Expansion creates jobs, more than doubles facility’s footprint
by Clint Riese
Polaris is booming. The Medina-based powersports giant has climbed to new heights in recent years through acquisitions and the wild success of new vehicle lines. Sales in 2013 reached $3.8 billion, more than double that of 2009, and profits and stock value followed suit.
Most of the technical brains behind the products driving the company’s surge punch the clock at Polaris’ product development center in Wyoming. The facility is filling up again after a $20.5 million expansion more than doubled its footprint last year.
The campus at the eastern end of East Viking Boulevard is Polaris’ main engineering center, responsible for developing the company’s motorcycles, side-by-side vehicles and many of its ATVs and electric vehicles. The site is key to powertrain development, as well. Not one product is manufactured there, but Wyoming workers have their hands in projects from Roseau to India.
Product development is the key to continued growth, engineering facilities manager Bob Kollross said. Companywide, investment in engineering leapt from $85 million in 2010 to $134 million in 2013.
“Polaris has grown dramatically, and as the sales grow the engineering investment has to grow with it, and a lot of that is coming here (to Wyoming),” he said.
The need for product development to keep up with sales growth is what brought Polaris to Wyoming nine years ago.
“We couldn’t get enough people to Roseau,” Kollross said.
He added, “It was too remote for the growth we needed, so by getting down into the edge of the Twin Cities, we were still able to keep the small-town culture by being in Wyoming.”
The location here also offered the company convenient access to its manufacturing facility in Osceola, Wis.
Polaris opened the Wyoming product development center with 190 employees in the spring of 2005. As part of a 20-year facility plan to accommodate 800-1,000 people, the original building was laid out on the far end of a large lot, and infrastructure was put in for future expansions.
That time came in September 2012, when Polaris broke ground on a 145,000-square-foot expansion, which Ryan Companies completed last June.
Dubbed Phase 2, it features office capacity for 332, bringing the center’s total office capacity to 626. Including all non-office employees, such as laboratory and workshop crews, total employment at the location has already increased to 458, representing an increase of more than 100 since the groundbreaking and more than 220 since the end of 2008.
Considering the rate of growth of the company as a whole, Kollross figures it may not be long before the campus hosts another groundbreaking. Room exists on the south end of Phase 2 to attach a 23,000-square-foot, two-floor office building. It could hold another 225 people, bringing the site’s total capacity in line with estimates in the original 20-year plan.
“We were sized for five-year growth (with Phase 2),” Kollross said. “Well, we’re into this not even a year yet and we don’t think we can wait four more years before we’ll have to expand again.”
In Roseau, where Polaris began in 1954, about 300 employees work in product development relating to snowmobiles, ATVs and engines, but their space is maxed out.
“Wyoming is the growth location for product development,” Kollross said.
In Wyoming, work is done in integrated teams. While product engineers specialize in a certain line, such as electric vehicles, motorcycles or ATVs, the team for a specific product also consists of members specializing in areas such as purchasing, sourcing, service and manufacturing support.
The new wing caters to the team model. Framed by low walls, desk areas are stationed in clusters of two, four or whatever amount is needed for a team working on a project or product.
“With the space and the way it laid out, it allows us to bring the groups together, and we get great results out of that,” Polaris Chief Technology Officer Steve Kemp said.
He added, “We really try to put all the things there that product development needs to be creative and innovate.”
On one day, meeting rooms may be used for teams to video-conference with engineers in Polaris’ Switzerland office. The meeting rooms intentionally bridge the office and workshop areas, so on the next day, teams might wheel in an ATV prototype for a project update session.
Break rooms were intentionally arranged on the border of the workshop and office spaces. They feature clear walls on which employees can jot ideas to share.
A spacious new conference hall holds desks for at least 350 people, and when more room is needed, clear-panel garage doors making up the back wall swing open to connect the space with the dining area of the lobby. Videos or slideshows are projected onto two large screens during big functions such as yearly managers’ meetings.
The new wing is designed so floor-to-ceiling windows along the front wall spill light onto the farthest recesses of the building. Skylights add to the natural atmosphere in the 44,000-square-foot office space. As in the original wing, huge murals featuring Polaris products hang over their respective zones, and workers’ motorcycle and snowmobile helmets dot the tops of cubicles throughout.
Unlike Phase 1, the new wing’s workshop is larger than its office space, and the shop will likely eat into some of the vehicle storage space behind it once it reaches capacity.
The 65,000-square-foot workshop features 25 large bays designed for the company’s off-road and electric vehicles. The original wing is now designated for Polaris’ motorcycle brands – Victory and Indian – as the bikes are easier to maneuver through the tighter workshop and narrower hallways on that side.
The building project also included new electrical labs, an electromagnetic interference chamber, and expansions to the kitchen, cafeteria and lobby display area. Separate from the project but completed simultaneously, Polaris spent $3.8 million for a sound-testing room and expansions to the structural test lab and fabrication shop.
It is easy to see the gains in efficiency made possible by the project, Kollross said.
“It made sense to expand, and now it’s even more so,” he said. “You go from the potential of leveraging 300 people together to now we can leverage 700 together, and you have all your laboratories and all your other support functions right here together. We have much better scale now, and it’s hugely efficient.”
The company’s recent success is even more impressive considering growth began during a recession in which consumers cut back on discretionary spending.
Investing analysts credit CEO Scott Wine, whom the Minneapolis/St. Paul Business Journal recently named its 2014 Executive of the Year. The Virginia native came to Polaris in 2008 with an approach of cutting costs while diversifying the company through acquisitions.
Polaris acquired Indian Motorcycle in 2011, as well as several foreign companies that specialize in small, on-road vehicles that are low-emitting or electric. It picked up the manufacturer of Klim riding gear in 2012, and just last week announced the acquisition of a Wisconsin company that makes ATV accessories such as plows and storage compartments.
Meanwhile, Polaris has unveiled a string of high-selling products. Demand for its sport side-by-side RZR line took off last summer, and the release of the Sportsman Ace single-passenger ATV this January led to the quickest initial sellout in company history.
About 70 percent of sales are coming from new products released in the last three years.
“That shows how impactful product development is, but it also says customers are excited about better, new and exciting things,” Kemp said.
Besides further developing international markets, Kemp said, a main focus is on reaching more riders with new types of vehicles. Polaris was founded as a snowmobile manufacturer, Kemp noted, then ATVs became the hot item, and finally side-by-sides. Today’s customers are also seeking developments on new fronts, such as ways to share their riding experiences. (Polaris has an app for that.)
“We just know that things are going to move, and what we are selling today may not be what we’re selling into the future, so we have to be looking for what that next interesting vehicle is,” Kemp said.
When that inspiration strikes, the product development teams will be called on to turn a concept into reality.
“A lot of our survival in this business is around speed to market,” Kollross said. “You’ve got to come with a lot of innovative products, and you’ve got to be there fast, and you’ve got to stay ahead of your competition. If you want to lead, you’ve got to be fast, so this (expansion) has really, really helped us in that approach.”