Country Coach boosting production.

Byline: CHRISTIAN WIHTOL Register-Guard Business Editor

JUNCTION CITY - Citing a brightening market outlook, Country Coach on Wednesday said it will boost production of recreational vehicles at its Junction City complex and reverse its decision to discontinue production of its Prevost bus conversion coaches.

As part of the move, the company is adding 30 to 35 jobs to its work force of 887, said spokeswoman Carol Taylor Clay.

Country Coach earlier this year said it would phase out its bus conversions - in which the company bought bus chassis and shells from manufacturer Prevost and turned them into RVs - and gradually absorb that division's 33 workers into the main Junction City production line.

Since then, however, Country Coach has found a dealer that has agreed to take 12 bus conversions a year and sell them at lots in Texas and Tennessee, Country Coach said. The dealer, Buddy Gregg MotorHomes, has agreed to buy all Country Coach's bus conversion inventory, plus all bus conversion production through December 2003, Country Coach said.

Also, Country Coach said it had been able to hire industry veteran Tom Nestell to oversee the conversions division.

In addition, because of a rise in RV sales and rentals nationwide, Country Coach is ramping up its regular RV production, Taylor Clay said. To handle the increase, the company is hiring 25-30 people, she said. The company also is hiring about five workers to take the place of bus-conversion employees who have already been shifted to regular RV production, she said.

Nationally, the RV industry predicts good times ahead, after two years of sluggishness.

U.S. coach shipments rose 19 percent in May compared to a year earlier, the fifth straight month of gains as consumers return to dealer lots, according to data compiled by the Recreational Vehicle Industry Association, based in Washington, D.C.

Shipments of trailers increased 20 percent, to 23,200, from the year-earlier month, while motor homes climbed 16 percent, to 5,200, the association said. Total shipments for the first five months of the year rose 12 percent, to 130,400.

``Everybody is pretty much making as much as they can right now and there's no sign it's slowing down,'' said Thomas Walworth, an analyst at Statistical Surveys Inc., based in Grand Rapids, Mich., which tracks motor home and trailer retail sales.

RV makers are benefiting from a recovering U.S. economy, lower interest rates, 350,000 baby boomers reaching age 50 each month and more people taking road trips, company executives said.

In addition to sales being brisk, the RV rental market is hot, Taylor Clay said.

Analysts consider RV sales an indicator of the broader economy because they slow before a recession and recover before other industries. While Country Coach is boosting employment, total jobs at the Junction City factory are still down from a year ago, when the company had 1,032 workers, Taylor Clay said.

Bloomberg News contributed to this report.