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Sad news - Palmer Johnson Yachts in Sturgeon Bay to close

Discussion in 'Palmer Johnson Yacht' started by ScotL, Sep 2, 2015.

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  1. ScotL

    ScotL Senior Member

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  2. Rodger

    Rodger Senior Member

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    Sturgeon Bay luxury yacht builder Palmer Johnson Yachts closing

    9/3 - Sturgeon Bay, Wis. – Luxury yacht builder Palmer Johnson Yachts in Sturgeon Bay informed its employees Wednesday that it will be closing. The closing was confirmed by the company, which says about 100 jobs will be affected.

    Palmer Johnson Yachts says the company’s operations and employment have been diminishing along with its sales. Additional offshore competition also put pressure on the company. The company says these factors forced it to make the decision to close.

    The company told its employees that it plans to close in 60 days. Bay Area Workforce is already working to help employees who will be losing their jobs to find new positions.

    WBAY
  3. FeBo

    FeBo New Member

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    That's very sad news :(
  4. FeBo

    FeBo New Member

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    Palmer Johnson will become a Dutch shipyard
  5. YachtForums

    YachtForums Administrator

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    Thanks for the intel Scott. This one wasn't a surprise. Mike Kelsey has been battling cancer for a few years. He was a real hands-on guy in the daily operations of PJ (a talented guitar player too!), but since he was stepped back there has been very little communication coming from the yard. Trust me, I've tried! The marketing end of the company never really evolved from analogue, but mostly it seemed like their hands were tied by old-school beliefs. Nuvolari and Leonard's designs for PJ's sport yacht series certainly helped PJ appeal to a new type of customer, but that's a VERY niche buyer!

    We've written a couple of PJ reviews. 'Dragon' has garnered almost 90,000 views! No surprise, aesthetically it's amazing so it's going to attract attention, but no matter how well appointed the interior, you're still subject to the limitations of an express layout.

    http://www.yachtforums.com/superyacht/palmer-johnson-yacht.54/

    Indeed, this is a very sad day.

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  6. NYCAP123

    NYCAP123 Senior Member

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    Sad news. Anybody have any insights into the general health of the luxury yacht building industry? After the crash of 2008-09 we saw the small boat market pretty much dry up. It seemed that the yacht building industry decided to cater strictly to the ultra-elite. Next it seemed like there were several ownership changes and new companies entering the luxury market. Has the luxury yacht market become saturated with more builders than customers or is it that American manufacturers can't compete?
  7. K1W1

    K1W1 Senior Member

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    The yards at the top end seem to be bursting at the seams these days.
  8. YachtForums

    YachtForums Administrator

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    Do tell FeBo!
  9. Capt J

    Capt J Senior Member

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    I don't think so. I just think Palmer Johnson got a little too far from their roots in regards to design and such. Hatteras is swamped with sales and orders and about a year wait. I've heard from a reliable source that they have about 8 orders to fulfill on the 45' EX and about 5 100' MY's and several other models are stacked with orders.
  10. YachtForums

    YachtForums Administrator

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    Glad to hear Hatteras is doing well. They deserve it! But Ed raises a good point...

    Broward is long gone. Burger hasn't built in years. Christensen just closed. Trinity is in Louisiana limbo. Bertram waived the diver's flag. Lazzara built a barge that sunk a company. Northern Marine can't build things that stay upright. We've lost a few other builders in the PacNW too; Richmond, Northcoast, Crescent, etc. And abroad, Moonen is in troubled waters.

    Anyone want to enter the yacht building biz?
  11. FeBo

    FeBo New Member

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    According to SYT, Palmer Johnson has announced the relocating of their facilities to the Netherlands
  12. Capt J

    Capt J Senior Member

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    I agree we've lost a lot of US builders. But, Broward never kept up with styling and kept an old look for far too long. Christensen kept an old hull design that wasn't good to start with for far too long. Bertram didn't build a boat that could stay a boat for more than 5 years. Lazzara, yeah Dick's ego got to his wallet which overspending on stupid things like a useless barge. However, some that have kept up with new designs and stuff are doing well....for example Searay, Viking, Hatteras, Westport, and others have lots of orders right now. Trinity's interior finish and paint finish was more to their roots than yacht like, although they sure spit out a lot of them for a while.
  13. YachtForums

    YachtForums Administrator

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    Design evolution for production boats such as SeaRay is critical to selling in competitive markets. I wouldn't say Viking has kept up with trends. They just make different lengths of the same successful design. Westport has only recently introduced a new 125' design, but otherwise they have stayed true to Starkey and Garden's original work and with good reason. It's a well received product and it's not cheap to build new molds for 100' plus boats.

    I have to disagree with you on Trinity. The interiors were world class, mostly by Evan Marshall and on par with any European yard. As to paint, I've been aboard a number of Trinitys and never noticed an issue. Can't say the same about a few Feadships.
  14. olderboater

    olderboater Senior Member

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    Trinity was just a horribly mismanaged company and under capitalized on top of that. Carl points out the important thing to remember. It's so common for people to point out failure of their company due to the economy, the country, even the weather but you look around and see others dealing with the same conditions and successful. SeaRay (and Bayliner) sell more boats than anyone else in the world. Westport, year after year, has been among the top yacht companies in the world. Hatteras has shown remarkable recovery. Yachts are for the most part all being built in relatively expensive countries in which to do business. US certainly isn't more expensive than Italy, the UK, Germany and the Netherlands.

    Worldwide the large boat or yacht industry has seen many companies come and go that really weren't meaningful in the market anyway. Some once were. Some never were. In many ways, boat building is hurt by being too easy to get into. The tooling and equipment costs to start building aluminum or steel boats are not that great compared to many other manufacturing industries. Now the cost to get into the business doing things right is far more.

    Some boat manufacturing is an enthusiast's dream too. You see the new, flashy, sparkling, great idea that just can't make a dent in the marketplace.

    You also see many builders who aren't builders. They are middlemen. But they haven't invested in a manufacturing facility. In fact, they continue to shop between various facilities. You run into this in all industries. Take Apparel as an example. Very few of your women's apparel companies are really manufacturers. They are distributors and marketers.

    We keep reading about the boat builder closing and in 90%+ of the cases it's a builder who wasn't even at this point a blip on the radar. When is the last time Burger built a pleasure boat? How many has or did Trinity build in the last five years? Northern, at their peak was building one or two a year and they weren't at that peak under the latest ownership. Christensen had no sales, had a half owner who wanted them in Tennessee, and had to underprice contracting to Ocean Alexander to try to stay afloat. Not to mention, well to mention I guess, but not elaborate on Westship, Northwest and all the others who will get you a boat built somewhere by someone if you'll give them the money to do so.

    Another recent death that just hasn't been pronounced by the attending physician yet, Grand Banks. Lost significant money this past year. They're reduced the Grand Banks Heritage line to 2 boats, the Aleutian line to 2, selling basically none of either. All their effort toward Eastbay and Palm Beach and are building a "New Grand Banks" which is nothing like a Grand Banks. Oh and one month adding dealers and the next saying no dealers. Now, they're an exception in a way in that the majority shareholder is beyond wealthy, but keeping that money for developing resorts and the cruise ship business. So, when the time comes they announce no more Heritage or Aleutian, no more traditional Grand Banks, it won't be a huge loss because they're entered the realm of immateriality already. Lost $3.4 million on sales of $28 million last year. Their market cap is down to $27 million or so. A Boutique builder?

    Just to put that number into perspective. Marine Products Corporation. Ok, I'll put a brand to that. Chaparral and Robalo. Market Cap of the company is $260 million.

    Oh and one final thought for those who question the viability of building boats in the US. Look at the commercial boat building. Just look at Gulf and Edison Chouest.
  15. NYCAP123

    NYCAP123 Senior Member

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    Sounds like I'm hearing that some of the American builders are doing poorly because they stayed in the past too long, while others are doing poorly because they progressed to fast. That makes me wonder if those are reasons or excuses. After 2008 there seemed to be a lot of 200'+ yachts sold, and a lot of 90'+ as well, because those were the people who still had money. The 30' to 50' +/- market dried up. Also quite a few new players seemed to come on the scene at the upper end from places like China, Turkey, Croatia. Especially with what's been going on with the Greek and Chinese economies I'm wondering if the market is becoming saturated at the top end or if it really is just a case of the Americans getting it wrong. Are total worldwide order numbers rising or falling, and in which classes, if anybody knows?
  16. YachtForums

    YachtForums Administrator

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    As always, good post OB! History has lots of proven examples. In recent years, there was software developer Monty Twining's 'Calixas' (built by Horizon) and commercial real estate developer Walt Wolf with the 'Affinity' Sportfish line (built by Cheoy Lee). There are so many others...
  17. olderboater

    olderboater Senior Member

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    Yachts 80' and up and yachts 100' and up have been on a steady rise the past few years.

    There is a lot of movement up in size. Sunseeker, Riva, Pershing, Princess all building larger boats. OA getting rid of their smaller.

    The 40-70' market was hurt most by the economic problems, but is recovering now. People such as Sea Ray are building new models and creating interest. Beneteau is moving forward and doing well with Swift Trawlers. I note them as they now own a US boat company, building Glastron, Four Winns,

    On the whole American businessmen aren't investing in the industry, but then Ferretti and Sunseeker are now Chinese owned. Outside the Chouest family there hasn't been a significant new individual investor in US boat building, just a couple of private capital firms such as Versa in Hatteras.

    The vast majority of boats sold are not yachts. We overlook the size and success of Sea Ray, Bayliner, Glastron, Four Winns, Cobalt, Chaparral, Nautique and dozens of other US boat manufacturers.

    Turkey isn't new to boat building, but continues to grow as do other countries like Croatia. There is nothing new about China boatbuilding. Cheoy Lee, OA, Nordhavn, Horizon, Hargrave and many more have always been there. No change. In fact, OA has been trying to get more US production.
  18. K1W1

    K1W1 Senior Member

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    Google. Yacht Global Orderbook and you will find some info on this.
  19. olderboater

    olderboater Senior Member

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    Horizon and Cheoy Lee are not successful because they're Chinese builders, but successful because they're well run companies that know how to build boats. I was watching a show "Selling Yachts" on AWE network recently. The episode was partly focused on Cheoy Lee. It struck me as seeing their set up in Fort Lauderdale, seeing boats available. They always have a couple of new and then several used in the models they can build you new. They had their people there to show you and sell you their boats. Want to see a new Grand Banks? Where? Who? What about a company like Bering, headquartered in Raleigh, NC, far from water, far from manufacturing. It requires investment and commitment. Also, look at how Cheoy Lee has continued to evolve. They don't toss out the old but they don't stand still. On the same show, the salesman showed the couple an Alpha and a Bravo. Wow. Choose your style. See them both in person. One was new and one used but the customer was able to compare and choose.

    Look at all the brands that the only time they really sell is at boat shows. Then they fade gently into the dark until the next show.

    Ferretti Group America has 19 boats in inventory, 12 of which are new. Want to see an example of what they have to offer? 12 months a year they can show you. Do they have the new 50 MT Riva to show you? No, but they can show you examples of their various lines and talk to you about the others and then make arrangements for more.