It wasn’t so long ago that transportation equipment manufacturing in Oregon’s Lane County – an industry dominated by RV makers – was so robust it threatened to topple timber as the region’s top employer.
At the industry’s peak in 2005, it employed 4,500 Lane County residents, according to a report in the Register-Guard, Eugene. By January of this year, employment was down to 1,000, a stunning loss of 2,700 jobs since January 2008 and a 73% decline in a year’s time.
The factories of the two biggest local RV manufacturers, Country Coach LLC in Junction City and Monaco Coach Corp. in Coburg, have been idle since December, their workers furloughed and the companies’ fates increasingly bleak with each passing day.
Monaco Coach announced Monday that it would terminate 2,000 of its employees, including 515 in Indiana, leaving just 145 to work at its Coburg headquarters, and would be forced to shut for good if it could not obtain new capital or a buyer.
Officials at Country Coach, meanwhile, say they’re still looking for a buyer. But they have creditors breathing down their necks, and their majority owner, acting as a creditor, has filed to put them into involuntary Chapter 11 bankruptcy.
The loss of those manufacturing jobs will be rippling through the economy for months, if not years, economists say.
“Anytime you’re losing manufacturing, there’s a negative multiplier effect,” said Brian Rooney, labor economist with the state Employment Department. “There are suppliers, and you lose high-paying jobs that were injecting money into the local economy.”
Mark Thoma, an associate professor of economics at the University of Oregon, said that if laid-off workers think RV builders will recover in the short term, and there’s a chance they’ll get their jobs back, they can live off savings and credit and try to wait it out.
But if they think their companies won’t recover, “they’re going to be very afraid,” he said. They’ll cut back on spending and not use credit. Without some other growth industry to pick up the slack, they’ll move to other areas where job opportunities are greater, he said. With unemployment now at 11.9% in Lane County, re-absorbing laid-off workers back into the work force will take a long time, he said.
In Thoma’s view, the outlook for the RV workers is “fairly pessimistic.” The stock market crash has hurt the wealth of retirees’ who otherwise might have been in the market for an RV, he said. When the economy does recover, it will look different than it did before the recession, he said. People will save more, consume less, and use less credit, he said.
“As mad as we are about the financial meltdown, all these stimulus packages are designed for this reason,” he said.
The Register-Guard reported that local employment officials say they are doing what they can to help workers find jobs.
Representatives of the Lane Workforce Partnership, Lane Community College, the state departments of Employment and Human Services, and United Way are convening an emergency meeting this morning to map out a response to the Monaco layoffs as well as other job losses in the community, said Chuck Forster, executive director of the Lane Workforce Partnership.
“We know we need to do something,” he said. “This is the worst economic crisis we’ve seen in a number of years.”