In the 1960s, Orange County was the center of the boat-building world.
All the big names lined Placentia Avenue in Costa Mesa.
Among them were Westsail Corp., Columbia Yacht Corp., Wayfarer Yachts and Islander Yacht Corp.
By the 1980s, most were gone.
Some couldn’t hack the state’s air pollution crackdown. Most were gobbled up by larger companies and eventually closed.
“They just couldn’t run them,” said Roger MacGregor.
His boat building business, MacGregor Yacht Corp., is one of the holdouts. MacGregor has been making boats in OC since 1965.
Today, MacGregor Yacht builds 26-foot sailboats at a 5-acre yard on Placentia Avenue. MacGregor is one of 83 boat builders in the state, according to the Chicago-based National Marine Manufacturers Association.
MacGregor Yacht does about $8 million in yearly sales. Its sailboats sell for about $22,000 through 60 dealers. The company’s 60 workers make everything for the boats, from the interiors to the trailers that carry them.
The company is considered the only mass producer of boats left in the county. A handful of others make a small number of boats to order. They include Sam L. Morse Co. and Bravura Yachts Inc., both of Costa Mesa, and Columbia Yachts,a name from the county’s heyday,which is back in Santa Ana under the son of the company’s original founder.
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MacGregor: home on Lido Isle, 70-foot sailboat |
Through the years, MacGregor, who owns the business with wife Mary Lou, has turned down offers to sell. In boat making’s go-go days, he got an offer a week, he said.
“I didn’t want to sell it,” MacGregor said. “I was having too much fun.”
MacGregor picked a niche that no one was in,boats that can be hauled on trailers, said Skip Elliott, co-owner of sail maker Elliott Pattison Sailmakers in Newport Beach. Other builders were making big boats, he said.
But MacGregor and others are going against the tide. Boating has declined nationally, as have the number of boat builders.
New powerboat sales were down 9% in 2007. Sailboats were off about 10%, according to the National Marine Manufacturers Association. Sales are likely to slide this year.
High fuel prices might give sailboat sales an edge over powerboats this year, MacGregor said.
Highly Regulated
Staying in business has been a matter of flexibility and consistency, according to MacGregor.
He’s had to comply with toughening air quality rules. He’s also had to learn how to be a good neighbor. Boat building is a smelly business from the resin used.
“Fiberglass in not the tidiest stuff to work with,” MacGregor said. “The city came down hard on builders.”
MacGregor has invested about $500,000 in air filters and soon will have to cut pollutants coming out of the plant altogether.
The city of Costa Mesa recently rezoned the area to allow for housing. A 5-acre condominium project is planned in back of MacGregor’s boatyard.
“I can’t have any smells coming out of the plant,” he said. “You’ve got to be willing to spend a lot of money.”
The poor housing market might bring an upside. It might slow the condo project and give MacGregor more time to adjust, he said.
He estimates he’ll have to spend at least another $200,000 on afterburners.
Controlling the company’s growth, sticking to one model and watching costs have boosted profits, according to MacGregor.
“I find it’s easier to double my profit margin than it is to double my sales and keep the same profit margin,” he said.
The company builds two boats a day in two shifts. There are only two color choices,white or blue.
His wife designed all the accounting programs and handles the books. MacGregor tracks labor and material costs.
“It’s a fairly straightforward operation,” he said. “I don’t really need much else. If one of those numbers goes up, I’m out there yelling.”
To motivate workers, MacGregor said he pits two assembly crews against each other. They each build a boat a day. The better team gets more raises, he said.
He’s been able to control workers’ compensation insurance costs through a bingo bonus game. He pays his workers about $14,000 in yearly bonus money if they avoid accidents.
Finding workers is easy, he said. He points to a help wanted sign. When he puts it out front, he gets loads of applicants, many of them Mexican immigrants.
MacGregor buys sails from Barbados and fiberglass and fasteners from China. Some parts and resin are bought locally.
He designs each boat using 3-D computer software. MacGregor is self-taught in design and engineering.
Controlling costs has allowed MacGregor to keep the price of his boats relatively low, he said. They sell for about $22,000. He tries to keep the price in line with what someone might pay for a Honda Accord.
Rivals sell similar size boats for upward of $70,000, he said.
MacGregor is working on a 30-foot boat, which will replace the 26-footer in the next few years. Like the auto industry, MacGregor has to keep coming out with models that are prettier, lighter and easier to use.
For inspiration, he spends time looking at airplane designs.
“I’m a geek,” he said.
About a third of MacGregor’s boats are sold overseas. The dollar is weak so it’s easier to sell overseas, he said.
Daughter Laura Sharp and son-in-law Paul Sharp modify the boats to be sold internationally through their company, Sharp Marine Industries.
MacGregor got his start in boating while he was working at the former Newport Beach operation of Ford Motor Co. After he got his master’s in business from Stanford University, he went to work at Ford as an administration manager and started building boats on the side.
When his hobby started earning him more money, he left Ford.
MacGregor brought up his two daughters in the business. They and his in-laws could take over, he said.
Son-in-law Dale Camper came to work for MacGregor when he was a young runaway.
“Within a month he was supervising one of the shops,” MacGregor said.
He ended up marrying MacGregor’s daughter Kathy Camper and now has an engineering degree.
MacGregor doesn’t plan on retiring or selling his business.
“I’m way beyond retirement age,” he said. “As long as I’m alive I’m going to own it.”
His business has afforded him a home on Lido Isle, where he parks his 70-foot MacGregor sailboat.
“I’m having a good time,” he said.
