Polaris meeting location changed

Polaris Industries' Osceola facility at 850 Seminole Ave.

In what it calls a realignment of its operations, Polaris Industries announced last week that it will shut down its Osceola manufacturing facility.

Polaris officials announced in meetings with its approximately 560 employees and Osceola community officials throughout the day last Thursday that it is considering opening a new facility in the Monterrey/Saltillo area of Mexico. The company said it would also enhance its operations in Roseau, Minn., and Spirit Lake, Iowa.

The Medina, Minn.-based manufacturer of snowmobiles, all-terrain vehicles and Victory motorcycles plans to phase out the Osceola operation over the course of the next 18 to 24 months.

In a prepared statement, the company said it intends to sell some segments of the Osceola operation to suppliers, who will continue to manufacture parts and components for Polaris. Some other operations will be outsourced.

“While this was a difficult decision for us, given the impact on our employees at the Osceola facility, we believe the creation of these manufacturing centers of excellence will strengthen our company over the long-term and enable us to maintain our lead in a competitive market,” Polaris CEO Scott Wine said in a prepared statement.

The announcement comes even as Polaris has recently touted increases in sales and income in the first quarter of 2010 amid reports of a recovering economy.

In an April 21 financial statement, the company said its sales were up 16 percent over last year’s first quarter, with net incomes increasing by 127 percent to a record high of $19.8 million. They announced additions to their Breeze line of electric vehicles. They reported sales of $1.6 billion in 2009, according to trade journals.

The company also announced this week an expansion of its subsidiary operations in Brazil, to establish a bigger presence in that country’s markets.

Polaris said it will operate the Osceola plant during the transition and will offer affected employees severance benefits. The company said it plans to work closely with the Wisconsin Department of Labor and other state and local agencies to offer employment assistance and other services.

Employees stunned

Rumors about possible mergers, expansions or other changes circulated within the company for months, Polaris employee Shane Marko said.

“We heard Ski Doo. We heard Arctic Cat [would be merging],” Marko said.

But none of them were accurate.

In a well-choreographed series of announcements, the company began announcing to lower management employees Thursday morning and met with employees company-wide at 2 p.m., between the first and second shifts.

Only a few management level-employees knew what was coming. Those who knew signed confidentiality agreements with the company.

“It’s been in the works for about five months,” said Marko, who works as a process technician in Polaris’ seat manufacturing division. “This was very well done. Nobody knew.”

After the announcement, second shift employees were allowed to leave for the day.

Local law enforcement and additional security personnel were brought in Thursday to handle any negative reactions from employees.

Marko and others headed to a local bar, where they chatted about the announcement and watched televised news coverage of the announcement.

“It’s just stunning,” Marko said.

Marko guessed the announcement would have a considerable effect on the local community.

About 80 percent of the company’s employees locally live within 30 miles or so of the plant, Marko guessed. He said he’s aware of more than a few husband-and-wife couples who work at the plant.

“We’re very close to this area,” Marko said.

Al Hogen, director of operations at the Osceola facilities, noted that Thursday was a difficult day for employees.

“It certainly is a difficult message that we’re sharing here,” Hogen said.

Hogen said the company planned to “work through the timelines” with employees in the coming weeks to provide greater detail as to when, and where, components of the Osceola plant and the related jobs will be going.

“Our first priority is going to be just making sure our people are taken care of,” Hogen said.

While difficult to swallow, Hogen said Polaris’s decision was strictly business.

“The team here has performed in a fantastic manner,” Hogen said. “This had nothing to do with the people here, this team.”

Hogen said the company is trying to negotiate the sale of its stamping and seat manufacturing systems — manufacturing components that currently aren’t part of Polaris’s three core “centers of excellence” business models — to a supplier or another company.

Such a move could spare up to 200 jobs from relocation, Hogen said.

“In the worst case, we would move those jobs as well,” Hogen said. “We’re trying to see how we can keep a base of jobs here.”

— Sun staff member Carrie Larson contributed to this report

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