Bump's World - June 2020
June 29, 2020
Corona Virus and the Marine Industry
Once again life has thrown a curve ball at us. The economy was doing really well, which of course was very good for yachts sales.
Around the end of March many states issues stay at home orders. The marine industry has the recreational side and the commercial side. The non-essential business closures were not clear enough so that with a little interpretation some marine business tried to stay open and others closed.
The marine industry is also international so different countries acted differently.
Our Hanse and Dehler are built in northeastern Germany. This area was East Germany 20 years ago. It is very rural, with high unemployment . Germany is working to make East Germany more modern like West Germany. This was a big reason to build the Hanse factory there to employ over 1200 people. This area of Germany had almost no virus cases and Germany allowed the factory to stay open. Hanse communicated with its dealers that in spite of the virus they were staying open and will continue to build boats. That was great news for us since we had several boats in production.
Every builder had major slow downs and many closed. Once again the marine industry was in turmoil.
At New Wave Yachts we moved our business to our homes. We continued to market our used boats and talk via phone and internet about new boats. A lot of people suddenly had a lot of time and why not talk boats. So we were busy. Not sure how productive but busy.
Shortly after the announcement that Hanse was not shutting down, I found out they lost about a third of their workers, due to Germany closing the border with Poland. About a third of the workers are Polish and come for the week to work. Most decided to stay in Poland. The other problem was a supplier problem. The boats are made from parts from many places. Engines built in Sweden and Japan, steering systems from Denmark. masts from Sweden, parts come from all over the world. All you need is one guy like the keel guy to shut down and your shut down. I have spies at the factory and they told me that yes the factory was open but production was slowing down.
Previous to 2008 the factories had huge inventory. The manufacturers would just deliver stuff and inventory it every moth to see what the builder used. Like there would be a 100 Yanmar engines piled to the ceiling. After 2008 they started ordering each engine for each boat. This was true of most suppliers, so they did not have a reserve of parts.
Production did slow down, but they were able to continue to build boats. Now suppliers and builders are trying to get back to normal levels. Most lost about 2 months of business.
I do think that a lot of people had time to ponder life and realized that being on the water is a healthy good thing. Now our phone is ringing and like everyone look forward to what ever life brings us down the street.
We still have a long way to go with this virus, but I hope everyone will get out on the water. I have been and when I'm sailing life is good.
Please mail comments to me at Bump@newwaveyachts.com