Spartan Motors has announced it will exit its Road Rescue ambulance operation as part of its continuing review of its business.
The company is currently in discussions with potential buyers of the segment.

The company said it wants to focus on the parts of its business with the highest growth and profit opportunities. Spartan expects to exit Road Rescue by the end of this year, as it fills existing customer orders. Road Rescue generated approximately $20 million in revenues in 2009, and it employs 132 full-time workers.

"Over the last 12 months, Spartan has evolved, as has the emergency response market, and the Road Rescue operation is not large enough to justify the resource commitment when we have greater potential elsewhere," said John Sztykiel, president and CEO of Spartan Motors. "Road Rescue partnered with another ambulance company, where there is additional scale and product breadth, would be a real asset."

Spartan also announced a number cost-cutting measures, including a temporary reduction in Board of Directors' retainer fees, salary reductions for members of the executive leadership team and other senior leaders, some select workforce reductions, and other actions.

"Although these decisions are never easy, as they impact the lives of our associates and the communities we serve, we believe these actions will result in improved effectiveness in our operations," said Sztykiel. "It also allows us to better focus our efforts in Spartan's five core markets - emergency response, outdoor recreation/RV, defense, delivery and service, and specialty - while maximizing demand for Spartan chassis, aftermarket parts and assemblies and the Isuzu strategic alliance. We have tremendous strategic opportunity, and it is imperative we reduce our operational cost base to improve our position going forward."

With the realignment actions and exit from Road Rescue, Spartan expects to incur pre-tax one-time charges of approximately $6 to $7 million, most of which will show up in its second and third quarter results. The company expects the moves to reduce permanent cost structure by $5 to $6 million on an annualized pre-tax basis.

"The actions we announced today represent our continuing efforts to right-size our operations based on the current business environment," said Joe Nowicki, chief financial officer.