Duffy Electric Boat charts a new course
Marshall Duffield is the first to admit that the Mojave Desert is a strange place to build boats.
At a factory near Adelanto, Calif., his Duffy Electric Boat Co. turns out its buoyant products even though the only water for miles around -- the California Aqueduct -- isn’t navigable.
“If you had said that it would have ever come to this, that I would be building boats in the middle of a desert, I never would have believed it,” said Duffield, the affable boat company owner known as Duffy. He moved the factory there in 1998 after swelling production outstripped the space and the air-quality standards at the previous shop in Costa Mesa.
But the consumer pullback during the recession and beyond hit his business so hard that Duffield wasn’t sure it would survive. New-boat sales peaked at $15 million annually before the downturn and now are holding at $7 million to $8 million, he said.
“We’ll have moments of brilliance,” the 59-year-old boat builder said. “We’ll have eight or 10 weeks of amazing orders and then it will just stop. It’s really nerve-racking. It’s just not consistent.”
To stay afloat, the company changed course. Duffy trimmed costs; 60 people work at the sprawling factory where 180 once built, repaired and refurbished boats. And the company focused on building up the rental and refurbishing business to make up for falling sales of new boats, Duffield said.
The key, he said, was to save the company without sacrificing quality on the electric party boats that inspire such devotion that owners post snapshots on the company website and vie to concoct the most clever name, including Cutty Spark, Sherlock Ohms and Shock Cousteau. Duffield’s own boat is currently out of the water and undergoing repairs. Just for kicks, he asked employees to come up with a name for it. His choice, after receiving 40 ideas: Passing Gas.
In their element, like the placid waterways of Newport Beach or the Ventura keys, Duffy boats have spawned a culture. At Newport Beach, home to about 2,500 Duffys, they are everywhere. The battery-powered vessels cruise at a top speed of 5 knots, about the same pace as a passing Rose Parade float.
On a recent evening, the boats meandered past bars and restaurants, dropping off and picking up passengers. Duffy owners called across the water to one another and waved at passersby.
“My favorite time to go out is at sunset,” said Marci Hollander, who has had a Duffy since 1989. The escrow company owner recently bought a new 18-foot, $38,000 Snug Harbor model with two friends. “You put on your favorite music, open a bottle of wine and just relax,” Hollander said.
Duffield started his boat-building business at age 19 after a boating mishap. His motorboat ran out of gas, and he rigged up a battery from a golf cart to keep it from happening again.
He called his first models Edisons, after his idol, Thomas Edison. Now, he frequently can be seen in the waters off Newport Beach in his own Duffy boat.
“We do 5 knots better than anyone in the world,” Duffield said.
But plotting a course for the 41-year-old manufacturer hasn’t always been as relaxing as lounging in one of his vessels. At first, traditional sailboat and powerboat owners were skeptical.
“Before the Prius and before electric vehicles had the appeal they have now, people used to laugh at us,” Duffield said.
Later, he faced the problem of finding a better location than his cramped, 12,000-square-foot Costa Mesa factory. It was so small that he had to contract out for about 35% of the work. Even then, he had space to work on only a few boats at a time.
Then he ran aground on the irony of his “totally PC, all-electric” product. During a relatively short phase of the boat manufacturing process, resins molded into hulls and other parts emit gases known as volatile organic compounds. To ramp up production, the company would need to emit more.
That simply wasn’t allowed from an air-quality standpoint in many parts of Southern California. Finally, a solution came from an unexpected source.
“My inspiration was Cabo Yachts,” Duffield said, referring to the sportfishing vessel manufacturer that was based in Adelanto. (In 2010, Cabo was acquired by Brunswick Corp. and production moved to New Burn, N.C.)
“I would have happily moved my factory to Riverside, somewhere in Anaheim, someplace much closer to my home, but it wasn’t possible,” Duffield said.
He found himself welcomed at Adelanto City Hall. The mayor even came out to greet him.
“They were petting me when I came in. No one’s ever petted me before. It was a whole different atmosphere,” Duffield said.
The Mojave Air Quality Management District, eager to bring manufacturing jobs to the area, offered him a permit to make more boats.
“I was shocked, no pun intended,” said Duffield, who now has 80,000 square feet of manufacturing space on a 6-acre site.
Duffy Electric Boat benefits from its long tenure and because it has little serious competition. To combat falling sales of new boats, the company pushed boat rentals and resales, Duffield said. New-boat sales have fallen to just 40% of revenue, down from as high as 70% before the downturn.
“Of the 10,000 boats we have sold around the world, a lot are still out there,” Duffield said. “Our best customers are our past customers. They trade up.”
Then the company puts a lot of work into the trade-ins.
“We put new everything on them,” Duffield said. “We give them a three-year warranty. There is a nice market for that because they are half the price of a new boat. We’ll have 15-, 20-year-old Duffys that are selling for $15,000 to $20,000.”
The company learned how to get by with fewer employees.
“You don’t need a computer to figure out that a lot less people can suddenly make the same number of boats. We learned the hard way,” Duffield said.
Now his company is running in such a lean manner that Duffield looks at a friendly but hotly contested lunchtime volleyball game by employees with a little concern about someone getting injured.
“When we are down to a fine-tuned crew like this, it’s hard to lose a guy,” he said.
Duffy saves money by handling every aspect of the manufacturing process, except for the motor and the six to 12 batteries that go into every boat.
Making an electric boat requires molds that are nearly perfect, waxed and polished for as many as six weeks to ensure that no surface blemishes show up on the vessels that will be built inside them.
Next comes the process of layering the thick, molasses-like polyester resin with fiberglass into the mold, using a catalyst. Then the bottom is coated with an anti-fouling paint.
Machines shape the hollow stainless-steel tubing that becomes the boat’s canopies. Company employees sew the cushions and the canopies.
The company’s signature part is probably its patented propulsion system, called the Duffy Power Rudder. The drive is on the rudder, eliminating the necessity of a long drive shaft. That has the beneficial side effect of leaving much more room inside the passenger section of the boat. The complicated, 76-part drive system is sealed inside foam more dense than plywood, keeping it safe from saltwater.
“We make it a real boat. This is not a toy,” Duffield said. “We make a high-quality boat that holds its value, and we charge accordingly.”
New, the 12 models of Duffy boats range in price from $14,000 to $75,000.
Some people need years to find their calling. Not Duffield. He had a father who was an entrepreneurial jack-of-all-trades. The elder Marshall Duffield was an All-American football star at USC who went on to run a liquor distribution business, two car dealerships and a trailer park. As a hobby, he refurbished old boats and then sold them.
“My dad, God bless him, allowed me to make things with him in situations where other dads would say, ‘No, don’t touch that’ or ‘Leave that alone,’ ” Duffield said.
When he was 5, his father showed him how to design and draw a boat. At 16, Duffield’s drafting teacher gave him free rein on complicated projects. His economics teacher gave him $500 to buy a drum of resin, a drum of acetone, a roll of cloth and a mat. He used them to build a 30-inch model of a sailboat, in much the same way he makes boats now.
“I’ll never forget when I pulled it out of the mold and it was real,” Duffield said. “It was in my hands and it was real. It hit me so hard. I knew I could make anything.”
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