Carver Boat Corporation LLC

views updated

Carver Boat Corporation LLC

P.O. Box 1010
790 Markham Drive
Pulaski, Wisconsin 54162
U.S.A.
Telephone: (920) 822-1600
Fax: (920) 822-8820
Web site: http://carveryachts.com

Wholly Owned Subsidiary of Genmar Holdings, Inc.
Incorporated: 1954
Employees: 1,200 (2007)
Sales: $150 million (2006 est.)
NAIC: 336612 Boat Building

Carver Boat Corporation LLC is a leading American builder of motor yachts. The firm’s luxurious, fiberglasshulled boats range in length from just over 30 to more than 60 feet, with prices starting around $300,000 and rising to $2 million or more. Carver offers several lines that include Mariner, Voyager, Nuvari, and Marquis, most of which are produced at its huge Pulaski, Wisconsin, plant, with a smaller number built in Fano, Italy, for sale in Europe through a partnership with Italian yacht-maker Dominator. The firm is a subsidiary of number two U.S. recreational boatmaker Genmar Holdings, Inc.

BEGINNINGS

Carver Boat Corp. was started in 1954 in a Milwaukee, Wisconsin, garage by Charlie Carter and George Verhagen to build high-speed mahogany runabouts. Fusing the first three letters of each of their last names, they christened the new company Carver. Their earliest boats were sold to friends, but as sales began to grow in 1956 the pair decided to move operations to the small Northern Wisconsin town of Pulaski (just west of Green Bay), which had good transportation links and a motivated workforce.

During the 1960s Carver expanded its offerings to include “flying bridge” designs and cabin cruisers, larger boats with enclosed living quarters. In the 1970s the company switched to building its hulls out of fiberglass, a strong but lightweight material that was easier to use than wood and more durable in the water. Its adoption enabled boatmakers to increase output and reduce labor costs, and Carver soon began to offer larger models, with the 32-foot Mariner becoming a top seller. Carver built the boats, but sourced components such as engines from outside manufacturers like Mercury Marine.

The company continued to grow during the 1980s as sales spread beyond the Great Lakes region. By middecade the firm employed 1,000 and had annual revenues of $170 million. In 1985 Carver was acquired by Miramar Marine Corp. in a $30 million leveraged buyout. Miramar was a new unit of the Thompson Co., owned by three Texas brothers who had invested in a variety of businesses including the 7-Eleven convenience store chain.

Two years later the growing Carver began constructing a $10 million, 217,000-square foot manufacturing facility near Rocky Point, North Carolina, to boost capacity as well as build boats for Miramar’s newly acquired Californian Yachts unit. Operational by early 1988, the plant soon employed more than 600. Carver boats were being sold around the United States as well as in foreign markets like Australia. For the year, the company’s sales reached a record $222.5 million.

IRWIN JACOBS TAKES CONTROL IN 1991

In the late 1980s fuel costs began to soar and the U.S. economy entered a recession, causing sales of luxury boats to tumble. In January 1991 the struggling industry was dealt a nearly fatal blow when a Congressionally-mandated 10 percent “luxury tax” on the price of boats above $100,000 took effect. Though lawmakers had reasoned that well-heeled boat buyers could easily afford the extra expense, many decided to wait out the law or make their purchases offshore, and American luxury boat sales quickly fell by as much as 75 percent. As unsold inventory piled up, Carver started losing $1 million per month and Minnesota buyout specialist Irwin Jacobs soon took advantage of the firm’s plight by purchasing the majority of its debt. In April Jacobs forced the company’s hand, causing Carver to file for bankruptcy and shut down both its plants, laying off its entire workforce of 1,050. In court filings, the firm listed assets worth $52 million and debt of $132 million.

Now in control of the company, Jacobs appointed a new CEO, Kenneth J. Severinson, under whose hand Carver initially began concentrating on boats that cost less than $100,000. Orders began to trickle in, and by summer the firm had rehired about half of its Wisconsin staff. In November a reorganization plan won court approval, and Carver was reincorporated by issuing stock to Jacobs and certain other creditors, with vendors and banks to be paid out of proceeds from operations. Carver, along with sister boatmaker Wood Manufacturing Co. and parent Miramar Marine, would be owned by Jacobs’ Genmar Industries, which held 74 percent of its stock. His total stake later grew to nearly 100 percent.

By the spring of 1992 Carver was on the rebound, with its employment ranks back up to 390 and output hitting 14 boats per week from 8 a few months earlier. The company had cut unsold inventory by more than half to 420, while reducing its product line by a quarter to 14 models priced between $50,000 and $300,000, which included a newly introduced 34-foot boat. Most cost over $100,000, and to entice buyers the firm offered to pay half of the luxury tax, with dealers splitting the remainder with the purchaser. Carver was also pushing export sales, which at 36 percent made up more than double the previous amount.

In June 1992 the company bought the bankrupt Pennsylvania-based Trojan Yacht division of Bertram-Trojan Inc. for an amount put at less than $2 million. Carver would acquire the name, tools, and other equipment, adding 100 workers in Pulaski to produce Trojan’s line of 30- to 46-foot express and sport cruiser boats.

In the two years following the luxury tax’s enactment, more than 100 boatmakers had gone out of business and an estimated 150,000 marine industry jobs had been lost. Production of inboard-engine cruisers like Carver’s fell from a peak of 13,500 in 1988 to 3,550 in 1992. Acknowledging its mistake, in the summer of 1993 Congress canceled the boat tax retroactive to the start of the year, which immediately boosted sales. Meanwhile, on the technological front, the firm was testing compressed natural gas as a power source in anticipation of more stringent emissions standards for diesel or gasoline-fueled marine engines.

In the spring of 1994 Carver’s parent became Genmar Holdings, Inc., when Jacobs-owned units Miramar Marine, Minstar, and Genmar Industries merged. After making a series of further acquisitions Genmar Holdings would become the number two boatmaker in the United States behind Brunswick Corporation.

COMPANY PERSPECTIVES

Every Carver Yacht is crafted with the confidence that comes from more than 50 years of quality boatbuilding expertise. We continue to raise both structural standards and customer expectations through our cutting-edge technology and with generations of handcrafted skills that put our manufacturing in a class by itself. At Carver, we’re never satisfied with building anything less than the finest luxury cruising yachts in the world. Which is why every step of construction is performed in-house with the perfect blend of artisanship and technology. All so we can closely manage a quality build, one boat at a time. You can be sure that every Carver Yacht is intelligently crafted to the highest performance and quality standards known to the industry, without compromise. The result is integrity that’s painstakingly built into every square inch of every model.

In the early summer of 1997 an almost-completed boat exploded and burned at Carver’s plant, critically injuring a worker and destroying two large cruisers worth a total of $800,000. Damage to the building was contained when a firefighter quickly moved the main boat involved outside with a backhoe. The Occupational Safety and Health Administration later cited the firm for hazardous electrical conditions and improper wiring methods, fining it $700.

BOOSTING THE EMPHASIS ON LUXURY IN 1998

During the 1990s the market for Carver’s largest boats had grown as sales of its lower-priced ones remained flat, and in 1998 the firm signaled its new focus on enhanced luxury with the introduction of the 53-foot Voyager. The boat’s spacious living quarters resembled a well-appointed vacation condominium with nearly seven-foot-high ceilings, two bedrooms and bathrooms, a large galley, a kitchen, and more, with finely finished cherrywood cabinetry and leather upholstery adding to the impression of elegance. The boat’s base price was nearly $700,000, with many custom options including more powerful engines and an entertainment center available.

To highlight this new emphasis on luxury, the firm upgraded its marketing materials to showcase the boats’ elegant features while increasingly using the term “yacht” as a descriptor. In the 1990s the company had also improved its designs by developing a frameless window system and eliminating the use of structural wood below the waterline, which could deteriorate more easily than fiberglass. Carver boats had a seven-year limited warranty on their hull and deck.

In 2000 the company introduced its largest boat to date, the 57-foot Voyager Pilothouse. The firm employed 1,400 at two sites in Pulaski, with annual revenues topping $150 million and boat production nearing 800.

A growing U.S. economic recession and the bursting dot-com bubble were combining to cause sales of luxury goods to plummet, and in early 2001 Carver laid off more than a third of its workforce. Sales ticked upward after the September 11 terrorist attacks, however, as Americans turned to more family-based activities, and the company began calling some workers back. Sales for the year fell to $125 million while production dropped to 600 boats.

ITALIAN CONNECTION FORMED IN 2002

Despite the recent sales downturn, the success of Voyager inspired the company to seek an even higher standard of luxury, and Carver president Bob Van Grunsven decided for the first time to use an outside designer for a new yacht. After considering several firms, in 2002 the renowned Venice, Italy-based team of Carlo Nuvolari & Dan Lenard was chosen. Italian yachts were viewed in the industry as the peak of stylistic elegance, though European boat buyers preferred different interior designs than Americans, making some changes necessary for the United States.

Carver officials hit it off with the Italians, and their assignment was soon enlarged to include making improvements to existing models. Nuvolari & Lenard also arranged for Carver to purchase designs and tooling for boats they had created for Mochi Craft, and in 2003 the firm began to build yachts at a new plant near Fano, Italy, for the European market, sharing the space with Italian boatmaker Dominator, a longtime associate of the Venetian designers. Carver would use the facility as a laboratory to learn Italian building techniques, as well.

The firm’s Italian-built yachts, sold under the Nuvari name, would be offered in 19-meter and larger sizes and sold via its dealers in Europe. The luxury models included such amenities as granite countertops and African cherrywood cabinets. With a wide range of custom options available, one of the company’s boats could cost as much as $2 million.

KEY DATES

1954:: Charlie Carter and George Verhagen begin building boats in Milwaukee.
1956:: Growing firm moves operations north to Pulaski, Wisconsin.
1960s:: Cabin cruisers added to offerings.
1970s:: Switch to fiberglass hull construction.
1985:: Miramar Marine of Texas purchases Carver.
1988:: New plant opens in North Carolina to make Carver, Californian brand boats.
1991:: Irwin Jacobs takes control of bankrupt Miramar; North Carolina plant closes.
1998:: New Voyager model signals shift to focus on luxury yachts.
2001:: Company lays off more than one-third of its workforce of 1,400 as sales plunge.
2003:: Firm buys manufacturing facility in Fano, Italy, to build Nuvari Yachts; ultra-luxurious Marquis line debuts.
2005:: Sales and distribution agreement signed with Dominator of Italy.

In 2003 falling interest rates and a federal tax cut for boats that included living quarters helped fuel another surge in sales, and during the summer the firm added 200 additional workers in Pulaski. To keep up with demand many staffers were putting in 50- and 60-hour weeks.

MARQUIS INTRODUCED IN 2003

During the year Carver also introduced its most luxurious yacht to date, the first entry in the new Marquis line. The styling of the 59-foot Wisconsin-made boat was the work of Nuvolari & Lenard, with Donald L. Blount called on for hull line and performance features, and Ward’s Marine Electric handling electronics, control, and navigational systems. A year later, an even more luxurious 65-foot Marquis model was added.

In 2005 Carver signed a sales and distribution agreement with Dominator, with whom it would partner to build a new global line of 62- to 90-foot Italian-made yachts. Dominator would finish boats for European tastes and distribute them in that region, while Carver would handle North and South American distribution for the 62–68 foot Nuvari line and offer larger models under the Marquis name.

By 2007 the firm employed 1,200 and its Pulaski manufacturing facility had been expanded to 800,000 square feet. Carver Yachts, and their more luxurious Marquis sisters, came with such standard features as SeaKey, a Global Positioning System-based tracking device, Sirius Satellite Radio, and the Carver Docking System, which used bow and stern thrusters and a wireless remote control to position a boat at the dock.

In just over half a century, Carver Boat Corp. LLC had established itself as one of the premier manufacturers of motor yachts in the United States. The firm’s partnership with Italian designers and boatmakers gave its products a distinctive elegance that was closing in on custom-built “mega yachts” in quality. Backed by the deep pockets of number two U.S. recreational boatmaker Genmar Holdings, its continuing growth and success looked certain.

Frank Uhle

PRINCIPAL DIVISIONS

Marquis Yachts; Carver Italia (Italy).

PRINCIPAL COMPETITORS

Brunswick Corporation; KCS International, Inc.; Grand Banks Yachts, Ltd.; Azimut-Benetti S.p.A. (Italy); Riviera Marine (Int) Pty Ltd.; Sunseeker Limited Ltd.; Rinker Boat Company; The Talaria Co. LLC; Viking Yacht Co.; Tiara Yachts; Regal Marine Industries, Inc.