A now widely circulated letter to its dealerbase from Textron’s Arctic Cat division has sent shock wave through the snowmobile and powersports markets.
In a communication sent to dealers at 4:04 p.m. central time on Wednesday, November 13, the company said that it has “initiated workforce reductions across our powersports business.”
The Arctic Cat letter further stated that “these actions include the elimination of numerous positions across our business. In addition, we will pause production at our Thief River Falls [Minnesota] facility after production of our model year 2025 snowmobile lineup is completed.”
The letter did state, though, that “We expect to resume production in Q1 2025.” It further stressed, “We remain open for business. Our sales organization, customer service teams, aftermarket distribution centers and other functions are ready to assist you and your customers.”
The letter was signed by Philip Jhant, the Textron VP and GM of Powersports. UPDATE: The Forum newspaper group, which owns several newspapers in the area around Thief River Falls, Minnesota, is reporting that 65 people who work at the factory were affected by the layoffs.
Some Arctic Cat Context
Copies of the letter were very widely distributed on social media starting Wednesday afternoon. It touched off all sorts of wild speculation, as enthusiasts and detractors alike pondered about the brand’s future or tried to assign blame.
In context of other news both at Arctic Cat and in the larger powersports market, though, the move is maybe not as shocking.
Well-placed rumors circulating in August and September said that Arctic Cat wasn’t planning to produce any model year 2025 ATV or UTV products. When we ran that rumor past a longtime Arctic Cat employee immediately after Hay Days, he stated that there is enough ATV/UTV inventory at dealerships right now – from Arctic Cat as well as other brands – that production was going to be slowing down.
“By the time we actually release our next offroad lineup, we can probably just label them 2026s,” we were told. We also know that many ATV/UTV offroad engineers were laid off by Textron over the spring and summer.
Moving that forward to Wednesday evening’s announcement, it then makes sense that once 2025 snowmobile production is completed, there would be a gap in the factory’s production schedule, which in turn would cause layoffs. The fact that the company completed the 2025 snowmobile build and is pledging to restart production in the first quarter is therefore somewhat encouraging.
That said, that doesn’t reduce the pain for those who were told their jobs are being eliminated. And we know the layoffs aren’t just from the production line, as for instance we know some engineers in the snow group are also being laid off.
More Arctic Cat Perspective
We regularly speak with dealers across the country, and from them we know the concerns about inventory levels – in snow, certainly, but even more so in off-road products – is real.
Also, other brands have also initiated layoffs, and an announcement of further workforce reductions by a competitive brand are expected to be announced in the next week, according to sources.
For more powersports context: Also this week, the Pierier Mobility group that’s the major investor/owner of the KTM AG (which includes not just KTM but also Husqvarna, Gas Gas, MV Agusta and other brands) announced that the company’s “Executive Board is currently working on securing the financing of KTM AG, in particular on a bridge financing in the three-digit million range.” That’s a lot of money, whether you’re talking dollars or euros!
It further stated that, “Against the backdrop of a challenging economic environment, an even more far-reaching operational restructuring is being driven forward with the aim of reducing inventories at both KTM AG and the dealer level to an economically sustainable level by significantly reducing production volumes. Furthermore, overheads are also to be significantly reduced once again.”
Yes, times are a bit tough in the powersports market right now.
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This was a common experience when I worked there in the mid 90s.
When the snowmobile production was done , we’d be laid off usually for a few weeks to a month before we started water craft production. When watercraft was no longer made , we’d be laid off til we started the atv line up.
Maybe they should lower the price of their products. Things are getting out of control. Same goes with the auto industry.
Man, thats pretty short sited and if you think their troubles are due to that then you truly don’t understand the industry.
It’s 100% due to that. $20K for a 3 month you is outrageous
Fundamental economics dictates that as production levels and volume goes down, pricing goes up that starts with every single component that goes into the final vehicle. It’s happening everywhere in the world on all products that are made. Sales volumes are dropping which means retail pricing, wholesale pricing component pricing is all going to increase
We’ll add our own bit of context: Over the last 20 years, each factory has tried to build (on varying levels) a few more affordable sleds — from Shifts, Phazers and Freestyles to base-level Indys, T570s and MXZ Sports to EVOs, Blasts, Venoms and Neos. Their first year they are popular. After that, you know what happens to most of those machines? They live long, lonely lives on dealership floors, where they’re repeatedly ignored while mega-featured Sidewinders, X-RSs, VR1, XCRs, ZR 9000s and like models sell out quickly. Heck, even 600-class sleds are hard to sell in many parts of the country. One of the major problems is that snowmobile consumers — us! — keep getting triggered to buy the latest and greatest. So if you’re in charge of Brand X (pick your brand) and you only have so much capability to build machines, are you going to build the ones that sell quickly for big dollars and turn a decent profit for the dealers and the factory, or are you going to forego those and build machines that don’t sell worth a darn and, when they do, they only sell after some big discounting after two years on the showfloor? Now in years where it doesn’t snow, everything piles up at dealerships (our current situation), but sadly until more of us consumers start actually buying naturally aspirated, mid-powered sleds without variable exhaust, and with base-level shocks, analog gauges and short-lugged tracks, I don’t know how many more times we can yell at the manufacturers for building full-featured, expensive machines. It’s sad but true. I bet we’ve had the “we need more affordable sleds,” discussion with factory officials more than 50 times over the years. But, as an anology, Apple keeps building next-gen iPhones with features most of us will never use for one reason: When they release a new one, people line up to buy them no matter how much they cost. Consumer buying habits have a lot of influence.
The problem with affordable sleds is that they were too expensive for what you got. For example, Blasts were too small and under powered for like $10k ( bad bang for the buck). Maybe for 7-8k you could sell that.
How about legacy designs for like 10-12k. Sleds like 2011 F8 or Indy’s. Or even 2007 Rev or CFR 800s or Firecat 700s. I would do that. Blasts, no way…garbage. A new CFR 800 for 12k, yes. A 22k Catalyst 858 or XC 850, nope.
But, I do agree that the consumer constant need for something new is wrecking the sport. Ultimately snowmobiling will either die (most likely) or it will just be for elites with one manufacturer, maybe 2. I think AC will fold and Polaris and Ski-Doo will stick to Dirt and quit losing money on snow.
I agree with John. Which is why I buy low mileage used sleds. Let someone else pay the big money first. The top of the line means nothing to me. I just want to ride and be able to reliably ride. I just wait until I find one that is affordable and low mileage. Doesn’t help the manufacturers but I don’t care. They are not producing anything new that I am able to afford. Years ago, there were six of us that used to ride new sleds etc. etc. Now only four of us still ride. Three of us buy used sleds when we can while the other every few years buy new. The last two of our group just said enough is enough with spending money on the sport all together.
Lot of people getting out of the power sports market. They are way too expensive and costly to run. Why can’t they just make a sled with a motor and a speed and tachometer? Decent brakes. Something you can work on? You can’t even change the belt or spark plugs on these sleds anymore. They have changed so much it’s kind of taking the fun out of the sport. 3 to 4 dollars a gallon of gas with synthetic oil 15 dollars a quart. You go 120 miles you have to stop and eat. Gas up again. It ends up being a 200 dollar trip. People can’t afford that these days. They have priced themselves right out of the snowmobile market. Polaris and the same. Just to expensive. Same with Automobiles. 80000 for a half ton pickup? I paid that for my house in Northern Maine.
Are you aware that Ski-Doo actually includes a tool in the supplied toolkit that quickly and easily opens the secondary clutch, allowing for drive belt replacement in about five minutes?
I’ve been sledding for a long time. Sleds are so superior today to what was being produced in the 70’s and 80’s… The world you’re citing sure doesn’t correspond to the reality I live and snowmobile in.
I totally agree with the superiority of today’s sleds although some brands are better than others, but hopping on any of them, if you have not rode a snowmobile the last couple of decades you will be shocked at how awesome they ride, handle and work than those in the past. I also find myself defending the value of today’s new sleds. Yes, you can spend a ton of money on a 175+ HP sled but shop around for a 125 or 160 HP or so model in a competitive market like here in the Twin Cities and as recently as 6-8 months ago you could get new outstanding trail sleds for around $12K.
I am trading every year or two and making reasonable trades and with most of my sleds trading in with 2000-3000 miles on them – they were trouble free. All have not even needed a belt or a plug. TROUBLE FREE.
PS – Our sport desperately needs Arctic Cat to survive.
While snowmobiles are superior in many ways compared to the 70-80’s machines, the price is just too high. And parts prices and availability has got worse. I can buy a cd box and stator for a 1976 Johnson, but I can’t locate and purchase a chain case for a 2009 Arctic Cat 1000. In some ways the old machines were superior. Easier to work on, cheaper parts costs and availability.
Well articcat you suck anyway but you don’t have to stop production and lay people off in this day and age and the times r just not good enough to support such a big business I here that this world sucks as a whole but you have to do what you have to do. But the least you can do is find other options for them in other parts of the company.
Products are way overpriced and not that good. That’s what happens in free enterprise, if you lag behind in these two major factors, you are lost
More the results of a a nothing winter, You need snow and ice on the lakes to make snowmobiles viable. Yeah price is also an issue, imagine car money for a snowmobile. That and Chinese competition, those golf carts from China, bring on the tariffs!
Arctic Cat is a Minnesota Icon. They build the world’s fastest snowmobiles. It may take a year and a half, but things will improve as we come out of this inflationary spiral,. As for price, when I went ATV shopping, AC beat out Honda by nearly a thousand. Cat’s have at least nine lives…AC will be a survivor in dark times.
Cat was doomed the minute Textron got involved
They were doomed until Textron bought them. They saved them from bankruptcy.
Nope textron has gutted bled and drained ac. They are less than a shadow of what they used to be.
Other companies, who know powersports, and have confident leadership we’re interested in buying Arctic Cat also
I have a 1997 Tigershark 770 and it’s a great.I hope everything works out in the future.
The 90s and early 2000s was the best
Now everyone are a bunch of pre Madonnas
Remember PRIDE magazine
Bunch of liberal sledders now
Bring back the pride
Still wooping all that new junk on a 03 firecat
Going to be a systemic issue, don’t count on them ramping up production next year. Once the tariffs hit, they’re going to slash about 40% of the workforce. America is in for a financial crash that will rival black Monday.
My 2 cents, Cat failed at 2012 release the sleds hyped light weight, and some innovative designs but failed to put that all together. their new generation of engineers Failed to understand properly designed components and the only saving grace was the Zuki engine, but then cat cheaped out there using inferior bearings that lead to some more offshore china made parts.
Then after Nearly double sales under Claude $342M to $700+ the new BoDs took a greedy turn brought in a no mind that was let go by several organizations and paid $MM in salaries and did “Nothing”!
As the brand slumped the other competitors picked up mark share…
Then history repeats Textron need a tax write-off buys a power sports company. Then just as they did when they owned Polaris Ind and ran it into the ground only saved by an employee buy out like what the Artco group did in 1980 that saved Cat 40 years ago!
Unfortunately Cat current diminished placement in power sports market and with new buyer trends which extend from cell phones to vehicles Cat will probability disappear like so many other that were not profitable hell even YAMAHA didnot see viability within a multi Billion company. Polaris nearly disappeared, Doo nearly failed and was saved by government handouts, Yamaha closed up the snowmobile shop.
The Cat came back once but all 8 lives were taken…
On an additional note Textron killed off hundreds of dealers demanding several million in additional security from small dealers (mom &pop)! for the floor plan, many of which just said “load your shit and go away” dealers have to survive or manufacturers will fail… car dealers learned this 20 years ago with direct to consumer sales that failed… Our nearest dealer used to sell 348+ sleds in a season and now maybe 2 dozen and was 9 times dealer of the year and now focus on Non Textron golf carts with huge success and distributorship!
Textron is a big problem. Prices spiked immidiatley as Textron being a public company has to make oversized profits to keep its stock moving. That is the problem having a big public company owning you. Price is an issue. In Canada we are now at 30k + 13% taxes + 6.99% interest. I am a buyer of a top sled at $15k but I will never be spending 30 K . I have 4 cats and love them. My main is a 2016 ZR 9000 wich I bought for $12,999 at 0% interest. I keep looking for better deals but they are to high. As sledder we are optimists for snow. We will buy before the season in hopes of snow, but the oversized price tags are too much
Prices are just too high and incomes not kept pace and no snow out east last few winters. Sad situation.
The new features eg. longer deeper tracks vs 1″ and digital gauges vs analog and smart shocks or more featured shocks are just a marketing excuse for higher prices, they do not cost much more to make, Just like the cc size of a sled is basically irrelevant to cost but a big excuse for marketing price difference.
IMO, not a doom and gloom for Cat. Textron wants out they were never in it for the long haul, just like when they owned Polaris. There are at least 6 potential buyers. I. Polaris 2. Ski-Doo 3. Argo 4. John Deere 5. Artic Cat Management 6. Elon Musk
If Polaris, Ski-Doo or Argo buys it they would eliminate all management and office staff (marketing, finance, legal, administration) distribution, R&D, engineering, testing. Polaris and Argo would also only use their production staff which can easily travel the 60 miles (for Polaris) between the production facilities in MN. Ski-Doo might want it to build US sales in US to eliminate any potential Trump tariffs.
John Deere would likely keep most production, engineering and marketing staff. AC management option would retain most staff in all capacity.
AC management is not like previous Polaris and AC management 1980″s buy out of the former companies as now they are no longer passionate loyal die hard users and believers of their products like they were back in the 1960’s-1980’s.
Elon Musk would only want AC for military, NASA and space exploration contracts because Trump would give Musk companies any and all exclusive contracts Musk desires. Likely could even eliminate all consumer products because that market is just too insignificant for Musk. AC employees would be treated even worse than how Musk treated / reduced Twitter workforce and Trump would encourage and brag about how Musk treated his workers just like he did many times as Trump is pro business and anti labour.
There are potential buyers for AC. Many options are OK for consumers but only a few are good for present AC employees.
Textron saved AC and was too successful in trimming the distribution / dealer network. AC is likely the only sled /ATV/SxS manufacturer who will have more sales (in dollar and units) in MY2025 than MY2024 and that success is likely made Textron ask far too much money vs what John Deere was willing to pay.
Other potential buyers are Harley Davidson, good fit good loyal customer base, good dealer support expansion but they likely don’t have the money to purchase AC due to low HD sales. Might be best for option for employees and customers along with Argo and John Deere.
All motorcycle / ATV companies (Japanese, like Suzuki, Kawasaki, Yamaha, Honda), Europe and China, CFMoto) to get around potential tariffs.
If AC built a new 700 cc two stroke with 155-160 hp and or update the 3 cylinder four stroke to 230-235 hp AC and put it in the Catalyst chassis it would be by far in first place in sales (volume and growth) for sleds.
Should be very easy the 2003 F7 had 140 hp 23 years ago. The turbo now has 205 HP and easily with slight boost increase makes 225+ hp.
Very simple for AC to be market leader in sleds, similar for ATV, SxS and UTV market.