ELKHART — The Monaco towable division, which includes Holiday Rambler and Trail-Lite, has been shut down by parent company Allied Specialty Vehicles, RV Daily Report has learned.
Employees at the Elkhart plant were greeted by security guards who would not allow them in the plant or office. A representative from the human resources department was on hand to pass out letters alerting employees that the company was exiting the towable market and offering information on how terminated employees could collect unemployment benefits.
“The plant workers showed up at 6 a.m., and the office workers arrived by 8 a.m.,” one source told RV Daily Report. “No reason was given. But, I have thought for a while that the company would likely shut down the operation.”
“The Oregon plant seemed to be doing okay,” he added. “They seemed to build more than the Indiana plant, they shipped more units and they serviced larger dealers.”
It is not known how many employees were impacted by the decision, but one source in Elkhart estimates that 115 people there lost their jobs today, and more positions could have been impacted in Oregon.
Not everyone was anticipating the shutdown. It was reported that ASV had moved employees into new offices to consolidate accounting and human resources just two weeks ago.
John Draheim, president of Fleetwood RV and CEO of the Allied Recreation Group, both of which are controlled by Allied Specialty Vehicles, told RV Daily Report that the move made sense considering the market.
“Monaco’s towable division was very small in the scheme in our whole portfolio of companies. The division represented less than 2 percent of total sales,” he explained. “Our motorhome business continues to improve and the market is getting stronger. We decided we need to focus our resources and efforts on capturing growth in that expanding segment of the market.”
ASV to honor warranty
To assure customers and dealers, ASV has announced that it will fully honor the warranty offered on the Holiday Rambler and Trail-Lite towable products it has sold, and that includes RVs already owned by customers as well as those still on dealership lots.
“Whether they have one month left on their warranty, or 11 months, customers should know we intend to honor that warranty, and will reimburse dealers who work on their RVs,” said Draheim. “Dealers can still sell the units at retail prices knowing that any needed warranty work will be covered.
“That’s the type of company we are and the reputation we want to have in the market,” he added.
Although warranty claims will be paid, one source suggested the challenge will be in securing replacement parts for Holiday Rambler and Trail-Lite products in the months and years ahead.
“The company doesn’t have a warranty department, and no active production, so I don’t know how they will handle replacements,” he explained.
When ASV acquired Monaco from Navistar in May of last year, one source told RV Daily Report that an individual had stepped forward seeking to buy just the towable division. But, for whatever reason, ASV or Monaco rejected that offer.
“It appears now that the company is more interested in shutting down the operation that it is in selling it to an interested buyer,” the source said, admitting that the company may have approached the buyer in recent months, but a deal could not be worked out.
“The product looked good, and people seemed to like what we had to sell,” one source said. “But, there was a lot of uncertainty about our company in the market, and that eventually lead to the closure.”
He said the confusion started years ago when Monaco declared bankruptcy and failed to honor their warranties. Then, Navistar acquired the firm and staff told nervous dealers that they had to wait to see what Navistar planned to do with the company. When ASR acquired the operation last year, the message changed to a wait-and-see what ASR will do.
As a result, dealers were reluctant to place many orders until more certainty was discerned.
“It is rather unfortunate and very disappointing that so many people showed up ready to work today only to find out they no longer had jobs,” one former worker told RV Daily Report. He did not want to be identified out of fear it could impact payment of unused vacation pay and his ability to secure unemployment funds.
Despite the closure of the towable division, Draheim said the future is brighter for Fleetwood and Monaco’s motorized divisions.
“We feel the motorhome segment will continue to grow like it did last year, but perhaps not at the same pace,” said Draheim. “Motorhomes are very profitable for us, and we will continue to focus on integrating our products into that expanding market.”