A company with a history that goes back 149 years, Chris-Craft today builds luxury and performance into every high-end boat it sends out the factory door.

It all began when Christopher Columbus Smith, the company’s namesake, built his first boat in Algonac, Mich., in 1874. The company went through several iterations over the years, through hardship and good times. Around the end of the last century, when the company seemed to have lost its way, Steve Heese and financial partner Stephen Julius bought Chris-Craft and its assets with an aim to return the company to popularity and financial success.

As president and CEO, Heese oversaw Chris-Craft’s transformation to profitability, focusing on a smaller product footprint and catering to affluent buyers who wanted great-looking boats with few compromises. Today, the company has 12 models in its lineup and a reportedly strong order sheet.

In 2018, Heese and Julian sold the company to Winnebago Industries, which also owns Barletta Pontoon Boats. Winnebago announced this past June that revenues in its marine segment were $129 million.

Soundings Trade Only connected with Heese in late summer to discuss what’s happening at Chris-Craft and in the larger marine industry. This interview has been lightly edited for length and clarity.

Tell us about your boating background.

I grew up in Tampa, Fla., and squandered my youth fooling around on boats, which in those days meant working on boats. Nothing flashy, aluminum to start with. I learned to water ski behind a 35-hp aluminum Evinrude power skiff and went from there. I also got addicted to sailing, first with a 16 Hobie Cat, a J/24 and then an Etchells.

I sailed in college. There was a benefactor at my fraternity. He was a heart surgeon in New Orleans, and he had a yacht called Pacemaker. It was a 42-foot Gulfstar, and I sailed with him a lot competitively. I went to Tulane in New Orleans, so I did lots of sailing on Lake Pontchartrain, which is right outside of town. There’s a competitive sailing crowd there.

When my first daughter was born, due to its time-consuming aspects, my yacht-racing career came to a grinding halt.

What sort of feedback did you hear from dealers over the summer?

Mixed messages, I would say. In some parts of the country, things are selling, and things are booming. In other parts of the country, summer never arrived, so it’s very much mixed. Saltwater has been stronger than freshwater for the last six months, and the economy’s transitioning. The smaller, simpler boats restock the shelves quicker than the bigger boats. So there’s plenty of inventory of those things in stock.

And it affects everybody. If a dealer gets overstocked with one product line, it affects all his product lines, which affects his outlook and ability to stock product. The level of inventory is back in units, and the cost of those units is much higher because of the inflation that we’ve had, and the cost of the floorplan is much higher. So even though they’re not overstocked, the carrying cost of it is much higher. So it’s created a — what’s the right word? — depressed dealer sentiment.

We’re returning to a more normal time, and whenever you have a transition from a crazy, booming time to a normal time, it takes a little bit of time. Your skills of selling and following up on leads are rusty, and you’ve got to shake it off and figure out what you’ve got to do to make a deal. That’s the part of the cycle we’re in right now.

Winnebago is a manufacturing juggernaut. Do its teams absorb any manufacturing practices from the Chris-Craft side, and vice versa?

Yes. Winnebago has centers of excellence at their corporate office in Eden Prairie, Minn., and although the manufacturing folks here report to me, they’re part of a manufacturing team that shares best practices. It’s been very helpful to us, having access to those experts that lead manufacturing, plant safety, waste reduction, that type of thing.

The average RV plant builds hundreds of trailers a day. The scale of it is completely different than what we have. So it’s wonderful to have that level of talent and support to help us.

How did the deal with Winnebago come about?

Our company wasn’t for sale. One of the reasons we sold it to Winnebago is because we felt such a strong cultural fit when we got to know the company’s leaders.

The deal happened when we designed a luxury towable RV and went to Winnebago and said, “Hey, we think this can carry our brand name, would you build it for us?” That’s how the conversation started. Over time, as we got to know them over a series of meetings, they asked us if we’d consider selling our company, and we realized that after building our company for coming up on 20 years, we couldn’t just sell it to the highest bidder. It needed to be put in hands that were going to appreciate it and love on it the way we did.

We saw that they love their products, love the employees, love the dealers, love the end customers, so it was clear to us that they were capable and had the right mindset, although you never really know until you’re married, but it’s turned out to be that way and more.

Because they’re a bigger company — they have well over $4 billion in sales with 7,500 employees — they’ve got systems, and teams of people who operate on such a different scale than we do. There’s so many wonderful things that they’re capable of doing that a business our size could never have done.

It sounds like the deal was more than just a net positive.

It was a positive for everybody that works here. I could go on and on. They have an employee stock purchase program that allows employees to buy stock at a discount. That’s been a home run for anyone that invested in that. They’ve got measurement and reward and talent development, and we have three HR professionals on-site here. They have a team of people that just worry about compensation and benefits, talent development, and training. It’s wonderful the resources that all the business units at Winnebago share.

Let’s talk about your new facility: 70,000 square feet, obviously a big building. Tell us about that investment.

It is good to see the company through its next phase of growth, which allows us to develop models above and beyond what we currently do. We’ve been at capacity for several years, and again, Winnebago’s got talent to help us. They have specialists that helped us design and lay out the plant, and design it in such a way that it’s a 50-year investment, at least, in how it’s built. It’s got our latest thinking of how to lay a plant out, how to automate what we can automate, climate control, dust control, all kinds of material-handling, add-ons and with safety in mind.

Did you invest in any high-tech, boatbuilding-focused manufacturing equipment?

For sure. The new plant will be aimed at smaller boats, and smaller boats need to be built correctly the first time and at a certain pace. So definitely, it’s set up for speed and agility. Our current facilities are more general-purpose and not as much automatic material-handling as we have in the new facility.

How do you decide which boat models to design and build?

We believe the market speaks to you. We see a quarter of our customers a year — about 20% to 25% a year — actually will come to the factory. So that’s a huge source of ideas and inspiration in meeting those folks and talking to them. I also stand at shows probably 10 or 12 times a year. I just stand there and talk to people that walk in or with people who are sitting down buying a boat, and that really is the most meaningful data I get. It is not an equation. It’s more like a three-dimensional analysis, but it happens at a visceral level in your head as opposed to writing a long report.

The needs of boaters in different parts of the world are different, and you have to decide which ones you want to go after. If you look at the boats that get sold in the Pacific Northwest and in the Scandinavian countries, they’re very different than the boats that are sold in the Southeastern United States. We’ve always aimed at the luxury end of things, so in terms of feature comfort and beauty and fit-and-finish, the question is, how do we incorporate those attributes into a floor plan and layout and design that’s going to satisfy that premium buyer based on where he or she lives?

I think one reason everybody gets along in this industry is we’re all going after a different customer, slightly different.

You had an electric prototype at the Miami boat show this year, the Launch 25 GTe. What was the reception like, and where do you see electrification headed?

We’ve taken deposits. It’s out on the road right now doing a whole bunch of customer events, and we’re gathering data and trying to decide what to do. It’s an amazing product. It delivers something very different than the same model with a gas engine. It’s quiet, so you’ll hear things you’ve never heard before, like the wind and the waves, water slapping, the spray hitting the water. It’s always been there; it just was drowned out by the motor.

The challenge is that the drive system and the batteries are a lot more complicated to install correctly. And electric is not for everybody because it requires high-voltage charging at your dock, and it lasts for about an hour and a half if you drive it the way most people drive a boat. We dedicated two of our best engineers to the project. I think it’s the future, for sure. When? I don’t know. Is it five years? Is it 10 years? I don’t know. But is it the future? For sure, because it’s clean, quiet, and the performance is amazing. The cost will
obviously need to come down, and the run time will need to go up, but when those two things happen, I think it’s going to create happy customers.

There’s also a trend of replacing gas and diesel generators with large battery banks. Chris-Craft is integrating these systems into high-end products like the Calypso 32.

I think with our 32 Calypso, not having a generator and having a lot of 110-volt appliances, it’s what people want. By taking out the generator and replacing it with a battery bank, we’re removing something that requires maintenance and that, in the mind of the consumer, is problematic for about the same money. What we replace it with is something that’s quiet and reliable. Those are the kinds of wins I just love. We’re simplifying the ownership experience for the owner. We’re increasing the reliability of his experience.

Right now, we’re taking 12 volts and turning it into 110 so we can power two air conditioners and a cooktop. It’s not going to be very long — in fact, it’s available now. You can buy a 48-volt bow thruster. You can buy a 48-volt cooktop. As soon as you can buy a 48-volt air conditioner, we will not need an inverter. We can create 48-volt batteries and run everything on the boat at 48 volts. The new Mercury 400 outboards have 48-volt alternators, so the engines can charge the battery to run every appliance without an inverter.

We’re not far away. It might be a year or two, at most, where we have boats without generators and without inverters that operate perfectly at 48 volts. When the batteries get low, which is going to be, in our case, eight hours later, the engines start on their own, and you don’t even know they’re running because they’re so quiet. They’ll charge the batteries at idle with everything running.

Workforce development is a huge issue in the industry right now. How are you attracting new talent for Chris-Craft and its dealers?

I think every manufacturer in this country is facing that challenge. We have been working with our buying group and our vendors to build a training portal. As that project has been unfolding, we’ve been talking to Matt Gruhn at the Marine Retailers Association of the Americas. He’s also building a training portal for dealers, and he’s approaching it more from a dealer-operation standpoint. We’re approaching it more from an OEM technician standpoint, but there’s a big overlap in the middle for the dealers’ techs.

No matter what, we’ll be working together and with our vendors. Independent Boat Builders Inc. has 95 contracted vendors, and we are working with each one of them to create training videos with a test so we can use that with our training portal to manage who’s taking what training, and logging if they passed the test. The vendor creates the video and the test. So, for example, we’ll have a training class on how install a trim tab, or as complex as rigging an engine. Eventually, we’ll have e-training for every employee that works here, and we’ll make that available to our dealers, either directly through Matt or with a login to our site for the dealer directly.

Another challenge is that not too long ago, your average 15-, 16- or 18-year-old knew how to use all the hand tools. But we’re hiring people now that have never held a screwdriver. So we need to get those folks on the learning curve and teach them how to build a boat quickly. But they’ve never used a screw gun before; they’ve never drilled a hole. That’s what we’re facing.

Advocacy and industry representation seem more important than ever. How has your experience been with the National Marine Manufacturers Association?

I’ve been on the executive committee for six years, and I was chairman for two years. It was very rewarding. Selling the Miami boat show to Informa was my first order of business and probably the best financial deal that I’ve ever done.

The Miami show was, obviously, a big, successful event, but financially, it had the possibility to, at best, break even, and at worst, lose $5 million or $6 million in any given year. We turned that around by teaming up with Informa, moving the show back to South Beach, and turning that into an annuity worth several million dollars each year. The annuity value of that going forward is tens of millions of dollars. That was the first major accomplishment that I feel really good about.

And then, going through Covid, although most manufacturers and dealers did well during Covid, the NMMA didn’t because all the shows were canceled, and that was a big source of income. The NMMA owns the 18 largest shows in the United States except for Fort Lauderdale, so going through Covid caused a massive restructuring of the NMMA. There were office closings, headcount reductions and a lot of pain.

I encourage everybody to get involved at the American Boating Congress, which is an annual event in Washington, D.C., focused on boating advocacy. You get back much more than you put in. There’s loads of opportunities to help the industry. You’ll meet the best people in our industry, and you’ll be rewarded with strong relationships and a lot of learning. We need to get the next generation of leaders involved at ABC and other industrywide events.

Is there anything that you’d like to add?

The whole training piece is an interesting one. It’s going to take the efforts of people like Matt Gruhn at the MRAA and Tom Broy at IBBI, and a huge team effort as an industry, to create a flow of talent and training within our plants. That will flow into talent at the dealerships that can service and repair the product and keep the repair-event-cycle time quick. 

This article was originally published in the October 2023 issue.