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Industry reacts to Genmar bankruptcy

Industry leaders say they were taken by surprise with Genmar's announcement that it had filed for Chapter 11 reorganization.

"Genmar has always been recognized as one of the largest, best-managed and best-funded companies in our industry, so it underscores the very challenging times that we, as an industry, are going through," Yamaha Marine Group president Phil Dyskow told Soundings Trade Only this morning.

Dyskow characterized Genmar as a "large and important" customer of Yamaha, but added that Yamaha is not owed any money by the boatbuilder.

"We are not a creditor of Genmar," he said.

Dyskow said he was surprised by the announcement, and the first concern was for colleagues at Genmar.

"We have many friends and associates within Genmar, so our first concern was for all those people within the organization. ... We wanted to give them our very best wishes during this challenging time," he said.

Ed Lofgren, a longtime Genmar dealer and chairman of the Marine Retailers Association of America, said he, too, was surprised by the news.

"I didn't see it coming, honestly. I had heard and read Irwin's remarks in the past, and there didn't seem to be any indication that there were difficulties," said Lofgren, who sells Four Winns and Seaswirl boats.

As a dealer, Lofgren said he's taking a wait-and-see attitude with regard to what this will mean for him and the more than 1,000 other Genmar dealers worldwide. He added that he hadn't heard from any concerned customers.

"I think if people were on the verge of buying 10 Seaswirls from us, I would hear from one or two of them, and that's not the case," he said.

The filing, he said, will definitely have a ripple effect through the industry, and it could push more businesses into bankruptcy.

"I am thinking this could be real tragic, and although I think we've hit a certain bottom, I think we're bouncing along the bottom and who knows how long it's going to take until we see an uptick," Lofgren said.

However, he added, he's confident Jacobs will be back.

"I think Irwin loves this business. ... I think that he will be back, and I predict a leaner, meaner, stronger Genmar," he said. "I want to be a Genmar dealer, I really do."

Others in the industry, including Brunswick Corp., agreed that Genmar's actions reflect the difficulties facing the entire industry.

Brunswick is the largest boatbuilder in the country and Genmar's largest competitor.

"For the past few years, we in the marine industry have seen market demand diminish as the economy has weakened and tighter credit has had an impact on both consumer demand, as well as dealers' access to wholesale financing to place new boats on their showroom floors," Brunswick said in a statement.

"We have said before that we expect that this situation will likely lead to a negative impact on builders and dealers," the company added.

In its soon-to-be-released 2008 statistical abstract, the National Marine Manufacturers Association notes that sales of new boats dropped an estimated 24 percent last year. It estimates that new boat unit sales on a 12-month rolling basis, from May 2008 through May 2009, are down about 35 percent.

The NMMA wasn't able to comment specifically on Genmar, and president Thom Dammrich is out of the country and unavailable for comment. However, the statistics provide a look at what is happening across the industry, according to the NMMA.

— Beth Rosenberg

b.rosenberg@tradeonlytoday.com

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