Boating Industry

July 2016

Issue link:

Contents of this Issue


Page 18 of 43

July 2016 | Boating Industry | 19 which was great as I was in the COO role. Becoming CEO, it was our intention to refi ll that position, because I really need someone that the boat group gets their undivided attention. Huw is a very talented executive, he's got a great track record and I really feel he's the right person to lead the group. We're quite excited to have Huw in that role. Boating Industry: You talked about the transition to CEO. For a long time we've been used to seeing Dusty in that chair, so what do you think you bring that's different? How are you guys similar? SCHWABERO: From a background stand- point, I'm a little more operational. Just given the nature of the industry and Brunswick as a cor- poration, you're likely to see me more focused on the growth aspects of the business. We're in a different place and a different time than when Dusty was leading the organization. In terms of our overall values, ethics, beliefs, things around how we lead an organization, Dusty and I are extremely similar. Boating Industry: You also recently announced plans to expand Mercury's Wisconsin facility. What is prompting that expansion? SCHWABERO: We've been on an expansion path up there for several years where we've been adding additional foundry capacity, machining capacity, coding capacity, we've added some assembly capacity. It's been almost a regular cadence of bringing additional capacity online. Really, fundamentally it all goes back to one of two scenarios. Predominantly, it's about expan- sion and growth in our four-stroke engine pro- duction and then, secondly, it's just the success of any number of new products. Boating Industry: You mentioned the successful new products. What products have really stood out for Brunswick among the recent launches? SCHWABERO: We've had lots of new product, but it goes well beyond just the Mercury side. One of our three fundamental strategic pillars in the company is to have product leadership. That is really focused around two things: It's about keep- ing our product fresh and the average age of our product, but it's also about having the idea of hav- ing designs and products that are more intuitive. You've seen a lot of things on the refresh cycle where we're updating about 30 percent of our portfolio annually. You look on the Bayliner side, we're extending the Element. We've had great success with that. Sea Ray, it's been the SLX. We have the 350 and we've been bring- ing that down, many of those characteristics to the 25, 28, 31. [Boston] Whaler has been a real home run with all the new products coming out of there, most notably the 420. Then Mercury, the most recent things have been around the 350 and our 400 horsepower, but also under the intuitive design has been the Active Trim elements. Boating Industry: Brunswick has made several acquisitions over the last couple years, especially on the parts and accessories side with companies like Whale and Garelick. What is the strategy driving these and what makes an attractive acquisition target? SCHWABERO: We said back in 2014 that we wanted to grow our parts and accessories business by about $350 million over fi ve years and we said that we would do that by making acquisitions in the product area — and that would be whether we wanted to get into a new product category or have a greater presence in a product category that we're actually in. In the product category, we've done the acquisition of Whale and Garelick, doing things on water systems and seating. We also said we would do it in the case of distribution and that would be through either trying to get into different market segments or trying to grow geographically with our distribu- tion. There again we've done two. We did Bell Recreation — which had a good [mix] of about 50 percent marine, 50 percent RV and power sports, so gave us some entrée into other seg- ments — and then we bought BLA, which is the largest marine distribution company in Australia. We've done four deals in '14 and '15 and it's the expectation that we will be doing this growth over fi ve years. We think ... it helps us from the standpoint that it buffers us from a cyclicality standpoint in the overall marine industry, given the stabil- ity in parts and accessories, but the other thing is that with the kind of products and delivery metrics that we're able to do … we think it is a continued way to differentiate us from some of the competition. Boating Industry: How is the strong dollar affecting Brunswick and how are you trying to deal with that issue? SCHWABERO: The strength of the dollar has impacted our ability to export, there's no ques- tion about that, but given our overall manufac- turing strategy and our manufacturing base, we have a fair amount of our engines that are manu- factured outside of the U.S. and we are also man- ufacturing boats in Brazil, Europe, New Zealand, so we're in those markets and in those curren- cies with localized manufacturing. The ability to export has been hit a little bit with the strength of the dollar, but we're doing fi ne in the markets where we're manufacturing locally. Boating Industry: One of the top challenges facing the industry is trying to grow our customer base, reaching out to more Hispanics, more women, younger buyers. How is Brunswick trying to do that? SCHWABERO: I'm going to give you a couple dimensions to this. We start with something as fundamental as bringing more diversity to our company. In terms of the role of women in our organization today, Hispanics and other diverse groups … so one of the areas I think you'll see is [Brunswick] trying to bring more diversity to our own company to help us be more mindful of what's going with Millennials and different ethnic groups. From an industry perspective, it's really hav- ing some active participation in things like the Grow Boating initiative that goes across the entire industry. Boating Industry .com Read the full Q&A at

Articles in this issue

Links on this page

Archives of this issue

view archives of Boating Industry - July 2016