Boss of Plymouth's Princess Yachts vows not to cut any of 2,200 staff
THE boss of Princess Yachts International has re-assured its 2,200 staff that job cuts are not on the horizon despite the luxury boat market facing choppy waters.
As another Plymouth employer, dairy firm Milk Link, confirmed 35 jobs are under threat at its Marsh Mills office, Princess Yachts' managing director Chris Gates said he was determined to retain the firm's large Plymouth workforce to prevent key skills being lost.
He said the recession-hit world economy, particularly in Europe, is shrinking the yacht market.
But he insisted the firm would fight back by winning orders ahead of rivals.
Business Cards From Only £10.95 Delivered www.myprint-247.co.ukView details
Our heavyweight cards have FREE UV silk coating, FREE next day delivery & VAT included. Choose from 1000's of pre-designed templates or upload your own artwork. Orders dispatched within 24hrs.
Terms: Visit our site for more products: Business Cards, Compliment Slips, Letterheads, Leaflets, Postcards, Posters & much more. All items are free next day delivery. www.myprint-247.co.uk
Contact: 01858 468192
Valid until: Friday, May 31 2013
"If we want a fair share we have to be aggressive," he said.
And Mr Gates wants to prevent a skills drain by embarking on a huge retraining exercise in a bid to shift staff to producing in-demand 100ft-plus vessels.
In July, Princess Yachts announced profits had tumbled by more than £6million – but it still made a £15.1million surplus on increased turnover.
The firm produces up to 300 vessels a year, with prices ranging from £250,000 to £15million a boat.
But talking exclusively to The Herald, Mr Gates said that although the business is stronger, the overall market has deteriorated.
"The world is a tougher place than a year ago," he said. "In our industry there is going to be contraction and we have to work hard to gain more market share."
Princess Yachts this year bought the freehold to its new 20-acres site in Devonport Naval Base's South Yard, for an undisclosed sum.
Larger vessels will be developed and built in the yard and work has started on the first phase of a £35million production facility.
"We have invested in the South Yard and a huge amount of money in new product development," Mr Gates said. "We are prepared to sacrifice profitability to long-term investment and to keep the workforce together.
"We are high-skilled and the workers are our greatest asset."
Mr Gates said that during the 1990s recession the company shrank so much "it took over a decade to recover the skills base".
He doesn't want a repeat for the 2,200 workers spread across sites in Stonehouse, Lee Mill, Langage, South Yard and Coypool.
"We are determined to hold on to the skills base," he said.
And Mr Gates said that in order to battle a shrinking market, particularly in countries such as France and Italy where the wealthy are being squeezed by taxation, the firm will also have to be more competitive and look further afield.
"We are looking at Central and South America, the Far East, the Middle East, and to do more business in the emerging markets," Mr Gates said. "But there is a huge cost in establishing your name in a market that does not differentiate in quality of product.
"It takes a lot of investment in time, money and effort."
Mr Gates said the firm is also targeting the growth area in luxury boats – those of 100ft and longer.
As a result staff are being retrained to work on larger vessels.
"The biggest job is to bring in the volume of business to keep everyone busy," Mr Gates said. "We are trying to increase volume where we have demand, and move staff around accordingly.
"We have growth in boats of over 100ft, but a model development programme this year started at 39ft and went up to 130ft."
He said Princess Yachts' main competitors are firms from the UK, Italy, and the USA, with a regional producer usually strong in each territory the firm targets for sales.
"The risk is we become inefficient as we move people around," he said. "But we are prepared to do it."
He said this ability to re-organise to tackle new opportunities is "what differentiates us from competitors".
Comment: Page 11