Brunswick will close boatbuilding plant in Brazil

Brunswick Corp. said today that it will immediately start to wind down its boat manufacturing operations in Brazil.
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Brunswick Corp. said today that it will immediately start to wind down its boat manufacturing operations in Brazil as the country continues to face challenging economic conditions.

The Joinville, Santa Catarina, plant will be shut and the production of certain Bayliner and Sea Ray models being built there for the South American market will be moved.

"The region's continued weak economy has made it difficult to profitably serve these markets with a dedicated manufacturing facility," Brunswick Boat Group president Huw Bower said in a statement. "With our existing commercial infrastructure and channel presence, we can return to our previous model of importing boats to the region to more efficiently and effectively fulfill demand to this important market."

The company did not immediately say where those boats would be manufactured, but said their production will be moved to Brunswick’s “remaining global boat manufacturing footprint.”

“We will return to our strategy of importing boats from other facilities within our manufacturing footprint to fulfill demand in the region,” Brunswick spokesman Daniel Kubera told Trade Only Today. “Those details have yet to be finalized. In the interim we will concentrate on winding down operations in Joinville, including the completion of in-process boats, and helping our employees through this transition.”

The company said the resulting restructuring charges are estimated to be in the range of $10 million to $12 million pretax, substantially all of which will be recorded in the first quarter this year.

Further, the shift is projected to have a modestly positive impact on earnings and a minimal impact on free cash flow, with the majority of the earnings benefit occurring in 2018.

Brunswick said the decision has no impact on its strategy or plans for its Mercury Marine business or life fitness business in the region.

“Though the region's economy continues to be challenging, its effects have been more pronounced on the boat business,” the company said.

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