Textron Specialized Vehicles – parent company of Dixie Chopper, Jacobsen, Arctic Cat, Textron Off Road, and E-Z-GO – announced that it will eliminate approximately 400 positions, which is 10 percent of Textron Specialized Vehicles’ workforce, and will close several factory-direct turf-care branch locations and a manufacturing facility.
The company also announced that it has ceased production of Dixie Chopper zero-turn mowers, Jacobsen zero-turn mowers and its Jacobsen Truckster L/M series utility vehicles.
On November 27, Textron Specialized Vehicles issued a Worker Adjustment and Retraining Notification Act (WARN) letter to the Indiana Department of Workforce Development that it was conducting a permanent reduction of its workforce at the Dixie Chopper facility in Coatesville, Ind. The facility closure affected approximately 107 employees.
Then, on December 6, Textron filed an 8-K form with the Securities and Exchange Commission. The filing read as follows:
On December 4, 2018, our Board of Directors approved a plan to restructure the Textron Specialized Vehicles businesses within our Industrial segment. We expect to incur pre-tax charges in the range of $60 million to $85 million under this plan, which will be recorded in the fourth quarter of 2018.
Textron Specialized Vehicles has undergone significant changes since the acquisition of Arctic Cat as we have expanded the product portfolio and integrated manufacturing operations and retail distribution. As disclosed in our Form 10-Q filed for the third quarter of 2018, the operating results for these businesses were significantly below our expectations as dealer sell-through lagged despite the introduction of new products into our dealer network. Management conducted a strategic review of the Textron Specialized Vehicles businesses, which included an assessment of the acquired dealer network and go-to-market strategy for the Textron Off Road and Arctic Cat brands, as well as cost reduction initiatives throughout the Textron Specialized Vehicles businesses. The restructuring plan will result in the impairment of intangible assets, primarily related to product rationalization, the elimination of approximately 400 positions, representing approximately 10% of Textron Specialized Vehicles’ workforce, and closure of several factory-direct turf-care branch locations and a manufacturing facility. The restructuring actions under this plan are expected to result in improved operating results for these businesses.
Severance and related costs for this plan are estimated to be in the range of $10 million to $15 million. Contract termination and other facility closure charges are estimated to be in the range of $5 million to $15 million. Impairment charges are estimated to be in the range of $45 million to $55 million and largely relate to acquired intangible assets. Expected cash outlays in connection with this plan are estimated to be in the range of $15 million to $30 million, with up to $10 million in the fourth quarter of 2018 and the remainder in 2019. We anticipate that this plan will be substantially completed by the end of 2018.
Textron Specialized Vehicles has indicated that it will continue to provide sales, warranty, parts, and service support to its dealers and end-user customers, and that it will maintain its dealer portal.
Textron acquired Dixie Chopper in February, 2014.
The very first Dixie Chopper zero-turn mower was completed by owner/founder Art Evans on April 15, 1980, in an old dairy barn on the family’s farm, and was used weekly by the Evans family to mow their property for more than 25 years before it was retired while still in working order.