Fairline Sold

[Hugin]

Found this on Boating Business: Sad to say but it looks like the last few nails in the coffin. I also noticed yesterday reading MBY's article about LBS 2016 that it has NOT been confirmed Fairline will be at LBS in January.
Who will pick up the brand name and assets for fire sale prices?

FAIRLINE: Following the Better Capital sale of Fairline to Wessex Bristol, most of the workforce was laid off on the lowest wages possible.
Now, however, BB understands the workforce is to be called in tomorrow (Wednesday) to be made redundant.
However, those required for the new business relationship will be employed on new contracts.
We understand the company has seven boats that are being worked on by a staff of around 50 people.
But completion of these hulls is difficult because most of the supply chain has put the company on stop, so it can’t get the materials and fittings necessary to finish the boats.

http://www.boatingbusiness.com/news101/industry-news/fairline-redundancies-ahead

 

[petem]

I read that article this morning but didn't post it because a) there was no attribution and b) it sounded factually incorrect.

Even if it is true then then at least it doesn't look like the company is being closed. What Fairline don't need, I imagine, is a load of negative speculation.

 

[halcyon]

I dont think it is Henry. IMHO what it means is that the mid market is too competitive and those companies based in countries with high labour costs cannot compete against companies based in lower labour cost countries, at least for the volumes that they can manufacture. Above 60-70ft, there are fewer competitors with low labour costs so the manufacturers with high labour costs stand a chance of making a profit in this sector. Also of course, in this sector customers are less price sensitive and more brand and quality sensitive

If there is a future in the mid market for Fairline, they will probably have to look at outsourcing the more labour intensive parts of the manufacturing process eg hull moulding

Why ? 20 years ago Sealine turned out a 360 flybridge every 11 days, 410 flybridge in 14 days and the 450 not that much longer.

It is just production engineering that makes the difference, one thing that has been lost in this country.

Brian

 

[jfm]

Brian, those numbers reflect speed of build AND degree of overlap on the production line. They did not make those boats start to finish in those 11 or 14 day periods.

 

[halcyon]

Brian, those numbers reflect speed of build AND degree of overlap on the production line. They did not make those boats start to finish in those 11 or 14 day periods.

You are overlapping, building next hull while assembling the previous, same with test/rectification overlap build of following boat, but that's production engineering. Found my copy of Jan 95 build list last year, 360S/088 hull went through rectification 12.01.95, boat was due completion 31.01.95 on pool test 06.02.95 so less than a month in total.

The record was fitting out a 450S in 2 1/2 days from bare hull.

It's all down to work methods and staff, worked with all the UK, well nearly all, on switch panels and electrical power, most companies lacked production skills for volume production.

Brian

 

[Deleted User YDKXO]

Found this on Boating Business: Sad to say but it looks like the last few nails in the coffin.

The story about laying off workers temporarily always was window dressing and I don't think its a surprise that these workers will now be made redundant. I presume that normal employment regulations had to be followed. More worrying is the reference to most of the supply chain putting the company on stop which means that Fairline aren't paying invoices any faster under WB than they were under Better and this is a show stopper. If Fairline can't get components or have to pay up front for them on a piecemeal basis, production will grind to a halt.

Who will pick up the brand name and assets for fire sale prices?

This seems to be the way that WB makes money

 

[burgundyben]

test/rectification overlap build of following boat, but that's production engineering.

If they fully embraced world class production engineering there wouldn't have been a rectification stage and that would have reduced cost.

 

[oceanfroggie]

Only catching up on this thread now as have been largely off forums for many months. Sad news but perhaps not surprising to hear of any high end luxury goods manufacturers in trouble after such a recession. Surprising all the big manufacturers are not in serious strife given the sales nose dive since 2009. Even before Lehman bros, skilled labour costs in developed economies just could not compete with the Far Eastern economies, nor even Eastern Europe. The future may be sales and service facilities in Europe with manufacturing in low labour cost economies well over the horizon.

 

[Deleted User YDKXO]

Surprising all the big manufacturers are not in serious strife given the sales nose dive since 2009. .

They are. Most of the large boat manufacturers in the UK and Italy are losing money. Its simply a case of whether the owners can sustain those losses until either the market improves or the overheads of the business are adjusted to the new market reality. In Fairline's case, the owners were not prepared to wait

 

[MapisM]

Found my copy of Jan 95 build list last year, 360S/088 hull went through rectification 12.01.95, boat was due completion 31.01.95 on pool test 06.02.95 so less than a month in total.

The record was fitting out a 450S in 2 1/2 days from bare hull.

Very impressive numbers indeed.
If you can/want tell us more about your experience back in those days, I for one would read that with interest.

 

[MapisM]

Its simply a case of whether the owners can sustain those losses until...

Yep, but it's not just that, it's also a matter of alternatives.
A major bug of capitalism (possibly the bigger/worse from a macroeconomic perspective, imho) is that - depending on the circumstances - the shareholders can find ways to make more money out of a company disintegration, compared to business continuance.
And particularly when the shareholders are just financial investors, they couldn't care less of any other element that could (or SHOULD, if business ethics would matter just a tiny little wee bit) be included in such evaluation, and simply go for whatever leave more money in their pockets... :ambivalence:

 

[JumbleDuck]

If they fully embraced world class production engineering there wouldn't have been a rectification stage and that would have reduced cost.

The long thread here about the building of a Fairline was fascinating for the staggering inefficiency it revealed. It seems to be endemic to the British boat building industry - the PBO series on the first Cornish Crabber 26 showed that things were just as bad there. Sure, it's nice to have some hand crafted stuff, but turning your nose up at 50 years of production engineering improvements is not a recipe for success.

 

[jrudge]

The Squadron 65 line and Squadron 78 line had / has a capacity of 12 boats a year. At any time there are I believe from my visits 4 boats in build on each line ( orders permitting) which would give an average start to end time of 3 months. The 65 line was at full capacity and the 78 line I believe was not far off ( June 2014). The majority of the 65s were sold via Boats.co.uk

 

[Deleted User YDKXO]

A major bug of capitalism (possibly the bigger/worse from a macroeconomic perspective, imho) is that - depending on the circumstances - the shareholders can find ways to make more money out of a company disintegration, compared to business continuance.

Yes but that is the fundamental basis of capitalism. The money should always go to the place where the return is the greatest with due regard, of course, to legislation on employment rights, environmental concerns etc etc. I don't want to drift this thread but in a nutshell there, you've encapsulated the difference between European capitalism and Anglo Saxon capitalism

Personally I cannot criticise Better for selling Fairline in principle. If they concluded that their money was better invested elsewhere then, harsh as it sounds, it was the right thing to do for them and for the UK economy

 

[MapisM]

it was the right thing to do for them and for the UK economy

This is the key point, M: of course it was the right thing to do for them, if by "right" we just mean whatever allows them to cumulate more money.

But it's more difficult to judge what is right for a Country in macroeconomic terms.
Let's assume that those folks, after drying out all the FL resources and assets, leaving people jobless etc., will decide to invest everything they earned from that transaction (more than likely tax free) in a condom factory in the People's Republic, 'cause ATM that's what grants them the best ROI. What's in it for the UK economy?!?
Mind, having known a few of these folks, I guess they could argue that being able to buy imported condoms at a lower price is good news also for UK citizens... :ambivalence:
...but I'm sure you'll agree that it ain't such great news for the UK economy!

 

[Deleted User YDKXO]

But it's more difficult to judge what is right for a Country in macroeconomic terms.
Let's assume that those folks, after drying out all the FL resources and assets, leaving people jobless etc., will decide to invest everything they earned from that transaction (more than likely tax free) in a condom factory in the People's Republic, 'cause ATM that's what grants them the best ROI. What's in it for the UK economy?!?
Mind, having known a few of these folks, I guess they could argue that being able to buy imported condoms at a lower price is good news also for UK citizens... :ambivalence:
...but I'm sure you'll agree that it ain't such great news for the UK economy!

Yeah, yeah, I meant reinvest the money in the UK economy obviously

 

[admillington]

I think we should be more worried about our seven boating comrades who have ordered boats and paid deposits and are waiting for their new pride and joys to arrive - assuming that it was true that Fairline had shifted to a build to order policy.

So much of a boat comes from outside suppliers - every door handle, light, toilet, water pump, switch, hinge let alone all the big items - Engines, Generators etc. And if you are on stop with your suppliers then no matter how many staff you have, if there is nothing to fit it is going to be slow.

 

[petem]

It's old news that Fairline have had weekly payment terms with suppliers. I see no real evidence that anything has changed or that these boats won't be completed.

What surprises me is that there are only 7 boats in build. I know that a fair few were sold at SIBS and F'line have exhibited at at least three international shows since then.

 

[nicho]

The story about laying off workers temporarily always was window dressing and I don't think its a surprise that these workers will now be made redundant. I presume that normal employment regulations had to be followed. More worrying is the reference to most of the supply chain putting the company on stop which means that Fairline aren't paying invoices any faster under WB than they were under Better and this is a show stopper. If Fairline can't get components or have to pay up front for them on a piecemeal basis, production will grind to a halt.


This seems to be the way that WB makes money

Last year, my stepson, the Finance Director of a large plastics company, was approached by Fairline to supply goods (mouldings?) He looked at their finances, and declined.

 

[Nigelpickin]

It's old news that Fairline have had weekly payment terms with suppliers. I see no real evidence that anything has changed or that these boats won't be completed.

What surprises me is that there are only 7 boats in build. I know that a fair few were sold at SIBS and F'line have exhibited at at least three international shows since then.

I imagine that a 'sale' @ SIBS is not penned in to the order book, especially given the timing of the ownership change...if I'd had a 5k deposit down and heard the news, I think that I would have walked away from anything other than a stock boat and perhaps even then.