Southern New Jersey’s major boat builders said this week they are seeing early signs of a rebound from the worst slump in 40 years and have already started rehiring for some of the 900 good-paying manufacturing jobs they cut last year.
“We started bringing people back after the first of the year,” said Brett Marshall, vice president of sales and marketing at Luhrs Marine Group in Millville. “We just finished a new Mainship Trawler we’ll be introducing this month in Miami and we brought people back to help on that.”
The National Marine Manufacturers Association said industry improvement has been unmistakable and should continue at its Atlantic City International Power Boat Show that starts today.
“Not a week goes by that we don’t hear from three or four manufacturers telling us they’re calling workers back,” said Thom Dammrich, association president.
Luhrs, which has consolidated the company’s Silverton and other lines, rehired 10 workers in January. Last year it reduced staffing from 250 to 97.
Marshall said Luhrs sold one boat and probably two others at the recently concluded New York show, and traffic and customer interest has been higher at all shows so far this year.
Viking Yacht Co., in Bass River Township, “had a good run of people buying boats” from an October Florida show through December, with about 15 boats sold, spokesman Peter Frederiksen said.
“We have two production lines running and we’re hoping to open a third line sometime in March,” he said. “We’re looking at calling back some of the people we furloughed.”
Last year, Viking reduced staffing levels from 1,400 to the 730 working.
If current expectations are realized, Frederiksen said, “we figure that by the end of this year we’ll be going from 50 percent to 75 percent of our capacity, and then to full capacity a year from now.”
Staffing at Ocean Yachts, in Egg Harbor City, dropped to 35 last year, down from 125, and it also sees signs of improvement in the boat market.
“We’re cautiously optimistic,” said Doug Finney, vice president of sales and marketing. “Since late October, some of the repossessed boats and a number of inventory boats all of a sudden started to move.”
As a result, Ocean Yachts is “going to need to build a lot of product” to ensure availability of its models, he said.
“We’re hoping that by the end of the Miami boat show (Feb. 11-15) we’ll have a few more boats on the line,” Finney said. “If we do, we’ll start selectively bringing people back a couple at a time to make sure we’re not overmanned. There won’t be a lot of hires all at once, but hopefully we’ll be continuing to build in jobs in the coming year.”
Egg Harbor Yachts, also in Egg Harbor City, was down to 10 employees last year, but has hired five back already, said Bob Hazard, director of sales and marketing.
Last year it built about 20 boats, down from 24 the year before, but is optimistic after getting a lot of interest at the New York show, he said.
“After the Miami show, we anticipate bringing more people back,” Hazard said.
The marine association’s New York boat show “was fantastic,” Dammrich said, with attendance up 51 percent from last year and up 10 percent over the three-year average.
Coming back from the worst downturn since the 1970s will take time. Marine industry sales — including boats, engines, trailers and accessories — were down 20 percent in 2008 to $13 billion.
Dammrich said 2009 figures aren’t ready for release yet, but sales were down another 30 percent last year. “So we’re down 50 percent or more from 2007 levels.”
Nonetheless, boating has gotten more popular since 2006, which gives the industry reason for hope, he said.
New Jersey data from the NMMA show the trend: While N.J. marine sales fell 15 percent to $297 million in 2008, boat registrations increased 1.2 percent to 185,359.
Jobs in the industry tend to pay well and extend beyond manufacturing. Average annual pay for boat builders in Ocean County in 2008, for example, was $42,691, according to the federal Bureau of Labor Statistics.
And another 500 people were employed by boat dealers in the region that year, with average pay ranging from $38,000 to $41,000, according to the BLS quarterly survey.
Boat building is an important part of the region’s boating industry because it is active year-round while the other segments — such as its 1,800 marinas — are generally seasonal, said Richard Perniciaro, director of Atlantic Cape Community College's Center for Regional and Business Research.
“Boats are one of the few things we actually manufacture in the region,” he said.
Frederiksen said the increased activity at Viking — whose boats sell for $1 million to $6.5 million — is concentrated in the higher end of its models.
The company’s customers tend to be boat owners who already spend winter in Florida or the Bahamas and want a bigger boat, he said. The first owner of its 82-foot boat, introduced a year ago, is an example.
“He has owned many Vikings, and when he took delivery on the 82, he sent it overseas to cruise in the Mediterranean over the summer,” Frederiksen said.
He said Viking built 52 boats last year, about the same as the year before and down from 95 a year before the downturn. The privately held company wouldn’t disclose its revenues.
Ocean Yachts produced almost 30 boats last year, Finney said, and also wouldn’t disclose its sales. Prices for its boats range from $500,000 to $2.5 million.
Luhrs Marine Group built 72 boats in its Silverton, Ovation and Mainship lines at its Millville plant last year, “the worst I’ve ever seen it,” Mashall said, giving no revenue figure. Luhrs models range from $200,000 to $1.5 million.
Before the downturn, Luhrs was building 400 a year there and then 300 as it shifted to bigger boats, he said.
“We’re going to try to gradually build it back up,” Marshall said. “We don’t want to hire and then have to lay people off.”
Egg Harbor Yacht is counting on brands it has acquired such as Buddy Davis to appeal to thrifty buyers. “We’re building a lot of outboard boats now, smaller but high quality,” Hazard said.
When the NMMA’s boat show in Atlantic City opens today, Luhrs and Egg Harbor Yacht will be the only regional boat builders with models on display — a new Luhrs 37-foot sport fishing boat and a Buddy Davis 34-foot center console.
Ocean Yacht and Viking Yacht both said that, starting with last year’s show, they could no longer arrange to have their large boats lifted by crane out of the water and rolled by trailer into the show.
“The NMMA said it was cost-prohibitive,” Finney said. To get an Ocean Yacht into the show without the crane, the bridge would have to be removed and reattached twice, something the company isn’t willing to do.
Frederiksen said trying to get a boat into the Atlantic City show doesn’t make financial sense, so like Ocean Yachts the company is concentrating on the Miami show and its own pre-show event in Florida with all of its models at a deep-water port.
Jonathan Pritko, manager of the Atlantic City show, said there wasn’t enough exhibitor interest in bringing in the biggest boats to make the capability financially feasible this year and last. As the industry recovers, he expects that to change.
“Definitely going forward we will try to get that back,” Pritko said. “Next year we’ll try to have a crane again. We want the big boats back at the show, to get it back to its full size.”
The 31st annual Atlantic City International Power Boat Show will still have the largest selection of boats and accessories in the Northeast from today through Sunday at the city Convention Center.
This year’s show, for the first time, will include sailboats. Among many new events scheduled are a bikini contest, a fish fry on Thursday and a fish tales contest.
The Affordability Pavilion, a sign of the economic times that debuted last year, will be back offering boat-buying options easier on the family budget.
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