Tuesday, July 30, 2019

Greenwich Boat Show 2019

At the crossroads

At The Crossroads
In the last few years I’ve noticed many more young people at industry events — IBEX, MIBS, FLIBS, METS — who weren’t there during the downturn. While we gray-hairs still outnumber the 20- and 30-somethings working entry-level through midexecutive positions, a few bolder family-owned companies, such as Edson and Ritchie, have installed younger presidents who bring the energy, drive and foresight the industry needs to find its way forward.
The generational churn is happening at the highest levels: NMMA, Brunswick Corp., MarineMax and dozens of other businesses are watching their old guards surrender the CEO seats to younger leaders with new ideas. Brunswick, once generally seen as the Darth Vader of boat and engine manufacturers, is now branding itself a lifestyle and technology company. Brunswick not only is ushering in a new era of the connected boat, but its Freedom Boat Club acquisition shows how it’s betting on the way millennials will boat in the future. What a generational shift.
This “Generations” issue uses a broad definition of the word. We look at companies where sons and daughters are moving into the business, but we’re also seeing the challenges family businesses are facing since the downturn. Prerecession, many owners had been considering retirement around 2010 but postponed it while they fought for their companies’ lives.
Assembly tech Kirbi Perkins is part of Mercury’s younger-
generation workforce. 
Assembly tech Kirbi Perkins is part of Mercury’s younger- generation workforce. 

Davids and Goliaths

While business has returned to prerecession levels, day-to-day pressures are just as intense for family-owned distributors, dealers and equipment manufacturers — in new ways. The acquisitions and consolidation across these segments have created larger public competitors, along with pressure to deliver products and services faster, courtesy of the Amazon business model. As a result, smaller family businesses have become the new Davids facing much larger, better-capitalized Goliaths.
The generations theme also has many positives: Bass fishing is exploding at the college and high-school levels, Discover Boating has launched a social media campaign zeroing in on younger first-time buyers, and diversity seems to be taking hold across the industry, at least with age and gender.
One of the best trips I’ve taken this summer was to Mercury Marine headquarters. I’ve been to Mercury many times since 1990 — as recently as five years ago for its 75th anniversary — but the changes I saw in Fond du Lac this time were impressive. We’ve all read about the $1.14 billion Mercury has invested in infrastructure over the last decade, including $9 million for a new die-cast facility expansion and $30 million for a new propeller facility. The old ’50s-style factories are still operational (if not a bit grim), but I also saw facilities like the $10 million Noise, Vibration and Harshness building that opened in December. Mercury is slowly but surely transitioning for its future.

Redefining Mercury

What really impressed me were the number of young women and men working in engine assembly. On my last visit, the workforce was mostly 50-something males. They’re still very much present. Now, however, women are driving forklifts, assembling outboards with pneumatic tools and overseeing robotics. Almost half — 49 percent — of the assembly area’s workforce is female, up 20 percent in the last five years. It was great to see my old concept of Mercury being realigned with the new reality.
Ernie Anderson, general plant manager of assembly operations, says the addition of robotic and other labor-reducing equipment has helped transform the assembly floor for men and women. “We’ve been trying to eliminate hand-loading across the facility and reduce wasted movement at every job station,” Anderson says. “The goal is to make men and women interchangeable in all jobs.”
That’s a truly next-generation idea. 
This article originally appeared in the July 2019 issue.

Tuesday, April 2, 2019

Boating season ready to launch in Greenwich

GREENWICH — Boaters from around the region are prepping their vessels for the opening of the boating season, ushered in by the Greenwich Boat show next weekend.

As the season opens with the warmer weather, boaters and marine operators are talking about some of the latest gadgets that are rolling out for navigation and fishing, and the advantages of various kinds of propulsion systems coming to the market. On a more serious note, the marine community is also coming together to oppose a proposal to raise state sales taxes on boat purchases, as well as on storage fees.

Rick Kral, president of the Greenwich Water Club and founder of Greenwich Boat Show, said expectations are running high among the boaters in the region, as the warm weather gets them in a mood to rev their engines on Long Island Sound.

“The biggest buzz in the industry right now is bigger outboard engines. They’re coming out with higher horsepower outboard engines — they can get away from three motors in the back and get away with two. It’s a better balancing program, for the boat, and with weight displacement, it’s little more efficient to run two engines rather than three. And you only have to service two engines,” Kral said.

New instrumentation is another aspect of the boating world that gets lots of discussions going.
“Electronics are upgraded every year - touch screen has gotten bigger and more available - and more functional in the marine world. And more cost effective. Some of the night-vision technology is still pricey, but it’s getting a little more popular. People love gadgets and toys,” said Kral.

The question of higher taxes for boat sales, as well as new taxes on boat storage, is likely to be another topic of discussion this boating season. Gov. Ned Lamont’s recent budget proposal would increase the sales tax rate on boats from a 2.99 percent rate to 6.35 percent, and also begin charging the sales tax on winter boat storage. The sales tax was previously dropped 2.99 percent. Opponents of the tax hike noted that Rhode Island has no sales taxes on new boat purchases, which would put the Connecticut market at a disadvantage.

John Herman, who owns the John Herman Marine Center in Stamford, said a tax hike would be counter-productive.

“Financing rates are low, and that allows people to get into the sport. But any additional costs will hurt that,” he said. “How about cutting (state) spending.”

Herman said one trend he is seeing is an increase in joint ownership of boats, a type of time-sharing. It especially appeals to the younger segment of the market, he said.

“I think we’re going to see more of that, given the cost of purchasing a boat, and carrying it,” said the Stamford boat dealer, based in Shippan. “The next generation of boat-buyers has more of a rental mindset. They shy away from commitment,” he said with a laugh.

At the Greenwich Water Club, Kral said he has also seen a move toward time-sharing. Club members have an option of taking out boats from the club on a short-term basis, and the program has been popular.

“That’s appealing to a lot of our members, who want to use a boat here or there,” he said. “Joint ownership programs are growing very rapidly all along the East Coast.”

As to the tax issue, the Greenwich marine operator said a tax hike would be a short-sighted move.
“It would be a huge step backwards, especially since Rhode Island is very aggressive in supporting their marine industry,” he said. The boating industry in Connecticut should have an opportunity to make its case that a tax hike would end up dampening revenue for the state, Kral said.

“In the end, it’s an industry, and we employ a lot of people. There’s a lot to be said for the economics generated by boat sales,” he said. “Give us an opportunity as an industry to prove that.”

As to the boat show April 6 and 7, Kral said the expo will be the biggest in the organization’s history.
“We’ve got a great mix this year, 22 dealers, the most we’ve ever had, and everyone is bringing some great boats. It’s going to be exciting - and we’ve got Lamborghini coming, with a couple of hot cars, to have a little extra eye candy,” he said.

The event, which is free, will run from 10 a.m. to 4 p.m. both days at 49 River Road, Cos Cob. For more details, visit greenwichboatshow.com.