Brunswick defends decision to close Tennessee plant - Trade Only Today

Brunswick defends decision to close Tennessee plant

Author:
Publish date:

A Brunswick Corp. official says the decision to close its Sea Ray plant in Knoxville, Tenn., was a difficult but critical one.

Sea Ray president Robert Parmentier made that statement in a letter obtained by Soundings Trade Only that was sent to employees in conjunction with the news that the plant where they worked will stop production in December.

“Although difficult, this decision was critical to improve our plants’ capacity utilization and our overall profitability,” Parmentier wrote. “We must stay profitable to support our dealers and strategic initiatives that will sustain the long-term health of our business. In the long run, the continuing strategy will create a leaner, more agile company that can more readily adapt to changing market circumstances.”

The need to make the move became clear as the company gained new insight into the marine retail environment, Parmentier wrote.

The most recently released numbers from Statistical Surveys Inc., a Michigan company that tracks boat sales, show August sales of fiberglass cruisers 31-40 feet plummeting 28.8 percent year over year and tracking a 6.7 percent dip for the year.

“We feel the actions that we are taking are aimed at getting ahead of potential market developments on a proactive basis and getting set up for 2013 going forward,” Parmentier wrote.

The decision was “in no way a reflection on the performance of our Knoxville facility,” he wrote.

“Shutdowns and layoffs, unfortunately, are a necessary part of ensuring that Sea Ray moves forward in what has become an extremely difficult and uneven market in Europe and North America,” he wrote.

The move, which Parmentier called “regrettable,” was possible because of capital expenditures the company has made “within the manufacturing footprint to increase capability and flexibility,” he wrote.

The investments, coupled with the ability to move the production of certain models between plants, will help the company emerge “stronger, healthier and more profitable,” Parmentier wrote.

Seven Sea Ray Sundancer models currently built in Knoxville will start to be built in other plants. Three will move to Brunswick’s Palm Coast, Fla., plant and the other four will move to Vonore, Tenn.

“The Sea Ray and Knoxville leadership teams will be working diligently to transfer as many employees between various Sea Ray and other Boat Group locations as possible and practical,” he wrote. “Every effort will be made to preserve the unique Sport Cruiser manufacturing experience and overall production excellence embodied in the Knoxville organization.”

Read more about the changes in the November issue of Soundings Trade Only.

— Reagan Haynes

Related

E-nnovation Lab to expand at 2018 Metstrade show

The growing demand for hybrid and electric engines is becoming more apparent within the leisure marine market, prompting Metstrade to introduce the E-nnovation Lab platform for electric propulsion technology.

Aluminum, tow boats lead moderate growth in May

Boat registrations were up 2.1 percent in May in the main powerboat categories, and rose 3.2 percent in all categories, according to preliminary data from Statistical Surveys Inc., a Michigan company that tracks new boat registrations.

Retaliatory tariffs on boats to EU start today

The 25 percent tariff the EU announced Wednesday on U.S.-built boats kicks in today, and a 10 percent tariff on boats sold to Canada will start July 1, prompting boatbuilders to worry they will lose sales to those countries.