Bankruptcy court approves Genmar warranty request

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A bankruptcy court judge approved a request by Genmar to allow its boat companies to honor appropriate past and ongoing warranty and rebate claims, chairman and CEO Irwin Jacobs said in a letter to dealers.

Also, the company says it has received assurances from GE Commercial Distribution Finance that it will continue to support the sale of Genmar boats while the company completes a court-approved agreement with GE.

“I believe the court’s actions … provide both our Genmar dealers and their customers the evidence of Genmar’s intention to move successfully through the Chapter 11 proceedings and exit as a stable and strong company,” Jacobs said.

Calling this week’s Chapter 11 filing “the most humbling and difficult business decision of my entire career,” Jacobs said he is committed to successfully reorganizing the company.

Genmar has 15 brands of recreational boats, which it sells through its more than 1,000 dealers worldwide.

Click here for the full text of the letter.

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Comments

13 comments on “Bankruptcy court approves Genmar warranty request

  1. Kurt

    Having done business with Irwin Jacobs for the past 20 years there was no doubt that he was “not” going to leave his dealers hanging as Phil Keeter implied in his reactionary statement following the BK Chapter 11 announcement.
    I think Phil Keeter would be of more help if he would contact Irwin Jacobs and see how the MRAA could assist in communicating that our Industry is in a turmoil right now but by making good business decisions it will come back.

  2. pete

    Does Phil have his future, job, personal guarantee hanging out there everyday like dealers and manufacturers do?  NO  –this is a solution to fire a shot at all bankers–Genmar was forced or the sweep of their bank accounts would continue and then have no $ for dealers.  What was the first item Irvin did—took care of his dealers—–where is Irwin’s $40,000,000 he and three invetors put into the company in Feb.—gone—is Phil making an investment and truly looking out for dealers???? and the future of the industry???

  3. JoelGlickman

    This court decision will really help all of the dealers maintain trust from their retail customers. It will also help them to weather the stormy seas that we all will face this fall.
    I hope that non Genmar dealers will not play the bankruptcy card in the summer boat shows as their manufacturers could easily be the next to fall.
    Our real competition is from outside our industry and there are plenty of problems already.
    The US consumers decisionto finally change savings into the positive catagory will help us all in the long run.
    It is a shame our government can not follow the same path. Obsessive greed for the material is not a sign of good moral
    character.
    If the boating industry is to survive a fundemental change must take place. The manufacturer does NOT sell boats to a dealer.
    The manufacturer and the dealer are partners,a team. Together this team SELLS boats to the consumer who must be happy with his decision to be a part of the boating life style.
    Manufacturers must adopt this attitude and end the cycle of 30 day goals and look at the long term effects of their decisions.
    I have been in this industry for 41 years and I have found the truth of success is learning from the dealers who have weathered this industry for 10 to 30 years.

  4. Jeanne Czel

    My experience with Irwin Jacobs exists because of my 22 year relationship as a dealer of LARSON Boats, Genmar’s first boat acquisition. From the first dealer meeting, Mr Jacobs honesty and committment to the boating industry was evident. However, this is a  very uncertain and challanging enviornment where every business owner’s savvy and moral apptitude is tested.As evidenced by Genmars petitioning the court to honor warranty ; dealer rebates,and employees compensation Mr. Jacobs again did not disappoint.
    Genmar and its dealer network will continue to succeed to the benefit of its many long term and future customers.
     

  5. part supplier

    I am glad the court allowed this.  However, you have to realize that it was not out of the goodness of his heart that Jacobs asked for the things he did.  He asked for these things specifically because they are the main things that keep the company value from plummetting and keep them from being dead in the water.  Without warranty, the game would be over for Genmar.  Without ability to take care of employees, they would all leave, again game over.  So none of this was for altruistic reasons, it was just good business moves that had to be done to survive in the short term.
    Unfortunately, everything that happens in the bankruptcy is coming out of the skin of the unsecured vendors.  We small to medium parts suppliers, that don’t get any payment for what is owed, which is millions, will bear the burden so that everyone one else in the supply chain, including the big banks, are made whole.
    We bail out the banks – like Wells Fargo – then they put the screws to Genmar, who is forced to then screw its vendors, who will never see a dime of what is owed to them.
     

  6. 26 year Twisted dealer

    Phil Keeter Is a past Glastron sales rep…so yea…he’s going to think highly of anything Glastron does no matter what it does to anyone….its called Blind Loyalty…..and Don’t think for a minute that Irwin Jacobs or any of his executives took a hit in pay…they never do…I was a Glastron dealer and Keeter was my rep…I also worked for a major corp after I sold my Dealership…yep I know whats going on…it stinks….Lean Six Sigma as applied to the boat biz has stuck it to all of us….IT REALLY PAID OFF DIDN’T IT ????????..it sure kept the middle and upper managment jobs and bonuses and kick us all in the pants…Phil Keeter lives in a fairy tale world…we are out here busting it while they sip tea and go to trade shows and fly around the country side in first class cabin…also I’m sick of the how the Grow Boating Campaign was slipped into us…shoot,everything I sold that had a Grow Boating Campaign TAX on it went to someones salairy….what idot thinks that we don’t know that there is a 3 figure paid stooge running that????….has it helped??? NO….are we all dang near bankrupting   YES….why don’t they take the Grow Boating Campaign Tax off of us…why????…I hope that while I eat beany weenys NMMA THINKS OF THAT !!!!!

  7. Daivd

    LOL Pete. What in the world does a manufacturing standard (Six Sigma) have to do with what the entire world is experiencing in this recession? Admittedley the marine industry is a convenient target but none are exempt from this.
    Whenever things get tough there are always those at the bottom with an overwhelming sense of entitlement that lob anonymous shots at executives…who I should add, still have their jobs.
    Jealousy has no play here. Mr Keeter is an experienced marine professional that is well liked and trusted in this business and his resume has made him the man he is.
     
     

  8. Ken Rosenblum

    I own a 28ft Hydrosport that has a warranty problem in that the gell coat has seperated from the fiberglass. I have been in tuch with two of the companies warrany reps only to be frustrated by various reasons why the company has not been able to either examine the boat or make the repairs. I had the boat examined by an expert who issued a report that this is a warrantied defect in oder to be sure of my position. This frustration is now in its  6th or more. I am a novice in boating having purchaed the boat for my families enjoyment and my fishing. I relied upon this warranty. What does it mean that the company will stand behind the warranty if they do nothing? How can anyone feel comfortable purchasing anyone of Genmars’ line of boats with this alledged warranty given my situation? How can the dealers feel comfortable selling their boats given my situation?
    I love to go bass fishing in the North Shore of Long Island where my boat waits on land while one of the very best fishing seasons is now going on. I am so frustrated that I have to charter boats just to get into the water at considerable expense. Anyone have any ideas to help me?

  9. One more vendor out to dry

    I’ve been in the marine industry since ’67 and for a long time I was part of the 800# gorilla’s management team, but that changed as they lost the competitive spirit as they hired rising managers fresh from unrelated industries not in-house entrepreneurs with the competitive spirit that grew that company. 
    About 10 years ago I went another direction and now run a small company that supplies parts to the boating business.  Along my career path I saw Irwin come on the scene and apply his methods to boating companies.  I couldn’t help but notice that he sure likes the limelight and having his name in ink, but since he earns the big bucks, who can blame him.  Don’t you imagine these slow spells are boring to that type person? 
    Now it’s ’09 and along comes the new policy makers in Washington who are promising the world in 100 days and will provide FUNDS to companies that produce green products.  Looking around there are no U.S. makers of windmill blades.  They are imported and you can see them leaving our ports headed across the interstates into the plains to make power. 
    Maybe I’m adding two and two and getting five, but I can’t help but wonder if there isn’t a connection to Irwin’s decision to erase debt at his big, slow moving dinosaur called Genmar, so he can focus his attention to making windmill blades.  I wonder if the method called bankruptcy had a part to play in that green business plan. Didn’t his background specialize in liquidations so he knows the methods?  
    Obviously producing green products will get you TV and press exposure, trips to Europe to secure loans and potentially a product that isn’t dependent on people relaxing by spending their play money.  And since boating will probably never in our lifetimes return to the glory years, does he care who is left holding the bag – customers, suppliers, employees?
    I wish for all of us there was a quick fix, but it doesn’t appear in the cards.

  10. yachtpilot

    mechanics liens are being put on new sold boats “under warranty” because genmar is not paying for warranty work approved and completed before bankruptcy……instructions are to “file as a creditor” meaning you won’t get anything
    no one is making sure the money allotted by the bankruptcy court is going where it should be

  11. Greg

    The offer to cover warranties was only good while it severed Irwin’s purpose. A year later, Larson is refusing to honour warranties for obvious gel coat deficiencies. Anyone thinking of purchasing a boat from Larson, now owned by Irwin should think twice and go elsewhere.

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