The Harbor Report: Rapid recession hit boating industry hard

This column is the last of a three-part series reviewing the history of boatbuilding in Costa Mesa.

“I never noticed an industry fall so fast and so complete,” Roger MacGregor, founder of MacGregor Yacht Co., recalled.

The year was 1980 and the screws were tightened on credit. Kind of sounds familiar to today, doesn’t it?

“The federal clamp down on consumer credit is not only taking its toll on the housing and auto industries, but on Orange Country multi-million dollar boat building enterprises,” John Longwell wrote in a May 1980 article headlined “Boating Blues.”

The article included quotes from Bob McCafferty of Down East Yachts, Buster Hammond of Islander Yachts, and Dick Valdes of Lancer Yachts. They all explained the cutbacks they were taking to survive through the lull.

Interest rates were at 18% and “either the buyers settle for a smaller boat or they wait.”

Valdes was quoted as saying: “Sophisticated money is waiting out the market, [and] even though they have the money they’re taking a wait-and-see attitude.”

One of my favorite quotes in this article was from Duncan McIntosh: “You have a weeding-out process that we go through from time to time. I think this may be one of the worst we’ve ever had. Never before has financing been completely shut off. But I don’t think it’s as bad as a lot people make it out to be.”

Builders were then facing rising property values, stricter enforcement of fire codes, rising political opposition to the housing of manufacturing on Costa Mesa’s West Side, where haphazard zoning had produced a mixture of residential and industrial uses.

Another problem in 1980 was that “Fiberglass boats don’t rot.”

It appears that the boating market can be saturated from time to time and this is what McIntosh was pointing out in his above quote. By 1985, most of the boat building industry had left Costa Mesa and had just shut their doors, or sold their companies to large corporations who ended up closing shop by 1989.

After 1995, the industry found its second wind and new boat sales took off like setting the 2.5 spinnaker.

I found a great quote from Tom Schock, owner of the W.D. Schock Corp. In a 1998 Los Angeles Times article, he maintained that the sailboat industry had been in a terrible recession since 1985. Sailing became too expensive and time-consuming, and stressed competition instead of family fun.

Just after saying this Tom went on to build the Harbor 20s, and the Lido 14 fleet had a resurgence. New boat sales lasted until 2008.

“So what will happen next?” I thought to myself while interviewing Roger MacGregor.

I probed for the answer because I know Roger is a much smarter man than I am.

“We are about due for some type of technical break through,” he explained. “Something radical, cosmic weight reduction and maintenance reduction.”

Therefore, if the market follows history, we should see a comeback within nine years. I hope it comes back sooner with the introduction of hybrid technology, new types of drive systems and the further development of different laminates.

I am also counting on a more mature new boat buyer to come along. We all know we are living longer. Maybe grandparents will be the ones purchasing new boats and introducing Catalina and the yachting scene to their grandkids? Let’s hope so.

I had better get back to work and “go straight, go fast and don’t touch the helm.”

It appears it will be some time before the next wave appears. I will be the one continuing on the same course and sailing with my head out of their boat. So follow me on Twitter (@Boseyachts) for daily Newport Harbor observations.

Before I leave this week, I need to give a big shoutout to Deputy Glasgow of the Newport Beach Harbor Patrol for helping me tow a boat in after it overheated. Thanks for the help, you did an outstanding job and we got our boat home safely!

LEN BOSE is an experienced boater, yacht broker and boating columnist.