GB question..

[ancora]

I see where long time California GB dealer Stan Miller no longer carries the brand. Heard that GB sells direct to buyers now. Is this a cost saving measure?

 

[Marin]

There is still a GB dealer in Bellingham. I heard the other day from their lead broker that someone has just ordered an Aleutian through them that will be placed in their charter fleet.

 

[Dawdler]

The GB website says they're switching to direct sales model...

 

[Dawdler]

There has traditionally been pretty good support of GB events from the Dealers. I wonder what will happen to that type of "sponsorship" going forward.

 

[BandB]

I see where long time California GB dealer Stan Miller no longer carries the brand. Heard that GB sells direct to buyers now. Is this a cost saving measure?

Cost saving or profit producing if in fact it worked at all. They've gone completely direct. But then the Grand Banks line as we know it is near death. We're talking Palm Beach and Eastbay and then something on the drawing board as a GB. The new boat has been publicized on some sites but not on Grand Banks website. Only 4 models remaining from the Aleutian and Heritage series and don't know how long they'll be there. The only boats they're having any success selling are the Palm Beach and Eastbay.

Grand Banks is losing money and spent quite a bit on Palm Beach while still spending more making production changes. A couple of board changes coming plus getting permission at their annual meeting to issue more stock.

They refer to this as their Customer-Direct model. They've gone back and forth a bit in the last few years. They were setting up centers of their own in strategic locations, then turned those over to dealers and backed away from that model. Now, gone away from the dealers. Their new President and the new board member they've nominated come from a background of racing sailboats.

 

[Ron T]

Too Much Change

Grand Banks made a high quality TRAWLER. 8 to 10 Knots vessel for owners who just wanted to mosey along with good fuel burn. Then they went to Fast Trawlers. I think they lost a lot of the old customer base. Fuel prices went up and so did price of boat. Boater I deal with today want low fuel burn and power to provide 8 to 10 knots max. The minute they see big engines they back off and look for another vessel. Lots of 3208s pulled out and replaced with Deere 4 Cyl. 135 HP engines. They should get back to where they started.

 

[BandB]

Grand Banks made a high quality TRAWLER. 8 to 10 Knots vessel for owners who just wanted to mosey along with good fuel burn. Then they went to Fast Trawlers. I think they lost a lot of the old customer base. Fuel prices went up and so did price of boat. Boater I deal with today want low fuel burn and power to provide 8 to 10 knots max. The minute they see big engines they back off and look for another vessel. Lots of 3208s pulled out and replaced with Deere 4 Cyl. 135 HP engines. They should get back to where they started.

Grand Banks sales were still solid until 2008-09. As to people wanting the smaller engines, the new boat buyer and the used boat buyer are very different. The new buyer is more inclined to want the option of going faster. This continues and is even more so now that fuel prices are down. However, basically a buyer spending $2 million and up isn't as concerned with fuel usage as the buyer looking at an older boat under $100k. The resistance to larger engines normally comes more as the boat ages.

Grand Banks moved to "semi-displacement" as the market did. Their demand for 8-10 knot small single engine boats dried up. Among their competitors, Marlow has followed that same course. Even Fleming has gone for greater speed than 8-10 knots.

The "trawler" purchaser willing to accept a new boat that will only get 8 to 10 knots maximum is a very small part of the market. Basically that's the Nordhavn and Kadey Krogen buyer.

 

[Xsbank]

I think the dealers balked at fronting a couple of million to have the boats sitting in their inventory. As much as I liked GB, they have no focus. I think they are toast.

 

[bnoft]

I understand that GB had discussed an exclusive arrangement with a SE FL dealer. This was after the acquisition of Palm Beach. This dealer apparently had no use for the Palm Beach guy now running GB. So GB has hired a couple of experienced GB sales folks from this dealer and is going direct. Not sure how this will play out.
I agree that GB abandoned their original market. Nothing wrong with complementing the trawler with down east boats but the trawlers became fast cruisers. The Palm Beach influence will likely bring about the end of the "classic" line, which is classic in name only. B&B is right, new boat buyers seem to want the speed.
We own one of the older GBs, a '91, which has a larger Cummins engine than the old Lehmans at 315 hp. She runs well at 1700-1800 rpm making about 9 kts and burning about 5 gph.

 

[BandB]

I understand that GB had discussed an exclusive arrangement with a SE FL dealer. This was after the acquisition of Palm Beach. This dealer apparently had no use for the Palm Beach guy now running GB. .

GB has discussed nearly every possible set up over the last two years. Just look at the press releases on their own website. 2013 they are all announcements of new dealer agreements. 2014, they're announcing the Palm Beach acquisition and making Richards CEO, they're announcing the addition of the Aleutian 55 and announcing the deal with NW explorations. 2015, they're announcing customer direct.

The part they don't include is setting up their own offices in several areas and then transferring those offices to other dealers as they did in Seattle. I'm amazed there's no news of litigation by dealers or former dealers.

I find it hilarious that they haven't put anything about the new GB 60 on their website, but it's on Bluewater's site (of course, Bluewater no longer a dealer) and Power and Motoryacht has it.

10 days until they're board meeting. They've already announced two board members leaving their positions and one joining (another sail boat racer like Richards...I wonder if anyone's told them they don't sell sail boats and these person's names mean nothing to a GB buyer outside of Australia). Don't automatically assume their board meeting will be boring. Not many years ago Livingston, who was the CEO and largest shareholder, presented a deal for the sale of the company (at more than value then and far more than value now). His deal was rejected and he was terminated. He was booted off the board as well, subsequently fought his way back on and then off again.

Oh, they're also getting permission to issue more stock. This is a move they've used before when things were going badly and they anticipated the need for more investment.

How, in the midst of all this, certain people remain arrogant and steadfast amazes me. A year ago I know people who would have been interested in purchasing the company. Today, I can't imagine anyone who would be. Only have Eastbay and Palm Beach and they basically duplicate each other.

 

[BruceK]

Mark Richards of Palm Beach as CEO of GB? Was this perhaps a reverse takeover by PB of GB?

 

[BandB]

Mark Richards of Palm Beach as CEO of GB? Was this perhaps a reverse takeover by PB of GB?

It was a clear purchase of Palm Beach by GB with Richards being paid for Palm Beach and also given a contract as CEO. Apparently he impressed someone important quite a bit. What made them think he was the right man to run the company I have no idea. Also, how much did he insist on the employment contract to make the deal. I can easily picture a deal of X dollars for Palm Beach which would be split with other owners, as I assume there were probably some, and Y dollars to him personally as an employment deal. I don't know. I just know it seemed crazy at the time and nothing has been done since to change that. Gary James Weisman is being proposed as a new board member. He was the former President of North Sails, a sailmaker.

Here was the basic deal. $A8 million cash to Palm Beach shareholders plus $A2 million in GB stock to Richards, giving him 6% of the company. In addition the appointment of Richards as Executive Director and CEO pursuant to the purchase option agreement.

 

[Marin]

Grand Banks moved to "semi-displacement" as the market did.

Grand Banks boats have always been semi-planing (what some people call semi-dislacement). Ken Smith's hull design for Spray in the early 60s was semi-planing and this became the hull design used by American Marine from the first Grand Banks woodies in 1966 all the way through the last of the GB so-called legacy models (GB52) just a few years ago.

While the engines steadily got more powerful over the years the hull shape never changed until the introduction of their GB44 in the mid 2000s or thereabouts which used a new hull design. All their current offerings use more of a planing-type hull.

 

[Liberty2015]

I hope it all goes well for them. I often see Mark Richards at our Marina, finishing and commissioning the Palm Beach boats, from what I can see he is very much a hands on guy, working on the boats and personally testing them. He appears very passionate about quality and customer service. This is just an observation. The Palm Beach boats are one of the sweetest running vessels around, but only a weekender, although Mark set off in a 50 or 55..... I think from our Marina and took it to New Zealand on its own bottom, just 2 onboard, it took them 60 hours to cross the ditch from Australia to New Zealand , it is approx. 1250 nautical miles so an average speed of 20.83 knots not bad. They did carry bladders in the cockpit to commence with. I tend to like what he has achieved with Palm Beach is extraordinary.

just my two bob's worth.

Cheers Chris D Liberty.

 

[Insequent]

Richards did a great job with Palm Beach, for sure. The GB takeover did not offer much in synergy, and seems to have been just another miss-step of many as B&B has posted from time to time. What seems clear is that there are folks involved with GB who are willing and able to pull whatever puppet strings they want, whenever they want. That makes it a tough gig as CEO. I have no idea whether Richards has had any real authority or been any good in the role, but everyone knows where the buck stops. And at present his reputation is taking a hit, rightly or wrongly.

A broader issue is the cost of quality in the industry. A couple of high volume French catamaran outfits seem to turn out boats as fast and cheap as possible, full of warranty issues to be sorted out. To be fair, some from OEM suppliers. Their model is that the dealers manage the commissioning and delivery process, and no doubt they claw back some from the factory as they resolve warranty defects to produce something of merchantable quality. So their dealers have to know how much fat to load into the selling price or they can end up in a hole. One dealer was telling me about the 'standard' things they did after getting a new boat even before the customer was able to get near it. It was quite a bit of work with a surprisingly large budget. Even so, it seems customers get to a point of 'I can live with it' and move on with life. Or they go online and complain. Bottom line is the boats only barely have adequate build quality, somewhat offset by bling and superb styling. It could bite them soon - people will only want to buy a 2 or 3 year old one with all the issues sorted. Meanwhile they still sell lots of boats, so maybe their model is right in a business sense. Which is even more troubling for outfits like GB (or the old Palm Beach) where quality ex: factory was a hallmark. Few are willing to pay for it, there are alternative brands and models that 'will do', particularly if they superficially look better.

I think I first lusted after a GB about mid 1986. Almost bought a used 42 a few years ago. Can't see me ever getting one now, or recommending them. The old ones have known issues that can cost a lot to fix and the company stagnated and the market left them behind so new ones don't appeal in value or styling terms. A fatal combo. Shattered dream, kinda sad.

 

[bnoft]

Marin, fellow GB owner, may chime in here, but the known "GB issues" are centered around the teak deck. The old style installation with thousands of screws placed a premium on maintenance; replacing the bungs and keeping an eye on the seam chalk. If this was not done, rusted fuel tanks were a near certainty and core problems would likely follow; this is not unique to Grand Banks. However; if owners paid attention to the decks, they can last 30+ years. The decks were glued own beginning between 2000-2002. Our decks were clearly mistreated by a PO, chemically cleaned resulting in some "grooving" that will shorten the useful life. But the plugs were maintained as were the seams so we have no tank issues. So how long will our decks last? beats me but they there is enough wood remaining to replace bungs without requiring recutting of the seams.
A buyer of any boat will benefit from understanding the issues related to their choice and examining those areas carefully before committing to that vessel.

 

[bnoft]

The foregoing is not intended to be a flag waving defense of GBs. Every boat is just that, a boat; they don't call 'em "she" without reason (no offense intended Mrs. B or Peggy). And that's before we begin discussing engines, every make and model has a "personality" and limitations. An abused engine can be just as expensive as an abused hull.

 

[BandB]

Richards did do a good job building Palm Beach. However, that doesn't necessarily transfer to Grand Banks, especially beyond Eastbay and the type boat he has experience with, nor to their market. Also his cost structure and methods of building apparently needed to be improved if turning Palm Beach into a more successful worldwide brand. He may very well be following the marching orders given though. It does very much appear though that the emphasis is Palm Beach, followed by Eastbay, in effect just turning Grand Banks into a very different company. So, although technically it was an acquisition by Grand Banks, it has much of the nature of a reverse acquisition from a marketing standpoint. From a manufacturing standpoint though, the emphasis is Malaysia plus updating the Australia factory to methods used in the Malaysia facility. Certainly appears part of the logic was that we don't have enough business to keep the Malaysia factory busy and you have more than you can produce in the Palm Beach factory, so we can build Palm Beach in Malaysia too.

As to mention above of who is pulling the strings, the largest owner now is the family behind the Genting Group, better known for resorts and casinos world wide and for their ownership of a cruise line. They became the largest shareholder over Livingston but also seem to have the support of the other largest shareholders plus the institutional investors. Grand Banks is a relatively small investment for them compared to their other businesses.

 

[KMA]

I think the dealers balked at fronting a couple of million to have the boats sitting in their inventory.

My understanding is that this is precisely why they have reverted to direct sales.

 

[BandB]

My understanding is that this is precisely why they have reverted to direct sales.

In my mind a builder can go three routes: Dealers, brokers or direct sales only. Having dealers impacts the price significantly but the trade off is they buy and stock product. However, it's not that simple. The builder must provide the structure and support for them to be able to stock and must not compromise their dealerships through direct sales. Look at the thousands of Sea Rays in dealer inventory. They didn't get there without a strong floor planning system in place. Brokers don't stock. Direct sales obviously doesn't. Now, direct sales only involves your internal costs. Brokers cost about 10%. Dealers increase the selling price by 15-30%.

There is another system GB actually talked about and that is setting up centers stocking boats that can be used by your broker/dealers. This makes boats available to be looked at and demo-ed, but without a dealer having to inventory.

I'm sure if you talked to GB they would tell you the dealers were not holding up their end. The dealers would tell you GB wasn't supporting them. Both arguments probably have some truth to them. The system wasn't working and changing it around several times certainly didn't help.

Personally, I think Eastbay and Palm Beach need to be inventoried to reach decent sales. I think with the traditional GB buyers are more inclined to wait and to buy without hands on, although I still think inventory would be advantageous. I know the company isn't going to support that though. I do not see direct sales working for Eastbay and Palm Beach. They were being stocked to some degree by the dealers. Their competition is readily available. Plus they are not the type boats people are going to blindly order and wait many months for delivery on.

 

[Capt.Bill11]

Marin, fellow GB owner, may chime in here, but the known "GB issues" are centered around the teak deck. The old style installation with thousands of screws placed a premium on maintenance; replacing the bungs and keeping an eye on the seam chalk. If this was not done, rusted fuel tanks were a near certainty and core problems would likely follow; this is not unique to Grand Banks.

In all the rusted fuel tanks I've seen on GBs, I don't recall any that I could say had to do with leaking decks. The teak decks or GBs are not the leakers as on other lesser quality boats.

 

[BandB]

In all the rusted fuel tanks I've seen on GBs, I don't recall any that I could say had to do with leaking decks. The teak decks or GBs are not the leakers as on other lesser quality boats.

We sometimes have to give credit to how long some of the boats have been around. Yes, you'll find some older GB with fuel tank issues. You'll find this in a time period that there are few other brands with a lot of survivors. When you're looking at late 60's and early 70's, you find a huge quantity of Grand Banks. There aren't a lot of brands you can say that about. So, yes, they will have problems that come with 40+ year old boats.

 

[Hawgwash]

The old ones have known issues that can cost a lot to fix...

Can you make me a list?

 

[Blissboat]

Windows, decks, tanks and blisters.

 

[Insequent]

Can you make me a list?

Well lets exclude the woodies, even though some would say they were the best GB's ever made. They would be no worse than other wooden boats but still an on-going high maintenance boat. Not so bad if you can do the work yourself and like doing it.

As to an exhaustive list, that might be better obtained from the GB forum where there will also be advice on solutions. When I was looking at 42's there were several things that leapt out from inspections and surveys, and Blissboat just noted them. Once again, if you have the skills, time and inclination they wont break the bank to remedy. The cost killer is in the labour if you have the work done for you. But the thing is, even a GB with some of these issues can still bring strong prices relative to alternative boats, unless its been on the market for a long time and the owner is getting quite desperate to sell it.

The worst situation is when these repairs are botched. An owner or his friends glass-in the windows, fill-fair-paint etc. Sooner or later you will need to re-do those repairs properly, and in the meantime you will be doing R&M on numerous other on-board systems that were also temporarily patched or 'fixed' by folks that might have been well meaning but really did not know what they were doing. Electrical systems can be a scary one in this regard even though ex:factory they were pretty good. You ought to be able to pick up a lot of the obvious things, and a good surveyor ought not miss much as they already know what they are looking for better than you or I.

If you are going to buy, then pick one where the most common problems have already been properly repaired. You likely will be paying less than 50 cents in the dollar for those repairs, the owner will just have to take a hit. Then you will take a hit on doing the work still to be done. You only do it for love, and you and your partner should be fully aligned on that before starting. No doubt you will get enormous satisfaction out of it at the end. That makes it all worthwhile. Just don't look at it as an investment or do any financial analysis.

 

[Hawgwash]

Windows, decks, tanks and blisters.

Ok, so no different than the others then.