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Location: Waukesha Wisconsin | From the Jan. 12, 2005, editions of the Milwaukee Journal Sentinel
ON WISCONSIN : JS ONLINE : BUSINESS & YOUR MONEY : BUSINESS NEWS :
http://www.jsonline.com/bym/news/jan05/292131.asp
BRP to stop selling to three of Brunswick’s companies
Outboard engine-maker says decision supports independent boat dealers
By RICK BARRETT
[email protected]
Saying that independent boat builders and dealers feel threatened by Brunswick Corp., the nation’s largest maker of recreational boats, BRP Inc. says it will no longer sell outboard engines to three companies that Brunswick recently acquired.
Brunswick, of Lake Forest, Ill., owns 19 boat brands and is the parent of Mercury Marine Inc., a Fond du Lac outboard engine-maker. BRP, a Canadian company, makes Johnson and Evinrude outboards in Sturtevant.
BRP’s decision comes as Brunswick and Japanese outboard engine-makers are entangled in a thorny trade dispute involving allegations of U.S. trade law violations.
In February, the U.S. International Trade Commission is scheduled to decide whether Japanese-made outboards should be subject to a permanent import duty. That would be a win for Brunswick and Mercury, and it could help BRP compete against Japanese engine-makers such as Yamaha Marine Group.
But in the latest controversy, BRP and Yamaha have said they won’t sell outboard engines to the South Carolina builders of Sea Pro, Sea Boss, and Palmetto saltwater fishing boats – three brands acquired by Brunswick earlier this month.
Since last March, Brunswick has acquired at least six boat brands, valued at hundreds of millions of dollars, with many of those brands using Mercury engines.
Brunswick and Mercury are implementing a strategy that forces marine product dealers to sell exclusively their brands, Roch Lambert, BRP vice president and general manager said.
“Following the acquisition by Brunswick of the Sea Pro, Sea Boss and Palmetto boat brands, we want to inform you of our decision to stop supplying our engines to those boat companies,” Lambert wrote in a newsletter.
Boat builders and dealers are feeling a lot of pressure from Brunswick, Julie Johnson, BRP’s manager of public affairs, said Tuesday.
“We want to support the independent boat builders that support us,” she said. “That is our long-term strategy.”
Brunswick is dismayed that BRP and Yamaha will refuse to supply engines to Sea Pro, Sea Boss and Palmetto, said Dan Kubera, Brunswick’s director of public and financial relations. Combined, the three companies had about $80 million in sales in 2004.
“We are disappointed because, from the start, we said that we were more than willing to continue offering consumers the choice of engines from other manufacturers, as long as we could get them,” Kubera said. “We fully intended to offer choices in engines, and the other manufacturers have chosen not to sell to us.”
Brunswick would not have bought Yamaha engines for the three boat lines much longer anyway, said Phil Dyskow, president of Yamaha Marine Group’s U.S. division, based in Kennesaw, Ga.
Yamaha’s policy is not to sell outboards to Brunswick-owned boat companies, Dyskow said.
“The reason is obvious because Brunswick is buying these companies in order to sell more Mercury outboards,” he said. “So any participation or involvement by Yamaha would be temporary at best. It would just be a transition step, and there’s no reason why we should help Brunswick with its transition.”
Genmar Holdings Inc., a Minneapolis boat builder that sold three brands of aluminum boats to Brunswick in 2004 for $191 million, supports the decisions by BRP and Yamaha not to sell engines to Brunswick’s latest acquisitions.
“I don’t understand how Brunswick and Mercury would consider for a minute that the independent boat builders and the non-Mercury and non-Brunswick boat dealers are going to want to continue to do business with their biggest competitor,” said Irwin Jacobs, Genmar Holdings chairman and CEO.
When Brunswick acquired the Lowe, Crestliner and Lund boat brands from Genmar, Yamaha stopped selling engines to them, Kubera said.
“We are disappointed when this happens, but frankly the decision is not in our hands,” he said.
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Location: Rockford MN | Good for them! One cannot cry foul and expect everyone to jump in with them! I hope Brunswick takes a VERY big hit on this one! I can't understand why anyone would want to make the builders of some of the best motors out there mad at them. I never thought it was good business to piss off the people who have better products than you! Why not stay with the flow and take you're far share? GREED is what KILLS and we will be the ones to suffer the most! |
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Location: Waukesha Wisconsin | What I find interesting is that those same outboard manufacturers who are voluntarily deciding NOT to supply outboards, are the same companies originally screaming foul, because they said that Brunswick would end up not allowing them to supply the outboards. Long winded sentence but I hope it made sense. My first boat show starts in a week and I can see now that many customers will think that Brunswick will not allow BRP and Yamaha to sell their products to them, when in fact they are doing it to themselves. Sounds to me like they are shooting themselves in the foot on a short term basis hoping that they win in the long term. Only time will tell whose marketing strategy works. I also find it interesting that out of 16 boat companies that Brunswick owns (they are not new to this) these two outboard manufacturers are selecting these three companies to boycott. Brunswick is trying to position themselves in the off-coast boating industry. What’s wrong with that? |
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Location: Rockford MN | I see it this way. You will still be able to hang what ever motor you would like on the back of a Brunswick backed boat, you just wont be getting the best deal! Why would Yamaha want to give a discount to Brunswick? What would they really have to gain? I want a Yamaha over a Merc.. I will pay the difference and Yamaha will make the most money.
In the end the ones with the best motors will win out in this peein match! When you own 60% of the world market there is no need to go after another company!!! This whole dumping thing is going to cost the buyers and no one else! |
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| Guys,
It is the duty and obligation of companies to protect their markets. Apparently Brunswick had a valid arguement or the courts would not have ruled in Brunswicks favor. It is Brunswick's obligation to their shareholders and employees to protect their business against unfair competition. It is the decision of competing manufactorers to restrict their sales to non-Brunswick products, not a decision by Brunswick to exclude them. The onus is on Yammie and Bombardier. It is all about determining what is best for each parties interest.
I support Brunswicks efforts because they had proven their case. I do not understand why some folks get so bent out of shape by this turn of events. The market place will dictated the best strategies and we all have zillions of choices for equipment choices.
Take care,
Jim O |
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Location: Waukesha Wisconsin | Gordy - 1/12/2005 9:27 AM
I see it this way. You will still be able to hang what ever motor you would like on the back of a Brunswick backed boat, you just wont be getting the best deal! Why would Yamaha want to give a discount to Brunswick? What would they really have to gain? I want a Yamaha over a Merc.. I will pay the difference and Yamaha will make the most money.
In the end the ones with the best motors will win out in this peein match! When you own 60% of the world market there is no need to go after another company!!! This whole dumping thing is going to cost the buyers and no one else!
Not sure if you are right at this time. I have heard that the foreign motor companies are not shipping new engines to US at this time and what dealers have in stock is what they get until a final ruling. I'd prefer not to get into an argument on who is responsible for this but for now, it will make buying decisions by consumers interesting to say the least.
I see your analogy a little different. I see Yamaha shooting themselves in the foot if the consumer must pay a higher price because they refuse to sell to Brunswick. THEY are the cause of the problem not Brunswick. They sell motors but refuse to sell to very popular boat companies. Who is causing the increase then? They have a lot to gain if they did, it's called market share. What am I missing? There could be price increases for two reasons if they continue this practice....... one reason because of the dumping ruling (if Brunswick wins) and one because they do not sell directly to the boat manufacturer at volume discount prices. They can tell everyone that Brunswick is at fault but prices could be lower if they CHOSE to sell at volume discount prices.
There's another looser in all of this besides the consumer. What about the boat dealers whose sales can be effected big time.
I look forward to your thoughts on this. I remain open minded and enjoy seeing other points of view.
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Location: Waukesha Wisconsin | Well said Jim. |
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Location: Kaukauna WI | When United State Car Makers started the same issues in mid 70’s and early 80’s with foreign motor companies and won. The foreign makers just built US factory’s I think this will not be case tomorrow but in future can become a reality.
On subject of companies stop selling motors to a Brunswick own company I hold reserve. For I was told awhile back that only motor to be shown on a Brunswick own brand boat company boats at boat shows will be Mercury outboards this may not be the case in 2005 but was suggested in the future marketing plans I was told. So in the season that has 180 boat shows in 110 days theses companies can possible see that their products will not given fair marketing and it could be a decision to put vital dollars in areas that make them money.
I wish every one could play fair and it is a shame that us the consumer needed to lose on this with higher rigging, factory packages and chooses of availability of motors to push the boats.
I speak for no one here but myself!
Edited by irishwebs 1/12/2005 10:11 AM
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Location: Waukesha Wisconsin | If/when the foreign makers start building US factory’s ..............could be a win win for everyone. More jobs for US would be nice.
You say that .....................On subject of companies stop selling motors to a Brunswick own company I hold reserve. For I was told awhile back that only motor to be shown on a Brunswick own brand boat company boats will be Mercury outboards in the future. .................... Isn't BRP and Yamaha making this happen and not Brunswick? The way things are going we'll never know what the marketing scheme for Brunswick was/is. The other companies are playing this card.NOT Brunswick |
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Location: Rockford MN | I think what he was saying is that a boat shows you would only see Mercs on the back of these boats. I know that boat and motor companies pay a % of booth space to dealers for having their products placed on display. Same thing with ads! So he was saying that the other companies would see no benifits from this.
I can see where both sides are coming from I just did not see a need for this! Merc has the market they are targeting so why get greedy? I just think that if someone is going to spend 15-20k on a motor THEY should not be told which one they have to buy! We should be able to run the motors that we are the most comfortable with and not get "hosed" in doing so. |
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Location: Kaukauna WI | Dennis
I realize it is these companies decision and not Brunswick and I hope them the best. But until all said and done the consumer loses. In statement I made I said I was told that Brunswick was considering forcing all boat shown to have their motors on them at a future time which is a wise move for them in a marketing world. For this each of the other companies choose too started looking how business was being done and then choose to spend vital dollars marketing lines that they can have maximum exposure.
I don’t mean you or any other Mercury Pro Staff member any disrespect on this matter and this is just my 2 cents worth. Please realize I didn’t mean to have a debate over this. If you wish give a call and we can talk this out more.
Edited by irishwebs 1/12/2005 11:09 AM
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Location: upper michigan | so if you heard that foriegn co. arenot shiping motors at this time and brp isnt selling to brunswick what you have is a shortage of motors wich would inevitably drive the price up |
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Location: Elgin, Illinois | Sort of reminds me of the Greek Gods fighting amongst themselves on Olympus... Since they were Gods, only humans ever felt the results...
We "humans" will suffer whatever happens... |
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Location: Coatesville, PA | Let's see, when it was OMC, they had lot's of their own boat lines. Now that Bombardier doesn't have any of their own boat lines, it's Merc who is the bad guy. Then you have Jacobs complaining after he just sold 3 very popular boat lines to Merc. Sounds like greed there alright, but I don't think it was Brunswick. I don't think for a minute that Bombardier, Genmar or Brunswick has the consumers best interest in mind. All in all, probably 95% of boat buyers are going for a package deal, if they can't get Bomb or Yamaha motors, they'll take whats offered. I doubt the number of boat buyers that refuse to buy a certain brand because they can't get their favorite motor isn't going to effect bottomline that much. |
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| Here we are discussing Brunswick, Yamaha, and BRP, none of which is owned by Irwin Jacobs, but his name keeps popping up!  Does that only sound strange to me?
Somehow it would not suprise me at all if someday we find out his fingers are involved in all of this somewhere. Maybe retrebution for Brunswick not selling Mercury to him several years ago!
Just a thought......
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Location: Lincoln Park, Mi | All I know is that the trend of having a cetrain brand of motor forced on you with a certain brand of boat turns me off that boat brand. Though I'm happy with my Tracker, I would really like to have a choice of motors if I purchased another. You're talking 40-50% of the package price wrapped up in that motor and it's the biggest repair expense. |
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Location: Rhinelander | That's why I always end up working for an independant, I guess. Companies like Tuffy, Yar Craft, Warrior, and a few others are always fighting for a niche, but never involved in the political fallout. I'll just keep my head down and hope there are enough motors for the rest of us to power our sold units and sell a few more. |
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| interesting isn't it? I would love to see a 350 chevy big block in a Ford F150? Make sense?? This will all be ironed out by the WTO soon. I believe it will boil down to a price increase and the consumer WILL be willing to pay the price to get what they want. Remember these are WANTS not Needs and we will succomb to the pressures of big business to get what we WANT.
It would be kind of interesting to see a Yamaha plant in Wisconsin with employees jumping back and forth every few years. Funny how the world goes round!
Good Luck
Tyee |
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Location: Waukesha Wisconsin | terroreyes - 1/12/2005 10:06 PM
All I know is that the trend of having a certain brand of motor forced on you with a certain brand of boat turns me off that boat brand. Though I'm happy with my Tracker, I would really like to have a choice of motors if I purchased another. You're talking 40-50% of the package price wrapped up in that motor and it's the biggest repair expense.
Jim,
I'm not picking on you but your comments are very interesting and very revealing. You say that the trend of having a certain brand of motor forced on you with a certain brand of boat turns you off that boat brand. YET, you bought a boat from a company that has been doing this practice for a very long time. Very Very interesting............... Maybe the manufacturers have figured out that most of us are like you. We'll complain a little but will buy it anyways.
I really like Tyee's analogy.. You do not expect the ability to put a Ford engine in a Chevy. We may be heading down this road in the boat industry. Tracker has been there for awhile and their sales appear to be good.
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