A year-long recession and a skittish credit market has proved the final death knell for one of Pendleton's largest employers.
Fleetwood Travel Trailers employees got the tough news Monday morning from management that their plant will shut down for good. The company also announced the closure of two additional plants, one in La Grande and the other in Ohio.
The closures affects 253 employees in Pendleton and 162 in La Grande, according to a letter to the cities from Evelyn Guiter, director of human resources for Fleetwood Enterprises, which owns the Oregon manufacturing facilities.
"We will cease production of travel trailers and begin closing your manufacture or service facility," Guiter said in the letter. "This process is expected to take 30-45 days, and we expect this closure to be permanent."
A portion of the workforce, however, will spend the next few days filling existing orders.
"I wish I could say this isn't happening, but it is," said Kathy Munson, Fleetwood corporate spokeswoman. "It is effective immediately - we're exiting the travel trailer business."
No one is surprised at the reason for the closure.
"It's been an extremely tough economy for RVs," Munson said. "We depend a lot on consumer confidence and there hasn't been any."
The travel trailer division has incurred significant losses. The division lost $16.8 million in 2008 and $65.3 million in 2007.
Fleetwood RV Group President Paul Eskritt explained the company's reasons for closure in a letter to dealers.
"In recent years, this division has lost market share due to aggressive competition from industry peers," Eskritt wrote. "Fleetwood has responded by improving its product lineup, but current market conditions are too severe to permit timely recovery."
Without the travel trailer division, the company will focus on its motor home and manufactured housing divisions, which also face difficulties.
"These challenging times have had an enormous impact on the recreation vehicle industry," Eskritt wrote.
The closure comes two months after Fleetwood's stock sank to 7 cents a share, before rising to 10 cents. As a result, the New York Stock Exchange suspended listing the company's stock.
During a visit last month from Rep. Greg Walden, R-Ore., and Sen. Jeff Merkley, D-Ore., Fleetwood area manager Jim Croxton expressed frustration with a credit climate that hampered his company's ability to fill orders. Croxton said he cut an order for 1,000 vehicles to 450 because he couldn't get credit needed to floor them in the showroom - this, he said, despite well-qualified potential buyers.
Croxton asked the two legislators about bailout money for the RV industry.
The three-plant closure is only the latest painful lopping off plants. In November, the company announced the closing of eight manufacturing facilities in the manufactured housing and RV divisions, cutting 760 jobs.
Robert Thompson, owner of Thompson RV in Pendleton, said a Fleetwood sales manger met him Monday morning to give him the news. Thompson said his dealership still has Fleetwood inventory, and Fleetwood has a reserve fund to handle warranties for a year.
Thompson said local travel trailer and RV sales have been good, bucking the declining nationwide trend. But he said it's too early to tell how Fleetwood's closures will affect his business. He speculated he may have to bring in new products from other manufactures.
Fleetwood's move to get out of the travel trailer business, however, will mean more opportunities for other manufacturers, Thompson said, such as Keystone in Pendleton and Northwood Manufacturing in La Grande.
Tracy Bosen, Pendleton economic development director, said he'd been in touch with Fleetwood corporate management. He called the closure and unfortunate blow to Pendleton.
"Our hearts go out to the people who are now looking for jobs," Bosen said. "We need to make sure they are provided with the resources and programs to help them move on."
Bosen also said the closure underscores the need to diversify the local economy and added economic development officials will work hard to find a new tenant for the Fleetwood site.