Fleetwood Closing Pennsylvania Plant

Motor home maker will shutter its production plant in Paxinos, Pa., and move the operations to Decatur, Ind.

RIVERSIDE, Calif. (AP) -- Fleetwood Enterprises Inc. on Friday said it will shutter its motor home production plant in Paxinos, Pa., and move the operations to Decatur, Ind.

The company, which makes motor homes under the Southwind, Terra, Jamboree and Tioga brands, said operations will cease in December at the Pennsylvania plant. The facility makes Class A gas motor homes, which resemble over-the-road buses, and Class C products, which look like recreational vehicles with pickup truck cabs.

The company said it will record related charges of $2.2 million for its fiscal second quarter, which ends later this month, and $2 million in its fiscal third quarter, which ends in January. Potential impairment charges on the Paxinos plant are being evaluated.

The move is expected to save $1.5 million per quarter, beginning with the fiscal fourth quarter which ends in April.

The Paxinos plant, which opened in 1973, currently employs approximately 325 people. Fleetwood said workers there will receive pay and benefits for at least 60 days, and career assistance will be provided.

The company said all of its current brands and models will continue to be made.

Fleetwood's other Class A gas and Class C facility in Riverside, Calif., will not be affected, the company said.

"This is a difficult but necessary operational change," said Paul Eskritt, president of Fleetwood's RV Group, in a statement. "We are now in the fourth year of a declining motor home market and current forecasts indicate further declines into 2009."

Should the market rebound, the Decatur plant has enough capacity to handle increased production, Eskritt said. It is also closer to most of the company's primary suppliers.

The plant in Decatur currently builds Class A diesel products, under brand names including Discovery, Bounder Diesel and Expedition.

Fleetwood shares, which closed Thursday at 62 cents, have fallen 94 percent since last year, when they traded as high as $10.

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