Arctic Cat lays off workers, suspends snowmobile production in Thief River Falls

Arctic Cat has permanently laid off 65 workers in Thief River Falls and furloughed other hourly workers at the snowmobile plant there.

Textron, Arctic Cat’s owner, will shut down the plant after the 2025 snowmobile models are completed, the company said. It expects to reopen the facility sometime before the end of March.

The permanent layoffs are part of a companywide restructuring, a spokesman said. The plant when it reopens will employ about 530 workers.

“These actions were tough but necessary given the current conditions in the industry,” Philip Jhant, vice president of powersports for Textron, wrote in a letter to Arctic Cat dealers. “We are offering severance benefits to affected employees, including outplacement services to help them find new opportunities.”

The recreational vehicle vehicle industry is in a slump. Polaris talked about slowing production during its last earnings call. Winnebago talked about finding efficiencies in production.

Textron, a large industrial conglomerate, has been restructuring companywide, with the goal of a workforce reduction of 4%, or about 1,500 total workers, according to documents filed with the Securities and Exchange Commission.

Company officials said in the documents that the cuts in the industrial division, which includes Arctic Cat, would have to be deeper than originally intended.

“I think the end markets, and particularly in a couple of segments of the business, are continuing to be soft, and I think they’re going to be soft for a little while,” CEO Scott Donnelly said during the company’s earning call last month. “So we’ll continue to do what we think is appropriate to restructure and maximize our performance in each of those business segments.”

Rhode Island-based Textron Inc. purchased Arctic Cat in 2017.

High interest rates and uncertainty around the economy had hurt the powersports industry throughout the year. Coupled with a poor snow season last year and dealers have excess snowmobile inventory.

The largest motorsports company, Medina-based Polaris, announced last month it planned to reduce dealer inventory by 15% to 20% by the end of the year to help support its dealers during the downturn in the industry.