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Analyst: Brunswick furloughs are ‘prudent’

Brunswick's decision to extend the furlough at two Sea Ray plants in Tennessee is "prudent" and "consistent with our prior comments that new fiberglass retail boat sales, in general (mid/larger boats, in particular), remain weak," according to Wells Fargo Securities senior analyst Timothy Conder.

Typically, production furloughs are taken near Thanksgiving and again at the end of the year. But Brunswick told employees at the Knoxville plant that its furlough begins Oct. 4. The plant in Vonore will begin its furlough in November.

Both plants are scheduled to resume production Jan. 4, 2011.

"We will continue to monitor retail boat sales as we enter the U.S. offseason, but feel ... absent dramatic ongoing year/year declines, it will be [March 2011] before we again get a good read on retail," Conder wrote. "The general exhaustion of non-current new and quality used industry product should begin shifting the 84 percent used/16 percent new mix back toward historical levels of 75 percent/25 percent in 2011, benefiting manufacturers.

"We see limited catalysts through year-end to break [Brunswick] out of a $14-$18 [per share] range," he added.

Brunswick stock opened this moring at $14.13.

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