The Ripple Effect In A Stormy Economy

CBS Evening News: Boat Dealer's Woes Highlight Financial Interconnectedness

(CBS)  Tampa boat dealer Robert Tronio calls it the "wow factor." For 30 years, a spin on the water has helped him sell thousands of new Pro-Line boats.

"Does the wow factor still work even in this economy?" CBS News correspondent Kelly Cobiella asked.

"Some people don't get to get their wow factor because I can't get their credit approved," Tronio said.

Today, Tronio's boats are as dry as his business. Sales are down 30 percent, from nearly $14 million in 2007 to $9.5 million last year. He said once the bills are paid, he's left with a much smaller profit, down a whopping 80 percent.

"Unfortunately, I have had to lay some people off, I've had to cut people's hours, cut people's salaries," Tronio said. "My managers got a 20 percent cut, I'm working a four day work week with the people that I have … I'm looking at getting into some new lines of credit."

Tronio's operating costs have skyrocketed. Banks are charging him a lot more to put boats on the showroom floor. Just last month, t hey upped his interest rate by 7 percent.

"It is a domino effect, if they push too hard, all the dominos are going to fall," Tronio said.

They've already started falling. Because Tronio is not selling boats, he has stopped buying boats from this Pro-Line factory in Homosassa, Fla.

The factory laid off most of its employees in November.

"It's so quiet in here, what did it used to be like?" asked Cobiella.

"Normally you couldn't hear yourself think," said Pro-Line President John Walker.

At its peak, 400 people worked here, building 10 boats every day. The day of the CBS News visit, there was one boat and four employees.

"If the dealer can't order boats you can't build them and sit them out in the yard, so we stopped building boats," Walker said.

And they stopped buying cushions for those boats from Gary Helms. He gave the nine sewers and stuffers at his upholstery shop in Homosassa busy work for three months, hoping the slowdown was temporary.

"We kept hearing next month, next month, next month," Helms said. "And we're still hearing next month."

Last November, he laid them off. That means Lois Mack isn't sewing. She made $9 an hour at the upholstery shop. Today she's earning $7 an hour at the local grocery store and supporting her husband Faron. He lost his job at the Pro-Line factory last November.

"We're making it, but barely, it wouldn't take much to push us the other way," Faron Mack said.

They've stopped eating out, and buying gifts for grandkids. Their 19-year-old son is helping with half of the $800-a-month mortgage on a home worth $50,000 less than when they bought it.

Jobs are hard to come by in this small town, and no one pays as well as Pro-Line.

"Watching him call every Friday to see if he could go to work …" Lois Mack said, choking up.

"Most days, do you think about what you're going through?" Cobiella asked.

"I try not to," Lois Mack said. "I keep trying to think things will get better."

"And are they getting better?" Cobiella asked.

"No," she said.

Nearly everyone in this small river town is caught in the wake of a sinking marine industry, and the ripple effect doesn't stop here. The waves of recession that hit t he boat seller in Tampa and the boat maker in Homosassa have washed up on the shores of Lake Michigan, where a fiberglass company in Chicago is trying to stay afloat.

[brad1951]

As a former employee of ProLine boats I can say that the lack of sales is not due to being union workers because we are not. The workmanship and materials in our boats is as high as any in the industry. As with most of the problems in our economy the lack of sales is due to the lack of available financing and the down turn of the economy

[tincup356]

It was an "historical" election. That is all that matters!!
Posted by jwind1 at 7:45 AM : May 7, 2009 .........................
....................the ONLY thing historical about it was a black man was elected...HE WAS STILL a member of a CORRUPT congress that is a co-conspirator with corporate America committing lobby robbery when the bailouts started and now as PRESIDENT he holds a much higher responsibility to the people,,,yet him and BOTH parties of congress are betraying the people,,,all for the sake of the lobby dollar,,,,,,,they take an oath to the people,,and they have ALL betrayed it.

[mypatch]

There's no unions in Florida. I worked for a boat mfger. NO union and crappy wages.

[ianlou]

quapawsix,
Sorry the joke sailed over your head.

[quapawsix]

This is the same attitude that got Unions started in the first place.

This guys problem is the same as Detroits.

These boats aren't selling because of poor quality and over paid union boat builders!

Damnn UBW.

[ianlou]

This guys problem is the same as Detroits.

These boats aren't selling because of poor quality and over paid union boat builders!

Damnn UBW.

[ianlou]

When the ship sinks, steerage passengers drown first but first class passengers aren't far behind.

[Professor2U]

I'll bet those backwards folks in Florida voted for McCain so he could give them another dose of "trickle". They are such RACISTS, they would prefer an incontinent and incompetent white man over a qualified black man. In those parts of the state, they deserve what they got.

[inketolstoy]

Bush tried giveing a few grand to the taxpayers, and it didn't work. Obama tried giveing a few trillion to select corporations, and that didn't work. I think it is time for the government to stop playing banker, and go back to being the cop. Liberals and conservatives, Republicans and Democrats blame each other, while our gevernment handles money like a two year old handles a baby rabbit. We need to take the rabbit away, before the government kills it. Our governemtn needs to stop handling so much money, and focus on making sure that they companies are not mishandling it.

[Professor2U]

I guess that Reagan Republican trickle down economics DOESN'T work very well. Those folks in Florida can fight over the scraps that trickle off the big mans table and pay a higher tax on it too!!!

[jwind1]

When will our government wake up and see,,,,they are dumping money into the wrong part of the economy? When the banks have it all where will congress run to then? Do they not realize that with each job, home , retirement , etc., lost in America by middle class citizens,,,,sends this country closer to revolt? This lobby robbery that congress is committing is HIGH TREASON.
Posted by tincup356 at 6:05 PM : May 6, 2009

It was an "historical" election. That is all that matters!!

[tbbaot]

Not surprising that luxery items are not selling during the worst recession since the great depression. There is no short tem solution. Americans will have to learn to live within their means as ready credit will become a thing of the past.

[seezero1]

Now if Person A does not buy that boat then the boat company can't make a boat to replace that one in the inventory. Then the cushion makers and fiberglas makers can't sell cushions and fiberglas respectively to the boatmaker for that boat since that boat does not need to be made. The cushion makers and fiberglas makers that get laid off generally are not able to buy an HDTV. The American companies that make HDTVs can't make as many HDTVs to replace the ones in their inventories since their inventories are not getting emptied fast enough. As a result, the HDTV makers have to layoff workers, too. These laid off workers from the HDTV makers can't afford to buy a boat. Check that out! We're back to the boat. Now that's a complete cycle of at least a small portion of a bad economy.

[jetranger7]

This is another one of those Super Expensive Luxuries, that the average person doesn't need, and most will borrow money to buy the stupid thing, and attempt to make payments on it for 7 years or longer, like they really need this boat, along with the insurance if they can afford it, most can't afford the boat, the insurance, and the slip fees, or the proper maintence of the boat or have no clue how to properly perform maintence and don't have the tools to do it themselves, nope just gotta have it tho,, and go deep in debt to get it at whatever cost,, with out any foresight into the reality of their future financial situtation, just like all the wanna be Harly Biker Riders who think they had to have a 15,000 to 35,000 dollar Harley Davidson, to ride about 3 months out of the year and bought it on Credit, because they couldn't actually afford it and pay cash,, Suckered Americans for buying these Luxury items they really don't need and can't get rid of now that the economy has hit bottom - bound to happen and they fell for it hook line and sinker !!!!!

[wogerwabbit]

Wow. $9 an hour are the good jobs. 40 x 9 = $360 a week... before taxes. We're in trouble.

[tincup356]

When will our government wake up and see,,,,they are dumping money into the wrong part of the economy? When the banks have it all where will congress run to then? Do they not realize that with each job, home , retirement , etc., lost in America by middle class citizens,,,,sends this country closer to revolt? This lobby robbery that congress is committing is HIGH TREASON.