Yacht Sales Slow Down As Millionaires Scale Back...

There's a statement in the story that has me a little confused. One person said "For the next four years, our order book is pretty full,". That may be right now, but these guys had better be prepared for the potential that some of the buyers may default due to the source of their future payments (ie stock market, economy, etc) drying up. Yes there is money out there, and those with it are being cautious. But others who may have been on the edge may be falling off. I do hope the orders remain viable, but the situation is hurting everyone, of every economic class. I heard second hand that the charter business in the Caribbean this winter is tough also; many yachts remaining at the docks due to no bookings.
The other thought is if these builders chase the $$$ to Saudia Arabia and Dubai now, they may alienate domestic and western European buyers. It's a balancing act.
Best to everyone.

PS Carl, Thanks for being honest and sharing the impact YF is seeing due to the economy.

The comment of being booked full for the next four years comes from the Lurssen shipyard in Germany and is effected very little by our economy. Lurssen is booked with a lot of orders from the Middle East. Remember with economies, the money doesn't disappear it just changes hands and changes countries. It's still out there, just in different locations and different people.

With the way oil prices have been the last couple years, it basically drained all of the worlds economies such as North America, Europe and South America and transferred much of that money (extra billions $$$) to oil producing areas such as the middle east and Venezuela.

Hi,

Here you go again with half baked statements.

It's not just the US Economy that is hurting, what started in the US spread like cancer amongst most financial institutions in the world, the effects are now being felt globally.

Lurssen and the other European Yards are no more magically exempt from the current economic situation than any other builder of this league/pedigree.

There has recently been one of the largest boats under construction at Lurssens change hands as the owner was not able to keep pace with the cost of things.

They also have at least 2 other 200 ft plus new builds where the clients would happily hand over their contractual obligations to another customer

Delta out in Seattle have taken over a 60m build for a European client who was not able to complete it himself.

Hi,

I didn't find this info till too late to add it to the post above.

http://www.ibinews.com/ibinews/newsdesk/20090009160646ibinews.html

Scroll down for a reasonably complete list of industry majors and see where their share price has gone in the last 52 weeks.

KIWI GROW UP, all you want to do is pick fights over nonsense. Are you sure you're not half-baked?

The article is based soley on THE US ECONOMY AND YACHTING INDUSTRY. If you would like to talk about any other economy it really belongs in another thread. I'm quite aware that most of the economies in the world are in trouble if you read what I wrote. Did you not read the second paragraph of what I wrote???????????

The story is speaking about OUR economy here in the US, not anywhere else in the world. The newspaper is based in FORT LAUDERDALE, FLORIDA. I was making a statement that Luurssen is interviewed and claims they have orders for the next 4 years. I made the statement that OUR economy has little to do with them considering the article is OUR ECONOMY AND THE YACHT INDUSTRY.

You've got a habit of blowing up at anybody who challenges your half-baked and uninformed proclamations. It's really distasteful and has driven people back into lurking mode from contributing mode.

That said, Germany does not exist in a vacuum. OUR ECONOMY, as you wish to shout, has a lot to do with orders worldwide, as individuals, institutions, and the individuals who work at those institutions have investments in this country's companies - equity and debt - as well as in commodities and real estate here. Germany just provided an additional €10 Billion to keep Commerzbank afloat, a scant two months after providing it with €8.2 Billion (Forbes Magazine). Angela Merkel just announced the creation of the "Germany Fund" with up to €135 Billion in bailout funds to provide liquidity to businesses (Bloomberg). The Euro has been dropping like a rock against the dollar (Bloomberg) which affects every investor here who holds overseas investments. Despite the relative increase in buying power of our currency, the US, the largest single consumer market for european durable goods, is not buying because our unemployment is rising, incomes are dropping, and that particular negative feedback loop is self-propagating. UK banks, Spanish banks, and investment banks worldwide have had stakes in our mortgage backed securities, and as a result they have lost investor value or failed. that's OUR ECONOMY having more than a little to do with other nations.

As for orders coming from the middle east, that region is seeing a drop in oil prices (which translates to a drop in oil revenues) coupled with a steep decline in worldwide oil demand... driven primarily by the sudden and drastic drop in demand right here in our country. We're not buying SUVs, we're not driving the ones we have. We're not even buying cheaper items, as evidenced by dismal holiday sales receipts. Those goods are mostly produced overseas, and shipped here. China depends on our consumption to keep up their production. When we stop consuming, they have nowhere to sell their products... so they also stop consuming. One of the major things they stop consuming is oil, compounding the decline in demand, and corresponding decline in price. How can our economy "have little to do with" other nations' economies, when we are a net importer by huge amounts?

Alcoa is shedding 13,500 directly employed positions worldwide, as well as 1700 contractors. Caterpillar share price is down nearly 50% since April '08, and they're putting over 800 employees on "permanent layoff." That means that it's not just the US that isn't building (more than just yachts) but the whole world. Those layoffs affect our economy, but are caused by more than just our economy.

What's the point? What does that demonstrate?

No nation is its own island anymore. "OUR ECONOMY," whether you are intelligent enough to understand it or not, has a lot to do with the economies of many nations around the world... and likewise theirs, ours.

It's a World Wide phenomenon.

The old joke about the hurricane and the coconut tree springs to mind.

We are all in deep doodoo.

Even the star of the Middle East "Dubai" is not imune...
http://www.marketwatch.com/news/sto...85-D4ED-489E-BBAE-7FE226413B9C}&dist=morenews

This quote applies to several (no names). In fact I'm sure most of us have been guilty of being a little to impressed with ourselves from time to time. We do the Forum and its members a disservice when it happens. Please keep in mind that the most informed, brilliant minds make mistakes and some brilliant insights have come from some uneducated and not to bright people. This is a new year. Let's educate, learn and amuse so as to invite more involvement.

Seafarer,

I have never personally insulted anyone or their statements and called them "half-baked". In my initial post of 2 paragraphs, my first paragraph talked directly about luurssen and the article regarding the US yacht economy and how it doesn't effect luurssen that much (considering most of their sales for the last 5 years have been middle eastern buyers). My second paragraph went on to talk about how other economies have been effected. It's pretty self explanatory. But anyone, that is going to call what I write half baked and write an epologue about the worlds economies when what I wrote spoke of that is not worthy of my respect. Here's is what I wrote and what he replied to:

The comment of being booked full for the next four years comes from the Lurssen shipyard in Germany and is effected very little by our economy. Lurssen is booked with a lot of orders from the Middle East. Remember with economies, the money doesn't disappear it just changes hands and changes countries. It's still out there, just in different locations and different people.

With the way oil prices have been the last couple years, it basically drained all of the worlds economies such as North America, Europe and South America and transferred much of that money (extra billions $$$) to oil producing areas such as the middle east and Venezuela.

What part of the preceeding posts was not clear enough. Please bring this stuff to a PM. I'd personally like to hear from more of the 162,000 readers not less. Who knows, a few of them might happen to say something we can learn from.

Hi,

I stand by what I wrote earlier.

Where does the identity of most of Lurssens clients of the last 5 yrs come from?

It's a pretty closely guarded secret so I am amazed that it is public knowledge that they are heavily booked with Middle Eastern Clients.

The economic blight that affects the world has it's source in the US Economy and the greed of man worldwide.

It is not just boat buyers in the US (Visitors to boat shows and residents alike) who are feeling the pinch today.

Mods- Edit what you like but think about this- What is better a lot of un substantiated statements or a drive for the facts?

Agreed.

Sometimes, though, it takes public scorn and ridicule to make the loud, obnoxious, know-it-all drunk at the end of the bar - the guy who's done more, seen more, knows more, and has a negative opinion about whatever anyone else has to say about anything and everything... the guy who makes everyone groan and roll their eyes whenever he opens his mouth - finally knock it off.

Now I've said my piece and that's enough.

Back to the subject at hand... when millionaires here stop consuming, millionaires abroad stop earning. When they stop earning, they similarly stop spending. Our economy has an indirect, yet marked, effect on economies and therefore luxury industries worldwide.

Actually, that's what they want because it makes them feel like they're important having gotten attention. Ignore them because their words are not worth listening to. As my long gone mother used to say "take things from their source".

Some where in this tread was the subject about the South Florida economy,, For some food for thought.. I was quite suprised to hear from people that I know that Directors in south FL had laid off quite a few poeple last week. Very suprising being that this should be the busiest and most needed time of the year right now. Reasons where said that that the boats are just not hiring the yard personel as much as they are hiring outside contractors. It did not seem like a good sign to me..

Hi,

It is not a good sign when anyone loses their job for whatever reason, the case you describe above may well have less to do with the economy and more to do with the work performed by the staff at the facility.

It could also be an excuse pushed out by management to avoid some of the costs of laying people off due to the current global economic situation.

Hi C4,
I didn't hear about the Derecktor's layoffs, but did hear that a number of yards are quieter than usual for this time of year. I would guess that major refits are being put off as discretionary cash is not available. No surprise that yards are cutting staff.
I attend networking events during the month and see a lot of crew around, with many of them lookking for work. So signs are pointing to an impact in the yachting biz on many levels.