WAKARUSA — In describing the obstacles posed by Utilimaster Corp.’s rambling campus along S.R. 19, John Sztykiel used the example of a clean car.

Sztykiel, president and CEO of Spartan Motors, the parent company of Utilimaster, explained the need for a new production facility during a conference call with analysts and investors Tuesday. The call came a few hours after Utilimaster announced it plans to relocate all operations and corporate offices from Wakarusa to Bristol.

Currently, the vehicle manufacturer occupies a 106-acre stretch of land that includes 16 buildings, most of which are more than 40 years old. Sztykiel used the car example to help the conference attendees understand the situation.

“If you ever went there and you have just washed your car and you drove around the facility, visiting the different buildings — and again 16 different buildings ... you would come out of there with a really dirty car,” he said. “And then you’d walk away and say, ‘Now this is absolute madness, trying to build products in 16 buildings where the average age (of the structures) is 30 to 40 years old.’”

Utilimaster intends to put production under one roof by moving to a 425,000-square-foot building in the Earthway Industrial Park off Maple Street in Bristol. Changing locations will bring a “huge simplification” in the assembly process and give the company the “ability to deliver a higher quality product,” Sztykiel said.

In addition, the physical footprint of Utilimaster will shrink to 26 acres which, Sztykiel maintained, would bring efficiencies that will result in cost savings. To explain that, he talked about a large house that has lots of closets and a big garage. The extra space just encourages the buying of stuff that oftentimes is not used and instead only creates a drain on household finances.

“The same is true in business,” he said. “You go from 106 acres to 26 acres, I have no doubt our inventory turns will go up, our inventory will come down and we will see significant cash balance sheet improvement in the Bristol facility. Why? Because you just have less space.”

REAL ESTATE

The building on the Bristol property was constructed in 1999 with additions erected in 2001 and 2006, according to Brent Miller, senior vice president at FM Stone Commercial. It was originally home to the former Odyssey Group, a distributor of electrical and building supplies to the recreational vehicle and manufactured housing industries.

It is now owned by Fruit Hills Investments LLC. Utilimaster will lease the building.

Miller called the facility state-of-the-art and said not many buildings of that size exist in Northern Indiana.

Sztykiel concurred, crediting the designer of the building as being “extremely intelligent” because the interior space is wide open with few supporting columns interrupting the landscape and very high ceilings.

“It is ideal from a manufacturing point of view,” he said.

Utilimaster is waiting to see what incentives the town of Bristol and the state of Indiana offer before it finalizes its decision to move. However, anticipating the assistance package will be acceptable, the company has outlined plans to begin moving in the spring and be finished by the end of the year.

That will leave Wakarusa with a swath of old, empty industrial space. Utilimaster owns the property and will maintain the facility after it leaves to make it attractive to potential buyers, said company president John Forbes.

Miller believes the Wakarusa campus will be marketable. Price will be a key element but the property could be sold either as a whole unit or as individual parcels, he said.

STEP THREE

Spartan Motors acquired Utilimaster in November 2009 in an all-cash transaction valued at roughly $45 million. Utilimaster manufactures walk-in vans and commercial truck bodies primarily for the delivery and service market.

The decision to shift operations to another place is the third step in a strategic plan Spartan launched when it took over the Wakarusa-based company.

Sztykiel said the first step to boost operating income at the present facility and the second step to bring the Reach vehicle to market have been accomplished. Now the company is taking the third step to consolidate Utilimaster into a modern facility in order to enhance efficiency and income growth.

“Bristol is an important part of improving our operation, driving income in the right direction and positioning Utilimaster for the next step of growth as they move into the future from a delivery and service perspective,” he said.

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