Genmar’s Jacobs calls MRAA dealer committee ‘insulting’

Posted on

Genmar Holdings chairman Irwin Jacobs is calling a move to form a committee of Genmar dealers who want their interests represented in court the “most insulting, obnoxious thing I’ve ever seen or heard about in my life.”

The Marine Retailers Association of America announced this week it is working to form the committee as Genmar moves through the reorganization process following its June 1 Chapter 11 bankruptcy filing.

“I don’t understand where [MRAA president Phil Keeter has] come up with all this concern,” Jacobs told Soundings Trade Only. “The financial condition of Genmar, even in [Chapter] 11 is better off than most companies who are not in it. We paid our banks now $10 million since we’ve been in [Chapter] 11. We have … hundreds of millions of dollars in assets.”

“I’ve worked my whole life to take care of my dealers, not to destroy them,” he added.

Genmar says it has about 1,100 dealers worldwide for its 15 boat brands.

“We’ve had an inordinate amount of calls from Genmar dealers in almost a panic mode, not knowing what to do,” Keeter told Soundings Trade Only. “Most dealers don’t have the wherewithal to hire an attorney to represent them in that at all, and being unsecured creditors they’re going to be way down on the list.”

The committee of Genmar dealers would be represented by New York-based law firm Bellavia Gentile & Associates. MRAA has a longstanding relationship with the firm, and its managing partner, Leonard Bellavia, played a leading role in the General Motors and Chrysler bankruptcies on behalf of those auto dealers, Keeter said.

MRAA has negotiated a flat-fee arrangement of $1,000 per dealer to become a part of the committee.

Bellavia, in an e-mail to Soundings Trade Only, said a “unified committee of similarly situated dealers will help level the playing field in bankruptcy court.”

“The unsecured creditors committee [already in place] is not exclusively for dealers,” he said. “It is for such a divergent group that individual dealer issues will not be the centerpiece of the representation. Dealer issues are unique and cannot be lumped together with the issues a bank, supplier or transporter may face.”

Chrysler and GM presented the same issues that Genmar will, he said.

“If the rejected dealers in Chrysler did not have a committee, they would be sitting with unsold new vehicles which would have fetched 50 to 60 cents on the dollar. Warranties would not have been honored,” he said. “In GM, every dealer, rejected or continuing, would have all of the state dealer statutes eliminated if it weren’t for collective action.”

“The Genmar dealers will be the subject of similar attempts if they are not represented in court as a group,” Bellavia added.

Jacobs said it is “outrageous” to compare Genmar to Chrysler or GM, adding there are “absolutely zero” comparisons between them. Also, he added, Genmar has been sending out its warranty checks and will continue to do so.

“What does [Bellavia] think he could do differently than the courts [can do] or we can do?” Jacobs said.

Bellavia noted that the point of Chapter 11 is to reorganize and “start with a clean slate” with vendors, dealers and other entities.

Why Jacobs would leave one group, such as dealers, “completely intact kind of belies the history of bankruptcy reorganization,” Bellavia said.

Beth Rosenberg

b.rosenbergtradeonlytoday.com

Welcome to TradeOnlyToday’s premium content! To continue reading, please register now, for access to 10 free stories per month. Or subscribe, for unlimited access to all TradeOnlyToday content!

Click here to Register ... it's free!

Basic subscription: Registered members get free access to 10 premium content stories each month!

Not a member yet? Click here to Register!

Already a member? Click here to Login!

Subscribe ... for unlimited access!

Individual subscription: $29 for unlimited site access for one year.

Small Business subscription: $140 for unlimited site access for up to 10 members of a company for one year.

Corporate subscription: $300 for unlimited site access for all members of a company for one year.

You may close this dialog after seconds.

Comments

31 comments on “Genmar’s Jacobs calls MRAA dealer committee ‘insulting’

  1. Al Williams

    Contrary to his comments he is just like GM and Chrysler – he drove his company into bankruptcy and usually some accountability goes with that.  The bankruptcy judge should quickly replace Jacobs and move forward with the proceedings, all parties being represented. Notice that both the GM and Chrysler CEO’s have both been replaced.  Jacobs is next in line.
    More power to the dealers.
     

  2. bill gardella jr

    What has Mr Jacobs to fear from the dealer group if he intends to treat them all so well? Nothing. I am not involved at all but would gladly pay the bargain price of $1K for such quality representaion. Mr. Jacobs responnse would appear to justify that decision. “Thou dost protest too much”…or so it goes.

  3. Not a Genmar Dealer

    Although I am not a Genmar Dealer I understand the situation they are going through. My question is that if Irwin Jacobs is so adamant about protecting his dealers, what is he worried about? The dealers are only asking to have what Jacobs says he will do part of the court documents.

  4. capt dave

    I am all for the committee Jacobs could care less about
    most of his dealers,  I know because i was a Wellcraft dealer
    and had warranty nightmares with little help from Genmar.
    He just want to stuff you with boats.  Jacobs only cares about
    the big dealers, i hope the committee works him good.
    I am sure he planned this move of Chap 11 to help free up
    money to go into the wind business, that did not happen overnight

  5. BoatdealerUSA

    The MRAA is completely wrong and their actions will hurt the dealers and Irwin’s efforts to bring the company back stronger than ever to the benefit of the dealers and customers.
    This is a misguided program and will run up massisve legal fees, complications  and stymie an otherwise smooth reorganization from which only the laywers and court trustees will benefit not the dealers

  6. Douglas W. Reimel

    I have to say that all of my dealings with Mr. Jacobs have always been for the most part on the up and up. He has corrected several issues with his companies that I have had. Now, here is were it hurts. Each boat company does not opperate by the same guidelines. One brand manager (depending on actual title) can be very fair. While the other deserves and has earned a reputation that is full of explicatives not to be mentioned here. I have three units left I have asked many times to be moved to another dealer. Make me happy
     
    Have a GENMAR day!

  7. sogables

    It seems unlikely that Genmar dealers would be unsecured creditors of Genmar so I don’t understand their need for representation in bankruptcy proceedings. I would agree with Bellavia that things are going to change because of the bankruptcy. I guess you can always find a lawyer to argue about something for a fee.

  8. diane

    I agree, we need to form an alliance to protect the dealers because Jacobs has proved to us in the past that he will do whatever is necessary for his bottom line and to hell with the dealers and everyone else.

  9. joemangler

    If Genmar comes out of Chapter 11 fine. If it does not, dealers will get pennies on the dollar on warranties, coop and rebates. In addition, being in Chapter 11 in the spring is awful for a boat dealer. Much money to be lost in margins I know I been through 3 builder bankruptcies. I don’t know Mr. Jacobs and have nothing to say about his ethics. What I do know however is you don’t declare Chapter 11 because you are financially strong. Something doesn’t add up. For that reason the dealers need to have a say.

  10. Long Time Genmar Dealer

    I am still waiting for thousands of dollars in unpaid warranty claims, that are more than 60 days past the payment date.  When we contact our Genmar Manufacturer, they do not know when they will be able to pay us.  SSSOOOOOO!!!!  At this time we are only getting lip service about getting paid for warranty work.  If Genmar really cared about its dealers, they would be paying us.
    Now, if Genmar says, that they cannot pay claims that were before Chapter 11, why would I not want to get my own representation in the court action.  Even if Genmar has every intention of trying to pay claims, there are a lot of creditors that will be fighting for there money, so MRAA and us dealers need to fight for ours.
    Irwin jacobs is way off base with his comments when he has little or no control over court proceedings.

  11. Charlie

    Irwin has a tendency to think of himself and self preservation not his customers. I used to be a Genmar dealer and I can not say much about the leadership and quality of their products. They took one of the most respected offshore boats made and took all of the quality of out them.
    If his company has so much money why are they in bankrupcy protection. I can’t blame the dealers for protecting themselves.

  12. former dealer

    Based on these comments and others I have read, I am curious as to why dealers continue to do business with large companies that force feed product to them? Why not deal with smaller, independent builders?

  13. alphonso

    “Insulting?”   That’s rich.  Mr. Jacobs has delivered the ultimate insult in putting 1,000+ marine retailers in jeopardy – at a very dangerous time.

  14. ben

    Mr. Jacobs has alot of chutzpah to say he is “insulted.”  What about all the suppliers that got screwed and will be lucky to get 5 cents on the dollar for their outstanding invoices.
    Didn’t Mr. Jacobs just jetset off to Europe to find investors for his wind turbin blades business?  Maybe he should spend more time “minding the store” of boat business. Dealers and suppliers are the ones that were “insulted”
     

  15. LARRY

    I AGREE WITH BILL GARDELLA, IF HE’S SUCH A SAINT, WHAT IS HE WORRIED ABOUT HIS ANGELS? LET’S FACE IT SOME OF US ARE NOT STUPID, WE KNOW HOW THE GAME, AND THE ONE IRWIN IS PLAYING. BOTTOM LINE WHAT’S REALLY HAPPENED IS HE GOT CAUGHT WITH HIS PANTS DOWN SINCE HE DIDN’T EXPECT ANY REACTIONS OTHER THAN LYING DOWN OR BENDING OVER.WHAT RESULTED FROM HIS ACTIONS IS NOT DIFFERENT THAT THE SAME STRATEGY MR. JACOBS HIMSELF WOULD HAVE DONE IF THE SHOE WAS ON THE OTHER FOOT.
    IRWIN, SURPRISED YOU EH?

  16. big al

    Unlike his comments I have heard warranty payments are only being paid a little at at a time and spread out with no way to know when checks will arrive.I know of one instance that a customer can not get their boat out of the shop as a pre approved warranty claim has not been paid . Genmar will not return calls to dealer or customet!!
    After Genmar comes out of bankruptcy, I hope the industry will remember how the dealers were screwed by Genmar!

  17. Former GM of a Boat Dealer

    When I read the article, I thought this would have much comentary and rightfully so!!
    Not only is the MRAA’s Phil Keeter taking the proper action, shame on any Genmar Dealer that does not sign up and participate to protect his or her’s business and,  in most cases, the livelihood of their family.
    Before spending the last 10 years in the marine business I was a retail dealer for 27 years in another industry, same story, different day.
    Just as individual dealers have unique personalities the CEOs, GMs, Presidents and Marketing Managers also have their own opinion of themselves. This opinion and subsequent actions of these individuals can be the kiss of death for trusting dealers. They are like many dealers, full of themselves and actually believe what they say as gospel! (notice the g is not capitalized)
    Given the ecomomic climate we are in it is the duty of entreprenours to protect and preseve for what they have worked so hard, a trade association is the avenue and venue for their voice to be heard!

  18. another former genmar dealer

    I, too, remember how well Irwin took care of us when we were a top five dealer.  90 days on warranty claims; parts returned and claimed they were never received–later to find out they were going out the back door.  And when we were struggling and called for help it was “who is this again–from where?   But all we ever heard was “we are your partners”     sure they were.  It’s high time abusive manufacturers were held accountable–and I believe it has begun.  Maybe now we’ll finally get dealer agreements that are fair and not one-sided.  It’s up to the dealers to take advantage of the present situation we find ourselves in to make all manufacturers step up to the plate and even the playing field–finally!!

  19. HG

    Genmar is a prime example of what is wrong with the industry. They make poor quality product, don’t honer dealer agreements, the whine about not being able to sell enough.
    I hope they fold.

  20. Aquasport Dealer

    We were one of the blind-sided Aquasport Dealer who felt the shaft of Genmar years ago. We had a fairly large inventory of boats when the carpet was pulled out from under us. We lost our shirts selling these boats once the word got out. Genmar has been relatively easy to work with on warranty issues up til now and I must say there were many as the 2005 models were very cheaply built. I can’t help to wonder how the unknowing Aquasport owner will react now when they come in for a warranty issue and we have to tell them, “Yes I realize you bought the boat from us and there should be a 10 year warranty on your boats hull, but sorry, we can’t do anything for you. I don’t know what to tell you about the remaining six years you have left on your warranty.”
    What comes of Genmar is yet to be determined and should serve them a lesson from their monopoly-style company practices.  
    Good luck selling your inventory dealers, and by the way, no matter how many times your rep tells you, “we are here to help you move your boats”, be ware…they are leaving you High and Dry.

  21. arch

    DEALERS NEED TO DO MORE BUSINESS WITH SMALLER INDEPENDENT BUILDERS.  On average, they build better boats, have better resale value, and you are treated much better as a dealership.
     

  22. IDGARA

    I was a a boat and motor dealer in the 1970s.  I had to sue Brunswick.  I should have sued OMC.  Actually the only company that treated us fairly was Chrysler.  Because they had so little market share, they made a real effort to support their dealers until we got sued by a customer who named us in a suit against Chrysler.  That’s when they threw us under the bus.

  23. Mike in Florida

    First of all, Genmar is a quality company that deserves credit for all the good things that they have accomplished over the years. In fairness, as dealers we need to remember when Irwin Jacobs personally jumped in decades ago to clean up the mess during the OMC/Chris Craft meltdown when he recognized that if the OMC mess hit the wall leaving banks, retail owners, and dealers hanging out to dry it would have impacted ever other builder and dealer in the country.
     
    As for the current Genmar bankruptcy problem I have a different point of view to share with Mr. Jacobs – the reality is this industry – AND I MEAN ALL OF IT – was built on the backs and credit lines of the dealers, many of whom have pledged their homes, retirement plans, and life savings as collateral for their lines of credit.
     
    Every single world famous builder was started by a tiny undercapitalized back yard dreamer who rode around the country hoping to find some dealer dumb enough to take a chance and floorplan some of his boats. And what was the dealer’s reward when the builer hit the big time or sold out and walked off with billions like Connie Ray and Orin Edson – – “stock more boats or we open a new guy down the block.” Tell your children when the next start up builder approaches them in ten or twenty years about stocking their boats tell them be sure to demand an equity position in return for the risk.
     
    This industry was better of before Irwin and all the other “suits” from Wall Street discovered the boat business. We were doing fine as a mom and pop industry, having a wonderful life, raising our families on the water, and we never once asked “Irv The Liquidator” or anyone on Wall Street to “help us”. Wall Street and water don’t mix – they never have and they never will.
    As for the MRAA organizing a defense strategy for the dealers at $1,000 apiece (assuming that is the real number not a token deposit), that is the bargain of the century. I think looking forward maybe the MRAA can create a legal defense insurance program that all member dealers can turn to when needed. Hell, I would mail $1,000 a year every year to a law firm that could defend me when needed. It cost more than that to even have a meeting with a top lawyer.
     
    What will come out of this for Genmar? A stronger more unified dealer group, which will benefit and protect both builder and dealer for the long term. I have told Bill McGill at Marine Max on more than one occasion that speaking personally as a dealer for over 40 years he is my hero. You can be sure that when there is a problem at Brunswick, Bill McGill gets to sit at the head table with the “adults” not at some back table with the rest of us “children”.
     
    Our country is in the middle of a depression which unfortunately is a normal cycle every 80 years or so. Just Google “Harry Dent, Jr.” to get a real idea on where we are headed and why this is happening. Much of this downturn is long term which is dictated by the aging of the baby boomers who will begin to stop spending in waves and start saving instead. The boom we experienced as the boomers hit their peak spending was predictable, and so was the crash that followed. Normal behavior dictated by historical demographic patterns.
     
     
     
     
     

  24. SD-Dave

    What is better for the dealers, to see genmar broken up into bits and have individual brands and boatbuilding operations sold off to generate cash to honor obligationsor to keep the company wholly intaxct and as is with  and  Mr Jacob’s having total control. Bancruptcy could lead to either. Will the committee’s legal team look at this aspect of the chapter 11 proceedings or does Irwin just get to have it his way?

  25. Re: Mike in Florida

    Harry Dent, Jr. also predicted the DOW would reach 40,000 in 2004. Seem’s like tarot cards may be a more accurate indicator of what lies ahead.

  26. Judge

    The big insult is genmar not advising the dealers of its finacial problems two months leading up to the bankruptcy.  Everyone talks about how smart Irwin is sounds to me he needs basic skills in balancing a check book.

  27. Sam

    What is he afraid of, the truth?  Through his leadership he has driven his company into the ground and who gets hurt? Why is this man still smiling?

  28. fmr genmar yacht builder

    I am a former Genmar yacht builder. I worked for the company for five years. I was told by a reliable source in Minnesota about a year ago that Mr Jacobbs said in a conference call he intend to close our shop and build wind generators. I said know way.
    Then we started to lose employees 50 at a time. We were at 1300. I was there until we were at 28. I personally saw wind generator plans that were being quoted to build. The employees were being terminated not layed off. I am a firm believer this has been in the works for along time. If you noticed VEC Company was seperated from genmar and now is in the business of building wind generator blades. Not Hulls. For all the dealers good luck with the claims and all I want is my vacation pay…..

  29. Jim - www.marineindustry.org

    I believe dealers have gone far too long on there own. Collective bargaining on some levels would help reduce costs, make us more competitive and avail us to benefits that only the largest corporations enjoy… like affordable health insurance…. there’s an oxymoron for ya…

Leave a Reply

Your email address will not be published. Required fields are marked *

Comments are moderated and generally will be posted if they are on-topic and not abusive. For more information, please see our Comments Policy.

Vote Today

What is the best outcome for the marine industry in the November mid-term elections?

View Results

Loading ... Loading ...

Search Boats for Sale

Length
Year
Price

Login to Trade Only Today

Lost Password