COVID-19 chaos

Yamaha continues outboard production in Japan; Malibu stops production; Regal will shutter Georgia plant; Beneteau shutters Michigan, France and Italy production; Imtra temporarily stops shipments
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Regal Boats CEO Duane Kuck said closing a plant in Valdosta, Ga., was a difficult decision. All of the models, including this 29 OBX, will be built in its Florida facility starting this summer.

Regal Boats CEO Duane Kuck said closing a plant in Valdosta, Ga., was a difficult decision. All of the models, including this 29 OBX, will be built in its Florida facility starting this summer.

Yamaha Motor Corp. is continuing to build and ship outboard motors from its Japan plant, said Martin Peters, senior manager of marine communications and government relations.

“Those products are manufactured in Japan and come in through the port in Seattle,” Peters told Trade Only Today. “They’re also shipped out of the facility in Georgia as well. There is no issue with that, we continue to ship those products.”

The company was able to continue building in Japan despite having stopped manufacturing at its U.S. subsidiaries, affecting around 1,500 employees in several industries, including marine.

Being a global company, it continues to evaluate the situation around the world on a day-to-day basis, like most stunned by the instant ripple effects of the coronavirus on global commerce, said Peters.

“The situation is very fluid, and we try to do the best that we can given the situation as it changes,” said Peters. “Even direction from state and local governments, as well as the federal government, changes all the time, and we have to change with it.”

Regal Boats announced on Monday that it would close its 165,000-square-foot plant in Valdosta, Ga., and focus operations in its 500,000-square-foot world headquarters in Orlando, Fla.

“This was a tough decision — unbelievably tough,” Regal CEO Duane Kuck told Trade Only Today. “We’re riding back from Valdosta to Orlando right now — so it’s a tough day. There’s hardly anybody untouched by the impact of the coronavirus in one way or another.”

The Valdosta plant, which has been owned by Regal and operational since 2001, is expected to remain open through May in order to complete all boat orders in process. The plant’s 105 workers have been invited to move to the Orlando facility, said Kuck.

“We think the coronavirus is going to certainly impact the marine industry, none of us know how sharply,” said Kuck. “But, we felt that focusing our attention exclusively in one city versus being spread in two cities was the prudent decision for the company to make — and a very tough one for us to make because there are a lot of great people in the plant we have up there.”

Valdosta workers will be provided financial assistance through the Kuck family’s philanthropic “Regal Cares” program, which is supported through nonprofit charity Helping Hands Inc. Besides continued employment and benefits through closure, Valdosta team members will also have direct and ongoing access to optional HR and outsourcing support, along with family counseling services.

Florida production is still underway, but employees are given the option of whether to work, and the company has implemented strict six-foot distancing, said Kuck. “Most want to work,” added Kuck.

Malibu Boats Inc. announced today it would stop manufacturing all its brands effective immediately through April 6, and that it would withdraw its fiscal year 2020 outlook given the pandemic. The closure affects all the company’s brands including Axis, Cobalt Boats, Malibu Boats and Pursuit.

“We are all navigating uncharted waters, as uncertainty in the broader macro-economic environment has reached unprecedented levels,” said Malibu CEO Jack Springer in a statement.

“In this moment, the health and safety of our employees, dealers and customers remain our top priority,” Springer said. “As a result, we made the difficult decision to suspend operations at our manufacturing facilities out of an abundance of caution for the communities we serve.”

Despite volatility in global markets, Malibu remains in an “excellent financial position,” but decided to draw just under $100 million on its current revolver to ensure sufficient liquidity, said Springer.

Massachusetts-based Imtra, which had already shifted customer service, technical support and production management teams to working remotely, was forced to close its doors after Gov. Charlie Baker, R-Mass., joined the list of state leaders banning non-essential business.

Imtra sent a letter to customers saying it would be unable to ship product starting today due to the shutdown.

“While we understand that this shutdown may cause disruptions in your supply chain, this situation is outside of our control,” said Imtra CEO Eric Braitmayer in an email to customers on Monday, adding that they would work overtime to ship as many orders as possible before closing.

Supply chain issues were on the minds of boatbuilders also. Brunswick Corp., which manufacturers all of its Mercury Marine motors in Wisconsin, announced on Friday it was suspending all boat and engine manufacturing.

On Friday, Groupe Beneteau announced it would halt operations at its Cadillac, Mich., plants, but continue to build boats out of its Marion, S.C., factory, albeit it at a lower pace.

Last week, Groupe Beneteau suspended production activities in France and Italy.

“In this exceptional situation facing our country and all our employees, this suspension of activity is necessary,” said Groupe Beneteau Chairman and CEO Jérôme de Metz in a statement. “We are taking all possible measures to ensure the protection of our employees in all countries and to help ensure a quick resumption of our activities as soon as the situation allows us to do so.”

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Quick Hits: April 1, 2020

Fairline scales back operations due to COVID-19 pandemic. NMMA Webinar: How the Stimulus Package Helps Boating Industry Businesses. Dates for 50th annual Newport International Boat Show announced. 2020 USCG Regulations for Recreational Boats Book now available.