“While this was a difficult decision for us, given the impact on our employees at the Osceola facility, we believe the creation of these manufacturing centers of excellence will strengthen our company over the long-term and enable us to maintain our lead in a competitive market,” says Scott Wine, CEO, Polaris Industries Inc. “This decision was based on a thorough review of our worldwide operations and will allow us to improve our ability to meet the quality, delivery and cost standards desired by our dealers and customers.”
According to Polaris, the realignment allows the company to dedicate capital for strategic investments in painting, welding and assembly operations by outsourcing certain non-strategic component manufacturing processes. A location is still being scouted for the Mexico facility, which is expected to improve the company’s on-time delivery to customers and provide significant savings in logistical and production costs.
Polaris says the realignment will enable the company to have production facilities closer to customers in the southern United States and global markets it currently serves or expects to serve in the future.
When the manufacturing realignment is completed Polaris will have capabilities to manufacture ATVs and side-by-side vehicles, which represents more than two-thirds of Polaris’ sales, in multiple locations depending on customer demand.
Snowmobile assembly will remain in the Roseau facility and Victory motorcycle assembly will remain in the Company’s Spirit Lake facility. As part of the manufacturing realignment, certain Osceola manufacturing processes will be moved into the Roseau, Spirit Lake and Mexico facilities.
Additionally, certain manufacturing processes and equipment are intended to be sold to suppliers who will continue to supply components to Polaris. Other non-strategic component manufacturing operations currently performed in the Osceola facility will be outsourced. The realignment will begin immediately and is scheduled to be complete in 2012. Polaris expects to have the new production facility in Mexico operational beginning in the first half of 2011.
Polaris is currently in negotiations with several suppliers to sell certain non-strategic component manufacturing processes and equipment in the Osceola facility. If successful, Polaris’ intent is that the suppliers will continue to manufacture these components in the current Osceola location. Polaris will operate the Osceola manufacturing facilities during the transition period.