I hope that you and your family are staying safe and healthy during these trying times.
It will not surprise you to learn that the impacts of Covid-19 on our company have been substantial, with all global markets affected by the pandemic and demand for golf products hardest hit in North America, Europe and Southeast Asia. Most of our production facilities have temporarily shut down, and the state of Massachusetts has extended its closure order for non-essential business services until May 4 at the earliest. We anticipate that California and most other states will adopt similar timelines, along with much of Europe.
Our approach and responses to this situation are guided by two key priorities.
The first is to protect the company and our associates during the next 30 to 60 days, which are expected to be the most intense period of this crisis. With production suspended, demand for golf products stalled, and Acushnet’s overall workload slowed or in some cases stopped, we must temporarily reduce company staffing levels to be compatible with these reduced work levels. While we do this, we have prioritized the importance of continuing to provide associates with uninterrupted access to company medical benefits during this period of great uncertainty.
To achieve these objectives, we are implementing a comprehensive and far reaching associate furlough program. Already more than 1,300 Acushnet associates have been placed on furlough leave, and many more positions will be furloughed by the end of this week as we in effect power down the company to match the powered down golf industry. These extraordinary times require an expansive approach which will unfortunately impact most of our associates. We are planning for the furlough period to last between 30 to 60 days, with the timing of associate returns varying depending upon government regulations and the pace at which work functions resume.
By utilizing this furlough option all associates will receive full Acushnet benefits, continue to accrue service time, maintain or be paid out accrued vacation, and collect unemployment benefits which have recently been increased through the coronavirus stimulus act.
Our second priority is to carefully assess the pandemic’s long-term economic impacts on the golf industry and Acushnet, and to ensure that our structure and staffing are aligned with revised, long-range forecasts. The use of furlough buys us time to better understand and prepare for what will likely become a new normal for our business.
The Acushnet leadership team is confident that this is the best approach for our company and associates as we endure the toughest weeks and months of this crisis, and for when the situation improves and we are able to gradually ramp up operations. We understand and are sorry for the difficulties this will bring to all associates and especially those placed on furlough leave. During the furlough period salary reductions have been implemented for Acushnet’s senior management team.
I will add that Acushnet entered this crisis healthy and financially secure, and will benefit from this over the coming month and years. Not all our competitors or retail partners can make this same claim, and some will find it especially difficult to withstand the economic impacts of this pandemic.
These are extraordinary times and admittedly the thought of a company furlough program had never before crossed my mind during my years with the company. After exploring all available options, I believe that this is what we must now do to protect Acushnet and our associates in the near term, and to responsibly position Acushnet for the future.
More than ever, I thank you for your dedication and commitment as we persevere through this global health crisis.
President & CEO