Monaco Coach Corporation Announces Relocation of Its Beaver Brand Recreational Vehicle Production From Bend to Coburg, Oregon
April 15 2005 - 3:59PM
PR Newswire (US)
Monaco Coach Corporation Announces Relocation of Its Beaver Brand
Recreational Vehicle Production From Bend to Coburg, Oregon
Monaco's Beaver Manufacturing Facility in Bend, Oregon Will Be
Permanently Closed COBURG, Ore., April 15 /PRNewswire-FirstCall/ --
Monaco Coach Corporation (NYSE:MNC) announced today that it will
move the production of all Beaver Class A motorhomes to its Coburg,
Oregon, campus and permanently cease operations at its Bend, Oregon
motorhome manufacturing facility. The Bend plant shutdown is
presently scheduled for approximately June 15, 2005. (Logo:
http://www.newscom.com/cgi-bin/prnh/19991018/MONACO) The 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 requirements. The transfer of Beaver
production will result in the creation of a significant number of
production positions in the Coburg facilities. Bend employees will
be eligible to apply for the vast majority of these new positions
and will be encouraged to do so. All employees who move will be
entitled to relocation assistance. The Company has created an
employee transition task force to help the affected Bend employees
seek and obtain new employment following the shutdown. All of the
affected employees will be eligible for severance benefits and many
employees will be eligible to receive relocation packages. Monaco
Coach Corporation will continue to operate its Electronic Design
and Assembly division (ED & A), which is also located in Bend.
Both the Beaver motorhome manufacturing facility and the ED & A
operation were acquired when Monaco Coach purchased SMC Corporation
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 Chief Executive Officer of Monaco Coach
Corporation. "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." "Bend is the only
manufacturing facility we do not own, and it would have required a
disproportionate investment of time and money to completely
reconfigure the design and layout of the plant in order to produce
the efficiencies that would result in competitive operations at
that facility," said John Nepute, President of Monaco Coach
Corporation. "In spite of this closure, we remain committed to Bend
and to our 150 employees at the ED & A plant in Bend. That
operation provides a key and very successful support operation for
all of our manufacturing activities in Oregon and Indiana. We look
to continue to grow that division of our Company." Monaco evaluated
relocating production of the Beaver motorhome line to either its
Coburg, Oregon or Wakarusa, Indiana location. "Both states provided
compelling relocation proposals. State income tax rules were a
significant factor in our decision. Changes to Oregon's income
apportionment rules in 2003 and the current progress of House Bill
2542, which will reconnect Oregon income tax rules with those at
the federal level, demonstrate that Oregon is committed to the
creation of a favorable business environment for manufacturers,"
said Nepute. "We believe very strongly in the legacy of the Beaver
brand name and the strength of the Beaver motorhome business. We
will continue to design, manufacture and support Beaver motorhomes
at our Coburg manufacturing facilities," said Mike Snell, Vice
President of Sales and Marketing. "Monaco Coach Corporation is
fully dedicated to preserving the uniqueness and quality of the
Beaver product line and the resulting loyalty that Beaver owners
have for these exceptional recreational vehicles." "This shift in
production will significantly increase the utilization of our
current manufacturing footprint. The anticipated savings on a
go-forward basis are considerable. We expect the change will add
approximately 8 to 10 cents per share to our earnings next fiscal
year," stated Marty Daley, Chief Financial Officer. Daley
continued, "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. Efficiencies gained in the
second half of the year will be approximately $2 million to $2.5
million on a pre-tax basis." Headquartered in Coburg, Oregon, with
additional manufacturing facilities in Central Oregon and Indiana,
Monaco Coach Corporation employs approximately 5,600 people and is
one of the nation's leading manufacturers of recreational vehicles.
The Company offers entry-level priced towable RVs up to custom made
luxury recreational vehicle models under the Monaco, Holiday
Rambler, Safari, Beaver, McKenzie and Royale Coach brand names. For
additional information about Monaco Coach Corporation please visit
http://www.monacocoach.com/. The statements above regarding plant
efficiencies, utilization, potential savings and expenses for the
second quarter and second half of 2005 and for the 2006 fiscal year
are forward-looking statements based on current information and
expectations and involve a number of risks and uncertainties. A
number of factors could cause actual results to differ materially
from these statements, including larger than projected transition
costs, less than anticipated manufacturing gains, slower than
expected sales of new and existing products, a general slowdown in
the economy, new product introductions by competitors, or the loss
of dealers or deterioration in the relationships with dealers.
Please refer to the Company's SEC reports, including but not
limited to the most recent Form 10-Q, the annual report on Form
10-K for 2004, and the 2004 Annual Report to Shareholders for
additional factors. These filings can be accessed over the Internet
at http://www.sec.gov/. CONTACT: Craig Wanichek Director of
Corporate Communications Monaco Coach Corporation (541) 681-8029
http://www.newscom.com/cgi-bin/prnh/19991018/MONACO
http://photoarchive.ap.org/ DATASOURCE: Monaco Coach Corporation
CONTACT: Craig Wanichek, Director of Corporate Communications of
Monaco Coach Corporation, +1-541-681-8029 Web site:
http://www.monacocoach.com/ Company News On-Call:
http://www.prnewswire.com/comp/123493.html
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