Spartan, Utilimaster Granted Tax Abatement

June 9, 2011 by · Comments Off on Spartan, Utilimaster Granted Tax Abatement 

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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Spartan Relocating RV Chassis Unit to Indiana

June 8, 2011 by · Comments Off on Spartan Relocating RV Chassis Unit to Indiana 

Charlotte, Mich.-based Spartan Motors Inc., a manufacturer of specialty chassis and vehicles, will be relocating its motorhome chassis manufacturing operations to Wakarusa, Ind., from Michigan and creating up to 60 new jobs by the second half of 2012.

The company, which acquired Wakarusa-based Utilimaster Corp. in 2009, plans to invest an estimated $1.8 million on machinery, equipment, tooling and facilities, according to a press release.

“It’s becoming well-known that Indiana’s automotive and RV workers are some of the best in the world and Utilimaster’s expansion in Elkhart County is further validation of the strength and value of the Hoosier work force,” said Gov. Mitch Daniels.

Spartan Motors acquired more than 550,000 square feet of manufacturing capacity in it purchase of Utilimaster. Operations consist of four manufacturing and 15 sub-assembly, support and paint plants. The company will continue to employ its existing work force of nearly 600 associates at this location.

“Eighty-two percent of all recreational vehicles are manufactured in Northern Indiana,” said John Sztykiel, president and CEO of Spartan Motors. “By moving production of RV chassis to Wakarusa, we can improve operational execution through alignment of strategic assets with the geographic location of our customer base. This initiative allows for effective and efficient collaboration with our customers, as well as reaffirms our commitment to the industry.”

The Indiana Economic Development Corp. offered Spartan Motors up to $450,000 in performance-based tax credits and up to $75,000 in training grants based on the company’s job creation plans. Elkhart County will consider additional property tax abatement at the request of the Economic Development Corp. of Elkhart County.

“John Forbes and team have been collaborative partners with the EDC of Elkhart County,” said Dorinda Heiden-Guss, president of the Economic Development Corporation of Elkhart County. “We continue to see enhanced efficiencies and increased employment through their innovation. We are fortunate to have Utilimaster as a growing and expanding business in Elkhart County.”

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Utilimaster to Make Isuzu Commercial Vans

March 9, 2011 by · Comments Off on Utilimaster to Make Isuzu Commercial Vans 

The Utilimaster Corp. in Wakarusa, Ind.,, a subsidiary of Spartan Motors Inc. announced today (March 8) that the Reach, a commercial van offering over 35% better fuel efficiency, made its world debut today at the 2011 National Truck Equipment Association’s (NTEA) The Work Truck Show.

Executives from Utilimaster and Isuzu Commercial Truck of North America conducted a joint unveiling at the opening of the The Work Truck Show before a large audience. This commercial van is offered with three sizes of 450, 530, 640 cubic feet of cargo capacity and is scheduled for full production in the second half of this year, according to a news release.

This is the first commercial van to effectively meet the needs of two market segments. The durability, cargo capacity, fuel efficiency and extensive green features make it the best business decision for large fleets. But it is the modular commercial vocational packages — designed to take full advantage of the van’s expansive aisle width and headroom – that give the Isuzu dealer network a no-compromise solution for the thousands of fleets they serve in North America.

The Reach sets a new engineering and design standard in the commercial van market by delivering significant improvements across five performance vectors: cost of ownership, capacity/efficiency,  durability,  green and safety.

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Utilimaster Corp. Closes 2 Plants Due to Storm

June 24, 2010 by · Comments Off on Utilimaster Corp. Closes 2 Plants Due to Storm 

One of  biggest companies in Wakarusa, Ind., shut down two of its plants today (June 24) because of storm damage from the previous night.

According to WNDU-TV, South Bend, the west wall caved in on one of the Utilimaster Corp. buildings and there was also roof damage. Company officials have closed plants 16 and 17 for the time being. The plants are located on S.R. 19 on the town’s east side.

Utilimaster, a subsidiary of Spartan Motors Inc., makes walk-in vans, parcel delivery vans, truck bodies and other specialty vehicles and was originally a key part of Holiday Rambler Corp., the original facilities of which, now occupied by Monaco RV LLC, are located nearby.

Winds clocked as high as 100 mph struck Goshen, located east of Wakarusa, minutes later. A tornado touched down just east of the city’s airport.

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Spartan Motors/Isuzu Announce Strategic Pact

April 23, 2010 by · Comments Off on Spartan Motors/Isuzu Announce Strategic Pact 

Spartan Motors Inc. announced Thursday (April 22) a strategic alliance with Isuzu Commercial Truck of America Inc., a market leader in Class 3 through 5 trucks, to assemble Isuzu’s gasoline-powered N-series chassis.

In addition, Spartan subsidiary Utilimaster Corp. and Isuzu have agreed to develop a next-generation commercial van, utilizing an Isuzu fuel-efficient diesel powertrain.

“We expect these agreements to be the beginning of a long-term relationship with one of the leading diesel engine and commercial vehicle manufacturers in the world,” said John Sztykiel, president and CEO of Spartan Motors. “This relationship with a market leader like Isuzu enhances Spartan’s ability to leverage our capacity and engineering and manufacturing expertise, which is critical as the landscape for the commercial vehicle market is being transformed by economic, environmental and regulatory forces even as the market is poised for growth.”

Under the terms of the agreement, Spartan will assemble the newly reintroduced Isuzu N-Series chassis, a low-cab-forward chassis powered by a General Motors 6.0-liter V-8 gasoline engine. The chassis will be built to Isuzu’s specifications using a General Motors powertrain at a Spartan assembly facility. Initial production of the N-series chassis is set to begin in the second quarter of 2011.

Shaun Skinner, executive vice president and general manager of Isuzu  Commercial Truck of America, commented: “The reintroduction of this product  rounds out the traditional Isuzu product line and positions our dealer base to  once again offer the broadest line of low-cab-forward solutions.”

In addition to the N-Series chassis assembly agreement, Utilimaster and Isuzu have entered into an exclusive agreement  under which Utilimaster will use Isuzu’s diesel chassis to power a next-generation commercial van currently under development by the two  companies.

“We have worked extensively with key customers to develop this product from  the ground up, and the response to the vehicle thus far has been very  encouraging,” said John Marshall, senior vice president of sales and marketing  for Utilimaster. “This next-generation vehicle offers best-in-class fuel  economy and lower total cost of ownership, while offering important additional  features to support commercial van customers, including a distinctly  automotive aesthetic, which we believe will set it apart in the market.”

Key specifications for the next-generation van include:

  • The van will be rated up to 12,000 pounds GVWR and will be produced in a number  of models with cargo capacities up to 600 cubic feet.
  • The new line will be powered by an Isuzu 4-cylinder, 3-liter engine that delivers 150 hp.
  • The engine is 2010 EPA and CARB OBD compliant, offering best-in-class fuel economy.
  • The model 4J truck diesel engine and 6-speed automatic transmission used in the new line offers a B10 engine life of 310,000 miles, which means that 90% of these engines and transmissions will go more than 310,000 miles  before requiring major service
  • Models will feature lower floors to allow for easier entrance and egress and  a taller interior height in the cargo area to allow for walk-through  capability in the cab and cargo areas

Spartan and Isuzu said their combined effort is the first in the industry to offer an integrated design for heavy-duty commercial vans specifically designed to reduce the cost of ownership while setting a new standard for fuel economy and reduction of carbon emissions. Spartan and Utilimaster anticipate using the new product line to expand their breadth of its addressable market.

Initial prototypes of the new commercial van are scheduled to be introduced in the third quarter or early in the fourth quarter of 2010, with full production scheduled to commence in the second half of 2011.

“We see our global assembly and product development alliance with Isuzu as a critical step in leveraging our core chassis and vehicle experience, while simultaneously expanding our end market potential,” noted Sztykiel. “Just as the Isuzu relationship is a starting point, not an end point, the same is true with Utilimaster and the commercial van platform; over time it will be about more than delivery and service.

“The new van project has been in development for more than 18 months and represents a significant portion of our R&D spend. It clearly positions Utilimaster for market share gains and a proprietary platform for entering new delivery and service niches, while taking advantage of other market applications over time. This agreement marks the early achievement of some of the promise we saw when we acquired Utilimaster last year and the continuation of the innovation trend that has been one of Spartan’s hallmarks since our founding.”

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Spartan Motors Inc. to Acquire Utilimaster for $45M

November 19, 2009 by · Comments Off on Spartan Motors Inc. to Acquire Utilimaster for $45M 

Utilimaster logoSpartan Motors Inc. today (Nov. 19) announced it has reached an agreement to acquire Utilimaster Corp. from John Hancock Life Insurance Co., a unit of Manulife Financial Corp., a leading Canadian-based financial services group, in an all-cash transaction valued at approximately $45 million.

Utilimaster is a dominant manufacturer of specialty vehicles made to customer specifications in the delivery and service market, including walk-in vans and hi-cube vans, as well as truck bodies, according to a news release.

Charlotte, Mich.-based Spartan said the acquisition of Utilimaster is expected to add approximately $105 million in annualized revenues and be slightly dilutive to earnings in the first full year and accretive by year two. Utilimaster has approximately 550 employees and more than 550,000 square feet of manufacturing capacity at its corporate headquarters in Wakarusa, Ind.

“This acquisition represents a major strategic step forward to diversify our revenue stream into new end markets that offer growth potential and are not directly dependent on government funding or consumer spending,” said John Sztykiel, president and CEO of Spartan Motors. “The two companies share similar cultures, a focus on premium products and innovation, and management depth that make this an ideal fit. We also gain entry into the North American delivery and service market, add fabrication and vehicle body expertise, benefit from Utilimaster’s strong brand, market share position and blue-chip customer base, and create opportunities to leverage future Spartan chassis growth.”

The majority of Utilimaster’s revenues are in the delivery and service market, which includes walk-in vans for the package delivery, bakery/snack delivery and linen/uniform rental markets. Its remaining revenues are attributable to commercial truck bodies, along with service, parts and accessories.

Spartan’s CFO Joe Nowicki commented: “This transaction creates the opportunity to leverage our strong balance sheet, while providing opportunities for growth in a business that is very scalable but not capital intensive, much like our current market. We also expect to see immediate operational and financial synergies, including achieving purchasing leverage in raw materials and driving joint R&D and product development efforts.

“We as a Spartan leadership team set out with a purposeful process and criteria in evaluating both organic market entries and acquisitions to diversify our business risk and growth potential. Utilimaster hit our targets for cultural fit, market potential and financial metrics, including sustained profitability and market share gains amidst an industry that has declined by 50 percent due to macro-economic conditions.”

Under the terms of the purchase agreement, Spartan will pay $50 million in cash, less a net working capital adjustment. In addition, Spartan has agreed to pay contingent earn-out payments of up to $7 million based primarily on the Utilimaster operation exceeding revenue milestones. The acquisition will be financed with a combination of cash and debt with an expected closing date for the transaction of Nov. 30, subject to the fulfillment of customary closing conditions.

Spartan had approximately $48 million in cash and cash equivalents and an additional $50 million in availability under its line of credit as of Oct. 30.

“We are pleased to join forces with the Spartan Motors team,” said Mike Kitson, Utilimaster president and CEO. “Spartan and Utilimaster share a similar business model, complementary team culture and financial discipline – focused on return on invested capital – that bode well for our continued momentum in the marketplace. Based on the excellent strategic fit, I am convinced our organizations will be stronger together as we seek to leverage operational best practices and attack new growth markets beyond those we could penetrate individually.”

Spartan Motors will host a conference call for analysts and portfolio managers at 1 p.m. EST today to discuss the acquisition. To listen to a live webcast of the call,  visit, click on “Shareholders,” and then on “Webcasts.”

About Utilimaster

Established in 1973, Utilimaster  is a leading manufacturer of walk-in vans and commercial truck bodies for the delivery and service market place. As one of the most respected and trusted manufacturers of commercial vehicles, Utilimaster designs, develops and manufactures products to customer specifications for use in the package delivery, one-way truck rental, bakery/snack delivery, utility and linen/uniform rental businesses. The company serves a diverse customer base and also sells aftermarket parts and accessories.

About Spartan Motors

Spartan Motors Inc. designs, engineers and manufactures specialty chassis and vehicles for the recreational vehicle, fire truck, ambulance, emergency-rescue and defense/specialty markets. The company’s brand names – Spartan, Crimson Fire, Crimson Fire Aerials and Road Rescue – are known for quality, value, service and being the first to market with innovative products. The company employs approximately 1,000 at facilities in Michigan, Pennsylvania, South Carolina, South Dakota and Texas. Spartan reported sales of $844.4 million in 2008 and is focused on becoming a global leader in the manufacture of specialty vehicles and chassis.

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