Monaco closing plants in Nappanee, Elkhart and Wakarusa

The latest layoff in the Elkhart County R.V. industry is a big one.

Monaco Coach Corporation Thursday announced that some 1,400 workers would lose their jobs due to plant closings in Wakarusa, Elkhart, and Nappanee.

The company will continue to operate facilities in Warsaw, Goshen and Milford with a total staff of some 700 workers.

“We needed to match up our capacity to what the market is bearing,” said Monaco spokesman Craig Wanichek from Monaco’s Wakarusa facility. “We needed to make this move and we really reviewed a number of different alternatives before we decided to do this. This has been a very difficult day.”

The 1,400 layoffs amount to 33% of the company’s total workforce. The plant closings will cut the company’s motor coach production capacity by 50%.

Employees at the Wakarusa plant got the news around 11 o’clock this morning. They were sent home to digest the news, and told to return to work on Monday. Workers already had a four day week scheduled, as part of company efforts to reduce production.

Ron Donovan has worked at Monaco for 16 years, and word of the plant closing caught him completely by surprise. Donovan says last year workers at the plant celebrated the 50th anniversary of Holiday Rambler.

He and others knew that things were bad for the R.V. industry, but until today, they had no idea just how bad. “We just figured they was going to cut us down for a couple of weeks and revamp and layoff and cut our production in half and close up a line,” said Donovan. “But no, did not think that it would close completely down.”

Production that now takes place at the three Elkhart County plants will be moved to Warsaw, and two plants in Oregon.

“This has been the largest, strongest, best business in the town of Wakarusa for 50-years,” said Wakarusa Town Manager Tom Roeder. “It’s sort of all coming to an end, it’s very difficult.”

The company cited poor sales for the plant closings. The Class A market is in its fourth straight year of declining shipments, while shipments so far in 2008 dropped a whopping 40% compared to the same period last year, according to a Monaco press release.

Much of the market downturn is being blamed on high gas prices, and the company is quick to emphasize that fact. “Part of this is fuel prices,” said Wanichek, “nationally as a government we need to come up with a better policy to help fuel prices come down because it’s effecting communities, it’s affecting livelihoods and jobs, we’re seeing that today and we keep on with a policy that doesn’t seem to work.”

In a letter sent out to employees, CEO Kay Toolson and President John Nepute state that the struggling U.S. economy is taking its toll on RV sales, and they have made the decision to reduce production.

The shutdown will affect over 1,400 area employees, which is one-third of their entire workforce. Officials say they will try to relocate as many of the employees as possible, including to the facility in Warsaw.

Monaco says it will move diesel production to Oregon and gas production to the Warsaw facility.

Rep. Jackie Walorski, from Lakeville, sent a letter to Governor Mitch Daniels today in response to the announcement made by Monaco. In it, she asks the Governor to provide aid to the workers who will be laid off through retraining programs and assistance with unemployment claims.

She also states that in January she will be proposing that Indiana suspends the sales tax on all RV purchases to help entice customers and bump up production.

Her complete letter to Governor Daniels can be read by clicking the link above.

Stay with NewsCenter 16 both on the air and online for more on this developing story.

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