Published: July 18, 2008 08:47 am         

Letter to Monaco Coach employees

This is a copy of the letter given to Monaco Coach employees Thursday.





July 17, 2008





To Our Valued Employees:





As you all know, the entire US economy is facing tough times. High fuel prices, tightening credit markets and low consumer confidence mean that fewer people are purchasing RVs right now. With sales down significantly, we cannot continue to be a strong and viable company unless we reduce our production capacity and build fewer units. So, it is with great sadness that we announce the closure of our production and service operations in Wakarusa, Elkhart and Nappanee, Indiana. This was a very difficult decision, and one that we delayed as long as possible.

The shutdown will occur over the next several weeks, and though we will relocate as many people as possible, it will result a job loss for over 1,000 of our fellow employees. We will move Class A diesel production to the Coburg, Oregon operation, and gas production to the facility in Warsaw, Indiana. In addition to the closure of these Indiana operations, we will be making additional cuts to our administrative staff as well as reducing the salaries of our executive team.

While this is certainly a major event, Monaco Coach Corporation remains a strong company. However, in order to maintain our Company's health into the future, we must take bold action now. We are confident that the RV market and the US economy as a whole will turn around. When that happens, we will be in a position of greater strength and able to capture even more market share as sales increase. Despite the current downturn, Monaco Coach Corporation is ranked as the number one Class A diesel and number two overall Class A manufacturer in the nation, and we continue to be a significant manufacturer of Class C, Class B and towable RVs.

We believe there is more our government can do to facilitate a recovery in our nation's economy. Our government leaders should be taking steps toward making our country energy self-reliant again through drilling for oil, building refineries and encouraging greater use of alternate energy sources. We encourage all of you to write your congressional representatives and ask them to support legislation that will assist in returning our nation's economy to a position of strength.

Thank you for your understanding of these changes. We appreciate your support during these times of transition, and we will do everything we can to continue to support you. We are committed to being a leader in the RV industry and believe the changes we are embarking on will ensure our long term success.

Sincerely,

Kay L. Toolson - CEO & Chairman

John W. Nepute - President