Oyster Yachts gone into administration

maby said:
Most of the big names have gone bust - or come close to it - over the last few years. There are two ways to make a million pounds - sell one item for a million, or sell a hundred items at £10,000 each - manufacturers like Oyster are in the first group; Beneteau, Bavaria etc are in the second. If the market takes a bit of a downturn for an Oyster, their quantum of lost revenue is much larger than it is for BenJenBav.
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Can't see how that is related to disputes with customers, nor the post I was responding to.

I do agree though that boatbuilding is a volatile business, particularly having been involved in it personally. Long time in the past and learned quickly to do something else for a living!
 
dom said:
Looking at Oyster's promotional video of its flagship 118, the entire process seems inefficient.
https://www.youtube.com/watch?time_continue=3&v=IHJOR2UIfiI

And it's not simply a function of size; the German Meyer Werft shipyard lies in stark contrast to these techniques. There's that old hangar Oyster have tried to convert, the specialist tooling and climate control systems which must be fitted for a small run, a large slop and bucket labour force, many of who will inevitably be left standing around for large periods, the use of transportation barges and heavy cranes to bring bits of the hull together, before yet another transfer back to Southampton for fitting.

And all presented by an achingly self-satisfied CEO, seemingly oblivious to the inefficiency of it all.

All of the ingredients are ostensibly present for inadequate budgeting, poor quality control, iffy cash-flow management and lousy cost control. How on earth could the engineers and accountants figure out that morass of fixed and floating costs ex-ante?

The problem might boil down to weak and unpredictable gross- and net-margins, far more dangerous than a one-off £7m hit. Worst of all, the problems were potentially magnified by Oyster's relatively recent decision to rapidly move up the size and price spectrum into a world where lawyers stand ready to pounce on any mistake.
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You make a case suggesting that the business was out of control, possibly due to a change of business plan regarding subcontracting some activities.
Building a boat at Oyster prices is not necessarily about doing it 'efficiently', sometimes more about doing it right. I suspect the labour of laying up the hull is not a big fraction of the contract price. Laminators don't get rockstar money.
It is a bit of a culture shock for some of us who get things made in very controlled processes, often highly automated, sometimes in 'cleanrooms' so clean I'm not allowed in!

Another possibile factor is that currencies have been all over the place in the past 24 months.
 
pandroid said:
Is that 118 actually finished, or has that gone down as well?
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Don't know, there doesn't seem to be anything on t'interweb. Oyster would normally have done press releases for the launch, etc. I imagine there's a mightily pissed-off multi-millionaire somewhere...
 
pvb said:
Don't know, there doesn't seem to be anything on t'interweb. Oyster would normally have done press releases for the launch, etc. I imagine there's a mightily pissed-off multi-millionaire somewhere...
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It was supposed to be finished late 2017 for commissioning and delivery immediately after, as it happens the same question had crossed my mind and I can't find anything. It must be virtually finished probably with an outstanding payment if it has not been delivered already. Perhaps their is some outstanding work required but you would imagine in that case the administrators would be keen to get it off their hands but I can imagine the owner wanting a discount as their can be no recourse to warranty work.
 
I think it is highy likely that the part finished boats will be finished by the administrators. They will protect suppliers and workers so that this can happen and final payments can be taken.
 
Seven Spades said:
I think it is highy likely that the part finished boats will be finished by the administrators. They will protect suppliers and workers so that this can happen and final payments can be taken.
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As I understand it the manufacturing company is not in administration - it is the company that holds the rights to the designs. Staff have been laid off by the company, so there is nobody to finish the boats. Of course as things develop this is likely to change and as discussed earlier in this thread some entity will be formed to complete the boats. this could be anything from an administrator appointed to the manufacturing company to a consortium of owners/buyers to another builder contracted by the owners. Difficult to say at this point without knowing who owns the part complete boats.
 
Interesting to see that the inside cover of the March (!) issue of Seahorsehttps://seahorsemagazine.com/ magazine features a full-page advertisement for Oyster:
OCEAN ADVENTURES. Our yachts have completed more than 20 million bluewater sailing miles. With 45 years of British craftsmanship and the security of worldwide aftersales support, with your Oyster you can sail anywhere in luxury and with confidence. Two exciting new models for delivery 2019, call for more information.
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Presumably the advert was designed and composed quite some time ago, with the publishing schedule prepaid. Still, it's difficult to escape the conclusion that Oyster's left hand didn't know what the right hand was doing.
 
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lw395 said:
You make a case suggesting that the business was out of control, possibly due to a change of business plan regarding subcontracting some activities.
Building a boat at Oyster prices is not necessarily about doing it 'efficiently', sometimes more about doing it right. I suspect the labour of laying up the hull is not a big fraction of the contract price. Laminators don't get rockstar money.
It is a bit of a culture shock for some of us who get things made in very controlled processes, often highly automated, sometimes in 'cleanrooms' so clean I'm not allowed in!

Another possibile factor is that currencies have been all over the place in the past 24 months.
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'Making a case' is prob a bit strong, shooting the breeze more likely!

Re your FX point, now that's interesting. Prima facie an exporter like Oyster shld have gained from a STG fall to the extent that secured contracts were not hedged, and yet a well known UK business recently took a whack by being so clever with these FX hedges that some knocked-out at predefined strikes and other 'premium reducing derivatives' were activated at terrible levels. Even so, this wld be a one-off loss, and while irritating wld not necessarily be the end of the world.

I suspect therefore that we are facing a binary decision (BTW Oyster is now on the block, so anyone who does know will be NDA'd)

(a) Wiggle the productive assets -- assuming gross/net margins, etc. all stack up -- out of the current financial structure and new-Oyster carries on in some form.

(b) The End
 
dunedin said:
Apparently blaming the subcontractor, in particular, does not create any brand trust ...
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Worse than that. If they'd said "We have found a design error in the 825 which applies only to that model" owners of other Oysters could relax. Saying "the bottom fell off because it was badly made by the same people who made your boat" does not engender quite the same relief.
 
JumbleDuck said:
Worse than that. If they'd said "We have found a design error in the 825 which applies only to that model" owners of other Oysters could relax. Saying "the bottom fell off because it was badly made by the same people who made your boat" does not engender quite the same relief.
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Pretty sure the owners of other Oyster boats are sufficiently astute to understand the difference between the design and construction of their boat compared with the one that failed. After all most people who have that kind of money to spare for one of them are not stupid.

So, while this saga will inevitably have some affect on their future activities it is unlikely to have any effect on either the desirability or value of the other designs going back 30 odd years.
 
Tranona said:
Pretty sure the owners of other Oyster boats are sufficiently astute to understand the difference between the design and construction of their boat compared with the one that failed.
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That is precisely my point. If the error was in the design, only the three owners of surviving 825s need to worry. If the error was in the construction, every Oyster owner has to worry because if Polina Star was laid up badly by two blokes in a shed, their prides and joy could have been laid up equally badly by the same two blokes in the same shed.
 
JumbleDuck said:
That is precisely my point. If the error was in the design, only the three owners of surviving 825s need to worry. If the error was in the construction, every Oyster owner has to worry because if Polina Star was laid up badly by two blokes in a shed, their prides and joy could have been laid up equally badly by the same two blokes in the same shed.
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The report in YW referred to above (and the earlier Russian one) identified more or less what the problem was. The 825 was the first Oyster design to use this method (not sure about other new designs) and the other 3 boats were modified in detail. So, none of this affects earlier boats which are of more conventional (for the time) design and construction.

Anecdotal evidence (I know somebody who works with Oyster on other parts of the boat) suggests that there was some concern about the radical departure in the design and potential for errors. However there is nothing particularly new about the design principles of the grid structure, just its application in such a big boat from a yard that had a reputation for "traditional" hull construction.
 
Tranona said:
The report in YW referred to above (and the earlier Russian one) identified more or less what the problem was. The 825 was the first Oyster design to use this method (not sure about other new designs) and the other 3 boats were modified in detail. So, none of this affects earlier boats which are of more conventional (for the time) design and construction.

Anecdotal evidence (I know somebody who works with Oyster on other parts of the boat) suggests that there was some concern about the radical departure in the design and potential for errors. However there is nothing particularly new about the design principles of the grid structure, just its application in such a big boat from a yard that had a reputation for "traditional" hull construction.
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In which case, whatever was going those the minds of the management if they somehow thought they could pin the blame for it on "the two blokes in the shed"?
 
Walther said:
Interesting to see that the inside cover of the March (!) issue of Seahorse magazine features a full-page advertisement for Oyster:Presumably the advert was designed and composed quite some time ago, with the publishing schedule prepaid. Still, it's difficult to escape the conclusion that Oyster's left hand didn't know what the right hand was doing.
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I am sure the right and left had did know that is was doing, but not told by the board that it was game over. Why would the board indicate that things were not going well, markets get upset when the gossip starts.

When I work in the accountancy field we often would do things out of sight of staff, customers and suppliers and then bang it would happen. All about protecting somebodies assets.
 
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