It’s been rough seas for many boat makers the last few years. “The market for boats under $150,000 typically comprises blue collar and entry level white collar workers, a category that has been particularly hard hit by the recession,” notes John Walker, president and Chief Executive Officer of Liberty Associates, a holding company of four boat brands recently consolidated under the roof of a single North Carolina-based manufacturing facility. “Even at the higher end of the market above $150,000 where buyers aren’t as reliant on financing and generally not as vulnerable to economic down swings, people have been taking a ‘wait and see’ attitude about the economy before making major purchases. Consequently, since about 2007 the boat making industry as a whole has suffered as much as a 75 percent decline in retail sales.”
It would seem, however, that calmer waters are ahead. A survey of marine dealers and manufacturers at the Miami International Boat Show conducted by GE Capital Commercial Distribution Finance projects modest growth in 2011. Indeed, Liberty boat brands Fountain Powerboats, Pro-Line Boats and Donzi Marine are already seeing increases in sales and overall brand growth, with the company revitalizing dealer relationships and production capabilities to meet the demand.
Up until late last year, Donzi Marine and Pro-Line Boats, acquired by Liberty in 2009, had been manufactured in Florida. Today, all of the internationally widely regarded Liberty brands are consolidated into the Fountain Powerboats 250,000-square-foot waterfront facility on 66 acres in Washington, N.C., which Liberty ownership brought out of bankruptcy in 2010.
“Having everything under one roof was a significant cost savings measure,” Walker notes. He emphasizes, however, that each brand continues to maintain its own manufacturing line. “While there are some efficiencies of scale in a combined operation, with lean manufacturing and a Toyota style production system to achieve the highest levels of efficiency and quality, each brand has its own distinct identity. We’re not building the same boat and just slapping on a different nameplate. Each line has its own sales and marketing staff, with Donzis being built by Donzi people, Pro-Lines by Pro-Line people, and Fountains by Fountain people.”
He adds, “This location also provides us with a significant competitive advantage. With our access to the Atlantic Ocean, we can water test every boat under real operating conditions. Many boat builders are landlocked and rely solely on computer models and tank testing. However, these don’t always accurately reflect the frequently unpredictable movement of water and waves. Our customers can be assured that every boat we make has thoroughly water-tested in ‘actual-use’ conditions prior to delivery.”
STRENGTHENING DEALER RELATIONSHIPS
Walker notes that the company has also worked to strengthen and rebuild dealer relationships. “At Fountain, we’ve ended factory- direct sales, we’ve signed four new dealers and we’re looking to sign a few others,” he says. “We’ve grown our backlog from essentially zero in November to currently two months. For Donzi and Pro-Line we’ve always had a backlog, but it has substantially grown to three to four months of mostly retail soldDonzis and nearly 100 Pro-Lines we need to build for our Pro-Line dealers.”
Fountain Powerboats has a long history of building the best handling, fastest and most dependable performance and fishing boats. Ranging in length from 29 feet to 47 feet, Fountain’s performance series utilizes the latest generation Super Ventilated Positive Lift hull technology – the most efficient hull design providing unmatched speed, fuel economy and handling.
With production ramping up for four separate lines, Walker notes that the company plans to add at least 40 more employees to supplant its current production staff of 60 people. With currently 124 employees total, Liberty projects adding 400 new jobs in the next five years.
“While the move to North Carolina has been good for us, it’s also been good for the economy and people of North Carolina,” Walker says. “Like everywhere else, unfortunately the unemployment rate has been high in North Carolina, which gives us the opportunity to draw upon a quality labor pool to retrain people and get them working again. At the same time, we can make a significant contribution to the economic revitalization of the area, which was once a backwater tobacco field. It’s the classic win-win situation for everyone involved. Our expectation is to continue for a long time to come a rewarding partnership with the pro-business climate here in North Carolina.”