boatman22

Brunswick Mothballs Knoxville Boat Plant
Thursday, January 08, 2009, 10:14 AM
Brunswick Corporation (NYSE:BC) announced on Jan. 6 that it will mothball its Riverview boat manufacturing facility near Knoxville, Tenn., and take additional actions aimed at reducing its work force, production and expenses. One of three manufacturing facilities in the Knoxville area, Riverview makes Sea Ray boats and will wind down production during the first quarter of the year. To better utilize Brunswick's overall boat making capacity, production at Riverview will be moved to nearby plants in Knoxville and Vonore, Tenn., which will remain in operation. In addition, production of certain models will be transferred to Brunswick's Palm Coast manufacturing facility in Florida, and a Brunswick plant in Reynosa, Mexico. The final impact of these production shifts on staff levels at those locations, if any, is still being determined.

At year-end 2008, Brunswick employed about 1,500 people in the Knoxville area. Approximately 300 production and support positions at Riverview will be idled by this action over the coming months. The company said it will work diligently to transfer as many Riverview employees as possible to the nearby Knoxville and Vonore manufacturing facilities. By mothballing this facility, Brunswick retains the option of restoring production should market conditions reverse and improve.

In addition, Brunswick plans to reduce up to 275 additional positions throughout Sea Ray manufacturing and product development facilities as well as at Sea Ray's Knoxville headquarters by Friday, Jan. 9. Further, all Sea Ray manufacturing facilities in Tennessee and Florida have scheduled at least a week of production furloughs each month through the end of June to reduce production rates. To be observed generally during the third week of each month, these furloughs will also provide the flexibility needed to integrate the models moving between facilities throughout early 2009. The company said it has the option to cancel or modify furlough periods, should marine market demand improve or pipeline inventory be depleted quicker than anticipated.

"We have taken a number of actions over the past few years in an effort to mitigate persistent difficult conditions in the global marine market and economy," said Brunswick Chairman and Chief Executive Officer Dustan E. McCoy. "These actions have included reduced production rates, as well as virtually halting production during periodic furloughs. The three plants near Knoxville have recently completed a production furlough, which has helped reduce our overall marine pipeline, but the global marine market remains in a severe downturn because of the weakening economies here and abroad and anxious consumer sentiment.

These conditions have led to the difficult decision to mothball the Riverview facility.

"This decision does not reflect upon the Riverview work force or product, but is the result of our need to develop a more efficient manufacturing footprint that is appropriate to the marketplace," McCoy added. "In addition to Riverview, we have closed, mothballed or sold 14 other North American boat plants since 2006 in response to these difficult economic conditions."

(www.brunswick.com)

Steve 1

"a Brunswick plant in Reynosa, Mexico" Then they should sell to the Mexican market also!

BAJA WILL

sadly, but I have been predicting a boat MFG to move to Mexico or china, say 19'-25' boats and fill the Bayliner nich but even cheaper (cost wise) If I had the capital, I would have spear headed a venture to do this.



WILL

Jupiter Sunsation

China has made yachts for years. Cheoy Lee/ Hargrave/ San Marino have all been made in China for years. The labor is getting more skilled and of course is much cheaper so in a 100 foot yacht can you imagine just the labor/ overhead savings when compared to Italy/ England or even the USA.

http://www.chinaboatmarket.com/megayachts.asp?sroom=3
article outlines $.70 hour labor rate ! ! !

Raylar

Oh thats a F***ing Great Idea!!
Ship some more American jobs overseas with the idea of making the product Cheaper! in more than one way! How many Chinese do you think are buying American Performance boats! thats kind of a no BRAINER, Like your idea to produce performance boats in China.
Remember you sometimes Financial Wizards! that it is Amercians and their job dollars that are buying these boats.
What we really need to do at this time is to put Americans back to work! Increase the earnings and disposable income spending of Americans so that your performance boating recreation and industry can survive and grow, not try to develop a cheaper product with overseas workers who do not buy the Product!!
Basic economics 1A class is now dismissed. There will be an open book test tomorrow with simple multiple choice questions for those who were not listening closely!! Those who just don't listen or learn in this class will be excused and shipped to CHINA!!

Best Regards,
Professor Ray @ Raylar

Jupiter Sunsation

Ray

I understand your post but reality is some things have gotten WAY, WAY, WAY overpriced in today's market and China/Taiwan/India is the way to go for cheap labor.

Here in FL:

White guys do not cut grass/landscape but they hire Mexicans/Guatamalans/etc. The industry was almost all white or black 20-30 years ago. White/black Americans won't work for those rates (minimum wage).

Big 3 automakers have the same issue with the same workers in the USA. Honda/Toyota/Nissan won't pay the insane benefits/ labor rates the UAW demands for its workers so they hire non-UAW Americans to build their cars. Those same benefits tack higher prices onto the Big 3's cars/trucks making them less competitive in the market (in addition to other issues).

Houses are not constructed by white males anymore here in FL. In comparison I visited Leavenworth, KS a few months back and was shocked to see a jobsite bustling with all white guys driving all American trucks! Construction in FL is staffed by the smarter Mexicans/Guatamalans that are too bright to cut grass/trees. White guys are supervisors/management and only the poor white trash drug addicts will still be swinging hammers.

Boats are ridiculously overpriced for what they are. They break constantly and are a luxury item that fewer people can afford. Look at the engineering that goes into a new Corvette for 45K then look at what you get for a 45K boat! The boat will be tiny, slow and won't run anywhere near as good or as long as the Corvette. My diesel GMC has 5900 hours on it, 130K miles and has only had a water pump, one set of batteries, 2 sets of tires and fluid/filter changes. I have spent less on maintainence on this truck than what a 100 hour service alone would cost on bigger twin 4 stroke outboards!

Luxury Yachts cost more than most people's homes and being made in China only puts them in reach of more buyers and at the end of the day the boat is going to just depreciate anyway so why not reduce the depreciation from the start with a lower price. All the components are outsourced anyway so whether you buy a 100 ft Hatteras or 100 ft. Hargrave they will still have the same power/ electronics/ etc.

Performance boats are already made overseas. Cigarette was bragging about how great Turkey was for its new 55 yacht. Do you think a 38 TG is far behind? It is fiberglass with fancy paint and everyone else's components rigged together. Does seem out of place that the American Legend isn't made in America but think of all the money Skip could save building boats overseas..........

Interceptor

Back in the early 1990's the high end boat industry was nearly destroyed and some companies went under due to the 10% luxury tax the Federal Gov't put on boat that cost more than $100K. Fortunatly that tax was recinded but the damage was done.
Todays economy will probably have similar impacts. We talk about the costs of offshores but look at the costs of the bigger yachts i.e. Bertram, Hatteras , Davis etc..
Anyone that is thinking boat sales will maintain or improve doesn't understand what is going on in todays world.
Boats like houses will lose value and also like houses they may sit for sale for a long time until the owner realizes he's going to have to write a check to get rid of it.

Knoxville may take some further hits since Saturn isn't doing well either.
ed

Steve 1

Personally I do not like to see any God Dam thing built in Mexico or China That said; if you want to work like in the 70’s or 80’s you are not going to make much in the end. BUT Nowadays
We Can have the fabric and cores Kitted out in boxes (first one used on top) and there are infusion systems where the stringers and Bulkheads can be in the shot with the hull, The glass crew becomes just installers for the Placement of Dry precision precut material. The input cost(resin glass Etc) is about the same where ever you go . As for the American Worker (baring screw the man union attitude) I will put them up against anyone. What I am trying to say is we need to get leaner and smarter.

There needs to be a Engineering position created right under the company owner for someone who can implement change in tooling and methods in line with the product development that is constantly occurring in our business.

BossBaja

Don't hold back Ray. Tell us how you really feel.

I agree with you 100%

I always say F U and your import.

Coolerman

well said!!