March 12 (Bloomberg) -- Mick Cookson, whose yachts have won world championships and the America’s Cup, says the global recession is putting his company in dry dock.

Cookson Boats, builder of vessels including Larry Ellison’s Sayonara, Roy Disney’s Pyewacket, and seven of Team New Zealand’s America’s Cup boats, says it expects to lay off all 62 of its workers at its shop in Auckland when its current projects are finished.

“We just can’t employ people to do nothing,” said Cookson, the 31-year-old company’s managing director, who plans to bring back employees when work returns. “There’s less people looking for boats. People are sitting on any money they’ve got to see what happens.”

In a sport where it cost Ernesto Bertarelli’s Alinghi 100 million euros ($136 million at the time) to defend its America’s Cup title in 2007, boat builders and marine-parts suppliers from Maine to New Zealand say they can’t make money as buyers abandon the market and banks withhold credit.

Fewer new boats are being sold, and events like the Cup -- those which require large, expensive yachts -- will suffer, said Gary Jobson, who won the event in 1977 as Ted Turner’s navigator.

“Key West Race Week, which is arguably the best winter regatta for larger boats in this country, had half the competitors this year than it had a year ago,” Jobson said. “The big pain is going to be felt in the America’s Cup, or round-the-world racing. It’s going to be harder for companies to justify spending millions of dollars on individual boat campaigns while they’re laying off people.”

Not U.S.’s Cup

It’s the America’s Cup in name only these days. A U.S. yacht hasn’t won since 1992 and hasn’t been in the finals since 1995. The New York Yacht Club, which held the trophy for 132 years, hasn’t entered a boat in the current competition.

Sponsors began withdrawing from the event almost two years ago. LVMH Moet Hennessy Louis Vuitton SA, the world’s largest luxury goods maker, said in July 2007 it was pulling its support after 23 years. Milan-based fashion house Prada SpA said the following month it was pulling out for cost reasons after a decade.

The economic skid, meanwhile, compounds a two-year decline in new sailboat sales in the U.S., according to statistics from the National Marine Manufacturers Association. U.S. sales of sailboats by unit fell 8.5 percent in 2007 and 10.4 percent in 2006. Last year’s numbers aren’t yet available. The U.S. sailboat industry generated $716 million in sales in 2007.

Court Control

“Everybody’s waiting,” said Tork Buckley, editor of the London-based industry newsletter The Yacht Report. “I don’t think they’re sure what they’re waiting for, but they’re waiting.”

Eric Goetz Custom Sailboats Inc., which made Bill Koch’s Cup-winner in 1992 and all three U.S. defenders in the 1995 regatta, went under Rhode Island Superior Court control in January after an unsuccessful refinancing attempt and a canceled order for an 85-foot racing sailboat. Goetz repurchased control at an auction last week.

“We’re trying to rebuild the place,” Goetz said in a telephone interview from his office in Bristol, Rhode Island. “At least I feel like we’re not alone.”

Jobs Eliminated

Hinckley Co. of Portsmouth, Rhode Island, whose boats have appeared on the cover of the J. Crew catalogue, has cut 74 jobs since October, reducing staff at the luxury sail and power boat maker to about 550, according to the Bangor Daily News.

Portsmouth, England-based Raymarine Plc, which makes radar and other marine electronics, last week announced a 50 percent decline in full-year profit, after cutting 125 jobs, about 20 percent of its workforce, in November.

Net income for 2008 fell to $12.5 million (8.72 million pounds) from $24.5 million. Tony Osbaldiston, the company’s finance director, said 2009 will be even worse. The company in October had a record 72 percent decline in London trading, the steepest since its initial public offering in 2004.

The slide isn’t limited to the high end of the market.

Chip Wilkerson, vice president of global marketing for LaserPerformance, which makes more sailboats than any other company, said it’s too soon to determine the economy’s full effect.

“We won’t know for certain until we get into the new season how things are shaking out,” he said from his office in Portsmouth, Rhode Island. “What we’ve seen traditionally is a switch from buying hulls to buying parts as people try to keep their boats going another season.”

Craftsmen at Work

Wilkerson said that even his company is a relatively small business, reliant on a small pool of craftsmen, who shape hulls out of fiberglass and materials such as carbon fiber. LaserPerformance employs 80 in the U.S.

“Most, if not all boats are still very much hand-built,” he said. “Losing that expertise would be very bad.”

The economy is also hurting sailing organizations that depend on donations, said Jay Bower, executive director of the Naval Academy Sailing Foundation in Annapolis, Maryland. The foundation receives donated boats on behalf of the service academy’s sailing program.

“In 2008, we didn’t get one boat donated,” Bower said. “That’s the first time that’s happened.”

Smaller Boats

Pete Melvin, a founder of the Huntington Beach, California- based Morelli & Melvin Design & Engineering, Inc., said his cheaper boats were finding less demand than large, custom projects. The company has worked on everything from adventurer Steve Fossett’s 125-foot catamaran to 18-foot, one-person racing boats.

“The lower-priced boats are getting hit harder than the upper end,” he said. “The larger boats we’re working on are multiyear projects and those people haven’t pulled the plug yet.”

That’s what happened at Cookson Boats, where orders have dried up at a shop known for building champions such as the Oracle chief executive’s Sayonara, winner of four championships in its class, and Fossett’s Cheyenne, which set the round-the- world record in 2004.

Cookson, who has worked in the marine industry for 40 years, said the company is not in financial difficulty, it just has nothing for its workers to do.

“It doesn’t appear that there’s any bright future,” he said. “It’s just the way it is until something comes along.”

To contact the reporter on this story: Aaron Kuriloff in New York at akuriloff@bloomberg.net.

Last Updated: March 11, 2009 20:00 EDT