For the Record: Wholesale shipments rose in first half of year

Author:
Publish date:

Advance data indicate that through the first half of this year wholesale shipments of traditional powerboats were up 7.9 percent from a year earlier and corresponding dollars were up 21.6 percent, the National Marine Manufacturers Association said in its monthly economic report.

87_wholesale_01

In the first quarter of 2011, new powerboat registrations were down 5 percent on a rolling 12-month basis, compared with a year earlier. Advance estimates indicate that sales will be down 0.4 percent on a rolling 12-month basis through July, the NMMA said.

Recreational boat and marine engine export volumes were up 3 percent in the second quarter of this year, and dollars were down 4 percent from a year earlier. Corresponding import volumes were up 9 percent and dollars were up 6 percent, according to the association.

Manufacturers grapple with injury lawsuits

Several manufacturers faced unfavorable jury verdicts in lawsuits brought by lawyers representing clients who were injured or killed while using their products. Decisions on appeal varied.

• In September, Yamaha Motor Corp. USA announced plans to appeal a jury’s decision to award $39 million to two Florida families in a case involving a 2005 WaveRunner PWC accident that left one teen dead and another injured for life. Lawyers for the plaintiffs accused Yamaha of failing to correct what it said was a known steering defect with the PWC and then failing to adequately warn people that an operator could not steer without throttle.

• The Fifth Circuit Court of Appeals in mid-August denied Brunswick’s request for a rehearing in a case in which it was found partially liable for a 2005 accident on Lake Austin in Texas in which a propeller severed a teen’s leg. The company said there will be no further appeals in the case. Jurors ordered the company to pay $3.8 million in medical expenses and damages.

• A Superior Court judge in Butte County, Calif., rejected MasterCraft’s request for a new trial in a 2006 accident that left two people injured, but the boatbuilder said it will appeal the decision.

A jury ruled in June that MasterCraft was 80 percent at fault in a 2006 accident in which two passengers were swept off an X45 wakeboarding boat and struck by the propeller. Jurors found that the driver, who had admitted to drinking alcohol on the day of the accident, was 20 percent at fault. Also, there were more passengers on the boat than the builder recommended. The jury awarded $30.9 million in damages to one victim and $530,688 to the other.

Credit criteria loosening, bankers’ survey shows

A survey by the National Marine Bankers Association revealed that all respondents to a second-quarter survey indicated that lending criteria (credit history, asset/net worth, debt ratio, income, collateral and other lender requirements) are the same or even less stringent than in the prior quarter.

Eighty-five percent of respondents indicated that the dollar volume of loans booked in the second quarter of 2011 was up from the same period last year. Asked about their outlook for the third quarter, 85 percent indicated that they expected business to be the same or increase from the same period in 2010.

Eighty-three percent of respondents believe financing is more readily available this year than last year as lenders reported losing transactions because of the borrower’s ability to get more favorable financing and terms elsewhere.

Association members include financial institutions such as commercial banks, private financing firms, savings and loan companies and credit unions.

Brunswick plans factory expansion

Brunswick Corp.’s facility in New York Mills, Minn., is expanding by 22,000 square feet to accommodate Crestliner manufacturing that the plant recently added.

Lund boats also are built at the facility.

The additional space also will improve manufacturing flow and efficiency, as well as provide needed warehouse space, the company said.

This project, which was to break ground in September, is slated to be completed by the end of the year.

“Demand has been solid for both the Crestliner and Lund brands of boats that are manufactured at the New York Mills facility,” the company said in a statement.

Plant officials said they are seeing “robust early season orders.”

NMMA supports kill-switch standard

The National Marine Manufacturers Association recently joined with BoatUS and the American Boat and Yacht Council to conduct testing on the ease of using emergency stop lanyards, how much time it takes to put on an ESL and how long it takes to switch vessel operators while using an ESL.

The testing was in response to the Coast Guard’s request for public comment about whether it should require ESLs as a standard safety feature on propulsion machinery and starting controls installed on recreational boats less than 26 feet.

The testing captured data from eight boat operators with varying levels of experience who performed start/stop tests on four different vessels. The NMMA also conducted a survey of its members to determine the prevalence of ESLs within the existing recreational powerboat fleet.

This survey found that more than four in five builders of powerboats less than 27 feet already equip the majority (more than 90 percent) of their boats with ESLs and that more than three in five builders support a Coast Guard mandate on ESLs for boats less than 27 feet.

The NMMA compiled final comments for the Coast Guard that recommend it incorporate the existing ABYC standard for ESLs in future rulemaking because it allows for a variety of devices, does not require one solution and allows for future innovation.

The comments also recommend that any new ESL requirement become effective on new boats built on or after Jan. 1 of the second year after the effective date of any final rule.

Mercury opens regional headquarters in Australia

Mercury Marine opened in August its new headquarters for the Australia, New Zealand and Pacific region.

The building, in the Melbourne suburb of Dandenong South, was officially opened by Dustan McCoy, chairman and CEO of Brunswick Corp., and John Pfeifer, president of Brunswick Marine in EMEA and Brunswick Global Structure.

Mercury’s new headquarters is equipped with an electronic parts-checking system, a training room and a workshop that includes a machine shop, a welding area and an enclosed rebuild and tool room.

“We look around the world, and this region is a great, great place for us. You have the best [marine] customers in the world and I know the dealers are fantastic business operators,” McCoy said in a statement. “As well, our staff here are the best there are. We measure our people in many, many ways, and whichever way we look at it, no one’s better.”

Riviera reports heavy export shipments

Australian boatbuilder Riviera said in August that it “continues to export, defying industry trends with its latest shipment of 10 new boats with a retail value of $12.3 million, shrink-wrapped in heavy-duty plastic and ready for shipping next week to varying ports around the globe.”

Riviera will export one 4400 Series II Sport Yacht, two 5000 Sport Yachts, two 38 Open Flybridges, two 43 Open Flybridges, one 51 Enclosed Flybridge, one 53 Enclosed Flybridge and one 61 Open Flybridge to dealers in Miami, Puerto Rico, Panama, Sarasota, Fla., Seattle and the Seychelles.

“We continue to export despite challenging market conditions,” brand and communications manager Stephen Milne said in a statement. “Our production capability is now solid following a successful Sydney International Boat Show, so there are only a very limited number of new boats available for pre-Christmas delivery.”

Just last year, the company sought bankruptcy protection in the United States, citing a drop in demand that started in 2008.

Volvo Penta marks IPS milestone

88_propeller_01

Earlier this summer, Volvo Penta delivered North America’s 4,000th Inboard Performance System engine package, the company announced.

“Volvo Penta IPS fundamentally changed the marine marketplace,” Volvo Penta of the Americas president and CEO Clint Moore said in a statement. “For the first time in my experience, consumers start the boat show-buying experience at our booth, asking us which boat brands are available with Volvo Penta IPS. For most boatbuilders and dealers, boats powered by Volvo Penta IPS represent incremental sales.”

Volvo Penta’s 4000th IPS unit was delivered July 27 to KCS International for inclusion in its new 48 Cantius cruiser.

Longtime Florida dealer is remembered

William “Pete” Loftin, who launched the Jacksonville, Fla., dealership Outboard Inc. in 1957 and operated it for 41 years, succumbed to cancer on Sept. 5. He was 88.

Born William A. Loftin Jr. in North Carolina, he was known simply as Pete by friends and colleagues. He also worked for 13 years with the Evinrude Motors division of Outboard Marine Corp., first as an assembly line supervisor and then as the Southeast sales representative.

“I counted Pete as a dear friend and a giant in the industry,” Phil Keeter, president of the Marine Retailers Association of America, told Soundings Trade Only. “He tackled all problems and challenges with reckless abandon.”

Like Keeter, Loftin served as president of the MRAA and was a pioneer in its creation. Loftin also spearheaded the development of a marine trades group, boat show and fishing tournament in his adopted home of Jacksonville. He served on numerous industry councils.

In 1992, he was elected to the Marine Retailers Association of America Hall of Fame. In 1997, he received its Irv Rosenthal Award for outstanding service to the boating industry.

Keeter said Loftin was “fiercely loyal” to friends and colleagues and a dogged advocate for marine dealers.

Sea Tow ranked among fastest-growing companies

Inc. magazine ranked Sea Tow Services International Inc. No. 4,802 on its fifth annual Inc. 500/5000, a ranking of the nation’s fastest-growing private companies.

Sea Tow posted a 9 percent growth in sales during the three-year period from 2007 to 2010, reflected by the 2011 Inc. 500/5000. This is the second appearance on the magazine’s list for the Long Island-based company.

Sea Tow ranked No. 4,489 on the 2007 Inc. 5000, with 43.8 percent sales growth during the previous three years.

“The marine industry has been hit very hard over the past few years, but due to the value of our product, the loyalty of our customers and the passion of our local Sea Tow captains, Sea Tow has been able to weather the storm,” Sea Tow founder and CEO Capt. Joe Frohnhoefer said in a statement.

Chaparral holds dealer conference

More than 400 dealers, vendors and employees attended a three-day dealer conference that Chaparral hosted this summer at Chateau On The Lake in Branson, Mo.

One hot topic was Chaparral’s recently introduced H20 Series, including new 18- and 19-footers in sport and ski/fish offerings. Powered exclusively by MerCruiser, the boats will be sold at package prices, including a trailer, starting at $21,885, not including freight and dealer prep.

“Judging by dealer reaction and initial sales orders our H20 line has already far exceeded expectations,” company president Jim Lane said in a statement. “This is the first time we’ve offered boats at nationally advertised prices. The H20 Series is competitively priced and on target for today’s value-minded buyers.”

The company has introduced 30 new boats at its dealer conferences in the last five years.

Another highlight of the meeting was the attendance of 20 new dealers. The worldwide conference included 25 dealers from around the globe, including China, Egypt, India, Australia and throughout Europe.

NMBA mourns finance executive

The board and members of the National Marine Bankers Association announced the sudden passing Aug. 20 of colleague Jesse Bragg.

Bragg was a consumer finance executive with more than 30 years of service with Bank of the West, its predecessors and Essex Credit Corp.

“Jesse was instrumental in the turnaround, positive growth and success of Essex Credit,” according to the association. “He cultivated outstanding lending relationships with national organizations, finance sources and vendors that became important operational components to his business. Jesse’s leadership has left a positive legacy for Essex Credit and its consumer recreation finance business.”

Marine education charity seeks project partners

88_welder_01

The non-profit organization Oliver Hazard Perry Rhode Island is working to cast a wider net in the marine industry as it forges ahead with construction of the Education-at-Sea school ship Oliver Hazard Perry and the development of its educational programs.

“We are formally announcing a program where we are looking to partner with the marine trades for our shipbuilding project,” Oliver Hazard Perry chairman Bart Dunbar says. “Our current partners have generously offered significant discounts and donations of goods and services, and more partnerships will allow us to help reinvigorate the marine industry, which is an important part of Rhode Island’s economic development.”

The 196-foot (sparred length) three-masted square rigger SSV Oliver Hazard Perry is undergoing construction at Promet Marine Services in Providence, R.I.

When it is 75 percent complete it will return to Newport waters, where it will be on display as an educational public exhibit. Its masts, rigging and hardware will be configured and installed while interior accommodations and other improvements are finished.

The organization planned to begin its outreach to the marine industry in the area in September at the Newport International Boat Show. Information about the project is available by visiting www.ohpri.org.

Analyst applauds sale of Sealine

A Wells Fargo analyst reacted favorably to Brunswick Corp.’s announcement Aug. 31 that it was selling its U.K.-based Sealine brand to The Oxford Investment Group.

“This announcement is not surprising, given recent management commentary alluding to the possibility of divesting a few non-core/non-profitable boat brands from its portfolio,” Wells Fargo Securities analyst Tim Conder said. “While not specifically disclosed by the company, we believe Sealine’s revenue as a percent of BC’s total 2010 global revenue to be less than 3 percent. We view this announcement positively, as [Brunswick] is shedding a non-core, unprofitable brand, allowing for additional focus on global core brands.”

In announcing the sale, Brunswick chairman and CEO Dustan McCoy said the decision allows the company to “best concentrate our resources on our continuing brands and the marine segments in which we compete.” Terms of the transaction were not disclosed.

Sealine, which builds sport yachts, cruisers and motoryachts from 35 to 60 feet, was established in 1972. Brunswick bought the company in 2001.

This article originally appeared in the October 2011 issue.

Related