What is the Fairline situation?

[crustysailor321]

I haven't really followed this story until now, so if this is old news, my apologies. But I heard Fairline's CEO got fired, and he was the third CEO to be fired in 3 years. Seems like each CEO can't last very long there. Which brings me to the question, what exactly is going on at Fairline? They are not about to go "Sealine" are they? All this constantly changing CEOs sure don't inspire confidence, either their HR department has done a really lousy job to hire the wrong candidates or there is something more serious that Fairline management don't want their potential buyers to know.

 

[jfm]

I haven't really followed this story until now, so if this is old news, my apologies. But I heard Fairline's CEO got fired, and he was the third CEO to be fired in 3 years. Seems like each CEO can't last very long there. Which brings me to the question, what exactly is going on at Fairline? They are not about to go "Sealine" are they? All this constantly changing CEOs sure don't inspire confidence, either their HR department has done a really lousy job to hire the wrong candidates or there is something more serious that Fairline management don't want their potential buyers to know.

Sealine's problem, very sadly, was that they were not cash generative/profitable at the operating company level. That unfortunately is terminal, as the events showed. Fairline in contrast makes cash at the operating level, and so the only people potentially disappointed are the financial investors. but that never affect sthe survival and continuation of any company: so long as the business is profitable at the operating level, it wont be closed/liquidated. Exact same applies/applied at Ferretti (in Candover ownership), Sunseeker (in current ownership), Oyster+ Canados (both in Balmoral ownership), Bavaria (in Bain ownership) and Fairline (in previous 3i ownership) to name but a few of the many "shirt losing" episodes in boat manufacture ownership - but crucially all those companies are still going and aren't going to fold.

So as I say, as long as the business is profitable at the operating level it will survive. There is no problem on that score at Fairline, and I speak as someone who has twice been an unsecured creditor to the tune of about £1.5m in recent years, in the form of stage payments before delivery.

Of course it would be nice to see some fresh investment etc (new models etc etc) at Fairline, so I'm not at all saying everything is perfect but I understand they are on the case with that.

Everyone, whether their preference is Fairline or another competing brand, should want Fairline to prosper. Apart from the important British manufacturing aspect and ~1,000 employees, we as customers need competitive tension to create technological advancement and pricing sense. For customers who like the British brands, you do not want just 2 major players in the <24m segment in the form of Sunseeker and Princess. You need at least three. There is tons of evidence to tell you that.

HR departments don't hire CEOs, seriously, and "fired" is not a fair description of Kevin Gaskell's departure imho

 

[petem]

HR departments don't hire CEOs, seriously, and "fired" is not a fair description of Kevin Gaskell's departure imho

It was Gaskell himself who stated that he was 'fired'.

See http://www.ybw.com/forums/showthread.php?409978-Kevin-Gaskell-(CEO)-leaves-Fairline.

 

[Andy Bav]

Sealine's problem, very sadly, was that they were not cash generative/profitable at the operating company level. That unfortunately is terminal, as the events showed. Fairline in contrast makes cash at the operating level, and so the only people potentially disappointed are the financial investors. but that never affect sthe survival and continuation of any company: so long as the business is profitable at the operating level, it wont be closed/liquidated. Exact same applies/applied at Ferretti (in Candover ownership), Sunseeker (in current ownership), Oyster+ Canados (both in Balmoral ownership), Bavaria (in Bain ownership) and Fairline (in previous 3i ownership) to name but a few of the many "shirt losing" episodes in boat manufacture ownership - but crucially all those companies are still going and aren't going to fold.

So as I say, as long as the business is profitable at the operating level it will survive. There is no problem on that score at Fairline, and I speak as someone who has twice been an unsecured creditor to the tune of about £1.5m in recent years, in the form of stage payments before delivery.

Of course it would be nice to see some fresh investment etc (new models etc etc) at Fairline, so I'm not at all saying everything is perfect but I understand they are on the case with that.

Everyone, whether their preference is Fairline or another competing brand, should want Fairline to prosper. Apart from the important British manufacturing aspect and ~1,000 employees, we as customers need competitive tension to create technological advancement and pricing sense. For customers who like the British brands, you do not want just 2 major players in the <24m segment in the form of Sunseeker and Princess. You need at least three. There is tons of evidence to tell you that.

HR departments don't hire CEOs, seriously, and "fired" is not a fair description of Kevin Gaskell's departure imho

Not going to disagree with anything you say JFM. Cash is king.

All I would say that is that from an outsiders point of view, and on the face of it, 3 CEOs in as many years is a red flag ...

 

[boatboat]

http://www.mby.com/news/fairline-shadow-s-london-boat-show/

 

[crustysailor321]

Of course it would be nice to see some fresh investment etc (new models etc etc) at Fairline, so I'm not at all saying everything is perfect but I understand they are on the case with that.

Everyone, whether their preference is Fairline or another competing brand, should want Fairline to prosper. Apart from the important British manufacturing aspect and ~1,000 employees, we as customers need competitive tension to create technological advancement and pricing sense. For customers who like the British brands, you do not want just 2 major players in the <24m segment in the form of Sunseeker and Princess. You need at least three. There is tons of evidence to tell you that.

HR departments don't hire CEOs, seriously, and "fired" is not a fair description of Kevin Gaskell's departure imho

Well, I don't recall saying I want Fairline to fail. And I agree, I certainly don't want it to happen, as you say, we need competition to ensure sunseeker and princess remain on their toes. So I hope you are right, and Fairline isn't in any danger for the moment.

Still, as Andy said, so many frequent changes at the top does raise questions. Let's hope it is just internal politics or disagreement over direction of the firm, and not something wrong with the viability of the firm.

 

[jfm]

All I would say that is that from an outsiders point of view, and on the face of it, 3 CEOs in as many years is a red flag ...

Yep, I see that - I agree. I'm a long time Man City season ticket holder so a change of management monthly does feel such a shock to me though . Premier league champions dontcha know

 

[jfm]

It was Gaskell himself who stated that he was 'fired'.

I know Pete, but come on. There was a disagreement.

 

[admillington]

Very odd first ever post on the forum - of all the things to talk about!

I haven't really followed this story until now, so if this is old news, my apologies. But I heard Fairline's CEO got fired, and he was the third CEO to be fired in 3 years. Seems like each CEO can't last very long there. Which brings me to the question, what exactly is going on at Fairline? They are not about to go "Sealine" are they? All this constantly changing CEOs sure don't inspire confidence, either their HR department has done a really lousy job to hire the wrong candidates or there is something more serious that Fairline management don't want their potential buyers to know.

 

[crustysailor321]

Very odd first ever post on the forum - of all the things to talk about!

Sorry, I didn't realize there were boating topics I'm not allowed to discussed in my first post?

 

[MapisM]

Very odd first ever post on the forum - of all the things to talk about!

+1. And I wouldn't be surprised if it'll be also the last....

 

[Deleted User YDKXO]

Yep, I see that - I agree. I'm a long time Man City season ticket holder so a change of management monthly does feel such a shock to me though . Premier league champions dontcha know

Try being a supporter of a club that's had 4 managers this season already and are still in the Championship play off positions Managers and I guess by definition, CEOs, are much overrated. According to this book http://www.amazon.co.uk/The-Numbers-Game-Everything-Football/dp/0670922242 managers can only influence about 15% of the result of any game and I guess thats the same for boatbuilding companies. Excellent book btw for anyone interested in football and with a basic understanding of statistics

 

[lanerboy]

I'm a long time Man City season ticket holder

John I always thought you were a very sensible guy but I suppose we all have at least one down fall

seriously though I would hate to see anything happen to Fairline one because I own a Fairline and as stated I think it would be trouble if we only had 2 major players in the uk boat building market lets hope they done go the same way as Sealine I for one don't think they will

True though it was a strange 1st post for the op when there is so much other stuff on here

LB

 

[rafiki_]

As others have said in the past, Fairlines main problem is their location. They cannot build bigger than the 78 at the moment, as it is the largest boat they can carry to Ipswich to launch. Princess and Sunseeker do not have this constraint, hence they continue to build ever bigger boats.

 

[beejay190]

Crustysailor321.

Welcome to the Forum. Please don't be put off by some of the critisicm of the subject matter of this, your first post. You did actually make an apology in your opening sentence.

Have a great Merry Christmas and a wonderful 2015 season afloat

 

[BartW]

As others have said in the past, Fairlines main problem is their location. They cannot build bigger than the 78 at the moment, as it is the largest boat they can carry to Ipswich to launch. Princess and Sunseeker do not have this constraint, hence they continue to build ever bigger boats.

Raf, you're probably right about location, but I've alway's been intrigued how we boatowners do our "armshair management " (me included)
while there are some clever and specialised Guy's paid to do that ;-)

last winter I visited the Monte Carlo Yacht factory in Monfalcone, and the MD mr F.i. gave us a tour there,
I was abosolutely inpressed with there new and modern approach to MY building right in the segment where Fairline is,
never ever have seen a similar thing here on this forum,
and I'm convinced that MCY is probably the biggest growing and most proffitabel company in this segment and in this challenging economic climate (stand to be corrected)
and that is what should happen IMO, thinking out of the box, and consider MY building from a completely different approach,

I prepared a thread at that time a report after my visit, but I didn't post it because I dind't have pics (where not allowed to make them)
might find the tekst on my computer if someone 's interested.

 

[crustysailor321]

Crustysailor321.

Welcome to the Forum. Please don't be put off by some of the critisicm of the subject matter of this, your first post. You did actually make an apology in your opening sentence.

Have a great Merry Christmas and a wonderful 2015 season afloat

Thanks very much, and I wish you have a wonderful Christmas as well.

I don't understand why some posters find this topic odd. I've been living away from the UK for many years and it if I want to buy a boat here, it is only natural that I inquire about the financial well-being of a boat builder whose boats I am considering. I don't want to purchase a boat from them only to end up seeing them go under before they can deliver it. So I just want some make sure Fairline is not in that kind of situation. And honesty, you can't blame me for wondering if they have such frequent changes of CEOs.

 

[martinriches]

Very odd first ever post on the forum - of all the things to talk about!

Well he no doubt posted on something he is interested in,which is what we all do.


Martin

 

[rbcoomer]

As others have said in the past, Fairlines main problem is their location. They cannot build bigger than the 78 at the moment, as it is the largest boat they can carry to Ipswich to launch. Princess and Sunseeker do not have this constraint, hence they continue to build ever bigger boats.

This seems to come up regularly, but I don't get that argument. If all the cars on the road were Range Rovers and Landcruisers because all the makers of smaller vehicles couldn't make money then I could believe it, but surely there will always be a bigger market for <78 than >78? On that basis, they simply need to be much better in the existing markets than the other two to maximise their share. They're all above my budget, but from my own impressions at SIBS etc, they do - the quality and finish stand up very well to the other two.

Many luxury car makers went through the phase where they thought they must offer an SUV, but Ferrari didn't and are still here! It sometimes seems that the big corporates think they have to offer something for every segment of a market just to please investors, but in reality success often comes from simply doing things better rather than bigger

 

[rafiki_]

Y

This seems to come up regularly, but I don't get that argument. If all the cars on the road were Range Rovers and Landcruisers because all the makers of smaller vehicles couldn't make money then I could believe it, but surely there will always be a bigger market for <78 than >78? On that basis, they simply need to be much better in the existing markets than the other two to maximise their share. They're all above my budget, but from my own impressions at SIBS etc, they do - the quality and finish stand up very well to the other two.

Many luxury car makers went through the phase where they thought they must offer an SUV, but Ferrari didn't and are still here! It sometimes seems that the big corporates think they have to offer something for every segment of a market just to please investors, but in reality success often comes from simply doing things better rather than bigger

Actually very few manufacturers of small cars make a decent return. Look at the dire straights in Europe of Renault, PSA, Fist, Ford, Opel etc, all losing shed loads of money, despite generally making decent cars. You have to have serious volumes in the small category to make a return, unless you are Dacia, which is making money on very basic product built off old Renualt platforms. JLR and Porsche are the most profitable car companies at the moment, with the majority of revenue and profit from the SUV's. Ferrari is a different business, max 7,000 units per year (or they were under Luca Montezemola). Marchione will try and push the volumes up, and we will see if this works for Ferrari. Maserati and Lambo are venturing into the SUV arena soon, as are Bentley. Aston would if they could afford the product development costs. In summary it is quite difficult to analogise marine for vehicle as costs and volumes are on different planets, although we all like to do so as most of us understand the auto industry better than marine (well I do anyway ).
Fairline would not identify themselves in the volume category, they are premium, alongside Prin/SS in the UK and several Italian builders. Bart points to MC Yachts as a progressive we'll run business. I cannot comment as I don't know their products. However Fairline can only look on as SS and Princess build bigger and higher margin products, as they are land locked.