Nov 18, 2015

Gunboat Factory & Financial situation by Peter Johnstone








Images: Jesús Renedo / Gunboat. - When you invest and create new projects, there is always a quota of risk. I've been involved in many projects, new companies / startups and new business built from scratch in the last 18 yrs, I can count about 8 on 3 different countries.  I helped to create many of them and also did some on my own like leaving office to build F18s cats, push for a multihull racing class in Arg, the F18 OP now being a reality built by Exploder , this website and other small projects.

So I'm all for entrepreneurs and people creating & pushing hard for their dreams at any level. I have taken many risks affecting personal & family status quo on each decision, of course in another level than million dollars boats business , but those risks I took myself never involved 3rd parties, the risks of failures would only affect me exclusively.

On bigger projects like Peter's or the companies/projects I've worked as employee this scenario is almost impossible to avoid, as you also provide work for others, (being employees or providers) which is the real drive and first engine chain of any economy: Entrepreneurs implementing new ideas.
But you always need to plan ahead to minimize, if possible,  any "collateral damage" (employees, providers & clients) , if not you belong to Wall Street.

Regarding Peter's list below, I mentioned here that the G4 was a Racer since day 1, and I think the marketing used focused on Cruising mainly made a rather innocent capsize to transform in a huge deal and 'tragedy'.

If you promoted the G4 for what it is , a thoroughbred racer with room to sleep and dinner at night , the impact of a 20knots flying racing cat slowmotion sideways capsize without any breakage in a regatta, would have been part of the R&D and test trials.

I can tell you this first hand as I passed Peter a rather closed sale for a G4, of a prospect client who thought of drinking champagne while foiling 20knots  from Buenos Aires to Colonia, Uruguay like the old Aliscafos foiling power boats ferries did in the past... So that capsize made the client abort any possible buy.
I wrote about this (being a racer first) almost every time I published stuff from the G4.

To me the G4 is quite easy to brand and market, if I have the money which boat of the 2nd photo above do you think I will buy to race at Voile St Barts? or any other regatta like that one? Is a no brainer, and after the racing I would call my friends, wife and kids to have a great dinner (like last photo above) on this incredible F1 . Rather simple and honest marketing strategy, if you sail and race performance Multis, the possibility of a capize is always there no matter the size, F18 or MOD70.

On the rest , well ...just big financial & logistics problems that such projects have to endure.
Gunboat line look like weapons and it is really a pity having the brand suffering this hit. I'm deeply sorry too Peter. Hope you can recover soon.

Meanwhile Holland Composites continues fully behind the G4, and with the good trials made last season they have made several changes to make this innovative flying cat a bit more safer. Check details at www.catsailingnews.com/2015/09/holland-composites-launchs-updates-g4-2.html
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Notes by peter Johnstone Published by Gunboat:
From our Founder, Peter Johnstone, regarding today's news about Gunboat:
In a period of non-stop accolades and introduction of several terrific new models, Gunboat has been quietly struggling behind the scenes for nearly two years. It has been a perfect storm of adverse business circumstances, mistakes, and disputes. A brief summary from my viewpoint/opinion:

• The Chinese built Gunboat 60 series cost Gunboat a fortune to sort out. The Chinese builder has fought its contractual obligations to manage, support, pay and reimburse for the completion, rework and warranty costs. Gunboat felt an obligation to its customers and spent millions out of pocket, which proved to be a huge strain on our resources, focus and productivity.
• The G4 capsize in April, and the recent photo boat collision on a magazine boat test in Annapolis have thwarted sales of this series to date. The investment was made. The return is in the future.
• The abandonment of RAINMAKER by her owner and crew certainly was not helpful to a new series. The Gunboat 55 is a great boat, and it will take time for that word to get out.
• The ramp up of production in North Carolina took longer and cost more.

I am sure our situation will be dissected. As sole owner of the company, these issues are all mine…..I could have overcome maybe 1-2 of these challenges, but certainly not all of these in one short period of time. Today, Gunboat will file for Chapter 11 protection under the Federal Bankruptcy Code.

With the challenges above, there are also positive notes moving forward. The operations have shown a nice turn-around in the past few months. Boats are being built, and we are meeting our plan for operating the business and recovering through the Chapter 11 process.

Business has ups and downs. Success and failure. I have enjoyed 30 years of both results. While the past two years been the most stressful and difficult period of my life and business career, this period has also been one of enormous assessment and growth personally and professionally. I have learned far more from the failures than the accolades. We have a lot of good people, and we will see our way out of this period in the next two years.

To everyone who has been so supportive, I am forever grateful. To anyone adversely affected by Gunboat’s situation, I am deeply sorry.

-Peter Johnstone, Gunboat
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