Shipyards across the country are experiencing the fallout from a weak economy. Potential customers are interested in newbuild projects. They’re impressed with the designs. They just can’t seem to open their wallets to get the money out.
Some yards have nice backlogs that will, hopefully, get them through this global economic rough patch. But most yards are seeing themselves reflected in the state of the U.S. economy. Activity has slowed down substantially.
“The volume has dropped off, and it’s probably related to everyone’s uneasiness about the economy,” said Abbie Walther, vice president and general manager, Moose Boats, Petaluma, Calif. “Customers are slow to spend money.”
“It’s a little slow,” confirmed Peter Duclos, president of Gladding-Hearn Shipbuilding, The Duclos Corp., Somerset, Mass. “We’ve been laying off since the first of the year.”
Good customers with sterling credit are learning that banks are reluctant to lend money. “Fully qualified people are finding that they can’t qualify for the money to build,” said Tom Johnson, vice president, business development, Senesco Marine LLC, North Kingston, R.I.
Many of the shipyards that build for customers who rely on grant money to help pay for new vessels are running into delays. “I’ve seen things drag out for a year,” said Walther. “Some of these agencies hold on to this money for as long as three years.”
SeaArk Marine, Monticello, Ark., recently announced that it was temporarily halting the acceptance of new boat orders. In a statement concerning the company’s decision, SeaArk officials said the shipyard “would begin an overhead reduction plan in an attempt to ‘ride out’ the effects of the current market until substantial improvement in the government [and]industrial marine sector appeared more apparent.”
You can read more about shipyards and the challenges they are facing in WorkBoat’s October issue.