Getting around the media’s bad news blitz these days isn’t easy. We’re living with 40-year-high inflation, record gas prices, rising interest rates and other issues. Retail giants like Walmart and Target outlined on earnings calls last week how soaring costs are hitting across all their operations.
Target said it is dealing with much higher-than-expected freight and transportation costs resulting in “hundreds of millions” above expectations. Walmart is similarly coping with the rapidly climbing fuel prices, running $160 million higher than its forecast.
Moreover, the planned move to deal with inflation by increasing interest rates can be risky business. If the Federal Reserve raises interest rates enough to choke off inflation, it could trigger a slowdown in jobs and economic growth.
But hold the phone. Some of us in the marine industry have been here before; we’re old enough to vividly recall it. And it may be a worthy history lesson for today’s dealers.
On Oct. 19, 1973, President Richard Nixon requested $2.2 billion in emergency aid to back Israel in its Yom Kippur War. That triggered an oil embargo on the United States by the Organization of Arab Petroleum Exporting Countries (OAPEC). Because the United States was a big oil importer, gas prices quickly began to rise as oil supplies were reduced. Over the next three months, it became known as the “oil crisis of ’73,” and the big concern was not necessarily retail cost but supply shortages.
Three months later the Cleveland Boat Show was set to open Jan. 19. Cleveland’s afternoon newspaper, The Cleveland Press (now defunct) hit the newsstands with the front-page headline: “No Gas for Boats.” Talk about a knife to the gut!
What the paper failed to explain was that the idea of no gas for boats on weekends to reduce demand on supplies was only one of more than 80 ideas being kicked around by the Nixon administration. Fortunately, it was never adopted, but it led all of us on the show floor to initially think the worst. Would the people even show up now? Could we sell boats with the threat of no gas? How do we deal with it back in the showroom after the show?
We overreacted, and that may have caused us to momentarily lose focus. Boaters came to the show, as always. While concerns about gas were voiced by some prospects, customers were still buying. I remember that show well because it was my first as president of the Lake Erie Marine Trades Association, a position I held for 34 great years.
So this is my point: Marine dealers need to look at the positives. Tune out this constant drumbeat of negativism coming out of Washington and elsewhere. Don’t get wrapped up in the downward spiral.
Memorial Day weekend kicks off the busy boating season. Millions are out there boating. And we’re still selling the No. 1 family fun experience.
Coast Guard on Great Lakes Warns Boaters
A tip of the cap to Coast Guard Sector Detroit for issuing a warning to all boaters about inadvertently fueling up with E15 as the boating season in the Great Lakes hits full throttle.
As reported in the Detroit Free Press, the Coast Guard cautioned boaters that new fuel standards that allow the sale of E15 gas during the summer months could pose safety hazards if used in vessels. In the past, the sale of E15 was not permitted during the summer months.
E15, gas that contains 15 percent ethanol, has been authorized for summer use in cars. However, it's federally prohibited for vessel use because of its potential to cause engine damage and void warranties.
The Coast Guard said that mistakenly using E15 fuel has been proven to cause engines to run hotter, which increases the possibility of a boat fire.
Dealers should follow suit by alerting customers to avoid E15, and point out that unleaded 88 at gas stations contains E15 and that there are often no adequate warning labels.