www.FarmProgress.com July 2010
Western Farmer-Stockman
29
Technology/Machinery
Polaris to open new factory in Mexico
By DAN CRUMMETT
OLARIS Industries says it’s realigning its manufacturing operations to include a Mexican
assembly plant that will ultimately save
the company about $30 million a year.
The move, announced in a press release and subsequent conference call
with members of the media in late May,
will eventually see the cessation of operations at the company’s Osceola,
Wis., facility. Operations there will be
integrated into Polaris’ Roseau, Minn.,
and Spirit Lake, Iowa, facilities, and
within 24 months to a new facility in the
Monterrey/Saltillo, Mexico area, several
hundred miles southwest of Laredo,
Texas.
Polaris CEO Scott Wine said a major
savings in labor costs and the logistical
advantage of having an off-road vehicle
assembly close to the Southern U.S.
(where a major portion of these sales
occur) are driving forces behind the
move, along with a desire to “penetrate
the Central and South American markets” with Polaris off-road equipment
sales.
P
Project to finish in 2 years
The project begins immediately and is
expected to be completed within two
years, Wine said. Meanwhile, Polaris is
negotiating to sell some of its support-
related manufacturing to local entities
in the Osceola area, but ultimately it
plans to see its engine and exhaust manufacturing and assembly located in the
other three plants.
Wine said the company is planning
to build duplication on engine assembly
at the three facilities to ensure quality
control and to provide flexibility to meet
demands that might occur in different regions. Basically, snow equipment engine
assembly will be concentrated in Roseau,
Victory motorcycle engines in Spirit
Lake, and off-road vehicle engines produced in all three facilities.
Over the next two years, the Roseau
and Spirit Lake locations will be retrofitted to take on the extra work coming
from closing the Osceola plant, and the
rest will be assigned to the Mexican facility. No specific models to be built in
Mexico have been announced.
Asked if crossing the border would
cost Polaris — a firm that has traded on
its “Made in USA” heritage — anything in
branding, Wine explained: “We certainly
considered that. As you know, we currently have our youth products being
manufactured outside of the United
States. And, we think as we deliver
quality and performance [through the
Mexican facility], we’ll be able to work
through this from a brand perspective.”
The company expects to record pretax transition charges to its income
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BUILDING CORP.
statement in the range of $20 million to
$25 million, and incur capital expenditures of up to $35 million over the next
few years related to the realignment
plan.
Wine said savings from the move
should begin occurring in 2011, and will
be significant to the company’s bottom
line in years thereafter. The company’s
business goals call for Polaris Industries
to be a $3 billion company with at least
an 8% growth rate by 2014.
MEXICAN MOVE: While no specific
models have been announced to be
produced south of the
border, Polaris Industries
says it’s opening a
factory in Mexico
and closing one in
Wisconsin in a move
to save $30 million
per year. The
realignment will
take two years to
complete.
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