To finance its $4.9-billion acquisition of Bobcat - the largest overseas purchase by a South Korean company in the country's history, according to media reports - Doosan piled about $4 billion of that purchase onto Bobcat.
Photo courtesy of Bobcat

Bobcat Co. recently announced it will be shuttering its Bismarck, N.D. plant by the end of the year. The plant's union leader recalled a conversation he had with Doosan officials in 2007 when the South Korean company purchased the manufacturer for $4.9 billion.

"We didn't pay $4.9 billion to move anything," was what Doosan officials told him two years ago, said Jeremy Bauer, the president of the United Steel Workers Local 566. "And two years later, here we are," he said.

By the end of the year, Bobcat will purge 475 jobs in Bismarck, move the plant's operations to Gwinner and open 390 positions there amid a global recession that has devastated the world's leading manufacturer of skid-steer loaders. Production for other equipment manufacturers has tailed off so Bobcat is not alone. How can the manufacturers stay competitive with each other in a down economy?

Chuck Yengst, a construction manufacturing industry analyst and president of the Wilton, Conn.-based Yengst and Associates, said Doosan was likely the victim of a down economy, but also burdened by the debt it took on when it purchased Bobcat from Ingersoll Rand in 2007.

As long as the company continued producing its skid-steer loaders and mini-excavators at peak levels, that debt would not affect Bobcat, Yengst said.

Source: Bismarck Tribune