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Monaco Coach Corp. announced today (July 13) that it will permanently cease operations at its Royale Coach bus conversion subsidiary in Elkhart, Ind.
The plant shutdown is presently scheduled for November 2005 and will affect approximately 85 workers. The company said most of the employees would be eligible for transfers to other Monaco production facilites in the Elkhart area.
Monaco said it explored several alternatives prior to making the decision to close the facility, which has been converting approximately 22 bus shells annually.
“In today’s bus conversion market, success is generally achieved when the manufacturer sells direct to the retail customer and not through a dealer network,” said John Nepute, president of the Coburg, Ore.-based company. “This type of distribution is counter to our current marketing strategies.”
Chairman and CEO Kay Toolson added, “Redeploying the talent and resources of Royale Coach will also help us focus on our core business strategies in the much larger Class A, Class C and towables markets.”
In April, Monaco consolidated production of its Beaver line of Class A motorhomes, moving operations from Bend, Ore., to its campus in Coburg.
The news also signaled additional impact on the Elkhart County work force, coming on the heels of an announcement by Coachmen Industries Inc. that 10% of its hourly workers and 12.5% of salaried staff corporatewide were laid off.
Monaco stated it will stand behind all established warranty and service commitments. The company also invited all Royale Club members to stay involved in other Monaco club groups and events.
“Due to the size and productivity of this facility, closing it will not materially affect our ongoing revenues or earnings,” stated CFO Marty Daley. “We expect a one-time charge associated with the closure of the subsidiary of $1.5 million to $1.75 million in the third quarter.”