Brunswick sees little threat in possible import taxes

Posted on Written by Reagan Haynes
Brunswick CEO Mark Schwabero (right), shown with Heyday founder Ben Dorton at the New York Boat Show, discussed concerns about potential import taxes with investors before heading to the show.

Brunswick CEO Mark Schwabero (right), shown with Heyday founder Ben Dorton at the New York Boat Show, discussed concerns about potential import taxes with investors before heading to the show.

NEW YORK — The mood at the New York Boat Show was positive, but some exhibitors expressed a bit of trepidation about President Trump’s intention to impose border taxes.

Despite that concern, dealers and builders were upbeat, as many expressed enthusiasm for Trump and the focus on businesses and growth.

“All of our dealers are worried about 20 percent,” said Ben Dorton, founder of Heyday Boats, a company that was recently bought by Brunswick-owned Bayliner.

Some of the raw materials, such as stainless steel, fabric and foam, come from Asia — largely China.

Several other dealers also said they were nervous about the suggestion that imports be taxed 20 percent, but largely remained optimistic that it would not offset the positive effects of a renewed focus on businesses.

The question was on the minds of investors during a conference call to discuss Brunswick Corp.’s fourth-quarter earnings.

Although some raw materials are imported, a vast amount of them are sourced in the United States, CEO Mark Schwabero told Trade Only.

“A lot of raw materials are domestic,” he said, adding that the company has figured in potential import taxes. “It’s going to have some impact,” but not a significant one.

“If you look at engines, a significant portion is done in the United States,” Schwabero said. “Every action has an equal opposite reaction, right? It’s the laws of physics. I don’t know what that will be — maybe the dollar strengthens. Whatever it is, we feel like we’re positioned well. We build Bayliners and Sea Rays for Europe in Europe. Rayglass is made in New Zealand for that market.”

The company did move production of Sea Ray’s SPX line to Mexico last year, but Schwabero said that could easily be adjusted and relocated back to the Tellico plant in Vonore, Tenn.

“We were there for years. It’s a couple of molds,” Schwabero said. “So we’re well positioned to handle any little bumps.”

Comments

One comment on “Brunswick sees little threat in possible import taxes

  1. Jeff J Erdmann

    The industry was severely injured by the 10% luxury tax, even untaxed used boat sales were impacted…
    Furthermore if the cost of all goods goes up it will affect discretionary spending.

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