In this issue of H&S Reports, we’re devoting quite a bit of space to Hunter. H&S Yacht Sales is the largest sailboat dealer in the USA and we represent Hunter Marine, the largest sailboat builder in the USA, in all of our locations. As a company, we sell or have sold most popular sailboat brands offered in the country today and if you were to poll our management team, you’d learn that Hunter is one of our all time favorite companies to work with.

Let me rattle off a few reasons why this is true, some of which impact you, the customer, and some which may not really matter to you:

• Outstanding Value — Hunter is not trying to be the low cost producer (do you really want to go to sea in a boat built by the low cost producer?). They want to be the outstanding value producer and have continually upgraded their boats over the years.

• Great Warranty — Hunter is dedicated to customer service and they’re very responsive and fair about fixing mistakes when they make them (trust me, ALL manufacturers make mistakes).

• Team — There are no rock stars at Hunter and no prima donnas. Hunter is an employee owned company with incredible experience and talent and when visiting the factory, I’m always impressed by how much people care.

• Marketing Support — The best boat in the world isn’t much good if it sits in inventory because no one knows about it or cares about it. Hunter is the best at finding our what their customers want and delivering it (hence their #1 ranking).

• Quality — I’ve personally been involved with Hunter for about 15 years now and been a dealer for them for 10 years. I’m still amazed by the number of people who come into the dealership with an ABH (Anything but Hunter) attitude. I’m the first to admit when they first came on the market in the ‘70s, I was underwhelmed, but along about 1985 Hunter got religion and brought in the W. Edwards Demming Total Quality Management team and turned the corner. You’d think we could finally forgive their sins of over two decades ago! By the way, a large majority of ABH buyers end up buying Hunters once we start actually comparing the boats and checking the facts.

• Responsiveness — Face it. We’re a nation in love with instant gratification. Who wants to order a boat, put up a bunch of money, and miss a season or two of sailing while waiting for the boat to be built? Hunter is very good at spooling up production to meet demand.

As great as Hunters are, we have plenty of customers who simply want something else. Our goal at H&S is to help you find the boat that’s right for you, not force you into something you don’t like — remember, buying and owning a boat is supposed to be fun! In order to serve your needs best, we’ve tried to represent the best of each market segment: Hunter, as the #1 selling sailboat line in the USA; Jeanneau, as the #1 selling imported sailboat in the USA; Mainship, as the #1 selling trawler in the world; Sabre, as the best semi-custom classic performance cruising sailboat; and Caliber, at the best “purpose built” long range cruising sailboat.

While we’re on the subject of the great boats we offer, I should toot our own horn. Recently, Boating Industry magazine ranked H&S Yacht Sales as the #1 dealership on the Pacific Coast in overall performance, professionalism, sales and customer service and #12 of the top 100 in the entire USA. This is the inaugural year for the Top 100 awards and the goal is to stimulate the best possible buying and ownership experience for boaters by directing them to dealers who can and will perform to their expectations. We’re gratified to be selected for this award from more than 2,000 nominees, but won’t be satisfied until we’re not just #1 on the west coast, but #1 in the country!

Hunter Factory Tour

At 72º with blue skies, it hardly seemed like a winter day at the Hunter factory in Alachua, Florida. Our tour guide and Hunter factory sales rep, Eric Macklin, tells us the temperature in north central Florida can vary greatly in the winter months and we’ve gotten lucky with perfect weather today. The purpose of our trip here was to see firsthand how the team at Hunter has been able to consistently maintain such a high level of quality in their product without sacrificing their price positioning at the value level.

In past issues, we’ve written about how Hunter’s engineering and design improvements have upgraded the product performance on the water. Since we could sail the boats here on the bay, it was an easy (and fun) topic to research. But the question that kept nagging was, “Given all the other improvements in hardware, equipment, interior fit and finish, woodwork etc., what was going on at the factory that allowed Hunter to produce a first class product without losing sight of the fact that its customers haven’t won the lottery?” Curiosity got the best of us last winter and we decided to take a trip to Florida and see the factory firsthand. What we saw there stunned us.

An unlikely place for the most technologically advanced sailboat builder in North America, Hunter marine is located inconspicuously about 20 miles north of Gainesville, Florida. If you come here during football season, be sure to wear orange and blue. Football is a big deal in this rural community, where churches actually outnumber fast food joints and more than half the vehicles in the factory parking lot are pickup trucks. The location of this facility is the first sign of what we were about to see at so many different levels — efficiency. It’s a pretty good guess the company founders Warren and John Luhrs didn’t pay much for the property when they bought it in 1975, but they certainly got what they were looking for: easy access to the interstate highway, a skilled and dedicated local labor pool, and temperate year round climate friendly to boat building. The complex sits on 500 acres, complete with its own test pond named after Henry Luhrs, the second generation boat builder who developed the techniques that would pave the way for his sons, Warren and John, to create successful companies under the Luhrs, Silverton, Mainship and Hunter brand names. The experience and diversity of the Luhrs Marine Group is what has allowed Hunter to evolve into one of the most efficient boat production facilities we’ve seen.

Spotlessly clean and beautifully landscaped, every employee-owner of Hunter Marine takes responsibility for the plant’s cleanliness and the quality of the end product. The employee ownership program was part of a retooling at Hunter that began in the early 1990s and has allowed 45 of its 400 employees to accumulate more than 20 years experience. Another 125 have been with the company for more than 10 years. The cumulative effect of the program has allowed the company to evolve in every department with practical ideas on how to improve efficiency, minimize waste, and make the product better.

As we walk through the first part of our tour, where computerized cutting machines turn flat materials into doors, cabinets, bulkheads and counter tops, Eric Macklin, our guide, explains, “Ten years ago, our waste factor for flat materials was average for the industry at about 18%. Using feedback from assemblers in the cabinet shop, machine operators, design engineers, and high tech software, we’ve been able to reduce it to about 6%.” When each member of the team has an interest in the overall success of the company, feedback
becomes essential in eliminating waste to improve the bottom line. We watched the machines quickly and accurately cut cabinet doors out of a 4x8 sheet of real teak veneered marine plywood. A cloud of sawdust hovers over the table as each edge is cut precisely to provide a perfect fit when it’s assembled in the cabinet shop down line.

There, some fifty carpenters and cabinet makers are building the subassemblies that make up the interior of the boat. Navigation stations and galleys are the largest of the sub assemblies and will be built complete with Corian counter tops, solid teak trim, and stainless sinks already installed before being wheeled over to the finish shop. It’s easy to see why this is efficient. Each carpenter has full 360º access to the part he’s building. Drills, staplers, screwdrivers and clamps are lined up on the workbench for easy access and within an arm’s reach of a myriad of fasteners. Once these sub assemblies have been completed and inspected, they are wheeled over to the finish area. We stop here to chat with supervisor Vance Simmons, a twenty two year Hunter employee. Vance is happy to talk about the process. “This finish is just awesome! We used to get a lot of customer complaints about the maintenance requirements of the oiled finish. This atalyzed lacquer has a semigloss sheen that really makes the wood look rich. It requires no maintenance and if damaged, can be easily repaired with a spray can version of the same material. It looks fantastic and we don’t get complaints about maintenance anymore.” Indeed, the finish does look incredible and it’s well protected with an adhesive paper through the entire boat building process.

Conveniently, the finish shop is close to the Module Area. This is where we were truly amazed. Here, the interior of each boat is assembled to about 80% of completion in a jig that is an exact replica of an actual boat hull. However, the jig is mounted on a wheeled frame so the completed interior can be moved under a gantry, lifted out, and lowered into a real hull. The jig also has big holes cut out of certain areas to allow easy access when fastening subassemblies or connecting systems. We focus in on a 41 that seems to be about halfway done. The process begins with a fiberglass grid that runs the full length of the boat up to about the waterline area. The grid will provide structural reinforcement for the hull and serve at the base platform for the interior construction. Once the key plumbing and wiring has been installed in the grid, it’s lowered into the jig and the interior assembly begins. With the jig low to the ground and wide open at both ends, workers, subassemblies, and other materials flow freely and quickly into the module as the interior takes shape. With a lot of the detail work having been already done at the subassembly stage, it’s easy to see why this goes together efficiently and cleanly.

Let’s take a look at the navigation station area where the electrical nerve center of the boat is located. In the old days, a builder would buy a breaker panel and connect each wire individually to the appropriate circuit breaker. It’s a functional, but time consuming process that has now been replaced by a much faster and more reliable method. At the Hunter factory, all the panels come with the breakers prewired. The leads from the panel are bundled together into harnesses that terminate in female plug ends. The male end of the plug comes from the prefabricated boat harness that has already been installed inside the interior. The plugs are connected and the boat is live. It’s fully tested right there in the module stage to make sure every light and switch is wired correctly. Not only is this tremendously more efficient, it’s more reliable. Each plug has a different shape, so it’s impossible to connect the plugs incorrectly.

Once the module has been competed, it’s wheeled over to the Hull Room for installation into an actual boat. By design, the lamination of the hull is timed to complete at the same time the module is finished. This helps reduce the amount of time a boat is considered “work in progress,” a phrase that is hated by accountants. While a boat is under construction, the cost of all the materials, components, and labor are tied up, requiring a great deal of working capital. Not a big deal if you are a small boat builder, but at Hunter when 50-75 boats are under construction at any given time, it adds up to millions of dollars. Reducing the amount of time a boat is “work in progress” minimizes the cost of capital needed to fund the production — yet another method Hunter uses to reduce the end cost of the product.

As we move into the Hull Room, it becomes apparent that we’ve located the source of that styrene aroma that permeates the air in various strengths throughout the factory. There are about ten different hull molds and all of them are framed with steel beams that converge into round bearings at the bow and stern. The bearings allow the mold to tilt over onto its side and we see how the workers are laminating with the help of gravity. Keeping the work surface on the low side helps stop the resin from pooling where it’s not needed and prevents the materials from slipping down a vertical hull side. The fiberglass fabric “kit” for each boat sits rolled up on a special dolly. Each piece is pre-cut on a machine that also labels it according to the location in the hull. Resin is sprayed onto the dry fiberglass cloth from a gun that also mixes it with a catalyst. Aside from the woven roving fabric that forms the majority of the laminate, Hunter also uses end grain balsa core above the waterline to build stiffness without adding extra weight. We also see the Kevlar® reinforcement added to the bow area for extra impact protection. Once the hull is cured, it’s ready to have the interior module installed.

Our timing is perfect, as we can see the interior module of a 41 being lifted out of the jig. From underneath, it’s easy to see the flat surfaces of the grid that will mate up with the hull. A special adhesive called Plexus® has already been dispensed onto the inside of the hull in a pattern that matches with the grid. Plexus is an extremely aggressive adhesive. It actually melts both of the fiberglass surfaces it contacts, fusing them together as it cures. Once lowered into the hull, the two parts are permanently bonded forming a “unibody” type structure. Workers use plastic squeegees to remove the excess Plexus® that has oozed out around the perimeter of the grid. They’ll also bond the bulkheads and furniture to the hull using fiberglass tabbing. About four hours later, this boat will be ready for demolding.

Our next stop is the deck room. Similar to the hulls, the deck molds are also made so they can be tilted from side to side. The shapes of the decks are a lot more complex than the hulls and you can see that this part is more labor intensive. We watch as a crew is stacking plywood blocks into a deck. The blocks will be covered by a layer of fiberglass to form a composite sandwich. This type of laminate stiffens the deck like an “I” beam structure, adding strength without extra weight above the waterline. Shiny aluminum plates can also be seen at various locations on the deck. They’ll be covered with fiberglass and serve as backing plates for the deck hardware. All the fittings will be bolted through the backing plates.

The next stop on the tour is the metal shop. Hunter fabricates a lot of its own metal parts including bow rails, stanchions, stern rails, and arches. The arch is amazing in its function and it’s interesting to see it constructed. The large diameter stainless tubes are cut to length and marked off for bending. Butch Chamberlain, weld shop manager, explains that it takes about 12,000 PSI to bend the tubes to the prescribed angle. Once the two main beams have been bent, a special jig holds them in place while the middle tubes, feet, and traveler plate are welded on. The welds are then buffed out with a high-speed wheel for polishing and inspection. The arches are then transported to the assembly line where they are fitted to a specific deck. From then on, the arch “belongs” to that specific boat and the hull number is welded into the foot.

We are now in the main assembly building and it is huge! 150 feet wide and a football field long, boats and decks are lined up eight across. We proceed straight to the decking area, which has staging platforms around each boat to keep the working surface at about chest level. White 3M 5200® oozes out from the seams onto a paper mat below. The decks are first screwed down for alignment, then through bolted together. The finished hull to deck joint is then covered with a rubrail capped in stainless steel. It’s also here that a key rig component is attached.

The chain plates carry the full load of the mast, rigging, and sails, so there is no such thing as overkill in this area. On the deck of a boat we find the rectangular piece of polished stainless steel with big threaded studs welded onto one side. We try to lift it and find that we need to use two hands. It must weigh 30 pounds! The hull has already been drilled out and by peering into one of the holes, we can see the laminate is at least an inch thick. Hunter does periodic “pull tests” to verify that the attachment meets a safety factor of four times the maximum calculated load. We definitely get the impression Hunter is serious about this critical component. A ten-point inspection form for each plate must be signed by a supervisor before the job is done. A bit further up the line, things are beginning to look
more familiar.

With the decks on, the boats are nearing completion. The keels are fastened at the very end of the assembly building and the rudders are installed. Nearing full weight, you’d expect it would be difficult to move them around. Not here. Each boat is now mated to a steel cradle that is parked on the pavement using special stands that hold it about two feet above the ground. A single employee can be seen operating what appears to be a very useful piece of equipment. The “bull” is a low rectangular platform about 25 feet long that rolls right under the cradle. With the turn of a handle, the platform lifts up the boat and cradle together. The operator steers it with wagon handle type control, and the battery powered platform creeps away around the corner. It just looks funny to see one person moving such a huge thing with virtually no effort. The boat takes its place under a big open-air canopy that is the final finish area.

Here a quality control specialist pages through the boat’s own assembly book, checking for sign-offs at every stage and visually inspecting the entire boat. Noted discrepancies are corrected and an overnight stay in Lake Henry verifies the integrity of all through hull fittings. With the tour now complete, the answers to our questions can be summarized in two words. Efficiency and teamwork. Hunter is a well-oiled machine that’s just gotten a tune up. The structure of the organization delegates responsibility to every member of the team. Everyone we encountered was very friendly and takes pride in what he does. On the other hand, the scale of the operation dictates efficiency. The latest in precision cutting technology and lots of special tools developed from years of hands-on experience help to minimize waste and make things go together easily and quickly. For us, this visit has solidified the confidence we need to represent the Hunter line to the best of our abilities. As it’s truly a first class product, it deserves nothing less.

The center cockpit concept is unbeatable for those who want and need interior volume. By moving the cockpit forward and raising the headroom in the aft part of a boat, the entire aft section becomes much more liveable. We began to see this in the 1970s with such boats as the Morgan Out Islanders, the Coronado 35 and 41, the Cal Cruising 46, and several other models that became big factors in the cruising sailboat market. These boats and many other models manufactured by many of the strong builders of that long gone era were a huge part of the market of those days. While these boats were very roomy they always lacked aesthetics. They were boxy, slow sailing and underpowered in most instances.

Hunter Marine’s commitment to center cockpit sailboats began in 1989 with the creation of the Passage 42 This boat was a huge step forward, particularly when compared to the boats of the time. It was a modern hull in an era when center cockpits all were boxy and sluggish. It was powered by the 55 and then the 62 horsepower Yanmar engine, that allowed it to move well in any wind and sea condition. It incorporated many of the innovations that have since become standard on all Hunters: Corian® counter tops, huge windows, sky lights, and opening ports that made the interior much more roomy appearing and liveable, a bath tub, a large aft cabin with pedestal berth. The boat caught on and sold and sold and sold. When it was finally replaced with the Hunter 420 in 1998, around 600 of these boats were delivered in its nine years of production.

The Hunter 450 was the next leap forward in center cockpit Hunters. This boat was introduced almost 10 years ago and has dominated the center cockpit market in the United States ever since. The Hunter Passage 450, later called the Hunter Passage 456, brought the more modern B&R rig and it’s many advantages to the center cockpit market. This boat had improved interior volume over the Passage 42 and many small conveniences. Over 1,200 of these boat have been sold since we received our first one in the fall of 1996.

These two boats, the Passage 42 and the Hunter 450 gave Hunter Marine the dominant position in the center cockpit market that they enjoy today. The new Hunter 45CC has taken this wonderful lineage to the new century and new levels of innovation.

The exterior appearance is the most striking step forward. The new, Glenn Henderson designed hull, withits efficient sailing lines is what first caught my eye. The modern, almost plumb bow, with the obvious effect ofimproved speed and sea kindliness, is dramatic and functional. Glenn and his team found a way to make a center cockpit sailboat look sexy. The wraparound windshield blends into the finely sculpted deck and makes the boat look as pleasing to the eye as a traditional aft cockpit vessel. It really grabbed me.

The functional byproduct of center cockpits has always been and will always be interior volume. The Hunter 45CC increases the interior volume of the older Hunter 456 by 8%. This layout gives a much larger second cabin than the Hunter 456 with it’s queen size forward
berth.

The sailing functionality and performance of the new 45CC is obvious also. The large forward facing navigation center creates a functional, sea going navigation work area. The engine access is the best I have seen with a moveable “chest of drawers” in the aft cabin that slides aft on a track giving complete access to the entire rear portion of the engine. Keeping this engine serviced and addressing maintenance on it is made very easy by the access panels around the entire engine area. The modern fractional rig with vertical battens (running the entire height of the mainsail) gives the increased advantage of smaller and easier controlling headsails. And roller furling mainsails with almost full sail area doesn’t rob the boat of the power of a good size mainsail (the mainsail has roach) and the sail longevity that comes with full battens. The performance cost of traditional center cockpits has been all but eliminated by Hunter’s new entry into the market.

The success story of Hunter center cockpit designs, which began in 1989 with the passage 42, just took another giant step with this new boat. These boats are shipping now and will soon be seen in mass on the local waterways and islands. You won’t miss it! Keep your eyes out for them. H&S Yacht Sales Sailing Centers have them in stock now!

New Jeanneau 42DS Breaks All Sales Records! 7 Orders already placed!

You read it here first. I returned from the Paris Boat Show six years ago and predicted in these pages that the biggest new trend in sailboat design would be deck saloon models. Deck saloon or “DS” designs offer a number of improvements over their more traditional brethren including: a lower center of gravity and more sail carrying ability; improved storage capacity; brighter, more open saloons; larger aft staterooms with more headroom; and better performance than center cockpit designs.

For once my crystal ball was crystal clear, as Jeanneau as had one incredible success after another as it has introduced the 43DS, 54DS, 49DS and now the 42DS. Replacing the immensely successful 43DS, which was Jeanneau’s best selling model in North America for several years, the new 42DS is already surpassing all previous sales records. Jeanneau America was allocated 25 units for the 2006 model year. So far only one boat has been delivered, the prototype which was displayed at the Annapolis Sailboat Show last October,
but 21 units have already been sold at retail and most buyers have yet to see the boat! We have deposits on 6 boats and are working hard to increase our allocation.

What accounts for this unparalleled early acceptance? I was fortunate to see the boat in Annapolis and am not the least bit surprised at the number of sales. For starters, the new model is about 10% less than the boat it replaced. The styling is in synch with the incredibly popular 54DS and 49DS. The new model has twin helm stations, a first for this size deck saloon model. The saloon is brighter and feels more spacious. The aft cabin is absolutely huge (I actually prefer it over the 49DS aft stateroom). The Fine Teak® finish is stunning. The forward stateroom ensuite head is a huge improvement over the 43DS. As you may be able to detect in the photos, this boat is fast! And all this segment buster wonderfulness delivers for under $300,000.

So what’s the bad news? In spite of dramatic increases in production capacity, its’ going to be awhile before supply comes close to catching up with demand, so the 42DS. is in very short supply. Currently we’re estimating delivery in early summer unless some of the deposits we’ve received don’t confirm their positions. In order to accommodate buyers, H&S is taking refundable $5,000 deposits to hold production slots. Once we have a boat in California for you to see, we’ll arrange an inspection and at that time the order must be confirmed or we’ll make a full refund of the deposit and free up the position for another buyer.

Industry Insights

It has been my practice in our first issue of the year to comment on trends in boating and the boating industry in order to give readers a glimpse of what’s new and something of an overview of where we seem to be heading (at least from my vantage point). Following are my insider observations and predictions for 2006.

It seems pretty clear to me the rising cost of fuel is having an impact on boating tastes. Many of the major powerboat builders are experiencing sales slumps. We’re seeing a renewed interest in trawlers and an expanded interest in sailboats. One Sea Ray owner who was looking at the Mainship 40 Trawler told me, “I’m tired of spending $500 (on fuel) to go boating for the weekend. I want to stay with power, but spending $50 to cruise the Mainship is a lot more appealing.” Just yesterday I was chatting with a couple who recently
traded in a 32’ express cruiser on a Jeanneau 45. The wife said they’d used the boat almost every weekend for the last four months and still had half a tank of fuel. Her husband piped in, “We used to spend $150 just to go out for the day!”

I personally own a 40,000 pound displacement, 42’ trawler, which we typically cruise at 7 knots. At that speed, the diesel engine burns 1.9 gallons per hour. At 8 knots, it burns 4.3 gallons per hour. We generally cruise at 7 knots. If I were in a hurry, I’d get on a jet! For us, the point of cruising is more about the voyage than the destination.

Obviously, fuel costs are also driving more boaters and potential boaters to sailing. Another client of mine who is looking for a sailboat, recently sold his cabin cruiser, but fuel is not the only driving force — it’s also the great strides sailboats have made in accommodations
and operating ease. Think about it. Not too many years ago, in order to go sailing we had to pull out the proper headsail, hank it on, run the sheets, clip on the halyard, and hoist it up. We had to go through the same procedure with the mainsail, or pull off the cover, attach the halyard and hoist it. When we returned to the dock, we had to go through the whole procedure again in reverse.

Today to go sailing, we fire up the diesel, head out and when we get to where we want to sail, we release a clutch or two and roll out the mainsail, then do the same for the jib and we’re sailing. The time taken to get underway really isn’t any different than going power boating; likewise for the time to put the boat to bed at the end of the cruise. This ease operation is attracting new sailors who favored powerboats in the past due to their ease of operation.

I mentioned accommodations above. On today’s sailboats of the size we offer, it’s not uncommon to find such amenities at central air conditioning and heat, Corian® counter tops, electric winches, Bose® stereo systems, flat screen televisions, front loading refrigerator/ freezers and washer/dryers. In summary, sailboats have made huge strides in comfort and ease of operation, which is causing some would-be powerboaters to give sailing a second look.

Six years ago I came back from the Paris Boat Show and made the prediction that deck saloon sailboats were the next big thing. Largely due to Jeanneau’s stunning designs, deck saloons have become hugely successful. I’ll stick my neck out here and make a prediction based on what appears to me to be two merging trends; the popularity of deck saloons sailboats and the growth of the trawler market, and say that I wouldn’t be surprised to see a builder or two introduce a full-on pilothouse style sailboat with inside steering, which would eliminate the last real disadvantage of a sailboat versus a trawler — the inability to get out of the weather. If I’m right, remember you read it here first! Another trend is really “deja vu all over again,” and comes from my having been in the industry long enough to see history repeat itself. The price of oil has gone up substantially, as we all know. We’ve had some relief from the absolute highs, but I suspect given the growing worldwide demand that we’d be well advised to get used to expensive fuel. Fiberglass is made of oil, plus there’s a huge transportation cost component in boats, which is resulting in the price of new boats rising significantly faster than many other goods. It’s getting to the point where we are starting to see a few boats sell used for more than they originally sold for new. So far it’s a rare occurrence, but one that certainly means used boat prices are firming up. Interest rates are also creeping up. The combination means buyers would be well advised to lock in their boat price and interest rate now, for they could end up saving thousands as they pay off their fixed rate loan with tomorrow’s cheap money. Some savvy buyers in the ‘70s made out like bandits by employing this strategy.

Finally I’ll leave you with a reminder: The Section 179 deduction is the best thing for tax reduction since the Investment Tax Credit of the early ‘80s. For example, if you’re in the 35% tax bracket and buy a new $125,000 boat for the Club Nautique fleet, you may be able to reduce your income tax bill by more than $35,000 in the year you purchase the boat! My last prediction: like the Investment Tax Credit, something this good isn’t going to last forever.

I wish you fair winds and following seas in 2006!