A Collection of Current Outdoor Power Equipment (OPE) Industry Related News Articles From OPEESA's (Outdoor Power Equipment and Engine Service Association) Newsletter "OPE-In-The-Know," the Business of OPE.
WASHINGTON, D.C. – August 13 -- The U.S. Consumer Product Safety Commission, in cooperation with the firm named below, today announced a voluntary recall of the following consumer product. Consumers should stop using recalled products immediately unless otherwise instructed.
Name of Product: Homelite, Husky and Black Max Brand Generators
Units: About 51,750
Distributor: Homelite Consumer Products Inc., of Anderson, S.C.
Hazard: The fuel gauge can leak excessive amounts of gasoline, posing a fire hazard to consumers.
Incidents/Injuries: None reported.
Description: This recall involves Homelite and Husky brand generators sold exclusively at Home Depot stores and Black Max brand generators sold exclusively at Sam’s Club stores. Affected generators include Homelite models HG3500, HG3510, HG5700 and HG5700R, Husky models HU3650, HUCA5700 and HUCA7000 and Black Max models BM10700, BM10700A, BM10700B, BM10711A, BM10700DG, BM10700R, BM10700BR & BM10722G. Generators included in this recall have manufacturing date codes between BML306-BMM151, CHL122-CHM151 and CRL153-CRM059. The model number and manufacturing date code are included on the data label located on the top or side of the generator engine. Products with a green “dot” on the outside of the package or a “silver dot” on the fuel gauge face are not included in the recall.
Sold exclusively at: Home Depot and Sam’s Club stores nationwide from July 2008 through May 2009 for between $480 and $1,600.
Manufactured in: China
Remedy: Consumers should immediately stop using their generator and contact Homelite Consumer Products Inc. (Homelite and Husky brands only) or Black Max (Black Max brands only) for a free repair kit.
Consumer Contact: For additional information regarding Homelite or Husky brand generators, contact Homelite Consumer Products, Inc. at (800) 242-4672 between 8 a.m. and 5 p.m. ET Monday through Friday, or visit www.homelite.com. For additional information regarding Black Max brand generators, contact Black Max at (800) 726-5760 between 8 a.m. and 5 p.m. ET Monday through Friday or visiting www.blackmaxtools.com
CPSC is still interested in receiving incident or injury reports that are either directly related to this product recall or involve a different hazard with the same product. Please tell us about it by visiting https://www.cpsc.gov/cgibin/incident.aspx
PORTLAND, Ore., Sept. 28 -- Blount International, Inc. announced today a succession plan for its Chief Executive Officer position. Under the plan, Joshua L. Collins will join the Company effective October 15, 2009 as its President, Chief Operating Officer and CEO Designate.
James S. Osterman, the Company's Chairman and Chief Executive Officer, will retire as an employee on January 4, 2010.
Upon Mr. Osterman's retirement, Mr. Collins will assume the position of Chief Executive Officer and retain the President position. Mr. Osterman will remain Chairman of the Board of Blount until the 2010 Annual Meeting of Stockholders in May.
Commenting on today's announcement, Robert D. Kennedy, Director and head of the Search Committee of the Board, stated: "The Board of Directors is pleased to announce the senior management transition plan for the Company in anticipation of Jim Osterman's retirement at the end of this year. Through an extensive search process, which was assisted by Heidrick & Struggles, the Board interviewed numerous CEO candidates before selecting Josh Collins as Jim's successor. Josh has worked extensively with the Company over the past decade, having served as a Director on the Company's Board for the past five years and as an executive of the Company's former majority shareholder for nine years.
Josh's proven leadership and management experience, background in complex business transactions and extensive knowledge of the Company make him the most qualified of the candidates to lead Blount into the future. On behalf of the Board of Directors, I would like to thank Jim Osterman for his leadership and contributions to Blount in a career that has spanned over five decades. We are pleased that he will stay on as a consultant to the Company following his retirement."
Mr. Osterman noted, "It has been a very interesting and rewarding 50 years, with many challenges and many opportunities. I think that we have positioned the Company well for the future, with new products and new technologies coming on line. I look forward to continuing to follow and to contribute to the Company in my new role."
Mr. Collins, 44, has been a Board member of Blount since 2005 and has been involved with the Company since 1999. He currently is a Partner of Collins Willmott & Co. LLC, a private equity firm focused on providing growth capital to middle market companies in the industrial, consumer, and energy sectors.
Prior to co-founding Collins Willmott & Co. in January 2008, Mr. Collins was employed by Lehman Brothers Inc. as a Managing Director and Principal of Lehman Brothers Merchant Banking, a private equity firm that was the former majority owner of Blount's common stock from 1999 until 2004.
Prior to joining Lehman Brothers, he was an infantry officer and Captain in the United States Marine Corps and is a veteran of the Persian Gulf War.
Mr. Collins holds an MBA from Harvard Business School and a BA from the University of Pennsylvania. Josh will be relocating to the Portland, Oregon area with his wife Kristine and their three children in the near future.
Blount International, Inc. is a diversified international company whose principal business is its Outdoor Products segment, the world's largest manufacturer of saw chain and accessories with plants in the United States, Canada, Brazil and China.
PORTLAND, Ore., Sept. 28 -- Blount International, Inc. announced today a succession plan for its Chief Executive Officer position. Under the plan, Joshua L. Collins will join the Company effective October 15, 2009 as its President, Chief Operating Officer and CEO Designate.
James S. Osterman, the Company's Chairman and Chief Executive Officer, will retire as an employee on January 4, 2010.
Upon Mr. Osterman's retirement, Mr. Collins will assume the position of Chief Executive Officer and retain the President position. Mr. Osterman will remain Chairman of the Board of Blount until the 2010 Annual Meeting of Stockholders in May.
Commenting on today's announcement, Robert D. Kennedy, Director and head of the Search Committee of the Board, stated: "The Board of Directors is pleased to announce the senior management transition plan for the Company in anticipation of Jim Osterman's retirement at the end of this year. Through an extensive search process, which was assisted by Heidrick & Struggles, the Board interviewed numerous CEO candidates before selecting Josh Collins as Jim's successor. Josh has worked extensively with the Company over the past decade, having served as a Director on the Company's Board for the past five years and as an executive of the Company's former majority shareholder for nine years.
Josh's proven leadership and management experience, background in complex business transactions and extensive knowledge of the Company make him the most qualified of the candidates to lead Blount into the future. On behalf of the Board of Directors, I would like to thank Jim Osterman for his leadership and contributions to Blount in a career that has spanned over five decades. We are pleased that he will stay on as a consultant to the Company following his retirement."
Mr. Osterman noted, "It has been a very interesting and rewarding 50 years, with many challenges and many opportunities. I think that we have positioned the Company well for the future, with new products and new technologies coming on line. I look forward to continuing to follow and to contribute to the Company in my new role."
Mr. Collins, 44, has been a Board member of Blount since 2005 and has been involved with the Company since 1999. He currently is a Partner of Collins Willmott & Co. LLC, a private equity firm focused on providing growth capital to middle market companies in the industrial, consumer, and energy sectors.
Prior to co-founding Collins Willmott & Co. in January 2008, Mr. Collins was employed by Lehman Brothers Inc. as a Managing Director and Principal of Lehman Brothers Merchant Banking, a private equity firm that was the former majority owner of Blount's common stock from 1999 until 2004.
Prior to joining Lehman Brothers, he was an infantry officer and Captain in the United States Marine Corps and is a veteran of the Persian Gulf War.
Mr. Collins holds an MBA from Harvard Business School and a BA from the University of Pennsylvania. Josh will be relocating to the Portland, Oregon area with his wife Kristine and their three children in the near future.
Blount International, Inc. is a diversified international company whose principal business is its Outdoor Products segment, the world's largest manufacturer of saw chain and accessories with plants in the United States, Canada, Brazil and China.
Washington – September 28 -- A push by corn-producing states and alternative fuel proponents to increase federal rules boosting the amount of ethanol mixed into gasoline is being fought by automakers because it would be costly and could damage engines.
By Dec. 1, the Environmental Protection Agency must decide whether to approve a request to increase the amount of ethanol that can be mixed with most gasoline sold at pumps to as much as 15 percent.
Most pumps already sell E10, which is 10 percent ethanol.
Automakers want the agency to further study the effects of the proposed increase before allowing it to happen.
Increased ethanol blends could corrode engines that aren't specifically built for E15, according to automakers.
Four farm state senators led by Ben Nelson, D-Neb., introduced a measure that would require the EPA to grant the request.
More than 13,000 people and groups have written the EPA since the request was filed in March.
Congress has required that the nation use 11 billion gallons of ethanol next year and 36 billion gallons by 2022.
Mike Stanton, CEO of the Association of International Automobile Manufacturers, the trade group representing major foreign automakers, noted the United States would not be able to consume even half of the ethanol required by Congress by 2022 by simply requiring all pumps to be E10.
"We're on a collision course here," he said.
And there are a number of problems with an immediate boost in the ethanol blend.
Automakers warn the higher ethanol blend could boost greenhouse gas emissions, damage engines or disable vehicles.
In Baltimore, nearly a third of the city's patrol cars stopped running earlier this month because a station had boosted the amount of ethanol in the fuel. It isn't clear how much ethanol was in the mix.
Stanton, and Dave McCurdy of the Alliance of Automobile Manufacturers, which includes Detroit's Big Three, Toyota and seven other automakers, wrote a letter Friday to Congress urging more research before approving ethanol blends like E12 or E15.
That idea "is premature, and since EPA has never allowed conventional vehicles to use higher ethanol blends, the research on their potential impacts on vehicles not designed, tested or warranted for their use is incomplete," the letter said.
The adoption of E15 could also affect users of other gasoline engines.
The International Snowmobile Manufacturers Association, based in Haslett, warned in comments to the EPA that the increase could do "irreparable harm" to the nation's more than 1.8 million registered snowmobiles and damage the economy of Michigan and other northern U.S. states that rely on snowmobiling for tourism.
Associations representing the nation's 80 million boaters have also opposed the request, saying it could damage marine engines.
In 2007, Congress required the nation to drastically boost the amount of ethanol it uses to 11.1 billion gallons this year, nearly 60 percent more than what the United States used in 2007, and more than 2 billion gallons over 2008. Nearly all of the U.S. ethanol is now corn-based, but research and investment into the commercialization of cellulosic ethanol could lead to production from renewable sources like grass or wood chips. No significant quantities of cellulosic ethanol have been produced.
Ethanol producers point to some studies that suggest higher blends wouldn't harm most engines. The EPA first approved the use of ethanol blends of up to 10 percent in 1978.
Congress asked to fund tests
Automakers have joined with the oil, ethanol, small engine, marine, outdoor power equipment and motorcycle industries to create a task force, along with the Energy Department and EPA, to assess different blends.
Dubbed the "midlevel ethanol blends research coordination council," the group says Congress needs to allocate money to fund testing.
The automakers wrote Congress on Friday asking it to set aside $17 million "to complete the necessary vehicle testing."
Congress is also considering whether to force automakers to build more cars that run on nearly all ethanol.
The auto industry has produced 7 million vehicles that can run on E85, a blend of 85 percent ethanol, or on regular gasoline. A bill in Congress sponsored by Sen. Sam Brownback, R-Kan., would require automakers to produce 50 percent of their fleet as E85-compatible by 2012 and 80 percent by 2015. A House version is sponsored by Rep. Eliot Engel, D-N.Y.
In March 2006, Detroit's Big Three agreed to build 50 percent of their vehicles as flex-fuel vehicles by 2012 under certain conditions. Automakers get credits toward meeting fuel efficiency regulations for building the vehicles.
Under EPA's recently proposed tailpipe emissions limits, it would continue the flex-fuel vehicle credit through the 2015 model year. After that, automakers would get the credit only if they could show that the fuel was being used.
The Union of Concerned Scientists urged EPA to "reject the E15 petition as a premature, unnecessarily piecemeal approach."
Low gas prices hurt ethanol
Many ethanol producers are struggling because motorists consider gasoline prices around $2.50 a gallon affordable, and are not clamoring for a cheaper fuel. E85 is averaging about $2.01 a gallon, but it's about 25 percent less energy intensive, so its price per mile cost is currently virtually identical to gasoline.
In May, the Obama administration created a task force to help the ethanol industry.
The $787 billion federal stimulus package sets aside $786.5 million to accelerate biofuels research and boost commercialization by providing additional funding for commercial biorefineries.
The new funds include $480 million for pilot- and demonstration-scale biorefineries, $176.5 million for commercial-scale biorefinery projects and $130 million for research.
Proponents of ethanol say the industry provides American jobs -- especially in rural areas -- lessens the nation's dependence on foreign oil and provides a steady income for farmers. Michigan has five ethanol refineries.
Iowa and South Dakota's agriculture secretaries wrote the EPA urging the increase.
"In 2007 alone, the ethanol industry created more than 200,000 American jobs that cannot be exported or outsourced, while contributing $47.6 billion to our (gross domestic product) and generating $4.6 billion in tax revenues," wrote South Dakota's Bill Even and Iowa's Bill Northey.
But using large amounts of the nation's corn boosts food and feed prices, critics say.
Last year, Texas Gov. Rick Perry unsuccessfully sought to water down the mandate, citing high feed prices.
The National Cattlemen's Beef Association said in opposing the 15 percent blend that it "would require an immediate 4.5 billion gallons of ethanol, and would require approximately 1.6 billion bushels of corn -- which is nearly equivalent to the amount of corn used by the cattle industry in an entire year."
Washington – September 28 -- A push by corn-producing states and alternative fuel proponents to increase federal rules boosting the amount of ethanol mixed into gasoline is being fought by automakers because it would be costly and could damage engines.
By Dec. 1, the Environmental Protection Agency must decide whether to approve a request to increase the amount of ethanol that can be mixed with most gasoline sold at pumps to as much as 15 percent.
Most pumps already sell E10, which is 10 percent ethanol.
Automakers want the agency to further study the effects of the proposed increase before allowing it to happen.
Increased ethanol blends could corrode engines that aren't specifically built for E15, according to automakers.
Four farm state senators led by Ben Nelson, D-Neb., introduced a measure that would require the EPA to grant the request.
More than 13,000 people and groups have written the EPA since the request was filed in March.
Congress has required that the nation use 11 billion gallons of ethanol next year and 36 billion gallons by 2022.
Mike Stanton, CEO of the Association of International Automobile Manufacturers, the trade group representing major foreign automakers, noted the United States would not be able to consume even half of the ethanol required by Congress by 2022 by simply requiring all pumps to be E10.
"We're on a collision course here," he said.
And there are a number of problems with an immediate boost in the ethanol blend.
Automakers warn the higher ethanol blend could boost greenhouse gas emissions, damage engines or disable vehicles.
In Baltimore, nearly a third of the city's patrol cars stopped running earlier this month because a station had boosted the amount of ethanol in the fuel. It isn't clear how much ethanol was in the mix.
Stanton, and Dave McCurdy of the Alliance of Automobile Manufacturers, which includes Detroit's Big Three, Toyota and seven other automakers, wrote a letter Friday to Congress urging more research before approving ethanol blends like E12 or E15.
That idea "is premature, and since EPA has never allowed conventional vehicles to use higher ethanol blends, the research on their potential impacts on vehicles not designed, tested or warranted for their use is incomplete," the letter said.
The adoption of E15 could also affect users of other gasoline engines.
The International Snowmobile Manufacturers Association, based in Haslett, warned in comments to the EPA that the increase could do "irreparable harm" to the nation's more than 1.8 million registered snowmobiles and damage the economy of Michigan and other northern U.S. states that rely on snowmobiling for tourism.
Associations representing the nation's 80 million boaters have also opposed the request, saying it could damage marine engines.
In 2007, Congress required the nation to drastically boost the amount of ethanol it uses to 11.1 billion gallons this year, nearly 60 percent more than what the United States used in 2007, and more than 2 billion gallons over 2008. Nearly all of the U.S. ethanol is now corn-based, but research and investment into the commercialization of cellulosic ethanol could lead to production from renewable sources like grass or wood chips. No significant quantities of cellulosic ethanol have been produced.
Ethanol producers point to some studies that suggest higher blends wouldn't harm most engines. The EPA first approved the use of ethanol blends of up to 10 percent in 1978.
Congress asked to fund tests
Automakers have joined with the oil, ethanol, small engine, marine, outdoor power equipment and motorcycle industries to create a task force, along with the Energy Department and EPA, to assess different blends.
Dubbed the "midlevel ethanol blends research coordination council," the group says Congress needs to allocate money to fund testing.
The automakers wrote Congress on Friday asking it to set aside $17 million "to complete the necessary vehicle testing."
Congress is also considering whether to force automakers to build more cars that run on nearly all ethanol.
The auto industry has produced 7 million vehicles that can run on E85, a blend of 85 percent ethanol, or on regular gasoline. A bill in Congress sponsored by Sen. Sam Brownback, R-Kan., would require automakers to produce 50 percent of their fleet as E85-compatible by 2012 and 80 percent by 2015. A House version is sponsored by Rep. Eliot Engel, D-N.Y.
In March 2006, Detroit's Big Three agreed to build 50 percent of their vehicles as flex-fuel vehicles by 2012 under certain conditions. Automakers get credits toward meeting fuel efficiency regulations for building the vehicles.
Under EPA's recently proposed tailpipe emissions limits, it would continue the flex-fuel vehicle credit through the 2015 model year. After that, automakers would get the credit only if they could show that the fuel was being used.
The Union of Concerned Scientists urged EPA to "reject the E15 petition as a premature, unnecessarily piecemeal approach."
Low gas prices hurt ethanol
Many ethanol producers are struggling because motorists consider gasoline prices around $2.50 a gallon affordable, and are not clamoring for a cheaper fuel. E85 is averaging about $2.01 a gallon, but it's about 25 percent less energy intensive, so its price per mile cost is currently virtually identical to gasoline.
In May, the Obama administration created a task force to help the ethanol industry.
The $787 billion federal stimulus package sets aside $786.5 million to accelerate biofuels research and boost commercialization by providing additional funding for commercial biorefineries.
The new funds include $480 million for pilot- and demonstration-scale biorefineries, $176.5 million for commercial-scale biorefinery projects and $130 million for research.
Proponents of ethanol say the industry provides American jobs -- especially in rural areas -- lessens the nation's dependence on foreign oil and provides a steady income for farmers. Michigan has five ethanol refineries.
Iowa and South Dakota's agriculture secretaries wrote the EPA urging the increase.
"In 2007 alone, the ethanol industry created more than 200,000 American jobs that cannot be exported or outsourced, while contributing $47.6 billion to our (gross domestic product) and generating $4.6 billion in tax revenues," wrote South Dakota's Bill Even and Iowa's Bill Northey.
But using large amounts of the nation's corn boosts food and feed prices, critics say.
Last year, Texas Gov. Rick Perry unsuccessfully sought to water down the mandate, citing high feed prices.
The National Cattlemen's Beef Association said in opposing the 15 percent blend that it "would require an immediate 4.5 billion gallons of ethanol, and would require approximately 1.6 billion bushels of corn -- which is nearly equivalent to the amount of corn used by the cattle industry in an entire year."
AMI, in partnership with a number of other trade organizations, voiced its opposition today to the use of mid-level ethanol blends in commerce in a full page print advertisement titled “E15? Bad for Consumers. Bad for the Environment. Bad for Rural Communities” in Roll Call, the newspaper of Capitol Hill.
The ad urges opposition to any action that would allow the use of so-called “mid-level ethanol blends” (blends above 10 percent ethanol, such as E15 or E20) in commerce before proper independent testing shows that it does not pose a risk to the environment, consumers, or rural communities.
“Some corn ethanol companies want to increase by 50 percent the amount of corn ethanol that can be blended into gasoline. Congress and the Obama Administration should follow the science before adding more corn ethanol to gasoline,” the ad reads.
The ad makes the following points about increased dependence on corn ethanol:
More corn ethanol is bad for consumers. Diluting gasoline with more corn ethanol could damage the engines and injure the users of millions of boats, cars, trucks, motorcycles, ATVs, snowmobiles, chainsaws, lawnmowers and other outdoor power equipment. That is why only a handful of car engines are warranted to run on fuels containing more than 10 percent ethanol.
More corn ethanol will drive up food and feed prices. Diluting gasoline with more corn ethanol could divert more than half of America’s corn crop from food and feed to fuel, increasing the cost of feeding livestock and food made from corn and forcing consumers to pay even more to put food on the table.
More corn ethanol is bad for the environment. Producing more corn ethanol could threaten air and water quality in many communities, destroy millions of acres of forests, and increase emissions of greenhouse gases that cause global warming.
More corn ethanol is bad for rural communities. Thousands of jobs and farms were lost when feed prices more than doubled in 2008. Adding more corn ethanol to our gasoline will increase feed prices again, harming livestock farmers and meat processors and risking more American jobs.
BEATRICE, Neb.— September 17 — A lawn mower plant in Beatrice has called back about 200 laid-off workers.
Company officials say the Exmark recall brings the plant payroll back to more than 300 — still far short of the nearly 440 reported to be working there last year.
Branden Happel is a spokesman for The Toro Co., which owns Exmark. He says the plant production is lower than last year to match the reduced demand.
Toro is based in Bloomington, Minn.
The cutbacks of about 175 mostly hourly employees in August followed a layoff of 80 in April.
Happel couldn't say when the rest of the laid-off workers might be recalled.
Exmark routinely stops production temporarily each summer, but this summer's cutback was larger than those in the past.
September 15 - Yesterday, Senators Susan Collins (R-Maine), Ben Cardin (D-Md.), Sheldon Whitehouse (D-R.I.) and Mary Landrieu (D-La.) introduced strong legislation designed to protect consumers, the environment, public health and manufacturers from the introduction of intermediate, or mid-level, ethanol blends in gasoline fuel, such as E15. S.1666, the “Mid-Level Ethanol Blends Act of 2009” would ensure new fuels introduced into the marketplace are compatible with the inventory of on-road and non-road gasoline engines, including boat engines, currently in use. Since the Clean Air Act (CAA) prohibits the sale of mid-level ethanol blends, the ethanol industry is currently seeking a waiver from the Environmental Protection Agency (EPA) to sell E15 as a general purpose fuel.
Taking a “science-first” approach, S. 1666 is designed to protect consumers with marine engines, outdoor power equipment, other non-road engines as well as automobiles. The bill requires that EPA’s Science Advisory Board (SAB) study the compatibility of such fuels with current engines before a waiver can be granted. The study would also include a comprehensive analysis of available independent scientific evidence on the compatibility of mid-level ethanol fuels with the emission requirements of the CAA and the operability of engines, among other things.
“During these difficult economic times, equipment damage due to ethanol-gasoline fuel blends only adds to the many challenges facing our nation’s farmers, fishermen, independent woodsmen, and recreational industry,” said Senator Collins. “As we pursue strategies to lessen our dependence on foreign oil, we must also take action to ensure that ethanol fuel blends are safe and efficient for small engines.”
“Ethanol simply burns differently than gasoline. I fully support the development of biofuels to help cure the U.S. of its dependence on foreign oil, but we need to make such a transition in a way that helps, not hurts, commercial and recreational equipment, as well as the environment,” said Senator Cardin, a member of the Senate Environment and Public Works Committee. “We need to let good science guide us in making sure that we are getting the clean air benefits and engine performance that boaters, lawn care companies and others who rely on smaller engines deserve.”
“NMMA applauds and thanks Senators Collins, Cardin, Whitehouse and Landrieu for introducing this important, common-sense bill,” said NMMA President Thom Dammrich. “This legislation validates a science-first approach to ethanol policy and shines the spotlight on the myriad of issues associated with hasty attempts by ethanol advocates to introduce mid-level ethanol blends into the marketplace.”
NMMA has raised serious concerns about the potential impacts of mid-level ethanol blends on recreational marine engines and boats, including increased air emissions, performance and durability issues, as well as warranty concerns. No recreational marine engines, fuel systems or boats are currently designed, calibrated, certified or warranted to run on any fuel with more than 10 percent ethanol. S. 1666 is supported by a wide and diverse coalition of organizations, including environmental groups, engine manufacturers, food groups, consumer groups, and refiners.
Sept 9 -- Michael Jones has been appointed head of Sales and Service in North and Latin America. He will report to President and CEO Magnus Yngen, and will be a member of Group Management.
Michael Jones is currently General Manager, Cooking Products, within the Appliances division of General Electric in the US. He has a B.A. in Business Administration and has held various leadership positions within General Electric in Sales, Service, Product Management and international business since 1994.
Jones will assume his new position as of 1 October 2009 and will be based at the Group's US headquarters in Charlotte, North Carolina.
Roger Leon, who is acting head of Sales and Service in North and Latin America, has been appointed head of Global purchasing.
In June 2009, Husqvarna announced a new organization which will be fully implemented as of 1 January 2010. Instead of six business sectors, the new organization comprises five operative units, i.e. Supply Chain, Products & Marketing, Sales and Service in Europe and Asia/Pacific, Sales and Service in North and Latin America, and Construction Products.
September 1 -- Briggs and Stratton Corp. plans to shutter its Jefferson factory by the end of the year, according to a filing with the state.
The Wauwatosa-based small engine and outdoor power equipment also plans to close its warehouse in Jefferson by the end of May 2010, the company noted in a mass layoff notice filed with the Wisconsin Department of Workforce Development.
Layoffs of employees at the Jefferson factory will begin on Oct. 31.
Briggs and Stratton announced in July a plan to close its Jefferson and Watertown factories and Jefferson warehouse in fiscal 2010, leading to the loss of at least 430 jobs.
The notice filed with the state indicates that 185 employees will lose their jobs in the initial round of layoffs.
The plants, which are run by Wauwatosa-based Briggs and Stratton’s power products division, currently manufacture all portable generator, home standby generator and pressure washer products marketed and sold by the company.
About 390 hourly production workers and 40 salaried employees will be permanently laid off as a result of the closing of the factories, Briggs said at the time.
An additional 90 to 100 salaried employees are expected to be given an opportunity to transfer to other Briggs and Stratton facilities.
The company has not yet filed an official notice with the state indicating the timing of the layoffs and planned shutdown of the Watertown plant.
Production at the Jefferson and Watertown plants will be consolidated into existing U.S. engine and lawn and garden product plants.
August 31 - San Diego's Fallbrook Technologies says it has struck a deal for what is literally a "greenfield" application of its NuVinci continuously variable transmission.
The venture-backed company, which has been steadily expanding the market for its transmission technology, has signed a licensing agreement with Hydro-Gear of Sullivan, IL, a leading maker of drive systems for lawnmowers and the outdoor power equipment market.
Under the agreement, Fallbrook and Hydro-Gear say they will develop a new application - an infinitely variable transmission (IVT) for zero turn radius (ZTR) riding mowers, which pivot rather than turn, as well as other types of mowers and garden equipment.
The IVT transmission, which includes forward, reverse, and zero output (idling) within its range ofgearless input-to-output ratios, enables the mower to move quickly forward and backward without manual shifting.
The innovation represents the latest in a series of technological advances over the past decade that have transformed riding mowers into more powerful, sophisticated, and versatile machines that also are used to plow snow, haul firewood, and carry out other chores.
Briggs & Stratton (the “Company”) is the world’s largest producer of air cooled gasoline engines for outdoor power equipment. Briggs & Stratton designs, manufactures, markets and services these products for original equipment manufacturers (OEMs) worldwide. These engines are aluminum alloy gasoline engines with displacements ranging from 141 cubic centimeters to 993 cubic centimeters.
Additionally, through its wholly owned subsidiary, Briggs & Stratton Power Products Group, LLC, Briggs & Stratton is a leading designer, manufacturer and marketer of generators (portable and home standby), pressure washers, snow throwers, lawn and garden powered equipment (riding and walk behind mowers, tillers, chipper/shredders, leaf blowers and vacuums) and related accessories.
Briggs & Stratton conducts its operations in two reportable segments: Engines and Power Products. Further information about Briggs & Stratton’s business segments is contained in Note 7 of the Notes to Consolidated Financial Statements.
The Company’s Internet address is www.briggsandstratton.com. The Company makes available free of charge (other than an investor’s own Internet access charges) through its Internet website the Company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after it electronically files such material with, or furnishes such material to, the Securities and Exchange Commission. Charters of the Audit, Compensation, Nominating and Governance Committees; Corporate Governance Guidelines and code of business conduct and ethics contained in the Briggs & Stratton Business Integrity Manual are available on the Company’s website and are available in print to any shareholder upon request to the Corporate Secretary.
Engines
General
Briggs & Stratton’s engines are used primarily by the lawn and garden equipment industry, which accounted for 81% of the segment’s fiscal 2009 engine sales to OEMs. Major lawn and garden equipment applications include walk-behind lawn mowers, riding lawn mowers, garden tillers and snow throwers.
The remaining 19% of engine sales to OEMs in fiscal 2009 were for use on products for industrial, construction, agricultural and other consumer applications, that include generators, pumps and pressure washers. Many retailers specify Briggs & Stratton’s engines on the power equipment they sell, and the Briggs & Stratton name is often featured prominently on a product despite the fact that the engine is a component.
In fiscal 2009, approximately 28% of Briggs & Stratton’s Engines segment net sales were derived from sales in international markets, primarily to customers in Europe. Briggs & Stratton serves its key international markets through its European regional office in Switzerland, its distribution center in the Netherlands and sales and service subsidiaries and offices in Australia, Austria, Brazil, Canada, China, the Czech Republic, England, France, Germany, Italy, Japan, Mexico, New Zealand, Poland, Russia, South Africa, Sweden and the United Arab Emirates.
Briggs & Stratton is a leading supplier of gasoline engines in developed countries where there is an established lawn and garden equipment market. Briggs & Stratton also exports engines to developing nations where its engines are used in agricultural, marine, construction and other applications. More detailed information about our foreign operations is in Note 7 of the Notes to Consolidated Financial Statements.
Briggs & Stratton engines are sold primarily by its worldwide sales force through direct calls on customers. Briggs & Stratton’s marketing staff and engineers in the United States provide support and technical assistance to its sales force.
Briggs & Stratton also manufactures replacement engines and service parts and sells them to sales and service distributors. Briggs & Stratton owns its principal international distributors. In the United States the distributors are independently owned and operated. These distributors supply service parts and replacement engines directly to independently owned, authorized service dealers throughout the world. These distributors and service dealers incorporate Briggs & Stratton’s commitment to reliability and service.
Customers
Briggs & Stratton’s engine sales are made primarily to OEMs. Briggs & Stratton’s three largest external engine customers in fiscal years 2009, 2008 and 2007 were Husqvarna Outdoor Products Group (HOP), MTD Products Inc. (MTD) and Deere & Company. Sales to the top three customers combined were 41%, 42% and 54% of Engines segment net sales in fiscal 2009, 2008 and 2007, respectively. Under purchasing plans available to all of its gasoline engine customers, Briggs & Stratton typically enters into annual engine supply arrangements.
Briggs & Stratton believes that in fiscal 2009 more than 80% of all lawn and garden powered equipment sold in the United States was sold through mass merchandisers such as The Home Depot, Inc. (The Home Depot), Lowe’s Companies, Inc. (Lowe’s), Sears Holdings Corporation (Sears) and Wal-Mart Stores, Inc. (Wal-Mart).
Given the buying power of the mass merchandisers, Briggs & Stratton, through its customers, has continued to experience pricing pressure; however, the Company attempts to recover increases in commodity costs through increased pricing. Briggs & Stratton believes that a similar trend has developed for its products in industrial and consumer applications outside of the lawn and garden market.
Competition
Briggs & Stratton’s major domestic competitors in engine manufacturing are Honda Motor Co., Ltd. (Honda), Kawasaki Heavy Industries, Ltd. (Kawasaki) and Kohler Co. (Kohler). Several Japanese and Chinese small engine manufacturers, of which Honda and Kawasaki are the largest, compete directly with Briggs & Stratton in world markets in the sale of engines to other OEMs and indirectly through their sale of end products.
Briggs & Stratton believes it has a significant share of the worldwide market for engines that power outdoor equipment.
Briggs & Stratton believes the major areas of competition from all engine manufacturers include product quality, brand strength, price, timely delivery and service. Other factors affecting competition are short-term market share objectives, short-term profit objectives, exchange rate fluctuations, technology, product support and distribution strength. Briggs & Stratton believes its product value and service reputation have given it strong brand name recognition and enhance its competitive position.
Seasonality of Demand
Sales of engines to lawn and garden OEMs are highly seasonal because of consumer buying patterns. The majority of lawn and garden equipment is sold during the spring and summer months when most lawn care and gardening activities are performed. Sales of lawn and garden equipment are also influenced by consumer sentiment, housing starts and weather conditions. Engine sales in Briggs & Stratton’s fiscal third quarter have historically been the highest, while sales in the first fiscal quarter have historically been the lowest.
In order to efficiently use its capital investments and meet seasonal demand for engines, Briggs & Stratton pursues a relatively balanced production schedule throughout the year. The schedule is adjusted to reflect changes in estimated demand, customer inventory levels and other matters outside the control of Briggs & Stratton.
Accordingly, inventory levels generally increase during the first and second fiscal quarters in anticipation of customer demand. Inventory levels begin to decrease as sales increase in the third fiscal quarter. This seasonal pattern results in high inventories and low cash flow for Briggs & Stratton in the second and the beginning of the third fiscal quarters. The pattern results in higher cash flow in the latter portion of the third fiscal quarter and in the fourth fiscal quarter as inventories are liquidated and receivables are collected.
Manufacturing
Briggs & Stratton manufactures engines and parts at the following locations: Auburn, Alabama; Statesboro, Georgia; Murray, Kentucky; Poplar Bluff, Missouri; Wauwatosa, Wisconsin; Chongqing, China; and Ostrava, Czech Republic. Briggs & Stratton has a parts distribution center in Menomonee Falls, Wisconsin.
As announced in April 2007, the Company discontinued operations at the Rolla, Missouri facility during the second fiscal quarter of 2008. Engine manufacturing performed in Rolla has been moved to the Chongqing, China and Poplar Bluff, Missouri plants.
Briggs & Stratton manufactures a majority of the structural components used in its engines, including aluminum die castings, carburetors and ignition systems. Briggs & Stratton purchases certain parts such as piston rings, spark plugs, valves, ductile and grey iron castings, plastic components, some stampings and screw machine parts and smaller quantities of other components. Raw material purchases consist primarily of aluminum and steel. Briggs & Stratton believes its sources of supply are adequate.
Briggs & Stratton has joint ventures with Daihatsu Motor Company for the manufacture of engines in Japan, with Starting Industrial of Japan for the production of rewind starters and punch press components in the United States, and The Toro Company for the manufacture of two-cycle engines in China.
Briggs & Stratton has a strategic relationship with Mitsubishi Heavy Industries (MHI) for the global distribution of air cooled gasoline engines manufactured by MHI in Japan under Briggs & Stratton’s Vanguard™ brand.
Power Products
General
Power Products segment’s (Power Products) principal product lines include portable and standby generators, pressure washers, snow throwers and lawn and garden powered equipment. Power Products sells its products through multiple channels of retail distribution, including consumer home centers, warehouse clubs, mass merchants and independent dealers. Power Products product lines are marketed under various brands including Briggs & Stratton, Brute, Craftsman ® , Ferris, Giant Vac, John Deere, Murray, Simplicity, Snapper, Victa and Troy-Bilt
Power Products has a network of independent dealers worldwide for the sale and service of snow throwers, standby generators and lawn and garden powered equipment.
To support its international business, Power Products has leveraged the existing Briggs & Stratton worldwide distribution network.
Customers
Historically, Power Products’ major customers have been Lowe’s, The Home Depot and Sears. Sales to these three customers combined were 35%, 34% and 38% of Power Products segment net sales in fiscal 2009, 2008 and 2007, respectively. Other U.S. customers include Wal-Mart, Deere & Company, Tractor Supply Inc., and a network of independent dealers.
Competition
The principal competitive factors in the power products industry include price, service, product performance, technical innovation and delivery. Power Products has various competitors, depending on the type of equipment. Primary competitors include: Honda (portable generators, pressure washers and lawn and garden equipment), Generac Power Systems, Inc. (“Generac”) (portable and standby generators), Alfred Karcher GmbH & Co. (pressure washers), Techtronic Industries (pressure washers and portable generators), Deere & Company (commercial and consumer lawn mowers), MTD (commercial and consumer lawn mowers), the Toro Company (commercial and consumer lawn mowers), Scag Power Equipment, a Division of Metalcraft of Mayville, Inc. (commercial lawn mowers), and Husqvarna Outdoor Power Equipment (commercial and consumer lawn mowers).
Power Products believes it has a significant share of the North American market for portable generators and consumer pressure washers.
Seasonality of Demand
Sales of Power Products’ products are subject to seasonal patterns. Due to seasonal and regional weather factors, sales of pressure washers and lawn and garden powered equipment are typically higher during the fiscal third and fourth quarters than at other times of the year. Sales of portable generators and snow throwers are typically higher during the first and second fiscal quarters.
Manufacturing
Power Products’ manufacturing facilities are located in Jefferson and Watertown, Wisconsin; McDonough, Georgia; Munnsville, New York; Newbern, Tennessee; and Sydney, Australia. Power Products also purchases certain powered equipment under contract manufacturing agreements.
As previously disclosed, Power Products ceased operations at the Port Washington, Wisconsin facility during the second quarter of fiscal 2009 and moved production to the McDonough, Georgia; Newbern, Tennessee and Munnsville, New York facilities.
In July 2009, the Company announced plans to close its Jefferson and Watertown, Wisconsin facilities. This production will be consolidated into existing United States engine and lawn and garden product facilities.
Power Products manufactures core components for its products, where such integration improves operating profitability by providing lower costs.
Power Products purchases engines from its parent, Briggs & Stratton, as well as from Honda, Kawasaki and Kohler. Power Products has not experienced any difficulty obtaining necessary engines or other purchased components.
Power Products assembles products for the international markets at its U.S. and Australian locations and through contract manufacturing agreements with other OEMs.
Consolidated
General Information
Briggs & Stratton holds patents on features incorporated in its products; however, the success of Briggs & Stratton’s business is not considered to be primarily dependent upon patent protection. The Company owns several trademarks which it believes significantly affect a consumer’s choice of outdoor powered equipment and therefore create value. Licenses, franchises and concessions are not a material factor in Briggs & Stratton’s business.
For the fiscal years ended June 28, 2009, June 29, 2008 and July 1, 2007, Briggs & Stratton spent approximately $23.0 million, $26.5 million and $25.7 million, respectively, on research activities relating to the development of new products or the improvement of existing products.
The average number of persons employed by Briggs & Stratton during fiscal 2009 was 7,024. Employment ranged from a low of 6,847 in June 2009 to a high of 7,212 in September 2008.
Export Sales
Export sales for fiscal 2009, 2008 and 2007 were $399.6 million (19% of net sales), $469.9 million (22% of net sales) and $388.9 million (18% of net sales), respectively. These sales were principally to customers in European countries. Refer to Note 7 of the Notes to Consolidated Financial Statements for financial information about geographic areas. Also, refer to Item 7A of this Form 10-K and Note 14 of the Notes to Consolidated Financial Statements for information about Briggs & Stratton’s foreign exchange risk management.
Briggs & Stratton maintains leased and owned manufacturing, office, warehouse, distribution and testing facilities throughout the world. The Company believes that its owned and leased facilities are adequate to perform its operations in a reasonable manner.
As Briggs & Stratton’s business is seasonal, additional warehouse space may be leased when inventory levels are at their peak. Facilities in the United States occupy approximately 7.1 million square feet, of which 55% is owned, including its corporate offices and an engine manufacturing facility located in Wauwatosa, Wisconsin.
Facilities outside of the United States occupy approximately 878 thousand square feet, of which 45% is owned. Certain of the Company’s facilities are leased through operating and capital lease agreements. See Note 8 to the Consolidated Financial Statements for information on the Company’s operating and capital leases.
Results of Operations
FISCAL 2009 COMPARED TO FISCAL 2008
Net Sales
Fiscal 2009 consolidated net sales were approximately $2.09 billion, a decrease of $59.2 million compared to the previous year. This decrease is attributable to the net effect of reduced shipment volumes, primarily related to lawn and garden equipment in the Power Products segment, unfavorable currency exchange rates, primarily the Euro, and a mix of shipments reflecting lower priced units. Partially offsetting the consolidated net sales decrease were sales of $39.5 million included in the results for the first time this year from the June 30, 2008 acquisition of Victa Lawncare Pty. Ltd., increased portable generator sales volume due to weather events and pricing improvements on certain products.
Engines segment net sales were $1.41 billion compared to $1.46 billion in the prior year, a decrease of $45.8 million or 3%. This decrease is primarily the result of product shipment mix reflecting lower priced units, a small decrease in engine shipments and unfavorable currency exchange rates. Softer demand for engines for powered lawn and garden equipment was offset by the improvement in demand for engines for portable generators.
Power Products segment net sales were $892.9 million in fiscal 2009 compared to $870.4 million in fiscal 2008, an increase of $22.5 million or 3%. This increase was the result of improved pricing on certain products and favorable mix improvements, the addition of $39.5 million from the Victa Lawncare Pty. Ltd. acquisition and a 58% increase in portable generator sales volume due to weather events. Offsetting these improvements was a 45% volume decline in our shipment of premium lawn and garden equipment that was comparable to the overall industry decline.
Gross Profit
Consolidated gross profit was $333.7 million in fiscal 2009 compared to $307.3 million in fiscal 2008, an increase of $26.4 million or 9%. In fiscal 2009 a $5.8 million pretax ($3.5 million after tax) expense was recorded associated with the closing of the Jefferson and Watertown, WI manufacturing facilities.
In fiscal 2008, the Company recorded a $13.3 million pretax ($8.1 million after tax) gain associated with the reduction of certain post closing employee benefit costs related to the closing of the Port Washington, Wisconsin manufacturing facility and a $19.8 million pretax ($13.5 million after tax) expense from a snow engine recall. In addition to the above items, consolidated gross profit increased primarily from enhanced pricing, lower spending and improved productivity, that was partially offset by the impact of unfavorable currency exchange rates, higher commodity costs and a mix of shipments reflecting lower margined product.
Engines segment gross profit decreased to $266.3 million in fiscal 2009 from $271.0 million in fiscal 2008, a decrease of $4.7 million. Engines segment gross profit margins increased to 18.8% in fiscal 2009 from 18.6% in fiscal 2008. As mentioned above, a $19.8 million expense was recorded in fiscal 2008 from a snow engine recall. In addition to the snow engine recall, the gross profit decrease year over year primarily resulted from $27.3 million in less favorable Euro exchange rates and higher commodity costs, partially offset by improved productivity.
The Power Products segment gross profit increased to $67.5 million in fiscal 2009 from $39.4 million in fiscal 2008, an increase of $28.1 million. The Power Products segment gross profit margins increased to 7.6% in fiscal 2009 from 4.5% in fiscal 2008.
As previously mentioned, a $5.8 million expense was recorded in fiscal 2009 associated with the closing of the Jefferson and Watertown, WI manufacturing facilities and a $13.3 million gain associated with the reduction of certain post closing employee benefit costs related to the closing of the Port Washington, Wisconsin manufacturing facility was recorded in fiscal 2008.
In addition to the above items, the gross profit increase primarily resulted from pricing improvements, a more favorable product mix and $9.4 million related to lower spending and improved productivity, which were partially offset by increased commodity costs and a 12% decline in sales volumes.
Engineering, Selling, General and Administrative Costs
Engineering, selling, general and administrative costs decreased to $265.3 million in fiscal 2009 from $281.0 million in fiscal 2008, a decrease of $15.7 million. Engineering, selling, general and administrative costs as a percent of sales decreased to 12.7% in fiscal 2009 from 13.1% in fiscal 2008.
The decrease in engineering, selling, general and administrative expenses was primarily due to planned decreases in advertising and professional services of $14.8 million and $5.5 million, respectively, offset by an additional $7.3 million related to the Victa Lawncare Pty. Ltd. acquisition.
Interest Expense
Interest expense decreased $7.0 million in fiscal 2009 compared to fiscal 2008. The decrease is attributable to lower average borrowings between years for working capital requirements and lower average interest rates.
Other Income
Other income decreased $38.2 million in fiscal 2009 as compared to fiscal 2008. This decrease is primarily due to the $8.6 million gain on the redemption of preferred stock and $28.3 million of dividends received on this stock in 2008.
Provision for Income Taxes
The effective tax rate was 20.9% for fiscal year 2009 and 23.7% for fiscal 2008. The fiscal 2009 effective tax rate is less than the statutory 35% rate primarily due to the Company’s ability to exclude from taxable income a portion of the distributions received from investments from the resolution of prior year tax matters and increased foreign tax credits. In 2008, the effective rate was reduced due to the Company’s ability to exclude a portion of distributions received from investments and the research credit.
