Luhrs Corp. is temporarily laying off nearly half of its workforce in an
effort to weather the "most difficult time ever" for the marine industry.

"We absolutely plan to survive," President Roger Yarborough wrote to
employees this week. "We have formulated a go-forward plan, which, while
painful to implement, gives us our best chance to be here when the
economy improves."

The temporary layoff will affect 73 employees, Yarborough said. It is
set up to run from Aug. 11 to Jan. 5

That will leave about 90 employees on the payroll, he added.

The company had a payroll of about 250 during more prosperous times a
few years ago, he said.

"We understand a temporary layoff will create hardships for the
individuals involved, but it is unfortunately unavoidable," he told the
employees. "We have always been a partner with St. Augustine, and we are
committed to working with the St. Augustine community for our mutual
continued success."

Production rates have varied over time, but the company typically pushed
18 new boats out the door each month, said Yarborough.

The layoff will slow production, "which will allow several things to
happen," he said.

"Dealer inventory will be reduced, the presidential election will be
behind us, and hopefully fuel prices will stabilize allowing consumer
confidence to return," Yarborough told employees.

The company has been adjusting production rates for the past 18 months
"in reaction to slow retail sales," he wrote. "Every reduction has been
done with the hope we had reached the bottom and things would start to
turn around.

"The problem with formulating a permanent plan is none of us can predict
the future."

Luhrs' bottom line is taking a hit because of a "combination of
factors," primarily the rising price of petroleum, Yarborough said.

"Rising petroleum prices affect virtually every item in our boats," he
said. "Resins, gel coat, stainless steel, plastic building materials,
transportation cost have all risen dramatically.

"Unfortunately, in a market that is already suffering from slow sales,
we cannot pass these cost increases along to the retail customer.

"This severely impacts our profitability."

Luhrs is one of four divisions in the Luhrs Marine Group. The others are
Silverton, Mainship and Hunter Marine groups.

Luhrs specializes in several styles of fishing yachts, while Mainship is
known for its express cruisers, sedans and aft cabin trawlers.

Silverton manufactures personal luxury yachts.

Recreational sailboats from 9 to 50 feet long are sold under the Hunter
name.

Sailboats are doing "somewhat better than power right now, but
everybody's feeling the pinch," said Yarborough.