Country Coach cuts jobs to be 'cautious'.

Byline: JOE HARWOOD The Register-Guard

JUNCTION CITY - Country Coach Inc. on Thursday said it has laid off 54 workers and slowed production on one of its manufacturing lines in response to slackening orders from its RV dealers.

The job cuts affect workers in Plant No. 2, which makes the Intrigue and Allure coach brands, said Country Coach spokeswoman Carol Taylor Clay. The layoffs cut total employment at the company, Junction City's largest employer, to 880.

Taylor Clay said the company decided to curtail coach production in order to avoid an excess of finished inventory going into the traditionally slow fourth quarter. "We're trying to be cautious," she said.

The company recently introduced upgraded 2003 Intrigue and Allure motor homes that are competing with 2003 Country Coach models already on dealer lots. Until dealers are able to sell off the models released earlier in the year, they won't be inclined to replenish their inventories, Taylor Clay said.

The upgraded models include standard features such as larger TVs and showers that were optional on the earlier models, she said.

RV makers continuously adjust production pace to closely meet demand. When sales slow down and RV makers get stuck with excess finished inventory, they often have to offer steep discounts in order to move their products onto dealer lots. That discounting quickly erodes profits.

Bob Lee, president of Country Coach, told The Register-Guard in October that he planned to take a conservative approach in balancing the pace of production with dealer demand in order to return the company to profitability.

Country Coach's parent, Perris, Calif.-based National R.V. Holdings Inc., last week said it has lost $14.5 million on sales of $239.2 million through the first nine months of the year.