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This article was in the Green Bay paper this morning. Wonder how low the prices are for those "other" motors?
http://www.greenbaypressgazette.com/news/archive/biz_14324497.shtml |
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| There was a similar article in the Milwaukee Journal yesterday. IMHO this will only hurt the consumer. How will making Yamaha raise their price help any of the consumers. Their lower prices are probably doing just the opposite and keeping all prices down.
I found it ironic that Yamaha was/is a partner/supplier of Mercury. I hope Mercury isn't cutting off the hand that feeds it.
I'm more concerned with the rumor that Mercury will be shipping some of its jobs over to China.
Written by someone too chicken to sign their name because of sponsorships.
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| I live in Fondy and have heard 400 jobs will be lost to China |
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Member
Posts: 1406
| Rick, Nice of you to post, I know Merc has been around the block on this topic for some time. I however am undecided on which of the great products out there will prevail. Merc has updated their web page with some neat marketing info on Project X being unvailed in Miami next month and I am sure there will be plenty of hoopla surrounding it, Its not a secret that Yamaha and Merc have been working together to reduce costs in many areas, but to what extent that is I think is really unknown. Have they been able to keep their loyal customers? What do you think? And how bout some comments from the guys out there that have the competition motors?
http://www.mercurymarine.com/
Good Luck
Tyee
Edited by tyee 1/26/2004 7:24 PM
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Well, I'm running the Evinrude Motor and am very happy with it. The new E-Tech looks very interesting and may consider buying one next year.
But also think that Merc, Yamaha, and Honda are all good motors as well. Been in boats with all of these as a amateur/co-angler and was truly impressed with each one.
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Location: Rhinelander | The issue here is part and parcel with free trade agreements and law, which are supposed to limit 'dumping' in any country's markets. If indeed the companies accused are actually selling motors in the US in the described fashion, there will be a ruling that will punish them, and probably a 'tax' or two added. |
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| Steve,
No one doubts or questions your proclamation that the issue here is free trade agreements in our country's markets.
But again, I ask the question....... who are they hurting? Not the consumer.
What do you think will happen when Mercury sends 400 jobs over to China? Will the price of their engines drop? I really doubt it. They like hundreds of other companies are moving production to China to benefit the stockholders and no one else. They're doing this on the backs of workers in Wisconsin. Since 1999, Wisconsin has lost 90,000 manufacturing jobs with most of these jobs being gone forever. How will any of us pay for these great motors when we do not have jobs.
I perceive a time when this country will charge a tariff to these companies when they try to return these product to the US. We'll all end up paying more. Again, who is prospering from all of this.
If Yamaha wants to sell me a motor for less money than what they sell it for in their own country, so what? Mercury cries foul. So what? Let's see Mercury lower their prices as well.
Mr. Chicken
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| Chicken, what field are you employed in so that someone may apply an analogy that makes sense to you. The same principals that apply to selling below cost in one area and charging more in another to hurt competition in a specific market must apply in a world market. I for one trust Mercury to do what's best for me and other Mercury owners and choose to stay away from the rumors. Wait for the outcome and the facts to be printed. I ran another brand for a long time, even had memo motors, but I have never felt so much part of a family as I do with my felow Mercury team mates. Dan Plautz takes the time to come up and shake my hand at the Milwaukee Boat Show, thanking me for insisting that he come to my (Mercury sponsored)Fish, Sticks & Stones outing and that it plyed a part in his choosing Mercury in 2004. Switching to Mercury has made m closer to friends like Keith Kavajecz and Gary Parsons, Daryl Christienson and Gary Gray and so many other anglers, well known and un-known from my area. Maybe it's because we all drive by the plant so often, who knows. Yet it instills the trust that THEY (the people at Mercury) have all the information and WE can only speculate. If it's true, it should be halted. |
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Yep, we have lost enough manufacturing jobs and tend to side with protecting whats left. If the competition is dumping below cost, there should be someway to level the playing field, be they tarriffs, or a reduction in Mercury's government costs. |
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Member
Posts: 714
| Isn't there already a tariff on Yamaha, Honda, and Suzuki motors?
If the story is true, which I won't speculate on, it would not be the first time the Japanese have done this. Does anyone here remember when the Japanese stock market colapsed? Much of this type of thing was behind that at the time. Unfortunetly, everyone gave Bill Clinton the credit for our economy's strength at that time, when actually he just happen to be in office at the time it happened. |
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Location: Rhinelander | Yamaha selling under cost to Yamaha's Boat Builders would hurt MY job, and anyone at Mercury or Bombardier, as well. Patriot buys motors from Mercury to deliver to the dealers, and if we are at, say, a 10% disadvantage because of predatory pricing practices from another outboard builder, we are out of the game. Why would a company sell under cost to say, Skeeter? To allow Skeeter a competitive advantage in the US, and take market share from Mercury and Bombardier AND genmar and Tracker and the independant boat builders in the process. Less market share means fewer engines built in Fon Du Lac, which means fewer jobs there.
The reverse of the 'on the workers back' argument makes more sense, as indicated the long term effect in the US of the Japanese dumping cheap steel here, below their cost to 'buy' market share. Ask the workers at US steel factories what that did to their jobs.
The engines built offshore for Mercury, as I recall the issues, are being built there because of pricing/cost issues. If the company cannot compete using US built motors against the offshore builders of small 4 strokes (ESPECIALLY if the competition is 'dumping'), and has the option to have them built in a competitive arena offshore, the corporate heads have what I see are limited options. Allow the competition to take market share on kickers and small outboards, which ultimately will cost them in a huge fashion with the V-6 market, or find a way to compete and fill the positions at Mercury lost to China with new technology like the X as much as is possible. It just isn't real common to see a Yamaha kicker next to a Mercury V-6 on a Walleye boat. One might argue this is the lesser of two possible evils. |
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Location: Rockford MN | I dont know all the details here, but Yamaha owns Skeeter boats. Merc. has been using Yamaha parts for their 4- strokes from day one. Yamaha heads with Merc finishing the motors at their plant. I dont see it as dumping motors atleast at the prices of motors today. Yamaha,Honda,Suz. are all so much advanced in the 4- stroke motors Than Merc. it will be very hard for them to catch up. Sorry to here about more jobs lost,WAGES and INSURANCE are driving the companies out of this country. |
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Location: Rhinelander | Gordy,
Mercury has a relatively new robotic assembly line for the 4 strokes up to 60 HP, I beleive, and is developing a new release for this year called Project X, a big turbo charged 4 stroke performance motor built exclusively at Mercury. I'm pretty sure plans are to build all mercury 4 strokes in house eventually, so don't count them out yet! |
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Posts: 188
Location: Westland, Mich. | a short study on dumping
http://www.gklaw.com/InfoResources/irPubInt_99iprices.asp
http://www.futurecasts.com/Book%20review%204-09.htm
http://209.157.64.200/focus/f-news/1018790/posts
and then there's the most famous dumping case of all; Harley-Davidson, which is cited in almost every dumping petition. |
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Posts: 105
| I think we will see in the not to distant future many large manufacturer's staying away from China. China has NO patent laws. 60 min. did a show last night about fake copies of a variety of goods that were copied from US companys who went to China with production plants and 2 weeks later Chinese firms were duplicating the product and selling for a fraction of the cost of the original.I am sure that Merc. or any other company will have alot less intrest in short term gains from lower labor costs if the possibility exists that they could lose market share because of cheap copies of their products.I work in Mfg. and have many contacts in this field, many who have lost contracts to overssea compitition have said that they are doing alot of rework on products made in China and while they would much rather have had the work from the start, the actual cost of fixing this junk is nearly what they would have done it for from the start. Their customers are starting to understand that in many cases they would have been better served to just keep the work here. Kitch |
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Jake, that middle link is pretty good stuff, but I stopped reading when I finished the paragraph "by improving productivity". That reads very good.
But the reality is, the US has the largest market of consumers in the world. For proof, check out the trade deficit. And not that the deficit is bad, just that there are certain times when our government must step in and preserve an industry because of an unfair practice - like an industry gaining monies from its government in the form of subsidies.
This often times leads to an artificially lower price for these products than is real, which will have a negative impact on similiar industries in our country.
I even will go so far as to write, these governments will target certain of our lower margin businesses for elimination.
Personnally, can relate to you that my business had a brisk trade to Mexico, and when NAFTA came along it placed such a high tariff it put me out of the game. When I inquired further as to why my tires were targeted? Was told the Mexican tire dealers had banded together and lobbied for these restrictions to protect them.
And used tires are also banned from being exported to Canada.
So when one reads about the great benefits of free trade, please realize there is no such thing (as free trade)...
Edited by Rick Larson 1/29/2004 9:30 AM
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Location: fond du lac, wi | Rich, did it ever occur to you that the only way Mercury or any other Co. can sell products in China is to have a large labor/material content come from China itself( Government requirement). The potential market in that country is HUGE and Mercury sure wants some of that action.If Mercury was worried about labor costs primarily why did they make the decision to keep project X in FDL? The fact is that profits lie in BIG motors not little expensive 4 strokes. Labor consists of around 7% of the direct cost of building a motor so a 50% or 75% reduction in direct labor doesn't have an enormous impact on the final cost.In the final analysis Mercury is keeping the cream in FDL and dumping the marginal business.
Keep the faith. |
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Posts: 188
Location: Westland, Mich. | i agree with your position that there is no free trade, i'm sure you have noticed my signature. i apply that to almost everything that is said, done or written that has the word free in it. theoreticly free trade is a good thing and protectionism is not, however when all the concerned parties aren't working with the same set of rules it's all just talk. as for "improving produtivity", i think most prodution managers have a formula that is based on making sure that productivity is linked to keeping wages just below the standard of living. |
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Posts: 617
Location: Oshkosh, Wisconsin | How is this any different than Mercury/OMC/Jiffy or most other large manufactures selling the same product cheaper to big dealers than they do to small ones in the same area??
Seems to me like the big boys don't mind turning the screws to the the little guys in their business, but get awful upset when someone else does it to them. |
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Location: Rhinelander | Most of the outboard builders don't. They offer volume discounts like most marine manufacturers, and some other incentives too. The playing field is pretty level, unless a boat builder or dealer is so small they cannot make the mimimum requirements. I am looking at the Mercury Marine and Bombardier 2004 Programs as I type this. If the dealer buys his Mercury or Bombardier rigged from a boat builder which is the 'new deal' these days, the playing field is dead level unless the boat builder plays around with the margins some. No one can tell the dealer or builder what to sell for, that would be price fixing, but there are general guidelines. The pricing one sees is the result of supply and demand, a component of our economic model. Problem with 'dumping' is that is short circuits our natural economic trends with the goal of possibly illegally gaining market share.
How is 'dumping' different? Easy, dumping effects EVERY US builder negatively at the factory level, is not part of a recognized and published marketing program or product promotion, and is considered an unfair trade practice. There is some indication some of the mentioned products perhaps are being sold UNDER FACTORY COST, definitely something one would only undertake to gain in another way---market share. giving away productunder cost is hard on the bottom line and must be part of an overall strategy, one would think. We definitely are NOT allowed the kind of access to the Japanese market that would ALLOW us to 'dump' products, either, so it sort of irritates more than it might. |
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No Big Guy, didn't know about the Chinese requirement. Having read your post and thinking a bit, it really seems very unfair to me and don't like it much. It doesn't even become a question of how can our labor compete in the Chinese market - because it isn't allowed.
Spose I should keep the faith though, as us folks in the United States always seem to succeed in another fashion! |
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| Biguy please elaborate some more. What do you think about Merc keeping the cream of the crop for years and now announcing that they will be closing down the majority of the assembly plant, obviously the casting plant is balls to the walls as they do an excellent job but Assembly is something they have relied on around Fondulac since they started bringing in most of the parts from overseas and many of the manufacturing jobs were eliminated. I am a supplier that lost 1 million in sales as they took our design over to China and DUPLICATED it. And I mean DUPLICATED it. They saved .30 cents each to do this on a 6.00 part. I have since left that job and am still a vendor to them as they do play an important role in our local economy and I continue to offer them the best service and value I can although moving the Assembly plant would put a big dampner on my business, As for the new robotic assembly line, I heard there is a Yamaha robot in there that is kickin but! |
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Posts: 2393
Location: Waukesha Wisconsin | WOW,
I'm getting a real education on international marketing, free trade, price fixing etc. Quite frankly, I tried to read the thread that someone sent and it put me to sleep 1/2 way through. I guess that's way I never did good with that type of class in college 
Here's my question? I was always under the impression that manufacturers in this country routinely sold items below cost occasionally for various reasons. Their reasoning could be: dump old product, a marketing strategy to get their name out, lure people toward their product line in hopes they get the new and improved (more expensive) model. Is this not true? Have I been living in a fantasy world? And if it is true, are there laws that say it's okay for US companies to do it but not foreign companies?
Thanks for the free education.
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Location: Rhinelander | About the only time a product is sold under cost is if the company goes out of business. Discounted, yes, sometimes down to cost, but rarely below because that would result in a severe negative toward the bottom line. If a company chooses to sell below cost on an item in the product line, it is referred to as a 'loss leader'. The guidelines and laws inside the US for our companies are not the same as international trade law, so what you see a company in the US selling in the US do doesn't necessarily reflect what that company does internationally. Mercury has an offshore brand. Mariner is sold outside our country. |
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Sunshine, selling at below cost is normally associated with a discountinued line, or slightly imperfect items.
What is happening to Merc is similiar to what confronted the steel industry a few years ago. The banks in Japan were forcing their customers in other far eastern countries to dump steel in the US for below cost prices, in order to raise the cash needed to pay on loans due.
This was subsidised by these steel mill's governments and also lent itself to other cost cutting way over and beyond normal world standards (like skirting labor and pollution laws).
In this case, Bush protected the US Steel Industry from this unfair trade practice with Tarriffs, and now may be the time to protect Merc similiarly.
Edited by Rick Larson 1/30/2004 10:15 AM
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