Sunday, August 22, 2004

Update on Mercury Marine's complaint against Yamaha This issue might not be on your radar screen, but perhaps you recall that earlier this year Mercury Marine filed a formal anti-dumping complaint against the Japanese outboard manufacturers with the U.S. Dept. of Commerce (DOC) and the International Trade Administration (ITA). The complaint alleged that Yamaha and other Japanese maufacturers were "dumping" engines on the U.S. market at lower prices than they were selling them for in Japan. On August 6, The DOC issued a Preliminary Determination Notice that affirms Mercury's complaint. A final determination will not be made until December, after it considers "comments from interested parties on its preliminary determination, as well as other record evidence." In the wake of DOC's preliminary determination, Irwin Jacobs, Chairman and CEO of Genmar Holdings, Inc., the largest manufacturer of recreational boats in the U.S., wrote a five-page letter to 7,000 marine dealers and marine industry leaders criticizing the DOC and asking others in the marine industry to comment on the matter. Among other things, Jacobs said "Frankly, after reading [the documents filed by Mercury outlining their anti-dumping complaint] and listening to and taking part in the hearings, I was shocked and in disbelief that the DOC and ITA didn't throw Mercury's case out on the spot." Jacobs says that in fact Genmar has paid more for Yamaha engines than Mercury engines, and that the largest discount Genmar ever received was from Mercury.  He goes on to set the record straight about why Genmar increased its business with Yamaha (product quality, customer request and the bankruptcy of Outboard Marine Corporation) and suggests that Mercury used the complaint as a way to increase business share lost in part due to the poor performance of its Optimax engines.  He points out that Mercury has closed down several U.S. boat plants and set up new plants in Mexico, and that it plans to build additional plants in China. "On its face aalong with the real facts," Jacobs says, "I believe Mercury's anti-dumping complaint against Yamaha is the most ridiculous and abusive statement of the facts I've ever encountered." Jacobs concludes his letter this way: "We all know that over the years our marine industry has been less than proactive in dealing with our challenges and issues that negatively impact our industry before they happen. I believe that in this case the industry needs to be heard from for the sake of everyone involved in the marine industry, including the boat-buying consumer. Finally, let's not forget that Brunswick [which owns Mercury Marine] is a substantial company in the boat business. If the U.S. Government allows them to substantially raise engine prices through their anti-dumping complaint, imagine what they someday will be able to do by combining their outboard engine price advantage with their own boat companies against the rest of the industry. The entire boating industry will forever change and not in a positive way." Jacobs has posted his testimony before the DOC/ITA hearing commission on a page on his company's website: www.genmar.com/iljTestimony.cfm. It is certainly worth reading, if you are at all interested in the politics of outboard motor sales and the things going on behind the scenes in the marine industry. Or if you are now or ever will be in the market for a new boat and outboard motor. Later... 9:47:17 PM    comment []