Be ready for this kind of news to repeated in the next months for other motorcycle companies. To cut its production costs, Polaris Industries plans to relocate the manufacturing operations of its Osceola, Wis., plant to a new facility in Monterrey, Mexico. The move should be completed in 18 to 24 months. The Osceola operation includes three buildings totaling more than 300,000 square feet. About 500 people are now employed at the Wisconsin plant and will be affected by this decision.
Engine manufacturing operations will now be in 3 sites: in Minnesota, Iowa and Mexico. Snowmobile assembly will remain in the Roseau facility and Victory motorcycle assembly will remain in the Company’s Spirit Lake facility. Economically, it’s a sensible move to employ a cheaper labor force. In terms of image and sales, what will be the reaction of bikers whose preference for Polaris/Victory was often motivated by the fact that it was the most “pure” American motorcycles/ATV’s/Snowmobiles manufacturer? Until now, all Polaris/Victory manufacturing is located in the northern part of the USA. In addition to must cheaper Mexican wages, the company is stating that it will be much more efficient by cutting tremendously its shipping costs to dealers in the southern half of the United States and Mexico. Restructuring charges and capital expenditures are estimated at US $60 million. Your reactions?
Added 05/20/10 at 5 pm EST: Polaris said it will operate the Osceola factory during the transition. Afterward, the company will provide the affected employees severance benefits and work with the Wisconsin Department of Labor and other state and local agencies to offer employment assistance and other services.
Added 05/20/10 at 7.35 pm EST: Robert Pandya, External Relation Manager for Victory Motorcycles sent me the following email. “Cyril. Victory is in fact moving the Freedom V-Twin operation to Spirit Lake . Polaris is shuffling some ORV operation to Spirit Lake and Rosseau, while indeed moving some operations to Mexico. Unfortunately the Polaris press release was not completely clear in regards to the Victory Operational changes. However in 2011, the line will have moved and both Victory engines and final assembly will be at the one facility. Thanks for helping clarify that. As you can imagine there is lots of misinformation out there and we have spent the better part of the day chasing it down. We certainly appreciate your outreach and assistance in accurately letting your readers know the situation”