dont believe it... dean says the economy is still strong
Boating industry struggles to stay afloat in U.S.
By ASHLEY M. HEHER Associated Press March 31, 2008
CHICAGO Since 1973, Hunter Scott had made sailboats, powerboats and custom-made lobster boats.
But he decided to close his Pocasset, Mass., shop in December, lay off half his staff and switch to cabinetry work as orders for the $300,000 vessels all but dried up.
"I had a lot of fun in the marine industry," he said. "But the economy has taken its toll."
Across the country, the $40 billion boating industry is struggling to weather a season of gloomy news.
A triple threat of falling consumer confidence, rising gas prices and the nation's economic downturn has pummeled the industry, changing the boating habits of recreational skippers while forcing layoffs, plant closures and corporate reorganizations the likes of which haven't been seen in nearly two decades.
"It's a challenging time," said Bill McGill, chairman and president of Clearwater, Fla.-based MarineMax Inc. The nation's largest recreational boat and yacht retailer recently laid off 10 percent of its work force as profit fell nearly 50 percent during the last fiscal year.
Industrywide, sales of new boats have been slipping virtually every month since mid-2004, when the nation's consumer confidence began to dip. Sales closed out the year down nearly 15 percent compared with the previous December, according to market research data.
Even more troubling: Souring sales, which began with smaller and cheaper boats and progressed to 30-foot midsize models, are beginning to infiltrate the yacht market, where yearslong waiting lists for the 50-foot-plus multimillion-dollar vessels are evaporating, said Marisa Thompson, an analyst at Morningstar.
That's a sign that even the wealthy are beginning to watch their pennies.
"A lot of people are holding out hope that things will turn around, that in another six to eight months they'll get a glimmer of a turnaround," Thompson said. "But that's up in the air right now. I don't see the catalyst on the horizon."
Since the beginning of 2007, Lake Forest, Ill.-based Brunswick Corp. which manufactures more than a dozen boat brands, including Bayliner, Sea Ray and Hatteras closed or announced plans to mothball seven factories and laid off more than 1,300 workers as it realigns its business and cuts production by more than 10 percent.
The company's boat segment lost $81.4 million in 2007, weighed down by a hefty one-time charge and anemic sales.
"We're running our company as if 2008 is going to be down and when we get to midyear, we'll begin to look at 2009 and we'll do what we have to do," said Chief Executive Dustan McCoy.
The industry's downturn became particularly pronounced more than two years ago as the nation's housing sector began to falter and grew steadily worse by the month.
"We thought last fall that what was being experienced by the industry was as bad as it was going to get," said MarineMax's McGill. It "has actually gotten worse."
Until consumer confidence returns, industry executives are making an effort to reach out to customers, offering classes and excursions, focusing on overseas sales buoyed by the weak dollar, and developing fancy-featured new models in an effort to win back U.S. shoppers when consumer confidence grows.
"When a recession first hits, the boating industry, like many of the other leisure industries, is the first to get hit and the last to bounce back," said Scott, 57. "Until that happens, it's going to be a little slow around the marinas."
Marinas see decline
Brian Tinkler, general manager at Sunset Marina in West Ocean City, Md., is preparing for a slow summer especially if the mid-Atlantic's fishing business is less than robust.
Tinkler has seen customers ration boat trips and share expenses for a single boat, rather than taking trips with several boats at a time.
"If people know the fish are there, they'll pay the money for the fuel to go catch them. But they aren't going to pay the money to go on a wild goose chase for fish," he said.
Meanwhile, Tinkler's seeing his charter business ebb as fuel prices climb. Three years ago, his marina on Maryland's Eastern Shore chartered boats for $800 to $1,500 a day. Now, a daylong rental for the same fleet costs $1,200 to $2,500.
Alex Laidlaw, a vice president of Encino, Calif.-based Westrec Marinas, said he expects to see fewer smaller boats on the water and fewer medium-size boats which can cost from $75,000 to several hundred thousand dollars departing from his company's 26 marinas.
"We're clearly going to see a slower summer," he said. "They're going to the boat, but the boat is staying at the dock."
Hixson, Tenn., insurance agent Gary Brown has no plans to keep his 32-foot cruiser, Gentle Persuasion with its twin 75-gallon gas tanks and a fuel efficiency of just a few miles per gallon in its slip.
Instead, "I'll throttle back, consume gas a little better, and just take a little longer to get there," he said.
Al Ehrlich, 67, of Chicago is scaling back what he spends on movies and other shows so he can afford to spend as much time as possible aboard his 45-foot boat, Adrenaline, when the ice on Lake Michigan thaws.
"I'm almost thinking of putting a sail on my boat to let the wind help me along," he joked.
But like most die-hard boaters, Ehrlich has no plans to be landlocked. "I have a large investment in mine, so I'm going to use it one way or another," he said. "I'm not going to let it sit."
The Beak be gone
dont believe it... dean says the economy is still strong
Bill McGill is an idiot. I've met him. He is a real "rocket scientist" but couldn't figure out that last June is when the boating market started to get hit hard.
"Friends don't let friends roll around in trash cans" - OSO Steve
Guys Deans outlooks are optimistic, he is a glass half full kind of guy you know? There are segments of the economy that are having problems and anything that requires fossil fuel and is non essential or pleasure related will be one of those segments not doing well at this time. I would rather have the positives pointed out to me in these times then have only the doom and gloom of the liberal media as my sole provider of information, Dean digs up some good articles that for the most part are slant free and bare bones fact driven articles which is the type of news I prefer. I hope he never stops posting personally.
FYI, I posted this article because I thought that it was relevant to this boating community website - not to counter anyone's optomistic view or promote anyone's gloomy view.
BTW, who's this Dean guy and has he ever posted anything about boats?
The Beak be gone
That article is sensationalistic and does not contain one bit of news. My advertising reps from the local paper were here yesterday and they got a verbal beating from me for running that story without a counterpoint showing that there has not been a better time in memory to buy a boat.
I pulled my ad $$ and am campaigning among my colleagues locally that they do the same until the paper starts printing some good news.
In the alternate, I offered to reinstate my ad $$ if they printed a story similar to this one:
copied here for your convenience.
Spiral Death Watch: Newspaper Ads In The Can
36 comments »
Newspaper ad sales continue their long, sad decline, down 7.4 percent in the third quarter. The shift to online is not going to save the industry. (And neither is the Kindle).
While online ads keep growing at a healthy clip, up 21 percent to $773 million industrywide, it is not enough to make up for the decline in print ads. Print ads in the third quarter were $10.1 billion. That is $1 billion less than they were in the same quarter last year. Meanwhile, online newspaper ad sales rose only by $135 million. After six straight quarters of decline, print ad sales are at 1997 levelslower if you adjust for inflation.
Despite McGill's forecast and the AP author's assertion of doom, our business is significantly better this year than last year. Admittedly, we are working very hard to earn every customer's business. But, isn't that what we are supposed to do in both good times and bad ones?
Don't let your personal outlook be dictated by people who have to sell newspapers. Regardless of their prognostications, the sun still seems to come up in the morning and as long as I wake up on the right side of the sod, it will be a good day.
news flash mercury lays off 50 salary employees . how that for a great ecomony ..
probably long overdue
nobody on the planet loves a fat middle management like Americans.
I wish that theme would come here. There are 6 managers right in my department to oversee less than 50 people and the work we do.
All they do is chase their tails and f*ck chit up constantly to give one of the other ones something to "re-work" and re-organize" perpetuating each others' existence.
It's for the most part exclusively American thinking and just another reason we are going down.
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