Brunswick Downgraded

[SnappingTurtle]

Re: Brunswick Downgraded

I think the single biggest mistake was to produce to many products that the shirking middle class could no longer afford. The auto industry has done the same in Europe. The middle class shrinks ever year, but the prices continue to climb. Back to the roots is called for now.

Too many brands competing for the top 5% of the market, while the big holding companies completely forgot “Joe & Sally Average”, and the rest of the 95%.

$60,000 (more than the average house cost) aluminum fishing boats do have there place on the market, as do $40,000 open bow fiberglass runabouts, but neither is a entry level boat as these companies have attempted to position them in their marketing of the last ten years.

People will also not purchase a new boat every two years as the companies wishful forecast in growth predictions suggest. The computer industry tried this, and is still trying it, it doesn't work.

Nor are the financing trends of up to ten years realistic. They expect new boat purchases every several years, each new purchase larger and faster than the last, but at the same time try to push financing packages of 10 years or more. It has become a classic case of the left hand not talking to the right hand, in many of these holding companies.

Lets hope that when this world wide recession is over, some of the traditional brands will have survived and are still being produced in the Americas. We can compete with the world, and it is time we start doing so again. There was a time here (Germany) where “Made in America” meant cutting edge quality, lets hope for a return to these times. If we continue the trend to offshore the production of American branded products we can forget it.

Not to get political, but the mistakes made by the big Holding Companies can't be pushed off on any one but themselves. They can't cry we can only survive if this party, or that party is in power, as one poster suggested. If this is the case, we can see just how badly they are, and have, been managed.

The very deep hole that we have dug for ourselves, can only be filled by us, one shovel full at a time.

 

[steelespike]

Re: Brunswick Downgraded

nothing, on BRP as they are Etec, but they are now a Canadian Owned Company.

I meant BRP and the Etec in particular.I know BRP has a number of enterprises
which may help out over the product line during hard times.

 

[tashasdaddy]

Re: Brunswick Downgraded

So does brunswick, but they are spead to thin. really almost all luxury enterprises are going to get pinched.

 

[CATransplant]

Re: Brunswick Downgraded

I'm thinking back a ways, to the time when a 16' Glasspar Avalon with a Fat Fifty on the back was a pretty nice boat to be in.

Maybe it's time for someone to reinvent the smaller family boat that will do fishing and skiing and whatever, without a monster outboard.

My parents had that exact boat, and we spent much of our summers in it and behind it. It went (with at least one other boat) out to fish the Channel Islands in California. It was comfortable for six people, and performed just fine.

And that's not all. Families used those old 14' and 15' Larsons the same way, but with just a 35 hp on the back.

Maybe it's time to revisit that style of boating. I can't imagine putting $40K into a boat. I just can't.

 

[SnappingTurtle]

Re: Brunswick Downgraded

I'm thinking back a ways, to the time when a 16' Glasspar Avalon with a Fat Fifty on the back was a pretty nice boat to be in.

Maybe it's time for someone to reinvent the smaller family boat that will do fishing and skiing and whatever, without a monster outboard.

My parents had that exact boat, and we spent much of our summers in it and behind it. It went (with at least one other boat) out to fish the Channel Islands in California. It was comfortable for six people, and performed just fine.

And that's not all. Families used those old 14' and 15' Larsons the same way, but with just a 35 hp on the back.

Maybe it's time to revisit that style of boating. I can't imagine putting $40K into a boat. I just can't.

Elvis Presley ran around in a small 60HP Glastron, and even President Lyndon B. Johnson's boat, a 1965 V-204 Gulfstream, was small by todays standards.

The manufactures just seem to have lost touch with their present customers, and their incomes. Just because they make it, and call it a entry level boat, doesn't mean the majority of America can afford it, no matter how often the corporates say they can.

 

[ondarvr]

Re: Brunswick Downgraded

They make what people will buy, nobody (people buying new boats) wanted a little 14' ski boat with a 35hp motor again until a few months ago, it's difficult to react that fast even if people would buy a new one now.
People wanted more HP and more space and that's what the manufactures built and even on this site when people asked about buying a boat, the vast majority of recommendations were go a little bigger and get the max HP.

As a teen living on an Island our family had several boats from 6' to 26', these boats were kept in the water all summer, the bigger it was the less it was used. From then on my boats have always been on the smaller side, easy to launch, easy on fuel, easy on the pocket book when repairs or updating is needed and no payments.

 

[SnappingTurtle]

Re: Brunswick Downgraded

They make what people will buy ...

I guess that is why people are knocking each other down now at the dealers, rushing to buy all these boats that are now generating this present boating boom.

They must have slept through the "future trends in boating", marketing and R&D meetings.

 

[SnappingTurtle]

Re: Brunswick Downgraded

As a teen living on an Island our family had several boats from 6' to 26', these boats were kept in the water all summer, the bigger it was the less it was used. From then on my boats have always been on the smaller side, easy to launch, easy on fuel, easy on the pocket book when repairs or updating is needed and no payments.

My experience exactly. Always buy the least amount of boat, that will satisfy your needs.

 

[SnappingTurtle]

Re: Brunswick Downgraded

First the States, now the UK.

Brunswick is closing three of it's four UK plants.

Brunswick's UK Managing Director of Sealine, Steve Coultate said: “The actions we are taking will leave us well positioned to respond to a market upturn, when it comes, he added. We will seek to minimise the number of compulsory redundancies by inviting applications for voluntary redundancies and for all of those employees affected we will be providing a full consultation and counselling programme.”

 

[ondarvr]

Re: Brunswick Downgraded

"I guess that is why people are knocking each other down now at the dealers, rushing to buy all these boats that are now generating this present boating boom.

They must have slept through the "future trends in boating", marketing and R&D meetings."


It takes a couple of years for a big company to actually get a new boat into production and I don't think most people would buy any kind of new boat right now, even if it was small.
While sales had slowed early in the year, the current models were still selling and there was no way of knowing there would be a huge increase in fuel costs over such a short period of time. Now that fuel prices are dropping people may think about doing a little more boating, at least until they get laid off.

 

[SnappingTurtle]

Re: Brunswick Downgraded

"I guess that is why people are knocking each other down now at the dealers, rushing to buy all these boats that are now generating this present boating boom.

They must have slept through the "future trends in boating", marketing and R&D meetings."


It takes a couple of years for a big company to actually get a new boat into production and I don't think most people would buy any kind of new boat right now, even if it was small.
While sales had slowed early in the year, the current models were still selling and there was no way of knowing there would be a huge increase in fuel costs over such a short period of time. Now that fuel prices are dropping people may think about doing a little more boating, at least until they get laid off.

You don't react to markets, after markets have changed. If you do you see what we are seeing now at Brunswick.

It is called trend forecasting. Just like in Automotive R&D, you work 5, 10, 15 years out in the future. These trends have been forecasted since the mid 90's. If you don't follow these forecast, you sooner or later, loose your market. The downfall of the middle class dissposable income has been in every trend forecast I have been involved in, or read for the last 15 years.

If I have access to this information, then so does Brunswick. It is not only fuel cost that have caused the crash in the economy, or the recent decline in boat sales. To blame it on this recent development, is a knee jerk, after the fact reaction to someone asleep at the wheel at Brunswick. Not my fault for not paying attention, it's the Oil Sheiks. Yea, right buddy, give yourself another milti-million dollar bonus for that one.

 

[ondarvr]

Re: Brunswick Downgraded

It seems almost every company and industry in the world made the same mistake then.


Most people did know that it would end, not exactly when, but there's no avoiding it. The problem is knowing when to pull the plug on current production, nobody wants to stop too soon and if current models are selling you can't just stop making them. Some companies like Brunswick had slowed production dramatically over the last two years, the problem is if your plant is designed to make ten boats a day and you only have two sales per day you can't be efficient at the lower production rate and money is lost. The other issue is what type of new boat would a person be looking to buy now, the answer is none, so even you had spend a great deal of $$ and time in R&D there wouldn't be any sales anyhow.

The smaller boats from the big players are priced to get people into boating, then after a year or two they hope you upgrade to and stick with their brand. There is little or no profit on these models, the 15' Bayliner Capri with a 50HP Force was that type of boat, I think the price on one new with a trailer was $4,900.00.

 

[SnappingTurtle]

Re: Brunswick Downgraded

It seems almost every company and industry in the world made the same mistake then.


Most people did know that it would end, not exactly when, but there's no avoiding it. The problem is knowing when to pull the plug on current production, nobody wants to stop too soon and if current models are selling you can't just stop making them. Some companies like Brunswick had slowed production dramatically over the last two years, the problem is if your plant is designed to make ten boats a day and you only have two sales per day you can't be efficient at the lower production rate and money is lost. The other issue is what type of new boat would a person be looking to buy now, the answer is none, so even you had spend a great deal of $$ and time in R&D there wouldn't be any sales anyhow.

The smaller boats from the big players are priced to get people into boating, then after a year or two they hope you upgrade to and stick with their brand. There is little or no profit on these models, the 15' Bayliner Capri with a 50HP Force was that type of boat, I think the price on one new with a trailer was $4,900.00.

You are right, many if not most, have made the same mistakes.

The mega companies all planned short term. Three month quarterly reports were their only concern. The CEO's of today don't operate like the successful examples of the past. They are not boat, or car, or what ever people. These are not family companies run for generations by people that have a longterm investment in providing products that will sell. They are finance people. They hope that you will upgrade to more expensive company products at regular intervals, because that is what they promise in their “Forward Looking Statements” to share holders every three months.

Their concern is the investor, not continued survival in both good and tough times. By the time their short term, grow at all cost, failures hit home, they are all setting pretty. Someone else will have to clean up the mess they made.

I know many who have not lost all, who planned for tougher times, who learned from the IT boom, Telecommunication boom, the Internet boom, the Real Estate boom, and the following sequential bust of all these. All these booms promised the same thing, all were lies.

These people would like to purchase new boats, but they say they don't want what is on the market. These same people go to the big boat shows and leave laughing at the prices being asked. Comments of boats being priced at higher levels than houses. Great that the industry caters to this small group of buyers, but this is a small majority of possible buyers out there.

A boat looses value, just like a car or truck. It is not an investment. The more expensive the boat, the bigger the depreciation. Expensive boats are bad investments, even in good times.

Demographically speaking, the baby boomer's are getting old, they are leaving the market. They had in many cases, cradle to grave jobs, good incomes, and safe retirement plans. This was a boom for the leisure industry. Plenty of money, and lots of free time. They are gone, and they are not being replaced.

We are seeing the jobs they did disappear from both America & Europe, and with these jobs go the buyers of today and tomorrow. These jobs have been exported to countries now, that build, but don't buy these products.

The reasons for exporting these jobs was cheaper production, but the prices for consumers didn't go down, they went up, so did the profits. Where did the higher profits go? I'll let you answer that.

Germany and America had the worlds strongest middle class. They were the backbone, and the customers, that drove our economies. They are now for all intents and purposes gone. Germany's statistical government agency just released a study that puts Germany at the bottom of all 21 industrial nations. Their middle class went from number three worldwide, to number twenty one, in ten years. Thats 1998 to 2008. America is following in their footsteps.

The companies that are now crying, are the same that have driven this change. Their record profits are gone & with it's disappearance, the futures of many employees, and in some cases the very future of the companies, these finance experts run.

Is it too late, to change this? I don't know. Lets all hope so. I for one am not giving up hope. Call me old fashioned, but I don't like to see traditions die.

One thing i am almost 100% sure of, when and if they open new plants, they won't be in North America or Europe, they will be in Asia, thus continuing, what the German experts are starting to call, the “Devils Circle” (Teufelskreis).

 

[ondarvr]

Re: Brunswick Downgraded

I don?t disagree with you, it just isn?t that simple in the real world.



The only way for them to have avoided this downturn would have been for them to stop building boats sooner, while they were still selling. There is no market right now for any type of boat and while there are a few people that will always have enough cash to buy something in any market, it won't be in the numbers needed to keep a company the size of Brunswick alive. And the type of boat your friends were looking for didn't appeal to a big enough market for anyone to make it.
For a company making something like a car, which is a necessity in most parts of this country, you can look into the future and change the type you?re making depending on what the long term outlook is. For a company that makes toys (a boat in this case) that are not needed and is one of the first things cut out of a tight budget, the only thing you can do is get out of that market and build other items if possible. No amount of planning will keep you in business if there is no market for what you build, in this case its boats in general.

 

[Stoutcat]

Re: Brunswick Downgraded

Hi Ondarvr,

I understand... My point was that regardless of the economy or business environment, a company (and people and politicians) should always look at a product or a product line and ask, "What is this really worth? What if times get tight?" Here's a good example... I worked as a senior engineer for a Microsoft outsourcer... (This was 10 years ago.) And I always wondered why Microsoft kept pumping out their little "Microsoft Works" suite. Now that the economy has gone south, the cheap little MS Works is looking pretty good.

Here's another example... Microsoft is introducing SW that you basically rent on a download basis. That way, if you only need Excel (or whatever), for a week, you can rent it for that time. It's a brilliant idea actually.

Another example: Anheuser Busch has been selling low-budget Natural Light forever. Why?

The bottom line is that companies like Microsoft and Anheuser Busch (very real world by the way) look at products and ask, "What is this really worth?" Yes, they'll continue to sell the high end stuff, but they'll also sell bare bones. (I've forgotten the numbers, but in the case of "Microsoft Works", they were practically giving it away at cost. If they had to field two tech support calls on a single customer, they lost money.) And if the simple truth be told, MS Works and Natural Light ain't all that bad. They're probably not huge sellers, but they are there if the consumer needs them. And should the economy tank... MS and AB are ready.

So... Why is it that big name boat builders can't offer low-buck quality products too? And why is it that people who buy boats don't stand back, look at a 2008 11' Boston Whaler Sport and ask why BW is asking $11,000? Is an 11' boat really worth $11,000?

My point being that long ago, many folks should have stepped back and asked the tough question, "Am I buying this boat because carpets and stereo and crazy HP speak to my soul, or am I buying it just because?" And long ago, boat manufacturers should have asked of themselves, "Who knows what the economy is going to do tomorrow... Why can't we make a quality low-ticket item? Microsoft and Anheuser Busch do it. Why can't we?" (By the way, companies like Dell have asked those same tough questions on huge-ticket items like computer servers, and come up with some extraordinarily practical, and amazingly cheap solutions.)

Bottom line? If you fall in love with a boat, stick with it for better or for worse. But I truly believe that one of the big problems in the boating community is that we (consumers and industry) don't look at a boat and just think, "Boat". We don't ask "Why do I need the shiny stuff?"

All I know for sure is that my wife loves her $1k 14' 1957 "tight as a drum" Starcraft aluminum "Speed Queen". Could we afford "more"? Yeah... But why?

We're happy,

Alan

 

[marine4003]

Re: Brunswick Downgraded

I don?t disagree with you, it just isn?t that simple in the real world.



The only way for them to have avoided this downturn would have been for them to stop building boats sooner, while they were still selling. There is no market right now for any type of boat and while there are a few people that will always have enough cash to buy something in any market, it won't be in the numbers needed to keep a company the size of Brunswick alive. And the type of boat your friends were looking for didn't appeal to a big enough market for anyone to make it.
For a company making something like a car, which is a necessity in most parts of this country, you can look into the future and change the type you?re making depending on what the long term outlook is. For a company that makes toys (a boat in this case) that are not needed and is one of the first things cut out of a tight budget, the only thing you can do is get out of that market and build other items if possible. No amount of planning will keep you in business if there is no market for what you build, in this case its boats in general.

Tis true,but if i read this right,it calls for Company's having the ability to "forecast" the future economic outlook,although some say this downturn was inevitable , none realized how severe it would turn out to be..and the reasons for that is all the unethical loans were undisclosed,and the folks responsible for monitoring these financial transactions were asleep at the wheel. So what we have, are sales based on credit, by folks who trusted this boom market to continue..either to naive to realize _ it cant last _ or understand credit to debt ratio,or care for that matter, On top of all that we have a demand for bigger-faster-shinier-boats,cars and houses and suppliers or manufacturers only too willing to comply.Where there was supposed to be reserved optimism , on the part of the Research part of R&D there was the same mindset of spend-spend-spend-buy-buy-buy,everything is great,attitude. From the Consumer to the Corporation, those markets and consumers who allowed for even a fraction for this mess,even partly ,can and will survive,but the one's who believed this Bull market was going to continue for years to come, are paying the price....its unfortunate so many are being layed off,so many are losing there homes,so many company's are closing....but its a problem of our own making..we are to blame.

 

[SnappingTurtle]

Re: Brunswick Downgraded

Yes we are to blame marine4003, because we don't seem to be able to learn from the mistakes of the past 15 years. We repeat them over and over. One wishful “boom bubble” after the other, each with the exact result as the one before.

I won't speak for sales in the States, but they didn't stop in Europe over night, as these mega companies would like you to think. According to those companies whining now, everything was booming, everyone was making records profits, and then high gas prices, and the recent financial fiasco ruined their planning. I don't think so. The are sounding like the three monkeys, Hear no Evil, See no Evil, Say no Evil, when speaking of their own actions. They are perfect, it is the others that are to blame.

We have seen one marina, one marine supplier, one boat dealer after the other, go belly flop bankrupt, year after year, for the last ten years now. This is not some overnight surprise. The manufactures continued to ignore this fact. They had plenty of time to, not stop production, but to re-aim their product line to the long changing market and it's customer base.

They didn't change as the market changed, they just started pushing 10 year finance packages, in an attempt to continue selling luxury products people could no longer afford. They are asleep at the wheel.

Excuses don't work. The have screwed up. They have no alternative products in the model line, and they are loosing their asses for not planning for this long predicted down turn, and permanent change in the market.

This is basic business class 101, yet these multi million dollar experts don't seem to remember what they learned in High School economics, much less in the ivy covered halls of Americas best business universities.

Who suffers for their lack luster business skills, the people who produce and consume their products.

 

[ondarvr]

Re: Brunswick Downgraded

I'm not sure how these boat builders could have force fed the consumer a boat they weren't looking for and didn't want. Right or wrong, the consumer wanted a boat with "everything" and the plain Jane boats went away years ago from lack of sales. I sell materials to every kind of boat builder you can imagine, none are busy, it makes no difference in the type, from dingys to 200' yachts its dead slow, so even if you built an affordable (compared to the higher cost ones) boat, there is no market for anything right now.

It costs a tremendous amount of money to keep molds from old designs around, the cost per sq ft of floor space is just too high to keep these little used old molds in the line up. Software is easy to store and entails no real cost to continue to offer it.

My boats have the less is more design, nothing is on them for flash, they're designed to fish from and like others here, I found a hull that I liked and built it into what I wanted, or I built the hull myself. The total cost of any of my boats is less than the options added to most new ones.

 

[SnappingTurtle]

Re: Brunswick Downgraded

I think you were smart ondarvr, for building “a less is more” boat, and I sincerely hope it pays off for you, and you weather this approaching storm.

35 years in high cost consumer goods has taught me, that if you wait for the consumer to ask for something, you waited too long.

There are many people I know who would buy now, and could pay cash, but they don't fish, and if you are looking for a "less is more" boat, that is the only section where you will find them. They want small day/weekend cruisers, and form follows function runabouts. These same friends have been complaining for years now, not since yesterday. They are also all lifetime, not first time boaters.

To hear them talk in the finance press, the big boys have got everything under control. Everything going according to plan, so I won't spend anymore of my time contributing to this thread, or worry about their industry. Not my problem.

If someone at the top wants my opinion they can pay for it, just like I have to for one of their boats. I am sure they would be happy if I would just shut up, and let the crash in peace anyway.

I do wish their soon to be former employees good luck.

 

[marine4003]

Re: Brunswick Downgraded

I think you were smart ondarvr, for building ?a less is more? boat, and I sincerely hope it pays off for you, and you weather this approaching storm.

35 years in high cost consumer goods has taught me, that if you wait for the consumer to ask for something, you waited too long.

There are many people I know who would buy now, and could pay cash, but they don't fish, and if you are looking for a "less is more" boat, that is the only section where you will find them. They want small day/weekend cruisers, and form follows function runabouts. These same friends have been complaining for years now, not since yesterday. They are also all lifetime, not first time boaters.

To hear them talk in the finance press, the big boys have got everything under control. Everything going according to plan, so I won't spend anymore of my time contributing to this thread, or worry about their industry. Not my problem.

If someone at the top wants my opinion they can pay for it, just like I have to for one of their boats. I am sure they would be happy if I would just shut up, and let the crash in peace anyway.

I do wish their soon to be former employees good luck.

How true is that !! look at what the Toyota did to U.S.Carmakers in the 70's,introduced the small fuel efficient car,about broke Detroit's back,as opposed to manufacturers building whats in demand...its like they build what they want to shove down our throat,and we keep buying it. That is until something truly better comes along...then like Lemmings,we go chase that.
I for one dont have any simpatico for the Big 3, just as with the Airlines,you reap what you sow.