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Indiana boats.

Pick a fishing boat, pontoon, runabout, deckboat, "cigarette" boat or 36-foot cruiser. There's an Indiana-made boat for you.

Many of Indiana's boat-building companies are independent and decades-old. Several started in other businesses before entering boat building in the 1950s or 1960s, when boat manufacturing presented great growth opportunities. Indiana's boat-building companies tend to be family-owned and -operated, and their success can be attributed in part to staying within the boat market niches in which they started.

"We have some old, established boat companies in Indiana," says Pete Gillon, sales manager at Harris-Kayot in Fort Wayne. "The niches have always been there--they didn't have to go after a niche. They stayed in a niche and perfected a niche."

Indiana's independent pleasure-boat builders include Harris- Kayot, Godfrey Marine in Elkhart, GW Invader in Tipton, Rinker Boat in Syracuse, Smoker Craft/Sylvan in New Paris and Thunderbird in Decatur.

The Indiana company that builds the largest boats is Thunderbird Products. It builds cruisers up to 36 feet long, as well as the speedy off-shore performance boats commonly known as "cigarette boats," says Vic Porter, chairman and chief executive officer.

Porter was a fiberglass pioneer, founding Duo Inc. in 1958 in Decatur to build runabouts. Starcraft acquired Duo in 1966 and Porter stayed on for a time. He eventually founded Signa Corp. in 1970 to build trihull boats in Decatur, the seat of Adams County, south of Fort Wayne. Three years later, Duo was sold to Fuqua Industries, an Atlanta-based conglomerate.

Fuqua hired Porter to be president of its entire small-boat division, and in 1976, Porter bought Thunderbird, including the Formula product line, from Fuqua. Now, Thunderbird builds cruisers and performance boats at its 5-year-old plant in Decatur.

Since the late 1950s, fiberglass has replaced wood as the material used for building runabouts, the relatively small boats used for pulling water-skiers, cruisers and yachts. Runabouts and mid-sized-cruisers are manufactured by Rinker Boat Co. in Syracuse, a family-owned company founded in 1945 in Noblesville. Originally a builder of wooden boats, Rinker made the move into fiberglass about 1960, says general manager Kim Slocum.

Later, the Rinker family moved the company to the Lake Wawasee resort area in northern Kosciusko County. From its location in Syracuse, Rinker Boat can test its smaller boats on nearby inland lakes, and its larger watercraft on Lake Michigan or Lake Erie.

What's more, Michigan is the top boat-buying state, and because Rinker is situated only 30 miles south of the Indiana-Michigan border, it is better able to stay in close contact with much of its retail dealer network. "Michigan is our No. 1 state for sales," Slocum says. "Dealers like to buy boats from manufacturers within a 500-mile range of their locations."

One Indiana company competing against Rinker in some segments is GW Invader, which moved manufacturing in February from Sharpsville to Tipton. GW Invader was founded in 1964, and was bought in 1985 by Roger Harmon, who was an executive at General Motor's Delco Electronics operation in Kokomo before entering the boat industry.

Rinker builds runabouts and cruisers ranging from 17 feet to 30 feet long, while GW Invader builds runabouts in the 17-to-20- foot range. GW Invader and Rinker also participate in the fiberglass-deckboat segment, and GW Invader recently reintroduced its 10-foot, two-seat runabout, which will compete against jet-skis, Harmon says.

Smoker Craft/Sylvan, primarily a manufacturer of aluminum fishing and pontoon boats, bought Elkhart-based Sun Chaser in 1991 to enter the fiberglass deckboat segment of the market, says Doug Smoker, vice president. The history of Smoker Craft/Sylvan actually is a story about the successful business ventures of two Elkhart County families: the Smokers and the Schrocks.

The Smoker and Schrock families operated companies in the Goshen area that were in different businesses, except for the brief time they were boat-industry competitors. In 1975, they merged their boat-building companies.

"From a manufacturing standpoint, you can't tell a Sylvan from a Smoker," Smoker says during an interview in his office at the combined company's 450-employee complex in New Paris, a village five miles south of Goshen. "But they have distinct dealer networks, and there are differences in the floor plans and appearances of Sylvan and Smoker boats."

Shortly after the turn of the century, Arthur Schrock co- founded Starcraft Tank to make metal feed-holding tanks for livestock. Starcraft Tank then moved into the manufacture of pontoon boats.

The Schrock family sold Starcraft in 1969. It was eventually split into three pieces, including a boat operation in Topeka in Lagrange County owned by Illinois-based Brunswick Corp.

Meanwhile, the Smokers went into business in 1921 making wood parts for Studebaker wagons. Later, they branched into lumber retailing, homebuilding, boat oar and paddle manufacturing, and, after World War II, construction of mobile homes. In 1963, Chet and Byron Smoker, now vice president and co-founder of Smoker Craft/Sylvan, bought Mitchell Boat, a small aluminum- boat builder in Elkhart.

After selling Starcraft, the Schrocks were out of the boat industry for only a relatively short time. They re-entered when Harold Schrock, now the chairman of Smoker Craft/Sylvan, bought Sylvan Pontoons in the early 1970s. When Smoker Craft and Sylvan merged in 1975, "The Smoker line was exclusively fishing boats while Sylvan had built pontoons since 1947," Doug Smoker says.

Godfrey Marine, a company formally known as Godfrey Conveyor, traces its roots back to the turn of the century. Originally, the Elkhart company built mechanized systems for unloading coal from railroad cars. In 1953, Sherrill Deputy--father of Robert Deputy, the president of Godfrey Marine--bought Godfrey Conveyor.

"Godfrey Conveyor was a very small business and we wanted a counter-seasonal business to complement our materials-handling business," Robert Deputy says. So the decision was made in 1958 to enter the aluminum-pontoon-boat business. "We were a pioneer because, until that time, it was all steel pontoons." Quickly, it was a case of "the tail wagging the dog," because Godfrey's boat business outgrew the company's materials-handling operations, Deputy says.

Since 1958, Godfrey Marine has grown steadily, both internally and through the 1969 acquisition of the Aqua Patio Boat Co. of Sturgis, Mich., and the 1975 purchase of Hurricane Boat Co. in Ashly, a town north of Fort Wayne. Godfrey Marine entered the fiberglass-deckboat segment through its acquisition of Hurricane, Deputy notes. Now, all of Godfrey Marine's manufacturing takes place in Elkhart, where it employs around 260 people.

Fort Wayne's Harris-Kayot has a similar history. The company was founded in 1957 as an aluminum-pontoon-boat maker, and it entered the fiberglass-deckboat segment through its 1983 purchase of the Kayot Boat Co. in Minnesota, Gillon says.

Although aluminum and fiberglass boats both float, they represent significantly different segments of the boat industry. That explains why fiberglass-boat builders have followed different evolutionary paths than the makers of aluminum boats. While aluminum boats are used by fishermen and, in the case of pontoons, families seeking leisurely cruises along rivers and on inland lakes, fiberglass boats cover a broader spectrum.

Godfrey, Harris-Kayot and Smoker Craft/Sylvan all extended into fiberglass deckboats because they are used for the same purposes as aluminum pontoons. The only difference is deckboats can travel fast enough to pull a skier.

The popularity of pontoons and deckboats should continue to grow as the Baby Boom generation ages and looks for affordable family-oriented recreation.

"I think 15-to-20 percent annual growth is realistic for Smoker Craft/Sylvan during the remainder of the 1990s," Smoker says. "I think we will continue to grow. Every time you look around here we're opening a new building."

"Godfrey Marine grew a bunch in 1992," Deputy says. "If you have what the buyer wants, you won't participate in a recession. It's not a head-long rush, but the trend towards family-oriented boats will continue. We figure we'll grow as much in 1993 as we did in 1992."

Although it participates in a different industry segment, Rinker Boat also had a successful 1992, largely due to the growth of its export business, Slocum says. "Twenty percent of our business is exports, mostly to Europe," he says. "Last year was our best year ever."

The federal luxury tax on boats selling for $100,000 and above didn't affect Rinker, because its boats retail for $9,000 to $75,000. "The 18-to-21-foot runabout is the bread-and-butter of our business," Slocum says. "But our 26-foot cruiser is a big part of our business. We ship a lot of them to Europe for use on the Mediterranean."

As a builder of larger cruisers and performance boats, Thunderbird Products was "impacted tremendously" by the luxury tax, Porter says. "Due to the luxury tax and recession, our business was off a little over 40 percent. But since July, our retail has been up 13.8 percent and we're looking to maintain that, or go up to 15-to-18-percent growth in calendar 1993. The luxury tax forced us into small boats to get under $100,000."

Porter believes Congress, with support from the Clinton administration, will repeal the luxury tax. The additional revenue it raised was more than offset by the decrease in marine-industry employment.

Many in the industry believe a strategy used by two giant marine-engine builders also caused some of the industry's problems. Skokie, Ill.-based Brunswick Corp. and Waukegan, Ill.-based Outboard Marine Corp. both purchased Indiana recreational-boat companies in the northern part of the state during the late 1980s. Industry insiders say Brunswick and OMC bought boat companies to guarantee a market for their engines and to keep foreign marine-engine manufacturers, particularly Japanese companies, from gaining dominance in the U.S. recreational-boating market.

In Indiana, Brunswick bought Starcraft in Topeka and also operates a plant in nearby Nappanee. Brunswick manufactures its Fisher, Monarch, Spectrum and Starcraft brands in its Northern Indiana facilities.

OMC bought Sea Nymph in Syracuse and Chris-Craft, a Florida- based independent. It built a new plant in Elkhart in 1989 to build Suncruiser aluminum pontoon boats, and reopened Chris- Craft's Goshen plant, which Chris-Craft had closed temporarily during financial difficulties.

Because of the sizable financial losses Brunswick and OMC incurred in the early 1990s--due largely to their acquisitions of boat-builders--it's generally believed that the recreational-boat industry's era of consolidation is over, except for larger independents buying small independents.

In what might be considered a surprise, Brunswick and OMC are not favoring their boat-building subsidiaries over the independents when it comes to selling engines. Consequently, the independent boat-builders are not worried much anymore about their industry becoming like the auto industry, where a small number of companies control the entire market.

"When Brunswick and OMC were engine companies, they could do what they wanted in dealing with boat-builders," Smoker says. "They had a rigid approach to selling because you have to have an engine. But they've come a long way from that."

Basically, Brunswick, OMC and the other marine-engine manufacturers want to stay on good terms with the independent boat builders, because the independents are important customers, Smoker says. Without sales to independents, Brunswick and OMC engine-assembly plants would have excess capacity, he says.

Brunswick and OMC also learned there are too many independent boat-builders for them to buy, Slocum says. "You can't buy all of your customers to control their buying strategies. Their vertical-integration strategy backfired on them."

The boating public benefits greatly from the continued existence of many independent boat-builders, Deputy concludes. "Consumers better hope the Smoker/Sylvans, Rinkers, Harris- Kayots and Godreys stay around," he says. "Independent boat builders are what's keeping prices reasonable."
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Title Annotation:Indiana's boat-building industry
Author:Kurowski, Jeff
Publication:Indiana Business Magazine
Article Type:Cover Story
Date:Mar 1, 1993
Previous Article:Rowland Associates.
Next Article:Indiana's dream homes.

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