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Guest J-Ro

Any News on Malibu?

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Guest J-Ro

Now that rumors are starting to fly, I assume some of us know what is going on with the possible sale of the company. I have heard employee buyout as well as an outright sale (Brunswick anyone?). Anyone have any concrete info yet?

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tgaugh

I heard the same. If Brunswick is the one, all the riteous here will have to stop bashing Bayliners! hahahaha

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aneal000

With the limited success of the SkiRay I've heard SeaRay has been looking to acquire a tow boat manufacture...

Get ready for the 2008 MaliRay... Crazy.gif

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Big Dubya

oh, say it isn't so! :(

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sliver

If Malibu must sell, I'm hoping that the employees can continue the tradition.

Otherwise, here goes another great, passionate, innovative company....down the drain No.gif

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lxirod

wakegirl should buy it!

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WakeGirl

With my charm & good looks I suppose? That wouldn't get all that far. ROFL.gifROFL.gif

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Coach
With the limited success of the SkiRay I've heard SeaRay has been looking to acquire a tow boat manufacture...

Get ready for the 2008 MaliRay... Crazy.gif

Doesn't Brunswick own SeaRay as well?

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Coach

Why the powerboat industry is sinking.

By Daniel Gross

Posted Tuesday, July 18, 2006, at 4:55 PM ET

Gas prices and interest rates are still going up, which means Wall Street is guessing which companies are going to suffer. Wal-Mart? Check. General Motors and Ford, where SUV and truck sales are dropping? Check and check. In the coming weeks, we'll know if seasonal businesses such as theme parks, campgrounds, and summer resorts will likewise suffer.

But the industry that's taken on the most water may be the powerboat business. Brunswick Corp., a big publicly held suburban leisure conglomerate (it makes bowling and billiards equipment, too), cut earnings and production projections for the year. The company's boat manufacturing (Sea Ray, Hatteras, Boston Whaler, etc.) and boat-engine units, which account for the lion's share of revenues, are floundering. In the second quarter, when about 40 percent of the expensive units are sold, Brunswick "experienced significant declines in retail demand." CEO Dusty McCoy said on a conference call that he expects substantial production declines in the second half of this year.

Brunswick's stock, which fell 14 percent last week, is off more than 40 percent since last summer. And the company has taken the rest of the industry down in its wake. MarineMax, the huge boat dealer that derives 60 percent of its revenues from Brunswick brands, has fallen by about a third since April. Marine Products Corp., which makes Chaparral power boats and Robalo fishing boats, in April reported that unit sales fell nearly 20 percent; its stock is off sharply. And boating-supply company West Marine earlier this month reported disappointing same-store sales for the second quarter.

Does the high cost of gasoline have anything to do with the fact that boating stocks are dead in the water? Probably. The National Maritime Manufacturers Association is trying to put a cheery face on the high gas prices. "People are very passionate about boating," said Thom Dommrich, president of the NMMA. "They wait all winter to get out on the water. Paying a little more for gas isn't going to stop them." Indeed, most people who own and buy the expensive boats made by Brunswick and Marine Products are well-off. And as I've noted (subscription required), spending on gasoline, which accounts for less than 5 percent of overall consumer expenditures, becomes a smaller burden as you rise up the income ladder.

Clearly, however, paying more for gas is a deterrent to boaters. In a report issued in May, NMMA noted that 25 percent of boaters surveyed said they would reduce the amount they would go boating because of high gas prices. And that was before the summer season started in earnest. Since then, gas has stayed high, and is up about 30 percent from last summer. What's more, for people who own powerboats—and who are thinking about buying the powerboats produced by Brunswick and Marine Products—gas is a potentially large expense. Powerboats get the sort of mileage that makes a Hummer look like a Prius. Gas use obviously varies widely. President Bush's new powerboat, Fidelity III, a 34-footer powered by three efficient outboard engines, gets 1.5 miles per gallon. Marine surveyor Rob Scanlan says a 29-foot Sea Ray powerboat with two engines burns 36 gallons per hour at cruising speed—that's about $400 in gas for a three-hour tour. Smaller boats, like this 19-foot runabout available at Lake Powell, go through 14 gallons per hour. Sure, if you have enough coin to own and maintain one of the world's largest megayachts, expensive gas won't put a dent in your water time. But for everybody else, filling up a boat's gas tanks can be a significant expense.

What's more, there are some key differences between gas consumption for boats and for cars. Unlike driving, boating is entirely discretionary. Very few people need to use their boats to get to work. Given the rising cost of everything else—gas for cars, real estate, higher interest rates—even well-off people may think twice about deciding to spend several hundred dollars on gas to take a long trip across the sound. The NMMA's Dommrich says that if you hang out at marinas, you'll find examples of people buddying up instead of taking out their own boats, running boats at half-speed, or spending more time floating than motoring. But, he adds, compared with the cost of owning a boat, the gas required to fuel it remains a pittance.

Still, it's the high price of gas combined with everything else going on that makes this a horrible boating summer. Boating-industry people are less likely to blame gas but rather the macroeconomic climate, the one the White House touts as being so strong. "Looking back, we find that when the Federal Funds rate is 5 percent or more, it has an impact on boat sales," said Thom Dommrich of the NMMA. "And of course, last month the Fed raised the rate to 5.25 percent." Most boats, like houses and cars, are bought on credit. Boats aren't just more expensive to operate, they're more expensive to buy.

Consumer anxiety is clearly drifting from Wal-Mart and General Motors up the economic ladder. "Our products aren't necessities," Brunswick CEO Dusty McCoy said on the conference call. "Customers have to be financially able to complete the purchase, but feel comfortable making the purchase." Thanks to higher interest rates and concerns about employment, the types of people who would be expected to buy these luxury items aren't pulling the trigger. All but the wealthiest of the wealthy are feeling the pinch in some way. McCoy noted that sales of large yachts that its Hatteras unit makes have been strong, but the cruisers, the midsized boats that cost in the low six figures and are the most profitable line, have been particularly weak. The economic tide may still be rising. But it's not lifting all boats.

Daniel Gross (www.danielgross.net) writes Slate's "Moneybox" column. You can e-mail him at [email protected]

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aneal000

With the limited success of the SkiRay I've heard SeaRay has been looking to acquire a tow boat manufacture...

Get ready for the 2008 MaliRay... Crazy.gif

Doesn't Brunswick own SeaRay as well?

Boy, you're quick... ;)

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tgaugh

Baja, 4Winns and the coveted Bayliner as well right?

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John I.

Main players in boat mfg.

Brunswick = Baja, Bayliner, Boston Whaler, Cabo, Crestliner, Hatteras, Lowe, Lund, Maxum, Sea Ray and others...

Genmar = Four Winns, Champion, Glastron, Larson, Seaswirl, Ranger, Stratos, Wellcraft, Carver, Marquis, and others...

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tgaugh

ah, dead wrong on the 4winns - my fault.

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sliver

I've been hearing these rumors for some time. But, what I've never heard is the reasoning. Why are they selling? With such a dedicated customer base and dealers struggling/praying for extra build slots each year, there must be something going on behind the scenes....

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Guest J-Ro

Per my source, Brunswick is not buying Malibu. That is all I can say.

Thank you "Source" ;)

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aneal000

Skiers Choice... Biggrin.gif

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WakeGirl
Per my source, Brunswick is not buying Malibu. That is all I can say.

Thank you "Source" ;)

Ah, you shouldn't tease them like that J-Ro. :lol: From what I heard, it wasn't another boating manufacturer either.

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Malibudude
Per my source, Brunswick is not buying Malibu. That is all I can say.

Thank you "Source" ;)

Next time just ask the "source"... Tease2.gif

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Malibudude
I heard two companies were battling it out. Svfara and Mastercraft because niether one has a tournamant boat!!!!! Yahoo.gifYahoo.gifInnocent.gif

Oh that is cold..but I like it ROFL.gifROFL.gifROFL.gif

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JohnDoe

Well, someone call Bob! He might know.

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D-GOOSE

Per my source, Brunswick is not buying Malibu. That is all I can say.

Thank you "Source" ;)

Next time just ask the "source"... Tease2.gif

Well "source" what is the news? We all know you know, so spill it or just PM me. ;)

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stewart

I heard two companies were battling it out. Svfara and Mastercraft because niether one has a tournamant boat!!!!! Yahoo.gifYahoo.gifInnocent.gif

Oh that is cold..but I like it ROFL.gifROFL.gifROFL.gif

Now that's funny right there!

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UWSkier

Per my source, Brunswick is not buying Malibu. That is all I can say.

Thank you "Source" ;)

Next time just ask the "source"... Tease2.gif

Well "source" what is the news? We all know you know, so spill it or just PM me. ;)

And be sure to CC me on it. :) And let me know next time you're going to be in WI so I can pay you back with some of our fantastic micro-brew...

Edited by UWSkier

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aneal000

Phillip Morris is looking as a part of their positive spin PR campaign.

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