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Baxter County’s Triton Boats plant is headed for a temporary shutdown as Bass Pro Shops moves operations over to its newly expanded Ranger Boat plant in Flippin, Arkansas.
A spokesperson with the outdoor giant said the decision is due to unfavorable economic conditions and a rise in interest rates for boat loans due to inflation.
“With the overall economic conditions, particularly around high-interest rates, creating headwinds in the marketplace we will, for the time being, transition operations from the manufacturing facility in Midway, Arkansas to our newly expanded facilities in nearby Flippin, Arkansas,” said Bass Pro in a released statement on Monday. “Our Flippin manufacturing facility has been producing Ranger boats for over 55 years and backed by multiple generations of some of the best craftsmen and women in the industry.”
While the news may not have come as a surprise for many of the plant’s employees, who have been dealing with reduced working hours for the past few months, Bass Pro and its White River Marine Group said it wants its local employees to know that it is still committed to them.
“Taking care of our people has always been a priority for us at White River Marine Group and we are deeply committed to ensuring every one of our Midway Outfitters is supported through the transition,” said Bass Pro in its statement.
Bass Pro also stated, “Re-utilizing our Midway facilities is an absolute top priority for us, and we are aggressively exploring many options. We take inspiration from our history in Bolivar, Missouri, which was temporarily closed in the downturn of 2009 and today stands as the leading pontoon production facility in America!”
In 2014, Bass Pro Shops acquired Fishing Holdings, LLC, the manufacturer of Ranger, Triton and Stratos fishing boats in what at the time was considered to be the largest fishing brand merger in the world.
The deal came about after Bass Pro CEO Johnny Morris and Ranger Boats founder Forrest Woods decided that a merger would be in the best interests of both parties. Both Morris and Woods are iconic bass anglers who fished together in the first national BASS tournaments.
The news of the shake-up was positively received by the fishing and boating industry, though there was some concern over redundancy in manufacturing and marketing.
Following the closing of the deal, Morris announced that Ranger Boats and other brands would continue to be based out of Flippin and Midway, Arkansas. Prior to the sale, Fishing Holdings had been sold to Platinum Equity following the steep economic downturn of the 2008 recession.
At the time, the Flippin plant employed 900 people and produced 7,500 boats a year.
Bass Pro would again expand in 2016 after it announced its $5.5 billion deal to purchase Cabela’s, pushing the private company to become the world’s largest outdoor sporting goods store. The merger brought Bass Pro an annual revenue of $8 billion.
The deal also allowed the Cabela’s brand to continue to live on. Like many other big box and brick-and-mortar stores, Cabela’s was struggling to keep up with the online success of Amazon and other online retailers like Walmart.com. Forbes ranked the brand to most likely follow in the footsteps of RadioShack.
Today, all of those brands face a downturn market underneath the Bass Bro umbrella.
On Thursday, Atlanta Federal Reserve Bank President Raphael Bostic stated that the Federal Reserve would be putting a pause on interest rate hikes and that the Federal Reserve’s monetary policy is already tight enough to bring inflation back to down 2% over a “reasonable” period of time.
“I feel policy is appropriately restrictive,” Bostic said in remarks prepared for delivery to the South African Reserve Bank Biennial Conference in Cape Town, South Africa. “We should be cautious and patient and let the restrictive policy continue to influence the economy, lest we risk tightening too much and inflicting unnecessary economic pain.”
While the news sounds good on paper, financial markets aren’t buying what the Federal Reserve is selling and have begun to price in close to even odds that the Fed will lift rates another quarter of a percentage by year’s end, given still too-high inflation, stronger-than-expected economic growth and low 3.5% unemployment rate.
In June, a large majority of central bankers announced they expected a Fed policy rate in the 5.5%-5.75% range would be needed to win.
Those high interest rates have taken their toll on car and boat manufacturers over the past year, as customers struggle with high interest rates on loans needed for new, and increasingly used, vehicles.
For companies like Bass Pro and their various boat brands, that means pitching their newly manufactured products to customers who are on average facing interest rates from 7% to 36% when taking out a loan to make large purchases.
The average monthly payment on a $50,000 boat over a 10-year term at an 8% interest rate is now around $607 a month, assuming no down payment.
Interest rates on loans for used boats around also hovering around a 7% interest rate.
The full statement from Bass Pro Shops over the temporary closing of its Midway factory can be read below:
Our Flippin manufacturing facility has been producing Ranger boats for over 55 years and backed by multiple generations of some of the best craftsmen and women in the industry.
The expansion of our plant in Flippin will allow us to return the manufacturing of Triton Boats to Flippin where they were previously built as well as expand operations to support improvements in the manufacturing of Ranger Trail custom trailers which have long been known for exceptional quality, dependability, and outstanding good looks. We have also expanded production capability and invested in new, state-of-the-art technology to build a new generation of high-performance aluminum Ranger boats.
Taking care of our people has always been a priority for us at White River Marine Group and we are deeply committed to ensuring every one of our Midway Outfitters is supported through the transition.
Re-utilizing our Midway facilities is an absolute top priority for us, and we are aggressively exploring many options. We take inspiration from our history in Bolivar, Missouri, which was temporarily closed in the downturn of 2009 and today stands as the leading pontoon production facility in America!