Pick a fishing boat, pontoon, runabout, deckboat,
“cigarette” boat or 36-foot cruiser. There’s an
Indiana-made boat for you.
Many of Indiana’s boat-building companies are independent and
decades-old. Several started in other businesses before entering boat
building in the 1950s or 1960s, when boat manufacturing presented great
growth opportunities. Indiana’s boat-building companies tend to be
family-owned and -operated, and their success can be attributed in part
to staying within the boat market niches in which they started.
“We have some old, established boat companies in Indiana,”
says Pete Gillon, sales manager at Harris-Kayot in Fort Wayne. “The
niches have always been there–they didn’t have to go after a
niche. They stayed in a niche and perfected a niche.”
Indiana’s independent pleasure-boat builders include Harris-
Kayot, Godfrey Marine in Elkhart, GW Invader in Tipton, Rinker Boat in
Syracuse, Smoker Craft/Sylvan in New Paris and Thunderbird in Decatur.
The Indiana company that builds the largest boats is Thunderbird
Products. It builds cruisers up to 36 feet long, as well as the speedy
off-shore performance boats commonly known as “cigarette
boats,” says Vic Porter, chairman and chief executive officer.
Porter was a fiberglass pioneer, founding Duo Inc. in 1958 in Decatur
to build runabouts. Starcraft acquired Duo in 1966 and Porter stayed on
for a time. He eventually founded Signa Corp. in 1970 to build trihull
boats in Decatur, the seat of Adams County, south of Fort Wayne. Three
years later, Duo was sold to Fuqua Industries, an Atlanta-based
conglomerate.
Fuqua hired Porter to be president of its entire small-boat division,
and in 1976, Porter bought Thunderbird, including the Formula product
line, from Fuqua. Now, Thunderbird builds cruisers and performance boats
at its 5-year-old plant in Decatur.
Since the late 1950s, fiberglass has replaced wood as the material
used for building runabouts, the relatively small boats used for pulling
water-skiers, cruisers and yachts. Runabouts and mid-sized-cruisers are
manufactured by Rinker Boat Co. in Syracuse, a family-owned company
founded in 1945 in Noblesville. Originally a builder of wooden boats,
Rinker made the move into fiberglass about 1960, says general manager
Kim Slocum.
Later, the Rinker family moved the company to the Lake Wawasee resort
area in northern Kosciusko County. From its location in Syracuse, Rinker
Boat can test its smaller boats on nearby inland lakes, and its larger
watercraft on Lake Michigan or Lake Erie.
What’s more, Michigan is the top boat-buying state, and because
Rinker is situated only 30 miles south of the Indiana-Michigan border,
it is better able to stay in close contact with much of its retail
dealer network. “Michigan is our No. 1 state for sales,”
Slocum says. “Dealers like to buy boats from manufacturers within a
500-mile range of their locations.”
One Indiana company competing against Rinker in some segments is GW
Invader, which moved manufacturing in February from Sharpsville to
Tipton. GW Invader was founded in 1964, and was bought in 1985 by Roger
Harmon, who was an executive at General Motor’s Delco Electronics operation in Kokomo before entering the boat industry.
Rinker builds runabouts and cruisers ranging from 17 feet to 30 feet
long, while GW Invader builds runabouts in the 17-to-20- foot range. GW
Invader and Rinker also participate in the fiberglass-deckboat segment,
and GW Invader recently reintroduced its 10-foot, two-seat runabout,
which will compete against jet-skis, Harmon says.
Smoker Craft/Sylvan, primarily a manufacturer of aluminum fishing and
pontoon boats, bought Elkhart-based Sun Chaser in 1991 to enter the
fiberglass deckboat segment of the market, says Doug Smoker, vice
president. The history of Smoker Craft/Sylvan actually is a story about
the successful business ventures of two Elkhart County families: the
Smokers and the Schrocks.
The Smoker and Schrock families operated companies in the Goshen area
that were in different businesses, except for the brief time they were
boat-industry competitors. In 1975, they merged their boat-building
companies.
“From a manufacturing standpoint, you can’t tell a Sylvan from a Smoker,” Smoker says during an interview in his office at
the combined company’s 450-employee complex in New Paris, a village
five miles south of Goshen. “But they have distinct dealer
networks, and there are differences in the floor plans and appearances
of Sylvan and Smoker boats.”
Shortly after the turn of the century, Arthur Schrock co- founded
Starcraft Tank to make metal feed-holding tanks for livestock. Starcraft
Tank then moved into the manufacture of pontoon boats.
The Schrock family sold Starcraft in 1969. It was eventually split
into three pieces, including a boat operation in Topeka in Lagrange
County owned by Illinois-based Brunswick Corp.
Meanwhile, the Smokers went into business in 1921 making wood parts
for Studebaker wagons. Later, they branched into lumber retailing,
homebuilding, boat oar and paddle manufacturing, and, after World War
II, construction of mobile homes. In 1963, Chet and Byron Smoker, now
vice president and co-founder of Smoker Craft/Sylvan, bought Mitchell
Boat, a small aluminum- boat builder in Elkhart.
After selling Starcraft, the Schrocks were out of the boat industry
for only a relatively short time. They re-entered when Harold Schrock,
now the chairman of Smoker Craft/Sylvan, bought Sylvan Pontoons in the
early 1970s. When Smoker Craft and Sylvan merged in 1975, “The
Smoker line was exclusively fishing boats while Sylvan had built
pontoons since 1947,” Doug Smoker says.
Godfrey Marine, a company formally known as Godfrey Conveyor, traces
its roots back to the turn of the century. Originally, the Elkhart
company built mechanized systems for unloading coal from railroad cars.
In 1953, Sherrill Deputy–father of Robert Deputy, the president of
Godfrey Marine–bought Godfrey Conveyor.
“Godfrey Conveyor was a very small business and we wanted a
counter-seasonal business to complement our materials-handling
business,” Robert Deputy says. So the decision was made in 1958 to
enter the aluminum-pontoon-boat business. “We were a pioneer
because, until that time, it was all steel pontoons.” Quickly, it
was a case of “the tail wagging the dog,” because
Godfrey’s boat business outgrew the company’s
materials-handling operations, Deputy says.
Since 1958, Godfrey Marine has grown steadily, both internally and
through the 1969 acquisition of the Aqua Patio Boat Co. of Sturgis,
Mich., and the 1975 purchase of Hurricane Boat Co. in Ashly, a town
north of Fort Wayne. Godfrey Marine entered the fiberglass-deckboat
segment through its acquisition of Hurricane, Deputy notes. Now, all of
Godfrey Marine’s manufacturing takes place in Elkhart, where it
employs around 260 people.
Fort Wayne’s Harris-Kayot has a similar history. The company was
founded in 1957 as an aluminum-pontoon-boat maker, and it entered the
fiberglass-deckboat segment through its 1983 purchase of the Kayot Boat
Co. in Minnesota, Gillon says.
Although aluminum and fiberglass boats both float, they represent
significantly different segments of the boat industry. That explains why
fiberglass-boat builders have followed different evolutionary paths than
the makers of aluminum boats. While aluminum boats are used by fishermen
and, in the case of pontoons, families seeking leisurely cruises along
rivers and on inland lakes, fiberglass boats cover a broader spectrum.
Godfrey, Harris-Kayot and Smoker Craft/Sylvan all extended into
fiberglass deckboats because they are used for the same purposes as
aluminum pontoons. The only difference is deckboats can travel fast
enough to pull a skier.
The popularity of pontoons and deckboats should continue to grow as
the Baby Boom generation ages and looks for affordable family-oriented
recreation.
“I think 15-to-20 percent annual growth is realistic for Smoker
Craft/Sylvan during the remainder of the 1990s,” Smoker says.
“I think we will continue to grow. Every time you look around here
we’re opening a new building.”
“Godfrey Marine grew a bunch in 1992,” Deputy says.
“If you have what the buyer wants, you won’t participate in a
recession. It’s not a head-long rush, but the trend towards
family-oriented boats will continue. We figure we’ll grow as much
in 1993 as we did in 1992.”
Although it participates in a different industry segment, Rinker Boat
also had a successful 1992, largely due to the growth of its export
business, Slocum says. “Twenty percent of our business is exports,
mostly to Europe,” he says. “Last year was our best year
ever.”
The federal luxury tax on boats selling for $100,000 and above
didn’t affect Rinker, because its boats retail for $9,000 to
$75,000. “The 18-to-21-foot runabout is the bread-and-butter of our
business,” Slocum says. “But our 26-foot cruiser is a big part
of our business. We ship a lot of them to Europe for use on the
Mediterranean.”
As a builder of larger cruisers and performance boats, Thunderbird
Products was “impacted tremendously” by the luxury tax, Porter
says. “Due to the luxury tax and recession, our business was off a
little over 40 percent. But since July, our retail has been up 13.8
percent and we’re looking to maintain that, or go up to
15-to-18-percent growth in calendar 1993. The luxury tax forced us into
small boats to get under $100,000.”
Porter believes Congress, with support from the Clinton
administration, will repeal the luxury tax. The additional revenue it
raised was more than offset by the decrease in marine-industry
employment.
Many in the industry believe a strategy used by two giant
marine-engine builders also caused some of the industry’s problems.
Skokie, Ill.-based Brunswick Corp. and Waukegan, Ill.-based Outboard
Marine Corp. both purchased Indiana recreational-boat companies in the
northern part of the state during the late 1980s. Industry insiders say
Brunswick and OMC bought boat companies to guarantee a market for their
engines and to keep foreign marine-engine manufacturers, particularly
Japanese companies, from gaining dominance in the U.S.
recreational-boating market.
In Indiana, Brunswick bought Starcraft in Topeka and also operates a
plant in nearby Nappanee. Brunswick manufactures its Fisher, Monarch,
Spectrum and Starcraft brands in its Northern Indiana facilities.
OMC bought Sea Nymph in Syracuse and Chris-Craft, a Florida- based
independent. It built a new plant in Elkhart in 1989 to build Suncruiser
aluminum pontoon boats, and reopened Chris- Craft’s Goshen plant,
which Chris-Craft had closed temporarily during financial difficulties.
Because of the sizable financial losses Brunswick and OMC incurred in
the early 1990s–due largely to their acquisitions of
boat-builders–it’s generally believed that the recreational-boat
industry’s era of consolidation is over, except for larger
independents buying small independents.
In what might be considered a surprise, Brunswick and OMC are not
favoring their boat-building subsidiaries over the independents when it
comes to selling engines. Consequently, the independent boat-builders
are not worried much anymore about their industry becoming like the auto
industry, where a small number of companies control the entire market.
“When Brunswick and OMC were engine companies, they could do
what they wanted in dealing with boat-builders,” Smoker says.
“They had a rigid approach to selling because you have to have an
engine. But they’ve come a long way from that.”
Basically, Brunswick, OMC and the other marine-engine manufacturers
want to stay on good terms with the independent boat builders, because
the independents are important customers, Smoker says. Without sales to
independents, Brunswick and OMC engine-assembly plants would have excess
capacity, he says.
Brunswick and OMC also learned there are too many independent
boat-builders for them to buy, Slocum says. “You can’t buy all
of your customers to control their buying strategies. Their
vertical-integration strategy backfired on them.”
The boating public benefits greatly from the continued existence of
many independent boat-builders, Deputy concludes. “Consumers better
hope the Smoker/Sylvans, Rinkers, Harris- Kayots and Godreys stay
around,” he says. “Independent boat builders are what’s
keeping prices reasonable.”
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