Location, Location, Location
The unlikely story of Cobalt Boats, whose secret ingredient to quality is...farmers?
Published August 2004
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COMMENT ON THIS ARTICLEAt the big-city winter boat shows, the crowds thicken near the 20- to 36-foot, $30,000 to $300,000 runabouts made by Cobalt Boats. They're beautiful crafts, recognizable from afar by their sleek lines and flowing power humps, and show visitors often ask where the boats are made. The answer can startle them.
Cobalt boats, widely admired as the Steinways of the runabout class -- roughly defined as trailerable craft with inboard motors -- are built about as far from a lapping tide as is geographically possible in America. Future owners who desire a peek at their boat under construction, as some do, drive through rolling prairie land dotted with cattle and blanketed with fields of milo, alfalfa, and wheat. It's all humming highway until you slow for the one-stoplight town of Neodesha (pronounced Nee- oh-de-shay), Kansas, population 2,800. This is Cobalt's home.
The town owes its name to the Osage Indian word for "the meeting of the waters," and the Cobalt website stresses this watery affinity. It's true that the Verdigris River and the Fall River meet in Neodesha, but both flow shallow and narrow -- no place for a Cobalt boat. The nearest decent lake lies a state away, nearly two hours' drive south in Oklahoma.
If building high-performance boats in the heart of the prairie seems unlikely, consider that most of the people making them are classic landlubbers, farmers to the core. These second- and third-generation farmers, some of them still working their land, many of them still stinging from their loss of it, are Cobalt's unique competitive advantage. Company founder Pack St. Clair doesn't remember exactly when, but at some point early in the company's history it dawned on him: Most of the employees he valued most came to work wearing cowboy boots and big belt buckles. "I didn't go looking for farmers," St. Clair recalls, "but I found out they were the ones who worked hardest."
A quick poll of the 550 workers attending last fall's annual associates meeting (Cobalt eschews the term "employee") fixed just how deeply the vein of farmers now runs through the company's ranks. Paxson St. Clair, Pack's son and the company president, asked, "How many of you were raised on a farm, currently live on a farm, or still work some land or care for some animals?" Easily three of every five men and women held up a hand.
The death of the American family farm has been much reported. The eulogies will continue, barring a reversal of two of the telling findings from a United States Department of Agriculture census. Nationwide, between 1992 and 1997, farmers and ranchers under the age of 25 declined by 25%; those aged 25 to 34 declined by 28%. "As...opportunities dim," write the authors of "Swept Away: Chronic Hardship and Fresh Promise on the Rural Great Plains," a report by the Center for Rural Affairs in Lyons, Nebr., "so do the lights in many rural agricultural communities."
The lights remain on in Neodesha largely because there's industry in town. Prestige Cabinets employs about 250. The Airosol Co., manufacturers of the first aerosol can, employs another 35. M-E-C, which makes industrial drying systems, has a payroll of about 125. But the biggest employer, and a cornerstone of the community, is Cobalt Boats, which took root in Neodesha in 1970, when the town enticed Pack St. Clair to move his two-year-old, still-struggling enterprise from his hometown in nearby Chanute into buildings on a sprawling refinery works just vacated by Standard Oil. It wasn't long before St. Clair understood that he'd tapped into a rich local resource: a core of workers with an unstinting, self-reliant work ethic, a can-do farmer's ingenuity, a bred-in-the-bones communal spirit, and perhaps most important of all, an owner's mindset.
The proof of those qualities is the company's lock on a JD Power award for customer satisfaction. Last year, as in the two previous years, Cobalt finished first, and far ahead of the runner-up, among builders of 20- to 29-foot runabouts. In a tough economy for big-ticket luxury items, Cobalt's production slipped last year to 1,940 boats, from a high of 2,501 in 2000. But 2004 will be much better. The company projects sales of 2,200 boats this year, and perhaps a run at the eagerly hoped for $100 million mark in sales. Market share is up nearly a percentage point, to nearly 5%, a decent gain in a fragmented industry in which the largest player, Sea Ray, commands only 12% of the family runabout market.
Those who contend that high labor costs make it nearly impossible to competitively manufacture world-class products in the United States and, likewise, those who see no solution for failing Midwest farm communities need only park with all the pickups in the Cobalt lot on the outskirts of town and pass beneath the big sign on the new factory: "Through these doors walk the finest boat builders in the world."
