CADILLAC, Mich. – When Roch Lambert left BRP in October of last year, retirement was in the cards. However, the 47-year-old said in an interview this morning that he knew he wanted to “shake up something” before he retired for good.
Between traveling with his wife, time spent with family and assisting in the leadership transition at BRP, Lambert kept busy for the first few months. Then, in January, he was contacted by Louis Samson, a principal at Platinum Equity, about doing some consulting work for the company regarding its acquisition of several Genmar boat brands. He accepted.
Soon thereafter, Platinum Equity asked Lambert to join their team full-time as president of Project Boat Holdings’ recreational boat division, which wasn’t part of his plan. He was working on some acquisitions outside the boating industry and didn’t imagine a permanent position at Platinum Equity as his next step.
Ultimately, there were a handful of factors that changed his mind. First was the strength of and passion behind the division’s Glastron, Four Winns and Wellcraft brands.
“The history of Glastron alone goes back more than 50 years,” said Lambert. “The passion behind that brand is phenomenal. It reminds me of my Evinrude/Johnson days.”
Second was a desire, if he re-entered the workforce, to do so in a top job for a global company of a certain size. Third was the need to work as part of a solid team.
Lambert said he had an advantage coming into the job because he had already worked with Samson and Steve Zollo, another Platinum Equity principal on its mergers and acquisitions team, as a consultant and was impressed by them.
“Platinum Equity has been a very successful organization, both in terms of raising capital and investing in companies in financial difficulty,” commented Lambert. “It’s part of their modus operandi. They know the recipe, and it’s a good fit with what I know.”
Fourth, he said the company is doing the right things for the business, not just trying to make a quick buck. It has no debt and therefore doesn’t face the financial pressures many in the industry are enduring today. And it has “given us some cash to make decisions for the long-term health of the business.” Lambert said Platinum Equity is truly committed to building the business.
Communication: Job No. 1
The first thing Lambert has focused on in his new position – which started Monday, May 3 – is enhancing communications with the three brands’ dealer networks.
“Similar to what I did with Evinrude when BRP was put on the blocks, I’m going to start a newsletter, probably bi-weekly, which will kick into gear next Wednesday,” he said. “The black hole is over.”
Lambert stressed the importance of ensuring that dealers know who the brands’ new leadership team is and where the brands are going. Most likely, they will hold dealer meetings this summer, and new products will be announced shortly.
“The story I have to tell is a very positive one,” he said. “There will be significant changes in how we do business, all for the positive. My role is to stabilize things.”
Lambert admitted that the companies have lost some dealers over the past 24 months. Even when Genmar was still running the brands, things were difficult, according to Lambert.
“If I were a dealer of my brands today, I would have had very significant concerns over the past 24 months,” he explained. “I’ve lived it in my previous life. I understand the dynamic. And competition has been doing what competition does, trying to attract our network away from our brands. All I’ll tell them is that there is a new team in town, our commitment is higher than it has ever been, and we are financially positioned better than anyone else in the industry right now.”
What comes next?
Once Lambert has reassured the dealer network that they have a manufacturer they can count on for the long term, he will begin further analysis of the situation at each of the brands, including how the company can support its dealers differently, giving them the tools to grow their businesses profitably again and continuing to invest in the product.
“My personal track record speaks for itself,” Lambert said. “I’m a product guy. And we have the financial backing to make it happen. We’ll start rolling out projects in the weeks ahead.”
The boats being built by the manufacturer today are 2011 models, according to Lambert. Programs and pricing for the new model year will be unveiled in early June. New configurations will come on line in July. And new platforms and boats currently being designed will go into production some time in the fall.
As demand has increased, the company has already begun driving up production in Cadillac, Mich., where the three brands will be headquartered and their manufacturing will be based. While some manufacturing continues in Little Falls, Project Boat Holdings started building its first Glastron boat in Cadillac this week, according to Lambert.
While Project Boat Holdings is ramping up manufacturing fast, it is facing the same challenges as other boat builders, challenges that have nothing to do with the brands’ transition out of bankruptcy. Suppliers are struggling to keep up with demand, specifically the engine builders and windshield suppliers.
“Demand seems to be a little higher than everyone anticipated,” said Lambert. “We have set up a priority system where units sold at boat shows or being sold in our dealerships now are first priorities.”
The company is also trying to move units around in the network in cases where it can’t build boats fast enough. With that said, Lambert expects there will be some pockets where there will be a shortage of boats for a little while.
“It’s getting better by the week,” he stated. “We recently went from tens of backorders on each boat to less than a handful per boat.”
Looking to the future
One of the changes Lambert expects to make that will help the company respond faster to changes in demand going forward is a reduction in the number of configurations offered to consumers on each boat.
He recently picked out a boat model and asked his team to determine the number of configurations in which it was available to consumers. The response he received was 1,960. With 68 total boats being manufactured between the two brands, that’s a big number – one that challenges not only the manufacturer, but also its dealers.
“The consumers don’t realize the cost they have to pay for that flexibility,” he explained. “That’s how I think we need to start rethinking the business. My team will do that. We will make sure we remain a reliable, financially strong company moving forward. We may sacrifice some elements of the business in the process. But the elements remaining will be strong.”
By reducing that number to 20 or 30 configurations, the manufacturer will be able to react faster to the dealer network’s needs.
As far as this year is concerned, Lambert expects to see a little bit of upside from last year, but last year was so hard on the industry that he believes we’ll still fall well short of the previous peak.
In fact, Platinum is positioning itself so that the company can be successful with far less volume that what the industry has seen historically. That was part of the reasoning behind moving the three brands to Cadillac, he explained, and refusing to make significant increases in the inventory the manufacturer will require dealers to carry.
“This is all part of the new reality,” he says.
The good news is that the market has hit bottom, according to Lambert. The question is just how fast and how far it will come back. To guarantee its success, Project Boat Holdings plans to be very conservative in its forecasting for the years ahead.
“We have a wonderful foundation here for the business going forward,” Lambert concluded. “In fact, I believe the results are going to exceed Platinum Equity’s expectations for year one. Personally, I sleep very well at night. I like what I see so far. We’re going to have a very good business proposition for the network in a very short period of time.”