The real McCoy – ‘Dusty' lays it on the line

by Bob Wonders on 25 May 2010 If any one ever doubted the ferocity of the global financial crisis and its effect on the boasting industry, they would need only to speak with Dustan ‘Dusty' McCoy, Chairman and CEO of industry behemoth the Brunswick Corporation, parent company of, among others, Mercury Marine.

‘Dusty' is on his fourth visit to Australia, a venue he rates as one of his favourite destinations.

I was privileged to catch up with ‘Dusty', as he prefers to be known, when John Temple, director and general manager, Brunswick Asia-Pacific, hosted a cocktail party for a select group of dealers during the Sanctuary Cove International Boat Show.

Although ‘Dusty' left the audience in no doubt as to the severe battering the industry took, he assured dealers that 'we have already turned the corner towards better times.'

In a one-on-one chat with ‘Dusty', I was left with one indelible impression – in Dustan ‘Dusty' McCoy, Brunswick has the right man in the right job!

He recalled that Brunswick saw the financial downturn's beginning as early as the fourth quarter of 2005.

'That was the beginning of much worse to come,' he said.'The real damage hit us in mid-2008 and we had no alternative but to take drastic action.

'We shut down 15 manufacturing plants across the United States, which related to a 60 percent reduction in the company's workforce. Sadly, that equated to a loss of about 10,000 jobs.

'And I'm not saying that's the end of plant closures,' he added.

Brunswick Corporation owns the real estate involving the closed plant and all are up for sale.

'We have already sold four,' ‘Dusty' added.

No where was the effect of the financial crisis more evident than in Brunswick boat sales.

'In 2006 we produced and sold 300,000 boats,' ‘Dusty' said. 'In 2009 that figure was halved to 150,000 boats.
'What's more, I expect the total for 2010 will be smaller again.'

‘Dusty' does not see 2010 as signalling the end of the ‘troubled times. 'I think the turn around is more likely to occur in 2011,' he said.

While much of what ‘Dusty' had to say may have appeared ‘doom and gloom', he was able to provide a feeling of confidence to his dealers as far as the future is concerned.

'We certainly experienced pain through the global financial crisis, but we will come through it and we will emerge stronger then before,' he declared.

'Our dealers are extremely important to us and will be looked after to the maximum degree.'

To the credit of its leadership, Brunswick's key management people all took a 20 percent pay cut and have forgone any thought of bonuses. 'We all felt the pain,' ‘Dusty' said.

'We slashed advertising budgets and took additional action to reduce our floor space at major boat shows.

'Simply put, overheads had to be drastically curtailed.'

‘Dusty' shares the identical view held by many Australian industry leaders that government, particularly the bureaucracy, is more hindrance than help to the industry.

'A company's primary aim is to keep costs down and to that end the best thing government could do would be to let us get on with the job,' he declared.

‘Dusty' believes the recreational boating industry is also on the threshold of a ‘technological age'.

'It won't be technology for technology's sake, but we must make full use of all technology available to us,' he said.

'We must be prepared to design and produce hybrid boats, something we have already done, in fact, and we can produce absolutely ‘green' boats, but at this stage we don't know if consumers will buy them.

'That all comes under the direction of planning for the future.

'Don't anticipate a return to the incredibly buoyant atmosphere we enjoyed prior to the financial meltdown, it won't happen, those days are gone, 'he warned.

'I'll leave you with two positive points; Brunswick Corporation is healthier than it has been for a decade and the company can claim to be #1 in every industry in which it operates.'