Page 19: of Maritime Reporter Magazine (February 1993)

Broward Marine's 105-foot Dasyatis, powered by two Detroit Diesel engines, was delivered in 1992.

MEGAYACHTS

U.S. Yacht Builders Believe Luxury Tax Repeal, Foreign Sales To Fuel Prosperous 1993

If it's true that adversity builds strength, then major U.S. megayacht builders should be the Samson of U.S. industry.

Faced in recent years with a reces- sion, a 10 percent luxury tax and increased competition from domes- tic and abroad, yacht builders have survived a barrage of negatives and are collectively looking for a turn- around in 1993.

At press time it was learned by

MR/EN that on the first day of the 103 Congress, a bill to repeal the 10 percent luxury tax was introduced by Rep. Clay Shaw (R-Fla.), joined by Reps. Ben Cardin (D-Md.) and

David Bonior (D-Mich.). The three

Congressmen were also champions of boat luxury tax repeal in the 102nd

Congress.

Meanwhile, U.S. yacht builders have kept the faith by concentrating on refits and repairs, on wooing for- eign customers and keeping domes- tic customers on the line, and on lobbying for the repeal of the luxury tax. One yard which boosted its refit business in '92 to pick up construc- tion slack was Trinity Yachts. "There has (in the past year) been a strong interest in refits, whether

February, 1993 because of ownership changes or because of owners looking for up- grades," said William S. Smith III, head of yacht sales, Trinity Yachts, citing the company's recent refits of the 250-foot Golden Odyssey and the 192-foot October Rose. "In the past year, we had quite a bit more volume in refit than in new con- struction." But Mr. Smith, and many of his colleagues and competi- tors alike, believe the imminent re- peal of the luxury tax will boost business across the board. "The luxury tax has devastated the 50- to 100-foot yacht market, and as long as it has the chance of being repealed, the buyers are freez- ing up, taking a wait and see atti- tude," said Mr. Smith. "We have inquiries for many large yachts, but it's really hard to predict (with the status of the luxury tax) and consid- ering these yachts are non-essential items."

The Trinity Marine Group-Alu- minum Boats, Inc. facility, kept busy in 1992 with the delivery of the 100- foot Lima, a Caterpillar-propelled catamaran yacht/party vessel. De- livered in September 1992, the boat features Mathers engine controls,

Char-Lynn steering controls and an

Allied 600 gallon per day reverse osmosis water maker. Electronics equipment includes: Sailor VHF ra- dios; Furuno radar, loran and auto- pilot; and a Danforth compass.

Along with refit business, increas- ingly U.S. yards have looked abroad for business. Palmer Johnson did both in 1992.

According to Mike Kelsey, chair- man of the 75-year-old Palmer John- son, the company opened a refit and service yard in Savannah, Ga., a yard which employs over 100 people and can service boats up to 200 feet long. In 1992 Palmer Johnson also delivered four yachts, ranging in size from 80- to 116-feet. "We were very fortunate and busy, but all of our business was over- seas," Mr. Kelsey said. When asked if the foreign only business was by choice or design, Mr. Kelsey re- sponded, "We are in a funny busi- ness, we take what the defense gives us, using a football analogy. The luxury tax has killed domestic busi- ness; it's not that people can't pay the tax, they won't." "We have been real fortunate, and 21

Admiral Marine Works has developed a process to build fully-detailed, one-off female molds.