Polaris Announces Layoffs

In response to lower sales Polaris Industries will be laying off 50-60 people next month at it’s Spirit Lake, Iowa facility.  The company is reducing production at the facility by combining the Ranger utility vehicle and Victory motorcycle production lines into one line that will only produce one type  of vehicle at a time.  The change is designed to help maintain lower dealer inventory levels during this economic downturn which has hit markets driven by discretionary spending, like the utility vehicle and motorcycle markets, hard.  Kawasaki, maker of the Mule utility vehicle, has also reduced their work force this year.  On a more positive note Polaris announced a $6 million contract with the US military for Ranger utility vehicles and service.   Learn more:  SiouxCityJournal.com

Kawasaki Layoffs Finalized

Kawasaki Motors Manufacturing laid off 320 employees last week following an earlier buyout offer to workers in their consumer products division, which produces their utility vehicles and other products.  Management reported that nearly all the layoffs were the result of voluntary acceptance of the buyout.  As a result, the consumer products workforce at the Lincoln, NE location has been reduced by 25% to approximately 900 workers.

Kawasaki’s consumer products division reported a sales decline of 22% for the fiscal year ending in March.  This is on par with first quarter declines recently reported by Polaris Industries and Arctic Cat.  Learn more:  Journalstar.com

Kawasaki To Cut Workforce

According to a press release from Kawasaki Motors, 320 employees at their Lincoln, NE plant are being offered buyouts.  Besides utility vehicles, the plant produces all-terrain vehicles, personal watercraft and other leisure  vehicles.  The buyout offer follows the laying off of 170 employees in January of this year.  The press release states that, “Kawasaki is experiencing increased inventory levels due to rapidly declining sales”.  Management also remaked that the plant has been operating on short weeks since the beginning of the year.  Learn more   omaha.com

Golf Car Manufacturers In the Rough

Bloomberg News reports on the current difficulties golf car manufacturers are facing. The industry is dominated by Club Car and E-Z Go which account for nearly all the fleet sales to golf courses. Besides the recession, these companies have also been dealing with pre-existing negative trends of declining golf course construction and fewer rounds played. The former is in part a market response to record course construction in the preceding years. Some courses are turning to refurbished rather than new vehicles to lower costs.

According to the story the manufacturers have reduced their work forces by about 3% and Club Car states that “orders for new carts have fallen by as much as 20 percent.”

I have started conducting some dealer interviews for a new version of our market study covering small, task-oriented vehicles like golf cars, NEVs and utility vehicles and have identified similar themes. In addition, some dealers told me that some courses are extending by a year the leases for their existing fleets. They also report that the once tight supply of used vehicle has now swung in the opposite direction. While golf course driven demand is not likely to improve in the short term, my interviews indicate that the utility vehicle and NEV markets will provide some growth.