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Q&A with Bruce Van Wagoner

Bruce Van Wagoner is managing director/president of the Commercial Distribution Finance marine group at GE Capital. He leads a team of employees dedicated to the marine industry, funding thousands of dealers in support of the sales of virtually all of the major manufacturers.


Van Wagoner, 57, has more than 30 years of financial services experience at such companies as Westinghouse Credit, Chrysler First Wholesale Credit, ITT Commercial Finance and Deutsche Financial Services. He has served on many committees dedicated to industry improvement, including dealer and manufacturer councils, Grow Boating and panels sponsored by Boating Industry magazine. He was recognized with the Industry Service Award from the National Marine Bankers Association in 2008.

Van Wagoner is a member of the National Marine Manufacturers Association and the Leadership Alliance, which participates in Boating Industry’s annual selection of the Top 100 dealers in America. He earned a degree in finance from Michigan State University and is a Six Sigma Green Belt.

Van Wagoner lives in Barrington Hills, Ill. He and his wife, Peggy, have been married for 32 years and have two sons: Phillip, 29, a producer and writer in the film industry in Los Angeles, and Patrick, 21, who attends Columbia College in Chicago.

Q: What are you seeing from dealers in terms of inventory levels and ordering new inventory, and how does it compare to last year at this time?

A: Over the past year, product on the floor more than 18 months has dropped from nearly 40 percent back to normalized levels of 13 percent. Dealers, with strong support from manufacturers, have done a great job of eliminating or reducing these excessive inventory levels. Dealers are naturally acting very conservatively, and ordering is barely keeping pace with retail sales. I expect further reductions in inventory during the selling season, to the point of some shortages going into the model year.

Q: At a meeting at the Miami International Boat Show, GE predicted an increase in retail sales for 2011. Do you still think that will be the case?


A: Some of the sales over the past two years were the result of repossessions and clearing the channel of aged product, and we have seen a decent uptick in wholesale shipments. (The National Marine Manufacturers Association reports 20 percent.) Matching wholesale and retail trends will keep dealer inventories healthy. While most segments of the market have remained flat, at best, this is still positive for most dealers because they are selling new product rather than distressed. The economy and consumer confidence must turn positive to see a significant change in retail demand.

Q: Are dealers still trying to sell new but older models (2010s, 2009s, etc.), and are there concerns of too much 2011 product remaining in the field as 2012s come out?

A: Today’s market is virtually clear of aged product. With reduced production over the past two years, dealers are now finding it difficult to secure good pre-owned product. Overall, field inventories are extremely healthy and, with a continued focus by GE, manufacturers and dealers on best practices, they will remain healthy. Dealer inventories are the best I have seen in many years.

Q: How does the number of dealers you lend to now compare with before the recession?

A: I would estimate that there are 20 percent fewer locations for most boat sales since the recession began. Business has stabilized, so we don’t anticipate further reductions. Some businesses actually have unused credit facilities but are holding off purchases until they are convinced the opportunities are better. They are looking for the right time to stock.

Q: Since the recession, how has your criteria changed when taking on new dealers or setting terms for existing dealers? If there have been changes, do you foresee a time when it would go back to how it was?

A: We all have learned much dealing in a reset economy. One of the most important lessons everyone has learned is to maintain inventory collateral values in line with market values. I don’t know if anyone wants to go back to how it was — with overbuilt inventory and pressure to move it at any cost. Today the market is healthier, and manufacturers and dealers realize it. Financial measures such as curtailments keep the market healthy. In fact, the pressure of paying curtailments can accelerate turns, which is a primary benchmark for a healthy dealership and distribution network.

Q: How would you describe the financial health of the dealers you work with?

A: Improving. Dealers are learning how to make money at lower sales levels and are diversifying their revenue sources. With the reduction of aged and distressed inventory in the marketplace, margins have improved.

Q: What would need to happen for more lenders to be interested in wholesale marine lending?

A: Over the years, many finance companies and banks have provided wholesale marine lending. Many have exited the market, but I doubt it was because they were being successful. Additional lenders will enter the space when they feel reasonably certain that losses will be low and they can earn a respectable return on their investment.

Q: Based on what you’ve seen, do you think we’re seeing signs of a recovery, as was reported following a GE survey done at the Miami show?

A: I have been in this business for many years and I have been fortunate to have four dedicated teammates who have worked with me for the past 23 years. Together, along with a very experienced sales, portfolio and risk group, we love working in this business and I think we understand the market quite well. In fact, a colleague and good friend, Dan Wullenweber, is retiring this year, having spent 30 years in the industry. We have many more like him, dedicated to the industry they love. We certainly see an industry that will rebound for the best operators. It will not be an immediate uptick. We expect slow, steady, controlled growth — but growth, nonetheless.

This article originally appeared in the August 2011 issue.



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