Monaco Coach Corp. announced today (April 15) that it will move production of all Beaver Class A motorhomes to its Coburg, Ore., campus and permanently cease operations at its Bend, Ore., motorhome manufacturing facility.
According to a press release, the Bend plant shutdown is presently scheduled for approximately June 15, affecting around 500 workers.
Monaco said it remains committed to the Beaver line, but the approximately 100,000 square-foot Bend facility, due to its age and configuration, has consistently been the company’s least efficient motorhome operation. A significant capital investment in redesign and renovation would have been required to meet production needs.
The transfer of Beaver production, which include motorhomes under the Patriot, Marquis and Monterey brand names, will create a significant number of production positions in the Coburg facilities.
Monaco said Bend employees will be eligible to apply for the vast majority of these new positions and that an employee transition task force will be implemented. Coburg is around 130 miles west of Bend.
Monaco will continue to operate its Electronic Design and Assembly Division (ED & A) in Bend. Both the Beaver motorhome manufacturing facility and the ED & A operation were acquired when Monaco purchased SMC Corp. in 2001.
“We deeply regret the impact that shutting down the Beaver manufacturing plant will have on our loyal and highly dedicated Bend employees and their families, and on the Bend community,” said Kay Toolson, chairman and CEO of Monaco. “We studied every option available to us to make the Bend manufacturing plant efficient and more profitable over the long-term before making this difficult decision. Unfortunately, we determined that it is not economically feasible for the company to commit to the investment that would be required to continue our motorhome manufacturing operations in Bend.”
Toolson added another factor that weighed heavily in the decision is the Bend plant is leased and the only manufacturing facility not owned by Monaco. Monaco also looked at moving operations to its motorhome plant in Wakarusa, Ind., but the tax environment was more favorable in Oregon.
Monaco CFO Marty Daley said the move will result in higher efficiencies and expected “the change will add approximately 8 to 10 cents per share to our earnings next fiscal year.”
He added, “We anticipate recording one-time pre-tax charges in the second quarter of 2005, totaling approximately $3 million to $3.5 million for severance and related expenses associated with the closure of the Bend manufacturing plant.”