream.

Navistar’s shift in production to Indiana results from a new factor in the local equation. Monaco, like Lane County’s other big RV makers, is locally grown, but its assets were purchased by Navistar after bankruptcy proceedings in 2009. Monaco’s jobs in Coburg became subject to decisions made by a multinational company based in Illinois. While 150 jobs will remain in Coburg, consolidating most of Monaco’s work force in Indiana makes sense to executives who see Lane County as an outpost distant from supply lines and markets.

Total manufacturing employment in Lane County peaked at the same time as the number of jobs in RV-making hit its highest point. Since then, manufacturing has declined by 40%, to 12,200 in June from 20,600 in the summer of 2005.

The RV industry accounts for about half of that decline. And the drop in manufacturing employment accounts for half the decline in total non-farm employment in Lane County, which stood at 143,500 in June after reaching a peak of 159,500 in late 2007.

Other sectors have suffered as well, but one contrast is telling. The wood products industry in Lane County has been shrinking for a decade, slipping to 3,400 jobs in June from 5,300 in 2001. Yet wood products remains the largest local source of manufacturing employment, and it is likely to remain so — particularly if a recovery in the construction industry ever arrives.

Wood products is known to be a boom-and-bust industry, highly sensitive to changes in the housing market. But it won’t be moving to Indiana, and it continues to provide jobs that form the base of Lane County’s economic pyramid. The RV industry, once poised to overtake wood products as the county’s leading manufacturing employer, is mostly gone.

The wood products industry is still here, and can be expected to remain.

 

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