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."
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.
— Beth Rosenberg