Boat dealership layoffs spiked in the state of Michigan in April, when compared to other states, as government officials locked down the state due to the COVID-19 pandemic, according to a survey conducted by the Marine Retailers Association of the Americas.
In a survey of 199 dealerships across the United States during the week of April 20th, 61 percent of the respondents suggested they had no layoffs to date, and another 14 percent had laid off just 1-10 percent of their staff.
Question: What percentage of your location’s workforce have you
had to layoff due to the COVID-19 Crisis?
61 percent of dealerships reported having no layoffs through the third
week of April. And 80 percent laid off fewer than 26 percent of their teams.
Of the 21 percent of dealerships that noted that 26 percent or more of their teams had been laid off, a full 45 percent of them were from the state of Michigan.
“Our state has shut down our business as well as the right to do any motorized boating,” noted the president of one Michigan-based dealership.
“Get the governor to let us do some business,” demanded the CEO of another dealership there.
In Michigan, Governor Gretchen Whitmer announced on April 10 that the use of motorized boats would be prohibited, and marine businesses had been deemed “non-essential” and therefore must remain closed. Her executive order remained in place until April 24, the day before this MRAA survey closed.
“Our governor has made the use of a boat with a motor against her mandates, with a minimum fine of $1,000 if you get caught,” commented the owner of a Michigan dealer. “We lost a month, but things are looking good as long as our shutdown doesn’t get extended.”
Similarly, dealers in New York, a state that also had strict “non-essential” mandates on marine businesses, recorded high levels of layoffs in the MRAA study, noting nearly 20 percent of the responses in the 26 percent and up categories. The “essential” business status for N.Y. marine businesses was returned on April 18, the Saturday prior to this survey launching.
One dealership operations manager from New York noted that the company had laid off more than 75 percent of its employees, but “we were allowed to reopen on the 20th, and we have brought back 35 percent of our workers so far.”
“We used our own cash to keep everyone on when the mandate to close first started,” shared another New York-based dealership president. “Now we have the assistance of the PPP loan program to help. We have just been able to reopen, so it remains to be seen how business will be and how long we can continue to front the payroll, the insurance and of the rest of our expenses.”
More than 80 percent of survey respondents had laid off fewer than 25 percent of their team members, a threshold that’s notable because the Small Business Administration’s Paycheck Protection Program provides for forgivable loans, so long as business owners retain 75 percent or more of their payroll. And it’s true that the PPP loans were mentioned numerous times throughout the 85 comments the survey received as the means for which dealers didn’t have more layoffs.
“Only because of the PPP was I able to keep my people working,” noted an Iowa-based dealership president.
“We were able to get the SBA PPP loan and keep our folks on payroll and working in the shop,” shared a Pennsylvania-based dealership general manager.
And many dealers who noted they had gone through some layoffs, have brought staff back since they received their loan proceeds.
“We reduced our staff from five days a week to four days a week,” commented a New Jersey-based dealership manager. “We received our PPP funding from the SBA on April 17, so we had our employees return to the five-days-a-week schedule.”
“Since we received the payroll protection SBA loan, we are almost back to 100 percent,” said the CEO of an Indiana-based dealership.
“I am lucky so far,” noted the president of a dealership who reported no layoffs. “I did not have to close so far, and we are busy. Liquidity is still an issue, though, and if we don’t close the gap in boat sales and/or get our PPP money, I will need to reduce staff by 20 percent and cut pay within the next 30 days. If I get the PPP money, I will actually add a technician.”