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Oregon Winnebago Plant Dragging Financially

A decade after the Great Recession decimated Lane County’s RV industry in Oregon, an iconic RV name has re-emerged as one of the region’s largest players.

This story by Elon Glucklich originally appeared in The Register-Guard.

Iowa-based Winnebago Industries capitalized on the collapse of Country Coach, paying $9 million for the Junction City company’s intellectual property and large manufacturing plant in late 2015 as Winnebago expanded to the West Coast.

Since then Winnebago retooled and reopened the Junction City, Ore., factory and has been assembling two of its diesel motorized RV models there: the Grand Tour 45RL motor coaches and, since last fall, the Horizon RV.

Winnebago officials late last year said the company employed 250 people in Junction City, making it Lane County’s largest RV manufacturer after Marathon Coach in Junction City.

But more than two years into operation, the Junction City plant appears to be a financial drag for Winnebago, executives with the publicly traded company said while discussing Winnebago’s latest profits in a June 20 conference call.

Overall, Winnebago posted 18 percent revenue growth, 21 percent gross profit growth and 39 percent operating income growth at the May 26 close of the company’s third quarter of its fiscal year compared to a year ago, Hughes told investors and analysts.

But those earnings were largely on the strength of Winnebago’s profitable “towables” division, which produces lower-cost travel trailers that hook up to a vehicle. Towables revenue rose 33 percent, Hughes said.

But revenue was up just 3 percent over the year in Winnebago’s motorized division, which includes the Junction City operation and plants in Forest City and Lake Mills, Iowa. The division’s earnings before interest, taxes, depreciation and amortization — indicators of a company’s earnings potential — fell 36 percent compared to a year ago, Hughes said, driven in part by its heavy startup costs in Junction City.

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