The Brunswick Saga continues... 2700 lay-offs.

lwrandall · Jun 27, 2008

I hate being the messenger of bad news, but I feel it's important to keep tabs on the largest boat producer in the world. What affects them usually affects the industry as a whole. 300' yachts excluded of course...

Brunswick to Shut Boat Plants, May Cut 10% of Jobs (Update3)

June 26 (Bloomberg) -- Brunswick Corp., the maker of Sea Ray yachts and Boston Whaler fishing boats, plans to close four more North American plants and may fire as much as 10 percent of its workforce to slash costs after U.S. powerboat sales fell to the lowest in more than 40 years.

Brunswick aims to reduce fixed costs by $300 million from 2007, according to a statement today. The Lake Forest, Illinois- based company had previously said it would close eight factories, reducing the number still in operation to 17 by the end of 2009, compared with 29 in 2007.

Brunswick, whose Marine unit contributed 81 percent to 2007 sales of $5.67 billion, said it may fire as many as 2,700 workers. The company had 27,050 employees at the end of last year, according to its most recent annual report.

Consumers' ``ability and desire'' to buy boats as well as Brunswick billiard tables and fitness equipment has been reduced by a shrinking U.S. job market, surging fuel prices and declining home values, Chief Executive Officer Dustan McCoy said in the statement. The cost of oil has more than doubled over the past year as the dollar dropped against the euro, driving the price of U.S. unleaded gasoline to $4.07 a gallon as of June 25, up 34 percent for the year.

``We are not assuming that these pressures will abate any time soon,'' McCoy said in the statement. ``We are planning for an environment in which the U.S. marine market will be smaller in the near term.''

Pretax restructuring charges, including asset writedowns, will total $200 million to $220 million, the boat maker said. Eighty-five percent of the charges will be recorded in 2008, the company estimated.

Brunswick fell 31 cents, or 2.6 percent, to $11.74 as of 11:01 a.m. in New York Stock Exchange composite trading. The shares sank 29 percent this year before today.

(Brunswick will hold a conference call at 11 a.m. Eastern time, available online at http://www.brunswick.com.)

To contact the reporter on this story: Andrea Snyder in Washington at asnyder5@bloomberg.netMeg Tirrell in New York at mtirrell@bloomberg.net.

Last Updated: June 26, 2008 11:03 EDT
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Loren Schweizer · Jun 27, 2008

My spies inform me that two large boat dealers in S. Fla. each canceled their respective large order of boats from two separate large boatbuilders. Having personally been "here" before, I understand the process of builders with stars in their eyes (Growth!) and a denial or myopic view toward the slowdown that many in the sales end saw coming quite some time ago. Again.

Meanwhile, recent figures indicate that there are, worldwide, over 950 yachts in excess of 80-feet currently under construction.

The smaller boats are still selling, albeit in lesser numbers.

The good news is, like a forest after a fire, the boat business always comes back better than before.

K1W1 · Jun 28, 2008

Loren Schweizer said:

recent figures indicate that there are, worldwide, over 950 yachts in excess of 80-feet currently under construction.
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Hi,

Does anyone know where these boats are going to berth?

I do not see any huge increase in the number of berths being constructed especially for the ever expanding fleet of over 50 metre boats that are being churned out today.

Loren Schweizer · Jun 28, 2008

From all the hype, I'd wager that Dubai will be the recipient of a lot of the new offerings.

K1W1 · Jun 28, 2008

Hi,

I was just there a few weeks ago seeing a client and was amazed at the development in general. I only saw the Marina at the Emirates Palace Hotel which is large and empty.

The dust out there and the heat make for a whole new yachting experience to put it mildly.

Codger · Jun 30, 2008

K1W1 said:

Hi,

I was just there a few weeks ago seeing a client and was amazed at the development in general. I only saw the Marina at the Emirates Palace Hotel which is large and empty.

The dust out there and the heat make for a whole new yachting experience to put it mildly.
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The marina across at Fujairah is quite nice and was designed for significant expansion when required.

YachtForums · Jul 1, 2008

Add another to the list... (source: IBI News)

KINGS MOUNTAIN, N.C. – Chris-Craft has cut 15 production line jobs and one warehouse job at its Kings Mountain, N.C. facility, the The Star newspaper in Cleveland County, N.C., reported in a recent story on its Web site.

"Right now, we're calling it permanent cutbacks, but hopefully in the fall, we will be able to start ramping back up," company spokeswoman Meghan Stout told the newspaper. "We are doing the best we can in this economy, which is frustrating."

Stout also said Chris-Craft will scale back its production to one Catalina a week at its North Carolina facility. The company builds center consoles there, The Star reported.

"We were building two different models, but because of the slowdown in the boat industry, we will produce one a week to better manage inventory in the field,” Stout said. "Our 23 and 26 inventory is strong, and this week we're building a 29. We had just started building a Lancer 20 here as well as in Sarasota, but Catalina is what the crew here is trained to build, so that's
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The Brunswick Saga continues... 2700 lay-offs.

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Loren Schweizer YF Associate Writer

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Loren Schweizer YF Associate Writer

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