Gehl to Discontinue Agricultural Implement Lines to Focus on Compact Machinery

Gehl Co. recently announced plans to discontinue the
manufacturing and distribution of its agricultural implement product lines. The
company’s West Bend, Wis., agricultural implement manufacturing operations will
permanently close following the wind down of operations over the next 60 days
(starting in April).

The product line discontinuation is expected to result in an
after-tax charge to the company’s 2006 earnings of approximately $9.5 million.
The company anticipates a reduction in employee headcount of approximately 140
individuals to match the decline in manufacturing and administrative activities
associated with its agricultural implement product lines. The location of the
company’s corporate headquarters in West Bend will not be impacted by this
action.

“Over the last 20 years, there has been a continuous
consolidation occurring in the U.S. dairy industry. Many of our small dairy
farmer customers have either retired or sold their operations to larger
producers. Consequently, the customer base for our agricultural implement lines
has declined dramatically,” said William D. Gehl, Gehl Co. chairman and CEO.
“The decision to discontinue the agricultural implement product lines is a
response to the ongoing reduction of the company’s traditional dairy farmer
customer base and the resultant decline in the company’s sales and earnings of
its implement product lines.

“Although we are eliminating our agricultural implement
product lines, we remain fully committed to our agricultural equipment dealers
and customers through our continuing supply of compact equipment and ongoing
parts and service support for the ag implement product lines.

“During the past decade, Gehl Co. has developed its compact
equipment product lines to adapt to the changes in the agricultural marketplace.
We have been proactive by introducing a new expanded line of skid loaders,
including the largest in the industry, along with track loaders, compact
excavators, all-wheel steer loaders and the CT Series telescopic handlers, which
are all well suited for the agricultural customer of today and tomorrow. The
evolution of our business focus on the growing market for compact equipment is
evidenced by the fact that over 90 percent of our 2005 sales were compact
equipment related.”