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Monaco Coach Corp. idled between 5% and 10% of the work force at its Indiana motorized plants in Wakarusa and Elkhart on Tuesday (March 1), according to a report in the Elkhart Truth.
The layoffs affect between 135 and 270 workers, said Craig Wanichek, investor relations spokesman for Coburg, Ore-based Monaco.
Disappointing retail sales of diesel-powered, Class A motorhomes, coupled with less-than-expected sales of gas-powered motorhomes, prompted the decision, Wanichek said.
Monaco’s sales of diesel units were down 3.4% in 2004, while gas-powered units rose by 8.5%. Industry wide, sales of Class A motorhomes grew by 15.2% last year.
The company had extended its holiday shutdown by a week at the start of the year and instituted three “down days” in January and February to get production back in line with demand, he said, but faced the need for additional cuts.
“We looked at dealer inventories and what’s retailing and what manufacturers are producing and we decided we needed to do something to change our production levels,” Wanichek said.
He said company officials opted for some layoffs so the remaining work force would be eligible for a 40-hour work week and production bonuses.
Monaco also will idle most of the 2,000 workers at its plants in Bend and Coburg, Ore., during spring break, the week of March 21-25, Wanichek added.
Monaco’s towable plants are not affected by the cutbacks, as that sector of Monaco’s business is outperforming industry averages. The company’s towables sales were up 37.2% in 2004, compared with 15.2% for the entire RV industry.
Monaco’s layoff appears to be isolated in the Elkhart County RV manufacturing community. George Lewandowski, local office manager of the Department of Workforce Development, said he was unaware of any other layoffs in the industry.
In fact, Thor Industries Inc. subsidiary Keystone RV Co., recently announced the hiring of 300 additional workers at its manufacturing complex in Goshen.
Wanichek said Tuesday’s cutbacks are permanent, but he held out hope that Monaco will increase its production run rates by the summer.
Chris Huffer, business development manager at Hart City RV in Elkhart, believed Monaco’s troubles might be a reflection of rising prices at the gas stations.
“I’d say due to fuel and gas prices we’re slow in this area,” Huffer said. “We are down just a little bit but we expect to have a gangbuster March.”
He also said slowing sales might be caused by recent hikes in interest rates and bad weather. He explained that for dealers in the north, sales typically drop during the winter months.
Wanichek said untimely bad weather coincided with two big retail shows already this year. One, in Boston, overlapped a 16-inch snowfall, while a show in Pomona, Calif., occurred during torrential rains. In both cases, the weather curtailed attendance and retail purchases, he said.