Jacobs charts the way forward for his dealers

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Things are going to be different this time around, Irwin Jacobs said in a letter sent out to dealers this morning.

The Genmar founder, who saw his boating empire tumble in the bankruptcy process, now owns six former Genmar brands with his partner John Paul DeJoria. J&D Acquisitions, their new venture, will not suffer the same fate as Genmar, he tells dealers.

“I assure you, I’ll never allow our companies to ever become overleveraged again as we did in the Genmar situation,” Jacobs wrote in his letter.

“I’m never going to allow a corporate structure to ever get in the way of making our business a success. If there’s one thing I allowed to happen … I believe that I allowed this thing to get out of hand with too many competitive brands competing against one another, allowing too big of a corporate structure, bloated corporate structure, that really didn’t bring much value at all to our businesses and just created more confusion and cost to our businesses,” Jacobs said in an interview with Soundings Trade Only.

“I complained openly many times about Brunswick, which I apologized directly to Dusty McCoy for when I saw him in Florida. I should have looked in the mirror myself before I started talking about him,” Jacobs admitted. “We were nowhere near the size of what his [company] was from a corporate structure, but on a relative basis, we were every bit as bad as anything I was saying to them. A pox on my own, so to speak. I was calling the kettle black.”

J&D Acquisitions now owns Larson, FinCraft, Seaswirl, Triumph, Marquis and Carver brands. The latter two – Carver and Marquis – are built in Pulaski, Wis., while Larson, Seaswirl and FinCraft are manufactured in Little Falls, Minn.

In his letter, Jacobs announced plans to move Triumph production from North Carolina to the Little Falls facility. The move, he said, allows the line to be close to where they hope to do much of their future business with that brand, including programs set up between Triumph and fishing camps in Canada.

The other lines, Jacobs said, are up and running, and doing well.

“If we could get the necessary parts and materials that we need to operate, we would be putting out 100 boats a week. Not just Larson, that’s the three brands – Larson, Seaswirl and FinCraft – and that’s with what we have on hand right now,” he said. “We’ve got a good eight to nine weeks of backlog at 100 boats a week of those three brands and that’s with no additional orders.

“These are still not the same numbers we used to put out, but the fact is I think we’re in as good, if not better, shape than anybody I’ve heard of out there. I don’t mean that in a bragging way, I’m very thankful for it that people are coming back very quickly,” Jacobs added.

In his letter, Jacobs wrote about the challenge of getting all the necessary supplies, parts and materials needed to build boats.

He is short on engines, certain windshields and some other items, but Jacobs expects this situation to work itself out shortly. Jacobs estimates 70 percent of Genmar’s former vendors are “back on terms with us.”

“There’s no shortage of people who want to do business today,” he said. “There’s not enough business to go around.”

VEC Technology

The Little Falls factory, Jacobs noted, is the only factory producing VEC boats. Jacobs believes the closed-molding manufacturing process designed to reduce production time and pollution will give him a competitive advantage that has never fully been explored.

In the next 90 days, once Glastron moves its production out of Little Falls, Jacobs’ boats will be the only VEC-manufactured vessels in the industry.

“We’ve never been able to exploit VEC the way I had hoped to when I first started this 10 years ago. … I was very careful if I was to go out there when we brought VEC out and we put it in Larson and Glastron products, we always had competing products in our other companies where we weren’t putting out VEC products, so I couldn’t sit there and badmouth another product of ours,” he said. “We’re going to exploit VEC now like we never have before because we’ll have the only VEC boats in the world and there’s nothing that competes with us in our own company.”

There are about 190 people currently working at the Little Falls factory and about 150 in Pulaski. He expects both of those facilities will continue to hire more employees as business improves.

Dealers, he said, are coming on board and putting in orders. Jacobs said his lines have a backlog of 800 boats.

“Eight hundred boats may not seem large based on what it used to be, but today it’s a lot of boats,” Jacobs said. “We don’t want more dealers than the company can support. We don’t want dealers on top of dealers. We want dealers to make a good living and to have some opportunities not to compete with the same products across the street from them.”

As for what the future holds, Jacobs said not to expect him to keep adding more boat lines.

“I would never say never about anything, but I have no intentions of buying any other boat companies that would be any overlay to the boat companies we have,” he said.

“I think things clearly have bottomed out. We are seeing it a whole lot better for us than we have for the last year, that’s for sure, over a year,” Jacobs added. “We see people coming back to us now who either left us or who were on the sidelines. A lot of people are buying boats out there.”

For more of our interview with Jacobs, see the May issue of Soundings Trade Only.

Click here to read Jacobs’ letter to dealers.

— Beth Rosenberg

b.rosenberg@tradeonlytoday.com

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Comments

19 comments on “Jacobs charts the way forward for his dealers

  1. tkmarine

    Interesting that Jacobs mentions the challenges of getting materials in to build the boats. Welcome back to the new marine industry you left us with. Most of these suppliers are trying to dig out of the past bills Genmar owes them for that, unfortunately,will only get paid cents on the dollar…if they get paid at all.

  2. Your Kidding...right???

    I cannot believe the nerve that Jacobs has writing a letter to dealers and the industry…like he has. Excited, optimistic,.etc are words he now uses…as he has secured a sugar daddy in his new partner…..so financially he is out of the woods…..leaving a trail of distruction, debt and dissapointment in his previous wake….with the dealers who are leftwith holdings IOU’s, and the vendors who get nothing but…it won’t “happen again” promisies.
    It “did” happen Irwin…and you elft these dealers and vendors stranded. Shame on you…going back to these same vendors…knowing they desperately need the business you offer them….deperstae because you helped to get them in this position.

  3. bobbyn

    Good luck to any dealers that remain with Jacobs.I pay what I owe,and would never do business again with this guy.

  4. Dementia?

    Maybe it’s possible he has dementia?  Just my humble opinion.
    “Dementia is a loss of brain function that occurs with certain diseases. It affects memory, thinking, language, judgment, and behavior.”

  5. ACORN gatherer

    Jacobs enthusiastically endorsed obama with his hope and change.
    Irwin, why don’t you seek a bailout from the people you so admire, where are they in your time of need?

  6. Bob Poole

    Not calling anyone a liar but some of the comments quoted in this article are VERY questionable.
    Things can’t be nearly as good as they are being portrayed.
    I.J. knows how to spin a not so rosey situation into a very positive press release.
    Heck, thats how we all got hypnotized before!

  7. chesboater

    “Jacobs charts the way forward for his dealers”
    Can you believe this guy?  His dealers?  More like his pockets!!

  8. tinatina

    Irwin, what about all the people’s jobs you took away with the Genmar disaster?
    I’m collecting unemployment while you collect new endorcements.

  9. Mercules

    And to think I shook hands with this guy right before the market crashed. He knew exactly how he was going to get out of his mess even before it happened. I’d definitely choose him as my poker partner, but not much else.

  10. Maverick

    Jacobs is trying to bring VEC technology to Texas.  Can someone find out how much tax abatement they are asking for and what promises they are making?

  11. Gordy McKelvey

    Simple solution to all the questions posed here….don’t do business with Irwin Jacobs.

  12. crosschopp

    Is Irwin Jacobs the only person which you blame for the circumstances besiged by the failing economy? Thousands of businesses have gone through the process of adjusting there business models to cope with the major downturn in their respective markets. In the scramble to survive these difficult times, it would be obvious that changes have been hopefully made “to right the ship”. Face it, fortunes have been lost, unemployment is at record levels and it’s all Irwin Jacobs fault?

  13. Pleeaase

    You’re right, things are going to be different this time around. Nobody wants to deal with you, either suppliers or dealers… You’ll never be overleveraged because no one will give you credit..
    You apologized to Dusty, I’m sure he’ll just open up the supply chain to you now.Volvo will also forget about what you owed them.
    You’ve got 800 boats on backorder? Maybe if that includes 2012 model year units. Don’t you think dealers talk to one another? We know that’s BS
    You say 70% of your suppliers are back on board but if the 30% includes suppliers of key parts you can’t get elsewhere (like windshield) you’re screwed.
    You’ve never been able to fully exploit VEC, too busy exploiting everything else I guess
    Dream on Big Guy

  14. Jef C Nelson

    You people kill me! hey jump on the band wagon of running I J into the ground why don’t ya! I tell ya if it wasn’t for him alot of people wouldn’t be working and alot of people wouldn’t have had a chance to go into the buisness! Beside all that look at the real problem where this mess all begins! at the top of our country! try fixing the main problem 1st then start pointing fingers! If it keeps going the way we are going every last one of u will be looking at the same problems I J did! Even on personal levels millions of people are losing thier house’s and property as we sit here nd point fingers! fix that 1st!!!!!!
    thanks Jef

  15. triumph?

    funny how all the compays are back but triumph. oh wait its moving to little falls but none of the staff are going. so who’s going to built them. there not fiberglass so whats that mean its been over 9 months since it closed no one has a clue when or even if its going to come back. lets face it 9 months closed no time line to move or even start back up this line is finished.

  16. Former Jacobs Dealer

    Former Jacobs dealer here, and from a personal point of view I wouldn’t sell one of this man’s boats if he gave them to me. He screwed his dealers and his suppliers last time, and he will do it again. I mean honestly, dealers talk to each other and this man couldn’t have an 800 boat backlog if he put them in dealerships on consignment, much less by selling them. All of your former dealers know you milked every bit of cash that you could out of Genmar by doing cash and carry deals for the last few months before you filed bankruptcy, effectively leaving your creditors with nothing. Those of us who actually pay what we owe prefer to do business with the same. Best advice for Mr. Jacobs is to hire a couple of good cooks and see if they can come up with a recipe for fiberglass because I hope you have to eat every single boat you make.

  17. mrboatguy

    I would like to start this off by saying that I have great admiration for Irwin Jacobs, and his involvement in the marine industry over the years, that has very often lifted the bar for other manufaturers, and investors. He has also been innovative, and courageous, often putting his money where his mouth is. Additionally, he has helped new dealers get started by providing them with a few boats “on the cuff”, when nobody else would have considered doing that… so, I’m not quite ready to jion these readers and throw him under the bus, yet.
    Having first said that, what I look for in someone who is trying to start over again is very basic. Irwin Jacobs is no different. People do business with people that they know, like, and trust. I.P. certainly doesn’t have to work on getting people to know “of” him – but he needs to step up to the plate to get people to know him as one who is humble, accountable, and one who can once again be trusted by everyone.
    Once integrity is lost, as it has been with Irwin Jacobs, it is difficult to gain it back, and almost impossible to gain it back quickly. Usually, that person needs to be lifted up by others around him that do have integrity, and are willing to “back” him with their own “personal” endorsements and commitment that establishes his accountability publicly.
    Furthermore, the one being lifted up needs to express to others that he is sold out to personal rehabilitation, and committed to personal change, and is making himself accountable to those who have committed themselves to help him – not to mention humbly seeking forgiveness.
    My hat is off to Irwin Jacobs for having the courage to start over in this industry, and in this economy, but his integrity will remain questionable unless he proves that he has become accountable to others who have the authority to pull the plug on him, without pulling the rug out from under everyone else involved with him.
    Certainly he could blame the economy, or blame this or blame that – and be right. That isn’t the issue here. I have failed in business many times. It always costs others something, and when it does, it really hurts to know that your failure has cost others, and I have always internalized that pain. But entrepreneurs have to get back up, dust themselves off and start over, and over, and over.That’s what entrepreneurs do.
    I’m am glad to see him fully engaged in the marine industry, where he has made a positive difference many, many times, and sometimes with those who really needed a helping hand. My hope is that he is able to gain back his own personal integrity with others like those who have placed comments in this article. That would certainly have the greatest impact on him, this industry, and his vision.
    - mrboatguyRindge, NH

  18. C'mon already

    He’s blaming the “corporate structure” for the failings. Seriously, who do you think was really pulling the purse strings here. It was you, Irwin. For you to come out and start throwing people under the bus is so typical of people like you. People who will do anything and everything to pass the buck and push the envelope no matter who it hurts. Take a look in the mirror, pal.

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