Brunswick believes the downturn in the U.S .marine industry is not going to end in 2008 or 2009 and that the economic factors causing the downturn here will spread and impact markets outside the U.S. As a result they consider it prudent to plan on being a smaller company and act accordingly. They plan to close another four plants over the next 19 to 20 months which will reduce the total number of plants from 29 in 2007 to no more than 17 by 2010.
On June 26 Brunswick announced that they have taken immediate action to reduce their headcount by another 1,000 employees (they had reduced it by some 1,250 employees earlier in the year) and more are contemplated. When all the actions have been completed Brunswick believes they will have reduced their marine operations and staff functions by some 4,000 hourly and salaried employees (largely concentrated in their marine operations) or 25% from the levels at January 1st, 2008.
You could be forgiven for thinking that with all of this specific and draconian activity Brunswick will be well positioned when the market picks up. The reality is that Brunswick is still not yet in charge of its destiny. This belongs in the hands of their dealers. The full impact of this year’s decline in dealer sales will not be known until the end of the summer and there are some knowledgeable people in the industry who are very worried about the number of dealer bankruptcies that could then take place. Brunswick’s helplessness here is highlighted in their June 26 statement which said “We will continue to support and more importantly improve our relationships with our distribution partners through continued investments in growth and in such efforts as our Dealer Advantage program”. Nothing specific, just ‘happy talk’.
Posted by: James
Categories:
Marine Industry