Brunswick Corp. will not sell Sea Ray, Vonore plant to stay open
Sea Ray will not be sold, the boatmaker’s owner Brunswick Corp. has announced.
Sea Ray’s U.S. and international operations are headquartered in Knoxville. Its Tellico factory in Vonore makes the 40-foot SLX 400 model, dubbed “The Entertainer.” Facilities in Dandridge and Greeneville support Sea Ray production. The company’s Palm Coast factory is in Flagler Beach, Florida, while its Sykes Creek plant and Product Development & Engineering facility are on Merritt Island, Florida.
In December 2017, Brunswick announced it would sell all those facilities, expecting to close a sale of the Sea Ray brand by mid-2018.
Instead, Brunswick will discontinue its Florida-built yachts, closing those facilities, Brunswick Director of Media Relations and Corporate Communications Daniel Kubera said. The Sykes Creek site will remain open for the foreseeable future to handle customer service, warranty questions and related issues.
“In the end, we’ve decided that the best path forward is to keep operating the Sea Ray brand,” he said. “We’re going to focus on sport boats and cruisers, which are made in Tellico. The sale process has been halted.”
Headquartered in Mettawa, Illinois, Brunswick Corp. owns multiple marine motor, boat accessory, fitness and recreation brands, as well as 15 labels in Brunswick Boat Group. Only Sea Ray was put up for sale.
“Over the last several months, we have engaged in a thorough sale process for the Sea Ray business, which we believed would generate the highest value for our shareholders,” Brunswick Chairman and CEO Mark Schwabero said in a news release. “Although there was interest in the business, the offers we received did not reflect an appropriate value for this premium brand, and did not meet our expectations. The lower value was largely due to the persistently weak financial performance of the yacht product category, which complicated and obscured the value of the remainder of Sea Ray.”
So the company decided to “maximize value” by winding down yacht production over the next few months, focusing Sea Ray on sport boats and cruisers, he said.
The emphasis will be on 24- to 40-foot boats, developing new products, features and services for that range, David Foulkes, Brunswick president for marine consumer solutions, said in the announcement.
Demonstrating that commitment, Brunswick is moving Sea Ray out of the “discontinued operations” category of its financial reporting, and into “continuing operations,” according to the news release.
Sea Ray’s engineering facility will combine with the Boston Whaler engineering location, an hour away in Edgewater, Florida, Kubera said. Brunswick owns both brands. The combined facility will be called the Brunswick Fiberglass Boat Technology Center. Sea Ray product development will continue there, Kubera said. Some Florida Sea Ray employees may be able to transfer to other Brunswick-owned boat marques.
Prior to the Florida shutdown, Sea Ray employs about 1,500 nationwide, Kubera has said. About 600 of those work at the Tellico West Industrial Park plant. A year ago the Tellico plant expanded, adding workers to increase SLX 400 production.
Decisions about any employment changes at the Knoxville headquarters will be made over the next few months as the Florida yacht operations wind down. Kubera said. He said no cuts are expected at Tellico.
“We will continue to turn out new boats with new features,” he said. “Tellico will keep operating as it’s operating.”
Sea Ray, founded in Michigan in 1959, built the Tellico factory in 1985. A year later Brunswick bought the company for $350 million, on the heels of buying boatmaker Bayliner for $425 million, according to BoatTEST.com.
At that time Sea Ray sold 28,000 boats a year, but today only sells about a tenth of that, BoatTEST.com reported. In 1986 Sea Ray had 4,500 workers, but now employs a third of that number.
Annual sales, pegged at $400 million in 1986, dropped to $380 million for 2017, and Sea Ray operates at a loss, BoatTest.com said, quoting a company spokesperson.
Sea Ray was not alone in its decline; overall, new boat sales in the U.S. dropped by more than half from 2000 to 2017, according to BoatTEST.com.
Source: Knoxville News Sentinel, by Jim Gaines
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Published June 28, 2018