Recreational products manufacturer Brunswick (NYSE:BC) announced that it will consolidate its yacht and motor yacht production facilities in a bid to save between $3 million and $5 million annually beginning in 2014.
Brunswick will suspend manufacturing at its Sykes Creek boat manufacturing facility in Merritt Island, Fla., at the end of June, and transfer production to its Palm Coast, Fla., manufacturing plant. The Sykes Creek plant manufactures Sea Ray and Meridian yachts and motor yachts from 51 to 61 feet in length, and employs approximately 205 people in manufacturing. For employees interested and able to relocate or commute, Brunswick will provide them the opportunity to help transition production to Palm Coast or to other company manufacturing facilities.
"Difficult as it was, this action was a necessary step to match capacity with market demand, position Sea Ray for success with new yacht product development programs, and work toward our near-term operational and financial objectives," said Brunswick Chairman and CEO Dusty McCoy.
Brunswick believes its post-consolidation manufacturing footprint will retain capacity to compete in a market in excess of 2.5 times current worldwide demand for yachts and motor yachts. It expects restructuring and impairment charges of $6 million to $8 million to be recognized in 2013 as a result of the move.