Goodbye Suzuki: Arctic Cat to Produce its Snowmobile Engines

Press Release -

Arctic Cat Announces Plan to Begin Manufacturing Snowmobile Engines in Minnesota

Arctic Cat to begin manufacturing snowmobile engines in its St. Cloud facility after 2014 model year

MINNEAPOLIS, June 10,2010 - Arctic Cat today announced that it has entered into an agreement to transition its snowmobile engine manufacturing from Suzuki Motor Corporation.

Arctic Cat will begin manufacturing some of its own snowmobile engines in St. Cloud, Minn., after the 2014 model year. Currently, Suzuki supplies all engines for Arctic Cat's snowmobiles. Suzuki will continue to supply the company with engine parts to service existing engines after the 2014 model year.

Commented Arctic Cat's chairman and chief executive officer Christopher A. Twomey: "Suzuki has been an outstanding engine supply partner for more than 25 years and remains a significant shareholder in Arctic Cat. However, we are changing our engine strategy in order to gain more control over our products, and enhance our ability to meet regulatory and performance requirements. This also will enable us to better utilize our current engine manufacturing capacity, resulting in potentially better costs."

Twomey added: "Our St. Cloud engine facility has been a great addition for the company since we began manufacturing our ATV engines there in 2007."

The 56,000-square- foot plant is located on 15 acres and currently employees 41 people. At this time, the company plans to use existing plant capacity and personnel during the transition. Arctic Cat expects snowmobile engine production to begin in St. Cloud in fiscal 2015.

-end release

My immediate thoughts:

“Shock” doesn’t even begin to describe my reaction after reading this news release. Suzuki has supplied Arctic Cat snowmobile engines since the 1976 model season, and a strong partner in the formation of Arctco as it rose from the ashes of Arctic Enterprises.

Suzuki has manufactured many excellent engines over the years, although I’ve also been told that they’ve been at times reluctant to provide the kind of technology that Arctic Cat requested.

I’ve been to the Arctic Cat Engine Facility in St. Cloud a few times, and it’s a model of technology and efficiency. And the ATV engines produced there have been excellent.

I like that Arctic Cat wants to have greater control over its engines, and that it wants to manufacture engines in the U.S. rather than Mexico or some other distant country. This will be a huge project.

The release's wording, "Arctic Cat will begin manufacturing some of its own snowmobile engines in St. Cloud, Minn..." also suggests further developments on the matter.

I'm going to attempt to get an interview with some people at Cat as soon as possible, because I have a lot of questions.

Wow. WOW!

What are your thoughts and questions?