Q%A with Duane Kuck, President/CEO of Regal Marine Industries - Trade Only Today

Q%A with Duane Kuck, President/CEO of Regal Marine Industries

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Duane Kuck is president and CEO of Orlando, Fla.-based Regal Marine Industries Inc., a leading manufacturer of luxury performance boats. Regal is a family-owned business founded in 1969 by Duane’s parents, Paul and Carol Kuck.

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As the oldest of three children, Duane Kuck quickly became involved in the family business, working part-time after school and on Saturdays at the plant. He officially became a Regal employee in 1973, at age 18, and worked his way up the ladder, learning every facet of the organization.

In 1982, he was named vice president and later became chief operating officer. In 1994, the torch was passed from father to son, and Kuck became president and CEO.

Kuck is a former member of the Young Presidents’ Organization and served on its Fellowship Forum Board. He is a board member and past chairman of the American Boatbuilders Association. Recently, he was re-elected to the board of the National Marine Manufacturers Association, where he served as an officer and director from 1993-1999 and as vice chairman from 1995-1997.

Kuck is married to Cindy Leigh and is the father of five children, ranging in age from 4 to 16. He is an active member of his church and serves on the board for the Beacon Foundation.
An avid boater, Kuck also enjoys flying and playing basketball.

Q: Your father, Paul Kuck, founded Regal Marine in 1969, so you grew up in the boating business. What was that like and did you always know you wanted to carry on the family tradition?

A: I’ve been working at Regal since I was 16, through high school, so I’ve actually been working here sort of full-time since I was a junior in high school. I did go to college full-time here and kept on working full-time while I did that, and so I’ve really had the privilege of working here with my father — he went to heaven about two years ago — but through that time I had the privilege of working with him and I always really enjoyed that.
I’m a boater, I love boating, so I’ve pretty much been attracted to the boat business since the very beginning and haven’t been tempted away from it.

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Q: Your father, Paul, was recently inducted posthumously into the National Marine Manufacturers Association’s Hall of Fame. What would he have thought of that honor, and how was it for you accepting it on his behalf?

A: It was an honor for my brother, Tim, and me to accept that on his behalf. He didn’t like getting awards and such, so he probably wouldn’t have liked it. Doing it posthumously was probably the only way you could have pulled that off, because if he had been around, he would have vetoed that idea.
But it was an honor for us. There are so many great people in this industry that invested a lot in my dad, and so he would have been thankful for that part of it. What my dad valued most in the boat business was the relationships he had with so many in the industry. So it was good for Tim and me to be able to accept on his behalf and realize he would share that honor with those in the industry that have meant so much to him.

We just thought it was a great honor for our dad and a great pleasure and blessing for us to accept that on his behalf.

Q: Can you talk about your faith and the role it plays in your professional life and business philosophy?

A: My mom and dad founded Regal with Judeo-Christian principles to operate the business under those guiding principles when they first founded it in 1969. Regal went through some really challenging times in 1973, and my mom and dad became even more committed that this business belongs to the Lord and that we’re kind of [its] stewards. We sort of think of it that way, and our faith is a part of who we are and what we’re doing. Our mission statement begins with: “With God’s help,” and we believe that there is a God, and we are able to operate the business in a way that would be well thought of from an eternal perspective.

We don’t really separate our personal faith [from] our work life. They kind of go together. I know for some, they prefer to keep that more separate, but we believe it just all goes together, and we try to operate Regal as a steward of the business and to be a good steward and make decisions that honor God.

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Q: There’s a lot of news about unscrupulous business practices these days, some of which have been blamed for the current economic conditions. What’s your take on this, and do you see this in the marine industry?

A: There is a lot of stuff you see going on in the general business world that is unscrupulous activity, but I really have not seen anywhere near that much of it in the marine industry. I think the marine industry is fortunate to have so many good people in it, and I think it’s, quite frankly, one of the things that makes it such a great industry. It is not near as unscrupulous and cutthroat as many other industries.

But it is so disappointing to see… business leaders that betray the trust of those that they’re in leadership over [or] the general public and the stockholders.

I believe we’re fortunate that we don’t see so much of that in our industry because of the great people that are associated with our industry.

Q: In the current economic climate, how is Regal Marine doing? Have you ever seen it like this?

A: We’re challenged by this economy, and we’re feeling the pain. We’ve, unfortunately, had staff reductions like everyone has, and that’s the hardest part. It’s a very challenging time. We know that the marine industry is cyclical, but we’re having to go through a very difficult period, not only in the U.S., but around the world. So it becomes a worldwide economic problem, and our industry is dramatically affected, and Regal is also dramatically affected.

We’ve most recently had to reduce our staff by 120. We still have about 520 people in our work force.
We have about 160 dealers worldwide and we have had a reduction of a few dealers. The dealers, by the way, have it extremely difficult. As retailers, they are sort of the first ones to feel it.

It’s a challenge at every level, whether you are a boat manufacturer or a dealer or one that supplies all the parts and pieces for these boats.

I have seen it like this in 1973. I don’t remember a lot of details; I was 18 and I’m 53 now, but I do know it was a very challenging time and we just barely made it through. Since then, I haven’t known any time more challenging than we have it now.

Q: Can you talk about any specific steps or measures you’ve taken to ensure success during this downturn?

A: I think the big thing that each business has to do is to reduce expenses. And so, clearly, you have to have strategies to reduce any expense that makes sense. We’re doing that. You have things you’d like to invest in that maybe are going to have to wait. We’ve kept our research and development; we haven’t had much cutback there because we do think one of the ways to propel growth is through new products. So we have had a smaller reduction there.

As far as helping our dealers, we’re trying to help them sell the boats that they already have, and then they’ll order more as they need them. Our purchase programs don’t require our dealers to buy a certain number of boats to have a competitive price. I think our programs are friendly to the dealer [by not requiring] them to order a certain number of boats. We’ve had a good program running for a while now, called the High Five, that celebrates our five J.D. Power awards, but at the same time has some incentives for consumers to purchase Regal Boats.

Q: The NMMA recently announced changes in the Grow Boating program, with 85 percent of the funds going back to the manufacturers to help the dealers. What do you think of that?

A: I think that was a really smart move on the part of the NMMA board. I’m newly elected to that board now as well, but I wasn’t at that particular meeting. We’re going to be redirecting that money to our dealers, and probably that money will end up getting spent largely going to boat shows.

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I think boat shows are still an important part of marketing at the retail level, and with the dealers’ financial picture being squeezed, I think this is going to help them in a very timely way to do a good job marketing at these boat shows. We probably won’t require that it be used this way, but we certainly are going to be redirecting that money to our dealers, rather than a national campaign of some kind of our own.

Q: Regal recently held an event in France to recognize the successful year you had overseas. Talk about how important the international market is to Regal. Has it slowed any due to the economy, and how much of your overall volume consists of international sales?

A: The international market has been important to Regal for 30 years. My father led that effort for that amount of time, so international’s always been important to Regal. We’re right now selling to over 40 countries, so we wanted to have that event over there to celebrate our past and our best year ever on an international basis.

One of the challenges that we have right now with international is the currency. There’s a lot of movement in the exchange rates, because investors are moving their money to the U.S. dollar because they’re most confident in [it]. And what that means is that other currencies are not as strong, like the euro, as an example. International continues to be extremely important, but that area has challenges, particularly as it relates to these exchange rates. About one-third of our sales are international sales.

I think that this year, both markets [international and domestic] are going to be slower. This is a cycle we’re in right now, where there’s going to be less sales in both.

Q: Once we come out of this cycle and move back to a healthier economy, do you think what’s happening now will change the marine industry?

A: I think there will be changes, but I’m not so sure at this point that I can see what they’re going to be.

I think that this is one of those cycles that you go through, and we’re hopeful that out of this comes good change. I know at Regal, that’s how we’re looking at it. How can we use this cycle to make good changes in the company, ways to organize the company different, costs you can take out that were non-value added, all that sort of thing.

When you get to the industry at large, some of those same things still apply. What are the non-value added costs that can be taken out so that it’s better for manufacturers and dealers alike.

Q: Would you want to see your children go into the boating business and continue what your father started with Regal?

A: I sure am hoping so. So far, [our] oldest is 16 and his name is Paul; he’s named after his grandfather, and he’s a junior in high school. It’s about 3:20 p.m., and in about five minutes I’m going to see his little Jeep drive up here, and he’ll be showing up for work. He loves the boat business.

There actually are 11 cousins. [Duane Kuck’s brother, Tim, and sister, Pam, and their spouses have six children between them.] The oldest is 17. I think there’s a whole lot of value in a family business, and I think there’s a whole lot to be enjoyed. One of my great privileges in my life was to work with my dad, so I’m hoping I can at least get one of my five. I’d like to have more than one. I’ve got one that loves animals so much that I just don’t see there’s anyway she’s going to be around the fiberglass unless there are animals everywhere.

Our family loves to boat, and sometimes you get in this cycle that you’re in, and you’ve got to do all this business stuff that you’ve got to do. But unless you’re out there boating a little bit on your day off or your vacation or whatever, you kind of forget about how great a sport we have.

I don’t think there are many sports out there that do as much for relationships as boating. Certainly, boating is one of the best. There are others that are good as well, but boating is such a great way to connect with your family or friends. We were fortunate this year to take a couple of trips on Regal boats. The last one was in the Chesapeake Bay on our 5260. We had a week on the Chesapeake Bay — Duane and Cindy and five “Kuckies.”

What a great thing to be out there boating. So I think that’s one thing on a positive note. We are in a terrible, tough cycle, but boating is a great sport. And I think our industry brings a lot of great enjoyment to those folks and families that we supply product to. I think we can be glad for that and be satisfied that we’re doing something that is worthwhile and adds a lot of value to people’s lives.

This article originially appeared in the December 2008 issue.

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