Like a lot of you, I have the current pop radio hit, “Call Me Maybe” stuck in my head. What can I say? I have a 14-year-old daughter I adore and her music, for better or worse, eventually becomes my music.
But as happens with music that gets stuck in your head, it tends to attach itself to other things, current events and such, going on in your life. Then you mess up the lyrics.
So when the late-May news came that Baja by Fountain would resume production sometime in the next month or so, and that John Walker, a key member of American Marine Holdings management, was back in place at the former Fountain plant in Washington, N.C., it got me wondering about the future of Fountain and Donzi. They are, after all, still under the same roof and, like Baja, were once immensely popular high-performance powerboat brands.
Chances are, last time you checked all the brands and American Marine Holdings itself, the company that had them under its umbrella, they were rather hopelessly locked in litigation with First Capital LLC, which was suing them for $61 million. A Mediated Settlement Agreement, sealed by the North Carolina Business Court in late May, opened the doors for the possibility of resumed production.
“I’ve been asked to take charge of putting together a plan for reintroduction of the brands into the marketplace,” said Walker, who headed the boat companies before American Marine Holdings left in October 2011. “We are going to start with Baja right where we left off, because we know there is some pretty decent interest in that brand.
“We are assessing the situation with Pro-Line, Donzi, and Fountain,” he continued. “We’re in the early stages of figuring out what has happened since we left in October, and putting a plan together. Right now, we’re just trying to wrap our arms around what we have. When we left, we had a bunch of orders for Fountain, Donzi, and Pro-Line. Do we still have those orders? They were not building boats under the receiver. Do we still have dealers? Who are those dealers? We have a different backlog than we did in October. So there is a fair amount of work to do in putting together a strategy and a game plan for where we are today.”
As it happened, when I interviewed Walker the song “Call Me Maybe” was still bouncing around my skull and it became “Just Say Maybe.” And there you go.
Why does reviving Baja seem like such an easy, slam-dunk decision, and the same move for Donzi and Fountain hang in the balance? Simple—there is a modest demand for new single-engine production-built, entry-level sportboats, and Baja clearly fills that bill. A new 23-foot Baja Outlaw will carry a base retail sticker of around $80,000, while a base 26-footer will run about $96,000. For those unfamiliar with the high-performance powerboat world, those prices are on the low-end of scale.
But the demand for new twin-engine production-built performance boats from $200,000 to $500,000, the realm of Donzi and Fountain, is not so clear-cut. In fact, that’s exactly what Walker—a savvy guy who’s spent his entire adult life building boats, most notably with Pro-Line (another brand in which the fate rests in his hands)—needs to figure out before a Donzi and Fountain revival can even start, if it is to start at all. And it could end up being a “one or the other” decision.
When the high-performance V-bottom market tanked four years ago, there was enough—and there still is enough—used product in the pipeline to fill the sharply decreased demand for go-fast boats in the $200,000 to $500,000 range. Some buyers who could afford new product at higher prices but would have purchased models from Donzi or Fountain went to custom builders such as Cigarette Racing Team and Outerlimits. Others chose not to buy at all.
To make Walker’s decisions even harder, the financing picture remains bleak for new sportboats that cost more than $100,000. And where that hits the hardest is the $200,000 to $500,000 range, as buyers who spend more than that typically don’t finance their purchases and buyers who spend less typically either can finance them or, ironically like buyers at the highest end of the market, don’t need to.
Plus, there’s one more decision-making challenge Walker and his team face. Neither the Donzi nor the Fountain lines have introduced a new model in several years. “What’s selling these days are either used boats or new models,” said Scott Sjogren of Pier 57 Marine in Waukegan, Ill. “That’s just how the market is now.”
Walker and company face what has to be one of the most difficult decisions in the history of the high-performance powerboat industry. They hold the fate of two once-venerable brands in their hands, and at this point they have not reached a decision. For the immediate future, like the revised words from a song blasting at full volume inside my head, it’s a “Just Say Maybe” call.