Oregon lost its bid to get Monaco RV LLC to concentrate its recreational vehicle production around Eugene, culminating in the loss of 450 jobs over the next several months.
But, according to a report in the Oregonian, state and company officials said Wednesday (Aug. 3) it wasn’t for lack of trying, and industry officials suggest that economic and manufacturing trends might have doomed the job-preservation effort from the start.
State and local economic development officials worked with Gov. John Kitzhaber’s office to offer Navistar International Corp. around $2 million in cash incentives to centralize its RV business at its Monaco subsidiary in Coburg, said Jack Roberts, director of the Lane Metro Partnership Inc. That could have expanded Monaco’s local employment from 600 to 1,000, he said.
Instead, Chicago area-based Navistar chose to invest $1 million in an existing Monaco plant in northern Indiana, long home to the nation’s largest collection of RV makers. Navistar also will move some executives from Monaco’s Coburg headquarters to its corporate campus in Lisle, Ill., where it makes buses and heavy-duty, International-brand trucks.
The decision eliminates 450 jobs in Coburg over the next nine months and signals a decisive shift in Oregon’s RV industry, which shrank considerably after the debt bubble burst and fuel prices jumped in the late 2000s.
The departure will leave the state with an industry making largely towable RVs which retail from $25,000 to $100,000 instead of $250,000 or more.
It also reflects a move by some large manufacturers to consolidate production close to suppliers to cut costs. Navistar officials said Monaco’s northern Indiana plant is closer to suppliers and its Warrenville, Ill., headquarters.
Monaco’s longtime rival Fleetwood, which filed for bankruptcy protection in 2009, was bought by a private-equity firm and promptly relocated from California to northern Indiana.
“Elkhart County in Indiana is arguably the RV capital of North America,” said Navistar spokeswoman Karen Denning. “Navistar’s headquarters are in the Chicago area, too, so there’s a proximity advantage for its engineers and support staff,” she said.
Still, the loss is a bitter pill for Lane County workers and politicians, who in 2008 won a similar bidding war with Indiana when Monaco was a standalone, publicly traded company. The financial crisis, credit crunch and spike in fuel prices drove Monaco Coach Corp. into bankruptcy, where Navistar purchased it in 2009.
Several companies making towable trailers — RVs that hook on to trucks — still call Oregon home. They also appear to be poised to expand.
Navistar plans to continue making towable RVs in Coburg while keeping some IT and finance jobs at Monaco’s headquarters there.
In April, Keystone RV Co., based in northern Indiana, bought its Pendleton plant along with an adjoining 10 acres for $3 million. The city had built the plant for the company.
“That kind of committed them to our area,” Pendleton city manager Larry Lehman said, noting that Keystone also purchased a plant abandoned by Fleetwood.
In La Grande, Northwood Manufacturing Inc. employs nearly 400 making travel trailers, fifth-wheels and truck campers. In 2009, owner Ronald Nash bought a plant vacated by Fleetwood in 2009 and opened Outdoors RV Manufacturing Inc. just a couple months later. It now employs 150 making towables, a company official said.
Trailer-chassis maker Lippert Components Inc. and window-maker Kinro also operate plants in Pendleton. Both are divisions of New York-based Drew Industries Inc.
Making lower-cost RVs regionally still makes economic sense, said Darin Nelson, the sales manager for Outdoors RV.
Shipping a towable RV to a dealer across country would add $3,500 to its $25,000 price tag, he said. Makers of $200,000 motor homes can more easily absorb those freight costs, Nelson said.
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