The recreational boating industry booms in good times and withers in bad. Even with that knowledge, few of us were prepared for the roller-coaster ride of 1988 through ’91. Fewer still saw that period as an opportunity, except a few contrarians who created one of the most dynamic success stories of the time.
The new line of boats was called Excel. It was one of the best short-lived achievements in the industry’s history.
The year 1988 was the best year ever for the boat business. The National Marine Manufacturers Association reported industry sales of $19 billion. But just three years later, NMMA executives were testifying before the U.S. Congress following a one-year loss of 19,000 industry jobs and a 45 percent drop in sales from 1988, to $10.6 billion. The industry was reeling.
At fault, according to most, was the 10 percent luxury tax, which was levied on the portion of a new boat’s price that exceeded $100,000. There was a bigger dynamic at play, though. Industry sales had started to slow in 1989, as increasing interest rates affected the cost of all purchases. Consumer confidence was noticeably waning when the United States and coalition forces invaded Iraq in 1991, reawakening fears of 1970s-era gas shortages and sky-high prices at the pumps. Americans took a time-out from buying.
The ripple effects soon caught up with boating companies that were used to years of good times. Many marine businesses shuttered. Others cut costs to the bone, displaced all but essential workers and hunkered down.
A handful of people saw the situation as an opportunity. They included Bob Long, president of Wellcraft; Irwin Jacobs, the Genmar chairman known for aggressive and often successful risk-taking; and me, an industry veteran who had been part of Bayliner’s rise to prominence, then working at Wellcraft.
A chance meeting in 1990 set the Excel project in motion. I had developed a business plan for a line of value-oriented trailer boats. Long needed a home-run product to get a share of that industry-leading segment. Jacobs, who had seen his Wellcraft brand’s sales falling, was persuaded to fund the project.
I was given wide latitude to implement the plan. I brought in a small group of design, engineering and manufacturing people to keep the project separate from Wellcraft. It was known only as Project X. The first full-scale mock-up of an Excel was completed in a locked executive office in Wellcraft’s corporate headquarters. A dozen of us operated on a need-to-know basis. Our big concern was keeping the project hidden from suppliers, vendors and other loose-lipped individuals who had open access to our engineering and manufacturing spaces.
Wellcraft was already a complex company juggling four product lines: runabouts, cruisers, saltwater fishing boats and high-performance Scarab models. All were option-laden to the point of being near-custom products. And all were premium-priced.
Excel, in contrast, was a value product that would complement, not compete, with Wellcraft. It was created as a separate brand, not as an add-on for Wellcraft dealers. We made sure it required a separate contract and, most important, the dealer’s commitment to buy and sell aggressively.
Excel was designed around low-cost, lean manufacturing: fewer parts, fewer hours of labor, more commonality of parts, just-in-time delivery and no-option simplicity. Only one color was available. Engines were Volvo Penta sterndrives or Yamaha outboards of a designated horsepower. No options were offered — just good-looking, good-handling boat-engine-trailer packages with wow pricing. Even freight costs were the same for every dealer, regardless of location, creating an equal-price playing field.
We received plenty of pushback. Wellcraft staff, field managers and dealers were among the dissenters who craved the advantages of value products without the restrictive disciplines that made them possible. I held firm against all the complaints and entreaties to the point where I was nicknamed, “Dr. No.”
And then, there was the question: Would any new line of boats sell in the toxic business environment of 1991?
Five prototype models of Excel — three 18-footers and two 20-footers — launched in September 1991 at the International Marine Trades Exhibition and Conference. A pall of gloom hung over most of IMTEC that year, but Excel’s display was a hub of activity. Before the four-day show ended, we had taken orders for more than 5,000 units totaling $72 million. There was no way our fledgling company could produce that many boats before the model-year end in July, but it was a good problem to have.
Excel began production in a vacant 20,000-square-foot building in Sarasota, Fla., shipping its first boats in December and delivering $17 million worth before the July deadline. It was nowhere near the order base, but it was more than the $10 million I’d promised Long and Jacobs to get the project started.
By the next year, we introduced more models, and manufacturing expanded to three plants. Sales pushed $40 million. By the time we added a 23-foot overnighter fishing boat and a 26-foot trailerable cruiser, Excel was a formidable line capable of supporting a trailer-boat dealership.
In 1993, as sales were projected to reach $70 million, it became clear that Excel was cannibalizing Wellcraft’s sales. The corporate decision-makers forced a move to protect Wellcraft’s brand equity, and it ultimately meant the demise of Excel.
The success story was finished almost as quickly as it had started. Excel became a Wellcraft sub-brand that lost its identity, competitive positioning and pricing advantages. By 1995, it was history.
For its time, however, Excel was the perfect product. Its success stands in stark contrast to the majority of companies in the early ’90s. It’s a story of what can happen when vision, commitment and resources all point in one direction, even while the rest of the industry is moving in another.
This article originally appeared in the June 2019 issue.