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20 | Boating Industry | July 2014 [ 85 Years of boating history ] www.BoatingIndustry.com 1990s The boating industry was in dire straits as the 1990s started. A crippling luxury tax was passed by Congress in 1990, levying a 10-percent federal tax on boats costing more than $100,000. The early-1990s re- cession provided a one-two punch that resulted in dozens of bankruptcies and thousands of employees losing their jobs before the tax was fi nally repealed in 1993. The industry's giants were especially hard hit. In 1990, Brunswick closed fi ve plants and laid off nearly 1,000 employees, while Gen- mar closed two factories. OMC closed more than a dozen plants in the early 1990s. Carolina Skiff, Carver, Ranger, Trojan and Sabre were just some of the brands that went in and out of bankruptcy. To add insult to injury, 1992's Hurricane Andrew – at that time the costliest storm in U.S. history – damaged dealerships and marinas in Florida and Louisiana. In 1993, massive fl ooding in the Midwest devastated businesses in that region. Overall, the industry went from employing 600,000 in 1988 to 400,000 in 1992. It was estimated that the average boat price dropped by as much as 50 percent. Sales of boats more than $100,000 dropped by 77 percent, estimated the Marine Retailers Association of Amer- ica. Boat sales nationally dropped by more than 40 percent from $17 billion in 1989 to $10 billion in 1992. The luxury tax led to an increased focus on Washington by indus- try associations and the Congressional Boating Caucus was formed as a formal, bipartisan body to focus on boating issues. Proving the old adage that there are no new ideas, in 1992 Boat- ing Industry covered the surging jet boat market. Boston Whaler's 13 ½-foot Rage was generating excitement with more than 450 units shipped, with competition on the horizon from Bayliner, Sea Ray, Yamaha and Sea-Doo. In other signifi cant events during the 1990s, Textron entered fl oor- plan fi nancing, where it would become a major player until the Great Recession and one of the leading pontoon manufacturers was founded when former Forrester president Bob Menne and dealer Gene Hallberg announced their plans to form Premier Marine. Honda, although it had been selling product in the United States for several years, formed its U.S. marine division, Cummins Diesel formed a marine engine division and Yanmar began building engines in the United States. Most of the industry recovered in the wake of the tax repeal, with some exceptions. Most notably, OMC continued to struggle, losing market share to other boat and engine manufacturers. In 1996, OMC announced it was considering leaving the boat-building busi- ness, although it later reversed course. After saying in 1997 that it was seeking new investors and merger partners after posting large losses for several years, it was acquired by Greenmarine Acquisition Corp., a company affi liated with George Soros. All of that turmoil, of course, foreshadowed the company's massive bankruptcy in 2000. 2000s Few decades in American history began as rosy as the 2000s. After the worst of the Asian fi nancial crisis receded, a roaring U.S. economy brought the unemploy- ment rate below 4 percent as investors marched headlong into the Internet bub- ble that infl ated the stock market. Bucking the positive economic trends, OMC fi led for bankruptcy and laid off its 7,000 employees. Bombardier Recreational Production and Minnesota-based Genmar jointly purchased Johnson and Evinrude at auction for $95 million. Signs of economic weakness appeared across the globe in early 2001, as tensions in the Middle East rose after Israel and Palestine resumed clashes and the U.S. attempted to restart peace talks. The world shifted on Sept. 11 with the coordinated Al-Qaeda attacks on the World Trade Center, Pentagon and a fourth hijacked plane that crashed in a Pennsylvania fi eld. Following this tragic turning point, the U.S. economy went into recession. American and British forces quickly launched attacks on targets within Afghani- stan. The invasion of Iraq began in March 2003. What follows is fairly recent, painful history: ongoing wars in the Middle East, the explosion of Space Shuttle Columbia in 2003, the Indian Ocean earthquake and tsunami in 2004, Hurricane Ka- trina and its effects on energy prices in 2005, and the fi nancial crisis that began in 2007. The Great Recession brought unprecedented turmoil to the ma- rine industry as credit dried up, scores lost their jobs, discretionary purchases ground to a halt and many dealers and boat builders struggled to keep the lights on. As annual boat sales fell by more than half, many boat builders large and small shut down, and deal- erships — possibly 40 percent of all U.S. dealers— were forced to close their doors. Genmar Holdings fi led for bankruptcy in 2009, and Platinum Equity purchased much of the company, including the Ranger, Glastron and Four Winns brands under the umbrella of its Rec Boat Holdings and Fishing Holding subsidiaries. Irwin Jacobs later reemerged with a partner to purchase Larson Boats in 2010. At Brunswick, Dustan McCoy was named CEO in 2005, and the company acquired 13 boat brands, nearly doubling the size of its boat group. Technological innovation helped pull the industry out of its deep funk as the economy gradually improved. Mercury introduced Digital Throttle & Shift Control in 2000 and the FourStroke Verado outboard in 2004. Nautique delivered its SportShift and Hydro- Gate wake technologies, celebrated its 80th anniversary and built a new 217,000-square foot plant in central Florida. As sterndrive sales remained in the doldrums, pontoons and outboard-powered boats in general became more popular. Al- though BRP exited the jet boat market with its Sea-Doo brand in 2012, several companies including Rec Boat Holdings (Scarab) and Marine Products Corporation announced plans to enter the jet boat market. 1990s The boating industry was in dire straits as the 1990s started. A crippling luxury tax was passed by Congress in 1990, levying a 10-percent federal tax on boats costing more than $100,000. The early-1990s re- cession provided a one-two punch that resulted in dozens of bankruptcies and thousands of employees losing their jobs before the tax was fi nally repealed in 1993. hard hit. In 1990, Brunswick closed fi ve plants and laid off nearly 1,000 employees, while Gen- Few decades in American history began as rosy as the 2000s. After the worst of the Asian fi nancial crisis receded, a roaring trends, OMC fi led for bankruptcy and laid off its 7,000 employees. P16x20-BI14JUL-AnvLookBack.indd 20 5/28/14 11:58 AM