From vimrich Tue May 10 18:30:33 1994 Date: Tue, 10 May 94 18:30:32 -0400 From: vimrich (Vernon Imrich) To: vimrich Subject: boats Status: R FWD> By Matthew Gaylor BOAT MAKERS REHIRE WORKERS IN WAKE OF TAX REPEAL CHICAGO, May 6 /PRNewswire/ -- Boat manufacturing jobs are up 27% since repeal of the 10% excise tax on new boats, according to initial results of a survey by the National Marine Manufacturers Association (NMMA). Responding to questions about employment levels in the wake of the August 1993 repeal of the excise tax by Congress, boat builders reported significant gains in both sales and production jobs. NMMA president Jeff Napier said the job gains help prove a point in Washington, "Repealing the tax did what we said it would do. People are getting their jobs back." NMMA and its 1,600 member manufacturers led the marine industry in a three-year battle to eliminate the boat tax, telling Congress that repeal would help put production-line employees back to work. Coming on top of depressed sales in 1991, the excise tax triggered a record 70% drop in sales from 1988 levels for larger boats costing over $100,000. But the sale of smaller boats also bottomed out as consumer confusion about the tax kept nearly everybody out of the new boat market. As business dried up for suppliers and retailers too, the crisis rippled across the entire industry causing widespread layoffs and plant closings. In 1993, small boat manufacturers began to see an upturn with improvement in the economy, but big boat manufacturers did not experience notable gains until the luxury tax was eliminated late last year. David Slikkers, president of S2 Yachts in Holland, Mich., observed a substantial increase in big boat orders over the 60 to 90 days following repeal. S2's payroll, which topped nearly 800 in 1989 and fell to 270 by 1993, is now back up to 490. He estimates net sales of S2 boats, priced from $100,000 to $500,000, will be up 40 percent over last year. Bob Johnson, president of Island Packet Yachts based in Largo, Fla., reported a record backlog of orders for the company's line of cruising sailboats and a 35% expansion in production-related jobs since last fall. Johnson, who rehired a number of workers on unemployment, indicated that repeal of the luxury tax has "restored lost jobs and federal revenues, while playing a significant role in the company's market improvement." A similar story comes from Viking Yacht of New Greta, N.J. Producing 38- to 70-foot boats, the company's work force plummeted from 1,450 to a core group of 60 in 1992. They have recently rebuilt to about 400 workers and may go as high as 700 by the spring. Viking, like other builders, noted some problems finding skilled workers as many laid-off employees moved to other industries to find work. Other manufacturers have plenty of work for new employees, but acquired significant debt to stay afloat over recent years and still face financial constraints to expansion. NMMA plans to carry results of the job survey to Washington at its Annual Legislative Conference for industry members, May 9-11. "We need to make sure Congress understands the impact this tax has had on our industry so that something like this doesn't happen again," said Napier. Including general sessions with lawmakers and federal administrators, and one-on-one meetings with senators and representatives, the conference gives industry members an opportunity for personal involvement in the legislative process. Among those in Washington tracking the boating industry's recovery are Reps. David Bonior (D-Mich.) and Clay Shaw (R-Fla.), and Sens. John Breaux (D-La.), John Chafee (R-R.I.) and George Mitchell (D-Maine). With significant portions of their states' economies tied to boating, all were vocal opponents of the boat tax and key figures in gaining congressional support for its repeal. During a recent tour of boat plans in his state, Chafee told reporters that the luxury tax was a disaster. "It just proves that some taxes are clearly regressive, and don't produce revenue," he said. Chafee, like the others in Congress who worked to rid their constituents of the luxury tax, are enthusiastic about the job gains since repeal of the tax, and continue to help boat builders back on Capitol Hill. -0- 5/6/94 /CONTACT: Arlene Sloan of the National Marine Manufacturers Association, 312-836-4747/ CO: National Marine Manufacturers Association ST: Illinois IN: MAR SU: