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|   Oregonian](../../../../../../../../oregoni                   |   |   |   |   |
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| **Monaco Coach will slash jobs**                               |   |   |   |   |
|                                                                |   |   |   |   |
| 04/04/03                                                       |   |   |   |   |
|                                                                |   |   |   |   |
| **TED SICKINGER**                                              |   |   |   |   |
|                                                                |   |   |   |   |
| Monaco Coach said Thursday that it will cut 850 jobs,          |   |   |   |   |
| including 450 at its plant in Coburg, as it tries to reduce    |   |   |   |   |
| ballooning inventories of recreational vehicles amid           |   |   |   |   |
| slackening demand from dealers.                                |   |   |   |   |
|                                                                |   |   |   |   |
| ![](media/image1.png){width="0.20833333333333334in"            |   |   |   |   |
| height="                                                       |   |   |   |   |
| 0.15625in"}![](media/image2.png){width="0.20833333333333334in" |   |   |   |   |
| height="0.15625in"}                                            |   |   |   |   |
|                                                                |   |   |   |   |
| The job cuts amount to about 15 percent of the company\'s      |   |   |   |   |
| 5,900-employee nationwide work force, which includes 3,000     |   |   |   |   |
| workers in Oregon. The remaining 400 layoffs come at the       |   |   |   |   |
| company\'s plant in Indiana.                                   |   |   |   |   |
|                                                                |   |   |   |   |
| As part of its effort to \"substantially reduce\" inventories, |   |   |   |   |
| Monaco also said it would shut its plants in Oregon and        |   |   |   |   |
| Indiana for a week beginning Monday.                           |   |   |   |   |
|                                                                |   |   |   |   |
| Monaco\'s announcement punctuates a bad week for manufacturing |   |   |   |   |
| jobs in Oregon and adds to a long list of family-wage job cuts |   |   |   |   |
| the state has suffered during an economic downturn now heading |   |   |   |   |
| into its third year.                                           |   |   |   |   |
|                                                                |   |   |   |   |
| Roseburg Forest Products said Tuesday that it was cutting 450  |   |   |   |   |
| jobs as it scaled back plywood production at a plant in        |   |   |   |   |
| Dillard, just south of Roseburg. On Wednesday, Sony Disc       |   |   |   |   |
| Manufacturing announced the closure of its 277-employee plant  |   |   |   |   |
| in Springfield. And on Thursday, in addition to the Monaco     |   |   |   |   |
| layoffs, Seneca Sawmill in Eugene said it was cutting 115 of   |   |   |   |   |
| 420 workers.                                                   |   |   |   |   |
|                                                                |   |   |   |   |
| Those cuts come on top of the loss of 26,500 manufacturing     |   |   |   |   |
| jobs, or 12 percent of the state\'s manufacturing employment   |   |   |   |   |
| base, in the past two years. The job losses have contributed   |   |   |   |   |
| to one of the highest unemployment rates in the nation during  |   |   |   |   |
| that period. It was 7.3 percent in February, down from a high  |   |   |   |   |
| of 8.4 percent in January 2002.                                |   |   |   |   |
|                                                                |   |   |   |   |
| What is unclear to economists is whether the latest flurry of  |   |   |   |   |
| layoffs is the last shakeout before a long-predicted recovery, |   |   |   |   |
| or a sign of another recessionary dip driven by war worries    |   |   |   |   |
| and rising energy prices.                                      |   |   |   |   |
|                                                                |   |   |   |   |
| Oregon\'s economic forecast has predicted growth \-- albeit    |   |   |   |   |
| anemic \-- starting in the fourth quarter of 2002 and          |   |   |   |   |
| accelerating at the end of 2003.                               |   |   |   |   |
|                                                                |   |   |   |   |
| \"It\'s looked like we were at the bottom of the downturn and  |   |   |   |   |
| even beginning to gain jobs, but those gains may be farther    |   |   |   |   |
| off than we were hoping,\" said Art Ayre, the state\'s         |   |   |   |   |
| employment economist.                                          |   |   |   |   |
|                                                                |   |   |   |   |
| That could be bad news for legislators, who are straining to   |   |   |   |   |
| craft a state budget amid plunging tax revenues.               |   |   |   |   |
|                                                                |   |   |   |   |
| The lumber, RV and disc manufacturing businesses have little   |   |   |   |   |
| in common, save some economic cyclicality. Jack Roberts,       |   |   |   |   |
| former Oregon labor commissioner and current director of the   |   |   |   |   |
| Lane Metro Partnership, an economic development agency in Lane |   |   |   |   |
| County, said he was still bullish on the area\'s RV industry.  |   |   |   |   |
|                                                                |   |   |   |   |
| Roberts cited the fact that a Monaco competitor, Country       |   |   |   |   |
| Coach, is hiring again after earlier layoffs. He said the      |   |   |   |   |
| opposite situations amounted to timing differences.            |   |   |   |   |
|                                                                |   |   |   |   |
| Roberts also said he had received assurances from Monaco Chief |   |   |   |   |
| Executive Kay Toolson that the company\'s production cuts were |   |   |   |   |
| temporary, driven by gas prices, and that it probably would be |   |   |   |   |
| back to full production in 60 to 90 days.                      |   |   |   |   |
|                                                                |   |   |   |   |
| \"We don\'t see this as a permanent layoff and loss of         |   |   |   |   |
| livelihood like Sony\'s\" closure, Roberts said.               |   |   |   |   |
|                                                                |   |   |   |   |
| No company assurances Mike Duncan, Monaco\'s head of investor  |   |   |   |   |
| relations, was unwilling to offer any such assurances.         |   |   |   |   |
| Employees were offered no severance, or indications that their |   |   |   |   |
| jobs would return in the near future.                          |   |   |   |   |
|                                                                |   |   |   |   |
| \"If the environment gets a little tougher, we may have to     |   |   |   |   |
| take steps to slow production even further, but for now we     |   |   |   |   |
| feel like we\'ve taken the appropriate steps,\" Duncan said.   |   |   |   |   |
|                                                                |   |   |   |   |
| Demand for Monaco\'s RVs, with resulting orders from dealers,  |   |   |   |   |
| has seesawed in recent years. A recessionary pullback and the  |   |   |   |   |
| Sept. 11 shock were counterbalanced by a strong recovery last  |   |   |   |   |
| year. RV-makers have benefited from low interest rates and a   |   |   |   |   |
| slew of retired baby boomers taking to the road.               |   |   |   |   |
|                                                                |   |   |   |   |
| RV sales had been forecast to rise 2 percent this year. But    |   |   |   |   |
| sales have shown signs of weakening the past two months, with  |   |   |   |   |
| other manufacturers nationally reporting cutbacks similar to   |   |   |   |   |
| Monaco\'s.                                                     |   |   |   |   |
|                                                                |   |   |   |   |
| Monaco\'s Toolson said in a release Thursday that economic     |   |   |   |   |
| conditions and the military conflict were pressuring consumer  |   |   |   |   |
| confidence, and that dealers had become cautious in purchasing |   |   |   |   |
| new inventory. The company\'s inventory of finished RVs has    |   |   |   |   |
| ballooned from \$42 million at the end of the year to \$70     |   |   |   |   |
| million today.                                                 |   |   |   |   |
|                                                                |   |   |   |   |
| Monaco spokesman Mike Duncan said the company typically would  |   |   |   |   |
| have \$10 million worth of finished RVs on hand.               |   |   |   |   |
|                                                                |   |   |   |   |
| Quarterly results fall Monaco on Thursday announced its        |   |   |   |   |
| preliminary results for the quarter ended March 29. It         |   |   |   |   |
| estimated earnings of 15 cents to 20 cents a share on sales of |   |   |   |   |
| \$271 million to \$273 million in the quarter.                 |   |   |   |   |
|                                                                |   |   |   |   |
| Analysts had expected the company to earn 29 cents a share on  |   |   |   |   |
| sales of \$276 million.                                        |   |   |   |   |
|                                                                |   |   |   |   |
| \"It was bad,\" said Jeff Tryka, an analyst with Delafield     |   |   |   |   |
| Hambrecht in Seattle. \"Revenues were in the ballpark, but     |   |   |   |   |
| earnings were a lot lower than we were expecting.\"            |   |   |   |   |
|                                                                |   |   |   |   |
| Seneca Sawmill said its layoff of 115 Eugene workers was       |   |   |   |   |
| driven by \"dumping of government-subsidized Canadian wood     |   |   |   |   |
| products\" in the United States and overly restrictive logging |   |   |   |   |
| rules on this side of the border.                              |   |   |   |   |
|                                                                |   |   |   |   |
| \"We\'re facing political and legal issues that are above and  |   |   |   |   |
| beyond our control that require this action, Seneca General    |   |   |   |   |
| Manager Rick Re said.                                          |   |   |   |   |
|                                                                |   |   |   |   |
| Ted Sickinger: 503-221-8505; tedsickinger@news.oregonian.com   |   |   |   |   |
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