Brunswick Corp. is suspending yacht production at its Sykes Creek facility in Merritt Island, Fla., and will consolidate its yacht and motoryacht production at its Palm Coast, Fla., plant.
"Difficult as it was, this action was a necessary step to match capacity with market demand, position Sea Ray for success with new yacht product development programs and work toward our near-term operational and financial objectives," Brunswick CEO Dusty McCoy said in a statement.
Production will end in June at Sykes Creek, where about 205 people build Sea Ray and Meridian models from 51 to 61 feet. The company is evaluating job opportunities for Sykes Creek personnel to help transition production to Palm Coast or at other Brunswick Boat Group manufacturing facilities for employees who are interested and able to relocate or commute, the company announced.
The Brunswick Boat Group's Product Development and Engineering Center, located adjacent to the Sykes Creek plant, will remain in operation. In addition, BBG will continue to utilize the existing customer reception facilities, sales and customer service offices, and wet slips on the Merritt Island campus.
"This action allows us to reduce production costs and shorten production cycle times of yachts,” Brunswick Boat Group president Andy Graves said in a statement. “Further, the transition is planned so that we can take full advantage of initial retail demand for our new yacht models that we are bringing to the marketplace over the next two years. Concurrent with the transition, comprehensive marketing materials will be provided to our dealer network to support the presale of the new yacht models under development. We can still support significant sales growth in these segments, as our post-consolidation manufacturing footprint will retain capacity to compete in a market in excess of 2.5 times current worldwide demand for yachts and motoryachts.”
When the entire consolidation is completed, the company estimates annual savings of between $3 million and $5 million, beginning in 2014. Restructuring and impairment charges of between $6 million and $8 million are expected to be recognized as a result of this action in 2013.
Check Wednesday’s Trade Only Today for an exclusive interview with Graves.