Alloy Yachts has laid off 60 workers because of weak demand in superyacht orders, according to the company’s managing director. Tony Hambrook told BusinessDay.com that the Auckland shipyard typically has 250 staff. But following the latest job cuts, the number will drop to 135.
“The big picture is world-wide sales for superyachts are dramatically less than five years ago, so we have had to reduce jobs,” he told the paper.
The company has been in business since 1986. Hambrook said this is the most difficult period it has ever seen. “We went through the 1987 sharemarket debacle in the early days and it took about four to five years to recover, but this downturn has been deeper and taken longer to recover,” he said.
Hambrook said a drop in resale value for brokerage yachts has also stifled demand for new builds. “Ten years ago yachts would sell within a year for more than the cost price,” he said.
Alloy Yachts also has an unfavourable exchange rate for the New Zealand dollar that is also stifling new orders. The Kiwi dollar has hit record highs against several currencies this year, though it has fallen more than 12% against the US dollar since July. Hambrook notes that EU, where most of Alloy’s competitors reside, is also trying to push down the euro with quantitative easing. “The European Central Bank has been quite clear in that they want to bring down the value of the euro,” Hambrook said.