Economic Development Podcast
Boatbuilding in East Tennessee
Moderator: We're speaking with Ron Hammontree, executive director of the Tellico Reservoir Development agency about the Knoxville, Tennessee, area's emergence as a hub of the boatbuilding industry. As head of one of the area's economic development groups, Ron has been a major player in recruiting boat manufacturers to east Tennessee. Thanks for joining us, Ron. First question: What have been the key elements in beginning the migration of boatbuilders to the Knoxville–East Tennessee area?
Ron Hammontree: Yes, Charles, it's really interesting. In the early days, in the '60s, when fiberglass first became a usable material in boats, a gentleman in Maryville, Tennessee, which is about 20 miles from where we're located here on Tellico Lake, actually began building a fiberglass hull. And that hull has been carried forward into most all of the ski boats that are available today around the country as well as a number of racing boats that were built, because of the uniqueness of the hull. So we had a birth in the boating business way back, if you will.
And then we began to see the ski boat industry collect around the area because of the closeness of the technology and the expertise that had developed this original hull. From that, we've seen a number of boat companies come to the area because of number one, our workforce, number two, our location. Being on the Tennessee River System, we've got access to the Gulf of Mexico, and then the ocean to the world, if you will, from that point. We're in an area where we have the facilities to house a number of boat industries on the water, which enhances their ability to test and provide those kinds of services. So we feel like we've seen the boat industry come to the area based primarily on the workforce and the location of the area.
Moderator: Ron, who was the early fiberglass boat hull developer?
Hammontree: It's Allison Craft Boats.
Moderator: And they're still around here, right? Still making bass boats and speedboats.
Hammontree: They certainly are. And they actually, I guess, gave birth to the boating industry in this area.
Moderator: So, in a sense, it's sort of homegrown and has grown from there.
Hammontree: It has, and one of the things that we realize is that any labor market area needs to brand itself, if you will. Years ago, if we were talking about computers, we were talking about the Silicon Valley. And we talk about other things. We talk about the Research Triangle and various things like that throughout the country. So we saw the opportunity that this area of east Tennessee, on Tellico Lake particularly, could well become the heartland for marine manufacturing.
Moderator: Ron, at what point did you guys, meaning the economic developers in the area there, decide to specifically target the boatbuilding industry, to make a concerted effort to bring some more of those kind of companies to your area?
Hammontree: Charles, it was about 18 months ago, two years ago we began to look around at branding the area and what jobs were coming alive and what were beginning to grow and see that pattern of things throughout the country. In doing so, we already had in our industrial park companies like Master Crafts Ski boats. Sea Ray has a plant here. Tennessee Watercraft, which is a Yamaha-owned company. And we were very fortunate about 12 months or so ago to recruit Cobalt Boat Company's new yacht division to locate here. And they will be building from about a 36-foot up to a 60-foot yacht on the Tellico West industrial properties here. And then, since then, we've been able to recruit the Christensen Yacht Company. Their headquarters is in Washington state, and so they operate there on the West Coast and will be building yachts there up to about 160 feet long. And then from the 160 feet up to 220 feet, they'll be built here in east Tennessee. It's kind of unusual to think about building boats that size 820 feet above sea level.
Moderator: Well, Ron, building boats like that, is there much specialized skill that's involved? And I know you guys have put in place some sort of training programs there. Are you working more on ways to provide these companies infrastructure to train their people?
Hammontree: Yes, Charles, we are. That's one of the things that we're addressing full speed. We were very fortunate to have a corporate training center in Tellico West Industrial Properties that is operated by three community colleges, which are right in the immediate area. And they were not involved particularly in the boat manufacturing skill levels; they were doing some soft-skill training for some of the marine companies. But in realizing with the growth that we have—we're probably going to have, in the neighborhood, over the next 18 months probably 1,800 jobs that will be new jobs created here in this industry. And so the idea is to work with this corporate training center and actually there develop what we'll refer to as a Marine Education and Training Institute. And we're working with the American Boat and Yacht Council, their certification program. They're the people who certify people who work on the boats. It's kind of like Mr. Goodwrench, if you will. And we want our facility here to be designated as one of those institutes that has the certification of the ABYC. We think that will be a great enhancement. The industries that are existing are very interested in helping put that together, and of course the new industries are excited about that as well.
Moderator: Ron, you mention 1,800 new jobs in the next 18 months. That sounds like a pretty significant impact. Can you talk a little bit about what sort of economic impact that the boatbuilding industry has had in east Tennessee?
Hammontree: Well, it's been phenomenal when people stop and look at it. It's somewhat of a hidden secret. But within 30 miles of our industrial properties—not just the boatbuilders but accessory builders, trailer builders, top manufacturers, people like that. There are over 6,000 people employed here within a 30-mile radius, so it has significant impact. And when you multiply that times the wages, you're talking about multimillions of dollars that are coming into the area in wages.
Moderator: Now, as I understand it, Ron, the boat industry or the marine industry in general is cyclical. When the economy's good, it's good. When the economy's a little bit soft, it tends to be a bit soft. Is that a concern at all?
Hammontree: Well, it's always a concern. And one of the things that we're addressing in our pursuit to grow the marine industry here is to try to seek out manufacturers who basically have what I would call a "niche boat," something that has specific things that people are willing to pay tremendous amounts of money for. As I said earlier, the Christensen yachts will run on up into the $60 million–$70 million for those vessels. Those businesses are basically recession proof, and we feel like that's a significant point. As we begin to develop jobs on the higher end craft, not only the skill crafts but the vessels, we're going to hopefully miss that curve to a great extent.
Moderator: Well, what's the long-term potential, Ron?
Hammontree: Oh, I think the long-term potential is great because we're already seeing other companies that are international companies—built in Asia, some in Europe—that are looking at this area because the American market is so valuable to them. And transportation is a major problem for these large boats when you move them from one continent to the other, if you will. The bigger boats, like the 220-footers, they can kind of go along on their own. They move back and forth across the ocean without any problem, but when you're talking about, you know, 50- to 60-foot yachts, you have to move those things differently.
Moderator: Well, Ron, thanks a lot for your time.
Hammontree: Well, we certainly appreciate your interest and look forward to talking with you later.
Moderator: Thank you, Ron. We've been speaking today with Ron Hammontree, executive director of the Tellico Reservoir Development Agency. And this ends our EconSouthNow podcast on boatbuilding in east Tennessee. If you'd like more information, please see the second quarter 2007 edition of EconSouth magazine. And from our Web site, you can read the full article or subscribe to Econ South in print. Thanks for listening, and please return for more podcasts. If you have comments, please send us e-mail at email@example.com.