Arctic Cat Inc. on September 26 announced that it has an agreement to sell its Madison, S.D., facility, which does painting, welding and subassembly work. The sale allows Arctic Cat to further leverage the company’s lean manufacturing and strategic sourcing initiatives.
Arctic Cat’s Madison operations will migrate to the company’s main manufacturing facility in Thief River Falls, Minn., which employs more than 1,500 people. Arctic Cat plans to hire 50 to 60 employees in Thief River Falls to handle the additional work. All 89 jobs at the company’s plant in Madison will be eliminated, and affected employees will be offered opportunities to work in the company’s other plants, as well as employment assistance. The company intends to close the Madison facility by February 2008.
“We decided to sell our Madison facility and consolidate those operations with our core manufacturing in Thief River Falls. We believe this decision makes good business sense, and is in keeping with our strong commitment to enhance operational efficiency,” said Christopher A. Twomey, chairman and chief executive officer. “We recognize that this decision is difficult for our Madison employees, with whom we have developed a great relationship. By providing this long notice, we expect that most of these employees will be able to find other employment either in the Madison area, where current employment opportunities seem strong, or at another Arctic Cat facility. We appreciate their hard work and dedication.”
Arctic Cat expects the sale of the Madison property will have no material impact on its balance sheet. Longer term, the company anticipates this action will save approximately $1 million a year in operational costs. The company expects to record a charge of $0.01 to $0.02 per diluted share, in its fiscal fourth quarter ending March 31, 2008, related to this announcement.
Arctic Cat Inc. designs, engineers, manufactures and markets all-terrain vehicles (ATVs) and snowmobiles under the Arctic Cat brand name, as well as related parts, garments and accessories.
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