Air Tractor and Thrush Issue an Update Letter to Customers

Last week, Air Tractor President Jim Hirsch and Thrush President & CEO Mark McDonald issued a letter to customers following the announcement of Air Tractor’s purchase of Thrush three weeks ago.

The letter explained the reasons for the transaction and how the companies will move forward. Air Tractor will end its plans for its large expansion into Plant 5 in Olney, with help from Thrush’s capacity. Thrush needs capital to weather the agricultural slowdown, and both companies need a backup plan in case a tornado or hurricane ever strikes a factory.

The companies announced a 5% price reduction on the 510P2 and 510P2+ models, effective immediately, and expect to maintain that pricing through 2027.

The letter stated, from the industry perspective, given the way costs have increased in almost every aspect of the agricultural and firefighting markets, the OEM’s needed to find a way to reduce prices and give some relief to customers. We are still feeling the effects of COVID and war on material costs and the performance of our supply chains. There are synergies the two companies can harvest to eliminate the need for future aggressive price increases. There are savings in the supply chain, in engineering projects, in overhead expenses such as marketing, and in insurance policies, etc. There are world-class processes at Air Tractor and at Thrush. The two have created teams that are at both locations, working to harvest as much of these savings as quickly as possible to protect the battered AG market.

The transaction was structured to help both companies lay a foundation for future growth. Air Tractor Holdings, Inc., the parent of Air Tractor, bought the equity of Thrush Aircraft, LLC, bringing Thrush in its entirety under the parent company. Thrush has a new board of directors and no debt. Air Tractor funded the working capital accounts and the all-employee bonus plan. A number of equipment and facility-related projects have been launched in Albany. The new capital expenditure budget at Thrush will be three times higher than in the past, which means safer processes, higher quality, greater throughput, and lower costs through improved efficiency. Employees from both companies are on board and excited about the future.

In the marketplace, both companies’ dealers continue to serve customers, and no changes have been made to dealers or service centers; competition remains as it was before the purchase. Air Tractor has confirmed in writing to Thrush customers that long-term contracts with product development activities will be executed as stated in the contracts, and those contracts include the 510 and the 710. Both companies are trying to learn from each other to improve products and services and to reduce costs.