Briggs Auburn Plant Shifts Gears, Accelerates Focus on V-Twin Engine Production

AUBURN, Ala., Aug. 28, 2012 -- Since its opening in August 1995, the Briggs and Stratton plant in Auburn, Ala. has manufactured a wide range of products. Now, starting its 18th year of production, the team at Auburn – over 400 employees strong – will switch from flexible to focused, as the plant transitions from producing multiple products to becoming a dedicated V-twin (twin cylinder) engine manufacturing facility to better meet marketplace needs.

In recent years, the demand for V-twin engines has increased as more U.S. homeowners and commercial lawn service companies have sought to buy zero-turn riding mowers and premium lawn tractors.  The Auburn facility has increased production to keep pace with this change in consumer preferences and demand for v-twin engines is expected to remain strong.  As this trend towards v-twin engines evolved, Briggs and Stratton launched new products such as the Professional Series™ and Commercial Turf Series™ engines, both produced in Auburn, to penetrate the premium and commercial segments of the riding mower market.

While the drive to innovate has ramped up, the team at Auburn has also boosted its continuous improvement efforts.  The plant utilizes a Lean Six Sigma methodology that utilizes lean manufacturing to address process flow and wastes issues, and Six Sigma, to focus on variation and design opportunities.  These complementary disciplines help the Auburn plant delivery a very high quality product to the market. 

Recently, the continuous improvement team even partnered with Alabama Power on a week-long event to identify energy saving opportunities that could lead to significant cost savings for the plant.  

"Customers are aware of our continuing efforts to manufacture quality v-twin engines.  And they are particularly pleased with the fact that we can deliver an engine made in the USA, at a facility located in Auburn, Alabama", said Russ Stone, plant manager for Briggs and Stratton.

Briggs and Stratton is a Top 5 employer in the Auburn-Opelika region and has been actively involved in community activities such as Habitat for Humanity, the United Way, and Rebuilding Together, as well as being a long-running sponsor of the Fourth of July fireworks for the City of Auburn.  The Company also has a long standing relationship with Auburn University, working collaboratively on many engineering projects over the years. 

Mayor Bill Ham, Jr. said "Briggs and Stratton is an example of what a great corporate citizen can mean to a community, and they are an important piece of the local workforce and economy. I look forward to their continued success as they evolve to meet the changing needs of their customers through their Auburn plant."

These Briggs and Stratton® engines manufactured in Auburn, Ala., using U.S. and global parts, power several popular riding mower brands including Ariens, Craftsman, Cub Cadet, Husqvarna, John Deere, Simplicity, and Snapper.  To learn more about why engines matter, visit EnginesMatter.com.

Briggs and Stratton Corporation, headquartered in Milwaukee, Wisconsin, is the world's largest producer of gasoline engines for outdoor power equipment. Its wholly owned subsidiary Briggs and Stratton Power Products Group LLC is North America's number one manufacturer of portable generators and pressure washers, and is a leading designer, manufacturer and marketer of home standby generators, along with lawn and garden and turf care through its Simplicity®, Snapper®, Ferris® and Murray® brands.  Briggs and Stratton products are designed, manufactured, marketed and serviced in over 100 countries on six continents.

Strategy Change for Briggs and Stratton

May 4 -- Briggs and Stratton Corp.’s decision to trim its white-collar work force, stop placement of lawn and garden products at national mass retailers and shift more work to China stems from a change in direction that began to take root two years ago.

“We decided to change our strategy,” Briggs and Stratton president and chief executive officer Todd Teske said in an interview with The Business Journal.

The shift in direction involves growing the company’s engine business, focusing on higher margin products and geographic expansion, said Teske, who took over as CEO of the Wauwatosa-based maker of small engines and outdoor power equipment in January 2010.

The changes are the result of a determination “that certain portions of our current business will not be strategic for us in the future,” Teske said.

Briggs and Stratton announced late last month that it intends to cut its salaried work force by 10 percent during fiscal 2012 because projections show that the lawn and garden market in the United States and Europe isn’t expected to return to peak levels any time soon. The cut will affect about 210 white-collar employees around the world, including staff at the company’s Wauwatosa headquarters.

The company also announced that it will no longer pursue placement of lawn and garden products at national mass retailers beginning in fiscal 2013. However, the company’s engines segment will continue to support lawn and garden equipment manufacturers who provide products to these retailers.

Teske called the profit levels for the mass retail business “unacceptable,” which led to the decision.

“We’re not positioned well to be profitable in the U.S. national accounts,” Teske said.

The move to exit the mass retail market is expected to free up $40 million to $80 million of working capital.

Instead, Briggs and Stratton will focus on “innovative, higher margin products” that are sold through its network of Simplicity, Snapper and Ferris dealers and regional retailers. However, Briggs and Stratton will continue to sell portable and standby generators and pressure washers through the U.S. mass retail channel.

Although the lawn and garden market in the United States appears to be poised for a recovery, longer-term projections for the country and Europe indicate that it won’t return to the peaks of 2004 and 2005 for the foreseeable future, if ever, Teske said.

Demand for lawn mowers and lawn tractors has been affected by sluggish sales of new and existing homes, brought on by the extended economic downturn, Teske said.

Peak demand for the products occurred at a time of easy access to credit and “free-wheeling” consumer spending, Teske said. The level of demand experienced in 2004 and 2005 turned out to be “unsustainable” for the long term, he said.

“We don’t see the market level going back to that, but over the next several years it will rebuild to normalized levels,” Teske said.

The housing collapse that followed the peak demand period should have been examined more closely for its potential effects on Briggs and Stratton’s business, he added.

“We didn’t fully appreciate it at the time,” Teske said.

Despite the changes, Briggs and Stratton’s products group remains core to Briggs and Stratton since it “captures incremental value” for its engines business, Peter Lisnic, an analyst at Robert W. Baird and Co. Inc., Milwaukee, wrote in a research note.

Other moves being implemented by Briggs and Stratton involve a shifting of production of horizontal shaft engines from its Auburn, Ala., plant to the company’s existing production facility in Chongqing, China. The product also could be sourced from third parties in Southeast Asia.

Briggs and Stratton previously moved smaller horizontal shaft engines to the Chongqing factory in 2007.

“The plant in China gives us a better cost basis,” Teske said.

The company will continue to manufacture portable generators in Auburn through 2012 and is evaluating alternatives with respect to manufacturing, assembling or sourcing cost-effective portable generators beyond this year. The Auburn plant will continue to produce V-twin engines used in riding mowers and other outdoor power applications.

Briggs and Stratton anticipates that about 250 regular employees will be affected by the Alabama facility consolidation.

The latest round of cuts follows Briggs and Stratton’s January announcement that it would close a plant in Tennessee and shift the work to Georgia, eliminating about 690 jobs in the United States. It also plans to close a plant in the Czech Republic, eliminating 77 jobs.

Briggs and Stratton reported that fiscal third-quarter net income including restructuring charges fell 22 percent to $39.9 million, or 80 cents per share, compared with net income of $51.5 million, or $1.02 per share, for the same period last year.

Revenue for the quarter fell slightly to $720.1 million, compared with $720.3 million for the year-ago period.

Excluding restructuring charges, net income was $49.5 million, or 99 cents per diluted share.

The early spring warm weather in many parts of the United States provided an early start to the lawn and garden season domestically, although sales were significantly lower in Europe as consumers are cautiously spending due to concerns about the overall economy, according to the company.

Baird’s Lisnic said demand appears to have improved, with Briggs and Stratton reporting solid retail sales of lawn mowers and the potential for walk-behind and riding mower shipments to increase 6 to 8 percent year-over-year in fiscal 2012, up from prior expectations of low-single-digit growth. Engine re-order rates also improved in April as manufacturers replenish depleted inventory, he noted.

www.bizjournals.com       Rick Rovito

Briggs and Stratton Picks Alabama for Shareholders Meeting

September 9 -- Briggs and Stratton Corp., which has its headquarters in Wauwatosa, has opted to hold its 2011 shareholders meeting in Auburn, Ala.

The Hotel at Auburn University will host the meeting, scheduled for Oct. 19.

Briggs and Stratton, which manufactures engines and outdoor power equipment, has a factory in Auburn, where engines for generators are produced.

“Our directors wanted to get to a plant. They haven’t been to one in a while,” Briggs and Stratton president and CEO Todd Teske told me Friday immediately before delivering a speech to about 350 people at The Business Journal’s Power Breakfast at The Pfister Hotel in downtown Milwaukee.

The plant has been especially busy given that demand for Briggs and Stratton’s generators rose dramatically as a result of Hurricane Irene, which left millions of homes and businesses along the Atlantic coast without power late last month.

Briggs and Stratton traditionally has shifted the location of its annual shareholders meeting. The company held last year’s meeting in Holland, Mich.

In 2009, the company held the meeting at the Country Music Hall of Fame and Museum in Nashville, Tenn. The Rock and Roll Hall of Fame and Museum in Cleveland hosted the gathering the prior year. Former Briggs and Stratton CEO John Shiely serves on the Rock and Roll Hall of Fame’s board of directors.

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