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Join Date: Sep 2007
Location: Tualatin
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Western RV goes south
Western RV goes south
Union Gap firm lays off its production workers, cites poor market conditions
By DAVID LESTER and PHIL FEROLITO
UNION GAP -- Reportedly strapped for cash and struggling in a down market, longtime recreational vehicle manufacturer Western RV shut down Tuesday, giving workers little hope for future employment with the company.
The longtime company said in a news release that its operations have been temporarily suspended due to a market slowdown.
"During this short break in manufacturing, Western RV will review our alternatives and determine the best course of action going forward," company President Bob Wert said in the statement. "Once a plan has been developed or a suitable buyer for the business is identified, we intend to resume normal manufacturing operations."
Production workers were informed Tuesday not to return to work and salaried employees were let go later in the day, reportedly told it would be best for them to look for work elsewhere.
About 220 employees are affected by the closure. The firm, which makes high-end motor homes, fifth-wheel trailers and campers, laid off 47 workers last month in a move company officials said was to align production with market demand.
The firm's owner, Monomoy Capital Partners of New York City, did not return messages for comment. A receptionist said the equity firm's partners were at an annual meeting and not in the office.
Monomoy bought the 37-year-old company, founded by Bill and Suzanne Doyle, in late 2006. The firm made an unsuccessful attempt last fall to merge the firm with an Indiana RV manufacturer.
The company's human resources director, contacted by phone at her office Wednesday, said she could not provide any information to clarify the situation.
Salaried employees weren't paid on schedule Tuesday, said one employee who asked not to be identified. Payday for production workers is today, but it's unclear whether they'll receive any checks.
"Those are 220 people who won't be buying the newspaper or getting a haircut," the employee said of the layoffs. "The ripple effect is pretty substantial."
The company shutdown in Union Gap is emblematic of tough times in the RV industry nationwide. As housing values have dropped, many potential buyers have lost the equity in their homes they had in the past to purchase big-ticket items.
According to the industry's trade association, shipments of new RVs are projected to be down nearly 25 percent in 2007 and 2008.
A quiet atmosphere hovered over the plant at 2900 Southerland Drive on Wednesday. Some employees were inside, but the doors were locked and customers -- some needing work done on their RVs and others wanting to pick up parts -- were turned away.
Beau Durkee, a salaried employee who headed sales for the company's camper division, told a reporter the company might be looking to sell. He was carrying out a box of his personal items to his truck.
"There's still a lot that's up in the air," he said. "It has not gone into bankruptcy. It's just shut down."
While Durkee said he believed the plant would reopen, he couldn't say when.
"There are a lot of things that could happen in a week and there are folks working on it right now," he said without elaborating.
One production worker who showed up late Wednesday morning to find out about his pay said the shutdown was sudden. Like others, he declined to provide his name or any details per the company's request.
"They don't want me to talk about it," he said as he got into his small, older compact style car.
A handful of RVs had been parked outside the plant Tuesday waiting for service, but left, said RV owners Ole Iverson and his wife, Sandy.
Sandy's sister's RV was scheduled to have warranty work done and remained parked at the plant alongside the Iversons on Wednesday. The work wasn't complete, said Sandy.
"No one from Western RV has come out and confirmed what's going on to its customers," she said. "To me, that's bad business."
The Iversons said they had ordered curtains for their RV a few weeks ago, but say they won't get them now.
Ole said he has empathy for the workers who lost their jobs, and that local RV owners will be affected by the shutdown.
"It will have a major impact on those who have newer Western RVs that need warranty work or repairs," he said.
Company officials say they will contact owners of RVs brought in for service so they can pick them up, Durkee said.
Whether work will be completed was uncertain Wednesday as was the ability to have future repairs and warranty work done at the plant, he said.
"Everything is up in the air right now," he said.
As far as those laid off, he would only say: "I wouldn't expect that to last forever."
Local Employment Security Department officials haven't been told very much.
Lori Edwards-Olson, dislocated worker supervisor at the WorkSource office in Yakima, said the agency was notified Tuesday that production workers had been laid off.
"They said the layoff was temporary and, based on demand, they will hire the people back," she said.
Local economic development officials said the news is a blow to the employees and the community.
Dave McFadden, president of the Yakima County Development Association, also known as New Vision, said the RV industry has struggled with economic uncertainty.
He said he was not informed of the company's plans.
"I think this industry is going through some significant challenges all the way back to 9/11," he said. "They have been through some pretty well-defined downturns."
Kevin Broom, a spokesman for the industry trade group, Recreational Vehicle Industry Association, based in Arlington, Va., said overall economic conditions have been the biggest challenge for manufacturers.
Country Coach, a company near Eugene, Ore., announced recently that it was laying off 8 percent of its work force, or about 100 workers. In Forest City, Iowa, Winnebago has announced plans to lay off 225 workers this year. And in northern Indiana, home of several RV manufacturers, hundreds of workers have lost or are expected to lose their jobs.
The slowdown comes on the heels of five consecutive years of growth, culminating in historic sales of 390,500 units in 2006.
But in a sluggish economy, a recreational vehicle can be daunting for price-conscious consumers.
Western RV motor homes can cost $250,000 to $500,000 each. The Alpine Coach Limited SE, for example, costs at least $300,000 for a motor home that is 34 to 40 feet long and includes features such as an entertainment system with satellite television and a DVD player, cherry cabinets and leather furniture.
"An RV is a discretionary purchase. When consumer confidence stops, they postpone discretionary purchases. We see heavy traffic at (RV) shows and a lot of interest in RV-ing," Broom said, noting consumers are still showing interest. But, he added, "People are postponing the purchase because they want to see what will happen."
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