Future of Boating & GW

[capeguy]

With oil prices continuing to rise, the value of the dollar continuing to drop, I wonder how boating/fishing will be impacted and how that will affect GW and others.

Oil prices continue to drive raw material, production, and shipping costs up, raising the price of a new boat for everyone. We are seeing a number of brands shuttered by the big guys already. At the same time oil prices drive up gas prices that not only impact the cost of boating, but also the types of vehicles people own. Will fuel costs drive people into hybrids and smaller cars at the expense of tow capable trucks and SUVs?

At the same time credit is harder to get, the falling dollar and inflation threaten incomes, is this a perfect storm?

I think we are going to see radical shifts in American lifestyle as we adjust to the reality that oil will continue to rise and our national debt and budget issues will continue to drive down the value of the dollar.

What will this mean for GW? I think they are probably better positioned than many to ride this out as their customer base is likely able to weather this better than many. Having high end products means relatively affluent customers that may be less exposed than the mid and lower tier brands.

However, they will face serious issues as more used boats enter the market making it harder to raise (and command) higher pricing on new boats. At the same time, their costs will increase squeezing margins... Dealers may find it harder to stay afloat...

Like the auto industry, the boating industry is going to need to look into power sources that reduce oil dependency. Will we see hybrid engines? E 85 engines? That R&D cost will also impact the boat builders' profits...

GW is private and as such has certain advantages, at the same time likely some disadvantages. Noone knows their financial condition and if things get bad, how long can they ride it out?

Just thinking about this as I watch the markets in turmoil, housing values plummet, the dollar crashing, and the deficit and debt ballooning. I would like for GW to be healthy when I am ready for my next step up, which unfortunately will be later rather than sooner...

Thoughts?

 

[PFB1769]

The rich get richer & the poor get poorer. When the cost of living pay increases (if you even get one) doesn't keep up with the skyrocketing cost of living the middle class is quickly sliding down into the poorer class.

 

[BobP]

Grady survived a lot worse economic times in the past 30 yrs.

During those times, they had a basic core product with specific market target customers, called fishermen.

I recall when there were more salesmen at the boat shows than people looking at boats, except at the Grady display.

 

[Average Joe]

I don't know how it's affecting GW but it's realy starting to squeeze me. Gas $4.00, groceries getting more expensive all the time, the local natural gas company is proposing a 35% increase and the power company is calling for an 18% increase.

I got a 4% pay increase this year and it's just not keeping up.

 

[RUMBLEFISH]

Resin costs are going to cripple the industry in the near term. DOW chemical just raised prices one month ago by 25% and again yesterday another 20% and will not honor any contracts.

Things are gonna get alont worse before they get better I'm afraid. Phosphates which are a back bone for chemicals and foods have just increased by 80% and we get most from china. China will not mine phosphates until after the olympics.

As far as boating maybe I'll just run it as long as I can then when fuel hits 7 bucks a gallon just burn it up out in the bay.

Well now that I put that in print I guess I'm stuck with her. :lol:

 

[capeguy]

I think we may be headed for a radical change in our economic landscape. I don't see oil prices coming back down as demand from the developing world continues to increase and many of those governments artificially keep prices down through subsidies. Oil prices will require dramatic shifts in our behavior/

I fear the boating lifestyle may become impossible for many. I think about moving to a Marlin, but it would cost me $4 a mile and increasing to use it. Ouch...

I don't think we have seen anything like we are going to see in the coming years. Never before have we had to compete for the supply of oil with other nations that want it just as badly, and can pay for it. China and India will only demand more of it and have the currency to pay for it.

 

[ocnslr]

I don't know how it's affecting GW but it's realy starting to squeeze me. Gas $4.00, groceries getting more expensive all the time, the local natural gas company is proposing a 35% increase and the power company is calling for an 18% increase.

I got a 4% pay increase this year and it's just not keeping up.

I live here in Tidewater also, so have seen the same increases. My employer (the Commonwealth of VA) managed a 4% raise last year, but it will be 2% this year, and that is a lot better than the ZERO that was proposed.

When we were on the plant tour, we heard that GW is selling a lot of boats overseas. A combination of their excellent reputation and the falling dollar has made foreign purchasers come knocking.. just hope it is enough to keep them afloat.

Brian

 

[BobP]

Thank you federal government both democrats and republicans for having no (as in zero) energy plan / policy for this country. You are doing a great job, keep up the good work. You earned your pay.

One of the Saudi kingpins announced yesterday he sees a barrel going to $175 by end of summer, thank you for taking care of the USA, a country that made yours filthy rich, and saved you and yours from an entire country of house invasions by your neighbor, with the american army in battle to do it.

 

[Grog]

I don't think it was one of the Saudi's, they have been increasing output where Libya cut back. I have no love for either but they don't set the price, the SPECULATORS do, THEY ARE THE ONES CRIPPLING US (our Govt. is just letting it happen).

The ban on offshore drilling is getting really stupid. Some are fighting the USA from drilling off the coast, well what are they going to do when Mexico or Russia or China does it?

 

[BobP]

The Saudis ought to be filling the tankers destined for USA - FREE OF CHARGE, for what we did for them.

Fighting the wrong people for the past 4 years (?)

 

[capeguy]

Yes speculators are doing their thing. But... speculators often get burned when the market returns to rational levels. However in this case, world wide demand is increasing rapidly due to industrialization in China, India and elsewhere.

These countries are growing ridiculously fast and are generating wealth for huge numbers of people. All of them want oil... Speculation is part of a free market, if the prices are unsustainable they will be burned...

 

[capeguy]

Yesterday Brunswick announced another 1000 person layoff, boat sales in Q1 down 25% from what was already a poor level. West Marine sales plummeting, Marine Max the largest boat dealer sales plummeting...

 

[BobP]

Speculation gets controlled by REGULATIONS

REGULATIONS get promulgated by the federal government.

Otherwsie it's supply and demand, who pays the most, gets it, when supply doesn't equal demand. Remember what happened to Calif electric bills? until re-regulated? It was regulated to begin, then deregulated allowed rigged bids, then re-regulated and NO MORE.

I guess the Saudis & remainder of OPEC don't care who they sell to, as long as highest bidder. Let's remember that next time they want american blood to protect their no army countries.

The oil comes out of their ground, they can choose who to sell it to, at any price they want to sell.

 

[ahill]

Capeguy,
As a home builder in Fla. I feel your pain.
These factors affect all segments of the economy, none are immune.
I've weathered every downturn since 1970 and I've not seen one like this. Too many global issues combined with US political posturing.
The non elected are the victims.
Speculators in RE, mortgage market, commodities and a host of other arenas have changed us for a long time to come.

 

[RUMBLEFISH]

When we were on the plant tour, we heard that GW is selling a lot of boats overseas. A combination of their excellent reputation and the falling dollar has made foreign purchasers come knocking.. just hope it is enough to keep them afloat.

Brian[/quote]

Yea I bet all the boats are being shipped to the middle east with all the money we are sending them. Instead of the gold plated cars or the ones covered in diamonds maybe we will see some Grady's pimped out.

This is a sad sad time for most of us right now.

 

[Grouper Duper]

Wow. I hate to be the one to say it (since I'm at least as suspicious of the government as most people), but damn, there are a lot of people on here blaming everyone else for all the economic problems. It's always about the government, the oil-producing countries, the speculators, big business, etc. etc.

At last check of these posts, I didn't see anyone say "I did something wrong/I could do better/let's help make a difference starting with me." It's all about someone else forcing circumstances on you.

So I'll start, but only in being accountable for part of the problem (I won't bitch about it). I drive a V8 SUV. I own a boat that gets 2mpg and I use it a lot. I'm keeping them both. I'll likely still have both if gas doubles from where it is now. I didn't overstretch my own income or credit, I have no loans on my cars or boats (the Grady and two kayaks :lol: ), I'm no where near upside down on either of two properties I own, and though I buy nearly everything with a credit card, I haven't ever carried a balance since college (LONG ago!).

My point is not at all to brag; it's simply that with fiscal responsibility comes some protection from such changes in the economy. I also absolutely mean no disrespect for the people that have posted here (I promise). I simply believe we should all take a look at ourselves before pointing fingers and hopelessly saying, "well, what can you do!?"

 

[Fishtales]

I think this thread was targeted at what happens from this point forward, not how we got here.

I'd say both are in for a long stretch of rough weather. What is happening is unprecidented in US history. The American life style of borrowing excessively with relatively cheap rates and low inflation, housing prices which were escilating unrealistically allowing people to pull cash out and continue to fuel the system, general over consumption all with a very strong economy and strong dollar are gone for good.

Couple this with the emerging 3rd world countries that want to be 1st world just like us with growing energy demands, a declining dollar, inflation heading north, and a government with fewer and fewer levers to pull and we are in deep yogurt for the near term. The real question is how bad does it get, and how fast does it get there. If both are worse case, we are all screwed from a boating perspecitve. Unless you have money to burn, it just won't make sense even for those that are fiscally in order. If it plays out overtime. well we have time to chart a new path.

Not only are boating and GW affected, our entire lifestyle from home energy, business, products, cars, electricity use and consumption habits will likely change dramatically. Some will be early adopters, and the rest of us will fall as our economic tipping point is reached. It will affect everyone at some point. I don't care if you are leveraged or not. It is just time for the vast majority of us.

I see the smaller boats being affected first. As stated, vehicles to trailer will likely go away and people will need to either put their boat on a slip or part with it. The next class is likely the 28-35 class where it will just not make economic sense for people to own a boat. Maybe more multiple ownerships come into play, there will be a need to lower the cost structure for most people or it will be gone.

The bigger boats are likely the least affected as these people have the means.

Sounds dire? Well there is one way out. American innovation. We need to find a retrofit system that pulls the gas/disele engines out of boats and puts in it a generator and/or solar panels, battery banks and an electric (best) or maybe a hybrid system. I strongly believe we are at a tipping point and if prices continue to rise, we will develop game changing technologies (battery, solar cell, fuel cell, hybrid etc - we likley need them all) that hopefully makes oil about as worthless as the sand is on top of it. Talk about a big economic change! I just hope I can afford the conversion and live to see the faces of those in the oil business.

I think this technology will cascade to many uses: home heating, autos, boats just about anything that uses diesel or gas today.

Lets hope it comes to market fast, choice is the best way to combat rising price in the long term and hopefully allow mass scale conversion in the longer term. If so, GW will be sitting pretty as all that changed is the proulsion system and the weaker competitors will be gone.

 

[RUMBLEFISH]

Wow. I hate to be the one to say it (since I'm at least as suspicious of the government as most people), but damn, there are a lot of people on here blaming everyone else for all the economic problems. It's always about the government, the oil-producing countries, the speculators, big business, etc. etc.

At last check of these posts, I didn't see anyone say "I did something wrong/I could do better/let's help make a difference starting with me." It's all about someone else forcing circumstances on you.

So I'll start, but only in being accountable for part of the problem (I won't bitch about it). I drive a V8 SUV. I own a boat that gets 2mpg and I use it a lot. I'm keeping them both. I'll likely still have both if gas doubles from where it is now. I didn't overstretch my own income or credit, I have no loans on my cars or boats (the Grady and two kayaks :lol: ), I'm no where near upside down on either of two properties I own, and though I buy nearly everything with a credit card, I haven't ever carried a balance since college (LONG ago!).

My point is not at all to brag; it's simply that with fiscal responsibility comes some protection from such changes in the economy. I also absolutely mean no disrespect for the people that have posted here (I promise). I simply believe we should all take a look at ourselves before pointing fingers and hopelessly saying, "well, what can you do!?"

I didn't hear anyone on this board complain that they cound not make their credit card payment or that they are going into forclosure on their homes. I woiuld think that most of us on this board have more brains then that. :wink:

And besides we have heard nothing yet about the price of oil. Wait until people have to spend 1300.00 a month or more to heat their 3 bedroom ranch. Those are the people we should all feel for as winter is just around the corner. Maybe they should all move to florida and save the money.

 

[Brad1]

Sounds dire? Well there is one way out. American innovation. We need to find a retrofit system that pulls the gas/disele engines out of boats and puts in it a generator and/or solar panels, battery banks and an electric (best) or maybe a hybrid system. I strongly believe we are at a tipping point and if prices continue to rise, we will develop game changing technologies (battery, solar cell, fuel cell, hybrid etc - we likley need them all)

I agree.

I finally get the 4 x 4 truck and boat I've always dreamed of, then along comes this $4 gallon gas. Well as unhappy as I am about the price of gas, I believe (or at least I'm hoping) there is a silver lining. The motivation is now stronger and than ever to develop alternate sources / means for energy. And even though it may take many years for the effect to be realized, I'm sure good will come from it.

Has anyone seen the hybrid boat Scout has come out with? It's small and limited, but a definate step in the right direction. It's a 14 ft boat. It has 3 two cycle batteries. It runs for up to 8 hrs at 8 mph on the batteries. There's a 20 hp Yamaha 4 stroke on the transom for when you need a little more speed than the batteries offer (or if the batteries run out of juice of course).

. . . that hopefully makes oil about as worthless as the sand is on top of it. Talk about a big economic change! I just hope I can afford the conversion and live to see the faces of those in the oil business.

You and me both Fishtales.

 

[capeguy]

Personal responsibility is required, however one can not count on everyone else to have the same discipline. Clearly not everyone is in a financial mess, but many are. And the crisis we are in is a collective one, not an individual one.

I agree with fishtales that our entire lifestyle is going to change rapidly. Our geographical distribution of suburban sprawl is a function of cheap oil. I think we will begin to see more concentration in cities and suburbs get less desirable.

I think the power boating industry is going to be hit harder than we can imagine. The R&D required to generate alternative power sources that fit a 25 foot center console are immense. If that boat can't run 30 knots and have 350 mile range, will anyone want it? How can one generate 700 HP on the transom of a Marlin using batteries?

While I may be fine with my boat and Grouper Douper is in excellent shape, their are many who are not and bought boats on a thin margin. Those will likely enter the used boat pool and all those who used now non-existent home equity to buy are gone, the supply will far exceed demand. I just hope that enough companies stay in business, including GW, to continue to offer a high value option...

My marina has empty slips this year when it has had waiting lists for years...