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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. RER

    RER Senior Member

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    Not accurate. Mag Bay is a California Corporation and the officers are a matter of public record. If you're going to state something as fact it's a good idea to have the facts. That's as far as I'm going on the subject as we've gotten off track.
  2. Liam

    Liam Senior Member

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    Anyways a custom builder like Palmer Johnson would never cut if it went to build production boats minus 100 feet.
    But what I think would work is that they offer a model (first in design) in the long term want harm the brand, especially since the last 5-10 years they have been building mostly semi-custom (intended as more or less the same outside shell) sport yachts.
    The Baglietto MV13 presented last year build of alloy is one such example, Baglietto want sell much of these, at the most they make ten considering its price tag, but it is a bit a sign of exclusivity and to take your brand in new places.
    I am not sure if I remember well but at some point in 1999 or 2000 Palmer Johnson had about 5 or 6 boats being built, most of which where around 100 feet.
    In my opinion this Holland move, is like a bit a fashion follow up. Many buyers go to Holland to build a yacht over 150 feet lets follow them. That is not how you consolidate your brand and your history which in Palmer Johnson case is pretty rich and important. Especially since many where already saying that you are building one of the best (if not the best) sport yacht of 100 feet plus in the market.
    I think this move in the long term will be a loss for them 1) for the long time standing workforce they have in the US 2) for losing your identity
  3. ArcanisX

    ArcanisX Senior Member

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    The "brand name" part is surprisingly important here. Less flattering to marketing people, the company name.

    The point is, selling smaller and ready-made boats gets you off the hook of a company scrutiny. People will see the boat itself, survey, probably haggle, talk warranties - and simply haggle more if unsatisfied, etc. I am not advocating buyer's remorse here, it's a simple fact how easier it is to sell small and ready boat on it's own merits alone.
    Now all them going-larger and, more importantly, built-to-order companies do face an increased scrutiny, since not only it's more money but more risks and commitment from the buyer's side too. I can't just survey the boat, it doesn't exist yet, so I have to give "a company" my money upfront and hope they make good on their promises. "Struggling", or should we more accurately say scandalous companies face a simple case of downward spiral. Problems finding new clients with millions of down-payments for a "brand" with a history of problematic or non- deliveries? what a surprise!

    In that sense in particular having a smaller but more actively turning over line helps immensely, as it shows buyers that the company "is there", it delivers, and in troubles they have revenue streams other then your own very project to cover for obligations. I figure there are other ways to arrive at the same ends of materially reinforcing client trust (such as securing bank guarantees etc), but those aren't abundant, cheap or easy.
    Going on with none while already having the un-cred? Predictable outcome.
  4. olderboater

    olderboater Senior Member

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    Here's what we know. It's highly unlikely we're being told the truth and even more unlikely that what they believe to be the truth will turn out to be so. Why do I say that? Look at their history of what they've told us, even within the past year. Also, their story makes no sense without the "rest of the story." We also know not to trust them. There was dishonesty and manipulation involved from the time of purchase in trying to circumvent the bankruptcy court with an end play for the name. Not unlike their previous bankruptcy and ownership change there is a boat sitting on hold for at least a couple of years at a manufacturing facility other than theirs.

    As to the debate of building smaller, I agree with both sides. It doesn't happen that builders of large boats start building smaller, but it should happen. They shouldn't turn away business for 150' to build a 40', but at the same time with most builders of large boats there is inconsistency in the order flow and smaller boats could be used to fill that space. It's either that or build spec boats when you have no orders and most aren't going to do that.

    You can build a tremendous amount of brand loyalty and interest with smaller boats. In fact that's how the larger ones often get started. You have builders like Riva, Pershing, Sunseeker, and Princess building large boats now, but the interest for those boats has generated from their traditional smaller line. Capt J mentions Donzi as the Classic is certainly not the high performance Donzi, but it's the most recognizable of anything they've ever built and that's why they brought it back.

    What it smaller to one builder is large to another. But looking at a smaller range, Sea Ray has a built in customer base for their Sundancer's and now their L line because they started cultivating them at 19'. Hatteras realized that there are a lot of customers out there who want Hatteras but don't want or can't afford 70' and above. Hence, they took the Cabo boat and rebranded so they'd have smaller.

    If your factories are at capacity building 100' and above, then do it. But if that's not the case then don't overrate your brand, instead build something smaller there is demand for. Feadship had no need to build smaller. Palmer Johnson obviously had needs to do many things differently and they're now talking about smaller sport yachts, although I don't hold hope out for them anymore than I do the large ones. Most brands could benefit by building some brand loyalty to customers working their way up. Also, many megayacht owners do own other boats as well. I think many wannabe builders like Palmer Johnson (yes, wannabe, pretending to be far more successful than they were, maintaining a public image not supported by fact) overestimate their image and brand and kill themselves in the process.

    I find it sad that brands like Burger have faded, a little less so that Trinity has. But I do find it smart business that when the recreation business wasn't there, they went for the commercial business. Now, I also think Burger lost sight of who some of their customers were. Their recent launches were all 127' and above (not so recent now as they've all been years). Their true volume over the years was not in those ranges, but in 85-110'. Then their new offerings, none of which ever sold, were initially 120' plus and now are shown at 112'-214' and a style inconsistent with anything they've ever sold.

    One thing yacht builders tend to lose sight of. The smaller the size, the greater the overall demand.
  5. Capt Ralph

    Capt Ralph Senior Member

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    Some not so expert comment from the Peanut Gallery.



    OB types of brand loyalty.

    When you shut down a company and start it up again somewhere else using the same name, there can’t be brand loyalty. There is NO proven brand.

    There is a new company with the old name. New employees, new training, new equipment, new levels of quality and probably new materials.
    Design is on paper & CAD and subject to arrive from any where in the world.


    My example; Cabo moved to North Carolina, Even with the same molds, that brand died. It was built differently. Better / worse, who cares. Different management, q control, materials, labor.
    It was built different.
    (I know they closed but that was an example)

    Keeping PJ in Sturgeon Bay these past few years may have barely helped the name and brand. A new owner building a new design under new management using new methods and who knows of the original employees.
    Doing business with PJ these last few years was a romance. It was not the same company.

    PJ moves over seas. It will be built differently. It’s a new company, a new brand to be proven.
    AND compete with existing yards.

    They can call themselves Palmer Johnson at there new location, but it will not be PJ.
    Even the romance would be gone from over seas.
  6. leeky

    leeky Senior Member

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    Are you trying to say, "The thrill is gone?" ;) (Thinkin' B.B. King)
  7. NYCAP123

    NYCAP123 Senior Member

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    Bertram is another example. Used to be that a name meant a lot, and buyers of companies sought to keep the quality of the brands so they could build on the name. These days they just buy the name and change everything else (or shut it down) in search of fast profits. I think the public is wise to it at this point, and customer loyalty leaves with the sale. A drop in quality is expected with a sale. That also seems fine with some buyers as well as the write off of the loss is worth it when dealing with a conglomerate. For some in the business bean counters are more valued than boat builders.
  8. Capt Ralph

    Capt Ralph Senior Member

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    B.B. King will NEVER be gone from my heart. That's a romance that can never be replaced. Some similar music can be found but it's from a different place, different time, different soul.
    This may turn into a good comparison after all.
  9. Capt Ralph

    Capt Ralph Senior Member

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    NYCAP has a good thought also. I knew Bertram was gone when it was built under a different flag. The move was the nails in the coffin.
    Skippy J mentions a new Bertram coming back,,,,,,,,,,,, Naw, there gone. The new name has to compete and make a name for themselves, even if it's name is Bertram. It will be another (NFG) new boat company.
  10. Capt Ralph

    Capt Ralph Senior Member

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    I hate talking poor of the ole name (Bertram). I am a fan ya know..
    The company is dead. I have mourned. Spilled many rum. Called peoples names. Did I mention spilled a bunch of rum?
    I will support old Bertram's. I will support old Post(Luv those Post kids). My new factory pledge will have to go to Viking
    (New Viking customer reads these post).
  11. Capt J

    Capt J Senior Member

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    Another thing everyone forgets as well. When building these 100' + yachts, you have to have a real yard with real capabilities to launch and service them, that means real overhead. If you're popping out say 3x as many yachts in the 50-100' range, you're keeping the yard busy with service work, you're keeping parts rotated from owners ordering various parts for their yacht, you're keeping raw goods rotating, you have more employees to shift around depending on size demand and needs. You can become more efficient.

    Maybe not the best example, but let's say Merritt's. They currently at full capacity building custom SF with a 2 year wait and 6 or 7 in process all 72'-86'. NOW, the boat yard is busy too, but the boat yard can support the entire property and ALL employees, but everytime you look, the boatyard is probably occuppied with 30-40% of the boats being worked on are Merritt's for existing customers. Now, you have an emergency fiberglass repair in the boatyard, you can pull employees from the boat building side to fix it, same with if they need extra workers in the boat building side. Everything is more efficient from a property utilization standpoint to employees this way. Think of the difference from a high end meat market/butcher to a high end grocery store. The grocery store sells everything, not just meat. But they can also use meat they need to move in ready made dishes they sell to customers so there's less wastage. If there's a hang up with delivery of engines, they have other work for their employees to do. This formula also has real net worth behind it, land, machinery, buildings....not just a warehouse building they rent from someone else and no tangible assets.

    Now look at a builder like JIM Smith, they're currently backed up with orders boat only pop out 2 boats a year. They have the finest craftsman, just like Merritt's. However, they need to launch a boat, they have to get even the electricity company involved and the police to launch it. They have to have a boat yard drive that boatyards travel lift about a mile just to pick the boat up and take it to the water. If they need additional employees they have to hire subcontractors for some jobs. If their master woodworker is sick for a week, no wood working gets done. If they have to do warranty repairs, they have to have the boat taken to someone else's yard. and then send their employees offsite to that yard to fix stuff. If they stop getting orders, what do they do, make model airplanes and fly them around the shop? If one boat has a major screwup like Northern Marine, their entire future is in jeapordy. If delivery of their engines is delayed 2 weeks or a month, they have a bunch of people twittling their thumbs.
  12. ArcanisX

    ArcanisX Senior Member

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    To be fair... not very "real". As people pointed out earlier, it's a surprisingly cheap entry market, relative to the price of goods.
    Much like the analogy from cars (and "supercars") industry, I wouldn't hesitate to bet it is actually more expensive to have a factory pumping out reliable "assembly line" 55'-s then a leased hangar with what, 200k worth of tooling "carving out" a 155' superyacht. Same as spyker/koenigsegg factories worth what, 1/10000's of volkswagen's?

    again, by far not just a yacht building industry phenomenon: some companies "move up" (size, price point etc) because they are good and it's a natural avenue of expansion, and some do because they can't compete on the "main" market and dream of green pastures of "luxury" where rich idiot clients shower them with money.
    sometimes, the latter even works.
    but rarely indeed.
  13. bor

    bor New Member

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    More news @ M.Y.S. :)
  14. German Yachting

    German Yachting Senior Member

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    They bought the Holland Jachtbouw facility.
  15. AffrayedKnot

    AffrayedKnot Senior Member

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    It’s likely when all the rhetorical dust settles, it will become evident that HJB has not been acquired by PJ. However, it may be clear that through HJB’s recent expansion and facility upgrades that certain surplus floor space became available. I may also become evident that PJ is becoming a tenant of HJB and will utilize HJB’s modern facilities on an as needed basis to complete whatever projects are funded. This is a new and wise operational strategy for PJ, eliminating unneeded overhead while utilizing state of the art resources. Smart... I wish them good fortune on their new course.
  16. FeBo

    FeBo New Member

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    I took this photo at the MYS

    Ph1.jpg
  17. MBY

    MBY Senior Member

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    J I've never met you but you sure seem to know a lot about what my dad and I do. My dad and I are in our business together. And yes i'm very hard headed. Carry on...
  18. Capt J

    Capt J Senior Member

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    I've met your dad a few times, but not in recent years, back when he owned Cabo. We have mutual friends, former employees of your dad.
  19. Rodger

    Rodger Senior Member

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    Sturgeon Bay, Wis.The saltwater vessel Tracer arrived Wednesday morning and pulled in next to the newly built barge Mississippi. Upon arrival the vessel’s crew prepared for the last super yacht Palmer Johnson built to be loaded aboard and taken elsewhere to be finished, as Palmer Johnson is closing. Bayship is in the process of buying the Palmer Johnson buildings at First and Jefferson and is also taking over the section of First Avenue between Iowa Street and Jefferson Street and a section of Jefferson Street between First and Third avenues.
    If Tracer dose a daylight transit of Welland Canal will try and get some pictures.
  20. bnk190

    bnk190 Member

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    Rodger - I will post some pictures once I get home from work today. I was there to photograph the loading. The weather for the loading was overcast skies and windy but it went well. Yesterday was nice and sunny and it looked like they were continuing to brace/fasten it to the deck of Tracer.

    After spending 18 hrs over 2 days sitting in my truck waiting for it to leave port I had to call it quits and head back to town to go to work today. I wish I could have seen it depart and was working on getting some aerial shots but with no information on when it's departing it's hard to charter a plane.

    Hopefully someone will get some shots underway. It was quite the sight to see.

    Brian