Workers’ compensation insurance costs are “out-of-control” in California and may force National RV Holdings Inc. to consolidate its operations in Oregon, President and CEO Brad Albrechtsen recently told The Business Press of Ontario, Calif.
National RV employs about 1,000 people at two plants in Perris, Calif., east of Los Angeles, and the company anticipates having to pay $4 million in workers’ comp. costs for its California employees next year.
Meanwhile, National RV, which acquired Junction City, Ore.-based Country Coach during the mid-1990s, will pay an estimated $300,000 in workers’ comp. costs for its Oregon employees next year, Albrechtsen said.
Additionally, National RV competes against several manufacturers from Indiana where workers’ comp. costs are “almost not an issue,” Albrechtsen told The Business Press. Competitive pressures have forced National RV to seriously consider moving out of California, he said.
However, Albrechtsen emphasized that a decision to close the company’s California operations and consolidate in Oregon is not imminent.
Two years ago, National RV considered closing its Oregon operations and consolidating in California because of excess capacity in Oregon, Albrechtsen added.
National RV, a New York Stock Exchange-listed company, needs to watch its expenses because it has reported net losses during each of the last eight quarters. Recently, the company reported a $2.7 million net loss for the three months ended June 30 and a $6.8 million net loss for the first half of this year, although there are stock market analysts who believe National RV will return to profitability during the current quarter.
Earlier this month, Albrechtsen was named president of the parent company’s California-based National RV Inc. subsidiary, replacing the company’s founder, 67-year-old Wayne Mertes.
Albrechtsen, who has worked for National RV Holdings the last 12 years, now is responsible for day-to-day operations of the National RV subsidiary in California, according to a Securities & Exchange Commission (SEC) filing.