Brunswick Corporation announced Thursday it will immediately begin to wind down boat manufacturing operations in Joinville, Santa Catarina, Brazil, as it prepares to close the facility. The operation manufactures certain Bayliner and Sea Ray boat models for the South American market.
Moving forward, this demand will be fulfilled through Brunswick’s remaining global boat manufacturing footprint, the company said.
“The region’s continued weak economy has made it difficult to profitably serve these markets with a dedicated manufacturing facility,” said Huw Bower, president – Brunswick Boat Group. “With our existing commercial infrastructure and channel presence, we can return to our previous model of importing boats to the region to more efficiently and effectively fulfill demand to this important market.”
The company said the resulting restructuring charges are estimated to be in the range of $10 million to $12 million pretax, substantially all of which will be recorded in the first quarter of 2017. Further, these actions are projected to have a modestly positive impact on earnings and a minimal impact on free cash flow, with the majority of the earnings benefit occurring in 2018.
The company further stated that this decision has no impact on its strategy or plans for Brunswick’s Mercury Marine engine business or its Life Fitness business in the region.
Brunswick opened the plant in 2012, citing the solid growth of the market.