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THE YACHTS TRADE — ARE THERE ANY ETHICS OUT THERE, ANYWHERE ?

By Michael Schemmann, PhD, CPA, ICPA, LLM, Assoc. Professor of Accounting & Finance emeritus, Managing Director of the IICPA and AASBI, Author & Publisher




Antony "Tony" Fleming — image cropped - grayscale - fair use Copyright Act.
                       

MILLIONS OF VIEWERS KNOW THIS LEGENDARY YACHTIE
who has become a public persona to millions of spectators on YouTube's highly popular yachting videos, talking to us in his calm and assuringly soothing grandfather's voice, showing us the magnificence of his Alaskan icefields, fjords, indigenous peoples' arts and villages, marinas, promoting the perfection of his yacht which he had designed and built, making it one of the most respected ocean going vessels of its kind, also knwn as the Rolls Royvce of motos yachts in its size — now retired from the busy day to day operations of the contracting shipyard on the island of Taiwan — from his motor yacht, a Fleming 65 called VENTURE's, as described in my photo books made with his kind permission, voyaging to DREAM DESTINATIONS of

Alaska and British Columbia; — Have a look inside this book - PDF 8 MB.

England to Iceland via the Inner Hebrides of Scotland, the Faroes, and on to southern Norway.
Have a Look inside this book - PDF 3 MB.

Alaska to Nova Scotia with a detour to the Galapagos Islands, through the Panama Canal, to the Caymans, along the US East Coast inland waterways to Lake Ontario, through the Sait Lawrence Seaway to Nova Scotia and back to New York. — Have a Look inside this book - PDF 6 MB.

Re-visiting Southeast Alaska 2022Look inside this book - PDF 3 MB.

See also:

   

Tony Fleming's (2014) biography — a 616-page paperback book entitled Riding the Tide: Art, Engineering and a Thirst for Adventure from AbeBooks $27.87 plus shipping from the UK — or from Amazon.com with a look inside for $14.50 in the US.

When I approached him in the summer of 2022 with my request for permission to use the pictures and texts from his magnificent 60+ YouTube videos into book form, he replied that he didn't have the time to select the photos, but more importantly that books were as good a medium as his films to convey content, and by the way the usually low resolution of his pictures of 72 PSI (pixels per inch) were too low to meet the usual 300 PSI used for printable book form. I told him that all of this was my job and not his worries. He gave his permission in writing, presumably under the assumption that I was not going to succeed anyway.


OUTSPOKEN PRAISE

Tony Fleming received the first printer's proof of my sized 8½ x 11 inch full-coloured 300-page book early December 2022 and praised its quality to be in excess of his expectations, writing on 8th December 2022:

    Hi Michael,

    We just received the copy of your Fleming Yachts book, Thank you for sending it.
    You are to be congratulated. I have to confess that it came much quicker and much better quality than I had anticipated. The photos also look much better than I had expected. I know the book represents a lot of work on your part. I have only had time to skim through it so far as I am still catching up. I have uploaded the first two videos representing our trip to Alaska last summer and have the third episode ready to upload. None of my videos have been monetized by us and every piece of music used has been purchased with licence from legitimate stock music companies but scammers falsely claim copyright and You Tube take their side, attaches adverts to my videos and then shares the income with the false claimant. Disputing these scams wastes a lot of time. The world is full of parasites feeding on the work of others.

    What did you have in mind concerning this book?

    Cheers, Tony


CASH TALKS TURKEY

The problem with Tony Fleming's praise is his realization of what a great high-quality printable book can be made from his many videos. Given his enormous popularity with 80,000 subscribers and 27 million views for his 60+ videos on YouTube, he wasn't going to let me enjoy my true rewards, but instead renege on his permission and go to prepare and publish my type of books himself. He would raise his concerns right and left, and have the decision to renege on his permission expressed and forwarded by the FLEMING YACHTS production management as the owners of the FLEMING YACHTS brand (trademark), cofusing copyright law with trademark law, rendering the notice from Taiwan irrelevant. He wrote of others, but gives me the impression in opinion, as we will see below, of being the one complained of himself:

    "None of my videos have been monetized by us and every piece of music used has been purchased with licence from legitimate stock music companies but scammers falsely claim copyright and You Tube take their side, attaches adverts to my videos and then shares the income with the false claimant. Disputing these scams wastes a lot of time. The world is full of parasites feeding on the work of others."

Put into numbers: If only 10% of the say 30 million views of the FLEMING YACHTS Venture videos eventually purchased only one of the four books (and he could add more), at a profit of $10 USD each, that would turn into a whopping $30 million USD, which easily covers the commissions for writing the books anywhere from $25,000 to $100,000 USD per book; not to mention the advertising benefits increasing demand and price for the yachts. Any argument to renege on Tony's permission for me is therefore welcome, but none of them hold water.

While he comes across as a benevolent story teller, there not a single strain of ethics in the man's bones when it comes to money. He constantly complains that he is the victim of internet pirates and that his videos are not monetized (how could they when they broadcast on YouTube?), but are still a most effective means of promoting the FLEMING YACHGTS brand for which I presume he receives a formidable type of pension and to pay for his extensive voyages.


DON'T SPEAK MY NAME

I did not pick-up on his question of what I was going to do with my book, meaning perhaps "what's in it for me?" and replied that done the work as a labor of love, re-visiting VENTURE's voyages and enjoying it immensely. I mentioned that I placed the books for sale on Amazon. When he replied that I should have consulted him first before publishing, I immediately delisted the books on Amazon. The Alaska and British Columbia book had already been blocked by Amazon on the contrived grounds that the material was already freely available on the internet and therefore disappoint customers as consumers in their reading experience.

In an effort to renege on his permission to use the pictures and texts in his videos in my books, he began to raise a number of invalid objections concerning the rights of others whose permissions were also required.

Tony Fleming made the ridiculous argument, that other peoples's faces were copyrighted and required their permissions before publication, to which I replied that copyright was not in issue but presumably meant their rights to privacy, which does not apply to photos taken on open public grounds, or at events on private grounds under circumstances that the owner used to shoot and publish videos on YouTube, giving his permission for use by others.

The name FLEMING YACHTS, he wrote, was protected as a brand and I had no right to use it wherever, to which I replied that the name, although unregistered as a trademark, was still protected against the use by other manufacturers of yachts. Although a book will also swim on water, it is not a vessel but is intellectual property and as such does not compete with the production and sale of FLEMING YACHTS in any way. He wrote in early January 2023:

    One thing that's absolutely for sure is that you cannot use the name FlemingYachts anywhere. Especially not on the front cover. So please do not print anything else. Your books have absolutely nothing to do with the company.

    I don't understand what you mean when you refer to "Taiwan's Wharf". I hope you are not referring in a derogatory manner to my colleagues and the skilled and dedicated craftsmen who design and build our very sophisticated boats. I certainly get that impression but sincerely hope I am mistaken.

    A few pictures and words are meaningless without them and the boats with the reputation they have built up over 38 years of dedication and sacrifice. So far as I am concerned nothing moves ahead without their total agreement.

Tony Fleming uses the word "wharf" in his own book "Riding the Tide" and it only means shipyward. His derogatory comments about my use of the term is entirely invented to prepare for his final message to renege on his permission.

He pointed out that he had completely resigned from the enterprise FLEMING YACHTS, and that their owners, namely his nephew and another co-worker, both Englishmen from the United Kingdom, permission was needed before my books could be published. I replied that the FLEMING YACHTS company owners were not parties to the agreement between him as the producer of videos and myself as author using his pictures and texts, and therefore their permission or disapproval had not legal bearing on my right to rely on his permission to use his material.


HOSTILITY

On February 15, 2023, I received a message from Tony Fleming, that his daughter had taken one of my books to the owners and managers of FLEMING YACHTS at their dealership conference in Florida, that the owners had decided against the publication of my books, and that their decision was final.


    Hi Michael,

    Nicky took a copy of Dream Destinations. (Alaska and British Columbia) across to Florida to show to Messrs Shard and Cowie who were there to attend a meeting of Fleming dealers from all around the world. I have tried to make clear in the past that they are owners and directors of Fleming Yachts who make all the decisions regarding the company. This is a very busy and high pressure responsibility which affects the welfare of the company as well as the livelihoods of hundreds of people. I gave up all connection with the running or ownership of the company when I retired 15 years ago. I have now received their response and I quote "Fleming Yachts has decided not to proceed with his book offer". So that is the final decision.

    I received your latest book re Alaska to Nova Scotia and I have to say that I am SHOCKED and very upset that you included photos not taken by me and which are totally contra to our company interest and philosophy. The worst is on page 70 of US President Biden. We have an iron-clad rule NEVER to allow politics to intrude in any aspect of our business. You must surely be aware of the divisive situation in this country and that slightly less than 50% of voters are vehemently opposed to Biden. To have my name and that of the company bearing my name linked to that person would likely result in an immediate cancellation of orders. Also, we equally avoid anything to do with the military and you have included photos of both West Point and Annapolis - including pilots. These photos are not only totally inappropriate but almost certainly protected by copyright. I don't know what you are thinking but it clearly shows that you have no understanding of the practicalities and philosophy that drives Fleming Yachts or myself. I have cut the offending pages out of the two copies you sent and run them through the shredder. Please do the same for any copies you have.

    So - just to make it absolutely clear - we do not wish to proceed with any book deal. You obviously put a lot of time into preparing the books but it was your decision to keep churning out additional books even after I tried to make it clear that I had problems with the concept and, in any case, the final decision was not up to me but to the owners of the company.

    There is nothing more I can add to this so please do not bombard me with any more e-mails. I am really very busy with many projects.

    Tony Fleming.


Tony Fleming's video "From Alaska to Nova Scotia" describes his voyage from New York to the Great Lakes on the Hudson River, mentions and shows us the US Military Academy at West Point, just like he had mentioned Anapolis being the seat of the U.S. Naval Academy. The annual Army-Navy football game is traditionally attended by the U.S. Vice President, who in my book happened to be Joe Biden, as he then was, congratulating\the players. There is absolutely nothing political about that picture, and showing the lady naval aviators at Anapolis from a U.S. government publication is in the public domain and never copyrighted. Pointing this out to him did not result in his correction, let alone apology, because he was fishing for reasons to renege on his permission no matter what!

Tony's critques of the printer's proofs resulted in amendments — that's what they are for — removing in their entirety anything he didn't welcome like Joe Biden's image as VP at the Army-Navy games at West Point or the women aviators at Anapolis and the facilities. America is as proud of their military as are the Brits! Nothing has been sent to the public, but Mr. Fleming's concoctions of misconceptions in bad faith remained once he realized the books' revenue potential, wanting it back for himself instead of sharing with the author.

Being educated as a lawyer with an LLM, I told Mr. Fleming so, but he only replied that he would not rely on casual legal advice... only to insult me. There is an obvious discrepancy between his public persona and his more private one. He also prides himself of never having taken a formal education, and his misconceptions are the proof.

In my later reply, I pointed out that under the judicial device of estopppel he was prevented from making assertions or from going back on his word giving me his permissions, especially since I had injuriously relied on his permission, did months of work and actually printed the books.

I suggested a sharing of income of $5.00 USD per book sold, with a large discount for books ordered for distributions to the worldwide dealership of FLEMING YACHTS, but the reply by the British production manager in Taiwan on May 6, 2023, was as simple as it was brutal:


            Michael,

    Tony Fleming already made it very clear to you that Fleming Yachts, and Tony Fleming, have no interest in promoting your books, nor do we grant you permission to reprint or use any our material or images.

    Please give up on this. We are not going to change our minds.

    Regards,

    Duncan Cowie.
    Fleming Yachts.


YACHT BUILDERS OF THE WORLD

Shipyards Around the World
by IYC "It's Your Choice" retrieved 2023-05-20

North America
With American yacht owners' fondness for cruising The Bahamas and Caribbean, it's little surprise that the North American market is driven by shallow draft boats and sportsfisher brands. Production is largely focused on semi-custom motor yachts with prominent yards like Westport Yachts, Palmer Johnson, Viking Yachts, Hatteras Yachts, Jarrett Bay, Merritt's Boats and Jim Smith Tournament boats at the fore. In the larger size segment where greater customizable made-in-USA superyachts are available, Christensen Yachts and Delta Marine deliver motor yachts upwards of 37m. This is echoed in Canada by Crescent Custom Yachts.

Asia
Asia is a hub for production series motor yachts made from GRP with most facilities, including for popular brands like Horizon Yachts, Ocean Alexander, Cheoy Lee, Heysea, Johnson Yachts and Nordhavn, located in China, Hong Kong and Taiwan.

Rest of the World
The remaining few yacht builders are in Oceania, South Africa and Brazil. SilverYachts and Echo Yachts are in Australia, matched by McMullen & Wing and Yachting Developments in New Zealand. Brazilians shipyards INACE and MCP bring up the rear for South America.

The IYC contains an impressive list some 300 Yacht Builders.

Unfortunately, FLEMING YACHTS does not make the list, for whatever reasons. The nearest comparable builder appears to be Nordhavn Yachts also headquartered in Greater Los Angeles, California, with four production facilities — 2 in Taiwan, 1 in Xiaman, PR China, and 1 near Istanbul, Turkiye. The Nordhavn's appearance in FLEMING YACHT's class a striking similarity of the elegant classic look, but is very differently configured inside with large windows and therefore less claustrophobic feel in the cabins.



Tony Fleming's 65-foot Venture at the Galapagos Islands
                 

A Nordhavn 60 Hull No. 80




Adi Shard   (Tony Fleming's nephew and protégé)
and Duncan Cowie, Fleming Yacht's owner-management in Taiwan.



FLEMING YACHTS, INC. (a California General Stock Corporation since 01/27/1995)
Agent Nicola Jane Fleming at 1760 Monrovia Avenue, Suite A18, Costa Mesa,
CA 92627 in Greater Los Angeles, Southern California.

             

Owners/managers Dan Streech (Pres.), Jim Leishman (VP) and Jeff Leishman (Chief Designer)
are in Dana Point, Greater Los Angeles, Southern California



Pacific Asian Enterprises Inc.(PAE) at 25001 Dana Drive, Dana Point, CA 92629 is Nordhaven's world
headquaters with their 70-member staff in a spacious waterfront building at the marina at Dana Point,
Greater Los Angeles, Southern California. The bar area and an outside patio are ideal for hosting
Nordhavn customers, who sometimes fly in from other countries or drop by from nearby harbors.

Visitors can also watch the inner workings of the company, as project managers, designers and parts
& services are now in one facility. — Ambrosia Brody theLog.com May 20, 2013.


PRODUCTION FACILITY(IES)

"China's war machine is ready for Taiwan invasion, US warns" — The Times


"China rehearses Taiwan blockade," DW 2023-05-08
   
Xi Jingping, "All necessary means..."
    TAIWAN   —   TAIPEI, April 10, 2023 (Reuters) — "China ended three days of military drills around Taiwan on Monday saying they had tested integrated military capabilities under actual combat conditions, having practised precision strikes and blockading the island that Beijing views as its own."

The two main topics at the G-7 Meeting at Hiroshima, Japan in mid-May 2023, apart from Russia's war against Ukraine, are how to deal with the military threat of Xi Jinping's armed forces, comprising the largest navy in the world, in the event of a blockade and/or military occupuation of Taiwan, which political commentators and military experts anticipate in 2027, only four years away.

"When will China invade Taiwan? Probably by 2027, if you believe Adm. Philip Davidson, the now-retired head of the U.S. military's Indo-Pacific Command." (Alex Willyns, RFA 2023.01.30).

BUSINESS CONTINUITY PLANNING

BBC News 16 June 2023:
Foxconn set to leave Taiwan and China
Full article online

    "We hope peace and stability will be something the leaders of these two countries will keep in mind," 67-year-old Mr. Liu told us in his office in Taipei, Taiwan's capital. "But as a business, as a CEO, I have to think about what if the worst case happens?"

The scenario could include attempts by Beijing to blockade Taiwan, which it claims as part of China, or worse, to invade the self-ruled island. — There are hopes of a thaw with US Secretary of State Antony Blinken visiting China this weekend. But there are also fears of a conflict - one US general has estimated it could happen as soon as the next few years.

Mr. Liu said "business continuity planning" was already underway, and pointed out that some production lines, particularly those linked to "national security products" were already moved from China to Mexico and Vietnam. He was likely to be referring to servers Foxconn makes that are used in data centres, and can contain sensitive information.

Foxconn, or Hon Hai Technology Group as it is officially known, started off in 1974, making knobs for TVs. Now it is one of the world's most powerful technology companies, with an annual revenue of $200bn (158.2bn). It is best known for making more than half of Apple's products - from iPhones to iMacs - but it also counts Microsoft, Sony, Dell and Amazon among its clients. For decades, it has thrived on a playbook perfected by multinational corporations - they design products in the US, manufacture them in China and then sell them to the world. That is how it grew from a small component-making business to the consumer electronics giant it is today.

FLEMING YACHTS have made it known to the author that they do not intend to diversify their production facility away from Taiwan; taking a gamble by burying their heads in the sane? In the highly likely event of blockade/occupation — both have the same effect here — FLEMING YACHTS will at best become collectors items, naval museum pieces, with a drastic reduction in value in spite of their very high quality of material and production. Who will take over to service the some 400 yachts remains an open question.

ALTERNATIVE TURKIYE

Nordhavn Yachts have entered into partnership with Telgeren & Partners, a new shipyard near Istandbul in Turkiye, a NATO member country, where Nordhavn's N41 yachts are being built; practically a bridge head that can be expanded if and when (more likely "when") the two production facilities in Taiwan are lost, in deference to the old saying: "He who lives of hope alone will soon die of hunger."




Nordhavn Superyacht 120 "Aurora" before delivery to Vancouver, Canada. NORDHAVN International Magazine 2023. See also Nordhavn 120 Delivery - China to Vancouver on YouTube 1.5M views Feb 2014. The complete journey of Nordhavn 120#01, delivery from Xiamen China to Vancouver Canada.

There is a very high likelihood that FLEMING YACHTS are quickly running down their time of existence, akin to the very narrow British practice of Brexit and splendig isolation, contrary to the open realistic practices of the somewhat larger and more successful Nordhavn company (PAE).


ENVIRONMENTAL ISSUES

     

Tony Fleming's personal yacht Venture was using 1 gallon of Diesel fuel per nautical mile when crossing the Gulf of Alaska from the Aleutians back to the SE Alaska mainland in calm seas. Venture's carbon footprint with 60,000 nautical miles under the keel amounts to 60,000 x 22 pounds per gallon equals 1,320,000 pounds of CO2, a huge amount compared to the number of people served. Source.

Of course we have Tony's magnificent videos viewed by 27 million people taking the voyage virtually from their homes Venture to Alaska 2012 - Part 1 - Vancouver Island to Tracy Arm 1.4M views, Venture to Alaska 2012 - Part 2,   Venture to Alaska 2012 - Part 3, while my book that he so exuberantly praised he then banned for his own monetary reasons.

"Yachting, like commercial shipping, has to abide by the current environmental rules and regulations, such as the latest MARPOL Tier III limits,

but as an industry with access to a lot of money, it should make the effort to go beyond the requirements. It can be the leader in developing new greener technologies and thereby help to justify its existence in environmental terms. Also, the health and cleanliness of the oceans and coastal areas are what make yachting an enjoyable pursuit in the first place, so it's in the interest of yacht owners to make the extra effort to preserve the marine environment."   John Pierce, "Building Yachts to Create a Zero-Carbon Future. " Dockwalk


SOLUTION — NORDHAVN 56 MOTOR SAILER — with controllable pitch propeller 1 gallon per hour doing 8 knots


The N56MS Motor Sailor by Nordhavn is an answer to getting greener. — See Nordhavn 56MS The Perfect Blend of Sportiness and Comfort   |   Nordhavn 56 Motorsailer Sea Trial   |   Nordhavn President, Dan Streech discussing the Hundested Controllable Pitch Propeller, reducing fuel consumption at 1,000 RPM doing 8 knots to as low as one gallon per hour N56MS Motor Sailer (video at 10:06/15:24), making the N56 M/S the perfect passagemaker.


PUBLICITY

When Tony Fleming left the American shipbuilding company in Hong Kong in 1995, he convinced the Taiwanese owner of Tung Hwa Industrial Co. Ltd. to build his design for sale to one customer who was interest in his concept, sight unseen. Tony's talent for design was his only asset, and combined with his love of detail and insistence on absolutely top quality of production, led to the production and sale of over 300 Fleming Yachts during the past 38 years. He left the business in Taiwan with his own Fleming 65, Hull Number 1, with now some 60,000 nautical miles under the keel, on the West Coast of North America and the North Atlantic.

Tony Fleming's 60+ videos on YouTube have reached 90.000 subscribers and attracted a record of some 27 million viewers, including myself, demanding more. If he ever took Fleming Yachts public to buy another shipyward — and venture capial providers are plenty in his home town Los Angeles — even by way of crowd financing, my guess is that the success would even astonish him.

All true, if there were not the following


CAVEATS

FLEMING YACHTS do not publish financial statements. As a licensed CPA and former corporate credit banker relying on experience, I would guestimate based on annual sales of 10 to 14, say 12 yachts at an average price ex factory of, say, $3 million USD, including contribution margin towards profit of 15% conservatively speaking, but up to 30% in the best of times, say an average 20%, an estimated FLEMING YACHTS' annual income statement could have the dollowing dimensions:



The balance sheet of a manufacturing company like a shipyard with relatively high costs for tooling, generating $30+ million in sales, would show about $30 million in productive capacity, say fixed assets. FLEMING YACHTS do not appear to own the Tung Hwa shipyard in Taiwan where all of their yachts have been produced since inception three decades ago. The shipyard is owned by a local Taiwanese person or family under the name Tung Hwa Industrial Co. Ltd. whose revenues are reflected in FLEMING YACHTS' Cost of Purchases, thereby avoiding depreciation and maintenance expense, as well as materiaL and other inventory, as well as expenses for labour, leaving the salaries and wages for FLEMING YACHTS' two owner/manager and the 7 administrative staff, leaving and estimated minimum amount of $2,500,000 for distribution to the former owner, Tony Fleming, his daughter Nicky and frugal rental expenses, as well as bonuses and/or dividends for its two owner/managers. Not bad for a 7-employee internationally active design and sales company operating from a location under political and military seige. Question: how much longer?

Not mentioned, but even more crucial and valuable is the maintenance of favorable relations with FLEMING YACHTS network of dealerships. If the dealers turn their back on FLEMING YACHTS to team up with a more diversified, also highly reputable, and larger producer like Nordhavn who are actively persuing greener propulsion of the yeachts, then the value of FLEMING YACHT becomes a guessing game in free-fall. The looming Taiwan blockade/occupation anticipated for 2027 or sooner would produce the same result.

To compensate for the somewhat dim outlook with Tony Fleming soon spproachning 90 and the end of advertisement by way of broadcast on YouTube, it appears as closed-minded for Duncan Cowie imitatating the role of Tony Fleming's neat shield by rejecting the DREAM DESTINATION books which can generate $5/copy sold for Fleming by sharing the net revenue with the author 50/50 given their big base of 80,000 video subscribers. Moreover, the books can be handed to visiting customers at their worldwide dealerships to take home and ponder, which the competition does not have.

Meanwhile FLEMING YACHT's management are lost in the detailed execution of production orders at very high levels of quality while their sole facility in Taiwan is likely to be lost, rather than busying themselves with strategies for survival by (1) diversifying production away from Taiwan — e.g., by going public to get the cash and acquire a shipyard in a safe country if not in the United States under Biden's massive manufactung push Fortune April 18, 2023 — and begin to make (2) green propulsion changes away from diesel towards solar, wind, and hydrogen, etc.









Updated 2023-06-16


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