Sea Change Story

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The London Free Press • Monday, July 6, 2009
Monday, July 6, 2009 • The London Free Press
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Keeping afloat
Area boat builders adapt in order to weather the global economic storm
JILL ELLIS-WORTHINGTON
Sun Media
The 4.9-metre float trailers are boats with a drop-down tongue
and wheels that recess into the hull, getting rid of the need for
a trailer. The bow drops down allowing easy loading of trailer
cargo, such as an all-terrain vehicle.
MIKE HENSEN mike.hensen@sunmedia.ca
Brian Stennett of Admiral Drive Systems shows off the float trailers in production.
Special to Sun Media
Mike Gozzard shows off one of his high-end creations, a sailing yacht dubbed
Trafalgar that is bound for Fort Meyers, Fla., which took his firm more than 8,000
person-hours to build.
They have much in common: all
three are family businesses with two
generations actively involved, all three
have European roots in the boat building business and all three are feeling the
effects of the stormy economic conditions.
Mike Gozzard is the second generation of his family to oversee Gozzard
Yachts, which was founded by his
father, Ted Gozzard, in 1982, in
Goderich. Ted had been building boats
since 1970 with his first company
Bayfield Boat Yard Ltd. in Bayfield.
Dad designs the boats, Mike does the
engineering, Mike’s wife Liz oversees
purchasing, mom Jan takes care of the
books. All have a voice in this family
business.
Mike wonders if this legacy will pass
on to his son, Robin, 25, who has
worked at Gozzard Yachts for about
three years, because global economics
are playing havoc with yacht builders
worldwide.
Having constructed more than 250
power and sail boats in a 27 year history, Gozzard built one sail boat last year
and is bidding on the opportunity to
build another this year.
The primary market is large, luxury
sail boats, usually 12 metres or longer,
priced at $800,000 to $2 million.
“We build for the Mercedes and Lexus
crowd,” Mike explains.
Some of those high-rollers are coming back as repeat customers and, now
that they’ve been in business for almost
three decades, the Gozzards also are
dealing with legacy boats, giving advice
to widows and children of former owners.
Despite the empty order book, the
Gozzards have kept their crew of 12 to
14 on payroll.
“We don’t want to lose them. We want
to be geared up for when times get better,” Mike says. He calls them “fine
craftsmen” — and the perfectly formed
fibreglass hulls, shining teak woodwork
and state-of-the-art systems all bear
witness to this statement.
In the late 1980s, during boating’s
heyday, 45 employees worked on the
boats that rolled through the construction process at Gozzard. Some larger
boats, up to 16 metres long, were built
during that time, in addition to a line of
smaller production power boats.
Offshore manufacturers, mainly in
Asia, are capturing much of the current
market on price, not quality.
The offshore competition doesn’t
impress Gozzard. He acknowledges that
the initial price of a boat built overseas
can be attractive, but he maintains that
North American luxury boat buyer’s
expectations can’t be met by those
manufacturers and much work must be
done to bring the boat up to specifications, adding considerably to the overall cost.
Gozzard Yachts’ approach to marketing is very low-key, Mike says. The company doesn’t haunt the boat shows like
manufacturers of production boats or
advertise in the glossy yachting magazines.
Family business works well
for us . . . (his parents are
able) to provide guidance.
Manfred Kanter Jr., one of the principals of
Kanter Yachts in St. Thomas
“Customers usually come to us with
an idea, and we work with them to
make it happen,” he says.
To keep his skilled workforce busy,
Mike is doing things he wouldn’t have
previously considered, such as repair
work on mass-produced boats, storing
and maintenance of Gozzard products
and even building kitchen cabinetry.
Likewise, Manfred Kanter Jr., one of
the principals of Kanter Yachts in St.
Thomas, has diversified his family’s
business. He and brother Chris oversee
the day-to-day operations, while dad,
Manfred Sr., and mom Lisa are still
actively involved.
While Gozzard hulls are fibreglass,
Kanter’s are aluminum, so fabricating
products such as wood stoves, has been
added to the roster of money makers.
Founded in 1977 by Manfred Sr., who
had worked in boat building in his
native Germany, Kanter Yachts started
building sail boats and branched out to
luxury power cruisers. Now, the pleasure boat segment of the business is split
between power and sail.
Both Ted Gozzard and Manfred
Kanter Sr. built boats for themselves
first and went sailing for an extended
period before starting their boat-building businesses.
Manfred Sr. and Lisa are still involved
in the business, though they are semiretired.
“Family business works well for us,”
says Manfred Jr., adding that his parents are able to “provide guidance.”
Similar to Gozzard, Kanter also has
experienced a downturn in yacht sales.
The company builds boats from six
metres to 44.5 metres long, costing
from $80,000 to $3.5 million. Kanter,
too, built one sail boat last year and
hopes to build another this year.
While constructing pleasure craft
used to be the bulk of the business, during the past five years Manfred Jr. has
been bidding on government contracts
to build smaller, utility-type boats for
the RCMP, Environment Canada and
the Canadian Coast Guard. He estimates this makes up 95% of Kanter’s
business.
While various branches of Canadian
governments are the primary market
for the smaller, utility boats Kanter produces, its luxury yacht market is mostly
south of the border.
To entice that segment, they periodically show boats at some of the larger
American boat shows and advertise in
major yachting magazines.
Since the utility boats are tested in
Lake Erie and larger boats are launched
at Port Stanley for fitting and finishing,
Manfred Jr. says moving the manufacturing facility there would make a lot of
sense.
They’d retain their staff of a dozen
skilled skilled craftsmen by keeping it
close to St. Thomas and being right on
the water would be a cost saving.
Unfortunately, finding an appropriate
piece of land for long-term lease is
proving an obstacle, and the planned
divestiture of the harbour by the federal
government is a concern.
Admiral Drive Systems also manufactures metal boats. A division of Abuma
Manufacturing on Admiral Drive in east
London, Nick Maars oversees this
newest entrant, just four years old.
His father, Jan Maars, started Abuma
30 years ago. Having been involved in
the boat building industry in his native
Holland, the elder Maars welcomed the
opportunity to use a product that the
company already produces to expand
into a new market.
European-style designs, 6.7 metres
and 8.5 metres long, were the first models they marketed. These didn’t sell
well, however, and were recently auctioned off at a fraction of what it cost to
manufacture them.
While flogging these models throughout North America at boat shows, new
models, like the popular float trailer
were in design. This unique boat incorporates its own trailer, with a flip-up
tongue and flip-down gate at the bow —
it can be loaded with an all terrain vehicle or work equipment and go from
trailer to boat in minutes. A version of
this boat without the trailer feature will
be built and marketed this year.
Admiral Drive Systems is a leaner
operation than the other two area boatbuilding companies, with four employees working directly on the design,
assembly, marketing and sales of boats.
Overhead isn’t as big an issue for
them, but Admiral is feeling the tougher
economic times, as well.
Maars says his company sold 55 units
last year and hopes to repeat that figure
this year.
“The ultimate goal is to sell 1,000
boats each year,” he says, “and if we are
half way there in five years, that will be
good,” he says
Admiral’s marketing approach differs. Admiral exhibits at many shows
across North America, including the
Toronto International Boat Show. The
company also has a television commercial running during various fishing
shows.
Sales for Admiral’s products are
stronger in western Canada than in
Ontario, and the U.S. market is yet to be
broken, though Maars is trying.
Overseas is the next frontier for this
manufacturer, as it already has a dealer
in Ireland that is trying to get a wedge
into the European market.
What will the “new economy” mean
for the boat building business?
Gozzard, Kanter and Maars all shrug
their shoulders when asked the question. Float or sink, it’s anybody’s guess
right now.
Mike Gozzard explains his take on the
situation: “We are the masters of own
destiny right now. When we’re not, we’ll
quit.”
Prosaic boats, built for
work, are keeping Kanter
Yachts busier than the
luxury sail and motor
yachts for which they are
best known.
Photos by MIKE HENSEN
mike.hensen@sunmedia.ca
Nick Dale adjusts a wiper on a work boat built at Kanter Yachts and bound for British
Columbia
A 9.75-metre rigid-hull, inflatable police boat built at Kanter Yachts is ready for delivery.