The Ripple Effect In A Stormy Economy

Lois Mack
Lois Mack, who lost her job sewing seat cushions for boats. Her husband Faron Mack lost his job at Pro-Line boats in November. (EN, Cobiella piece)

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.