Real estate. Banking. Insurance. The list of industries blown down by this year's economic storm is climbing – and the marine sector is among the casualties.

While quieter than the sinking of American automakers, boatbuilders and other marine businesses have been devastated by a recession that has choked off credit, slowed boat sales to a trickle and left many companies struggling to survive. Not surprising, consumers, too, are feeling the impact.

"This is the most devastating blow I've ever seen," says Wanda Kenton Smith, who is president of the Marine Marketers of America and has spent three decades working in marine advertising and public relations. "Our industry is shrinking before our eyes."

Fewer people are buying boats, with sales down 30 percent last year and estimated to sink another 20 percent according to the National Marine Manufacturers Association (NMMA).

CHRIS-CRAFTChris-Craft, a solid industry name, is one of the companies limiting production and trimming costs.Fewer boats are being built, with one in three companies furloughing operations for some period during the fourth quarter last year and roughly one in 10 closing down a plant, according to the NMMA. Even the rarified sector of the industry that builds megayachts, long essentially immune to twists in the economy, has been impacted, as orders for new custom yachts from last fall through early this year slowed dramatically for some and even dried up for others.

Fewer people are employed. Venerable companies like Viking, Hinckley, Chris-Craft and many others have undergone layoffs. Unemployment in the industry could be as high as 50 percent, according to the NMMA.

Indeed, there are few corners of the industry that have not felt the crunch. Boater's World was sold to a liquidator in a federal bankruptcy court auction. Power Cruising magazine stopped publishing. Boat shows in San Diego, Washington. D.C., Virginia and elsewhere have been canceled or postponed. And on June 2, Minneapolis-based boat manufacturer Genmar Holdings filed for Chapter 11 bankruptcy protection.

"We're a product no one needs," says Jim Krueger, director of sales and marketing for Luhrs Marine Group's Mainship line. "It's pure recreation. Everyone knows the industry has been hit, but not many people know how hard."

A blog post on Chris-Craft's Web site was more blunt: "Many manufacturers and dealers will not make it through this downturn."

CONSUMER IMPACT

Of course, not all of this will be meaningful for everyday boaters. A Mad Mariner survey in April found that only about 40 percent of those polled felt the economy would impact their boating season this year. In fact, with fuel prices far short of last year's $5-a-gallon misery, one-third of the participants said they plan to get out on the water more often this year.

But it is axiomatic that an industry under strain will impact the consumers who fuel that industry. To better understand that impact, Mad Mariner reporters interviewed dozens of marine experts, examined sales and polling data and poured through online forums, blogs and other places where people gather to discuss the industry. The result is the Economic Blowdown series, occasional stories that examine the economy's impact on the marine industry in general and on boaters in particular.

VIKINGViking has delivered six of its new 82-footers, but sales are still way down from previous years.The truth is that the downturn in the boating industry is already affecting boaters in ways both large and small. How it impacts you, of course, depends largely on your circumstances.

It's a good time to be buying a boat – if you have the money or the credit. Both new and used boats are substantially cheaper than they were even a year ago, and many brokers and dealers are willing to throw in extras in order to move their inventory.

It's a bad time to sell a boat. The used market is loaded with vessels, driving down prices and increasing the time that boats sit on the market. Stories about boats getting repossessed in record numbers – or abandoned entirely along the nation's coasts – are becoming the stuff of economic legend, reported well outside the marine press in mainstream outlets like The New York Times.

For those with no appetite – or need – for big changes, simple ownership may also be impacted, too, albeit in more subtle ways.

Companies under strain are less likely to spend money on innovation or to release new products. If manufacturers and their dealerships begin to fold – not yet a widespread occurrence – customers may see parts, service and expertise become more difficult to find.

"If they need warranty service and backup from the factory, there may be no factory to go to," says Caroline Ajootian, consumer affairs director at BoatU.S. Even if a boat company goes belly up and its physical assets are purchased by another corporation, the new owner is not legally bound to fulfill the warranty on older products, she says.

On the up side, you may find slips opening at your local marinas and boatyards less crowded, as financial circumstances force some people to curtail annual maintenance or abandon boating altogether.

Kevin Kerwin, a naval architect in Fort Lauderdale, says the NMMA unemployment numbers largely support the scene as it continues to play out in his local boatyards, which he estimates are half full – and mostly with small maintenance jobs.

"Ordinarily you can't spit between the boats up on the hard at the yards this time of year, and I'm working 80 to 90 hours a week for three months – not this year," says Kerwin, who posted his observations on a networking Web site earlier this year. "One large brokerage firm here told me in December that they had more repo boats they were taking care of than regular managed yachts."

Kerwin, like other industry observers, says he's eager to see what the summer will bring, noting that recently "the phone has rung a few times with small jobs."

LUHRSLuhrs Group is consolidating operations, but is still releasing new models, like the Luhrs 37 Open.For those with boats who are struggling to make ends meet, it may be a difficult road. Mad Mariner's survey showed that, among the four in 10 boaters who do think the economy will impact their boating season, 30 percent anticipate taking shorter trips, and 15 percent plan to spend more time at the dock.

"They have to be creative about how they use their boat and how they're able to continue owning boats," Ajootian says. "They're probably hunkering down, limiting the amount of spending they do related to the boat."

TREADING WATER

Many experts say conditions this year far exceed the downturn in the early 1990s, when Congress levied a luxury tax in the face of a recession and crippled the industry, forcing many companies – including some highly respected boatbuilders – out of business.

This time around, there was no pernicious tax. Instead, it was declining stock and real estate markets, rising unemployment and tight credit that delivered the volley of punches that knocked down sales. Faced with such uncertainty, consumers have gone underground, avoiding the kind of big-ticket sales that fuel the boating industry.

The tight credit markets delivered another gut punch to the industry, by crippling the practice of "floorplan financing" that allows dealers to carry inventory on favorable terms.

With fewer people buying, inventory has piled up on showroom floors, forcing some dealers to shoulder extra carrying costs, a situation that adds to the financial strain brought by decreased sales. Lenders, too, have been hurt, and many have responded by changing their underwriting guidelines – cutting credit lines, raising rates or otherwise altering their contracts with the dealers. It has been so rough for some lenders, like Textron, which had roughly 10 to 15 percent of the marine floorplan finance market, that they announced in December plans to leave the financing business altogether.

"It's a very, very difficult time in the industry – more difficult than the days of the federal luxury tax," says Thom Dammrich, president of the NMMA. "People are doing the things they need to do to survive."

Often, survival means cutting back – on staff, on building, and on research and development. Even the NMMA has let go 50 of its 150 employees in the last year.

In April, Hinckley Yachts announced plans to let 26 employees go, the third round of layoffs since October, bringing the total number to 100. If things don't improve, officials say they may have to shutter their Trenton plant. At Chris-Craft, 200 employees have been let go. "We slowed production, minimized costs, reduced headcount, and limited our production," the company announced on its blog. That same post hinted at big changes to come for production boatbuilders if the economic climate persists. "In the future," it said, "most customers will need to order their boat, and it will be built especially for them."

And it's not just production boats that are getting hit. Manufacturers of custom megayachts, boats larger than 80 feet, were once considered immune from the economic downturns. But that is clearly not the case anymore. "They're there not getting orders," Dammrich says. "It's affected every level."

At Viking Yachts, which has released about 600 of its 1,400 workers, orders are down. In its heyday, Viking, which is based in New Gretna, New Jersey, was producing 103 yachts a year. Today that number is down to about 80. While the company hopes to bring back its laid-off workers once the economy recovers, it is still working to make ends meet.

"We're committed to getting through this mess," says Peter Frederiksen, Viking's marketing director, noting that the company is working up new designs to stay competitive. "After 45 years we're not ready to throw in the towel. That's not what we do."

Frederiksen says Viking's biggest hurdle is sales – and not just new boats. Often, would-be customers are having trouble unloading their old boat before they can buy new. "No one wants to get stuck with two boats," Frederiksen explains. He tells the story of one customer who has consented to buy an 82-footer – what Frederiksen calls "a ray of sunshine" in this dismal economic climate – even though he still has not found a buyer for his 74. Late last month the company delivered hull number six of its new 82-footer, and Fredericksen says officials can at last sense that their segment of the market, which serves wealthy customers, was starting to loosen up "if ever so slightly."

A CHANGED FUTURE

Many companies are doing more than just hunker down – they are rethinking how they do business. And that could have a long-term impact on the industry.

Kenton Smith saw the changes coming and adapted accordingly, closing her high-overhead full-service advertising and public relations agency and opening a sole proprietorship that she can manage on her own with the help of contractors. A new day, a new business model.

She suggested that her clients stay visible with advertising in order to gain market share, but many have cut marketing budgets, using advertising only in limited applications. "Many companies in the industry flat don't have the funds available," she says. "They've shut down plants, laid off staff and are down to skeleton, bare-bones survival mode."

While Luhrs Marine Group has undergone some serious belt-tightening, shutting a plant in St. Augustine, Florida, and relocating operations to a center in Millville, New Jersey, company officials say they're trying to position themselves for the future. The company will be leaner, and there may be fewer boats on the showroom floor. "They won't be able to walk into the dealer showroom and say, 'I'll take that one,'" Krueger says. "There just won't be as much out there."

At the same time, the company has released new models – including a 31 and a 37 with Volvo Penta IPS pod drives from its Luhrs division – that officials hope will carry it forward as the economic maelstrom settles. "We have a plan to get through it," says Krueger. "In the end, we'll see."

Some say that consumers, too, will emerge from the economic wreckage with new thoughts about the boating business.

"I don't believe it will ever be 'business as usual' or as we knew it for so many years," Kenton Smith says. "Consumers have faced a new reality, an understanding about credit and debt, and I believe it will forever change the way they view their purchases."

'TIME TO BUY'

While it may seem that bad news is everywhere, there is at least one bright spot to be found in the economic downturn. If you have the cash, industry experts insist that now is the time to acquire a boat.

"If you want a boat and you have the money or credit, it's never been a better time to buy," Dammrich says.

With sales down to critical levels, some dealers suggest that consumers may see prices down as much as 30 percent off the Manufacturers Suggested Retail Price. Incentives to sweeten deals, such as service and dockage are also being offered.

While some talk of the value in buying repossessed boats, Ajootian warns against any deal that means forgoing the opportunity to inspect the boat, take it for a sea trial or have it surveyed. "Proceed with caution," she says. "If it seems too good to be true, then it probably is."

Some also say that the good deals are finite. When the boats out on those showroom floors are gone, so, too, will be the once-in-a-lifetime deals. "It's a really great time to buy a boat," says Krueger. "The deals out there today won't be there tomorrow."

While Dammrich says it won't be easy to heal the economy, he has consistently told industry gatherings that a recovery will eventually take place. As consumer confidence improves, he says, so will the buying climate.

"We believe there is a significant amount of pent-up demand," he says. "People who want to buy a boat, who are putting it off because of the uncertainty surrounding the economy, will be coming out of the woodwork very strongly."

Meghan Stout, a spokeswoman for Chris-Craft, says consumers will undoubtedly emerge from this downturn with new attitudes.

"Once the economy bounces back, there will be customers who will want to enjoy going out to dinner again before they jump into a big purchase," she explains. "But that said, the American economy has a relatively short memory. We all feel confident we'll come back. It's just difficult to say when."