The State of the Industry

[capt chris]

I don't if you all have seen this yet but it's not good news!

Brunswick to Mothball Riverview Boat Plant in Knoxville,
Make Additional Reductions to Match Market Demand
By PR Newswire
Last Updated: 01/06 10:00
LAKE FOREST, Ill., Jan. 6 /PRNewswire-FirstCall/ -- Brunswick Corporation (NYSE: BC) today announced
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."
About Brunswick
Headquartered in Lake Forest, Ill., Brunswick Corporation endeavors to instill "Genuine Ingenuity"(TM) in all
its leading consumer brands, including Mercury and Mariner outboard engines; Mercury MerCruiser
sterndrives and inboard engines; MotorGuide trolling motors; Teignbridge propellers; Arvor, Bayliner,
Bermuda, Boston Whaler, Cabo Yachts, Crestliner, Cypress Cay, Harris, Hatteras, Kayot, Lowe, Lund,
Maxum, Meridian, Ornvik, Princecraft, Quicksilver, Rayglass, Sea Ray, Sealine, Triton, Trophy, Uttern and
Valiant boats; Attwood marine parts and accessories; Land 'N' Sea, Kellogg Marine, Diversified Marine and
Benrock parts and accessories distributors; IDS dealer management systems; Life Fitness, Hammer Strength
and ParaBody fitness equipment; Brunswick bowling centers, equipment and consumer products; Brunswick
billiards tables; and Dynamo, Tornado and Valley pool tables, Air Hockey and foosball tables. For more
information, visit http://www.brunswick.com.
The following story was published on Thomson ONE:
For information on Thomson ONE go to www.thomson.com/financial
SOURCE Brunswick
Contact: Daniel Kubera, Director - Media Relations and Corporate Communications of Brunswick, +1-847-
735-4617, daniel.kubera@brunswick.com
Copyright © 2009 PR Newswire Association LLC. All rights reserved.
BC I/SHP I/LOD R/IL
The following story was published on Thomson ONE:
For information on Thomson ONE go to www.thomson.com/financial

 

[megabytes]

A businessman from near Raleigh (Zebulon) recently purchased Albemarle.

 

[capt chris]

A businessman from near Raleigh (Zebulon) recently purchased Albemarle.

Megabytes,
I hope he is extremely well capitalized, bought it cheap, and will continue their tradition of quality. It could be a while before the business is healthy again, but we will get through this. As Henry Ford once said, "Failure is the chance to start over again, only this time more intelligently." I hope we have all learned from this because those who fail to remember the past are condemned to repeat it.

 

[megabytes]

Raleigh paper could only report that the price was a great deal but had two commas. Here is the link.

http://www.newsobserver.com/business/story/1355880.html

 

[gradyfish22]

Everyone is feeling it big time, no boat builder is doing well, and only those who are well ran are surviving. Any brand who is owned by a larger firm like brunswick or genmar is in trouble in these times since they never can hold onto all of their brands and they only wish to save the big sellers and the big sportfish brands so the rest suffer. Most brands have felt thedecline in the economy for over a year now, some longer, those who faired well only felt it within since the end of the summer. Biggest issue is the used boat market, nobody is buying boatys for sale so nobody will buy new until they do. It will be a while until things improve in the boat business, the big sportfish brands will pull out first if they are ran well since the rich always have money, just are leary to spend it now, the small brands will get out of it later on since their cliets are those who are feeling the pinch the worst right now. Let's just hope we see it bottom out early in the year and see improvement by the end of the year. I work in the industry and have many friends who work in it for other brands so I know personally how bad many brands are doing.,...it isn't a great situation out there and it effects many more then just the builders, the suppliers of all the mechanicals, engines, and parts and materials are all feeling it as well so it stems deeper then many realize.

 

[megabytes]

If the major auto makers are down 25% to 45% in sales for 2008 I cannot imagine the numbers for boat builders. You have to figure the boating industry would experience a decline at least that large considering the relative importance of the two products. So many builders are privately owned that the media doesn't report the numbers but they must be bad.

NC is one of the top boat building states so I am sure we are feeling the pinch in certain counties.

 

[Fishtales]

From what I see (not in the marine business) it is going to get worse and then slooowly improve. It could be closer to 2010 or 11 before we pull out of this funk.

 

[VinMan]

Has anyone read or heard how the Grady factory is doing? Have they had to go to furloughs or layoffs? I hope they hang in there. I am a new Grady owner but love the boat. They truly build battleships up there in Greenville.

 

[gradyfish22]

From thoise I know within other companies...saes are down to almost NOTHING... very few builders are open, small boat builders are all experiencing lay offs and furloughs, many are shut down for periods of time. Many of the larger sportfish builders are only building upon full payment, and the few who aren't have cut their lines big time. My wrk cut our production by 60% as of jan 1, hopefully that is all we have to do but it may not be...it may get worse. The only buildrs fairing well are a handful of custom builders who only build a small number of boats anyways, it is much easier to fill their small required numbers to maintain their regularbusiness, and their clients are a slecet few anyways sho are likely not too harmed by the current economic state.

Even when the economy itself begins to improve, the boat industry will feel it for a while longer, boats aren't the top priority to most when other bills come first. The largest issue is the used boats and the large quantity of them, for new boats to sell, the used boat market has to fizzle out as well, so boat builderswill feel it fora while after tings improve.

All we can hope for is an improvement sooner then we all think, or for conditions to improve quicker then most predict them to.

For everyone out there effected my best wishes and good luck!!

 

[Tashmoo]

Personally, I am glad to lean of the purchase of Albemarle. Getting that company out of the hands of Brunswick has to be a good thing for the brand. Last I was in Edenton in November the factory was shut down until after the first of the year as was Regulator, Carolina Classic was open.

If there is a good side to this down turn it is that the process does prunes out the weak. The well run companies that make it through will enjoy higher and more stable profit margins on the other side. Desperation price cutting by manufacturers may well feel good to the consumer in the short term but it is the long term death nail to those manufacturers that do it. Think about anyone that got a great deal on a Sea Pro last year or the year before last. Not such a great deal now is it?

Hang on this is going to be a very bumpy ride!

 

[capt chris]

I agree with Tashmoo. This is going to be a long, protracted recovery with no easy solution and with a lot of pain and hardship involved. Boat builders are going to have to be very flexible in their thinking in order to weather this storm. We have discussed in the past about Grady offering refurbishing services for older boats. I think all manufacturers will need to consider this option if they are to retain the craftsman and skilled manufacturing teams they have assembled over the years. Once these employees have moved on it will be extremely difficult to reassemble them once the business returns. I am aware of all the arguments against this in regards to hurting new boat sales by extending the life cycles of the older boats, but there seem to very few new boat sales to hurt at present and the demand for rehab from current owners seems to be there. The goal right now is to keep your long time employees working and with the company. Whether they are building new boats or refurbishing older boats isn't the issue. Keeping them employed and with the company is. Advancements in technology and innovation in design will always create a desire for new boat sales. I have owned boats since 1987 and I'm always thinking about what I would like my next boat to be. I think a viable market exists for Grady to establish a factory authorized refurbishing business. I hope they will consider it. What do you all think?

 

[gradyfish22]

I agree this does help weed out the weaker brands, also what many may not realize is that times like this often weed out the so so workers so boats built during a timelike this are the ones you want to buy used down the road since they were built with the remaing work force...typically the better workers. This is not always the case, depend on the brand itself and how they are dealing with the situation, but thsoe who are furloughing and laying off typically hold onto those experiencedworkers who do top notch work, they are all that remain so eep that in mind. There are certain exceptions where brands make bad choices and get rid of the experienced to save cah since they also tend to be the higher paid workers, but this usually bites them in the butt down the road with a bad rep and a poor wuality product and they struggle to come out of it well. Something for everyone to monitor and consider down the road and for years to come with future boat purchases.

 

[VinMan]

This is a very sad but very interesting topic. So, does anyone know how GRADY is fairing through all this. Are there furloughs? Layoffs? Someone mentioned they are on a mandatory 32 hour work week. Is that true? I think they'll come through this but was curious if anyone knew anything.

 

[megabytes]

The 32 hour work week for hourly employees at GW is true. I've heard reports of layoffs as well but no comfirmation. I really hate to ask you know.

I was told this past weekend of a marina/dealer/shop from our area which recently had to cut 11 persons due to the slow economy. Times are very tough for almost every industry. I agree with others that Darwinism will come into play with the weak folding and the strong surviving.

Demand at our marina is increasing however. I was told there have been some slip sales and some new rentals already in anticipation for Spring. The price of gas is helping offset other bad economic news while perhaps renewing interesting boating.