Monaco Coach will slash 450 jobs in Coburg, OR . Roseburg Forest Products and Seneca Sawmill also cutting jobs.

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.

TED SICKINGER OregonLive.com

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; [email protected]

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