Brunswick CEO announces succession planPosted on Written by Reagan Haynes
The recent appointment of Mark Schwabero to the newly created post of president and COO of Brunswick Corp. is part of a long-term succession program that will allow CEO Dusty McCoy to retire in 2016.
“This is part of our succession planning,” McCoy told investors Wednesday during a B. Riley & Co. conference in Santa Monica, Calif. “I will be departing early in 2016 and Mark will be succeeding me and right now all the businesses are reporting to Mark.”
The long-term plan began with the appointment of Bill Metzger as CFO about 18 months ago, McCoy said.
“We’ve been planning this over a long period of time, and now we’re in the execution phase,” he said.
Recently Brunswick Boat Group president Andy Graves left the company as Schwabero moved into his new role. Jeff Behan, vice president of planning and businesses; Boston Whaler president Huw Bower; Freshwater Group president Jeff Kinsey; and Recreational Boat Group president Tim Schiek are reporting to Schwabero.
The company said recently that John Pfeifer will step into Schwabero’s former role as president of Mercury Marine, the most profitable part of the Brunswick portfolio. Pfeifer had been vice president of global operations for Mercury.
McCoy touched on Mercury Marine during his presentation, saying that part of Brunswick’s strategy was to have a “big installed base” for its engines.
That means that even companies that compete against Brunswick brands on the boat business side are looked at as allies when they are growing share against those using the engines of competitors, McCoy said.
“We look to grow share against people who don’t use our engines as part of this platform,” McCoy said, adding that Marine Products Corp., which also spoke at the event, is among those allies. “We’ve led the market in new product development in the marine engine business and that’s something we’ll continue to do.”
The operating margins on the engine side are growing, McCoy said, from the mid-13 percent range to 14 or 15 percent.
McCoy gave a rare glimpse into profitability among the company’s boat brands.
“Our boat business lost money and has been losing money now for several years,” McCoy said. “It will be profitable in 2014.”
He said the aluminum pontoon business has been great for Brunswick. “We’re at 23 or 24 percent market share in aluminum product,” McCoy said. “The fiberglass sterndrive [segment] — that’s where we’ve not been making money and we have been very open about that.”
Not all of the company’s fiberglass products are losing money, he said.
“Boston Whaler is probably the most profitable boat business in the world, but we don’t break it out for people to see,” McCoy said.
He emphasized the company’s commitment to bring out new models with a cost that is equal to or less than the products they’re replacing across all brands.
“We need to double our new-product output,” McCoy said. “Every model from last year will roll over in 4.5 years; by next year, it will roll over every 2.5 years. We’ll continue that model introduction rate for the next several years.”
The Sea Ray 350 SLX has been “much hotter than we’d thought it would be,” McCoy said, alluding to the new product as the impetus to turn around sluggish sterndrive segment sales. “We have a lot of big-boat product coming to the market in 2014. We’ve made big investments that have caused our year to look very lumpy.”
The company expects to see large increases in sales in the second half of the year as a result of the work it is doing.
“As we step back, we’re very comfortable with our operating plan in an economy where we get no help and a boating industry that’s going to grow very slowly,” McCoy said.