Dometic, which specializes in the mobile living market and has a large footprint in the marine industry, reported nearly $3 billion in net sales last year across all of its segments. Its products are sold in 100 countries to OEM and aftermarket customers. Worldwide, the company has more than 8,500 employees.

Its marine products include climate control, water desalination and purification systems, sanitation systems, water heaters, coolers, refrigerators and a wide range of power and control systems that include electric, hydraulic and mechanical steering; shift/throttle controls; joystick control systems; autopilots; digital switching technology; trim tabs; outboard jack plates; and other products.

Soundings Trade Only met up with Dometic Marine’s Eric Fetchko, who has been president of Dometic Marine Global since April 2020. He discussed consolidation, electrification, technology, market headwinds and more.

Courtesy Dometic

Tell us about your professional and boating background.

I started in 1986 as part of Teleflex, where I designed the current SeaStar hydraulic steering, which I believe launched in 1989. I have an engineering background. I started as product designer, design leader, engineering manager, director of engineering. While I was director of engineering, I also started my own business unit. We went from $800,000 a year to $24 million in four years.

Then I became chief technology officer. I helped Teleflex divest its other parts when it decided they were going to be medical. I helped divest aerospace and automotive, and when it came to divest marine, it was 2007. They pulled us off the market, and in 2011, we divested ourselves. In 2011, I ran the Vancouver facility. I went from developing the product to actually running the facility, and when we got bought by Dometic, my CEO retired and I took over for him.

I’ve boated my whole life. I’m the youngest of eight kids, so we had to fish and hunt. Anything we could tie down, we’d eat. I remember we always had boats, and the one thing I always remember is we’d take that boat to the boat launch, and there’s a 50-50 chance we were going out because engines were so bad back then. I don’t think I ever remember when all the gauges were working on the dash or all the switches were working and it was just — you grow up and you develop, and you think, There has to be a better way. That’s part of our motivation at Dometic today.

Courtesy Dometic

Last year, Dometic rebranded Sierra, gathering several sub-brands under its umbrella. How is that going so far?

Last year was the debut. We’re collapsing a lot of other brands, like Prime Line and Shields, into Sierra, and that’s underway right now with new packaging, but it’s going very, very well. There’ll be one aftermarket parts-accessory brand instead of five different ones.

Has supply-chain pricing improved? Are you finding it easier to get the components to build and ship product at the right pricing?

Some of it has [improved], but I can tell you that pricing hasn’t. That’s because at the end of the day, sometimes material pricing has come down, and sometimes it hasn’t. But when you trace it back to us, to what we’re doing, we go back to the suppliers and say, “Hey look, aluminum’s gone down, copper’s gone down.” They usually respond by saying, “Yes, but our shipping’s still expensive, our cost of labor has gone up.”

Courtesy Dometic

So whatever’s coming down in the actual raw-material side is not getting transferred to the actual people who are purchasing and processing it. That, too, will change. We’re seeing some drops in logistics and shipping. Some of that is starting to come down, and some electronic components have become more available. We’re still on allocation for a few of our key products, but yes, compared to a year ago, it’s better, but we’re not out of the woods yet. My guess is, it’s going to be end of the year before I feel like we’re in ideal shape.

What does the microchip supply chain look like?

It’s become better for the microchips for some of our air-conditioning products, since we managed to secure substantive amounts on the gray market. So that’s keeping us going. There are a few products, like our trim tab controllers, where we bought enough to keep us going for a certain period, and we’re hoping by the time we burn through those that the general market will have come back. So half the chips we’re having issues with are now stable, and half the chips are, I won’t call it unstable, but on allocation still. But it’s not like a year ago when we had eight engineers redesigning circuits so we could use different chips and validate them. That has slowed down tremendously. We’re getting there.

Does Dometic source most of the microchips it uses in the States, or out of the country?

It’s wherever we can get them. There’s a lot of counterfeit chips out of there, and, touch wood, we haven’t been burned yet, but there’s a lot of fly-by-night people that are selling gray-market chips, and I know many companies that have been burned with counterfeits. That said, right now we’re still getting them wherever we can.

Courtesy Dometic

How is the trend toward electrification in propulsion and high-output alternators affecting your business?

Electric propulsion is still a time away. There are people doing some boats and doing interesting things in that space, but it’s all very much, what shall I say, concept stuff right now.

We started the revolution turning boats digitally about five or six years ago when we acquired Marine Digital Integration, and we’ve been growing that business. So we put in digital switching with what we called boat-in-a-box. That was phase one. With phase two, we acquired Treeline, which was CDI and Balmar. That’s battery management and high-output alternators. Dometic also has purchased nine mobile power systems companies. We have an ecosystem, and we’re only shooting for marine.

Secondly, with the battery management systems — the high-output alternators and the battery systems, solar panels, solar chargers, inverters — that’s part of Mobile Power Systems Marine. And we’re doing our own thing, not because we don’t play well with others, but we’re just in a unique market. Things in mobile power systems that work in RV won’t necessarily work in marine because of the nasty environment.

We’re very much system-oriented. We have our first lead customer that is going to take all of it, including telematics and everything from our connectivity, and we’re starting with them in this month. Then we’re just going to continue to grow the business. As far as lithium-ion batteries, we actually have technology from one of our sister companies that we’re going to use to customize batteries for our marine customers.

These are smart batteries; they have inverters and everything built into them, so we’ve got a bit of a unique proposition, but we’re also in a situation where we’re shooting for better reliability, because there’s less forgiveness for failure in a boat than there is in, say, an RV. An RV, if you have problems with the electrical system, you pull off the side of the road. Marine, if you’re 60 miles offshore and a storm’s coming in and your electrical system fails, it’s a different story. So that’s why it’s a unique offering. But we are continuing to grow. We have one more acquisition, which we bought as an add-on. It’s the final piece of our puzzle, and we’re hoping to close that one down in about three to six months.

Does Dometic currently offer a lithium-ion battery product?

We got the [battery]recipe from our sister company in Europe, and we’re building a production line to manufacture these batteries to work with our product. We’re in a unique position to do well in marine here because on a boat, for instance, the highest power draw is air conditioning. So we’re doing a battery management system, we’re doing lithium-ion batteries, charging, all that. But everything that plugs into the system: air conditioning, stoves, refrigerators, you name it.

And we have algorithms in the product that work well with our system solution. Other people that are doing the same thing, well they’ve got to plug into ours, and sure we’ll allow them to do it. But because we are designing both, and every one of our devices is connected on the boats, they can talk to each other.

A good example is our Voyager [air- conditioning system]. We’ve just finished our first production run. This thing, no matter where you are in the world, it’ll use 440 volts, 220 volts, 110 volts … 50 hertz, 60 hertz, it all plugs in automatically. It’s got algorithms in the system, so when you’re sleeping at night, when it’s keeping the air cold, it’ll slow things down a bit. It won’t shut off, but it’ll slow down and run at a certain level, and it’ll just go up and down to keep the noise level down and keep the battery from drawing too much. So we’ve got the ability to do a lot of that; it kind of gives us the ability to get ahead.

It sounds as if there’s a lot of vertical integration in the company, and you have the solutions to support it.

You said the key word: solutions. We’re looking at solutions because we’re responsible for it. Our business model at Marine Digital Integration is to send engineers in so they can live around the boatbuilders, help them design the loads, find out what’s needed, and get them the harnesses and digital-switching modules they need. That’s where we coined the phrase boat-in-a-box. So we build it all, test it in the factory, and all of it goes on a skid to the boatbuilder. It just ties into the boat seamlessly.

What other headwinds are you, your dealer network and people who sell your product facing?

First and foremost, it’s still supply chain. Secondly, it is absolutely inflation, and because, if you look at it, and where I’m seeing it hit already is on the boats that blue-collar guys buy. In Finland, multiple little aluminum boat companies are shutting down for four or six months. Americans have a love affair with boats, which thank God keeps us all in business, and a lot of guys will take their tax return, put a down payment on a boat and finance the rest.

Interest rates have gone up 4, 5, 6%, and maybe because of the supply chain, that boat has a $2,000 or $3,000 surcharge. They’re now in a position where if they do that, like they’ve done in the past, the buyer cannot finance the rest of it. So that’s where we’re seeing a bit of an issue. But we’re also starting to see field inventory normalize. The last two years, there’s been historic lows for field inventory of retail boats. And now, certain types are starting to normalize. So that means, we figure by June, towboat and aluminum boats, I think, will be normalized, and by the end of the year, some of the other types of boats will also be normalized. And in the field, typically a healthy time has been when there’s about 180 days of inventory.

But the problem is that with inflation and retail sales dipping a bit, you’ve got to wonder if even 180 days is sustainable anymore because the world learned a lot of lessons from 2008. And there was so much field inventory that I recall one customer had a ton of money in incentives to sell boats in 2008, because there was so much field inventory. I don’t think the industry is shortsighted enough to fall for that again. I think we’re not going to go up to the 180-day level. I think they’ll start pulling back before that, is my guess.

A lot of the dealers I spoke to at [MRAA’s] Dealer Week were like, “This is the first time we’ve had a floorplan in two years.” And I talked to a floorplan financier who’s like, “We’re already having to call back boats that are not being paid for.” So it’s just interesting in the last 12 months where things have — normalize is the word industry tends to like to use, but it was a very quick normalization.

Is Dometic active in the telematics space aboard boats?

Yeah, we developed it ourselves. Dometic is putting it into RV and all other areas, too. So we worked with the team, and we took advantage. We had to do our own thing for marine, but the tooling and things like that, we were able to piggyback. We’ve done our own app and the gateway that ties all the way into our digital switching and our spine of the boat. So that’s starting to ship to customers in this month.

Are you eying any acquisitions in systems electrification?

There’s a few that we’re working on, but for marine, I’m in charge of acquisitions, and what we do with my team is look for companies that will fit our ecosystem. As things have been changing in the market, you’re seeing that sort of integration in motors for Yamaha and Mercury and things like that. We’re kind of reinventing ourselves because we used to sell steering to everybody, and now people are integrating where we wanted to be the integrator. So we came out with some technology that allowed us to do so.

What are customer expectations for your products these days?

With older boaters, there was always an inconvenience to boating, and there still is to a certain degree. People from the past generation absolutely accepted that as part of boating. I knew when I was a kid that there was a 50-50 chance that I wasn’t going fishing because of a mechanical issue.

But nowadays, the expectations of a boater are totally different. Last year, there were 400,000 boats sold in North America, both new and used. Forty percent of those buyers were first-time boat buyers. And most of these guys, they expect to come up to their boat, point a key fob at it, and have everything just work. We knew these expectations were coming. So with MDI, you have a key fob, you’re walking to that boat, click a button, it turns on the batteries, turns on the light, sets things up for the boat owner.

We are trying to address all these expectations. It’s impossible to do it overnight, but our whole goal, and my goal, is to make it easier for everyone to boat. When someone comes into boating, I don’t want them to leave. That keeps her in a job, me in a job, everyone else in a job, and it’s good for our industry. We have to meet their expectations. So that’s what we are driven about right now. People want to pull up on a sandbar — they don’t want to leave their engines running, they do not want a genset running, but they want their air conditioning running. So we must address all those issues.

What other aspects of the Dometic business are you passionate about?

In the last three years, I’ve seen more adoption of new technology in marine than ever before. So yeah, I’m passionate about it. I’ll tell another little story. When I was a young engineer, I went to this guy — he had a $500,000 boat — and I went in there and sorted something out for him. He said, “Son, my wife’s Firefly is $6,800, and she has power steering. My $500,000 boat doesn’t have power steering.”

So now you’ve seen things like our Optimus electronic power steering, and our goal was to make a boat drive like a car. We did that with Optimus, and we nailed it. XPA, which is the cable assist, that’s to bring electric power steering to the masses. We have a couple more things coming that are more in the price range of where we need to go to get — we want everyone that’s driving a boat to actually go out and have it feel like a car. So yeah, I’m passionate about that.

Autonomous boating seems to be creeping up fast on the industry. What are your feelings about that technology?

We’ve been playing with it for five years, and there’s several companies doing it. It’s probably got a better chance of success than autonomous automobiles. But in the end, I’m ambivalent one way or the other.

Saying that, absolutely there’s a place for it. I think it’s way off. There are a lot of people out there, and they sell a good story, but I think it’s way off. Reliability’s a big thing, but that’s just my opinion. 

This article was originally published in the May 2023 issue.