Brunswick to sell Hatteras and Cabo

Posted on Written by Michael LaBella

Brunswick Corp. announced Thursday that its board of directors authorized the company to seek a buyer for its Hatteras and Cabo brands.

The move came just a few hours after the company said Sea Ray president Rob Parmentier stepped down to pursue other opportunities.

The company is now announcing its exit from the sportfishing convertible segment “in an expeditious manner,” Brunswick CEO Dustan McCoy said in a statement.

“This action reflects our decision to exit the sportfishing convertible category and to concentrate our resources in the yacht segment on our remaining brands, Sea Ray and Meridian Yachts,” McCoy said.

“When completed, this action will also contribute to our goal of a break-even or better boat segment in 2013, even if the larger sterndrive/inboard fiberglass markets do not improve,” McCoy said.

“The current plan assumes that the eventual purchaser will retain both the physical plant and the talented workforce of Hatteras/Cabo,” he said.

Despite that announcement, the Sun Journal in New Bern, N.C., where both companies are based, reported that Hatteras was laying off 105 workers.

In emails to the Sun Journal, Dan Kubera, a spokesman for Brunswick, said the layoffs announced Thursday were necessary to better adjust to the market conditions.

He also told the newspaper that the layoffs were “unrelated and separate” to the decision by Brunswick’s board to seek a buyer for Hatteras and Cabo.

“During the sale process, which we seek to complete in an expeditious manner, Hatteras and Cabo will maintain ongoing operations, and we will keep our employees and dealer network informed of our progress,” McCoy said in a statement.

As a result of this decision, the company expects to record charges in the range of $70 million to $80 million, a majority of which will be recorded in the fourth quarter of 2012.

Brunswick purchased Hatteras Yachts in 2001 and Cabo in 2006.

Click here for Sun Journal report.

— Reagan Haynes

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Comments

15 comments on “Brunswick to sell Hatteras and Cabo

  1. Chris Foster

    Get ready Boston Whaler! You’re probably next. Unfortunately Brunswick and their dealer body do not have the clientele or sophistication for the more premium blue water and coastal fishing boats. When I bought my Boston Whaler back in 2001 from my local Sea Ray dealer (who has since given up the line) I knew far more about the boat than the dealer. It was embarrassing. It was almost as if I bought the boat in spite of the dealer. In the long run it’s probably the best thing for Hatteras and Cabo. Brunswick was always out of their league with regards to these two brands and I feel the same goes for Boston Whaler.

  2. Jeff Erdmann

    This is a sad day when Hatteras, one of the finest large boat manufactures in the world is up for sale!
    Hopefully they will find a buyer quickly to keep this iconic brand building in the USA and put those workers back on the job!

  3. Capt Mitch Witt

    Let’s hope the buyer is a private individual rather than a corporation and that person’s primary interest is in building the very best product possible while keeping costs down and turning a modest profit. After all, eveyone in the pleasure craft industry should be more interested in boats than in operating as though they were investment bankers !

  4. Eric

    I remember Brunswick hinting at purchasing Viking at a meeting with the Healey’s when the ecomony was booming and the Healey family said, “We are not for sale.” Bob Healy then said, “Maybe we will buy you.” Viking is a family owned company who has survived very tough times. Hatteras, Viking and Cabo are great products and I would hate to see any of them dimisnish in the market place.

  5. boatbuilder

    Interesting that Dusty led the charge to buy these companies and fill white space. Now he is selline and the shareholders will likely be left holding the loss. Hope both brands land with a committed owner.

  6. michael myers

    Since almost the beginning, Hatteras has been a division of a large public company, Rockwell International, AMF, Genmar, and Brunswick. Companies are bought and sold. It will be business as usual for this venerable brand. Hatteras has been a victim of the financial crisis and I have no doubt that they will survive and will flourish. They have a great management team in place and great product and over the long term with a supportive new owner they will succeed. I look forward to the future.

    Michael Myers owner
    Boston Yacht Sales
    Hatteras dealer for 40 years

  7. veritas

    The saddest part of this is the comments following the article. I have no knowledge of the financial condition or performance of Hatteras and Cabo but can guess that both are dire. McCoy is acting the way any decent CEO should.
    The world has changed. I’ve been in boating for 48 years as a boat owner, retailer and marina owner. 2012 boat sales were thankfully up by 10%, but the bulk of the sales were in the 15-26 foot range. As price points keep rising, consumers step down to boats they can afford.
    Venerable names in boats/yachts (I owned two Posts which I loved) can only survive by using technology (including to identify low cost labor inputs) to lower the first and operating costs of their products. Otherwise they end up in the tarpit or selling to a tiny, purely custom market.

  8. David

    Why on earth would they publicly suddenly announce they are for sale. Why not market the company discreetly in a more normal businesslike manner?

    They have just destroyed the in stock dealer’s inventory value, made them far more difficult to sell at all and wiped 10-15% off the value of the brokerage used boats.

    The new mini mega yachts they were building just got depreciated an unwanted with a serious decline in value.

    Miami should be a funeral for their dealers as who is going to buy or order one with such an uncertain future and a public announcement of throwing in the towel.

    It is a replay of Brunswick 1972 when they dumped the second largest boating company in the world overnight, Owens and Concorde, walking away. Sparrows Point Maryland took 15 years before it began to recover.

    Which one is next? Sea Ray? Meridian?

    What am I missing in business 101 here.

    Shame on you Brunswick.

  9. boatman

    Yes I could not agree with the last poster. These big corporations who do not have a clue on what it takes to run a successful organization and the ability to hire and retain competent people to service the dealers and the dealership customers. I was a representative for one of the Brunswick’s companies, a newbie to that side of the industry, but had numerous years of sales and dealership experience. My area was the strongest in the whole USA, and while the other reps, some with 15 years at their positions, were trying to figure out how to duplicate my success, the economy took its turn for the worst. Do you think the one you would want in the trenches with you when the going got tough, the who understood dealership challenges, would be the one who kept the position? or the ones that had no clue, but 15 years of playing corporate game would be? I think you know the answer. They are getting what they deserve and I could not agree more, Whaler will be next. Hopefully a competent owner will purchase all 3 of them and run them properly

  10. PETER B WRIGHT

    It was a foregone conclusion, I am sorry I could not figure out how to do a short sale a couple of years ago.

    I hope people who actually know something about the wants and needs of big game fishermen (and women) including both anglers and crew wind up owning Hatteras.

  11. BayBoater

    No surprise here… Due to Brunswick’s failure to produce what the buyer’s of both of these awesome brands actually want, both icons’ sales have tanked yet Brunswick, through their “media events” would want you (actually their investor’s) to think otherwise. They can only “make” the numbers look favorable for so long… And it seems that that time has come. I’d love to see both brands taken over by a company/person that truly knows what the two lines are capable of being in today’s market, rather than just another foo-foo boat line like Brunswick tried to turn them in to.

    The layoffs are tough to swallow, but in reality, the 105 workers weren’t in secure positions anyway. Now that Brunswick HAS to make the numbers look good for a sale, the casualties had to occur. Sad to say.

    As far as Parmentier leaving S/R goes, that is a good thing! It’s been a long time coming! Now there is a real reason for Brunswick’s stock to go up! LOL Funny thing is, didn’t an un-named industry publication just name Mr. P the top dog of the industry??? Really???

  12. Dan

    Dusty gets the BOD to support a buy high and sell low plan for several brands. Sad for dealers and employees. They are the joke of the industry.

  13. giancarlo

    This story is very sad indeed. I’m Italian and I remember when Ferretti Group bought Bertram, Immediately I thought what they’re going to do with this american sportfishing icon? Building cruising yachts or ruining it’s reputation as one of the best sportfishing? Well recently the story took an even worse way, when a chinese corporation bought Ferretti Group then obviously Bertram, for sure sooner or later they will bring the production down in their country and probably leave just a distributor here in US. What if another chinese corporation is going to buy Hatteras and Cabo? Should we say thanks for saving those brands just because they will keep the name alive or crying because they will be gone for ever remaining just an iconic memory? Then what when the economy here will be flourish again, american anglers will buy a chinese Bertram or Hatteras or someone will create a new brand building nice sportfishing with a new name without any pedigree? Will we just remember about those nice old Hatteras or buy an old one and restoring her only to say I have an Hatteras? Thanks for commenting and sorry for my written english.

  14. Former Brunswick Employee

    How Dusty McCoy still has a job is beyond me. As stated in other’s comments he led the charge in buying all of these boat companies when the market was high and now that the market is down is either selling the companies at huge losses or just walking away from them all together. The market is always going to go through ups and downs and the marine industry is always directly effected. Maybe Dusty knows something other’s don’t. BUY HIGH, SELL LOW????????????? Great strategy.

  15. Wilbur

    Brunswick has completely gutted the company of anyone who knew anything about boat building. They changed the focus of the company from making fantastic boats to driving numbers. Buckley started by bringing in his cronies from Emerson Electric and systematically got rid of some of the most knowledgeable and hands on Plant Managers in the industry. This is exactly the opposite of what Toyota would do. Hmmm.
    And, you can say what you want, but if Brunswick’s approach is so good, why are they in such big trouble. Sea Ray was the standard for the industry and they no longer are. Enough said. BC, you have ruined on of the most premier boat manufacturers in history with your arrogant “talented” cronies.

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