This is my 23rd spring in the boat business as the General Manager of Huntsville Marine. The economic downturn in the United States was much more severe there than our own economic problems. A high majority of US boat builders lost significant production as the US buyer stayed on the sidelines. Many of the major boat builders were forced into Chapter 11 protection forcing the closure of plants and layoffs of skilled workers while they reorganized their business to meet the new reality. This resulted in further problems for the marine parts manufacturer's as they did not have the volume of orders to keep their plants in production.
As an example the largest boating group of Companies Genmar with its 11 boat companies filed for Chapter 11 protection in early May 2009. I have been told that Yamaha USA lost in excess of one billion dollars in 2009. Mercury only lost in the area of 350 million. Regal, Chapparel, Rinker to name a few shut down for long periods or reduced production to numbers not seen in many many years. Crownline was shutdown to look for a new owner with deep pockets. Companies such as Stingray and Monterey fared significantly better as they are privately owned companies and operated boat builders with little of no debt leverage.
What does this mean for this seasons boat business in Ontario. Four Winns has a new owner in Platinum Equity and is now one of the best financed boat companies. Unfortunately with Four Winns there is severe product shortages and long delivery periods. Brunswick, owner of Mercury Marine decided to close Maxumm Boats altogether and focus their attention on Searay and Bayliner. Some companies have had to push through very high price increases to cover their fixed costs. Glasstron is now part of the Platinum Equity Group and now a separate boat line from Larson with production being moved to Cadillac Michigan. Glasstron a middle tier boat company,is going to be repositioned in the market in 2011 to complete against Bayliner and Tahoe as another low priced reduced build quality entry level boat. Owners of Glasstron Boats will most likely see increased depreciation of your boat and those buying this product this year may be in for a major surprise. The Triumph plant in North Carolina is closed and the plant is being moved to Minnesota. I could go on but I think you see the picture.
Of particular note is that as of today if you are ordering a new boat you are most likely looking at a minimum of June delivery and in some cases July. There is very large shortage of marine engines particularly Volvo, boat windshields as there is only one remaining manufacturer and some upholstery components. Companies such as Stingray are in a good position here as they manufacturer all of their own interior components.
In the middle of this economic restructuring the EPA in the United States decided to make it mandatory that as of Dec.1, 2009 all 3.0L marine engines will have catalytic converters to meet new emission standards. Canada is exempt for the moment but we will get caught up in this as all the sterndrive engines are manufactured in the USA. The next on the list is the 4.3L V6, one of our most popular engines which is due to have mandatory catalytic converters added in the fall of 2010 and them followed by the 5.0L engines shortly there after. Fuel injected engine will be standard. All of this means our boats will be more environmentally clean but this will come at a high price increase. Right now the price increase on the 3.0 after installation of the converter and fuel injection to meet the new standards is in excess of $2000.00.
I will expand on the situation more in the coming weeks.
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