Hallberg-Rassy Downsizing

[TaoJones]

Hallberg-Rassy has announced that it may be laying off 40+% of its 242-person workforce. Here's a link:

Hallberg-Rassy in lay-off move

At the same time, however, a North Carolina boat builder World Cat Offshore Power Boats reports that it will add 120 jobs over the next three years by investing $2.65million in an expansion of its operations. Here's a link:

Boat maker to create 120 jobs at Tarboro plant - Business |

Such seeming contradictions, I suppose, will have a lot of people looking back on this era one day and saying:

"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way - in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only."

Charles Dickens, A Tale of Two Cities
English novelist (1812 - 1870)

TaoJones

[MarkJ]

Originally Posted by TaoJones

Hallberg-Rassy has announced that it may be laying off 40+% of its 242-person workforce.

Then they are about 6 months too late. They should have been shedding quicker.

Originally Posted by TaoJones

< add 120 jobs over the next three years by investing $2.65million in an expansion of its operations. TaoJones

And Tao, $2.65 M into 120 jobs? LOLOL Thats Prospectus talk if I have ever heard it Mark

[TaoJones]

Originally Posted by MarkJ

And Tao, $2.65 M into 120 jobs? LOLOL Thats Prospectus talk if I have ever heard it Mark

I'm not so sure about it being "prospectus talk," Mark. As I read the press account, it was the purchase of Glacier Bay Catamarans of Seattle by World Cat, and relocating the newly-combined operation into a single facility in North Carolina, that is the basis of the $2.65 million dollar investment.

The 120 new jobs will be created over the next three years as the larger entity comes up to speed. If the $2.65 million was for the purpose of paying the salaries of 120 employees (just over $22,000/employee) for one year, it would, indeed, be laughable. However, I believe that is a mis-reading of the news item.

TaoJones

[DeepFrz]

Are those net new jobs?

As I read the press account, it was the purchase of Glacier Bay Catamarans of Seattle by World Cat, and relocating the newly-combined operation into a single facility in North Carolina

[Southern Star]

Tao, it may also reflect the fact that demand for power cats has increased over the last several years and hence, the downturn in the economy has had a lesser effect on them than on a manufacturer of expensive cruising monohulls (where I suspect demand has been at best static). In addition, there are very few used power cats on the market, so for those in the market for one, there will be few options but buying new. The same clearly cannot be said for cruising monohulls.

Brad

[TaoJones]

Originally Posted by DeepFrz

Are those net new jobs?

That's probably arguable, Freeze, as there will undoubtedly be job losses in Seattle with the closing of the Glacier Bay facility there. Any employees of GB who opt to transfer to North Carolina in order to keep their jobs would be a push, and any new hires - up to the number of GB people left behind in Washington state who are now unemployed - would also not represent any net gain. It's even conceivable that potential gains in efficiency from combining operations could result in a smaller workforce at the combined facility than the separate entities employed.

The best hope for a net gain in new hires is probably from an increased sales volume - possible, in the current economic environment, but I wouldn't bet the farm on it.

Originally Posted by Southern Star

Tao, it may also reflect the fact that demand for power cats has increased over the last several years and hence, the downturn in the economy has had a lesser effect on them than on a manufacturer of expensive cruising monohulls (where I suspect demand has been at best static). In addition, there are very few used power cats on the market, so for those in the market for one, there will be few options but buying new. The same clearly cannot be said for cruising monohulls.

Brad

Perhaps, Brad, but I don't believe that what either World Cat or Glacier Bay Catamarans produce is what cruisers consider a proper power cat. I think they're basically go-fast pickleforks designed to get to offshore fishing grounds fifty or a hundred miles out as quickly as possible, then zip back in just as quickly if weather threatens.

TaoJones

[DeepFrz]

it may also reflect the fact that demand for power cats has increased over the last several years

I doubt that. PDQ couldn't make a go of it and probably had one of the better known power cats.

[CarlF]

The Halberg Rassey news is certainly not one of a failing company. They are at "full production" until summer, will report their highest revenue year ever this year, and have experienced "golden years" since 2006.

Boat building is a cyclical business. "Survivor" builders like HR expand and contract with the cycles. The ones that get in trouble allow their fixed costs to increase when times are good - usually by taking on large amounts of bank debt to somehow further accelerate sales.

This down cycle in boat building is not nearly as bad as the boat "luxury tax" in the US during the early 1990's.

Carl