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April 10, 2009
BASS RIVER TOWNSHIP - Viking Yacht Co. concluded its final round of layoffs and furloughs last week, bringing the total to 560 fewer employees since the cost-saving measure began in December, company officials said Thursday.
Viking, a high-end boat builder in New Gretna, long has been one of the region's largest private employers, with nearly 1,400 workers at the beginning of 2008. A year later, its payroll has shrunk to 800, said Andrew Davala, a vice president.
The company said no more layoffs or furloughs are planned and that it hopes to bring back as many of those workers as possible by the fall. But "it absolutely hinges on the economy recovering," Davala said.
The company said it saw a glimmer of a turnaround with this year's Miami International Boat Show in February. Davala said it was the most-attended show in three years.
"We have had a good Miami show and we're starting to sell boats in inventory," he said, although he was unable to provide sales figures.
Peter Frederiksen, a Viking spokesman, said the company was delivering an 82-foot model to Florida on Thursday. Those yachts are Viking's largest and can cost as much as $5 million.
"There are spurts of activity," Frederiksen said.
But will it be enough to bring back jobs?
In a letter to the state Labor Department in January notifying it of the layoffs, Viking cited the global economic downturn and credit crisis for causing it to cut its work force.
Davala said the company has had to slow its production lines and is preparing for 40 percent less product.
That has meant everyone from highly skilled fabricators to engineers to accountants have been let go.
Meanwhile, the entire U.S. boat-manufacturing industry has been pounded by the pullback in consumer spending.
Thom Dammrich, president of the National Marine Manufacturers Association in Chicago, said new-boat sales were down 30 percent last year and are expected to fall by 20 percent this year.
"Today, every (boating) sector is feeling the pain," Dammrich said.
Elsewhere in southern New Jersey, Millville boat builder Silverton Marine Corp. began layoffs in January, telling the state it could lose as many as 202 workers in the poor economy. And Egg Harbor City-based Ocean Yachts has slashed its payroll over the past two years, from 130 employees to about 50.
For New Gretna, a wooded community in southern Burlington County's Bass River Township, any loss of employment at Viking has a ripple effect. Here, locals say, everyone knows someone who works or has worked at the company since it began about 45 years ago.
Mom-and-pop store owners and employees along Route 9, where Viking is located, say their own businesses have been affected as every round of layoffs has meant fewer and fewer customers.
"We usually got the coffee business in the morning," said Carlos Cespedes, who runs the nearby deli, Munchies. "It's not the same since they've gotten laid off or fired or whatever they're calling it."
Viking and its properties remain the township's largest ratable. The company has been current with its tax bills, including for its largest property assessed at more than $10.8 million, municipal tax records show.
In the early 1990s, Viking nearly capsized after a poor economy and a federal luxury tax on yachts hurt its bottom line. The company fell from 1,500 employees in two plants to 80 employees in one.
"They weathered the economy because they have the product that allows them to do that," said T. Richard Bethea, Bass River Township's deputy mayor. "Meanwhile, it's unfortunate, because in any industry, the rank-and-file are the ones that get hurt the worst."
Viking Yacht Co.
History: Founded in 1964 by brothers Robert and Bill Healey, who purchased Peterson-Viking Builders
Employees: 800 (down from 1,400 in early 2008)
Output: Builds 108 luxury yachts each year valued at between $1 million and
$5.5 million
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