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camaraderie 11-18-2008 11:30 AM

Tartan Being Sold?
 
Check this out four paragraphs from the end:
The Star Beacon; Ashtabula, Ohio - Hundreds of jobs may be heading to Conneaut

No further info available at this time.

T34C 11-18-2008 11:38 AM

Interesting. Also helps begin to explain a few things.

JohnRPollard 11-18-2008 12:34 PM

I wonder who the Rhode Island boatbuilder/purchaser is?

Pearson Composites might be a good fit.

Vasco 11-18-2008 12:54 PM

A ruse to get the City off their backs? Who's got money to buy a boat business nowadays? A boat business? About the last thing you want to buy right now.

T34C 11-18-2008 01:31 PM

Quote:

Originally Posted by Vasco (Post 403923)
A ruse to get the City off their backs? Who's got money to buy a boat business nowadays? A boat business? About the last thing you want to buy right now.

A great brand, with great designs, production facilities, at a bargain basement price. Might be a great time.

night0wl 11-18-2008 01:45 PM

Quote:

Originally Posted by T34C (Post 403955)
A great brand, with great designs, production facilities, at a bargain basement price. Might be a great time.

Boats are just capital intensive, low margin items. First off, from what I understand, dealers only have about 10% margin on new boats...probably higher on semi-production boats like Tartan.

Manufacturers have to back up or offer carry/trade financing on dealer inventory. Otherwise, what dealership has $1-$2MM to hold 3-4 boats at their paddock with all the associated maintenance that goes on top!

Add to that, the manufacturing process is incredibly commodity driven. Unless an order/deposit is placed, a manufacturer has to commit tremendous resources right up front to get all the materials to build a boat.

Add to that, the boat market is so tied to the overall economy...much more so than cars that eventually wear out. Nobody ever says "I need a new boat..my old one is falling apart" like they say "I need a new car...my old one is falling apart". So, inevitably...you get sales ONLY when times are good, and that just happens to be when your build costs (labor, materials) also tend to be the highest.

The final nail in the coffin of a lot of manufacturers. Nearly ever chain of the building/selling process involves leverage, except if you're public co. We're talking large lines of credit to get materials from manufacturing....large capital/finance agreements to keep your dealers in business....large loans to your customers to purchase new boats. And guess whats happened to leverage in the marketplace? So, unless you're 'big' already and can ride out this downturn, its likely we'll see many many smaller, non-public manufacturers go by the wayside. Call it the late 80s all over again.


Its a lose lose proposition. High up front capital, low margins relative to manufacturing capital...and heavily leverage driven.

night0wl 11-18-2008 01:49 PM

I think the future of semi-custom builders is the "do one thing, do it really well" arena. Purpose built boats.

Unfortunatley, you then have to compete with your used market heavily. Who would pay $500k for a new Valiant 42 when you can get a used one for a fraction of that.

T34C 11-18-2008 01:55 PM

nO- It's all relative. Yes many will go under in the up coming future and no one will step in to save them all. However, someone will step in to buy up a few of the better brands that they can get at a bargain. Tartan may just be one of the latter. They may even decide to buy them up and sit on it for a year or two. The economy will recover at some point in the future and there are still people/companies with pleanty of money. I am familiar with the concept. Trust me when I say my business is probably one of the top 5 enconomy/commodity driven industries around.

Cruisingdad 11-18-2008 02:00 PM

Quote:

Originally Posted by T34C (Post 403973)
nO- It's all relative. Yes many will go under in the up coming future and no one will step in to save them all. However, someone will step in to buy up a few of the better brands that they can get at a bargain. Tartan may just be one of the latter. They may even decide to buy them up and sit on it for a year or two. The economy will recover at some point in the future and there are still people/companies with pleanty of money. I am familiar with the concept. Trust me when I say my business is probably one of the top 5 enconomy/commodity driven industries around.

I did not realize that blow-up sheep had taken over the top 5 spot.

- CD

sailingdog 11-18-2008 02:09 PM

Hmm... maybe the upcoming sale is why they applied pressure to have the sailnet thread on them removed.


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