MRAA reacts to Genmar bankruptcy

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Genmar’s Chapter 11 announcement will likely have a devastating effect on its dealers, Phil Keeter, president of the Marine Retailers Association of America, said this morning.

“My concern is there’s hundreds, if not thousands, of Genmar dealers out there that have Genmar product in stock, and now if Genmar is bankrupt and all those boat companies go down, what will happen to that product out there?” Keeter told Soundings Trade Only. “Who will supply the warranty on that product?”

In a statement, Genmar chairman and CEO Irwin Jacobs said the company plans to ask the bankruptcy court for approval to allow Genmar to pay appropriate dealer warranties and rebate claims.

“The key thing is they are going to ask,” Keeter noted. “The court doesn’t have to grant that. The court can say they can get in line like everyone else.”

Keeter said this morning that he has received numerous calls from concerned dealers asking what they should do and if they should switch brands. Genmar says it has approximately 1,100 dealers worldwide for its 15 boat brands.

It’s important, Keeter said, for dealers to work out as soon as possible how they will handle warranties. Dealers need to ensure they don’t lose their customers over this.

“There will be a lot of dealers that will never sell another Genmar boat regardless of what Irwin does,” Keeter predicted. “It’s devastating.”

— Beth Rosenberg

b.rosenberg@tradeonlytoday.com

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Comments

13 comments on “MRAA reacts to Genmar bankruptcy

  1. sean pierce

    Genmar deserves to lose it’s dealer base. The dealers are the ones who will suffer durning this ordeal, not Genmar. Genmar will and has figured out how to screw it’s lenders as they have in the past . I promise you this, they will have a plan that will leave Erwin in the cat bird seat. It won’t cost him a dime and he will be back, less debt and money out of his pocket.
     

  2. tjorgensen

    Jacobs is a smart cookie,  This isn’t his “first Rodeo” he has learned how the business and finance world worked long before he got in the “Boat Biz”.   The dealers are the ones that are going to get stuck with unsaleable parts and inventory. 
        As far as the outstanding and future warranties are concerned I know how that works.  I was a marine dealer for many years before my retirement in the late 90′s and still have a box full of unpaid warranties from other failed manufacturers.
        Wonder what his next “venture” will be,  Wind or Solar power? 

  3. Marc Luft

    Irwin is always one sharp tack in the drawer, but it is always the dealers and the lendors who get stuck in the finger. Is George Clooney driving this ship now? Hey wait, maybe Irwin got an Obama check?

  4. Peter Rachtman, Corrales, NM

    This is a very sad story.
    I worked for Genmar for 6 years until last October, handling all of their brands for Australia and New Zealand.
    I always found Genmar to be a very sincere and caring company and while Irwin Jacobs has a reputation for being very shrewd, I always found him and all management to be straight shooters and operate with the very highest ethics. Irwin cares passionately about the industry.
    Outcome may be totally out of their hands, but I am sure that Genmar’s people will strive to meet all obligations to dealers and retail customers.
    I am saddened for the negative impact on dealers as well as the many good people working there…. as well as the downstream effect for the rest of the industry.

  5. Dino

    Say what you want and think but the fact is that Irwin and his brands have made a lot of boat dealers very wealthy people over the past many years.  People who enter into the boat business should realize that as the economy goes so does the boat business.  It is a risk you take.

  6. Robbie Norris

    Mr. tjorgensen; to answer your question from above:  Wonder what his next “venture” will be,  Wind or Solar power? 
    VEC Tech. is already working with GE to provide the props for its wind turbines.

  7. Boat Part Boy

    The dealers will have inventory that they can sell at some price.  But the supplier to Genmar will be out all the money.  From cleats and lights to seats and pumps.  The lawyers are all that will profit from this sad state of affairs.

  8. Simon Miller

    I have been a Genmar dealer (Four Winns, Wellcraft and Seaswirl) for the past 6 years and have always found them to be honest and forthright in all areas.
    They build an extremely competitive and high quality product that deserves to survive this financial challenge. I for one will stay committed to our Genmar brands and I urge all other Genmar dealers to do the same.
    I also urge Genmar dealers to ignore all the scuttlebutt that is already finding its way on line and just stick to the facts as relayed by Genmar staff. I have had a long conversation with Genmar today and I am confident Genmar will emerge from this process stronger and more committed than ever.
    Simon Miller
    Fleet Marine, Melbourne, Australia.
     

  9. Part Supplier

    As a parts vendor to several Genmar boat companies, I can tell you this can be devastating to the parts suppliers.  I don’t believe that $186k is the largest unsecured creditor either.  I bet there are many larger parts vendors who were owed several hundred or over a million. 
    I am sure there will be some vendors who will not survive this.  Our industry is made up of a lot of small to medium companies, and losing $100k or even less can easily put them over the edge in the terrible recession we are in.
    Funny thing is Brunswick, another big corporate boat builder, is pounding its vendors for price decreases since they say “commodity prices” are so low now.  Well, I can tell you that just because some of my incoming materials are down, that is FAR outweighed by the fact that I have half the revenue I used to have to cover fixed costs of running the business and my margins are WAY down this year even though commodities cost less.  I have also had to write off lots of accounts that cannot pay – including Genmar now.  Are they just that flipping STUPID or are they trying to drive the remaining healthy vendors into bankruptcy too.  And where will they be if lots of their vendors start failing.
    We really need all the conglomerates to fail so the independents can take back over the industry as it should be and spread the risk appropriately.
    We also need the boat builders to really consider their supplier base and partner with domestic suppliers to insure a healthy vendor base in the near term and long term.
     

  10. Susan Wendt

    Is it genius . . or insanity?  Only time will tell.
    Don’t forget that there are two brilliant businessmen at the helm, between Jacobs and Cloutier.  It’s not over yet . . .

  11. Simon Miller

    I have been a Genmar dealer (Four Winns, Wellcraft, Seaswirl) for six years and have always found Genmar to be honest and forthright in all areas.
    I for one will be staying committed to our Genmar brands. Genmar builds a highly competitive and extremely high quality product that deserves to survive this financial challenge. I urge all Genmar dealers to do likewise.
    I also urge dealers to ignore all the scuttlebutt that is already emerging on-line. Lets just stick to the facts as relayed by Genmar staff. I have already had a long conversation with Genmar today and I am confident they will emerge from this process stronger and more committed than ever.
    Simon Miller
    Fleet Marine, Melbourne, Australia

  12. SpokaneInc

    A former supplier of trailers for Genmar has approximately $1.3 million of unsecured receivables outstanding.  I would bet that  there are several more of this magnititude.

  13. mbd

    I use to work for Genmar at the Sarasota facilities for over twenty years, before the plant closure in 2008.  Genmar has always been an honest and decent company to work for.  You got a good day’s pay for a good day’s work.  The crew always sought to deliver the best product they could.
    People working there had the uneasy sense of potential closure a couple years before the actual event; I suspect the dealers were very much held the same enlightenment.  I understand firsthand the inability to let go of a lame bird in hand in hopes that it can be nursed back to health.  The loyalty and commitment in a time of uncertainty is always to be respected.  However, perhaps, for the dealers who at least have a remaining inventory to sell, tonight it’s bird for supper.  Tomorrow, like for many in this time of economic upheaval, it’s only mac & cheese.
     
     

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