Ore. Developer Looks for Buyer of Monaco Site

August 21, 2012 by · Leave a Comment 

Former Monaco Coach Corp. facility

With designs on reviving a work force still staggered by the economic downturn, an Oregon developer is actively marketing the former manufacturing campus and headquarters for Monaco Coach Corp. that encompasses nine stand-alone facilities situated on 69 acres in Coburg.

Steve Lee and his wife, Sally, finalized the purchase in late June from a division of Navistar International Corp., which acquired Monaco after an industrywide plummet in sales that forced the venerable manufacturer into foreclosure three years ago and left around 2,000 people unemployed. While acknowledging the property’s potential to be parceled out to different buyers – each building is self-sufficient – Lee’s long-time ties to Monaco and the industry have him hoping that “Coburg North Industrial Park” will once again house an RV manufacturer looking to establish a West Coast presence.

“Sally and I developed the Coburg site and also Monaco’s Holiday Rambler facilities in Wakarusa, Ind.,” Lee said. “The quality of construction was far above what you see in the RV industry. Both sites are the Cadillac of industrial complexes with not only top quality construction materials but also an emphasis on energy efficiency and overall aesthetics.”

But, according to Lee, one of the most attractive selling points is the area’s veteran work force.

“We have people that are primed and ready to go to work with no training required,” said Lee. “And unlike Elkhart County, you don’t have the competition for skilled laborers from all the other RV companies. Sally and I truly have a passion for bringing work back to the area.”

He added, “My son, Ryan, who was director of marketing for Monaco, has given a lot of tours to potential buyers. I asked him what it was like to see all those empty buildings. He told me that wasn’t the problem, it was not seeing the faces of all the people that are missing.”

The centerpiece for the property is a 336,849-square-foot production facility, which over the years produced towables and gas motorhomes, and later Monaco’s high-end diesel coaches. Ryan Lee says it’s “absolutely ideal for an RV manufacturer,” adding, “It’s basically in move-in shape. A company could be up and running in 72 hours.”

The plant boasts 8,600 square feet of office area and 340,988 square feet of production space along with an expansive covered storage area, covered loading dock and multiple loading docks and cranes. “It’s first class,” said Ryan Lee. “There are even copper air lines, which are great for tools.”

Lee noted that Navistar is still leasing a facility for its customer service department, but said the company recently moved all towable production to Harrisburg, Ore.

Other features of the property include:

• Nearly 1 million square feet under roof.

• Buildings constructed by Butler Manufacturing.

• Mature landscaping around buildings.

• 200 electric roll-up doors.

• Facilities include a former Monaco medical building and wellness center, and a 12,000-square-foot office building.

• Several manufacturing buildings previously used for chassis production, paint and final finish and component production.

• Close proximity to shipping docks in Portland and also Interstate 5, the main north-west connector on West Coast.

• Wood products all produced in Oregon.

Steve Lee said that he had already shown the property to several commercial developers and was currently conducting two or three major tours a week. “We will probably start off leasing the buildings,” he said. “But if someone wanted to buy it outright we could work them. The local and state governments are also motivated to put people back to work so there should be some incentives available.”

For additional information on Coburg North, visit or contact Jeff Elder with Evans, Elder & Brown at or (541) 345-4860.


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Monaco’s Kay Toolson Announces His Retirement

May 4, 2011 by · 3 Comments 

Kay Toolson

Kay Toolson

Kay Toolson, president of Monaco RV LLC, will retire the end of June.

After 25 years at the helm of Monaco RV and Monaco Coach Corp., Toolson will step away from the day-to-day operations, but still be involved in special projects and take an advisory role in the company, according to a news release.

A native of Smithfield, Utah, Toolson joined the recreational vehicle industry in 1972 as product manager for Kings Highway Mobile Industries in Los Angeles, where he later held the positions of national sales manager and vice president.

In 1982, he joined Anaheim, Calif.-based motorhome manufacturer Executive Industries as a minority owner and executive vice president of operations, a position he held until 1986.

Toolson joined Oregon-based Monaco Coach Corp. in 1986 and completed a management buyout of the company in 1993, and took the company public that same year. He served as president for the company from 1986 to 2000, CEO from 1986 to 2009, and as chairman from 1993 to 2009.

During his tenure with Monaco , the company grew from a small, specialty RV manufacturer recording $17 million in annual revenue to a 5,70-employee company producing a broad spectrum of RVs and annual revenue in excess of $1.4 billion.

The company filed for bankruptcy in 2009 and was subsequently purchased by Navistar Inc. Since that purchase, Toolson has served as president of Monaco RV.

Monaco RV’s current management team will remain, reporting to William H. Osborne, the newly named vice president of custom products for Navistar Inc. In this role, Osborne will have accountability for the Monaco RV and Workhorse business units.

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Oregon RV Alliance Marketing Arm Active

January 17, 2011 by · 1 Comment 

Reports of the demise of the RV industry in Oregon’s Lane County are greatly exaggerated, industry veteran Bradley Waring says, borrowing a line from Mark Twain.

There’s no denying that the industry has taken a beating in the economic downturn. Two of the area’s major coach companies, Country Coach Inc. and Monaco Coach Corp., were purchased out of bankruptcy and now operate on a much smaller scale, The Register-Guard, Eugene, Ore., reported.

Monaco is a tiny division of multinational Navistar International, and Ron Lee, younger brother of Country Coach cofounder Bob Lee, recently resurrected Country Coach as a sales and service center, with hopes of eventually resuming production. Marathon Coach in Coburg still converts buses into million dollar coaches, but far fewer than in its heyday.

Lane County’s transportation equipment manufacturing sector, which has been dominated by the three RV manufacturers, employed 800 people in November, according to the state Employment Department. As recently as 2005, it had employed 4,500 people.

Even without a major manufacturing presence, Lane County still has a deep well of experience and expertise in RV sales, service and support, people in the industry say. They wanted to get the word out to RV owners across the country, so they formed the Oregon RV Alliance, a nonprofit marketing group. On Tuesday, the alliance’s founder, Bradley Waring, and several other members boarded a coach headed to the RV resorts near Palm Desert, Calif., where the snowbirds flock.

More than 2,000 snowbirds were expected at the Family Motor Coach Association (FMCA) rally in Indio, Jan. 13 through Jan. 15.

The Lane County delegation in Indio included Waring, former Lane County Commissioner Jerry Rust; Susan Graham, sales manager at Premier RV in Junction City; Meg Trendler, Travel Lane County’s tourism sales manager; and Tom Schneider, a retired Guaranty salesman.

Travel Lane County provided 1,200 Lane County Visitor Guides to hand out at the rally, and the Southern Willamette Valley Wineries Association supplied local wines for the delegation to serve as samples.

“We’re telling coach owners we’re still here,” Waring said. “The same people who sold you your coach, the people who serviced your coaches, the manufacturers who have built your coaches are still here.”

And while coach owners are having their vehicles serviced, they also can check out all the sights and attractions of Lane County, he said.

“We’re going to give them our message of renewal, and we’re going to … encourage them to bring their (coaches) back into this community over the spring and summer,” Waring said.

This is just the first of many of the alliance’s outreach efforts, he said.

Alliance has 30 members

Kurt and Betty Simon already visit Lane County often. The Eugene area is a convenient rest stop between their home in Auburn, Calif., and their children and grandchildren in Seattle and Portland, Kurt Simon said.

The retirees routinely have their 45-foot Monaco Executive serviced at Guaranty RV in Junction City where they bought it several years ago.

Simon said he’s not sure whether more RV owners will put Lane County on their itinerary after talking with Oregon RV Alliance members.

“I suspect that people are still staying closer to home,” he said.

But the Oregon draw is there, he said. “Motorhomes tend to be mobile anyway, and Oregon is a good place to go. It’s a beautiful state.”

The alliance already has 30 members, including RV manufacturers, dealerships, service centers, suppliers, local chambers of commerce, community festival organizers and others. Waring predicts it will have at least 200 members by the end of the year.

“I started this movement over Thanksgiving, and, frankly, it’s such a sensible idea that I’m having trouble getting around to meet with all the people who want to participate,” he said.

Through the ’90s and up until 2007, when the local manufacturers were going strong, there was a steady stream of out-of-town coach owners, who dropped by the factories to have their coaches serviced or remodeled, or to take part in motor home rallies.

Many stopped to shop at Guaranty RV in Junction City, formerly the largest RV dealership in the nation — and now the largest one that has managed to stay out of bankruptcy, general manager Shannon Nill said.

He said RV manufacturing has been Junction City’s strong suit for years.

“Even though it’s down a notch; it’s not gone,” Nill said.

So he said he was all ears when Waring contacted him about the alliance.

“I thought it was really tremendous that he would take it upon himself to gather up all the quality elements and put a shine on it and find ways to further network and make sure people know we are open for business in Junction City for motor home sales, service and accessories,” Nill said.

Some out-of-area coach owners still stop in Lane County, “but with the motor home manufacturing on the downside, there’s less and less of a need for them to come to this area,” said Rob Dickman, owner of the Les Schwab tire store in Junction City, a longtime supplier to the RV industry.

“By promoting the area, the recreation, the other people who work on motor homes here, and just the beauty of our area, we hope to give them a good excuse to keep coming back here,” he said. “They bring a lot of money when they come.”

Just filling up a coach’s 100-gallon tank, for example, is a nearly $400 expenditure, Waring said.

“If we band together and pitch to those people to come back to our area, it’s going to help everybody,” Dickman said.

“Attracting RV travelers to the region for service as well as sightseeing is mutually beneficial for the tourism and RV industries,” said Lisa Lawton, community relations manager for Travel Lane County. “We’re looking forward to connecting with industry leaders and RV travelers one-on-one to tap into this market and ultimately bring more visitors to this region,” she said.

More disposable income

Many coach owners have maintained ties with the people who sold and serviced their RVs. But alliance members said they want to cast an even wider net.

Most of the coaches serviced at Oregon Motorcoach Center are from out of the area, operations manager Ed Read said.

The 2-year-old business is owned by Bob Lee, founder of Country Coach, his wife, Terry Lee, and their son-in-law, Patrick Mason.

Oregon Motorcoach was eager to participate in the Oregon RV Alliance’s marketing efforts to RV travelers. “We want them to know that there’s a reason to be here again,” Read said.

Waring founded the alliance after losing his RV-related businesses, his mobile office — a Country Coach — and even his home in the downturn. He said he took “an involuntary sabbatical” from his 15-year career as a nomadic salesman, selling heated flooring and other supplies to major coach makers, and moved to Eugene in March 2009.

“I had all my eggs in the RV basket and I’m starting again,” he said. “My wife has been feeding me and giving me gas money.”

Recently, Waring has renewed relationships with old friends and associates in the RV industry.

“I’m so passionate about this,” he said. “(I want) to bring my friends back to work.”

He said he thought for years that the Lane County RV industry should partner more closely with the local tourism agencies to market the area to RV owners.

“This is a group of people who are mobile, they’re more affluent than most, they have disposable income that most of us don’t have,” Waring said.

The idea came into clearer focus over the summer when he volunteered at the front desk of Travel Lane County’s new adventure center in Springfield’s Gateway area.

Waring said he reached out to former Lane County Commissioner Jerry Rust after reading his campaign paper outlining his economic development ideas.

Rust signed on as the alliance’s co-director.

“I think it’s an interesting assignment,” he said. “I’m happy to go do it — be a cheerleader for Lane County.”

Before Rust and his wife, Zhang Yu Cai, boarded the coach Tuesday, he said he had ridden in Georgia-Pacific’s helicopter and even in the Goodyear blimp, but he had never ridden in a large RV.

“I’ve been in little camper outfits, but I don’t think I’ve really ever set foot in one of these monsters,” Rust said. “I’m looking forward to it, and I understand how excited the people in Junction City and Coburg must be to see some new life breathing into this industry that a lot of people thought was dead, dead and never would return.”

An all-volunteer project

The nonprofit alliance is an all-volunteer project, Waring said. Its sole source of funding is annual membership dues: $500 for charter members and $200 for associate members.

He said he’s heartened to see a core group of RV entrepreneurs have survived the downturn and are working to renew the industry.

“It’s pretty hard to put an entrepreneur down,” he said.

“I just want to inspire people to dust themselves off and pick themselves up and put this behind us,” Waring said. “We have everything in the world to offer here.”

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Leaner Fleetwood Eager to Please Buyers

January 10, 2011 by · 2 Comments 

John Draheim addressing 2010 Fleetwood dealer conference

John Draheim addressing 2010 Fleetwood dealer conference

Sometimes things are so bad, it seems they can only get better. That’s how it was two years ago for RV makers, the Fort Wayne, Ind., Journal Gazette reported.

At the depth of the recession, most consumers were too worried about losing jobs and homes to consider spending thousands of dollars on a recreational vehicle. So Northeast Indiana felt the shockwaves of the RV industry’s collapse as well-paying manufacturing jobs evaporated.

This is the story of one company – Fleetwood RV Inc. – that rose from the ashes to create a leaner organization with updated product designs and an improved way of filling orders.

The business is smaller than its bankrupt predecessor, Fleetwood Enterprises Inc. But CEO John Draheim said the reorganized Fleetwood is more stable.

“We’re still dealing with a flat retail market,” he told The Journal Gazette, “but we’ve restructured our company to be profitable at the current (sales) volume level.”

A fresh start

In June 2009, New York-based American Industrial Partners Capital Fund IV LP paid $53 million for Fleetwood Enterprises’ brand, the Decatur operations and some equipment in the company’s California plant.

The company consolidated in Decatur, where Fleetwood has eight buildings: two for motorhome production, one paint shop, three for fiberglass production and two for service and parts.

When Fleetwood Enterprises filed for bankruptcy in March 2009, it simultaneously closed its travel trailer business and began steps to close its motorhome plant in Riverside, Calif. The company still operated one motorhome production plant in Decatur and had 12 manufactured housing plants in 10 states.

Fleetwood Enterprises’ total employment, which was once 2,000, dwindled leading up to the bankruptcy filing. A company spokeswoman didn’t have a definitive number for how low it dropped.

With the sale, Fleetwood Enterprises ceased to exist. As spokeswoman Heather Everett explained, Fleetwood RV is a 16-month-old company with a 60-year-old brand legacy.

The new owners consulted Draheim on how to structure the company before closing the deal.

Draheim has worked in the RV industry since 1997. Before joining Fleetwood, he worked for Monaco Coach Corp., National RV Holdings Inc. and Thor California Inc.

The workforce now has grown to 1,200, but the corporate staff still includes only four positions: chief executive officer, chief financial officer, vice president of operations and vice president of engineering.

Fleetwood RV Inc. team members

Fleetwood RV Inc. team members (from left) Colin Roberts, John Draheim, Debra Pak and Luis Ortiz.

Corporate staff members own a stake in the company. The remaining employees are in business units, which are responsible for their own profits and losses.

A new structure

Although the name switch might seem like a minor technicality, the ownership change carried major implications. Fleetwood RV had no debt and no employees when it was formed; 450 were quickly hired for service, parts and warranties.

Former employees who hired on with the new, consolidated operation accepted 10% pay cuts and started over earning vacation time and other benefits. The owners estimated that hourly employees would make as much as they did before the wage reductions, however, because work would be steady rather than punctuated by the layoffs that happened frequently at the former company because of insufficient customer demand.

The company also started from zero when it came to selling its products.

Fleetwood RV had to sign up independent dealers because it doesn’t own any and couldn’t use agreements negotiated by the previous company. Many dealers left the industry in 2009. The smaller group that remains is stronger financially, Draheim said.

With a sales network in place, the company had to recreate a supply network for parts needed to build motorhomes and campers. The previous one, Draheim said, was “fractured” by the recession.

Various suppliers couldn’t keep their companies going when orders dried up. Fleetwood RV had to find reliable suppliers who make the necessary RV components.

A slim operation

Fleetwood RV has a “lean” culture, which means the company actively eliminates waste and inefficiency while stressing continuous improvement, Draheim said.

“We’re able to produce more than we could a year ago,” he said. “If it weren’t for lean, we wouldn’t be where we are today. We wouldn’t be a profitable company.”

Just how profitable, he won’t say. Fleetwood RV also doesn’t release sales figures, but the amount is “substantially higher than a year ago,” the CEO said. And the company still has zero debt, he said.

Statistical Surveys Inc. (SSI) data from October found that Fleetwood RV ranked third in the industry in overall retail sales.

Because of lean business practices, the company is now taking ideas to market in just a few months, Draheim said.

Fleetwood has changed the production process and flow at least six times in the past 16 months, Draheim said. Changes have freed up floor space, leaving the manufacturer enough room to more than double capacity on a single shift, he said.

Making those changes has been a joint effort.

Draheim has read about lean practices, visited other lean plants and completed lean training. The vice president of operations has lean experience. And the equity firm lends expertise in financial and engineering matters, Draheim said.

The most significant change has been in how the plant builds RVs. Previously, workers manufactured in batches, making 10 identical motorhomes before switching to make 10 of a different model.

The process led the company to build more of some models than needed. Fleetwood Enterprises used to pressure dealers to take models they didn’t really want as a result. But Fleetwood RV, the new company, can switch models with each individual RV it builds, Draheim said.

Fleetwood RV builds more than 50 different floor models.

Pent-up demand

One major challenge is designing those models to fit consumers’ wants and needs.

The company keeps up with the changing marketplace by doing year-round grassroots research. Fleetwood staff goes to more than 200 RV retail shows to conduct focus groups, gathering feedback. The manufacturer recently surveyed more than 2,000 owners and one-third of its dealer network.

The company also seeks input from the more than 4,000 members of its RV owners club.

Customer feedback prompted Fleetwood to launch a product that combines aspects of a Class A design with a Class C. Class As have a front that looks like a bus, carry more water and have more towing capacity. Class Cs have a front that looks like a van, sleep more people but have less water capacity.

“Both products have their strengths and weaknesses, so we created a crossover,” Draheim said.

The resulting RV costs from $80,000 to $100,000. The vehicle sleeps four to eight people, depending on whether they are adults or children. The breakfast dinette converts to bunk bends, and a “hide-a-loft” is a platform that pulls down from the ceiling and holds an air mattress. The idea for the loft came from the sales staff. Fleetwood engineering group made it work.

The model is shorter and gets better fuel economy than other models that sleep the same number, Draheim said.

“That’s one of our highest-volume products over the last year,” he said.

Mac Bryan, vice president of administration for the Recreation Vehicle Industry Association (RVIA), said several RV makers are offering more stripped-down models to appeal to money-conscious shoppers.

RV sales grew 45% industrywide in 2010, “but, obviously, from very low levels,” he said.

The Virginia-based industry group expects sales will increase 6% to 8% this year, a more sustainable level of growth for models that can range from $5,000 to $500,000. Luxury options include gas fireplaces, Jacuzzis and patios that slide out 3 feet above the ground with canopy overhead and a railing around the sides.

“It’s almost like anything your imagination can conceive, they can build,” Bryan said.

The association expects RV sales will grow faster than some other discretionary spending because, as Bryan put it, “Many people are passionate about the lifestyle. We build family memories.”

The recession was devastating for the RV industry.

October 2008 though June 2009 was the 100-year-old industry’s toughest stretch since major oil embargoes in the 1970s, Bryan said. He expects it will take longer for the industry to recover this time because unemployment rates will probably take longer to fall than gas prices.

Getting a loan

Lending is a major factor in the sales equation. Some prospective buyers have had trouble getting approved for loans, Draheim said. But that’s starting to ease, with some lenders once again approving loans for consumers and dealers, he said.

During the recession, some people ended up buying smaller RVs because that’s all they could get loan approval for or that’s all they felt comfortable spending. But that’s changing. In the past six months, they’ve started buying bigger models. Draheim thinks these owners are rewarding themselves for making it through the recession.

When Fleetwood Enterprises was selling 50,000 to 60,000 units a year, most of the sales were in the mid-priced range, he said. Now, with the market at less than 20,000 units a year, most of Fleetwood RV’s sales are split between the top and bottom of the market.

RV demand is picking up, however. Statistics from verify increased interest. Traffic to the website has increased more than 40% this year, spokeswoman Christine Morrison said. The site is run by the industry trade association.

Some consumers who postponed purchases during the recession are now looking to buy, Draheim said. He thinks the company is well-positioned for when the market recovers.

Until then, if Fleetwood RV sells more vehicles, it has to take market share from a competitor.

Draheim plans to continue innovating and running a lean operation.

In the short term, he said, “We’re just going to keep doing what we do.”

Indiana Gov. Mitch Daniels (third from right) attended the Fleetwood ribbon cutting in August 2009.

Indiana Gov. Mitch Daniels (fourth from right) attended the Fleetwood ribbon cutting in August 2009.

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‘RV Capital’ Looks Inside Itself for Recovery

October 8, 2010 by · Leave a Comment 

Ed Neufeldt introduces President Obama during his visit to Elkhart, Ind in February 2009.

Ed Neufeldt introduces President Obama during his visit to Elkhart, Ind in February 2009.

For 20 months now, Ed Neufeldt has kept the photograph in his wallet as a reminder of a promise made but not yet kept.

The small, scuffed print shows Neufeldt standing next to Barack Obama on Feb. 9, 2009, the day the U.S. president came to this recession-battered slice of the American heartland and assured its anxious residents the economy was soon going to improve, PrimeMedia News reported.

“One of the first things he said to me was, `I’m going to get you back to work,'” recalls Neufeldt, a 64-year-old father of seven. “But I really don’t think he helped me get back to work at all.”

Neufeldt makes this statement more out of disappointment than anger.

Like many other longtime residents in this county of 200,000, located about two hours east of Chicago, Neufeldt had been counting on Obama’s $787-billion stimulus bill to jolt the U.S. economy into recovery.

Known as the “RV Capital of the World,” Elkhart became a symbol of the Great Recession when its signature industry was slammed by a brutal combination of economic factors in 2008 – $4-a-gallon gasoline that sapped demand for gas-guzzling motorhomes, a consumer-credit squeeze and a collapse in Americans’ discretionary income.

The local unemployment rate shot to 18.9% in early 2009 from under 5% in 2007, turning Elkhart from one of the most prosperous industrial areas in the country to one of its most desperate.

“It was dire,” says Dorinda Heiden-Guss, president of the Economic Development Corp. of Elkhart County.

Neufeldt was among the recession’s earliest victims, laid off after 32 years working on the assembly line at Monaco Coach Corp., a maker of high-end recreational vehicles.

He received six weeks in severance pay and then turned to unemployment benefits to support his family.

In all, 1,400 workers lost their job at Monaco – one of several companies to close its doors or slash workforces.

The economic carnage in Elkhart caught Obama’s attention even before he was president. He visited the county twice as a candidate while courting voters in Indiana, a traditionally conservative state that he carried in the 2008 election.

Obama has visited twice more since entering the Oval Office, first to plead for the stimulus shortly after taking office and then again in August 2009 to announce a $39-million grant for the production of electric delivery trucks in the county.

But almost two years after passage of the stimulus, the economic recovery remains uneven in Elkhart — with signs of hope tempered by ongoing struggle.

The county’s jobless rate has fallen amid a welcome upswing in the RV industry and the arrival of some “green” manufacturing jobs. Even with the modest surge in economic activity, unemployment stood at 13.4% in August.

“Consumption has been pretty weak coming out of this recession. Consumers and households have decided to hunker down, and I think they will remain hunkered down for a while,” says Bill Witte, an associate professor in economics at Indiana University Bloomington.

“That will have an impact on discretionary expenditures, which include things like great big RVs.”

In Nappanee, a town of 6,700 in southern Elkhart County, street signs advertise a food drive to aid residents struggling to make ends meet.

“I don’t think the recession is anywhere near being over,” says Larry Thompson, Nappanee’s Republican mayor.

“Even those who got their jobs back, they might be getting those jobs back at $10 less an hour than what they were making, and maybe their spouse, husband or wife didn’t get their jobs back at all,” says Thompson.

Debate over whether the stimulus worked — or is working fast enough — has dominated the political conversation here ahead of next month’s congressional elections.

Just two years after Obama won Indiana, Democrats are at risk on Nov. 2 of losing the U.S. Senate seat being vacated by Evan Bayh.

According to a September poll by Rasmussen Reports, Republican Senate candidate Dan Coats is leading Democrat Brad Ellsworth by 16 points. In Indiana’s second congressional race — which includes part of Elkhart County — incumbent Democrat U.S. Joe Donnelly is in a close race against Jackie Walorski, a Tea Party favorite one local resident described as “Sarah Palin on steroids.”

Elkhart Mayor Dick Moore (right) chats with Mike Huckabee during Huckabee's visit to Elkhart in the spring of 2009.

Elkhart Mayor Dick Moore (right) chats with Mike Huckabee during Huckabee's visit to Elkhart in the spring of 2009.

“The stimulus is a hard sell to the guy that is unemployed,” acknowledges Democrat Dick Moore, mayor of the city of Elkhart.

“As people go back to work across the country, the first thing they are going to provide for is their needs. What we make here in Elkhart, Indiana, can be considered a want, not necessarily what you need. So we will lag a little bit.”

Still, Moore says the stimulus has provided a vital boost – launching infrastructure projects that are rejuvenating the city’s streets, schools, airport and municipal buildings.

He also credits Obama for raising Elkhart’s national profile – saying it has paid off by driving interest among entrepreneurs looking for a place to locate new businesses.

On a recent morning, the local newspaper reported a start-up recreational vehicle manufacturer was bringing 40 new jobs to Elkhart after receiving tax breaks from the local government.

Think, a Norwegian electric carmaker, has announced plans to begin North American production in 2011 in Elkhart, promising another 415 local jobs.

“We have been through a lot of these cyclical times with the RV industry. We have always survived,” says Moore.

Indeed, there have been other success stories.

Prime Time Manufacturing, a start-up company backed by investor Warren Buffett, has 125 employees and is producing three lines of recreational vehicles in facilities left vacant at the height of the recession.

Challenger Door, which supplies companies making RVs and transit buses, rose from the ashes of another failed firm. It has hired 120 workers in Nappanee.

“Three-quarters of the workers were actually from the old plant and out of work,” says Merlin Yoder, Challenger’s president.

Some local officials say new businesses are thriving despite the stimulus, not because of it. Other companies that sought stimulus funds are still waiting for the money to be released, says Heiden-Guss.

“This county, in particular, has gone around government in order to get things done. They are entrepreneurs,” she says.

Among some local businesspeople, there is grumbling about the administration’s decision to give $39 million in stimulus to Navistar, a large truck manufacturer that acquired Monaco Coach, the failed RV maker.

After Obama announced the money would be used for state-of-the-art “Made in America” electric trucks, it emerged that the first vehicles were largely assembled at a company factory in Coventry, England.

“It was a scam,” says Wilhelm Cashen, vice president of Livin’ Lite Recreational Vehicles LLC, a small local company that designs light camper trailers for Jeep.

“The government gave (Navistar) $40 million. They went to Europe and built the truck. They didn’t do anything here.”

Among critics of the stimulus, Neufeldt may be the most surprising. He gained national prominence after being asked to introduce Obama during his first presidential visit to Elkhart.

“I came away feeling he was really going to turn this country around,” Neufeldt says. He felt that way until about three months ago.

Still unable to find full-time work in the RV industry, Neufeldt now juggles three part-time jobs in the town of Wakarusa. He delivers bread to local stores, cleans the office at a local medical clinic and is helping Cashen with the launch of the company making Jeep trailers.

Neufeldt makes enough money to afford the $400-a-month premium to provide health insurance to his wife and two children who remain at home. But he can’t afford the extra $500 a month it would cost to obtain coverage for himself.

“It took me a year to get back to work. I didn’t get back in the RV industry. My first job, delivering bread, had nothing to do with the stimulus at all,” Neufeldt says, who recently attended a Tea Party rally headlined by anti-Obama broadcaster Glenn Beck.

“I think I just did it on my own.”

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Alliance Coach Flourishing at Ex-Monaco Site

June 30, 2010 by · Leave a Comment 

Alliance Coach Inc., Wildwood, Fla., has become a full-service RV dealership.

Alliance Coach Inc., Wildwood, Fla., has become a full-service RV dealership.

A sprawling RV service center in Wildwood, Fla., built in 2003 near the junction of I-75 and the Florida Turnpike by now-bankrupt Monaco Coach Corp., has become a full-service motorized and towable RV dealership.

Alliance Coach Inc. opened in September under new ownership — 10 days after the 62,000-square-foot service center went on the auction block during Monaco Coach Corp’s. Chapter 11 bankruptcy proceedings.

”When Monaco built this, they needed a factory service center on the Eastern Seaboard,” said Cy Whisnant, Alliance Coach general sales manager, who for 15 years was vice president of Tennessee-based Buddy Gregg Motorhomes overseeing that company’s sales operation in Lakeland, Fla., until it closed.

The new owners are Brett Howard and Carolyn Champion, who had operated the facility as Monaco employees, and Holiday Rambler motorhome owner Alan Shapiro, all of whom teamed up to bid on the property.

”With his help, they bought the entire facility and the ground around it and formed an alliance, hence the name,” Whisnant said. ”Over $1 million in parts came with the building.”

The facility sits on 30 acres and has 40 indoor and 26 outdoor service bays along with a 40-site campground.

Alliance Coach initially operated as a service center. But the company in December took on the Monaco McKenzie and R-Vision towable lines from Monaco RV Inc., a new company created when certain Monaco Coach assets were purchased by Chicago-based truck and engine builder Navistar International Inc.

Alliance Coach later obtained the local Holiday Rambler and Monaco motorized franchises, and expects the first shipment of Monaco  motorhomes to be delivered by early July. More recently, the dealership added Holiday Rambler towable brands.

A motorhome undergoing repairs in one of Alliance Coach Inc.'s 40 indoor service bays

A motorhome undergoing repairs in one of Alliance Coach Inc.'s 40 indoor service baysmotorhomes to be delivered by early July. More recently, the dealership added Holiday Rambler towable brands.

Currently, Alliance Coach has $1.8 million in Monaco RV motorized and towable inventory, and in addition to new models, also is selling used RVs, some on consignment.

Alliance’s sales department is open six days a week, while the service center, headed by Michael Hawkins, operates Monday through Friday. Dennis Burke will join the company as F&I manager on Monday.

Currently, Alliance Coach will service any brand of motorhome or towable RV and is certified to provide warranty work on Tiffin motorhomes and Workhorse and Spartan chassis.

As a service center that can do collision repair, Alliance Coach also has its own metal fabrication, woodworking and upholstery shops in addition to two 65-foot paint booths. Alliance Coach employs 35 people, 25 of whom are service technicians.

”It’s incredible what we can do here,” Whisnant said. ”We can do everything here for an RV but build them.”

And good fortune came quickly, he reported.

”Since the day they opened here, it’s just been absolutely packed,” Whisnant said. ”And here it is in the middle of summer, which isn’t the high season in Florida, and the shop is nearly full.”

Since Alliance Coach opened as a Monaco RV dealership in March, business has steadily increased, Whisnant said, with floorplan and retail financing arranged through Bank of America.

”Sales have been picking up and we are seeing people putting more significant amounts of money down to get financing in place and a lot of cash buyers have been coming in who don’t need any financing whatsoever,” Whisnant said. ”Right now, we are exclusively Monaco RV, but we are leaving our options open.”

Alliance Coach plans an open house Friday and Saturday (July 2-3). An updated website — — will be completed by the end of July.

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Riverside Press: RV Sector Showing Recovery

April 19, 2010 by · Leave a Comment 

When Gary and Dottie Williams ordered their MVP RV Inc. trailer in April 2009, complete with nameplates attached to the bunk beds for their grandsons, they expected to get it a month later.

They planned a cross-country road trip, but stayed in hotels instead.

When they took a vacation to the lake, they rented a trailer.

In between April 2009 and April 2010, the Moreno Valley company that was building their trailer shut down its factory like several other RV makers had done, according to The Press-Enterprise, Riverside, Calif.

While the company looked for investors and tried diversifying its business by going into the electric vehicle industry, salespeople at Giant RV showed Gary Williams other trailers. He said he couldn’t find anything comparable.

He didn’t need to. Gary and Dottie Williams picked up their finished MVP RV trailer at the Giant RV dealership in Montclair this month.

MVP RV, the Moreno Valley maker of their trailer, didn’t get the funds they needed to build electric vehicles but they found an overseas investor willing to back their RV factory.

“It’s such a great feeling to come back,” said Brad Williams recently in his Moreno Valley office. “We survived.”

Manufacturers and RV dealers are beginning to climb out of the wreckage wrought by the recession much like the industry has done early on during past business cycles when the worst appears at an end.

Would-be campers are hardly stampeding to RV dealers to purchase high-end Class A diesel motorhomes, Class C RVs or even pop-up tent trailers but they are looking, and some are even buying.

“We’re first to get hurt, and the first to recover,” said Tom Powell, CEO of Riverside-based travel trailer maker Pacific Coachworks.

Recession history

In 1979, preceding the 1980 recession that lasted from January to July, RV shipments fell a staggering 48.9% to 199,200 vehicles sent to dealers.

Wholesale shipments fell another 46.2% in 1980 to 107,200 RVs. By 1981, the number picked up 24.6% to 133,600 units. Despite a recession that stretched from July 1981 into November 1982, shipments increased another 5.2% to 140,600.

With the exception of a dip in shipments in 1985, RV production increased nearly eight straight years until 1989. The recession started July 1990 lasting until March 1991. RV shipments picked up 24.6% by 1992.

With the exception of another dip in 1995, RV production grew again year over year for nearly eight straight years until 2000 when it dropped 6.6%. A recession began in March 2001, ending November. That year RV shipments dropped another 14.4%. But by 2002, it was up 21.1%

The most recent recession started December 2007.

Two popular Inland recreational vehicle makers, Weekend Warrior Inc. and National RV Inc., bowed out early on before the economy started to exhibit true signs of stress.

Fleetwood Enterprises Inc., a longtime RV industry icon based in Riverside since 1963, had managed to navigate recessions before usually emerging a stronger company after other competitors blew a tire. This time though, saddled with too much debt, the company filed for Chapter 11 bankruptcy in March 2009 selling off the motorhome division to an equity group out of New York that moved all of the company’s operations to Indiana.

Before, Southern California dealers could pick up the RVs they ordered in Riverside. Now some say they pay extra for shipping.

Elsewhere, Monaco Coach Corp. filed for bankruptcy in March 2009. Country Coach Holding Inc. was liquidated late last year.

In 2007, RV makers shipped 9.5% fewer vehicles. The number dropped another 32.9% in 2008, and continued to cascade another 30.1% in 2009 until there were just 165,000 shipped to dealers, the lowest level since 1991.

First to recover

The Recreation Vehicle Industry Association (RVIA) is expecting shipments to jump 30% this year to 215,900 vehicles.

“When things go down, the RV industry takes it in the gut,” said Joe Laing, director of marketing for El Monte RV which rents ands sells trailers. But it also seems to be one of the first to recover, he said.

Laing said El Monte RV staff noticed year-over-year sales growth since January.

“We don’t know that it means anything,” he said, hesitant to herald economic recovery based on their business. “We’re pretty optimistic that it looks like we’ve come through the worst of it.”

Frank DeGelas, owner of Mike Thompson’s RV Super Stores including locations in Colton and Cathedral City, said he dumped older inventory at a loss to clear out his dealerships for new models being released by the manufacturers who remained.

Usually the recovery after a recession is strong and fast. This one, though, is taking its time.

He sold 11 Coleman folding camping trailers in three weeks, a sign that family buyers are looking for an affordable alternative, as well as Class B motorhomes and the larger Class A diesel RVs.

“I think I’ve been helped by my competitors failing,” he said. The pie may not be any bigger, he said of the RV selling market, but he gets a bigger slice now, he said.

New features

DeGelas credits manufacturers who spent their downtime during the downturn designing new features.

“I’ve been doing this for a long time, over 30 years, and I have never seen the amount of innovation,” he said of new models from manufacturers like Fleetwood RV Inc., now under new ownership. The Encounter, Fleetwood’s latest model, features a bunk bed that converts into a dinette.

“It’s almost like a ‘Transformer’ motorhome,” he said.

Pacific Coachworks Inc., which survived the lean times after having shut down production in the first half of 2009, developed a trailer with a slide-out outdoor kitchen and in another trailer, a slide-out queen bed.

“When things are going extraordinarily well, there’s not as much impetus to be innovative,” said Tom Powell, CEO of Pacific Coachworks.

The company has 100 employees, about half of the staff compared to its height in 2007.

Powell described new orders as solid, “but it’s not sensational” especially compared to stratospherically successful years in 2005 and 2006.

Powell said he wished more Inland RV manufacturers had survived the recession, that way suppliers would take root in the area too. As companies closed, though, so did suppliers and the cost of doing business for those who remained rose.

His company and others are now building based on orders rather than making RVs with the hope someone will eventually order it.

“I think we all learned to be a little more cautious,” he said.

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Signs of Life in RV Industry; Is Boating Next?

January 18, 2010 by · Leave a Comment 

tradeonlytodayEditor’s Note: This thorough story about the RV and boat industries was written by Reagan Haynes and is taken from Soundings Trade Only Today.

There’s a long-standing belief that the RV market leads the boating industry by about six months. Feedback from those in the RV and marine trades indicates that formula is holding true in this recession, even though the numbers show both industries are tracking similarly.

Still, there are leading indicators on the RV side that are hard to ignore. Fleetwood Enterprises Inc. and Monaco Coach Corp., two of the RV world’s largest manufacturers, filed for and emerged from Chapter 11 restructurings. While some components of the brands were lopped off or modified (or sold off entirely), both remain in business, giving the industry a much welcomed sense of stability.

Meanwhile, the marine industry’s second-largest manufacturer, Genmar, remains embroiled in a difficult bankruptcy process, with no clear sense of what the final outcome will be. That not only is a concern to dealers and industry insiders, but some believe it’s one reason lenders are more hesitant to loan money to marine businesses than their RV counterparts.

The marine and RV industries share some of the same impediments to recovery, including financing and the fact that they sell “luxury” items.

Manufacturers seem to be approaching the recovery differently, too. Some boatbuilders are keen to offer more modest and affordable options to consumers, while many say RV manufacturers are looking for the next big “wow” factor to spur consumers to trade up before they’re quite ready.

Both industries have had to deal with credit crunches that have stunted their rebounds, and most forecast a long, drawn-out recovery. Suppliers and vendors to both marine and RV manufacturers have faltered precariously. Weakness in consumer confidence is keeping sales difficult to come by.

Those customers who are buying are tending toward smaller boats and RVs. They’re the “bottom-feeders,” as one insider says – looking for, and often finding, a steal. But if the RV industry is a leading economic indicator, there are some reasons to be hopeful.

Credit seems to be easing slightly, as RV dealers find both wholesale and retail financing options through local lenders who are looking to replace lost car dealership clientele. Shipments are increasing, meaning at best that improved sales are ahead and, at worst, that dealers are clearing and replacing their aged inventory with new models.

And whether the numbers support it or not, the prevailing perception is that the RV industry is doing better overall – a definite boost at a time when everything hinges on consumer confidence.

More fragmented

Both the RV and marine industries have lost dealers and manufacturers. The RV industry has counted 170 dealerships that have gone out of business since 2007, out of a total of 3,000, according to Phil Ingrassia of the national Recreation Vehicle Dealers Association (RVDA). It’s a small percentage, but it’s much higher than the typical 15 to 20 closings the RVDA tracks in a typical year.

The Recreation Vehicle Industry Association (RVIA) estimates that about 50% of its work force has been laid off, according to spokesman Kevin Broom. The RV industry has about 80 manufacturers – down from about 100 – whereas the marine industry has about 1,500 boatbuilders, according to Scott Stropkai, an RV industry analyst with Statistical Surveys Inc. (SSI) in Michigan.

Some think the marine industry must contract more to shrink capacity to demand, but experts say it won’t become as small as the RV industry. “This is an industry with lots of small niches, more so than the RV industry,” so it needs more manufacturers and dealers, says Thom Dammrich, president of the National Marine Manufacturers Association (NMMA).

The NMMA estimates that around 20% of boat dealers have failed – some 1,500 of approximately 6,000. The marine industry is losing dealers more quickly than the RV industry because so many are undercapitalized and overstocked, says Phil Keeter, president of the Marine Retailers Association of America (MRAA). RV dealers tend to have one or two brands, while it’s common for boat dealers to carry five or more, making the RV dealer more stable.

“The (boat) dealer shouldn’t buy so much stuff; he shouldn’t try to be everything to everyone,” says Keeter. “He ought to be more focused.”

Inching ahead

Just as unemployment numbers tend to be a lagging economic indicator, the RV industry seems to be a leading indicator, says Mac Bryan, vice president of the RVIA. Though sales dipped similarly through 2008 and the first two quarters of 2009, according to SSI data, the perception is that the RV side is rebounding ahead of the boating industry.

“We’re definitely seeing the RV side recover quicker than we’re seeing the boat side recover, although there are still some similarities where maybe larger motorhomes and larger boats are softer, and smaller boats and smaller trailer sales are improving,” says Chris Hoover of Ron Hoover RV and Marine Center, which has five locations in south Texas.

The RV industry definitely leads into recessions but not necessarily out, according to Mark Bretz, of Bretz RV and Marine in Missoula, Mont. This time Bretz saw the same early decline on the marine side. “I think that these industries were probably aware something was going on that wasn’t good for close to a year before a lot of other industries felt that,” Bretz says.

A shorter boating season makes the industries tough to compare in terms of who is first in or out of a recession, says Earl Stoltzfus, who has owned Stoltzfus RV and Marine in West Chester, Pa., for 42 years.

In 2006, the RV industry shipped 390,000 units. The 2009 projection was at 146,000, but a 27% increase is forecast for 2010 over “admittedly weak numbers,” Bryan says.

Bretz isn’t comforted by the new projection. “I just think that manufacturers are out of sync with retail,” he says. When dealers saw their business plummet, they quit buying. Now inventory is so low that they are buying to restock.

“But on the sell-through rate, it’s still not very good,” says Bretz.


Like many, Stoltzfus thinks the RV industry is healthier because major manufacturers have already worked through Chapter 11 restructurings. Though the largest boatbuilder, Brunswick Corp., responded quickly to the downturn by downsizing, the future of No. 2 Genmar has been up in the air since its Chapter 11 filing last June, leaving dealers, suppliers and consumers fearful of the future, he says.

Stoltzfus worries that Genmar is repeating the pattern of an RV manufacturer that hurt its dealers and customers in the Chapter 11 filing process. Though the assets were sold to a solid builder with a good reputation, they were sold on a net-net basis with no liabilities. That means approved warranties will not be paid and dealers are not able to sue for damages, he says.

“You don’t do that and get away with it,” Stoltzfus says. “They are currently trying to mend their ways, but it’s going to take a long time. They’re going to get a much smaller portion of the industry. The portion that is taking care of consumers and dealers during this time, they are the ones that will get more market share.”

The major RV bankruptcies came early in 2009 and were resolved during the summer, giving more weight to the idea that the RV industry leads marine. Bretz predicts that RV manufacturers will have a tougher recovery because, in the past, RV builders who filed for Chapter 11 typically didn’t emerge from bankruptcy, yielding their market share to survivors. This time, the same number of major builders is competing for a smaller market.

“Maybe these industries will end up like the airline industry – to be a survivor you have to go through every few years and do a bankruptcy again,” says Bretz. “I think part of it will make businesses, unfortunately, less afraid of debt, because it appears that if you take on a bunch of debt and don’t manage it very well, you get a get-out-of-jail-free card.”

However, the prolonged uncertainty caused by Genmar’s unsettled Chapter 11 is scaring off potential lenders, Hoover says. A banker that RV and Marine Center deals with told Hoover that, from a lending perspective, RV manufacturers are more stable than marine manufacturers. That makes banks hesitant to issue marine dealers floorplan money.

“Two of the three biggest RV manufacturers … both filed and both emerged, [so] it seems like just a hiccup,” Hoover says. “There’s still some question on where the marine manufacturers are.”

Easier credit

The marine industry is operating with only one national wholesale lender – GE – and the RV industry with three – GE, Bank of the West and Bank of America. Still, Stoltzfus says the two industries have suffered equally but that the RV industry has moved further beyond its low point. He believes he is paying more than he should for GE’s wholesale dollars but says he has no shortage of credit.

Bretz says there’s a mixed message being sent. “Legislators are saying they want to grow business, but meanwhile the banking regulators are being incredibly onerous on banks in many cases, and until that changes, I don’t think you’re going to see significant expansion” into RV and marine wholesale finance, Bretz says. “Regulators that had capital ratios that they thought were acceptable two years ago are now saying those ratios need to be twice as high, and the only way you can get there logically is to reduce outstanding loans. Until banks are positioned to where regulators stop getting them to beef up capital liquidity, you’re not going to see significant change.”

However, RV dealers have been resourceful with local lenders, and credit unions and have been helping them understand floorplan finance, says Ingrassia. RV dealers say they have had some relief across the board, since local banks are loaning wholesale credit lines.

One reason credit unions have been more open to providing credit is because they have undergone such a change in the auto market, Bryan says.

Marine and RV associations have joined forces to secure Small Business Administration loans that were to be spread between marine, RV and auto dealers. That program has performed below expectations, Ingrassia says, and though everyone expected the new program to take time, it’s taking longer than anyone thought.

Bryan speculates that the credit crunch on the retail side has caused a slowdown in the turnover of vehicles, perhaps similar to that of the marine industry. “Typically, people trade in RVs every four years, and my guess is that time frame has been lengthened,” says Bryan.

Factories ramping up

RV manufacturers are gearing back up to build more product, but Keeter says that won’t necessarily be reflected in the retail market.

After both industries focused on clearing out aging inventory, combined with a credit shortage, there is little product in the pipeline, Bretz says. “I believe RV manufacturers will have a relatively good 2010 just bringing inventories back to normal,” says Bretz. “That’s one of the problems with both industries – we don’t have good information about retail. There’s much better information about shipments, but in times like these [shipment numbers] tend to either understate or overstate the problem and are not a very accurate indicator of what’s really going on.”

The RV industry is also moving to a system that allows consumers to dictate production.

That is especially true for dealers who sell higher-end motorhomes, since those already were declining in popularity before the recession’s onset, Bryan says. In 2006, that segment accounted for about 15% of the 390,000 units sold. Now it’s less than 10%, says Bryan.

“Because dealer inventory is being watched very closely and because the cost of that inventory has … gone up in several different ways, dealers are reluctant to take on inventory they don’t think they can move very quickly,” says Bryan.

If the RV industry does, in fact, lead marine, that could be a cue for dealers who sell larger vessels to pay close attention to their inventories, because Bryan says no one anticipated such an extreme decline in that RV segment.

Retail credit could also be a factor. Bretz says he has problems securing financing for buyers of the expensive RVs he sells.

Ingrassia says dealer inventories have thinned, as has the competition with the liquidation market. Maybe it’s fortunate that few expect a swift upswing in either market, because many worry that decimated supplier ranks would be hard-pressed to keep up.

Dealers will have smaller inventories moving forward, Bretz predicts, and will understand the importance of turning them more than in the past. And it will take time before the manufacturers have the clout they had a few years ago.

“We’re in the process of opening a new store in Portland [Ore.], and we’re amazed at how many good product lines are available in what would be a pretty major market,” says Bretz.

New models

The RV industry is unveiling new products for the upcoming model year at a pace likely to exceed marine, where some manufacturers are offering scaled-down versions of models, or resurrecting smaller, previously discontinued boats.

“I would say that is a pretty significant opposite,” says Hoover. “(RV manufacturers) are bringing out bigger TVs and fancier things and trying to give people a reason to buy.”

Some marine manufacturers say that after such a long trend of adding technology and gadgets to boats, there might be a consumer trend toward simplicity. But in the RV market, Broom predicts, that predilection will not just disappear.

There will be a trend to provide better value in the future, Bryan says. The marine industry seems to be catching up in terms of offering fewer options or more specific packages. Bryan says the RV industry has already made that shift. And even when people buy less-equipped vehicles, they buy add-ons after the fact, he says.

“That’s been a strongpoint in the industry – the aftermarket sales,” Bryan says. That being said, RVs are increasingly coming fully loaded with home conveniences like televisions and microwave ovens.

And though nobody expects a rapid rebound in either industry, Hoover says the family dynamic of both is giving him leverage in this uncertain economy. People are making choices about their limited disposable income, and in the end, family activities win. That gives him hope for both the marine and RV industries.

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Lazydays Sued After Fatal Truck/RV Accident

January 14, 2010 by · Leave a Comment 

A woman claims her husband burned to death inside his truck because a poorly installed television set in an oncoming motorcoach fell from its mount, bonking the driver on the head. The driver’s wife tried to steer the vehicle but it struck the truck, which burst into flame, killing the truck driver.

The widow, Roxane Rodriguez Leal, sued the retailer that provided the motorcoach, Lazydays in Seffner, Fla., according to the Courthouse News Service.

She claims Monaco Coach Corp. designed and built the 2004 motorcoach with a defective TV mount over the driver’s seat. “Monaco received customer complaints regarding televisions falling out of the area in which they were installed, but the company failed to address those complaints,” she says in the suit.

She did not, however, sue defunct Monaco Coach. Instead, she sued Lazydays, from whom Don Tolner and his wife bought their motorcoach. The Tolners are not named as defendants either.

Leal claims the Tolners’ motorcoach drifted onto the median on southbound U.S. 77 in Texas, which dislodged the TV and dumped it on Don Tolner’s head, “rendering him unable to drive the vehicle.” His wife tried to regain control but failed, and “steered it into the tractor unit that Jose Luis Leal was driving northbound on U.S. 77. As a result of the collision, the tractor unit caught fire, and Jose Luis Leal burned to death,” according to the complaint.

Leal and her two minor children seek damaged for medical and funeral expenses, loss of her husband’s income, and her husband’s death, pain and suffering.

They are represented by Robert Ammons of Houston.

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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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WSJ: Signs of Revival in the Nation’s RV Industry

December 23, 2009 by · 1 Comment 

Eight months after unemployment in Elkhart County, Ind., hit 18.9% and helped make this middle America spot a symbol of the economic meltdown, people are starting to go back to work.

In November the unemployment rate in the county fell to 14.5%, the lowest since November 2008, when it was 13%. A big reason for the turnaround is the rebound in the recreational vehicle industry, which is responsible for about a quarter of the county’s annual economy, according to the Wall Street Journal.

As a result, Elkhart RV makers that were laying off workers last year are now hiring. The Keystone RV division of Thor Industries Inc. is one of them, adding about 500 workers in recent months. “It’s a very positive thing for our community,” said Ron Fenech, Keystone president and CEO.

Keystone laid off 1,000 employees as the recession took hold, cutting the staff from 3,100 to 2,100 before the recent reversal. The turmoil in the marketplace last year created a lot of uncertainty, Fenech said, but that began easing earlier this year and the buying trend has continued through the summer and fall. “I think things are positive and heading in the right direction, but we certainly are not all the way back,” he said.

Nationally, the Recreation Vehicle Industry Association (RVIA) projects that shipments to dealers from manufacturers will increase 27% in 2010, rising to 203,000 units from 159,500. RV sales nose-dived in 2008 as gasoline prices soared and consumer credit contracted.

At one point Elkhart County had 71 manufacturing facilities that produced about 65% of all recreational vehicles made in the U.S.

For years, employment in Elkhart and the surrounding area was stable, rising from 3.3% in 1997 to 4.6% by the end of 2007. In 2008 high gas prices and the downturn accelerated that, and unemployment in the county tripled to 16% in one year. The two hardest-hit industries were construction and manufacturing.

Earlier this year, when unemployment was at its peak, many restaurant and shopping center parking lots were virtually empty.

President Obama visited in February, pointing to the problems in the area to support his argument that Congress should pass a stimulus bill.

Things have improved significantly since then. Jayco Inc., another Elkhart RV company, has hired 250 employees in recent months, bringing staffing levels to 1,450 people. During the downturn it let go 900 employees and cut its daily production from 30 units to 15 on some assembly lines. Those assembly lines are now producing about 23 units per day, said Sid Johnson, the company’s director of marketing.

The company now has back orders, Johnson said, adding there was “a certain amount of optimism, albeit pretty cautious, as to what we think next year will be like.”

Dorinda Heiden-Guss, president of the Elkhart County Economic Development Corp., said a positive aspect of the notoriety from Obama’s visit was business interest. She said she was hoping to get 25 companies to tour the county this year and consider locating there. Through early December 59 had come, looking at buildings, meeting with local officials and, in some cases, exploring financing.

The county has more than $134 million in new projects going on from outside companies that are investing in property, equipment, buildings and other improvements. That equates to about 3,300 new jobs, Heiden-Guss said.

Electric Motors Co. hired Ed Neufeldt, a laid-off RV plant worker who introduced Obama during a presidential visit. Now the 62-year-old father of seven is helping the company, which partnered with Gulf Stream Coach, to build a prototype truck modeled on the Ford F-150 pickup truck but with an electric engine.

Neufeldt made cabinets for Monaco Coach Corp. for 32 years before he was laid off in September 2008, along with 1,400 other workers. He was volunteering with several out-of-work RV plant employees at a local shelter when he was asked to introduce Obama during one of his visits to the community. He got a part-time job delivering bread afterward and is now working both jobs. “I’m still not making what I made on unemployment, but I am blessed,” he said.

Phil Penn, president of the Greater Elkhart County Chamber of Commerce, said stimulus money — through October Indiana received $848 million, according to the federal government — has to be credited with helping keep some people in the area employed and accelerating work on some local infrastructure projects.

“But that’s not what our economy is built on. We certainly welcomed the stimulus dollars to our community, but as far as direct job creation, quite frankly, that will come from the private sector.”

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Oregon’s RV Industry Recovering, But Very Slowly

December 14, 2009 by · Leave a Comment 

The fall of the recreational vehicle industry in Oregon’s Lane County was swift, relentless and brutal.

A year ago at this time, local RV makers sent workers home for their customary holiday furloughs. Most workers never came back. Within months, two companies, Monaco Coach Corp. and Country Coach LLC, filed for bankruptcy, reported The Register-Guard, Eugene, Ore.

Today, Country Coach is all but dead, its bankruptcy case now in Chapter 7, meaning everything it owns will be sold to satisfy debtors. Monaco Coach, once a high-flying publicly traded company headquartered in Coburg, became a tiny division of a multinational corporation, Navistar International, after its assets were sold off in bankruptcy. A third manufacturer, Marathon Coach, remains in business, but has limped along on a curtailed production schedule, building a fraction of the high-end bus conversions that it did in previous years.

“It was one of those business cycles that happens once a century,” said Steve Schoellhorn, president and chief operating officer of Marathon Coach. “It came so fast and so hard, it was like a tsunami, and we couldn’t get out of the way of it. … The whole thing blew up.”

While the Oregon RV industry is not gone, what’s left is a mere shadow of what was a major force in the local economy.

As recently as 2005, transportation equipment manufacturing — an industry dominated by the three RV makers — employed 4,500 people in Lane County, second only to the wood products industry. By last March, that number had fallen to 900, before rebounding to 1,400 in October, according to the state Employment Department.

Monaco Coach employed more than 2,000 people in Lane and Linn counties as recently as 2008. Today, about 400 people are working at the Coburg plant, Navistar spokesman Roy Wiley said. Country Coach employed nearly 2,000 workers at its Junction City plant as recently as 2006. Today, the company is defunct. Marathon Coach employed more than 400 people in 2008. Today, it has 240 employees.

Ron Folk is among the former RV workers who hopes things start turning around soon. A production worker at Monaco for 51/2 years, Folk now is working part time, doing maintenance at an RV resort on the coast, making about one-third of what he earned at Monaco. He stays in a travel trailer, and only makes it home to see his wife in Springfield a couple of times a month, he said.

“It pays more than unemployment,” he said. “You do what you got to do. … As soon as the economy turns around, and people start hiring inland, I’ll probably find something closer.”

Other workers, such as Todd Wilson of Springfield, were called back to work for the new Monaco last summer after being unemployed for more than six months.

“When I got the call, I was ecstatic,” he said.

With fewer people on the job, workers carry more responsibility for quality, he said. Workers also make more money than before, and get similar benefits, he said.

“It’s still a great place to work, and a great crew of people to work for and work with,” he said.

Skilled workers remain

Jack Roberts’ job is to find the silver lining — or at least a ray of hope — in all those clouds. As executive director of the Lane Metro Partnership, Roberts works to retain and recruit employers. One bright spot he sees in the implosion of the RV industry is the number of skilled workers left behind. He said he’s hopeful most will stick around Lane County until the economy turns around.

“When people get back into the production cycle, when manufacturing jobs start to come back, the presence of that work force here should make us attractive,” he said.

Roberts said that, in hindsight, it’s obvious that a business that relied on wealthy people spending large wads of cash on discretionary, luxury items would be vulnerable in an economic downturn. But, he said, “It’s very hard to say no to people who have large sums of money and who want to buy what you’re selling.”

While the industry looked at demographics in its favor — aging baby boomers with time and money to spend on leisure — they missed the economic clouds, he said.

“We didn’t fully understand how much we were riding a stock market and real estate bubble,” Roberts said.

Monaco is building both motorhomes and towable RVs. Wiley, the Navistar spokesman, was vague on production levels, saying it has “gone up somewhat.”

“We’re looking for a pickup in the market next year,” he said.

Navistar, based in Warrenville, Ill., is best known as the maker of International brand buses and heavy trucks, and Roberts said he’d like to see the company move some of that production out to Coburg. The proximity to the large California market makes an Oregon location attractive, he said, but there isn’t the supply network established here that there is for its Midwest factories.

The local RV companies weren’t the only ones hurt by the downturn. The Recreation Vehicle Industry Association (RVIA) predicts companies will ship 159,500 units this year, down 40 percent from the 265,000 units shipped in 2008. Those numbers include both motorized and towable RVs.

As for 2010, Richard Curtin, the University of Michigan economist who does forecasts for the industry, predicts RV shipments will increase by 27% to 203,500 units.

Richard Coon, president of the RVIA, points to signs of a recovering economy, including a stronger stock market, slowing job losses, higher productivity, increasing home sales and rising manufacturing hours. But weak consumer confidence, continued high unemployment, and anemic consumer spending remain cause for concern, he said.

RVs, he said, “are woven into the fabric of America.”

High-end market survives

Marathon’s Schoellhorn said the high end of the RV market — the niche that his company occupies with its $1 million-plus custom bus conversions — “is still really, really challenging.”

“It’s better right now than it was a year ago, but it’s still way, way off from the highs of a few years ago,” he added.

Marathon built fewer than 20 coaches in 2008, compared to 70 or 80 per year a few years back.

“We really slowed down production” in 2008, Schoellhorn said. “We’re just starting to ramp up a little bit.”

Marathon, which is a privately held, family owned business, specializes in building high-end coaches, bought by race car drivers, professional golfers, actors and others who can spend $2 million for what Schoellhorn once called the “Ferrari” of motor homes. That rarefied niche has enabled the company to survive the recession, he said.

“Our niche doesn’t require the volume that a typical RV maker requires,” he said. “Even though things are bad, we can get by and even prosper with fairly minimal sales, while other companies need substantial volume.”

But the recession has hurt prospective Marathon buyers, he said.

“I put a lot of our customers and prospects in two categories: One group doesn’t have the money they used to because of lost investments; the other has it, but is afraid to spend it.”

“Every now and then I hear people express the view that the rich will always have money,” said Bill Conerly, a Lake Oswego consultant.

“It’s kind of true, but there are times when the rich don’t want to spend money.”

Comeback will take time

As the RV industry comes back, it will look different than the prerecession industry, experts say. The high end of the market in particular will take time to come back, said Frank Magdlen, a Portland analyst.

“It’s going to be smaller until times get better,” he said. “It might take three to five years for it to be what it was in ’06.”

Bob Lee is the godfather of the local RV industry, co-founding the company that became Monaco Coach in 1968, and starting the company that became Country Coach in 1973. He said that while lower-end RVs, such as trailers and toy haulers, will bounce back, he thinks the high end of the market — the niche that Country Coach carved out for itself — “is pretty much history.”

“The tribal knowledge to build high-end is going away fast,” he said. “With that gone, there’s no way to crank it back up again.

“It’s not just a production line product,” he added. “It’s not an easy program to just go out and build some of these. I’m not even sure I could put together a company that could build these at this point.”

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Idled Monaco Workers in Oregon to Get Assistance

October 23, 2009 by · Leave a Comment 

More than 1,000 laid off employees from Monaco Coach Corp. will receive worker retraining assistance through $3.85 million in federal grants announced Thursday. 

The money is intended to extend aid to 1,430 workers who lost their jobs at the recreational vehicle maker’s operations in Coburg and in the Eastern Oregon community of Hines, according to the Register-Guard, Eugene, Ore. 

Lane Workforce Partnership and the Oregon Consortium will each handle grants awarded by the U.S. Department of Labor. Most of the money will flow to Lane County, where the vast majority of Monaco workers lost their jobs as the RV industry contracted during the high fuel prices and economic recession of the past two years. The March termination of 2,200 Monaco workers, including 1,355 workers at its Coburg plant, was the biggest layoff ever in Lane County. 

Kristina Payne of Lane Workforce Partnership said earlier grants of nearly $1 million had provided 70 scholarships to workers seeking retraining last spring, as well as 66 scholarships during the summer and 73 this fall. With the latest award, she said her agency could now more aggressively promote the availability of aid to help laid off Monaco workers get retrained for new careers. 

“It’s hard when you don’t know that you have the funds in hand,” said Payne, the work force investment manager for Lane Workforce Partnership. 

Payne said the Lane Workforce Partnership had not been sure it was going to get the grant money. “We were starting to wonder if this was really going to come through for us,” she said. “So it was somewhat of a surprise. It’s not automatic to receive the funds.” 

Monaco filed for bankruptcy protection in March, and in June sold its major assets to Navistar International Corp., which created a new division called Monaco RV LLC to build recreational vehicles.

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Biz Prof Says Corporate Bankruptcies to Hit 300 in ’09

October 5, 2009 by · 1 Comment 

Editor’s Note: Fleetwood Enterprises Inc. and Monaco Coach Corp. remain on Robert Salomon’s list of what he calls “noteworthy” bankruptcies of 2009. The associate professor of management at the Stern School of Business, New York University, filed the following story on his blog at 

In January I predicted that “major” bankruptcies in 2009 would challenge the 383 mark set in 2001 (the high-water mark after the dotcom bubble). I even suggested that it was possible that we could exceed 400 “major” bankruptcies in 2009.

According to, there have been 208 “major” filings thus far in 2009. Assuming that bankruptcies are equally distributed throughout the year, this puts us on pace for 277 bankruptcies. That is tracking well shy of my prediction. In fact, bankruptcies were down significantly from Q2 to Q3, and have been trending downward throughout the year.

That stylized fact begs the question: Is that a “green shoot” dip in bankruptcy filings, or might the Fed/Treasury liquidity programs be keeping weaker firms on artificial life support?

Although I cannot be sure why bankruptcies have tracked lower than forecast — whether due to a better-than-expected economy or government intervention (or some combination of the two) — I am certain that my prediction was way off. At this point then, if the bankruptcy pace quickens in the 4th quarter (as is typical), the final number will likely come in around 300. With 300 major bankruptcies, we would exceed last year’s number by 30%.

But looking forward, the question now becomes: What should we expect for 2010? I will wait for the final 2009 numbers to make a definitive prediction, but right now, my informed guess would be 350, … and that’s even if the economy rebounds in 2010, barring a double-dip recession scenario.

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Irrigation Firm Offers $2.2M for Former Monaco Facility

September 11, 2009 by · Leave a Comment 

Gheen Irrigation Works, which lost its historic Eugene, Ore., plant to a massive fire two years ago, is preparing to buy a piece of commercial real estate in Harrisburg, Ore., from the bankrupt Monaco Coach Corp.

The $2.2 million purchase requires approval of the bankruptcy judge overseeing the Monaco case. A hearing on the issue is scheduled today (Sept. 11) in U.S. Bankruptcy Court in Delaware, according to The Register-Guard, Eugene.

Gheen has signed a sales agreement to buy the property in Harrisburg, according to court documents. The deal includes five buildings, totaling 93,600 square feet, on 13.8 acres on the Willamette River, according to a listing of the property on the  website The original asking price was $2.9 million.

Gheen, established in 1933, sells irrigation equipment to farmers nationwide and in Canada and Mexico.

The company’s 40,000-square-foot plant went up in flames in April 2007, causing $5 million in damage and temporarily idling more than 65 employees. 

The company shifted its manufacturing work to a 15,000-square-foot building that survived the fire, and to outdoor production lines. In December 2007, Gheen bought the local manufacturing operations of the Lake Co., a California-based competitor in the irrigation equipment industry, including a 27,000-square-foot plant on Airport Road in Eugene.

 Since then, the company and its 85 employees have been operating at both locations, said Alan Thayer, a Eugene lawyer for Gheen.

 Gheen officials are waiting to see whether the court approves the Harrisburg deal before making firm plans for the property, he said. But company officials were attracted to the Harrisburg property because it would allow them to move the business to a location accessible to its current employees, Thayer said. The Harrisburg plant is about a 20 to 30 minute drive from Eugene-Springfield.

The site is big enough that Gheen could combine both operations in one location, Thayer said, though the timing of such a move is not yet known.

Harrisburg City Administrator Bruce Cleeton said the city is interested in attracting people and businesses to live and work in the community.

“With Monaco having vacated this building and property, to hear that Gheen is possibly interested in moving in there bodes very well for our community,” he said.

The Harrisburg sale is one piece in the winding down of Monaco Coach’s bankruptcy case. The Coburg RV manufacturer filed for Chapter 11 bankruptcy protection in March and in June sold its major assets — factories, inventory, brands and intellectual property — to Navistar International Corp. for $47 million, which created a new division called Monaco RV to build recreational vehicles.

All that was left over of the old Monaco Coach was seven properties in Indiana, Florida and Oregon, including the Harrisburg real estate.

In a court filing, trustee George Miller, charged with selling those properties, said Gheen emerged as the leading candidate to buy the property after several months of marketing by Evans Elder & Brown, a Eugene broker.

The Gheen offer appears superior to any other offers that the trustee might reasonably obtain, Miller said. Gheen officials said Gheen needs the deal to close by the end of this month, or it won’t buy the property, Miller said.

If the trustee were to put the property up for public auction, he would not be able to close by the buyer’s deadline, he said.

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