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Boat business makes a comeback


SALISBURY -- The large open shop is filled with the whine of sand blasting equipment and the smell of spray paint as men in white paper overalls fashion fiberglass and steel into $300,000 yachts. Seven of the gleaming white yachts, which measure 45 to 47 feet long, line the main work area of the Bayliner plant here.

Times are good for the Bayliner Marine Corp. plant, which builds more than 100 of the yachts a year, or two every week.

For Pat B. Alschlager, a level two supervisor, and the 100 people who work at the plant, the upturn in business has one overriding result. "It's job security," he said.

Beaten down by a recession and a luxury tax, the boating industry in Maryland has suffered lean times from 1989 until last year, when people became freer with their money and the hated luxury tax was repealed.

But it will be a long time before the boat business sees the boom times that it saw in the late 1980s, according to industry observers.

Although the Maryland boating industry wasn't hurt as badly as some nationally, more than a thousand jobs were lost during the four-year slump, and marinas were only 50 percent to 75 percent full, according to Beth Kahr, administrative director of the Marine Trade Association of Maryland Inc.

"A lot of people went out of business. A lot of jobs were lost," shesaid.

But even though about 300 jobs have been recovered since last year, boat-related companies are still reluctant to build their employment back up, Ms. Kahr said.

"It's struggling back and it's taking longer than a lot of people thought," Ms. Kahr said. "People are still very cautious about the way they are spending their money, particularly recreational dollars."

The number of boat-building jobs in the state dropped by 20 percent from 969 in 1988 to 766 in 1992, according to the Maryland Department of Economic and Employment Development. The most dramatic drop was from 1990 to 1991 when the number of boat builders dropped from 973 to 780. Since its low in 1992, boat building employment has increased by 15 percent to 878 last September -- the most recent figures available.

Likewise, the number of people selling boats was cut in half, plummeting from 1,679 in 1989 to 802 at the beginning of last year, according to state statistics.

More than half of the state's boat builders work at one company, Bayliner Marine Corp. Part of U.S. Marine Corp., the country's largest boat manufacturer, the company has 475 workers in three plants in the state.

Two plants in Cumberland, which have a total work force of 375, make power boats ranging from 17-foot runabouts to 28-foot cruisers, according to Gerald T. Stansfield, director of marketing and communications for U.S. Marine. The Salisbury plant builds yachts.

Together, the three plants account for 30 percent of Bayliner's annual sales -- a figure Mr. Stansfield declined to release citing competitive reasons.

U.S. Marine Corp. is part of the Brunswick Corp., a Lake Forest, Ill.-conglomerate with annual sales of about $2.1 billion. Besides boats, Brunswick manufactures bowling and billiard equipment.

Coming on line in 1986 and 1987, Bayliner's Maryland factories did not have a chance to build up to high employment levels

before the downturn in 1989, Mr. Stansfield said. But dozens of workers were laid off at the three facilities during the recession, he said.

In fact, employment at the Maryland plants is down about 15 percent -- or about 80 jobs -- from last year, Mr. Stansfield said.

But the Salisbury and Cumberland plants escaped the fate of nine other Bayliner plants that were closed between 1989 and 1993 when the company slashed its work force by 40 percent as sales fell by a like amount. Currently about 2,800 people work at the remaining 14 plants, Mr. Stansfield said.

But things are looking up this year. Sales are running 15 percent ahead of last year and consumer confidence appears to be rising.

"We're seeing a pretty significant turnaround," Mr. Stansfield said, though business is still far below 1988 peak levels. "We see continued measured growth through the rest of the decade."

Sales have picked up to the point that some of Bayliner's dealers are seeing something that they haven't seen in a while -- a shortage of products, -- and are finding they have to beef up their inventories, Mr. Stansfield said.

U.S. Marine's optimistic outlook is shared by the boat building trade organization, the National Marine Manufacturers Association. This year "will be pretty robust," said Greg Proteau, spokesman for the group.

With the first gleamings of a recovery last year, boat sales nationally edged up by 10 percent to $11.3 billion in 1993, Mr. Proteau said. A like increase is expected this year.

This is still a far cry from the glory days of 1988 when boat sales hit $17.9 billion.

fTC Besides the recession, one of the chief culprits of the downturn was a luxury tax enacted by Congress in 1990 that added 10 percent to the cost of the boat above $100,000.

The tax also affected smaller boat sales because consumers were confused about what would be taxed, Mr. Proteau said. The combination of the tax and the recession proved to be a powerful blow to the boating industry, whose employment dropped from 600,000 in 1988 to its current level of 400,000 -- the biggest economic setback for the business since its modern beginnings in the 1950s, he said.

One company, Performance Cruising Inc. in Southern Anne Arundel County, managed to avoid the sharp downturn in the market.

The firm, which builds about 40 of twin-hulled cruising catamarans a year, kept its 20-person operation busy by keeping its vessels in a price range of $80,000 to $95,000, thus avoiding the impact of the luxury tax, said Susan G. Smith, who co-owns the company with her husband, Tony.

The catamarans, which feature sleeping facilities, also appeal to retirees who want to live aboard, sailing inland estuaries in the shallow-draft vessels, Mrs. Smith said.

"We are in a lot of ways in the retirement industry," she said.

The sailing boats, which use wind to move and a solar panel to power electrical equipment on board, also appeal to people who want a simpler, more environmentally correct life, Mrs. Smith said.

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