California Yachts to Close Three O.C. Plants, Lay Off 138 Workers

The 138 employees of Tustin-based Californian Yachts Inc. were told Friday that the main plant and two smaller facilities in Santa Ana and Anaheim will be shut down by mid-November.

Larry Volz, chief financial officer for Carver Boat Corp., California Yachts’ parent company, said that a “market softening in the marine industry” was behind the Pulaski, Wis., company’s decision to consolidate operations and continue building its luxury motor yachts in a more modern plant in North Carolina.

“It’s sad because we run a profitable division,” said Jerry Henry, manager of the Tustin plant. “If the market had not decreased, we’d still be operating.”

Orange County used to be one of the boat-building capitals of the world, but in recent years many manufacturers have shut down or moved to the East Coast, as escalating rents and strict air pollution controls in Southern California have cut into profit margins.

“It’s a very unfortunate situation, but the company feels it is necessary, given the market,” Volz said.

Carver considered building a new Southern California plant, Volz said, and even conducted an engineering study.

But strict regulations on pollutants released into the air by the materials involved in boat building--including wood, paint and fiberglass--made the project unprofitable.

By boat manufacturing standards, Carver’s Tustin plant is small, producing one of the company’s 42- to 48-foot yachts a week. The new plant near Wilmington, N.C., now produces three yachts a week and is not yet running at capacity.

The price of the Carver California yachts ranges from $300,000 to $500,000 and can go up considerably depending on options. “It is not unlike a luxury car; there are a number of standard items and optional features,” Volz said.

Yacht building is “very labor-intensive,” Volz said, with many of the jobs requiring a high level of skill.

Henry said he believed Carver had planned to shut down the Tustin plant, at 1402 Morgan Circle, when the lease on the facility expired in 1991, but that the market downturn accelerated the timetable. He said the marine market “has got to be off 40%.”

Company employees knew that sales were slow and had heard rumors of the plant being closed but still “they were surprised this was finally happening,” Henry said.

“All the employees are protected under the plant-closing notification rules of the federal government,” he said. The plant-closing law, which took effect earlier this year, requires most employers to give workers 60-days notice of a plant closing or large layoff.

Henry, who has worked for California Yachts for 11 years, said Carver would help some employees find other jobs in the shrinking boat-manufacturing business and help others find jobs in other industries.

Volz said Carver has not yet determined whether it will offer any of the Orange County employees a transfer to the company’s other facilities.

In addition to the Tustin plant closure, Carver is laying off 90 of its 1,020 employees in Wisconsin, he said.