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Brunswick closing Little Falls, Minn., plant - Trade Only Today

Brunswick closing Little Falls, Minn., plant

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Brunswick Corp. today announced it will consolidate a portion of its aluminum-boat production as part of its ongoing efforts to be more agile and responsive to market demand.

During the next several months, Brunswick will transfer production of its Crestliner and Triton aluminum brands, now built in Little Falls, Minn., to three other manufacturing plants. As a result, the company said, the Little Falls facility will close sometime this fall.

Production of Crestliner and Triton fishing boats and pontoons will be integrated into Brunswick manufacturing plants in New York Mills, Minn., Lebanon, Mo., and Fort Wayne, Ind. Both the Crestliner and Triton brands and their dealer networks will remain intact, and the change is expected to be transparent to the dealers, the company said.

The Little Falls facility will begin to ramp down production in May. As many as 50 percent of Little Falls' current jobs could be transferred to the New York Mills or Lebanon facilities.

Brunswick spokesman Dan Kubera said the move will mean about 90 of the approximately 180 production positions will be terminated in Little Falls, while the rest could be transferred to other plants.

"We do anticipate that many of the people now in Little Falls will be offered roles in those plants, as a reflection of their capability and to provide continuity for the brands which are not affected by this announcement," Kubera said.

"For the past several years, we have worked hard to institute more flexibility into our boat-making capabilities," chairman and CEO Dustan E. McCoy said in a statement. "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."

"While consistent with our manufacturing strategy, such decisions are always difficult," McCoy added. "This decision does not reflect upon the Little Falls work force or product, but it is the result of our overarching need to develop a more efficient manufacturing footprint that is appropriate to the marine marketplace, which has been under pressure for several years."

Tim Conder, an analyst with Wells Fargo Securities, said this latest move by Brunswick was not surprising and appears to be part of an already communicated restructuring plan.

"We have been anticipating consolidation of the aluminum production for over a year," he said. "We continue to believe [Brunswick] is well-positioned to expand its lead … in the industry as the recovery unfolds in '11."

Last week, Brunswick reported a 22 percent drop in net sales for the fourth quarter of 2009, including a 38 percent decrease in net sales in the boat segment.

Brunswick reported net sales of $657.3 million for the quarter, down from $837.7 million in the year-ago quarter — a net loss of $124 million, or $1.40 per diluted share, compared with a net loss of $66.3 million, or 75 cents per diluted share, for the fourth quarter of 2008.

Today's announcement is the most recent plant closure by Brunswick. In May 2008, the company announced it would close four plants in the coming year, in addition to eight plants it had previously closed. At that time, the company said this would bring the total number of plants to 17 or fewer by 2009 and would reduce the company's fixed-cost structure by $300 million.

— Beth Rosenberg

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