A once-booming local houseboat manufacturing plant has shut down and is up for sale.
Sumerset Houseboats, which opted to undergo an extended summer production shutdown in July of last year, didn't reopen in November as was planned -- and now Citizens National Bank is looking for someone to purchase the plant's building, property and equipment.
Steve Lochmueller, former president and CEO of Sumerset Acquisition, LLC, said he and the board of Citizens National Bank came to a friendly agreement, after extensive discussion, to "deed (Sumerset Houseboat's) assets back to the bank in lieu of foreclosure."
Both Lochmueller and CNB president Don Bloomer agree that the recent economic downturn is to blame.
"We shut down production in July, hoping to build a backlog of business for the spring boating season," Lochmueller said. "From August to November, we really tried to do that, but the sales just aren't there -- and what sales were available weren't good sales. ... People just are not buying luxury items."
Lochmueller said he tried to negotiate with CNB to find a solution that would help Sumerset Houseboats "weather the storm," but, in the end, the two parties "couldn't come together on financing."
Bloomer is confident the plant won't be closed permanently, referring to the issue as a "delay in regards to the reopening of the plant." He also said it's possible that, when the plant reopens, it will retain its name.
"We're in the process of working with parties interested in purchasing and reopening the plant," Bloomer said. "We're in negotiations at this time."
Lochmueller said only a couple individuals were employed at the plant when the decision to sell came in November. The majority of employees had been laid off in July when production stopped.
Amidst the news of the sale of Sumerset Houseboat, there is a glimmer of hope for those whose jobs were lost.
"The parties that have expressed interest are interested in reopening the plant because of the qualifications and expertise of those (former) employees," Bloomer said.
And Lochmueller doesn't plan on leaving his former employees stranded either.
"I've been working with some folks, trying to help them find employment," he said. "I'm also working on some projects to try to bring some jobs back to Somerset. ... A year before everything went bad, I was working on a plan for diversification."
Lochmueller did not go into specifics, but he said he had plans which could help those who are qualified to build houseboats be able to perform other jobs, and "not put all our eggs in one basket."
Sumerset Houseboats has enjoyed moments of great success in its years of operation.
"Until September of 2008, we were doing as well -- if not better than -- everyone else," Lochmueller said.
But then the nation's economy changed, and production at the 200,000 square-foot facility began to slow.
"That is a first-class facility. ... The overhead there is higher than some other facilities that aren't as modern," Lochmueller said.
The decision to sell "was a business decision," he added.
"Business isn't going to come back in one or two years. ... There are so many used boats on the market right now," he said.
Another deciding factor was news that a houseboat manufacturing plant was being opened in Phoenix, Ariz., which would take customers from Sumerset's "major market" in the western United States, Lochmueller said.
Sumerset Houseboats had been in business for more than 40 years, and was considered one of the industry's leading houseboat providers.
In the mid-1990s, the company's profits declined and employees were laid off.
In 2003, the company's assets were purchased by former University of Kentucky basketball stars Jamal Mashburn and Ron Mercer. Lochmueller, who became the company's president and CEO in 2003, also played basketball at UK in the early 1970s.
Lochmueller said CNB was "easy to get along with" during their negotiations.
"That is a first class, well run organization," he said. "I have a lot of respect for (Bloomer) and the board of directors."