Monaco offers some workers glimmer of hope

Tools

State officials met with executives at Monaco Coach on Monday, July 21, 2008 to develop a plan to help the 1,400 employees who will be laid off in September. (WSBT photo)

By Beth Boehne

Story Created: Jul 31, 2008 at 2:23 PM EST

Story Updated: Jul 31, 2008 at 2:23 PM EST

ELKHART (AP) — Some workers of Monaco Coach Corp. received a glimmer of hope when company officials left open the possibility that it might keep a joint venture chassis-building operation in Elkhart.

Monaco President John Nepute told investors during a conference call that Monaco is working with partner International Truck and Engine, a subsidiary of Navistar, to determine the future of the plant.

The Custom Chassis Product was started in January 2007. Monaco, which announced two weeks ago it was closing three plants in Elkhart County, initially said that plant would be shuttered and production would move to Oregon.

"At this point, it's unclear whether or not it will be moving out to Oregon or still have it remaining in Elkhart, although it appears maybe it will be a combination of the two," Nepute told investors Wednesday.

Kay Toolson, chairman and chief executive officer, said Monaco is facing a market downturn that he had not seen since 1979-80. The Coburg, Ore., company announced a quarterly loss of $9.7 million, or 33 cents per share, compared to a profit of $4.5 million, or 15 cents per share, in the same quarter last year.

Toolson characterized the closings of the facilities in Elkhart, Nappanee and Wakarusa announced in July as "drastic" and "painful" but said "it was necessary for us to take very decisive steps to make sure we could be profitable."

The closings would idle 1,430 workers at the three plants. This reduction along with the 600 workers laid off in April has cut the company's employee head count by 40 percent since the end of the first quarter, Nepute said.

Nepute said the company is nearing a decision on what to do with the plants. Likely Monaco will not want to sell off all the facilities but rather keep some capacity "that we could then fire back up when the market turns," he said.

The properties are being appraised and other parties are interested in them.

Toolson was optimistic the RV market will return and Monaco will emerge from these difficult times as a strong participant.

"We are also redoubling our efforts to come out with new fuel-efficient, lighter-weight products, both on the towable and motorized side of our business," he said.

___

Information from: The Truth, http://www.etruth.com

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