Manufacturing concerns: Sale of Sea Ray Boats raises questions about the future

The announcement last week by Brunswick Corp. that it intends to sell its Sea Ray Boats division raises some concerns about the future of the manufacturing plant and the 440 people who work there.

“Obviously there is always concern with all of those jobs on the line,” said Flagler County Commissioner Donald O’Brien. “But I got a decent feeling talking to the plant manager last week and he seems to think they will land with a purchaser that is interested in staying in the boat business.”

O’Brien was at the Sea Ray plant as part of the Americas Competitiveness Exchange tour that visited Flagler County on Dec. 6. He said if a new owner decides to shift production to other facilities or cut workforce levels at the plant off of Roberts Road “it would be a major jolt to our local economy.”

He said parent company Brunswick has not indicated any dissatisfaction with the local plant.

“I think it’s just a strategic decision and nothing that doesn’t happen every day of the week around the world,” O’Brien said. “I don’t know if there is anything particular we can do about it.”

While the local implications of the Sea Ray sale are still unclear, the announcement comes as the marine industry is riding a wave of growth. Thom Dammrich, president of the National Marine Manufacturers Association, said the boating industry is “doing very well” and optimism is high.

“We are in our sixth year of growth,” he said. “We are projected to grow 5 to 6 percent in units and in the low double-digits in dollar sales. Confidence among people in the boating industry is very high today.”

In addition to the Flagler County manufacturing facility, the sale includes Sea Ray’s Sykes Creek plant in Brevard County, a manufacturing facility in Tellico, Tennessee and support facilities in Dandridge, Tennessee and Greenville, Tennessee, as well as a research and development facility on Merritt Island, the company said.

Brunswick officials said the status of all the Sea Ray facilities would be determined by the new owners.

“The specific and ultimate impact on any plants and facilities will depend on the prospective buyer and an evaluation of their needs and capabilities,” said Brunswick spokesman Daniel Kubera.

Kubera said during the sale process, expected to be completed in the first half of 2018, “it will be business as usual at Sea Ray” and Brunswick will focus on a “seamless transition of the business to a suitable owner who will carry the Sea Ray business forward and be a good steward of the brand.”

The level of that stewardship depends on the business needs of the new owners, according to Sean Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida.

“I think it really all depends on what happens after the transaction and what changes, if any, the new owners make,” Snaith said. “If they are buying it with an eye to investing and expanding the operations, certainly there could be a positive gain to the region. If, on the other hand, they are making changes and outsourcing elements of the production to other parts of the country, that could potentially result in a job loss.”

Snaith said a large corporation peeling off subsidiaries is fairly common.

“All businesses are not locally owned mom-and-pop stores they all have diverse structures,” he said. “It’s just the nature of the beast, really. Being acquired by a larger company brings with it the ability to access capital more easily. There are upsides to it.”

Jayne Fifer, president and CEO af VMA Manufacturing Alliance, said she is not concerned about the sale of Sea Ray.

“I think that it will be great,” she said. “It will probably enhance their manufacturing up there.”

Fifer said the Flagler County facility has an “ideal location” and an “established workforce” and while it depends on who eventually buys Sea Ray, she believes it will remain a viable piece of the local manufacturing landscape.

“I can’t imagine they would be moving it,” she said. “Anything can happen, but I think it will be all good.”

At the Flagler County facility, plant manager Tim Singley said employees are still “wrapping their heads around” the announcement and awaiting more information from corporate headquarters.

Kubera said company officials are aware the announcement could raise concerns about the future of the manufacturing facility.

“We understand that this decision will be difficult for certain stakeholders, but we want to be clear that we will continue to diligently manage Sea Ray through the sales process by executing its business and product plans to support and protect the interests of our employees, dealers, customers and shareholders,” he said.

 

 


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