Four months ago, John Collins, vice president of the consumer business for Textron Specialized Vehicles, talked with us here about Textron’s purchase of Arctic Cat.
The interview occurred just six weeks after the sale of Arctic Cat to Textron was finalized. In terms of what Arctic Cat would look like under Textron ownership, that first interview offered only a few broad-brush strokes, and less specific detail.
Now that we’re nearly six months into the new Arctic Cat and Textron Off Road, Collins (above right, shown talking with Arctic Cat legend Roger Skime) offers new insight into the integration; what they’ve learned about Arctic Cat and its loyal customers; the just-released model line of ATVs and side-by-sides; and more.
AI: Thanks again for taking time to talk John. Like many Arctic Cat fans, I care deeply about the brand and am curious about how the last six months have gone. In general, how’s it been for both Textron and Arctic Cat?
Collins: It’s been great. We completed the acquisition in early March. Most individuals expect that on the first day, all systems, employees, products and process will fall into order. It’s natural to think that, but it doesn’t happen. Less integration happens before the acquisition is final than what people expect. This is the first public acquisition that I’ve personally been a part of, and the same is true for most of us at Textron Off Road and Arctic Cat but that’s no excuse, we’ve implemented a lot of great things in a short amount of time.
In terms of personnel, we’ve consolidated the sales team, because we wanted a unified approach to dealers for the various product lines we offer. We also consolidated the marketing teams to ensure that we have and deliver a consistent message.
We made decisions to invest where to build product, including moving the Stampede line from Augusta, Ga., to Thief River Falls, as well as moving production of the Textron Motors 850 engine to St. Cloud, Minn. Those were great, correct decisions, but of course it’s meant a lot of work.
We’ve consolidated engineering teams on the dirt product. We hired Craig Kennedy to run the snowmobile division as Vice President, Snow. Craig has had a longstanding, successful career at Arctic Cat with broad knowledge of engineering, sales and marketing.
We hosted eight dealer meetings throughout North America, with more than 500 dealers opting to invest and carry product that they didn’t have before, whether that is E-Z-GO, Stampede or Arctic Cat.
Really, it’s been fast and furious. We’ve made great progress, but there’s still more to be done.
AI: What specifically are you thinking of when you say that?
Collins: Both us, and our dealers, want to see the integration of Arctic Cat and Textron Off Road happen faster, especially the communication system. Kevin Holleran [President and CEO of Textron Specialized Vehicles] says we need to be easier to do business with, which I agree with. We’re focused on improving these systems.
New products are the other area: We talked about Wildcat XX and Havoc, our two soon-to-come performance models. As we told our dealers, Havoc will be released this fall and the Wildcat XX will be coming in the spring of 2018
AI: I’m going to come back to specific product in a moment, but first I want to hear what have you and other Textron leadership learned about Arctic Cat the company, as well as dealers and customers that maybe you didn’t know back in early spring?
Collins: We knew that people were passionate about brand. That’s been reaffirmed many times over in recent months!
We’ve learned that Textron Off Road and Arctic Cat are full of hard working, passionate and smart employees who are capable of so much, in Thief River Falls, St. Cloud and Augusta.
Our dealers’ passion has also been great. They’ve embraced Stampede, which has been gratifying to see. Retail of Stampede is going very well, but we’re not feeding inventory to our dealers fast enough. We had hoped to be able to ramp up production faster than we’ve been able to, in order to match demand.
AI: Textron Off Road just released its 2018 model line of ATVs and side-by-sides. To be honest, there wasn’t much new in the just-released line. Why is that?
Collins: As I mentioned earlier, from an outside view, like you, I think consumers expected an entirely new product line with an acquisition like this one. Again, we’re only at the 6-month marker and new product development cycles take 2-3 years (sometimes longer). For this first wave of 2018 Textron Off Road units, we needed production-ready machines to go down the line which consisted mostly of the legacy Arctic Cat products like Wildcat and Alterra. And although its technically not new, we introduced, the fresh-to-market from last year, Stampede, to the 2018 Textron Off Road line-up. We know everyone expects more new product, and they’re going to get it. We’re not done introducing machines for 2018.
AI: That’s great to hear. Tell us about Havoc. What can you say about this machine, and when do you expect it will be released?
Collins: It will be a performance crossover UTV built for the enthusiast that wants the best attributes of a Stampede and Wildcat. Engine performance, suspension and styling will be class leading.
AI: Production of Stampede side-by-sides now takes place in Thief River Falls, and production of the 80-hp 850 twin used in those machines will soon be moved from Germany to St. Cloud, Minn. How has that transition gone for the company?
Collins: Stampede is being produced every day now in TRF. That’s been excellent.
We’re going to fill up the factory in TRF with production.
Production of the 850 Stampede engine and 957cc twins for the Havoc is being moved to St. Cloud, to leverage that state-of-the-art engine manufacturing facility as well as the excellence and proximity of that work force by year end
We’re also producing Arctic Cat snowmobiles in Thief River Falls and E-Z-GO product will continue to be built in Augusta, Ga.
AI: When the 2018 dirt model line was introduced recently, several former Arctic Cat models were noticeably absent, such as most full-sized Alterra ATVs, the youth models, Prowlers and HDX. Are these models gone for good?
Collins: Some no, some yes. To make those decisions, we studied the 2017 and earlier models that dealers had in inventory, as well as general sales numbers for everything. We didn’t want to introduce a 2018 version that had a large inventory of non-current models. That type of plan doesn’t help our dealers.
Some of those models will return, some won’t. You can expect another announcement on model year 2018. We will continue to introduce new product and expand our model line-ups.
AI: Has Textron made other improvements to either the Thief River Falls or St. Cloud facilities?
Collins: Yes: all side-by-sides are being assembled on a new line that features auto-guided component delivery vehicles. There are no chain-on-ground or overhead conveyor delivery methods for this line. This translates into more efficient production.
We’ve also made a substantial investment in new welding robots in Thief River Falls. The new paint line was completed last year and is working excellently, which was central to a $27 Million plant upgrade.
The St. Cloud facility will see more investment as we bring in more engines for production.
AI: Textron is closing down the former Arctic Cat corporate headquarters in Minneapolis. When will that be complete and where are the remaining employees based?
Collins: That’s a great facility, but was built to support a corporate overhead structure that no longer exists, because we have it in our facilities in Augusta or Providence, Rhode Island. Many of the people who work in Minneapolis are relocating to St. Cloud.
The snowmobile business will primarily be run out of Thief River Falls, with the dirt business primarily running out of St. Cloud.
AI: Where are you working and living?
Collins: I’m now a resident of Minnesota, with my family, and my office is in St. Cloud!
AI: Awesome, that’s good to hear! How long will it take for this entire integration process to be complete, and the company – both Textron Off Road dirt products and Arctic Cat snowmobiles – to fully operate on their core business of designing, building and selling machines?
Collins: From a brand standpoint, we’re done. We are Arctic Cat snowmobiles and Textron Off Road dirt products. That transition has taken place, although we will continue to invest in building the brands.
From an engineering standpoint, of integrating all the great people from Stampede and Cat, we’re 75 percent complete.
On the sales side, we’re done. People know their roles and are operational.
From a dealership acquisition standpoint, we’re 50 percent done. There are still dealers who are waiting for product.
From an ease of doing business standpoint, including the operational tools, portals and communications aspects, we’re probably only 25 percent complete. That’s because Textron Specialized Vehicles and Arctic Cat were each standalone companies for more than six decades. It takes a lot of work to integrate the various systems into one coherent method of working with our dealers. This is the longest part of it all, and we’re getting more efficient every day, but it will probably take 18-24 months.
AI: How do you decide which business system to use, or whether to create an all-new one?
Collins: We’re incorporating the best elements of all the brands. There are examples where the way that Arctic Cat did business was better than how we’ve done it at Textron Specialized Vehicles, and vice versa. We’re recasting ourselves using the best practices.
We are now one company that needs to do business the right way. We’re getting there. There will be some fine-tuning along the way.
AI: How has Textron ownership affected the snowmobile division so far? Are there aspects of the division that now reflect new ownership?
Collins: We need to remember that in the earliest days of integration, we did a lot to sell aged inventory and give customers a reason to engage in our brand. The No Brainer event for dirt was wildly successful. A lot of customers got new machines for amazing prices.
We now just started doing that with new, non-current snowmobiles. We’re also calling it the “No Brainer Sales Event.” It will help our customers get incredible machines at fantastic prices, while also helping our dealers to sell inventory. We put Craig Kennedy in charge of the snowmobile division. He’s a great leader. I have some view into what snow Engineering is working on, and it’s outstanding.
AI: We all want new and innovative product, good dealerships and strong customer service. It’s what most snowmobilers have always wanted.
Collins: Yes, and we’re committed to delivering exactly that.
AI: Thanks for the update, John. I’d like to follow up with you again, perhaps after Arctic Cat announces the 2019 snowmobile line in February.
Collins: Your welcome, and I look forward to it. We want everyone in the Arctic Cat and Textron Off Road family of riders, dealers and fans to be aware of the steps we’re taking to be the best powersports company in the business.
