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Spartan Motors Inc. Names Rooke to Board Seat

February 24, 2012 by · Leave a Comment 

Spartan Motors Inc. today (Feb. 24) announced that Andrew M. Rooke has been named to the company’s board.

Rooke currently serves as president and COO of Manitex International Inc., a leading North American manufacturer of engineered lifting equipment. He has held this position since 2007. His professional experience includes GKN Sinter Metals, where he served as CFO, and with other organizations that include Quaker Oats Ltd. and Rolls Royce Ltd.

John Sztykiel, CEO of Spartan Motors, stated, “The board has been integral in transforming Spartan Motors, ensuring accountability and providing leadership as management executes its strategy. Having Andrew join the board makes it stronger, which in turn strengthens the company and ensures that Spartan evolves in the right direction.”

Rooke holds a bachelor’s in economics from the University of York, England, and is a Chartered Accountant. He is a native of Birmingham, England and currently resides in Bloomfield Hills, Mich.

 

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Utilimaster Move Aids Bristol, Shocks Wakarusa

February 16, 2012 by · Leave a Comment 

Spartan Motor’s Inc. announcement Tuesday (Feb. 14) that it was relocating operations for its Utilimaster Corp. subsidiary proved to be a wash as far as the overall employment picture in Indiana’s Elkhart County because no jobs are ultimately being shifted out of the northern Indiana county. But for two small communities it was pivotal news, as Bristol’s fortunes rose and Wakarusa’s sunk quickly.

As reported by the Goshen News, John Forbes, president of custom vehicle manufacturer Utilimaster, announced the company would be moving from Wakarusa to Bristol, taking 600 full-time jobs and 200 temporary jobs with it.

Standing inside the massive former Odyssey Group building in the Earthway Rail Park on Bristol’s southwest edge, Utilimaster President Forbes stood in front of a knot of TV cameras and reporters and said the decision was based on creating an efficient workplace.

“This facility is 425,000 square feet,” he said. “It is a clean, newer facility than our current campus and it gives us a great opportunity to grow out business, support our customers and support our team members for years to come.”

“We are very excited about the opportunity to grow our business,” he continued. “Last year we enjoyed 46% sales growth and that allows us to be in a position to invest in the future of our business.”

The news of the move was broken to Wakarusa town officials at 7:30 a.m. Tuesday. In a town that saw more than a thousand jobs swept away by the recession when Monaco Coach folded in 2008, it was another “Oh, no,” moment.

“We weren’t ready for that. It was kind of a shock,” said Jeff Troxel, Wakarusa Town Council member.

The silver lining in the announcement is that the current work force will remain intact and be able to move with the plant if workers want to make the drive north.

According to the Goshen News, just hours after the surprise announcement, Troxel said he was trying to stay optimistic as he watches another long-time local company leave his small town. He said the Elkhart County Economic Development Corp. will be working to market the Utilimaster complex, which consists of 106 acres containing 16 aging buildings.

“We are resilient,” Troxel said. “We will get through this. It’s a neat town and it is a great place for business to come. I am looking forward to moving forward and having some businesses come to our location.”

The condition and size of the Utilimaster complex is one of the reasons Forbes said the company needed to move. The Odyssey building is large, but at 425,000 square feet is smaller than the 760,000-square-feet of space under roofs at the Utilimaster location.

Forbes said he expects there will be many efficiencies that stem from the move, especially in the movement of parts and vehicles under construction, which will have a much shorter assembly line. Utilimaster vehicles now travel 2 1/2 miles during the assembly process, and Forbes said that distance will be reduced to about a half-mile.

“Today in Wakarusa we have 16 different facilities,” Forbes said. “So our product flows from building to building, not in the most efficient fashion. Putting our operations under one roof gives us a great opportunity to do things in a higher quality environment a safer environment and a more efficient environment.”

The process for the move began when Spartan Motors acquired Utilimaster in 2009, according to Forbes. He said planning began to make the company more efficient and profitable, which meant a new facility was needed. He said company officials looked at sites in Michigan, Indiana and in the South, but decided to stay in Elkhart County.

Asked what the determining factor was, he said it was the ability to keep the company’s production team intact.

But the key to making all the changes happen, Forbes said, is a package of incentives the company is asking for from state and local entities, including the Bristol Town Council.

David Ogle, president of the Economic Development Corp. of Elkhart County, outlined the plans with the Bristol council, which met in an informal work session Tuesday night.

Ogle said Utilimaster wants to stay in Indiana and stay in Elkhart County, although the company looked at other states before deciding on the relocation.

“We think we are competitive. We feel for Wakarusa, but it is nothing they did. It is an efficiency thing,” Ogle said.

The company will seek state and local incentives such as tax abatements and Tax Incremental Financing as it moves the operation to Bristol. The town now has two TIF districts, and may be asked to approve a third one.

Ogle said state officials are expected to act quickly on the request for aid. He said the state may be in a position to make an offer to the company within 10 days.

“We are willing to go that extra mile,” said Bristol Town Council president Floyd Lynch said Tuesday night.

“Just keep us in the loop,” he told Ogle.

The town council will hold a meeting Thursday, then another work session March 13 and regular meeting March 15.

 

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Spartan’s Still Moving MH Chassis to Elkhart Co.

February 15, 2012 by · Leave a Comment 

In a conference call Tuesday (Feb. 14) following Spartan Motor Inc.’s fourth-quarter and year-end financial report, CEO and President John Sztykiel elaborated on the company’s announcement that it would be moving operations for its Utilimaster Corp. subsidiary from Wakarusa, Ind., to nearby Bristol.

According to a transcript from the earnings call (to read the entire transcript click here), the relocation would include motorhome chassis manufacturing that was to be transferred from Charlotte, Mich., to the Utilimaster facility in 2012. He also said that production of the Reach van, a commercial vehicle currently being built in Wakarusa, would be moved to Charlotte as previously announced in 2011.

Sztykiel stated: “From an RV perspective, one of the benefits of Bristol as well is we’ve talked about moving the RV business down to Bristol, or I should say down to Northern Indiana. All the RV chassis will be built in the Bristol facility. So we’ll now be within minutes of the RV marketplace, thus improving our competitive position in a substantial way.”

RVBUSINESS.com also learned that Utilimaster will be moving into a vacant facility formerly occupied by industry supplier Odyssey Group. Odyssey began liquidating inventory in January 2009 following reports that the company was closing the Bristol plant.

Below are Sztykiel comments regarding the Utilimaster move.

“Let’s talk a few minutes about Utilimaster Bristol consolidation, of which there is a separate release on that today, an extremely exciting event. In earlier calls, Joe and I have had business with each one of you and at times you’ve all complemented us on the improvement of Utilimaster. We’ve all said that there is still much more improvement yet to be had, as there is tremendous opportunity.

Earlier today, we announced the third step in our strategic plan to meet these goals. The first step was to improve operations and profitability in the existing Wakarusa facility, a tact that we’ve accomplished and Joe is going to get into some of that detail. The second step was to bring the Reach van product to market. That was accomplished.

The third step was to look or develop the right facility operational map, and that is now in Bristol, Indiana. To give you some idea into this goal for the product and what it means, we signed a lease with Fruit Hills Investments today on the Bristol facility that will allow us to move from a sprawling 16-building campus, which is over 700,000 square feet into a more modern and efficient one-building under one roof that is about 13 years old and has about 425,000 square feet.

What’s interesting is in Wakarusa, most of the buildings are more than 40 years old with the newest being 30 years old. And to give you just a little bit of perspective, if you ever went there and you just washed your car and you drove around the facility, visiting the different buildings and again 16 buildings, so when you think about the added indirect cost, the overhead, the operating expense, the inefficiencies et cetera, when you would come out of there with a really dirty car, and then you’d walk away and say, this is absolute madness, trying to build products within 16 buildings with the average age of 30 to 40 years old.

As the release noted and please take time to look at the release, we’ll be reducing the non-value added process in material handling by over 80%. When you take a look at the length of line for a walk-in during the travel, it’ll be going from 2.5 miles to less than 0.5 mile. It’s huge simplification in the assembly process, also the ability to deliver a higher-quality product.

Third, the assembly lines in the new Bristol facility will be much more flexible. They will allow changes in the layout and equipment rather easily. It’s our expectation that the new plan will not have any permanent fixtures in place that dictate how the assembly lines must be laid out.

What’s interesting about the facility is when I first went in there, I didn’t see very many columns and whoever built the building was extremely intelligent 13 years ago, because they have very few columns, very, very high ceilings, very strong support. So from a facility’s perspective, it is ideal from a manufacturing point of view. And when I spoke about where we came from to where we’re going, we’re going from 106 acres to 26 acres.

The reality is facility’s operations is no different than your house. If you have a large house, over time you’re just going to buy a lot of stuff and you’re probably not going to use it and you’re going to accumulate it. You’re not going to manage a personal sheet and cash very, very well. The same is true in a business. You go from 106 acres to 26 acres. I have no doubt our inventory turns will go up, our inventory will come down and we will see significant cash balance sheet improvement in the new Bristol facility. Why? Because you just have less space. So as we look forward, we’re extremely excited.

Fourth, the working process from one plant to another, and as mentioned in the release, these changes should result in annual cost saving reductions of $4 million a year at a minimum. So when you look at Utilimaster and you’ve heard Joe and I talk over the last 12 months while you’ve complemented us on the rate of improvement, et cetera, this is the third step of the plan. And we have several steps yet to execute, but in 2012, we will be very focused on bringing horizon on line to ensure that we see the operational benefits late in the second half and throughout all of 2013.

From an RV perspective, one of the benefits of Bristol as well is we’ve talked about moving the RV business down to Bristol, Indiana, or I should say down to Northern Indiana. All the RV chassis will be built in the Bristol facility. So we’ll now be within minutes of the RV marketplace, thus improving our competitive position in a substantial way.

At the same time, just to reiterate, when that happens, we will be moving the Reach van production from Indiana up to the Charlotte campus. So from an Isuzu partnership perspective, everything with and around Isuzu will be located in Charlotte, Mich.”

 

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Spartan Motors Posts Lower 4Q Revenue, Profits

February 14, 2012 by · Leave a Comment 

Spartan Motors Inc. today (Feb. 14) announced operating results for the fourth quarter and full year 2011.

Revenues for the fourth quarter of 2011 were $111.2 million, down 12% from the fourth quarter of 2010. Most of the decline in sales compared to the fourth quarter of 2010 was due to a non-recurring order for defense parts in the prior year. Revenue in the fourth quarter of 2011 was also negatively impacted by delayed shipments of the Reach commercial van and some walk-in vans. Net income for the fourth quarter of 2011 was $0.7 million, or $0.02 per diluted share, compared to net income of $3.4 million, or $0.10 per diluted share.

Revenue for the full year totaled $426.0 million versus $480.7 million in 2010, a decline of 11.4%. Declines in defense-related chassis and service parts sales, along with general softness in most other business units accounted for lower revenue compared to 2010. Partially offsetting weaker segments was the Delivery and Service business, which posted a sales gain of 46.5%t for the year.

Gross profit for the year totaled $60.6 million, or 14.2% of sales, for 2011. For 2010, gross profit totaled $72.5 million, or 15.1% of sales. Lower gross profit in 2011 was due to lower total revenue as well as the lack of higher-margin defense parts sales and a less profitable product mix in the Emergency Response Bodies business.

“As we focus on 2012, we will continue to execute our plan, a blended strategy of acquisitions, alliances, organic growth and systematically reducing our operating costs,” said John Sztykiel, President and CEO of Spartan Motors. “Our total order backlog increased nearly 2% over the fourth quarter of 2010, with Utilimaster more than doubling its backlog compared to last year. We reduced the lead time to produce an Emergency Response chassis from seven months to four, significantly shortening our cash conversion cycle. We accomplished all of this despite operating in challenging markets. We are dedicated to capitalizing on the progress we have made and expect to deliver sustained revenue and profit growth in 2012 and beyond.”

To view the entire report click here.

 

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Spartan Motors Relocating Utilimaster Operations

February 14, 2012 by · Leave a Comment 

Spartan Motors Inc. today (Feb. 14) announced that it will relocate Utilimaster Corp.’s manufacturing operations, headquarters and all supporting departments and functions to Bristol, Ind., from the current location in nearby Wakarusa. The move is expected to begin during the second quarter of 2012 and be completed by year end.

According to a press release, the final lease agreements are pending as company officials are working closely with leaders from state, county and local government in Indiana to finalize the negotiation of incentives for the relocation, which will result in continued economic growth and stability for Utilimaster, as well as the Elkhart area.

The move to Bristol, located 20 miles east of Wakarusa, will consolidate Utilimaster’s operations into one facility from its current campus of 16 buildings. Moving into a single plant, combined with lean manufacturing practices, will enable Utilimaster to improve product quality and manufacturing efficiency by reducing operating costs and eliminating non-value added steps. Other highlights include:

• Reducing footprint from 760,000 to 425,000 square feet.

• Campus shrinks from 106 to 26 acres.

• Estimated annual savings of $4 million.

• Improved manufacturing flow, containerization and kitting.

• 80% reduction of material/vehicle movement.

• Production lines will accommodate multiple platforms.

• Increased sub-assembly capacities.

• A new manufacturing showcase for customers.

“The competitive nature of the delivery and service market requires that we continuously assess and improve our operations,” said Tom Gorman, COO of Spartan Motors, parent to industry supplier Spartan Chassis Inc. “The relocation to the Bristol plant will create a safer manufacturing environment for our associates and a platform from which we can accelerate our ongoing quality improvement efforts, in order to grow the Delivery and Service business in the future.

“While Utilimaster continues to perform well, we are taking these steps to ensure the business remains competitive in the long term. The dramatic reduction of non-value added operations represents an opportunity to reduce costs, and we’re focused on ensuring this strategy delivers the right results.”

The Bristol facility features over 425,000 square feet of contiguous manufacturing space that will enable continuous flow and improved work cell layout.

“Utilimaster has experienced significant growth since we acquired the company more than two years ago,” said John Sztykiel, president and CEO of Spartan Motors. “Their successful integration has exceeded our acquisition performance targets and is an important part of Spartan today. Ensuring Utilimaster’s long-term growth and profitability are driving our actions as we consolidate Utilimaster into one modern facility.

“This is the third step of our strategic plan to enhance Utilimaster’s performance. Our first step was to improve operating income in the current facilities; and the second was to bring the Reach to market. Our third step is to consolidate Utilimaster into one modern facility in order to enhance further operational efficiency and income.”

Reflecting the current weakness in the commercial real estate market in Wakarusa, the company will incur an asset impairment charge of $4 million to $6 million in the first quarter of 2012 as a result of closing the facility.

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Delivery Vehicles Boost Spartan 3Q Revenues

October 26, 2011 by · Leave a Comment 

Charlotte, Mich.-based Spartan Motors Inc. today (Oct. 26) announced improved operating results for the third quarter of 2011 reflecting significant gains in its delivery and service vehicles segment and the ongoing benefits of actions taken earlier in the year to realign operations.

Revenues were $120.3 million, up 21% from the second quarter, driven by increased sales in the delivery and service segment ahead of the peak holiday season, which offset softness in other markets Spartan serves. Also contributing to the improvement in third quarter revenues were sizable orders for aftermarket parts and assemblies. Improved product mix and initial cost savings due to Spartan’s operational realignment in the previous quarter resulted in net income of $3.2 million, or $0.10 per diluted share.

Third quarter 2011 results:

• Net sales of $120.3 million (flat with Q3 2010 sales of $120.6 million).

• Gross margin of 17% of sales (up from 16.4% in Q3 2010)

• Operating expense of $15.2 million (up $0.8 million compared to Q3 2010)

• Net income of $3.2 million 10 cents per diluted share), down from $3.3 million (11 cents per diluted share) a year ago

• Cash from continuing operations of $26.4 million (for the first nine months of 2011)

• Ending consolidated backlog of $142.8 million (down 20.4 percent from Q2 2011)

• Total debt of $5.2 million

• Cash balance of $30.5 million (up $16.0 million from Q4 2010)

“Our top line performance highlighted the strength of our diversified business lines as solid growth in Utilimaster’s business drove outstanding results in our delivery and service vehicles segment,” said John Sztykiel, president and CEO of Spartan Motors. “The performance at Utilimaster helped to offset softness in the recreational vehicle, emergency response and defense markets and helped reduce our exposure to government-dependent revenue streams.

“Our net income for the third quarter validates the restructuring actions we have taken over the last several months and demonstrates our ability to drive significant leverage to the bottom line. Our relationship with Isuzu grows stronger as we approach full capacity with production of the N-Series Gas cab and chassis. As we begin generating sales of the Reach commercial van that will also help us achieve a more diversified revenue mix.”

To view the full report click here.

 

 

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Spartan, Isuzu Launch Reach Delivery Vehicle

October 25, 2011 by · Leave a Comment 

Reach delivery vehicle

Utilimaster Corp., a subsidiary of Charlotte, Mich.-based Spartan Motors Inc. specializing in walk-in vans and commercial truck bodies for the delivery and service market, and Anaheim, Calif.-based Isuzu Commercial Truck of America, Inc., one of the world’s largest manufacturers of medium- and heavy-duty trucks, jointly launched the Reach commercial van today (Oct. 25) at Spartan’s Utilimaster plant in Wakarusa, Ind.

Senior management from Utilimaster, Spartan and Isuzu held a ribbon-cutting ceremony and ceremonial gift exchange before an audience of customers, government officials, regional media and special guests.

“The Reach represents a great opportunity to impact our customers’ businesses, significantly reduce both fuel consumption across their fleets as well as their carbon footprint,” said Utilimaster President John Forbes. “Today is the culmination of a focused program that benefited from the global resources and power train capabilities of Isuzu and the market-specific knowledge and product development capabilities of Utilimaster.”

“We are leading – not following – the changing needs of the marketplace,“ Spartan President & CEO John Sztykiel told the assemblage, adding that the Reach is “the biggest breakthrough in the commercial van marketplace in the last 30 years” because of its styling, fuel-conscious drivetrain and durable chassis.

First introduced in March, the Reach – with a Utilimaster-designed body atop an Isuzu NPR ECO-MAX chassis powered by Isuzu’s 3.0-liter diesel engine – offers the functionality of a custom-built work truck along with the styling and ergonomics of a cargo van, Spartan reports. Fuel economy is a key selling point of the Reach, according to Spartan, which claims that it yields 35% better fuel economy than a traditional commercial van.

Spartan claims the Reach offers “best-in-class mileage” and meets EPA emissions standards, yet still provides true commercial truck capabilities and delivers a dramatically lower cost of ownership than traditional walk-in vans.

“The continued diligent work of everyone involved on this product has positioned us for further growth in the delivery and service market,” Sztykiel commented. “Today we celebrate the success of this team and their ability to produce a sustainable product that meets the duty-cycle demands of our customers, improved safety performance and driver ergonomics, as well as an exceptionally low cost of ownership.”

“Powering the Reach is Isuzu’s state-of-the-art, bio-diesel fuel compatible 4JJ1-TC 3.0-liter turbocharged engine mated to an Aisin medium-duty 6-speed automatic transmission,” Spartan’s release states. “Both the engine and transmission have class-leading B10 durability ratings of 310,000 miles, meaning that 90% of units will reach that mileage before requiring an overhaul.

“Utilimaster guided the development of the Reach’s aerodynamic shape, along with its use of composite materials, which together improve fuel efficiency and reduce interior noise,” the release continues. “The lightweight composite materials provide a 700-pound weight savings compared to traditional aluminum and steel materials. The Reach van also employs impact-resistant composite panels designed to reduce overall maintenance costs.”

Spartan’s new Reach, which some in the industry have speculated could have small motorhome applications, has a 151-inch wheelbase and is available in 12-and-14 foot body lengths. With an interior up to 27 inches higher than a conventional domestic van — and ten inches wider than imported vans — the Reach’s cargo area offers 540 or 630 cubic feet of storage, depending on the body length selected, Spartan reports.

Meanwhile, Hodge Patel, district director for 2nd District Rep. Joe Donnelly, told the Utilimaster crowd that the Reach launch represented yet another step in the recovery of Elkhart County, where the unemployment rate exceeded a “staggering” 20% in March of 2009 during the pit of the recession. Patel applauded Spartan for taking an inventive approach in new product development that helped bring jobs to the area. “We see it right here behind us – a light weight vehicle, better fuel efficiency and a better design,” said Patel.

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Spartan Keeps on Rolling, Even in Tough Times

August 8, 2011 by · Leave a Comment 

The following is a column authored by Tom Walsh of the Detroit Free Press offering a look at Spartan Motors Inc.’s ability to roll with the times.

“Adapt. Evolve. Lead.”

John Sztykiel, president and CEO of Spartan Motors, kept repeating that mantra during our breakfast last week.

It may be the only way for him to keep his sanity.

In a topsy-turvy business world typified by last week’s stock market spasms, few companies have endured more extreme ups and downs in the past few years than Spartan Motors.

Left defenseless

When I wrote in 2007 about Spartan — a builder of custom chassis and motor vehicles — the company was on a roll.

The Iraq war was in full swing and Spartan had suddenly become a favored supplier of Mine Resistant Ambush Protected (MRAP) armored vehicles to the U.S. military.

For a modest outfit whose previous product mix was mostly fire engines, ambulances and motorhome chassis, “it was like a gold rush,” Sztykiel recalled.

Employment at Spartan, based in Charlotte, about 20 miles southwest of Lansing, doubled to more than 1,000 within 20 months. Sales jumped 89% in two years, but then, as the Iraq war wound down and MRAP orders dried up, plummeted from $844 million in 2008 to $409 million a year later.

Net profit plunged from $42 million in 2008 to $12 million in 2009 and $4 million last year. Spartan started this year with two quarterly losses. Its stock price, near $25 per share in 2007, fell 90% to barely $2 in late 2008 and ’09, and has recently traded near $5, closing Friday at $4.51.

Changing the mix

Sztykiel and his team have had to reinvent Spartan — and they appear to be making progress. Order backlogs have risen 33% so far this year to $179 million.

The big move to shift away from reliance on military orders was the acquisition in late 2009 of Utilimaster, an Indiana-based maker of delivery and service vans.

“Internet shopping and other changes in society are working in their favor,” Sztykiel said of Utilimaster vans used by such companies as UPS and Federal Express.

An alliance with Isuzu followed. Three months ago, Spartan began assembling Isuzu N-series commercial trucks in Charlotte. The N-series had been built at General Motors’ Janesville, Wis., plant until it closed in 2009.

Meanwhile, Isuzu and Utilimaster are partnering on a next-generation commercial van called the Reach, which promises 35% fuel-economy improvement in the segment.

“In 2008,” Sztykiel said, “89% of our business was government-related, including military and emergency-response vehicles. Now it’s only 45% government and 55% private.”

Spartan’s employment in the Charlotte area fell to around to 600 with the decline in MRAP orders, but the ramp-up of Isuzu N-series work has recently added 56 jobs and total Spartan employment is expected to reach 1,750 by year-end, with the biggest clusters in Michigan and Indiana.

Sztykiel expects a return to profitability the second half of this year.

And true to his adapt-evolve-lead mantra, he’s scouting for new revenue streams.

The step-van truck segment where Utilimaster is a market leader “is about 12,000 trucks a year,” he noted. “But the larger market for commercial vehicles, where Ford and Nissan and others play, is about 225,000 units a year.”

“Now if we snag just 2% of that, it would be nearly 5,000 units a year and 400 or 500 more employees …”

 

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Spartan CEO Sztykiel Still Upbeat on RV Sector

July 27, 2011 by · Leave a Comment 

Editor’s Note: The following is a blog authored by Julian Gothard for Examiner.com.

John Sztykiel, president and CEO of Charlotte, Mich.-based Spartan Motors Inc., said during Tuesday’s (July 26) webcast following the company’s second-quarter earnings report that he remained bullish about Spartan’s future prospects in spite of the company recording a Q2 adjusted net loss of $424,000. The loss came on the back of $2.8 million in restructuring charges and a dramatic 14% drop in sales which cost the company some $16 million in lost revenue.

Sztykiel, who expects growth in both company revenue and earnings in the second half of the year, was upbeat about Spartan’s performance in the recreational vehicle market where, in spite of a slight improvement in the RV market as a whole, Spartan experienced a 26% fall in chassis sales. The Spartan CEO noted that the motorhome sales mix has shifted from high-end diesel to less expensive models in the Class A and Class C markets with some existing customers downsizing and new customers opting for smaller sized motorhomes.

As reported in June, Spartan Motors is relocating in 2012 their motorhome chassis manufacturing operation from Charlotte, to Wakarusa, Ind. Northern Indiana is home to many of Spartan’s chassis customers. Indeed, more than 60% of all RV’s and 58% of all Class A motorhomes are manufactured in the Hoosier State.

Sztykiel reiterated that Spartan’s current focus will remain on motorized RVs principally because of the size of the RV market from a dollar perspective and the RV market’s continued popularity amongst vacationers. An “RV is not only … inexpensive but it gives you the freedom to go wherever you want whenever you want. Thus as we look to the future we’re still very, very excited about it,” he said.

 

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Spartan, Utilimaster Granted Tax Abatement

June 9, 2011 by · Leave a Comment 

The Wakarusa (Ind.) Town Council passed two resolutions declaring certain Utilimaster Corp. properties as revitalization areas for the purpose of 10-year tax abatements on both real and personal property for Utilimaster and Spartan Motors Inc., which owns Utilimaster.

According to the Goshen News, Utilimaster will be making real estate improvements of approximately $1.88 million, including adding about 6,000 square feet to Plant 11. The company committed to adding 60 additional jobs in return for the tax abatements.

Council member Phil Klotz said Spartan Motors will move part of its motorhome chassis department from Charlotte, Mich., to Wakarusa.

The tax abatement amounts to 100% the first year and goes down to 5% in the 10th year. Although the official abatement documents state the company will be adding 60 jobs, a sign by the road outside the plant says the company is hiring 100 people.

In a separate article, the South Bend Tribune reported that the Spartan chassis will be made at a building already on the Utilimaster property, which consists of four manufacturing and 15 additional buildings.

“One of our 10 strategic directives is customer-centric because in any business model, the closer you can get yourself to the customer, typically the easier it is to be more effective and efficient in growing the business relationship,” John Sztykiel, president and CEO of Spartan Motors, said. “Eighty-two percent of all recreational vehicles are manufactured in northern Indiana.

According to the state, Elkhart County will consider additional property tax abatement at the request of the Economic Development Corp. of Elkhart County. But Sztykiel seemed to downplay the role the incentives played in making the move in a phone interview with the Tribune on Wednesday (June 8).

“Indiana’s a great state and they have done a lot of things right from a business perspective,” he said. “But it simply boils down to we are within minutes of where 80% of the industry is, so just pure logic said this is the right thing to do.”

It was the company’s long-range thinking when it purchased Utilimaster in 2009, he said, adding that the company hopes for additional growth in the future.

“Obviously if the business grows, which we expect it to over time, from an RV perspective, our business would grow,” Sztykiel said.

There is not a whole lot of automation in the production of chassis so if sales grow, so will the work force, he said.

Sztykiel also noted that University of Michigan economist Richard Curtin, an RV industry adviser, has been stressing how speed to market will be even more critical as time goes on because people expect to have their product much faster.

The move of the chassis division ties in directly with that thought process, Sztykie said.

Spartan Motors was formed outside of Lansing in 1976 when a small group of automotive engineers, who had lost their jobs when their company went bankrupt, launched their own business. Today, it employs approximately 1,600 in six states and had $481 million in sales in 2010.

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