After initial honeymoon, the iconic founder leaves the company, citing differences with new owners
When Fountain Powerboat Industries was going through the Chapter 11 bankruptcy process in 2009, company founder Reggie Fountain fought hard for court approval to sell his company to Liberty Associates.
Though FB Investments had made an unopposed credit bid of $8.75 million for Fountain's assets, a bankruptcy court judge in North Carolina ruled that Fountain could sell to Liberty and in doing so remain head of the company he had founded some 30 years ago.
"We don't think there'll be a stronger company in the world," Fountain said at the time of the pairing of Liberty and Fountain, which would bring Fountain, Baja, Pro-Line and Donzi together under one organization. A year later, Fountain abruptly resigned from the company that bears his name, citing irreconcilable differences with the new owners.
Although he was initially happy that Liberty bought the company, there were differences of opinion. "Sometimes when you get to know people better, things don't work out like [you] thought they would, whether you're getting married to another person or whether you're getting into business," Fountain says. "After a while, it became apparent to me that there was a very substantial difference in both philosophy and opinion as to how we should run the business."
He wouldn't give specifics, but Fountain says those differences were substantial. "It was a difference in opinions and philosophies as to how you run the business, including, but not limited to, the engineering, the manufacturing, the sales, the marketing and also the financing of the operation," he says.
John Walker, who was named president and CEO of Fountain, says it was not a shock that the company's founder resigned, although there was some surprise. "Typically when you have somebody that owns a company for as long as Reggie has and then you have new management, there's differences in how things should go, and we've always appreciated Reggie's position," Walker says.
Walker is also CEO of American Marine Holdings, owner of Donzi Marine and Pro-Line, and CEO of Baja Marine. Production of Donzi and Pro-Line is moving to Fountain's Washington, N.C., plant.
Although he expects talk in the industry about Reggie Fountain's departure, Walker is confident that the Fountain brand, along with the other three boat lines, will continue to grow. "Unfortunate while it is, everything doesn't come to a halt," he says. "People are still building boats. Everybody is continuing to do what they do. Eighty percent of the people in the company have been with the company 15 and 25 years or more. Between Donzi and Pro-Line and the excellent Fountain staff that we do have, I think our depth of knowledge is far greater than it's ever been."
Changes at the company
Some of the more recent changes at the company include closing Fountain's factory-direct store, relaunching Baja as a stand-alone brand and moving production of Pro-Line and Donzi from Florida to North Carolina. North Carolina officials offered state and county economic grants as incentives to encourage the move.
Walker says Donzi and Pro-Line boats will be produced at the Fountain plant by their own dedicated work forces. "Sales, marketing and administration for both brands will continue to be run from our Florida offices," he says. "At the same time, the added production volume will significantly enhance manufacturing efficiency at the North Carolina plant, which has been fully operational since November of 2009, when Fountain emerged from bankruptcy under our ownership."
As for the decision to close the factory-direct Fountain Factory Superstore, Walker says, "The factory superstore was an effective interim selling solution prior to Fountain's reorganization, but today retail interest is on the rise, our dealers are gaining confidence in our new management team and other dealers are taking notice."
He adds: "Overall, the mood surrounding Fountain Powerboats is very encouraging and we are enacting new strategies that serve our long-term vision for the company."
Fountain and Walker are confident that the outlook is bright for both of them. "I've always been one that plotted his own course and feel the best ways to utilize my talents is in new-product development, racing and working directly with my customers," Fountain says. "The performance-boat business is changing fast and there are certain basic elements that must be in place to succeed."
He did not rule out returning to the boating industry in some capacity, possibly as a consultant or in a new company, and said that since his departure was announced his phone has been ringing with opportunities. "I love [the industry]. It's all I've done for 30 years," he says. "If I do start another company, I think I have plenty of work I can do down the road."
As for the company, Walker says it's in good hands and he expects to see good growth in the coming years. About 80 people work in the North Carolina facility and he anticipates that the number will grow to more than 200 in the next six months and more than 400 in the next four to five years.
"I think [Fountain's resignation] is going to certainly cause its share of talk throughout the industry," Walker says. "Reggie has a very loyal group of followers, primarily in the retail end. Reggie's an icon. We wanted him to stay on and be the icon. Col. Sanders is no longer alive, but Kentucky Fried Chicken is doing well. Sam Walton's no longer alive, but Wal-Mart's obviously doing well."
This article originally appeared in the February 2011 issue.