RV Industry Struggles As Boomers' Funds Dry Up

As retirement funds lose value in a declining market, the RV industry’s primary customers, retiring baby boomers, are no longer buying.

EUGENE, Ore. (AP) -- In a place where it rains a lot, retiring baby boomers often dream of buying an RV and heading south for sunnier climes. But many retirement funds went south first, and for now the boomers aren't buying.

Their dreams and Lane County's once-robust RV makers took the hit.

Economists say the ripple effect means more problems and could last for years.

In 2005 the industry employed 4,500 in Lane County. By January of this year it provided 1,000 jobs, a loss of 2,700 since January 2008.

The factories of the two biggest local manufacturers, Country Coach in Junction City and Monaco Coach in Coburg, have been idle since December, their workers furloughed.

Monaco Coach announced Monday it would terminate most employees, leaving just 145 at its Coburg headquarters, and will close for good without new capital or a buyer.

"Anytime you're losing manufacturing, there's a negative multiplier effect," Brian Rooney, labor economist with the state Employment Department, told The Register-Guard newspaper of Eugene. "There are suppliers, and you lose high-paying jobs that were injecting money into the local economy."

"We've already felt the hit," Rooney said.

In Lane County January's seasonally adjusted unemployment rate hit 10.8 percent, up from 6.2 percent in January 2008. That's its highest mark since 1983.

Mark Thoma, an associate professor of economics at the University of Oregon, said if laid-off workers think the RV industry will recover quickly they may try to wait it out.

Otherwise, he said, they'll cut back on spending and credit. Unless another industry picks up the slack, he said, workers will leave.

He sees their outlook as "fairly pessimistic." The stock market crash has hurt the wealth of retirees who otherwise might have been in the market for an RV, he said, adding that when the economy does recover, people will save more and consume less.

Yet there may be a positive spinoff.

Jim Lindly, director of Lane Community College's Business Development Center, said some people who have lost their jobs are saying this might be a good time to start their own business.

Lindly said a number of good businesses got their start in the early 1980s, when Lane County unemployment approached 20 percent. "Once you're laid off and you've tightened your belt, it's a lot easier than giving up a nice steady income. You don't have as much to lose."

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