part 2: Northern Marine 90' Yacht Capsizes Upon Launch...!

Well, remember Nordhavn doesn't build just for the US market and they can build in China and deliver to Europe cheaper than one could from the US. I also think at that time they were comparing to inefficient US builders. And, they were not looking to invest in the plant but have someone else do that. I can get a boat built in China with the money of others building the factory. In the US I would have to build it myself.

A US facility must be very efficient to compete, very modern. Think of someone like Boeing. Now translate all those production methods to boats. The typical boat builder over history hasn't been that efficient. Now if you're going to be inefficient with your labor in particular then paying less to employees makes a huge difference.

Shipping/freight is always a balancing factor and that is shipping of both raw materials and finished product. Another point is that boat manufacturing is not labor intensive. It's not like apparel where the labor is the great majority of the cost and the materials a minimal part.

Note that when you look at the boat market as a whole, a small percentage of the manufacturing is done in the Far East. Look at small boats and the vast majority of those are built in the local areas. Pick a 19' Sea Ray. You could never justify building it anywhere but fairly locally where you can truck it to the buyer. But then when it comes to larger boats. Who are the largest yacht builders? Depending on how you define large, they're in the Netherlands, the UK, Italy and the US. Netherlands and Germany for Mega Yachts but then beyond that your largest builders are Azimut-Benetti, Ferretti, Sanlorenzo, Sunseeker, and Westport. Last I looked neither the Netherlands, Italy, or the UK had cheap labor. Now, make a note that two of those five are owned by Chinese companies. That's the greatest available Capital market today.

Others and I did a study of the possibility of moving a Far East boat builder to the US a couple of years ago. This was a company that sells the vast majority of their boats in the US. It's also one with a very inefficient operation where it is. With that scenario we could have reduced the costs delivered to the US customer and we would have concentrated on the US market. Now it would have required a very sizable expenditure to build the right facility and to acquire the company. Lead times could have been reduced very significantly and we think sales increased dramatically. As it turns out, while some of the owners wanted desperately to sell, the majority refused.

The closest I ve been to a nordhavn is towing a fairly recent 60 footer thru nassau harbor a couple of months ago after the owners called a mayday due to a wing engine electrical fire leaving the dead in the water and drifting toward an incoming cruise ship... Owners got the small fire under control and boat suffers nearly no damage but I ve go to wonder about quality control...

Just when you think a thread is gone;
Was wondering;
Did the soon to be owner ever make a statement? or any comments lately?
Or is it still to soon (& in court).

The boat purchaser will never make a statement. He's tried to keep his name out of the public eye. Ultimately, he will end up with some amount of insurance money, some sizable loss, and walking away with a lot of bad memories. He had already decided to sell the boat, long given up on actually owning it.

As to the rest of it, you're talking a liquidation through bankruptcy court, but no assets really to be distributed. There haven't been any new court filings since October.

Whether the name of Northern Marine will be revived is still to be determined. Rumor was Bud had found another buyer (or sucker). How many times can one company go in and out of business? Honestly, I think they've just run their course.

The current registered agent for New World is a bankruptcy, debt collection, guardianship attorney.

Meanwhile the Northern Marine website hasn't been touched.

Understood.
Thx,
rc

NTSB Accident Report

http://www.ntsb.gov/investigations/AccidentReports/Reports/MAB1514.pdf

The owners come from a yacht brokerage background and timed the transition from sail to power perfectly. They were never hands on builders but commissioners of designs (Al Mason for sail) and then became in-house designers and commissioners. Building in SoCal is a venture that only a few could do successfully during this era (Cabo and Navigator) , as the EPA has driven off this industry, which typically has very little to no access to expensive waterfront property. Remote desert building is not for everyone, not as rewarding as back east when you can actually float and test a boat on your own facility's property. The amount of product they have moved over the years is a tremendous success story. But look at the business side they have selected to operate - marketing/design/commissioning/deliver/warranty. It is a much cleaner side of building boats, no EPA permits and rules required overseas, no fiberglass on your daily work clothes, no OSHA labor requirements, no need to manage hundreds of employees and the associated headaches of human resources, etc.

They did have the 40' Nordhavn built in the states for a brief period of time, but the business model did not work. I do believe that they could be built in the states for nearly equivalent prices, especially somewhere like North Carolina, but who would really want to leave Dana Point and the lifestyle associated with it? As far as quality, I would say there is no difference in the top tier Asian yards, it really comes done to how they are managed by those who commission from them.

The latest post is off course. No one has yet to comment on the incredible NTSB report that Olderboater posted. Maybe because everyone is speechless although not surprised. Lots of prior surmising, suppositions, speculating, and theorizing. Thanks for posting! There's an unbelievable amount of information in the report and numerous lessons to be learned.

Well, it clearly shows how screwed up things were for the entire build. New World had no engineer. Andy had turned into owner, designer, captain and then was out several months ill. The project manager on the owner's side was removed, by his accounts for his concern over potential stability issues based on the outside engineering report, no one was checking work so you had critical stability measurements entered wrong, The owner actually had three representatives during the course of the build with the last one being the brokerage that was charged with the task of selling the boat if it ever was finished, since the owner had long ago gotten disgusted with the entire fiasco and had no desire to own it.

Again, there was no naval architect designing the boat, just internal staff. Note the external engineering firm also had very limited scope. Their role was to review data and comment only on stability. They had no other role.

They don't even have the launch centered on the ramp, but they felt they'd reached the the point of no return when the boat started tilting on the ramp so better to proceed than let it turn over on the ramp.

I noticed that you not only had ballast not secured but appliances and other items. No reason for that, which contradicts their statement of no rush because they were ahead of schedule. No reason not to have appliances and furnishings secure nor any not to have temporarily secured the ballast in some way. Of course if all in the world was fine you don't immediately close after the failed launch. Assuming it was adequately insured it changed nothing other than available immediate work.

Then the final slap in the entire process is that with this boat as they had done with others, New World got it back inside their facilities and it was impossible to then weigh it due to then going straight into receivership. So, that precluded gathering the final information/evidence.

One other item overlooked as New World told them they'd launched similar boats the same way. None of that had been recent and they had also previously used other facilities on the island that had proper lifts. The only reason not to this time was financial. They also repeatedly noted that the cradle did not use bow constraints to hold the front and assist in keeping a boat from tilting, a fairly easy thing to design. Also, no stability analysis done on the incline of the launch.

The owner and security manager talked after the event of their engineer having checked everything and their designer. Well, the facts are that the engineer left early in the project. The consulting architect/designer who stepped in while the owner was out also left prior to the launch. The understatement of the year, "breakdown in the technical oversight of the
design and build process."

The projected weight of the boat went from 130 LT at a 6'5" draft to 154.1 LT at a 7'2" draft. That's an 18.5% increase. That tells you clearly there is a disconnect. The Ballast was overstated as 23 LT when it was really 16.61 LT, a 28% difference.

Everyone knew things were out of control and there were problems. You've got another boat locked up in a shed due to litigation with no work done on it in a year. This boat schedule got later and later. Key people walking off the job or being terminated. Honestly, if he actually collects the insurance for a total loss, this is the best possible outcome for the buyer of the boat.

The other positive in all this is no one was badly hurt or killed and the boat never took to the water to put lives at danger. This disaster of a boat was put out of it's misery.

And the lesson to be learned is to research and check out your builder very carefully, not taking the recommendation of a commission earning broker as your only research. It's also to look at recent activity, not old history, especially when the history was done under other ownership. And it's to know who really owns what and what the financial condition of the builder is. Then it's to have your expert on site and choose him carefully, not just a captain. Have a naval architect involved in the entire process. And when things start falling completely apart, don't just let things go deeper and deeper hoping somehow it will work out in the end. I guess the last thing may be the hardest. Know both the ability and the integrity of the person you're dealing with. The owner was the President prior to the previous bankruptcy under different ownership.

Go to the facility yourself, walk the grounds, ask questions, find out who is getting the other boats built and how they feel about things. And seek local knowledge. Walk or drive the island and talk to people. Talk to other yards or builders. There was a lot of available information including rumors (not necessarily rumors) that the company was for sale. In fact one entity claimed to have an option to buy.

Most people getting boats of this size built are businessmen. Handle the process just like you handle business. Don't be blinded by the beauty of your imagined boat, but make wise business decisions. I know the buyer of this boat is a very good businessman as is the buyer of the previous boat that ended up in litigation. But they didn't make wise business decisions. If you own a business and a vendor building equipment for you says he needs a loan to continue even though you've made your progress payments. He'll apply it in the future. You don't just hand him a check. You require full disclosure or you don't do it. In a situation like New World evolved to a some buyers have just ended up owning the company to get their boat finished. If I was going to make a loan to get my boat finished I'd get the stock of the company as collateral.

It's not rocket science. None of the information I had was difficult to get. Same with Christensen. If I was getting a boat built, I'd have that type information before starting. It's called "due diligence" and I guess that's really all I'm saying is do due diligence and then manage the process.

Like most catastrophes, this one had many parts.

1. Sending the wrong information to the off site engineer regarding distribution of weight, resulting in an 8,000# error, heavy to port.
2. Not knowing how much ballast was actually on the vessel, and sending the wrong data to the engineer, resulting in amplification of problem #1.
3. The results of 1 & 2 was an incorrect statement from the engineer that stability was sufficient for launch.
4. Inability of the dolly to secure the bow during launch, resulting in complete reliance on stern buoyancy which complicated launch stability further.
5. Refusal by launch crew to stop and take a deep breath when the boat unexpectently listed to port when partially launched. Concerns about the effects of a receding tide was the motivator here with the decision made to 'just go for it.'.
6. Failure to center the dolly on the ramp, which probably didn't matter given all the other eff ups involved.
7. Refusal by launch crew to stop and take a deep breath when it was clear the vessel was resting on the port stabilizer and think about what the list would be once that support was inevitably removed.
8. Decision on the part of the launch captain to get the vessel off the dolly in the "hopes" that once fully in the water the port list would be corrected by gunning her in reverse.
9. A builder in financial trouble resulting in poor supervision and no ownership by a single master for a successful build and launch.

This report describes a real tragedy, but like many such, a completely avoidable tragedy.

One other item overlooked as New World told them they'd launched similar boats the same way.

The 80-foot mold was lengthened in the midsection and stem, the bow was given more flare, and a swim platform was added. The resulting 85-foot vessel was designated Northern Marine model 8501 and was the first of its kind.

They also heard a bang during launch. That should had been a big red flag.
Front dolly tire had not gone flat yet.

Could of been all that loose ballast and nobody looked?

Are there not construction bonds available for the completion of large yacht projects?

The problem with construction bonds for boat building in the US is that the builders you could get a bond on are not the ones who need it.

Let's see...you want a $10 million bond on New World.

Let's see your income statement.
Losses
Your balance sheet
Negative net worth
Do you own the property you're on?
We don't. We're renting.
You do own the name Northern Yachts though?
No, we're leasing it.
Well, then you own the equipment?
Some leased and the rest is financed.

Thanks OB, you learn something new every day on this forum thanks to folks like you!!!

And the businessman who went to contract with Northern Marine had his own responsibility. I doubt very much he only approached one yard to do a build.
He does deserve a lot of sympathy, yet he very likely went for the best price, the best deal and thought he could handle any shortfalls in a company with a shady reputation by controlling the money.
When the Project Manager is let go because of his concerns, the engineering firms concerns regarding stability ignored and no naval architect? Did this save money?
Blinded by the thought he knew better.
As OB stated, at least no lives were lost.

I don't believe the owner had anything to do directly with the project manager being let go. By that time the boat was being built for resell and the brokerage that started the entire thing was handling things.

As to how he got into the situation, probably too little due diligence on his part and too much trust in those brokering the deal. It's not surprising how quickly the brokerage talked about themselves as just brokers when everything fell apart (or sideways) but that's not what they tout on their website where they talk about wealth of knowledge on construction and advising on every step of the process.

The first question to ask a builder might be: How many lawsuits have been filed against the company and/or the principals? Ask, then verify. The real answer might be a shortcut to eliminating subsequent questions. What's the cliche of history repeating itself?

Interesting report for sure, mistake after mistake, all the holes in the Swiss cheese lined up...
Perhaps the launch-roll saved lifes: If that tub went to sea and encountered serious weather, it could have been game over with a roll straight to the bottom.