Monaco hits the brakes and fires 600

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Sunday, June 01, 2008

COBURG Rising gas prices and the slowing economy hit Oregon’s largest RV manufacturer hard in late April, but other companies in Oregon’s luxury motor home cluster say they’re doing just fine.

Coburg’s Monaco Coach reported its first- quarter revenue had plummeted 22% from the year before, $252.4 million compared to $322.2 million. In response, its stock dropped to a 10-year-low. The company cut 600 jobs, or about 12% of its workforce, in Oregon and Indiana.

According to Craig Wanichek, director of investor relations, Monaco doesn’t anticipate more cuts and is developing lighter, smaller RVs to meet consumer demand for fuel efficiency.

The economy also is hurting the nation’s non-luxury RV makers. But at Country Coach in Junction City, spokeswoman  Sherry Fanning says fuel prices are not affecting the company’s business or marketing plans. Like Monaco, Country Coach makes RVs that cost more than $1 million, and get less than 10 mpg on average.

Steve Schoellhorn, president and COO of Marathon Coach in Coburg, says that because his company focuses on high-end conversions — which he describes as a low-volume, high-price business model — there has only been a slight slowdown in production. The company’s upgraded coaches run from $600,000 to more than $2 million.

“The people who enjoy RVing,” he says, referring to Marathon’s customers, “aren’t going to stop. But when we hear about oil hitting $200 [a barrel], well, we’re hoping prices stay right where they are.”       

ABRAHAM HYATT


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