Good news for New York Mills traveled quickly from the Lund Boat plant and into the community Tuesday morning.
Dirk Hyde, president of Lund Boat Company, announced the consolidation of the Crestliner plant in Little Falls with the New York Mills Lund facility.
The manufacturing facility in Little Falls will phase down production and close by the end of the year, according to a Brunswick Corporation news release. Crestliner and Triton boats currently built in Little Falls will now be built in New York Mills on new welding production lines.
With the state of the economy, and particularly a struggling boat industry, Hyde said many production facilities have excess capacities, and the New York Mills facility allows Lund leverage for such a consolidation.
The transition will take time and Hyde anticipates they'll see the initial prototypes for the Crestliner boats around April.
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"This is going to be a well-managed process and we'll make sure we do it right," Hyde said. The merger is a good thing for New York Mills, which creates the possibility of adding local jobs after layoffs over recent years.
"A call back would be positive, not only for the city and Lund, but for suppliers as well," Hyde added.
Approximately 180 production positions will be affected at the Little Falls plant, according to Dan Kubera, director of media relations at Brunswick. He anticipates about 90 of those positions will be transferred to New York Mills or a plant in Lebanon, Mo.
"For the past several years, we have worked hard to institute more flexibility into our boat-making capabilities," explained Brunswick Chairman and Chief Executive Officer Dustan E. McCoy. "We have been steadily moving toward 'category'-type production that focuses more on models and segments, rather than the traditional approach of having manufacturing facilities dedicated to a particular brand. Pursuing such a strategy, we have been better able to size capacity to anticipated market demand, utilize our available capacity, improve quality and productivity and significantly lower our fixed costs. As a result, we are more competitive, offering better value and quality products for boaters."
The Little Falls facility will begin to ramp down production in May, and is expected to complete that process in the fall. During that time, as many as 50 percent of Little Falls' current jobs could be transferred to the New York Mills or Lebanon facilities. The company said that it plans to work with local community leaders and government organizations to help with the transition of affected employees.
"This is a consolidation of manufacturing facilities and not a reflection on the Little Falls facility or workforce," Kubera said. "We're approaching this as a merger of facilities."
The Crestliner and Triton brands will be unaffected by the merger and will still be sold.
According to information sent out by Lund to dealers, "this change will improve our fixed costs and manufacturing efficiencies by leveraging the additional unit volume. Both the lean initiatives over the past few years and the capital expenditures assigned to this project will provide improved production technologies, processes and efficiencies at the New York Mills facility, resulting in superior product quality."
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Brunswick, the parent company of Lund Boats, said the reasons for the merger include the fact the company has excess capacity within the Brunswick manufacturing footprint.
Brunswick plans to invest capital in the remaining plants in the form of equipment, paint booths, and employee training to maintain and improve upon the current quality.
"Since 2007, when the global marine market began to enter into an extended downturn, Brunswick has done much to make our global manufacturing footprint more in line with anticipated demand. This was done to not only mitigate the persistent difficult conditions in the global marine market and economy, but also to ensure that Brunswick can both effectively meet current demand and have sufficient capacity to accommodate increased volume as the opportunity arises," McCoy concluded.
Despite U.S. marine retail sales hitting their lowest level in nearly 40 years, Brunswick made significant progress during 2009 in reducing its inventory pipeline to historically low levels, and improving its overall financial structure.
