Boating Industry: How do you think what your target customers are looking for in a boat has changed over the past few years and how do the new products you’re developing reflect that change?
Jim Lane: Our feel is that the customer himself has not changed dramatically in what he’s looking for in boating. I think boating provides a tremendous event for himself and his family to enjoy everything boating brings. I believe the customers themselves haven’t changed what they’re looking for: quality and value, consistency and less hassle on the water. They want the best quality boat they can afford at the best price with the feeling that that company will be there to support them in the future.
Our new product is greatly improved from the old product. We’ve found new ways to innovate and create a product that people can enjoy. I don’t think their needs are really changing.
Boating Industry: We’ve noticed that some boat builders that may have strayed from a focus on the small boat market are returning to it by introducing some smaller boats.
Jim Lane: We always have to be conscious of new people getting into the industry. We’ve always had competitively priced 18- to 19-foot boats. Right now, we’re developing a new 18 that reflects the style and features of our larger boats. The challenge is to get the boat priced at a level people will find attractive. We feel like we offer very good value. We’ve put a lot of effort in that product to offering more than just another 18-foot runabout. The styling, performance and appearance are something new they wouldn’t have seen in the past.
Boating Industry: We spoke earlier about dealer failures, but there also have been predictions of more boat builder bankruptcies. Do you agree with those predictions?
Jim Lane: The boat builder is facing a lot of issues with much of the fixed cost we all have. There’s a special burden on all of us to try to control our costs. The boat builder himself is going to be facing a lot of problems. I hope that we don’t have any boat companies fail because I believe that only creates problems for all of us. There are many, many successful boat companies, and you’re going to see a significantly large number of them come through the recession.
The dealer has his own individual set of problems, such as financing and inventory. Those problems will have to be worked out to make the dealer viable in the downturn. We can’t handle every one of those problems, but we’re working hard on one of them.
Boating Industry: Is there anything I haven’t asked about that you’d like to touch on?
Jim Lane: We have a strong company we’ve managed well. Most of our employees that are salaried own stock in the company. And this ties them closely to the company and helps us succeed in hard times. We feel we have a very good supportive group because they want to see the company do well, not just for their pay but for their stock as well.
You also asked about the Genmar bankruptcy. You can’t go a day without hearing something about it. Everyone has a comment on it. When we first heard about it, our immediate concern was for their employees, their dealer network, that they would perceive this as extremely negative news. On the retail side, it could affect the confidence of boat buyers as well. Obviously, this is not good news for the industry because there are repercussions. We feel the best scenario is that, under Irwin, Genmar will be able to successfully reorganize, recapitalize and be able to support their dealers and customers
Then there are the vendors. Most of us share common vendors. Whether it be engines or different products we buy, there will be an adverse effect on the health of vendors, which will impact all of us as we outsource parts in the future. We know how important cash flow is to them. There’s nothing ever good when a company goes into a financially difficult time period. But we’re trying to concentrate on what we need to do to make ourselves successful.