Crownline Boats Is Back in Business - 08/26/2009
Last December Crownline Boats announced to its workers that they would be furloughed for the holidays. Unfortunately this was the norm for most boat builders last winter and production was sporadic as the boating industry was hit by a sales decline that was far steeper than even the one that hit boating in the Great Depression. Some builders shut their doors for good, some went into “hibernation” and others reduced staff to a tenth of what it had been the year before and built a trickle of boats. Crownline's factory did not reopen after Christmas. The company struggled all spring long to recapitalize. In 2006 the company had become the ninth largest fiberglass boat builder in units after just 12 years in business, and the fifth largest builder of sportboats. Given its high unit sales and good reputation most industry veterans figured that it was simply too good a franchise to be abandoned and at some point a buyer would emerge. That event was finally announced last Friday. Two entrepreneurs in the boat business have officially bought the company and vow to get it back on the track it was on before a majority of the company was sold to a private capital management firm in 2007.See Crownline models
The new owners of Crownline Boats say they expect to restart production in six to eight weeks, with plans to have models in time for the upcoming winter boat show season. "We plan on going to the boat shows this winter with a powerful company and a good direction," Nathan Heisner, inside sales manager for Crownline, told Soundings Trade Only (an industry trade magazine.)
Back to the Future
"The main direction we would want to use is 'back to the basics.' We're going to get back to the basics of boatbuilding and taking care of our dealers, taking care of our consumers and taking care of our employees," Heisner added.
Kevin Riem – who ran the company for several years before a majority interest was sold to a venture capital firm in 2007 and who left the company the following year for personal reasons – is being brought back as vice president and general manager. Guy Coons will be CFO, Tami Murphy will be director of manufacturing operations.
The New Owners
The company announced last Friday it had been jointly purchased by Tony Zielinski, owner of Leisure Properties, and Dave Wilson, owner of Misty Harbor and Ultracraft. The press release announcing the deal said that Zielinski has extensive experience working for Ford Motor Company within their dealer development department and also owns a marine retail establishment in Wisconsin. Wilson started Misty Harbor in 1990 and has managed and grown the business to be a leading pontoon boat manufacturer.
Heisner said that the new owners “…understand retail, wholesale, production and manufacturing and it's not just that they understand it as a whole, they understand manufacturing boats," Heisner said. "It's just a powerful situation for us to be in."
Dealers Stayed Loyal
Heisner said that “Crownline dealers stayed very loyal to the brand and we thank them for that. It's an extremely strong brand.” The press release said that company has more than 120 North American dealers, and sells internationally through distributors. At one time the company had 150 dealers world-wide, including ones in Europe, South America, Australia and Russia.
Riem said sales meetings are planned for later this week and he anticipates staff will start calling on dealers next week.
Riem Says “All Warranties will be Honored”
The once and future CEO, Kevin Riem, said in the release: "I think the first thing for Crownline to do is take a step back and thank all of our dealers and suppliers for standing behind us. There were opportunities for all these folks to take on other boat lines or go on to other things and they decided to stand by us through this process," he said.
Riem also said the company is putting together processes to honor all warranties and "make the dealers whole."
This pronouncement was received with hearty approbation from virtually all members of the boating industry because it signals to the American boat consumer the good will and good faith of the new owners. The fact that both Zielinski and Wilson are both in marine retail means that they are personally in touch with consumers and understand the importance of builders operating by both the spirit and letter of their warranties.
Continue 28 Models?
The new management says that Crownline plans to “build a mix” of all of its boats, ranging from 18 to 34 feet. “Quantities of each will depend on what the dealers need and what they have in stock,” Heisner said. When production resumes, the company will have more than 100 employees at its Illinois facility.
Timing is Everything
So what happened to the private capital firm that had made Crownline owners an offer they couldn’t refuse in 2007? No mention was made of this aspect of the transaction in the press release. Pouschine Cook Capital Management, LLC’s first venture into boat company ownership was a profitable one when it bought Mastercraft several years ago, rode boat sales up, then sold the company to another venture capital group led by Roger Penske in 2007. Evidently the folks at Pouschine Cook Capital Management thought turning a quick profit in boat building was easy, so quickly plunged into buying Crownline a few months later. Indeed, they say on their website: “Pouschine Cook, because of its experience and success with MasterCraft, was identified by management to help acquire the Company [Crownline] from its founders.”
As of press time there was no mention of the Crownline sale on the Pouschine Cook Capital Management, LLC, website.
Local Mayor Cares About Jobs
The Crownline factory is located in West Franklin, Illinois and at one time employed as many as 800 people and was the largest employer in the area. When it became clear early this spring that Crownline was not going to re-open, West Frankfort's mayor, Marion Presley, along with others stepped in to help and looked for someone to buy the company.
Franklin County Regional Economic Development Executive Director William Dill says the new owners of Crownline plan to hire between 100 to 125 new employees. "After that particular point in time the economy will dictate how many more people they (need) to have and how soon they have to have it," Dill said. "Tony Zielinski and Dave and Lisa Wilson are in the marine business and they are going to move the company forward at a very fast rate," Dill added.
Dill says the new Crownline owners plan to get the boat plant back up and running as soon as possible. To do that, employees are needed. Dill says a job fair is expected in the coming weeks. Meanwhile, a ribbon cutting is set for this morning to celebrate Crownline's reopening.