Brunswick defends decision to close Tennessee plant

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A Brunswick Corp. official says the decision to close its Sea Ray plant in Knoxville, Tenn., was a difficult but critical one.

Sea Ray president Robert Parmentier made that statement in a letter obtained by Soundings Trade Only that was sent to employees in conjunction with the news that the plant where they worked will stop production in December.

“Although difficult, this decision was critical to improve our plants’ capacity utilization and our overall profitability,” Parmentier wrote. “We must stay profitable to support our dealers and strategic initiatives that will sustain the long-term health of our business. In the long run, the continuing strategy will create a leaner, more agile company that can more readily adapt to changing market circumstances.”

The need to make the move became clear as the company gained new insight into the marine retail environment, Parmentier wrote.

The most recently released numbers from Statistical Surveys Inc., a Michigan company that tracks boat sales, show August sales of fiberglass cruisers 31-40 feet plummeting 28.8 percent year over year and tracking a 6.7 percent dip for the year.

“We feel the actions that we are taking are aimed at getting ahead of potential market developments on a proactive basis and getting set up for 2013 going forward,” Parmentier wrote.

The decision was “in no way a reflection on the performance of our Knoxville facility,” he wrote.

“Shutdowns and layoffs, unfortunately, are a necessary part of ensuring that Sea Ray moves forward in what has become an extremely difficult and uneven market in Europe and North America,” he wrote.

The move, which Parmentier called “regrettable,” was possible because of capital expenditures the company has made “within the manufacturing footprint to increase capability and flexibility,” he wrote.

The investments, coupled with the ability to move the production of certain models between plants, will help the company emerge “stronger, healthier and more profitable,” Parmentier wrote.

Seven Sea Ray Sundancer models currently built in Knoxville will start to be built in other plants. Three will move to Brunswick’s Palm Coast, Fla., plant and the other four will move to Vonore, Tenn.

“The Sea Ray and Knoxville leadership teams will be working diligently to transfer as many employees between various Sea Ray and other Boat Group locations as possible and practical,” he wrote. “Every effort will be made to preserve the unique Sport Cruiser manufacturing experience and overall production excellence embodied in the Knoxville organization.”

Read more about the changes in the November issue of Soundings Trade Only.

— Reagan Haynes

Comments

14 comments on “Brunswick defends decision to close Tennessee plant

  1. john

    If Sea Ray is closing the Knoxville plant, are they also going to close the offices also located on the same island as the plant? These offices are home to many Bayliner, Sea Ray and boat group corporate functions like purchasing, sales, marketing and accounting. Didn’t Brunswick just move employees from the downtown office out the the island earlier this year????

  2. Virgil

    Sounds like an intelligent move to me. We keep preaching hyped up optimism to each other but even if Romney wins unit sales are going to be down another 15-20 % in this market segment next year.

  3. Curtis

    I heard a rumor lately that things were getting better. But we are closing plants and laying off people. Somebody is lying.

  4. Bhil

    Just another way of saying that Bayliner can’t compete in todays quality driven marketplace. I wouldn’t be surprised if the current quality standard they are currently using will not hold up to some upcoming legislated standards. Poor quality these days means extremely poor sales.

  5. Neal

    Other builders like the pontoon and SKI guys are swamped and still building 6+ a day some pontoon guys up to 20 a day…its not the price its the brand and what you are getting…others in SR class are not closing plants…..then again they did not set out to own the world…Good Luck to SR..some great folks there!!

  6. FRED

    With price increases of over 10% year after year they have fially priced the middle class out of the market.

  7. Fred Glass

    Don’t y’all get it?

    The marine industry as we once knew it is gone forever.

    The newer generations of potential boat buyers understand accelerated asset depreciation, high operating costs, and extremely high maintenance costs associated with boating.

    They want no part of it.

  8. Don

    Just look at the day’s supply in the whole system (all makes and all models). GE is way out there again on underwriting stale and excessive inventory. Will somebody train this out of control beast called “I gota boat plant to run” and find a way to throttle back? Maybe Sea Ray will lead the way. I’m impressed with their ability to address the difficult & painfull problems. I am extremely sad that our country is lead by people who don’t know where the money comes from. I am sad for all our brothers & sisters who are in a tough market. Don’t forget to vote !!

  9. Donzi Jim

    Brunswick is and has been for awhile bean counters run amok. Working for bayliner in the mid nineties was one of the most frustrating experiences of my professional career. Everything was nickle and dime to death. Every suggestion for improving anything was met with a smug “Well we’re a xxx million dollar a year company so we must be doing this right.”

    Also after using Stillwater OK as a cudgel to get concessions from Fond du lac and the unions, they pulled the rug out from under that town and the plant. They have have an abacus where their hearts and brains should be.

  10. Boatman

    What Cynthia M. Trudell could not accomplice in breaking the moral and culture of Sea Ray, Dusty and Rob have. This brand along with most of Bayliner and several others purchased will soon be history. CN RAY just rolled over in his grave.

  11. Escaping

    Recreational boating has become out of reach for middle class families. We cannot afford the products we sell. We are held to a high set of standards by the manufacturers, they dictate the dealer’s margins by advertising prices that dealerships cannot survive on, and provide the worst customer service and support to their dealers. Bayliner as it was provided the conduit for families to get into boating. With the brand destroyed and Sea Ray out of touch with reality, dealers will need to survive on brokerage and service-for awhile, until it all is just too old. At that point we will turn to golf, kayaks, airline travel and other activities with boating just a memory.

  12. JI

    Hey Virgil, You are funny!!! Sounds to me like you work at SR corporate offices and are trying to smoke screen people into believing that SR is fine getting ahead and positioning themsevles as a leader in the Market….getting more “Market Share”?? Doesn’t seem to me that Dusty and Rob”s plan has worked too well so far!!! Making SR a Leaner more efficient company… More along the lines of an anorexic and irrevelant!!!! Happy Boating Virgil

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