Spectator — February 2002
Selecting a Custom Boat/Yacht Builder, Part I.
Mike Joyce is CEO of, among other enterprises, Hargrave Custom Yachts and Monte Fino Custom Yachts. Since meeting him in 1978, we've collaborated on many new construction projects. During the last Fort Lauderdale International Boat Show, we were having a nice buffet lunch Joyce had arranged for owners and clients at Bahia Mar. I was scarfing down a couple of roast beef on rye sandwiches when Joyce uttered two truths (numbers one and two below). As soon as I heard them, I tapped him on the knee and said, "That's an article!" Serendipity! Free lunch and two articles to boot. So I wish to thank Joyce, my office staff (Mike, Nick, George, Dave, and Wyatt), and others in the business (who shall remain anonymous) who have contributed to this article.
Some of you may get your shorts in a knot over what follows, but everything I write here has been gleaned from experience on the part of those in my office (with a collective 130 years in the business) and me, plus some of the big players in the motoryacht industry who I've come to know over the years. Everything I describe here has actually happened. Before you get upset and start writing snotty letters to the magazine, remember that truth is power. So read, learn, and hold the snotty letters. And remember, if any of the following items apply to your builder, it doesn't necessarily mean the firm is heading for trouble, but it does warrant careful investigation.
TWELVE SIGNS YOUR CUSTOM BUILDER MAY BE HEADING INTO TROUBLE
- The yard just signed a contract for its biggest boat ever. Time and time again in the industry, builders have gotten into big trouble building boats much larger than they've ever built before. Believe it or not, many reputable builders have started huge projects without really knowing what the vessels will even cost. Project lengths should increase in reasonable increments. For example, if the builder's largest launch is 120 feet, it will probably have no problem building a 130- or 135-footer. However, jumping to 180 feet could be big trouble. It's hard to believe that management would bet the future of the company on a huge megayacht, but the glory of such projects is often just too great to resist.
- The yard just moved into a new, state-of-the-art, multimillion-dollar facility. Builders who had perfectly adequate (although maybe a bit primitive) boat shops get all glassy-eyed about a huge, new facility with multiple overhead cranes, polished concrete floors, mega-lumen lighting, hot- and cold-running secretaries, and private offices for everybody including the sweeper. In their original facilities they put out excellent vessels with low overhead, but the exact same boats built in the new facility now cost the buyer 15 to 25 percent more.
- The yard is going to build the "fastest motoryacht in the world." Building the "fastest motoryacht" again involves a builder's quest for glory, and again, it is best that speeds increase in measured increments rather than quantum jumps. Fast yachts require a whole different construction philosophy using exotic materials and eat up more labor. High-speed motoryachts often involve jet propulsion and gas turbines. The builder should be familiar with, or seek outside help for, the propulsion systems proposed. The yard should never be learing on your project.
- The yard just bought a private jet or helicopter. No builder needs a private jet or helicopter. It is part of the glory thing again. If the yard has something special to offer, clients will find their way to the facility and do not need to be ferried around. Besides, clients with means will usually have their own private jets or helicopters. If the jet or `copter is needed primarily to shuttle the builder's repair crews around the country, this may indicate something in itself.
- The builder offers you a piece of the company before you sign the contract. Alarms bells and claxon horns! Abort! Abort!
- The company has recently been taken over by a successful businessman who knows nothing about building boats and, in fact, made his fortune in the brassiere business. This is the guy who figures that "business is business," and if he can run a successful brassiere company, he can apply the same "foundations" to boatbuilding and also do well. Sometimes it works, but usually it doesn't.
- Management is full of nonboating land lubbers. Most guys get into the boatbuilders business because they simply love boats. Once outside MBA types or lawyers get involved, it becomes just another business.
- When you go through the yard, workers are swarming all over your boat like diligent ants, but when you look at other boats under construction, nobody is working on them. You can bet your sweet transom that as soon as you leave the facility, guys will be off your boat and working on another in preparation for that owner's visit. The old switcharoo.
- Personnel turnover is faster than that of the the local pizza joint. No mystery here. The employees know something you don't and are seeking greener pastures.
- The principal of the yard has an unlisted phone number.
- The principal of the yard is driving a '66 Buick, but after you sign a contract, he buys an $80,000 Benz.
- The yard owner is also the owner of a recently launched boat. Believe me, this is usually not a case of "I liked it so much I bought the company." It is more likely, "In order to get my boat, I had to buy the company."
Next month I will explore more signs that your custom builder may be headed into trouble. ➤ It is important to note that hundreds of custom boats are delivered each year to happy owners, and honest, capable boatbuilders can be found worldwide. Nevertheless, it is important to involve a good liar--er, lawyer who knows the marine industry at contract signing time. In the end it is usually pure stupidity or greed on the part of the buyer that leads him (or her) to an unqualified builder.
This article originally appeared in the February 2002 issue of Power & Motoryacht magazine.