The jet boat manufacturing industry has been caught in the wake of rising fuel prices and the nation's flailing economy.
The economic downturn has slowed jet boat sales and caused two large manufacturers in the Lewiston-Clarkston Valley to lay off employees. ThunderJet in Clarkston laid off about 40 employees but has already rehired 10 of them. Renaissance Marine Group, also in Clarkston, laid off 22 workers.
Darrell Mills, president and chief executive officer of ThunderJet, said many of the other laid-off employees will be rehired when the economy rebounds and orders from dealers pick up.
"We are planning on hiring them all back little by little as we beef things back up a bit," he said.
The company is going forward with expansion plans and is working on a 15,000-square-foot addition to its operation on Bridge Street despite soft sales.
Mills speculated dealers reduced their normal orders after fuel prices climbed above $4 a gallon and the financial markets took a tumble because of the home lending crisis. But he sees signs of a turnaround and is now waiting for dealers to place orders for the 2009 model year.
"For us, hopefully, it is all in the past," he said. "We see a bright future. We have a special market. About 40 percent of our boats go into Canada, and the Canadian market hasn't been hit as hard as the U.S. market.
Bruce Larson, director of administration, finance and marketing for Renaissance Marine Group, said the bad economy has led people to be a bit more thrifty with their money. It has also made credit more difficult to come by. Renaissance builds Duckworth, Weldcraft and Columbia welded aluminum boats.
"The general economy has a huge impact on it. Some of the specific, obvious culprits are the high fuel costs and the mortgage market," Mills said. "A lot of the money being used for recreational purposes has not completely dried up, but they have definitely gotten tighter because the second mortgage market has taken a hit."
Mills did say the boating industry in the Northwest and the market for large welded aluminum boats is doing much better than markets in other parts of the country that tend to be dominated more by fiberglass boats. He's heard some estimates by industry insiders that the market for boats could remain soft through next year.
"It could be the spring of 2010 before the recreational marine market really starts to breathe some new life."
Boat makers will soon get an indication of how consumers and their dealers are feeling about the economy. The 2008 model year is drawing to a close and dealers are poised to order products for boat shows in early 2009.
Bryce Barnes, general manager of Custom Weld Boats in Lewiston, said the industry has seen the price for materials used to build welded aluminum boats soar in the last year. Costs for things like engines, cables, wire and aluminum have all risen dramatically.
"It's all-time-high prices. That is a savage cycle right there."
Custom Weld has not laid off any of its employees, but Barnes said the market has been soft of late.
"We see our slowdown in dealers that would usually have more boats on order than they do right now."
He said Custom Weld has weathered the storm by aggressively going after buyers and picking quality dealers.
"It's tough," he said. "We just have to work harder. You just have to be aggressive and go and get it and have a good attitude and give A-plus and you'll get it."
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Barker may be contacted at ebarker@lmtribune.com or at (208) 848-2273.
