Brunswick to close Knoxville Sea Ray plant

Bayliner

Christopher Gerber (CGerber@BoatingIndustry.com)
October 10, 2012
Filed under News, Top Stories

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 statement.

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 third quarter.

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.

Comments

13 Responses to “Brunswick to close Knoxville Sea Ray plant”

  1. w on October 10th, 2012 11:17 am

    TAKING MANUFACTURING JOBS AWAY AND SENDING THEM’
    OVER SEAS. THAT’S GOOD PR FOR A COMPANY, WHILE
    US WORKERS GO ON UNEMPLOYMENT and welfare.

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    MWR Reply:

    Read the article, they are consoidating and Moving the US operations within the US. The Brazilian plant was already there and they are closing that plant too.
    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.

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  2. JC on October 10th, 2012 12:31 pm

    @W – they’re not sending jobs overseas, they are moving production to another country where there is actual demand for the product. There is no way Bayliner could have been competitive having to export boats from TN to Brazil and then have to compete against boats already being built in Brazil at much lower cost. Those jobs were going to be lost in the US either way – Brunswick was going to close Knoxville anyway, the US demand for cruisers (of all brands) just isn’t enough to keep the plant operating. Let’s put a new president in office that can actually help our economy!

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  3. Mike on October 10th, 2012 12:50 pm

    Did you not READ the article. People in North America are not buying cruisers any more. So Brunswick is moving the plant to Brazil were people still buy these type of boats. Stop complaining about companies moving overseas. Most people on unemployment or welfare are just lazy anyways. Go find a job.

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  4. Boatman on October 10th, 2012 1:37 pm

    It is a shame that eliminating jobs on the US and sending production to South America, at a time when the image of Made in the USA really means something. The results will be a diminished image for Bayliner, and Brunswick. It is also a slap in the face of the Mercury division to have engines produced in Germany for the new Jet Boats. It’s kinda strange that the leader, got out of the Jet Boat business and now Brunswick decides to get into it. Is it just bad judgement, or really poor top management at Brunswick. Closing plants and cutting costs in one thing, and you can consolidate production, but outsourcing in other countries at this time is going to create problems.

    Volvo recently got an award for product innovation, and Mercury is going to change the logo. I think the priorities have gotten mixed up. What happened to the Philosophy ” We will be the leader in every market, or we won’t be in that market” ? Seems like the present management only is interested in personal gains. As one of the oldest US corporations, they have been destroying the heritage many people spent their lives building.

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  5. Boatman on October 10th, 2012 3:03 pm

    Dear Mike :
    I actually DID read the article, but did you……? I only stated they were “eliminating” jobs here. No problem with building models in an area where they are sold, and yes I understand that cruisers are down this year, but NOT the upper end models of various companies. Could this be because the tail is swinging the dog at Sea Ray ? Sea Ray over produced based on projections provided by a large group. This in fact caused problems throughout the Brunswick Boat Group. You have to make a realignment somewhere, and the management changes at Sea Ray are an indication of future changes coming. Anytime a team changes, so does the strategy, and players.

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  6. Scott on October 10th, 2012 3:57 pm

    My understanding is that they are not moving any production overseas which wasn’t already outside the U.S. They are consolidating Sea Ray production in Florida by closing the Knoxville plant. Bayliner cruisers are being discontinued everywhere but South America, where these models are being made today (already there or Mexico). Sorry to know the TN plant is closing, but this will strengthen the Sea Ray brand.

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  7. Capt. Jack on October 12th, 2012 1:07 pm

    Boats in this catagory average 1 to 2 miles per gallon of gasoline.
    Marine gasoline is edgeing up to $5.00/gallon. So it now costs $2.50 to $5.00/mile to operate gasoline powered cruisers. Until the U.S. decides to get serious about energy independence, the cost of operating these types of pleasure boats will continue to become more out of reach of the average american.
    Brazil has been energy independent since 2006.
    In the U.S. the price of gasoline averaged $!.87 in November 2008.
    The cost of energy has devalued americans buying power by one half in four years.
    As long as America continues with its present energy policies the pleasure boat market will continue to suffer in the U.S.

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  8. George on October 12th, 2012 1:47 pm

    Yamaha is made in Japan and U S consumers love their product. ??

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    Ed Reply:

    George is only 3/4 correct. It is true that Yamaha engines are made in Japan. However the development, and hull and final assembly happen in Vonore, TN using lots of American workers and materials. They are loaded on American trailers. So the boat could be considered at least half American. It is true that people love them.

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  9. Boatman on October 12th, 2012 1:52 pm

    What Cynthia M. Trudell could not accomplice in braking the moral and culture of Sea Ray, Dusty and Rob have. This brand along with most of Bayliner and several others purchased will soon be history. CN RAY just rolled over in his grave.

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  10. Donald Vicknair on October 12th, 2012 3:39 pm

    This article said nothing about moving jobs overseas. Stop saying what you want to hear and discuss the facts. The only thing said in this article is they are closing the TN plant and consolidating to 2 other U.S. plants. I get it, no one wants to see jobs go overseas, but this article doesn’t say anything about jobs going overseas…

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  11. Randy on May 21st, 2013 2:41 pm

    Say what you will. Bayliner Cruisers were killing the overpriced obnoxious SeaRay sales.

    Bayliner over the last 20 years has designed some of the best price point cruisers in the US. Models like the 2452 (242) 2859 classic, 2858 (288). Many of these fine boats are still on the water today.

    Yet another arrogant move by an arrogant company with an overpriced product.

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