A future boating industry Walmart?



================================================== ==============

Founded on billiards and best-known for bowling, Brunswick Corp. is a
fast-expanding power in the boating business. From runabouts to cruisers to
$10 million yachts and the engines that power them, the company gained more
than 80 percent of its $5.2 billion in sales last year from boats and marine
engines.

What's really drawing attention lately, though, is Brunswick's aggressive
strategy as it tries to reshape an industry that has seen millions of
boaters quit the pastime since the 1990s.

The 160-year-old company, which didn't get into boating until the ripe age
of 115, has been buying up boat and engine brands and suppliers and trying
to extend its influence to all parts of the business.

In the past year, Brunswick has scooped up seven brands - including such
well-known names as Lund and Sea Pro - to leapfrog Genmar Holdings Inc. as
the world's largest manufacturer of recreational boats. Those acquisitions
followed the 2003 purchases of Land 'N' Sea and Attwood, top marine parts
suppliers.

More deals are envisioned as Brunswick, which makes more than 130,000 boats
a year, barrels ahead with an ambitious strategy it unabashedly calls "Cover
the waterfront."

"What that means is we want to be in engines and boats, we want to be in
related services, we want to be in marina management," Buckley said in an
interview. "We want to be essentially everywhere the consumer is spending
money."

But Brunswick's quest for dominance has perhaps inevitably thrown a scare
into independent builders and suppliers and made many dealers uneasy about
devoting their loyalties to a single company.

The United Marine Manufacturers Association, the largest organization of
independent boat builders, has urged its members to avoid buying the
company's products because "Brunswick intends to put you out of business."
Group president Kent Wooldridge likens the big manufacturer to Wal-Mart with
its growing presence and clout.

"We would have no issue with Brunswick if they would split off their power
(engine) company from their boat company and simply conduct business on a
level playing field," he said.

No one disputes Brunswick is on a roll. After being hurt by the recession
that damped consumer demand from 2000-03, the company outpaced the industry
last year with a 16 percent sales jump, excluding acquisitions. Profits
doubled to $270 million.

The gains came despite the fact the estimated number of 72 million U.S.
boaters is flat compared with 15 years ago and down more than 6 million from
its 1997 peak, according to the National Marine Manufacturers Association.
Sales are now climbing again as boats get bigger and fancier, thanks largely
to affluent baby boomers.

The average boater is 48 with an annual income of $71,000, and the resurgent
economy has helped some afford yachts outfitted with flat-screen plasma TVs
and staterooms. Sales of Hatteras yachts, Brunswick's most luxurious line,
soared at boat shows this winter.

http://www.mercurynews.com/mld/mercu...s/11052663.htm

================================================== ==================

Given the generous return policies and customer satisfaction levels at my
local Wal-mart....we'd all be better off with them ( or someone acting like
them ) than reading weekly about yet another Piece of C%$# BRAND NEW boat
that some poor consumer bought and can't get fixed properly BY THE BUILDER.
RichG TX
--
RichG manager, Carolina Skiff Owners Group on MSN
http://groups.msn.com/CarolinaSkiffOwners
..

Big difference between Brunswick (or Genmar) and Walmart.

Walmart doesn't manufacture anything, and by insisting that its
suppliers deliver at the lowest possible per unit cost (or lose the
contract to somebody who will) Walmart has indirectly forced a lot of
previously US mfg jobs overseas.

The big boat builders build boats, and most of them here in the US.
The fear that big boat companies will reduce all the brands down to the
lowest common denominator so far appears to be unfounded. In fact, the
most notable recent change in Brunswick products has been an
*improvement* in the quality of a lot of the medium size cruising
yachts as the Bayliner name was scrapped and the Meridian line
introduced instead. The top person in the Meridian division has been
(and may still be) the previous head of Sea Ray in Tennessee.

When Meridian was first introduced, most people suspected that the
company was simply trying to distance itself from the "stigma" of the
Bayliner name on more expensive boats. In fact, the first generation of
Meridians were primarily rebadged Bayliners with upgraded hardware,
systems, etc. Now that the Meridian line is filling up with "new"
models, even the harshest critics have a difficult time dismissing them
as simply dressed up Bayliners.

The boat business is a low-volume business, and many small
manufacturers build less than 10 boats per year. If the product
integrity can be maintained, (and only if), then there are some
benefits to everybody by combining the administrative costs, facility
costs, marketing costs, etc for a few brands.
Some of the savings is reflected by prices that rise more slowly than
they otherwise might, and the rest by increased corporate profits and
dividends.

I think that UMMA has an axe to grind and is being alarmist when
suggesting to its members that Brunswick hopes to put the independent
dealer out of business. Nonsense. There's so little money, and so much
risk in retail that the mfgrs are overjoyed to let somebody else try to
eke out a living on the short end of the stick.

wrote in message
ups.com...
Big difference between Brunswick (or Genmar) and Walmart.

Walmart doesn't manufacture anything, and by insisting that its
suppliers deliver at the lowest possible per unit cost (or lose the
contract to somebody who will) Walmart has indirectly forced a lot of
previously US mfg jobs overseas.

The big boat builders build boats, and most of them here in the US.
The fear that big boat companies will reduce all the brands down to the
lowest common denominator so far appears to be unfounded. In fact, the
most notable recent change in Brunswick products has been an
*improvement* in the quality of a lot of the medium size cruising
yachts as the Bayliner name was scrapped and the Meridian line
introduced instead. The top person in the Meridian division has been
(and may still be) the previous head of Sea Ray in Tennessee.

When Meridian was first introduced, most people suspected that the
company was simply trying to distance itself from the "stigma" of the
Bayliner name on more expensive boats. In fact, the first generation of
Meridians were primarily rebadged Bayliners with upgraded hardware,
systems, etc. Now that the Meridian line is filling up with "new"
models, even the harshest critics have a difficult time dismissing them
as simply dressed up Bayliners.

The boat business is a low-volume business, and many small
manufacturers build less than 10 boats per year. If the product
integrity can be maintained, (and only if), then there are some
benefits to everybody by combining the administrative costs, facility
costs, marketing costs, etc for a few brands.
Some of the savings is reflected by prices that rise more slowly than
they otherwise might, and the rest by increased corporate profits and
dividends.

I think that UMMA has an axe to grind and is being alarmist when
suggesting to its members that Brunswick hopes to put the independent
dealer out of business. Nonsense. There's so little money, and so much
risk in retail that the mfgrs are overjoyed to let somebody else try to
eke out a living on the short end of the stick.


Good point Chuck, although I not agreeing with your editorial comments.

Perhaps a better analogy is that Brunswick will become the equivalent of the
1970's MaBell.

Wally wrote:

Uhhhh, please name the companies that don't buy at the best price
available.

*************************

Not the same thing.

Example: Ma and Pa Electric, at 1234 Main Street, Yourtown USA, need to
order some toasters. They call 4-5 toaster manufacturers and discover
their best available price on toasters is $19@ in quantities of a dozen
or more. Ma and Pa Electric order two dozen toasters.

Walmart needs to order some toasters. They make the same calls, and
discover the best available price is $14@ in quantities of a gross or
more. Walmart doesn't order the toasters at $14, but invites the $14
vendor down to Arkansas for a meeting.

Walmart: We would like to order 400,000 toasters. We will pay $6
apiece.

Vendor: Six bucks? You're kidding. Our pure cost to manufacture a unit
is $8.50. How could we possibly sell them to you for $6?

Walmart: Cut your costs.

Vendor: How can I possibly cut my costs? Materials are nearly $2 a
toaster, labor is $4.75, and plant overhead and taxes about $1.50.

Walmart: Cut out most of the $4.75, and you will be very profitable at
$6.

Vendor: A good worker can build about two toasters an hour. We can't
attract reliable help for less than $8 an hour, plus a few benefits.

Walmart: Sure you can. Just not in the United States. We're buying
400,000 waffle irons every year from X-CO. Their costs were not that
different from your toasters, but they have cut their labor costs to
less than 20-cents per unit. They fired all those expensive,
potentially someday union laborers and moved the factory offshore to
Tumbleweedzia. The government of Tumbleweedzia will build you a new
factory, and forgive all taxes for ten years if you close your plant in
Missouri and build your toasters in Tubleweedzia.

Vendor: I'd hate to do that, some of my workers are the second and
third generations to work at the plant, and we're the largest employer
in our little town.

Walmart: This is a free country. We're not trying to tell you how to
run your business, we're simply telling you what we're willing to pay
for toasters. If you can't supply them for $6 a copy, we will find
somebody else who can and will. Of course you do realize that when
we're paying $6 apiece for toasters, we'll be free to *retail* them
for, oh, say maybe $8.49? What did you say it costs you to *build* a
toaster?

On Fri, 4 Mar 2005 17:04:45 -0500, "JimH" wrote:

A future boating industry Walmart?

I was the late Sam Waltons finacial adviser, and am still working with
his lovely wife regarding this exact matter. I cant say any more
because of legal reasons, but lets just say boats may not be the only
thing in Wal-Marts future.