Country Coach likely to remain, grow in Junction City.

Byline: Joe Harwood The Register-Guard

JUNCTION CITY - Will Country Coach stay or go?

Two weeks after telling the City Council that the company might move most of its operations out of Junction City in search of additional manufacturing space, company President Jay Howard said Wednesday that he is now "99 percent" sure that the recreational vehicle maker will stay.

With 1,400 workers, Country Coach is the city's largest employer and one of the biggest private-sector employers in Lane County.

The flap came after negotiations between National R.V. and Lee Joint Ventures Inc. broke down. National R.V., the parent company of Country Coach, leases just less than half of its 600,000 square feet of manufacturing space from Lee Joint Ventures, which is owned by Country Coach founder Bob Lee and two family members.

National R.V. is planning to spend millions of dollars to build at least 250,000 square feet of new manufacturing space to increase production and feed the nation's growing appetite for high-end diesel motor homes.

As part of the capital upgrade, National R.V. wants to buy the space it now leases from Lee, plus 14 acres of vacant land nearby. That 14 acres is next to 17.5 vacant acres Country Coach owns.

"It's not fiscally responsible to do tremendous amounts of capital expenditure on land you don't own," Howard said.

The sides wouldn't disclose the financial specifics of the negotiations.

But the talks became sticky enough that at one point earlier this summer, Country Coach looked at seven or eight different properties around the Lane County area as potential relocation sites, including the vacant Sony factory in Springfield.

The matter is "emotional" because of Lee's close ties to the company and the community, Howard said. Lee is the largest noninstitutional holder of National R.V. stock.

Lee said Wednesday that he's optimistic he'll reach a property deal with National R.V. "I'm sure we'll put something together. We just haven't come to the right understanding," Lee said.

Time is important for Country Coach, which wants to exploit the cyclical RV market while it's hot. The company is coming off two quarters of record sales. Through June, RV shipments nationwide to dealers were running 20 percent above the same period in 2003.

"We have three new models we want to bring to reality, but we haven't yet because we have no place to build them," Howard said.

Howard said the company now is in a "positive position" in working with surrounding landowners to make sure it can assemble a contiguous parcel large enough to meet its expansion needs.

He said he expects to have most of the expansion issues resolved within 45 days.