Meridian production on 'furlough'

ARLINGTON As Meridian Yachts shuts down between July 28-Aug. 25, in response to a diminished demand for recreational boats in the current economy, company officials have emphasized that this is a temporary move.

Dan Kubera, a spokesperson for Meridian's corporate parent Brunswick, explained that most of Brunswick's fiberglass plants in the U.S. went on "furlough" in July, but elaborated that they waited until August to declare a similar furlough for Meridian in Arlington. Each Meridian yacht is made in a series of stages, and a number of those boats had to be finished before their plant could be shut down.

"The reason for the furlough is to manage the pipeline better," said Kubera, who conceded that the the economy is slowing. For Meridian, the market started softening late in the fourth quarter of 2005, and accelerated a bit in first and second quarters of this year. However, due to high fuel prices and the housing industry crisis, Kubera still characterized the economy as "uncertain," and noted that it has affected discretionary spending for boats and automobiles.

"It's not something we like to do," said Kubera of the furlough. "We know it's difficult on our employees."

Brunswick operates 10 plants across the country and employs approximately 400 people in Arlington. Those workers are eligible for unemployment, and can file for it if needed.

"We are doing what we can to lessen the impact," said Kubera, who added that those with accrued vacation time can get pay-outs, although they will continue to pay premiums on their medical and dental coverage. In response to difficult market conditions, Brunswick is adjusting its production rates, as it feels is "prudent and appropriate."

Kubera described the "last bad spell" for Brunswick taking place in 2000, but he admitted that the industry bounced back more quickly back then. This time, he sees a different economic environment entirely, with the job market, inflation and a number of other factors coming together to create "the perfect storm."

Kubera pointed out that a number of customers use their houses as collateral to buy boats, and therefore concluded that the housing market and mortgage crisis affect the boating market more than many people realize, since property that once appreciated on a monthly basis is now lucky to remain flat in value.

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