Brunswick Corporation will close its Sea Ray manufacturing plant in Knoxville, Tenn., and consolidate U.S. cruiser production for Sea Ray in Palm Coast, Fla., and Vonore, Tenn., while producing Bayliner cruisers in Brazil, the company reported Tuesday. Production at the plant will cease by the end of 2012.
“This will be more efficient and still allow us to retain capacity
equal to three times our current worldwide cruiser demand, enabling us
to adequately increase production when the market improves,” Andrew E.
Graves, president of the Brunswick Boat Group, said in a company
The plant currently has a full-time workforce of about 225. Brunswick
estimates the actions will save approximately $10 million – $12 million
a year once implemented.
The move is part of a larger repositioning of the Bayliner brand as
the result of continued weakness in the cruisers segment. Bayliner will
make Brazil the center for its cruiser business but will suspend the
brand’s cruiser sales and production outside of South America, leaving
Sea Ray to represent Brunswick in the cruiser segment in North America.
“Though the U.S. marine marketplace has improved recently, the
recovery has been uneven across the various market segments,” Dustan E.
McCoy, Brunswick’s chairman and chief executive officer, said in the
statement. ”While sales of smaller boats, such as popular fishing boats
and pontoons, have improved, demand for cruisers and larger boats
remains weak. We believe this is due to a number of factors, including
continuing economic uncertainty as well as a cautious and evolving
consumer. The actions announced today are a necessary step in enabling
us to reach our near-term operational and financial objectives, while
positioning the Company to exploit future market growth in the
fiberglass boat segment.”
The company says Bayliner will refine its North American and European
product portfolio by focusing on its core bowrider and deckboat models
as well as categories new to the brand, such as jet boats.
“Our current plan reflects a change in focus for Bayliner’s global
product portfolio to emphasize and expand its leadership across a
broader set of recreational day boat craft types,” said Graves. “In
doing so, we continue Bayliner’s legacy of successfully anticipating and
adapting to the marketplace for more than 50 years. Over the next
several months, we will introduce an all new line of bowriders, a new
series of deckboats with innovative and modern design, and we will
launch the ‘Element,’ our newest concept in affordable boating. In 2013,
Bayliner will enter the jet boat category with a new series of boats.
We believe this effort will solidify our position in the market and
offer dealers and boaters a wide variety of choices and models.”
Separately, Brunswick reported that a portion of its assets
pertaining to certain boat brands, including Hatteras, Cabo and its
European and Asia-Pacific boat brands, have been impaired and that
impairment charges related to these brands will be recognized in the
The company’s estimate of total restructuring and impairment charges
in the third quarter will be in the range of $25 million to $32 million
pretax. These charges primarily include non-cash asset write-downs, but
also include charges for severance, facility closing and other costs.
Brunswick anticipates that additional charges pertaining to these
actions will be recognized in future periods.
( Source boatingindustry.com )