The 500 employees at the idled Country Coach plant in Junction City, Ore., shouldn’t wait around for the plant to restart, founder and investor Bob Lee told the Register-Guard, Thursday (Jan. 9).
“They should be out looking for a job,” he said in an interview.
Country Coach’s attorney, however, said that the company has every reason to believe it will continue operations.
Lee has been at odds with the company since December when he sued to evict Country Coach from its 60-acre property in Junction City that Lee and his family continue to own.
This is after Lee sold the company he founded to Perris, Calif.-based National RV Inc., watched it lose millions of dollars over 11 years, then helped a clutch of investors re-buy the company, returning to the Junction City campus in 2007 as a hero.
CEO Jay Howard referred to Lee as the “essence of Country Coach” at the time.
The eviction lawsuit is just one more sign of the luxury recreational vehicle maker’s financial woes.
Just over a week ago, Howard sent a letter to employees saying the plant might close permanently if the company could not get new financing, and that massive layoffs are in the works in any case.
Howard did not return calls to the Register-Guard seeking comment for this story.
But, on Thursday, Country Coach attorney Todd R. Johnston provided a written statement saying that the company will remain in its current location and that “Country Coach has every reason to believe that the financing it needs to continue operations will be forthcoming and that the valuable niche it has developed in this market will be preserved.”
Attorney David Wade, who represents Lee, his wife Terry, and his brother Ronald, said the family is prepared to dismiss the eviction lawsuit under a set of terms that Wade declined to disclose.
“Let’s just say that, if it’s performed the landlord will be satisfied, and we’ll dismiss the eviction proceeding — and I expect it to be performed.”
The Lee family brought the lawsuit, court records show, after Country Coach defaulted on the December lease payment on the plant property — located on eight city blocks in Junction City.
Lee said the family was not trying to shut the plant down or require it to move.
“Sometimes you have to use a little force to get the decision you’re looking for,” Lee said. “It was a way to keep the pieces in place. That’s all we we’re doing. It was a way to keep things from being auctioned off. It succeeded, I think.”
Lee said he has no direct say in business decisions, even though he was named “emeritus CEO” when he returned in 2007, after a Los Angeles-based private investment group that he was allied with bought the company.
Lee said he’d worked at other RV enterprises alongside Howard, who the investment group installed as CEO in Junction City.
“Jay and I have worked on three turnarounds and they were all successful except this one. So far, we’re not successful in turning this one around, but the economy has gotten so much worse,” Lee said.
The economic downturn has been brutal on the nation’s RV makers.
The Register-Guard reported that the industry has shipped 50% fewer Class A units — the large, bus-like motorhomes — this year compared to the previous year.
In the past 12 months, 45 of about 2,850 RV dealerships around the country have closed, according to the Recreation Vehicle Dealers Association (RVDA).
Country Coach began a series of layoffs in December 2007, with the work force falling from as many as 1,800 workers to about 500.
Last month, Country Coach doubled its usual holiday idle period to four weeks. The plant had been set to restart on Jan. 5, but, as of Thursday, there was no sign of resumption.
“The finance companies are not working with us much,” Lee said. “There’s no money to buy a new coach; You have a hard time getting a loan, if you’re a buyer. The banks won’t (provide) loans for coaches to the dealers because the dealers can’t afford to do it — so you can’t build any new product and you can’t pay your suppliers.”
Country Coach fell behind on its payments to suppliers, who tried to remain patient so the company could regain its footing, company officials previously said.
“We’re working to get the pieces together so (Country Coach) can get enough money together to pay some of the suppliers who can’t afford to carry it anymore,” Lee said Thursday.
“All the little mom and pop shops in the Junction City, Harrisburg and Monroe area, all those people are in trouble because the RV company is in trouble. The economy today is just upside down.”
Lee said he’s still striving to preserve Country Coach — and that the company’s current nosedive is painful for him to witness.
“The lender is in on some of the things we’re doing; it’s not as much as we’d like. (And) we’re trying to get the investors to come more in, too,” he said. “We’ll work with them until everything is gone — or it’s up and running again.”