With production line shifting to Michigan, Utilimaster preparing for its own move
WAKARUSA — Production of the new environmentally-friendly Reach delivery van has started to migrate from the Utilimaster plant on S.R. 19 to the campus of Spartan Motors in Charlotte, Mich.
Although the manufacturing schedule was delayed by three months, the vans are being built. Spartan, parent company of Utilimaster, is expecting to ship a total of 500 to 1,000 Reach vehicles in 2012 and anticipates production will nearly double in 2013.
Spartan and Utilimaster officials recently provided details on the Reach production and gave an update on the work in Wakarusa as well as the impending move to Bristol.
As part of the original Reach launch plan, the assembly line will shift north from Indiana to the Spartan headquarters which will put the body assembly closer to the Isuzu diesel chassis operation.
Despite losing the new van, Utilimaster has a backlog of orders and is growing its payroll. To date, about 80 new production workers have been hired and the company is looking to add another 150 by the end of August. The manufacturer has a current workforce of 839.
Utilimaster heralded the start of the Reach vehicle production with special luncheon in October 2011. However at the release of the 2012 first-quarter earnings, the company acknowledged production did not get into gear as quickly as planned, in part because of issues with components either not being delivered on time or having to be reworked.
On Monday, Spartan sent out a press release updating the status of the Reach launch, highlighting that demand for the vehicle continues to be positive and the relocation of production is under way.
Spartan CEO John E. Sztykiel characterized the delays as not surprising considering the vehicle’s use of advanced composite materials and new manufacturing processes.
“As is often the case with game-changing new products, we have encountered some challenges to overcome as we bring the Reach into the marketplace and believe it is appropriate to slow the production ramp-up,” Sztykiel stated in the release. “But all problems have identifiable solutions. Those solutions are being put into effect now and the customer’s delivery requirements will be met.”
In anticipation of the shift in production, Utilimaster built extra units and is now outfitting those vehicles with assorted options like back-up cameras and shelves, according to John Marshall, senior vice president of sales and marketing at the company. This will allow the Reach to continue flowing onto the market so dealers will not have any interruption in getting the vans.
The Wakarusa manufacturer is also addressing some “fit-and-finish and appearance issues” on roughly 170 Reach vans. Marshall said these issues revolve around the company continuing to improve the quality of the vehicle and working with suppliers to find better materials.
“These are not catastrophic scenarios by any means,” he said. “We’re in great shape.”
The plan for relocating the Reach production also included shifting a chassis production line to Utilimaster. Bringing the work to Indiana remains the intent but it will not be coming as soon as originally expected because of Utilimaster’s impending move to a plant on Earthway Boulevard in Bristol.
“The relocation of all Utilimaster operations from Wakarusa to Bristol is a significant endeavor and that is going to cause us to push out the movement of the RV chassis line somewhat,” said Spartan spokesman Russell Chick.
On June 21, the Bristol Town Council gave final approval for tax abatements on real property and personal property for Utilimaster.
The manufacturer has been remodeling the former Odyssey Group building, adding concrete, knocking down two interior walls and enclosing an outdoor courtyard. Office furniture and personnel will start to be moved in July with production lines shifting toward the end of the year.
“It’s going to become a customer showcase that we really haven’t had before,” Chick said of the new location. The company will be moving from the multiple-building campus in Wakarusa to a single 425,000-square-foot facility. “When we’re all in one building in Bristol that will enable us to showcase the production process in a way we’ve never been able to do before.”