NEODESHA, Kans. – With retail sales down by 18 percent, Cobalt Boats has made changes to its staffing and production plans moving forward, according to a release received today.
The company pointed to the struggling world economy, and specifically the lack of consumer confidence and dealer floorplan financing as it reported that it had to layoff 30 associates this week, while continuing to adjust staffing levels to lower production rates.
When compared to the prior year, Cobalt sales are down 18 percent at retail, while most of its competitors are off 35 to 40 percent, according to Paxson St. Clair, Cobalt’s CEO.
“We are pleased to be experiencing positive momentum through gains in market share,” said St. Clair. “It is very difficult to see fellow associates leave our company. Our hearts go out to them. But to be clear, our intention and expectation is to not only weather these challenging times, but to position our company to take advantage of a market rebound when it does occur.
“We plan to further leverage our brand strength, quality product and tremendously talented associates to capture additional market share. In addition, we are aggressively investing in new boat models that will be introduced later in 2009 and early 2010.”
Although at a reduced rate when compared to 2008, Cobalt said it continues to build boats each week and maintain appropriate staffing to support our dealers and customers. Cobalt does not have any factory stock boats, so ordered boats are built every day in Neodesha, the company explained. And to ensure the future relationships of the company’s dealer network, Cobalt plans to maintain conservative production levels to reduce dealer inventories. The company added that its production plan reflects expectations of soft demand through the remainder of 2009 and a slow rebound in 2010.
“We are very confident that we made the right decisions at the right time,” said Sean Callan, Cobalt president. “In partnering with our dealers, we adjusted production and expectations to conservative levels early in 2008 to ensure the stable, long-term viability of our brand and our business.
“We feel fortunate to be in the position of building boats on a routine basis today. Our experience tells us that the logistics of shutting down a boat building operation and restarting weeks or months later can make it very challenging to maintain your boat’s quality and seamless communication with your dealers and customers.”
“Our dealer network is in a healthy position overall to weather this economic downturn with us,” St. Clair added. “Additionally, we are in a strong financial position, carrying little debt. This will prove to be a competitive advantage to our business’ operations going forward.”
In other Cobalt news, last week the Kansas Chamber of Commerce awarded Cobalt Boats with The Ad Astra Award, which is given out annually to a Kansas-based company that “exemplifies business and civic excellence.” According to the Kansas Chamber of Commerce, the award comes to Cobalt in recognition of five decades of innovative design and manufacturing capacity set against the rural work ethic of a small Kansas town.
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