Staying afloat is key in the boating industry but some manufacturers and dealers are close to being capsized by the stormy economy.

Last month, the industry's troubles sideswiped Pittsburgh when the parent company of Ranger Boats filed for Chapter 11 bankruptcy, sparking questions about what would become of prize money the company had promised to the winner of the Forrest Wood Cup bass fishing tournament, which runs from tomorrow to Sunday.

But the problems at Minneapolis-based Genmar Holdings Inc., which owns 13 brands and is the nation's second largest boat manufacturer, is more the rule than the exception in the boating industry these days.

"It's analogous to the struggles in the auto industry right now," said Matt Gruhn, editor-in-chief of Boating Industry magazine. "This is an industry where product prices are similar to cars, and it's hurting just as much."

Except unlike cars, sailboats and yachts are generally not items that consumers need to have. That reality has boat manufacturers easing up on production, shutting down plants and laying off employees in record numbers in an attempt to simply break even.

Boat production and employment in the manufacturing side have both dropped 70 percent in the United States, according to Thom Dammrich, president of the National Marine Manufacturers Association.

Not even the biggest companies are immune.

"I've never seen anything even remotely resembling this situation," said Genmar CEO Irwin Jacobs, who has been in the business for 35 years. "It's humbling and humiliating."

Ironically, Genmar's business strategy had been to buy up bankrupt brands. Now, the company has closed plants in Florida and Oregon, and slashed its workforce 67 percent.

Genmar has stated that it is facing a cash operating loss of about $35 million. Plus, after a bankruptcy court ruling earlier this month, its Ranger Boats division will still owe $500,000 to the winner of the Forrest Wood Cup tournament.

Even before the recession hit, the company's sales had been losing speed. From July to December 2007, year-over-year sales were down 40 percent. But that was just a prelude to 2008, when sales from January to July -- the typical peak period -- dropped 80 percent.

Genmar is not alone in its plight. Many companies are on the "fringe of bankruptcy," said Mr. Jacobs.

Bad news is also coming out of Bombardier Recreational Products Inc., based in Quebec, Canada, which owns the Sea-Doo brand of watercrafts and sportboats. The company announced a major restructuring in December, involving cutting employees, merging divisions and decreasing production by 30 percent to reduce inventory at the dealer level.

Industrywide, many attribute the problems to consumers' sagging confidence in the economy and the drop in home prices. People looking to save money are less likely to splurge on a boat.

In Allegheny County, the number of boat registrations dropped by 902, or 3.6 percent, between 2007 and 2008. The state as a whole experienced a drop of 1.2 percent, or 6,279 boat registrations.

Other areas hit harder in the recession have seen still deeper cuts. In California, boat registrations dropped by 105,666 -- or 11 percent -- between 2007 and 2008.

The tight credit market is also a factor. With loans becoming harder to secure, consumers are having a hard time affording new boats bearing six-figure pricetags.

Dealers, too, are looking for funds. Floorplan financing -- or the financing to buy products from manufacturers for showroom floors -- is "tighter than ever before in history," said Mr. Dammrich. "It's created a real pinch for dealers and their ability to order products from manufacturers."

That doesn't mean showrooms are empty. In fact, there's plenty of inventory. Because consumers aren't buying, products are more often gathering dust instead of being moved and replenished.

Unit sales of new powerboats declined 24 percent in 2008, and dollar sales declined 20 percent to $7.6 billion, according to statistics from the National Marine Manufacturers Association.

Ed Crognale, general manager of P&L Boat Sales on the North Side, attends boat shows across the country and has seen sales drop nearly 50 percent in top boating states like Florida.

Locally, he said boat sales are holding up better. P&L reported a year-over-year decline of 10 percent but used boat sales have increased since last year, Mr. Crognale said. Whereas a new 30-foot boat costs roughly $150,000, a used version could be as low as $35,000.

With the large stock of boats, both used and new, dealers are offering steep discounts. P&L Boat Sales' Web site is advertising rebates up to $10,000 on select models and prices have dropped by 20 percent across the board, said Mr. Crognale.

According President Terry Grantz of BoatPittsburgh.com, an online resource for local recreational boaters, the Pittsburgh boat market is "fairly insulated."

Mr. Grantz, who also manages Lock Wall One Marina in the Strip District, said the marina is almost full. Oakmont Yacht Club reported the number of boats there has remained on par with figures from previous years.

The only trends Oakmont office manager Faye Nickel has seen are that people are traveling less on the river, perhaps to save on gas costs. They're mostly staying on their boats in the marina or going shorter distances.

On the national level, the troubled industry may be sighting land soon. In May, a survey by BoatUS, a national advocate for recreational boaters, found 96 percent of the 30,000 respondents said the economic downturn would not lead them to stop using their boats this summer.

But many said they would modify their boating habits by reducing cruising distances or selecting boating destinations closer to home (24 percent), reducing the number of boating trips or days (17 percent), spending more time anchored out (17 percent) or at their home marina (13 percent), running the motor less (13 percent) and sharing costs (10 percent).

BoatUS spokesperson Scott Croft said many boaters will pinch their budgets to continue boating because "it's not just a sport or a hobby. It's a lifestyle choice."