Mario Andretti's 1981 El Tigre 6000

1981 Arctic Enterprises news

   To the chagrin of the workers and management at Thief River Falls, history continued to repeat itself in the decade ahead, as the early 1980s paralleled the early 1970s and rampant growth quickly disappeared. This time, however, the effects were much more devastating. Sales in 1980 climbed to $185 million, despite a decline in snowmobile sales throughout the country, but by far the most telling and most depressing financial figure for the year was the company's profit total. Arctic Enterprises lost $11.5 million during the year, a staggering blow that was followed by another $10 million loss the following year. As production totals in 1981 fell to their lowest levels since 1969, the bankers who had granted the company loans over the years became disgruntled and alarmed. Worried that the company would not be able to make good on its financial promises, the bankers called for the payment of $48.5 million in loans on February 6, 1981. Eleven days later, Arctic Enterprises filed for protection under Chapter 11 of the U.S. Bankruptcy Act. In a year that otherwise would have been celebrated as the company's 20th anniversary year, Arctic Enterprises was ruined financially.

1981 Arctic Enterprises under bankruptcy

   The news could not have been worse, but even as steps were being taken to liquidate the snowmobile operations and the rest of the company was being sold piecemeal, there were some encouraging reports that at least seemed to underscore the strength of the Arctic Cat name in snowmobile circles across the country. Even though the company's production facilities had been shuttered, the demand for Arctic Cat snowmobiles had increased. Remarkably, sales were up high enough for the company to capture 38 percent of the U.S. market one year after production had stopped, providing ample evidence that loyalty to and confidence in Arctic Enterprises' products remained high.

   Dead but not forgotten, Arctic Enterprises was etched in the memories of its loyal customers, some of whom vowed never to ride a snowmobile again. The memory of the company also was etched in the hearts of its former employees, the pangs of which led a small group of former managers to attend the auction of Arctic Enterprises' various properties. Included in this group was Edgar Hetteen, who returned to witness the dismemberment of the company he had left nearly 20 years earlier; by the end of the day the group had acquired enough of Arctic Enterprises' properties to establish a new snowmobile manufacturing company, which was incorporated as Arctco, Inc. in 1983. As company advertisements would soon announce, the Cat was back, and for the legions of faithful customers the return of the popular Arctic Cat snowmobiles was welcome news.

   After acquiring the production rights and the exclusive use of the Arctic Cat brand name, Arctco made preparations to get its product to market, beginning production of its snowmobiles in August 1983. The less than 3,000 snowmobiles made for the 1984 model year sold out quickly, enabling the company to generate $7.3 million in sales and post $600,000 in profit. All of Arctic Cat's trademarks, equipment, and manufacturing properties were acquired subsequently in 1986 and 1987, restoring much of the luster formerly radiated by Arctic Enterprises.