US industrial conglomerate Textron — best known for aerospace activities which include manufacturing the Bell helicopter, Beechcraft and Cessna light aircraft, and Lycoming aviation engine brands — is seeking to exit its under-performing powersports business.
Textron originally entered the powersports market in 2017, with an acquisition of established snowmobile, quadbike and side-by-side ATV producer Arctic Cat. This Minnesota-based company, with plants at Thief River Falls and St Cloud, became a division of Textron Specialized Vehicles (TSV), which also has significant presences in the airport handling equipment, horticultural and golf buggy markets.
But problematic signals began to emerge last November. Arctic Cat announced, through a communication to dealers, that it would be initiating workforce reductions at Thief River Falls and output would temporarily cease after commitments to its model year 2025 snowmobile line-up had been completed. And then in December, Textron filed a shareholder advisory Form 8-K report with the US Securities & Exchange Commission. Essentially, this indicated the company was looking for a powersports escape route.
“Consumer end-market demand for powersports products continues to remain soft,” the filing explained. “As a result, and in conjunction with its annual operating plan process, TSV has begun to pause production as Textron’s management reviews strategic alternatives. Upon completion of limited production runs to satisfy customer commitments, production of TSV’s powersports products will be paused indefinitely in the first half of 2025.”
According to industry insiders, the obvious “strategic alternative” would be selling Arctic Cat as a going concern to a third party. In theory at least, brands already in the same game like Argo, CFMoto, John Deere, Yamaha and others could be interested, both for its current products, IP and US manufacturing facilities. Equally, given inherent market weakness, it might be simpler for Textron to just pull the plug.