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Ingersoll Rand Wants to Sell, Spin Off Bobcat Company

Fri May 18, 2007 - National Edition
James Macpherson - ASSOCIATED PRESS

BISMARCK, N.D. (AP) Employees of Bobcat Co., showed up for work May 15 to learn their company might be sold. The news left them with more questions than answers, but union officials said they were not panicking.

Ingersoll Rand Co. Ltd., Bobcat’s parent company, announced May 15 that it is looking into the possible sale or spin-off of North Dakota-based Bobcat Co., and construction-related businesses that no longer fit the company’s long-term plans.

“We are exploring our options right now,” said Paul Dickard, an Ingersoll Rand spokesman in Woodcliff Lake, N.J. “We have made no secret of wanting to divest or move away from a capital-intense machinery profile.”

Bobcat, known for its skid steer loaders, employs more than 2,600 people in North Dakota. It is headquartered in West Fargo, with plants in Bismarck and Gwinner that make machinery for light construction.

Bobcat began as Melroe Manufacturing, making a skid-steer loader originally designed to clean turkey barns in southeastern North Dakota. Melroe, founded in 1947, became part of Clark Equipment Co., which sold it to Ingersoll Rand in 1995.

“We’ve pretty much been through sales before,” said Arnold Zins, treasurer of Steelworkers Local 566 in Bismarck. “It was a smooth transition and the day-to-day operations, as far as the jobs were concerned, never really changed.”

Gov. John Hoeven said he spoke with Bobcat Chief Executive Officer Richard Pedtke about the importance of the company in the state.

“There is interest from other companies in buying it. They’re going to evaluate those options and also the possibility of spinning it off to their shareholders,” Hoeven said. “It could end up being a stand-alone company or it could be sold to a different company.”

Hoeven said he had no indication of any major changes in Bobcat’s North Dakota work force and that the business overall is strong. The news comes a week after another a data storage company, Imation Corp., announced plans to close its Wahpeton plant by mid-2009.

Dickard said Bobcat also has operations in the Czech Republic and China but is “primarily a North Dakota company.” Ingersoll Rand expects to make a decision on Bobcat’s future sometime this year, he said.

Ingersoll Rand would spin-off Bobcat to its shareholders if it were for sale but did not fetch a favorable asking price, Dickard said.

“It’s still an excellent business, but it has hit a rough patch recently,” he said. “We still think very highly of the business.”

Bobcat revenues dropped approximately 5 percent last year compared to 2005, due to a decline in North American markets and a drop in shipments to distributors, Dickard said. Company revenues declined by more than 15 percent in the fourth quarter of 2006 compared with the same quarter in 2005, he said.

“I guess anything is for sale for the right price,” said Tom Ricker, president of the United Steelworkers Local 560 in Gwinner.

“Sure, employees will have a lot of questions — like if it’s sold, to whom?” Ricker said.

Union workers at the Bismarck plant agreed to a new four-year contract in October, after a two-week strike in a dispute over wages and health care costs. Union workers in Gwinner approved a new four-year contract in December without a strike.

Ricker said 63 workers took voluntary severance packages, and 78 were laid off in February, bringing the work force down to 921.

Ricker said many of the laid off workers have been recalled at the Gwinner plant although the company said the positions may not be permanent.

Ingersoll Rand, incorporated in Bermuda, has long been known as a construction and mining equipment manufacturer. It also builds such things as refrigeration equipment, locks, tools, air compressors and golf carts.

In February, the company sold its road construction equipment division to Sweden’s AB Volvo for $1.3 billion in cash.

“We’re moving toward business that provides a more consistent growth stream for us,” Dickard said.

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