Mike,Originally posted by mike merola
BUT...... He still sell over 500 boats a year.
His doing something right.
Maybe not. From a published report...
Struggling Fountain slashes worker benefits
In an effort to reduce costs and reverse two years of operating losses, Fountain Powerboat Industries Inc. has joined the growing list of small companies cutting employee health benefits.
We do not expect anyone to celebrate the changes we are making they required some difficult decisions, the company told employees in an Aug. 1 letter from president and CEO Reggie Fountain, and director of human resources Carol Price. Fountain, himself, has taken an 85-percent pay cut, the letter points out, as the company struggles to survive.
Price this morning acknowledged that benefits have been reduced, but she says none has been eliminated.
I would rather leave a little bit on the table and be able to add it back later, she said I will fight tooth and nail when things pick back up to add these things back.
The Washington, N.C.-based boatbuilder blames the slow economy and a reduction in orders for an operating loss of almost $4 million for the fiscal year ended June 30. In fiscal 2001 Fountain reported a loss of $900,000. The company is reorganizing its sales and operations processes to improve both sales and the efficiency of the operation.
However, none of the steps taken to this point goes far enough, the company said.
We need substantial increases in sales and dramatic reductions in the cost of operations at Fountain to continue as a business, Fountain and Price wrote in the letter.
According to the letter, the companys medical and prescription drug costs increased more than 23 percent in 2001. That trend is expected to continue. As a result, the company increased employee contributions from $10 to $30 a week for single coverage. The boatbuilder says the effect on take-home pay will be less than $20 per week because its paid with pre-tax dollars.
The annual deductible for the companys prescription drug plan also was raised from $50 to $100, with coverage reduced to 50 percent of the cost instead of 80 percent. Finally, the life insurance death benefit was reduced to $25,000 from $50,000.
Despite the reduced benefits, Fountain said the company remains committed to its employees. He said Fountain Powerboat continues to pay an average of $3 more per hour than other employers in the area, and will continue to offer a 401(k) plan with a 50-cent match per dollar.
We need you, and we want to continue to offer the best pay and benefits we can, the letter states. We do not want to lay off workers or shut this business down so we are making responsible and necessary changes.
Fountain is one of many small companies across the country forced to cut benefits because of rising costs and a sluggish economy. A recent survey by the Kaiser Family Foundation and the Health Research and Educational Trust, found that many workers are now paying more while benefits erode. The survey found a 12.7-percent increase in monthly premiums from 2001 to 2002. It was the second consecutive year of double-digit increases, and the largest increase since premiums rose 14 percent in 1990.