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It’s the “right stuff” in a bad situation! That’s the bottom line of MRAA president Phil Keeter’s announcement that the association will serve as a catalyst to bring together Genmar dealers.

Genmar’s recent filing for protection under Chapter 11 bankruptcy puts every Genmar dealer at risk of being left out of what is likely to be a tedious reorganization process. MRAA, responding to its members’ concerns, has presented a plan that may give the dealers a voice in the reorganization process.

It’s not surprising that Genmar dealers have serious concerns. After all, the nightly TV news reports covering the GM and Chrysler reorganizations, and the interviews of dumped auto retailers across the nation, are still vivid in our minds. In the Chapter 11 process, reorganization means just that: reorganization. Accordingly, if Genmar emerges from Chapter 11 as I believe it will (FYI, statistically, most companies don’t), it won’t be the Genmar we’ve known.

During the GM and Chrysler reorganization, we learned that the company executives, the union, the bond holders and the Obama administration had the major seats at the table. It seemed the group that was least recognized in the process was the retail dealers. Moreover, these dealers even had strong franchise agreements, not the impotent dealer agreements we use in the marine industry.

Any way you look at it, Genmar dealers have a basis for sleepless nights, particularly if they are unsecured creditors owed warranty reimbursements, rebates, or promotional or other funds.

So MRAA’s recommendation that dealers unite as the “Committee of Genmar Dealers” and become represented by a high-profile law firm in the field of dealer issues, Bellavia Gentile & Associates, is exactly what MRAA should be doing for its members. To be clear, this does not mean MRAA will be representing the dealers in the bankruptcy process. It does mean Genmar dealers should join this committee so they have their own strong representation and influence in the difficult reorganization process ahead.

I’m reminded of a case in Ohio a few years ago when a shrink-wrap manufacturer sued and/or demanded payment from 36 dealers for alleged use of a proprietary process. Individually, many dealers couldn’t afford the legal costs to defend themselves, so they all formed a committee, each contributing a small fee into the pot. They hired a good law firm that went into federal court and won a favorable summary judgment.

The point is that while that case and the Genmar reorganization are completely different, it illustrates how when dealers join together they can accomplish things that individually they simply couldn’t.

One more observation: I suspect Genmar’s Chapter 11 filing won’t be the last we’ll see in the months ahead. As Genmar’s Irwin Jacobs so accurately wrote to all Genmar dealers: “I have never throughout any time in my 50-plus years in business experienced anything that even remotely resembles the unpredictable business environment that we have experienced over the past several years and which still continues.”

Sadly, it’s the “still continues” part that makes the MRAA recommendation in this case a likely model for other dealers in the future.



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