Arctic Cat suspending production of snowmobiles, ATVs

(KNOX) – A major blow for workers at Arctic Cat in Thief River Falls and St. Cloud as the company announces layoffs and the suspension of snowmobile, ATV and UTV production.

According to a Securities and Exchange filing, Textron, the Cessna jet maker that owns the company, is exploring alternatives for its powersports product line. The company will complete limited production runs to fulfill customer commitments already on the books.

Production is expected to be paused indefinitely through the first half of 2025 and workers will be cut. Those who work through their completion date will be offered severance benefits.

In the filing, Textron says the “consumer end market demand for powersports products continues to remain soft”.

The company expects an inventory valuation charge in the range of $30 million to $40 million to write down production-related powersports inventory, cutting earnings per share for 2024 by approximately $0.12 to $0.16.

Around 65 employees were already affected by workforce reductions made last month.

Textron acquired Arctic Cat in 2017.

Statement from Textron’s Director of Communications Brandon Haddock:

“In response to the ongoing business conditions facing the powersports industry, Arctic Cat will suspend manufacturing operations indefinitely at our facilities in Thief River Falls and St. Cloud, Minnesota, after planned production in the first half of 2025 is complete.

Textron Inc. also announced that it is exploring strategic alternatives regarding the future of the powersports business. These actions are difficult but necessary as we have continued to experience softness in consumer end-market demand, resulting in a need to reduce costs.

Arctic Cat remains open for business with respect to selling current inventory and providing aftermarket support and services to our existing installed customer base. Our sales organization, customer service teams, aftermarket distribution centers, and other functions are ready to assist our dealers and loyal customers. We are committed to providing the service and support to keep our thousands of loyal customers riding and enjoying Arctic Cat vehicles.

We will resume production as planned after the new year to produce units under existing customer commitments. However, once that build is completed, we will suspend operations indefinitely, and will release our manufacturing employees at the Thief River Falls and St. Cloud facilities. Employees who work through their specific completion date will be offered severance benefits.

We will monitor industry conditions throughout this suspension, and make further announcements about our operational plans when we have more information to share.

We thank our employees, dealers, customers and supporters for their loyalty, patience and understanding as we weather the difficult conditions facing our business and our industry.”