As heavyweight motorcycle makers like Harley-Davidson deal with a shrinking motorcycle market, their suppliers are also having to contend with the reduced sales volumes that come with declining motorcycle shipments.
Milwaukee-based seat maker Milsco Manufacturing made the strategic decision in 2015 to pursue additional business in the heavy equipment market, including in construction, agriculture and material handling.
The result is heavy equipment has gone from 25 percent of revenue in 2015 to 35 percent today, Brian Kobylinski, chairman and chief executive officer of Jason Industries Inc., said on the company’s earnings call. Jason is the parent company of Milsco and is also based in Milwaukee.
“The motorcycle market is core to Milsco and we will continue to anticipate and support our customer needs, but it was imperative for us to better balance our sources of revenue to minimize cyclicality,” Kobylinski said.
Harley has long been an important customer for Milsco and the company used the motorcycle maker’s 115th anniversary as an opportunity to show off its new research and development facility in the Menomonee Valley.
Kobylinski said Milsco’s product development capabilities are helping it compete for new business in new markets.
Net sales for Jason’s seating segment, which is comprised of Milsco, declined from $176.8 million in 2015 to $159.1 million in 2017, a drop of 10 percent. Through three quarters this year, sales are up about 1 percent. Four of the last seven quarters have seen core sales growth, including a 5 percent increase in the most recent quarter.
Kobylinski attributed the gain to increases in the construction, agriculture and material handling markets.
“These are double digit type growth rates, pretty healthy,” he said. “Not only do we have markets that are doing well in this area, but we are picking up share and I think the combination of the two is more than offsetting what we see as, quite honestly, the secular decline of motorcycles.”
He added that the turf care segment has also seen some growth and the company is making progress toward securing a supply and partnership agreement for “an early mover position” in electric turf care products.