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CEO Fix says OMC divisions may be running again in February
|Author||Topic: CEO Fix says OMC divisions may be running again in February|
posted 01-06-2001 07:29 AM ET (US)
Finally OMC has spoken out --- now it will be wait and see time --
posted 01-06-2001 10:42 AM ET (US)
Instead of going to the site you can read it here:[ -text removed- ]
posted 01-06-2001 11:38 AM ET (US)
Easy E -- Question do you have permission to reproduce this copy righted material?
If not I believe JimH should remove your post ---
There is nothing wrong with linking to an article on another site, however it is not proper net behavior or legal to copy and then reproduce it on another site without written permission --- please in the future refrain from such practices --- Tom
posted 01-06-2001 05:15 PM ET (US)
I don't think any copyright laws were broken by Easy E copying the article to this site.
He didn't try to pass off the article as his and he gave credit to the author. No harm was done to the original source and no credit or profit was taken from it, rather they may benefit from the free advertising.
What's the difference between this and photocopying the article out of the magazine and faxing it or sending it to you, how often is that done?
posted 01-06-2001 06:05 PM ET (US)
As a person who has spent a lot of time creating content on a website, I'd rather not see it reproduced extensively on someone else's website.
In that light, I have removed the re-posted article from the referenced site.
There is quite a bit of borrowing of other people's intellectual property that goes on that should not.
Also, at the very beginning of this website I made a decision that I would build a site that contained interesting content, and not a site that merely collected or cataloged other sites and provided links to them.
It takes much more work to create interesting content that it does to surf around, collect other site's addresses, and post lists of these sites, albeit there is some value to be added if that job is done well and there is good organization in the listings.
So in that regard, I tend to eschew including links to other sites, except in exceptional cases, and to prefer to develop real content on this site instead.
I don't mind an occassional posting of an interesting link, but in the long view, to me, it is far better to keep people on this site and involved in its discussions than to send them off to another site to read other people's stuff.
posted 01-06-2001 07:49 PM ET (US)
You're both right!
Jim, your editorial decision to keep original content rather than links and copies is your call.
The statement posted on the OMC site is just that, a public statement. It may be quoted by anyone. In fact, since it is a press release, I'm sure OMC is anxious for to see it reproduced in as many places as possible.
I'll agree with jim in taking it off because he would risk letting this forum get filled up with public relations posts.
posted 01-06-2001 08:02 PM ET (US)
Gosh Tom, I felt some hostility or as if you where mad at me in that post even if that was not the intension.
On that last post i was just tryin to make the message convenient.I enjoyed when members in the "Whats next for OMC" forum did the same as I did.I do not think they should be removed.I also do not think i have broken any laws but i dount want to get into any arguments.Im sorry if i have upset any of you and I will "refrain" myself from copying a "press release".-Easy E
posted 01-06-2001 08:12 PM ET (US)
It is hard in written word to convey the intended tone and sometimes words sound harsher than intended by their author.
As for the material being a "Press Release", were that so it could be quoted or cited, but in this case I believe the author specifies this was his exclusive interview with the subject.
It is better to be talking about boating and engines than copyrights and net etiquette.
Anyone thinking about buying an OMC outboard in the next few weeks?
posted 01-06-2001 08:26 PM ET (US)
I produce copyrighted material in both my
professional life (software) and personal
life (underwater photography).
"Copyright" means just that: the right to
In general, you can't legally copy anything
It would perhaps be more appropriate to call
posted 01-06-2001 08:52 PM ET (US)
Easy E, get used to it, I did! Regards-Jack Graner.
posted 01-06-2001 10:08 PM ET (US)
I hear ya Jack-Easy E
posted 01-06-2001 10:28 PM ET (US)
Jim, My frist cousion is the owner of Precision Marine in Goldsboro NC, He is a Johnson dealer. After talking to his father this afternoon, I was told that Johnson was not paying for any warranty work to be done at this time. He is really upset with Johnson because of it. Also, there is a boat show this weekend in Raleigh. Johnson in the past pays 75% of the show fee for Precision Marine. This year Randy (the owner) was told Johnson would pay 0% for any shows.
Thought it was interesting.
Tim / NC
posted 01-06-2001 10:50 PM ET (US)
Tim, so in essence, OMC is saying the factory warranty that the customer pays for either in the price of the engine or an add on, is now not going to be covered by the factory? That is horrible business practices and is terrible to do both to the customer and the serviceing dealer. I am starting to wonder about OMC and their business practices. It`s kinda of like a business struggling and the owners pay themselves first, but you should pay the employee first,business second, then the owner in my opinion. Regards-Jack Graner.
posted 01-07-2001 12:26 AM ET (US)
Maybe Chuck Triblet can give you a legal opinion on this one, too. He managed to reduce the copyright case law to a paragraph. I'm sure he could do the same for contract law.
posted 01-07-2001 12:33 AM ET (US)
When a company goes Chapter 11, and then sells itself off to pay off creditors, it is at the option of the new owners to pick up existing warranties. OMC CAN'T pay for warranty work, co-op dollars to dealers for shows or advertising, or pay them the rebates owed to them from all the motors they bought in early December with a special 10% rebate. Only the federal Bankruptcy court can order that, and belive me, all of the above are way behind all the other creditors of OMC, like those that hold bonds, loans to OMC, suppliers, and the like. They also do not have to pay the laid off workers any severence pay, vacation time, and goofy things can even be done with pensions, like underfunding them, or converting them from defined benefits plans to cash plan, or to just 401(k) plans.
The divisions will be sold to the highest bidder,and it may be pieces. Indeed, there may be no takers for all of the engine divisions, only the boat divisions, and maybe only some of those. It is clear now the David Jones left because Roger Fix was hired to liquidate the company. They were making engines and boats like crazy almost to the end to bridge this in-between time.
It a big mess, and the employees, dealers, and consumers have all be taken to the cleaners. If engines gets a new owner, it could take years to even build up sales back to 20% of the market, let alone the pre-bankruptcy market share of about 30% or so.
Time will tell.
posted 01-07-2001 01:02 AM ET (US)
Welcome to the WWF (Whaler Wrestling Federation) - You guys are rough!!!
Good info though, I am personally loking into new 30 and 40HP motors, and I can honestly say that I am shying away from OMC product.
posted 01-07-2001 03:44 AM ET (US)
Like the sea; unforgiving.
posted 01-07-2001 06:34 AM ET (US)
Easy E I apologize for what appeared to be the harshness in my post regarding this story you posted. It really wasn't meant to convey any personal attack on you --- it was meant to point out the fact this is wrong and anyone who does it I would have said the same. (heck I good have cut and pasted the story when I made the first post)
All Content Copyright 2000
The above spells it out, this is at the bottom of each page on the NTP's site --- these are articles/stories not OMC press releases, in other words these are paid for exclusive stories to NTP's site just as an API or UPI stories would be on say CNN --- so this is the end of discussion I hope.
Anyway the situation as Tim states is rotten.
I was at our marina Thursday , man is OMC treating their dealers like "S" ---
The whole darn thing stinks --- I think Jones left in August because he knew
Very depressing when you see thousands of people who's lively hood depended
Even now OMC management is back pedaling getting information and help out to their employees. In this case speculation has it that OMC is trying to hold out till the last minute so that whom ever purchases it can still count on an in tact work force.
Oh well no use getting in a tizzy --- time will tell and hope like hell it is a very short time for the shake of all those folks affected --- Tom
posted 01-07-2001 12:24 PM ET (US)
Warantee situation in two sentences:
Warantee holders are just another creditor
I am NOT a lawyer.
posted 01-07-2001 01:06 PM ET (US)
I for one would appreciate it if before you make any further attempts at adding to the content of the forum, you would identify yourself, as the rest of us have done.
I think most people would find it difficult to respect your right to an opinion, sarcastic or otherwise, when they have identified themselves but you choose to remain anonymous.
I'd like to welcome you to the forum, but being able to see neither the point of your post nor a legitimate source from which it came, I am finding that to be difficult.
Help me out here.
posted 01-07-2001 06:08 PM ET (US)
I certainly don't feel welcome. If name-calling such as "thief" is ok publicly, what kind of slander can one expect via e-mail?
posted 01-07-2001 06:27 PM ET (US)
posted 01-08-2001 08:01 PM ET (US)
Getting back to the OMC situation, I heard that before going Chapter 11, they tried to sell to Bombardier, the SeaDoo French Canadian Company. They evidently wanted OMC, but couldn't come up with the funding. With the collapse of that deal, Chapter 11 became necessary. I also heard that Greenmarine may have paid out another $25 million to take care of certain key obligations before filing. I understand that Penske is still out there, but only interested in the Ficht technology. Toyota, long interested in getting into the Outboard engine business has been mentioned, as has OMC's 4 stroke producer, Suzuki. Volvo's out there, also. All this stuff is rumor mill, so take it at that.
Supposedly, the boat companies have been making money, and buyers for those should be easy to find. It's the engine divison that has killed the Company, particularly after the long plant shutdown this summer, a complete disaster. This will be harder to sell. My guess is that they had to pump in the additional cash to at least get the 2001 models back into production and advertised, and keep the Dealer network intact. This would give them something to sell, in an effort to recoup part of the losses. But the plan failed, people got strung out and mislead, and everything collapsed. Plus the total Marine marketplace has slowed considerably, as the stock market tumbled.
What are the problems with the outboard division? As they have said, funding the design, research and testing for the mandated new technologies is costly, and a company that's been failing (but hiding it pretty well) for the last 3 years just didn't have the funds to compete with the likes of Mercury, Yamaha and Honda. In reality, OMC doesn't really have that much to offer to distinguish them from their competitors. They have no four stroke capability, instead letting Suzuki walk away with that section of their small/mid engine market. Conventional 2-strokes, their previous strength, are almost dead, and certainly dead-ended as a business opportunity for a buyer. This is simply a situation of running the old designs out to extinction mandated by the Government. Ficht, although badly tarnished, is really all that looks to the future business opportunities, as Penske has recognized. And now, EVEN the new breed of DFI engines (Ficht, Optimax and HPDI) may have a limited future, being in reality only a stop-gap filling in between new four stroke development. It appears that unexpected new developments in large 4 stroke technology may do them in, combined with stricter pollution regulation. (See my next Mercury post). I think the new Yamaha 225 4-stroke announcement has sent shock waves into the OMC situation, and possibly finished them off. Mercury is in this game, but OMC is hopelessly lost here without new money. Then, finally, there is unrelenting competition from Mercury, Yamaha,
It seems that we have seen this situation before, for those of you old enough to remember the Chrysler outboards. Like OMC, lack of R & D funds, once they were sold to Bayliner and re-introduced as the Force brand, did them in, and Mercury simply ran out the clock on the old obsolete technology.
The other thing that scares me is that under this bidding situation, the successful high bidder may not be the best operation to take over. This happened with Greenmarine. Penske might have done much better with the company. What if Meridian is the successful engine bidder!
This whole situation is sure going to provide some interesting discussion here, as it unfolds.
posted 01-08-2001 09:19 PM ET (US)
Thanks LHG for the interesting comments.
The marketplace can be quite tough.
For many companies, actually competing in an open, global market is not a real possibility.
When Lee Iaccoca was at Chrysler and the American auto business was under seige from Japanese imports, he pointed out to other businessmen the nature of global competition in a manufacturing business versus service businesses. I think his line was:
"You don't send your dry cleaning to Tokyo, do you?"
posted 01-08-2001 10:53 PM ET (US)
> "You don't send your dry cleaning to Tokyo, do you?"
Maybe WE don't, but the the California Gold
posted 01-09-2001 12:14 AM ET (US)
I noticed that Free Press is a "member". How many posts does it take to reach this status? Seems I remember a different designation when I first logged on to this site. Could we have an alias here?
posted 01-09-2001 06:03 PM ET (US)
I spoke to my dealer this last week and he seemed not to be concerned as I gather he didnít take advantage of the rebate being offer. He said he has seen this before in the boating industry and would cover my warranty until things got worked out with OMC. I also purchased an extended so at least I got that going for me ( Just purchased my engine & Boat in August, 115 Ficht) Should have gone for the Yamaha! He also added that there would be some kind of announcement at the end of the month from OMC.
I hope a white night saves them. There has to be value in the dealer network and the customer base. If they back away from warranty work I think that would be a big mistake Ė They canít hide under any name and consumers would never trust them again.
posted 01-17-2001 02:09 AM ET (US)
In an article today by ESPN, they indicate that the consultants dealing with the OMC bankruptcy said there were no buyers for the intact OMC, and it will be dismantled to the highest bidders. My guess is the OMC name is gone.
Evidently there is interest in the boat companies and Evinrude/Johnson, mainly because of the Ficht technology. The consultant also indicated not to expect much news on various division buyers before the end of February. So everything will probably be shut down that long. The Court has refused to let them honor warrantees and it sounds like the Dealer networks will not get thousands due in payments due for incentive sales, shows, etc. Dealers can get SOME parts if they are willing to pay cash up front, and the parts come without warranty.
They said repair orders are getting backlogged at the Dealers. Evidently Dealers are unloading existing engine stock at cost just to be competitive, considering no factory warrantee exists. The article also indicated that 2001 outboard engine production of Mercury, Yamaha, Suziki and Honda are all pre-sold out already, in filling the gap left by OMC.
posted 01-17-2001 09:12 PM ET (US)
Wow, am I glad I repowered with a Yamaha last summer. I almost considered putting it off until this year.
posted 01-26-2001 01:17 AM ET (US)
The OMC Johnson/Evinrude situation seems to be deteriorating by the minute, if the scuttlebutt in the Marine industry here in Northern Illinois is even partly accurate!
We are home to Brunswick/Mercury and OMC engines, plus the bankruptcy proceeding.
I have heard that the Johnson/Evinrude outboard operation, as we know them, is probably finished, and will never again produce it's own engines, and likely to be broken up into a few small pieces where potential profit exists, such as the brand Names, manufacturing equipment, and maybe spare parts licensing. Legal issues are starting to surface, including intellectual property rights infringement claims and major problems with the EPA! Evidently the cost of re-starting and making the operation viable could be as much as $750 million, more than they're worth. For owners of existing models still under warranty, you probably don't have one, unless your Dealer will cover it for you out of his pocket. And many have already said they'll do that, IF they can get the needed parts. And aftermarket warranties, although reputable, are only as good as parts availability. New parts for 25 years of existing product could be a huge problem. Someone has to think they can make money on this and start manufacturing them again, otherwise it's use up existing inventory, find what aftermarket parts you can, then start canniblizing older engines, or unsold new engines, or get used parts from junkyards. Evidently some Dealers are already talking of selling their existing new engine inventory for PARTS!
Here are some more examples of how badly the company has been run over the years, only now coming to light. This company has been a nightmare of mis-management! The Waukegan IL engine plant is evidently an environmental disaster, designated an EPA Superfund cleanup site. I have mentioned before that OMC for years has been recklessly polluting its land and adjacent Lake Michigan waters, and now it's coming home to roost. For anybody to buy this liability and try to begin the engine manufacturing operations again, they would have to be crazy. There is also a coke making plant nearby that they own, also a pollution site. The town of Waukegan is suing to prevent the sale and to collect back taxes owed, if you can believe that. They really would prefer to see the land cleaned up and used for Lakefront private development. The plant is literally on the beach. Regarding the supposedly saleable Ficht technology, Orbital Engine is also suing to prevent the engine division sale, based on a successful patent infringement suit they recently won against OMC. They are saying OMC/Ficht stole their technology, owes them money, and in lieu of that, they want control of the Ficht technology (probably to sell it to someone else). So with Ficht rights being contested, no 4 stroke technology (evidently they owe Suzuki a ton of money also), the old 2 stroke engine designs are worthless to a prospective buyer. They cannot meet the mix of engines needed to comply with the EPA regulations. I've also heard the Ficht is not yet totally fixed, and that an onboard fire hazard exists in the larger models, every boaters' worst nightmare!
Enter Brunswick's CEO, George Buckley, who today said he believes there are no credible buyers (bidders) for the intact engine operation, and that it will be broken up. Bids are due tomorrow in Chicago, and he thinks that even a few of the boat companies may not be sold.
Mercury is afraid that the OMC disaster is going to hurt their engine sales, as OMC Dealers, once realizing Evinrude & Johnson are gone, will dump their inventory at fire sale prices, hurting Merc and Yamaha sales, and generally causing market disruption. Lets face it, even without warranties or parts availability, if the engines are cheap enough, people will buy them, and run them til they drop, treating them as potentially "throw-away" engines. ( Why not, used outboards don't bring much anyway!) This could be a real chance to get a cheap outboard for many. My guess is that values of used OMC engines will also plummet as trade-in collateral. This might also be a great time to buy a used Whaler that has OMC power on it.
Brunswick also announced the permanent closing of 4 boat building plants, but BW was not one of them!! Evidently they are Bayliner and Maxum facilities.
All of this is really too bad, for all involved, and for the American outboard engine market. More jobs lost, millions of dollars in value lost by thousands of people, and only Mercury is left. Mercury and OMC together had about 75% of the world outboard market. It seems doubtful that Mercury can capture all of OMC's 30%. At a recent boat show, I was beginning to think OMC's new engines were really quite nice and well designed, at least with pleasing, modern exteriors. I did notice, however, that both Johnson and Suzuki are using a color about as close to Mercury black as possible!
posted 01-26-2001 10:07 AM ET (US)
To again add to LHG's excellent report, and as previously posted regarding the possible fire hazard, last summer one of the 200 Evinrude Fichts on our town's police boat looked like it caught on fire!
posted 01-26-2001 10:49 AM ET (US)
OMC is selling motor inventories to raise cash -- just out --- Dealer Net less 20% --- cash sale only, no returns, no warranty -- look for some real deals on certain models from dealers who can swing truckload purchases --- faxed to dealers today 1/26/01
Genmar has reportedly purchased all current Yamaha inventory --- look for real shortages for the short term in certain models -- you can still get a dealership just no inventory
The 4 closing Brunswick boat facilities will be incorporated into the other existing 18 boat operations --- basically a consolidation move ---
If the National economy heads south this may well straighten out this OB motor industry mess because no one will be selling much of anything this season ----
Unlike Larry I will cannot speculate -- what will be will be for OMC --- the cards are shuffled and there ready to be dealt -- Tom
posted 01-26-2001 12:45 PM ET (US)
Why anyone would be a new motor without a warranty and a sure source of parts is totally beyond me. I would think you would be better off buying a used outboard that is from a manufacturer still in business than a new outboard from a manufacturer that is out of business. With the used motor, at least you could get parts of something fails, along with tech support. With a 2001 Johnson or Evinrude, who knows? This also makes used OMC motors next to worthless. (Just like a Yugo or an AMC car, an outboard from a defunct manufacturer would depreciate like crazy.)
I don't think anyone will buy the engine part of OMC as a business. My guess is that the Johnson and Evinrude names will be sold to somebody like Suzuki, and the rest will be sold off as equipment, buildings, and land, not as a business.
As far as FICHT goes, I could see someone like VW Marine buy that, and settle with Orbital on licensing portions of the technology. The technology could still be useful for PWC's and other applications reuiring maximum power-to-weight ratios. (Although that is rapidly changing too!)
DFI 2-stroke outboards are only a stop-gap. By 2010, everything will be 4-strokes, with catalytic converters, if not sooner. OMC has no real 4-stroke technology to offer, so why would any company bother to buy what is basically a 2-stroke outboard company.
This is all very sad for former OMC employees, the dealers, and customers, but I think this is where it will end up.
Besides, when George Soros said on "Talk of the Nation" on NPR earlier this week that regarding OMC, the "motors had problems that could not be fixed", that was the final nail in the OMC engine group coffin.
Bids are due today on the bones that are left.
posted 01-26-2001 02:19 PM ET (US)
Fourth word bove should be "buy", not "be".
posted 01-26-2001 04:29 PM ET (US)
Well cdn as far as omc engines being worthless, I wouldn't count on it. Sometimes companies go out of busines or stop production on some lines of products for one reason or another. Look at whaler for instance the classics are great designs and made well. People know it that's why they fetch such high prices on the used market.I would agree that some of the newer technology ficht outboards could be a risky purchase due to the lack of surplus parts, but on other engine models that they have produced over the years there are plenty of parts. Take for instance a 2000 9.9 2 stroke it is still very similar to my old 1977. If I needed a 9.9 I would jump at the chance to buy a new one for less than a used merc, yamaha, etc... I'm currently looking for a deal on a 2000 150 (not ficht). I have a 1987 and other than the block it has some of hte same parts as the 2000. I called my local dealer a few weeks ago and inquired about any old stock they might have and he suggested that these engines might become a bit of a commodity on the used market. As far as AMC goes there old stuff is not worthless, take for instance the jeep line, ever looked at the used prices of an old cj-7? The gremlin is now sought after world wide. Well it is going to be interesting to see what really happens. If anyone knows of a dealer that is wholesaling a 150 hp oceanrunner I'm looking.
posted 01-26-2001 06:13 PM ET (US)
Re: AMC being example of poor US manufacturing.
The 4.0 litre straight-6 engine from Jeep/AMC is considered an excellent design, one of the best six cylinder engines ever made.
posted 01-26-2001 07:20 PM ET (US)
The 4.0 L straight six in my '93 Wrangler is based on the same AMC block that was in my '73 CJ-5 (which, by the way, looked sweet pulling my '72 13). It tows my Montauk with no problem at all, even with a 5 speed and factory draw bar hitch.
posted 01-27-2001 12:50 AM ET (US)
My point is that motors, cars, or anything else are generally worth less than something equivalent that is still in production by a company that is still in business. AMC cars and Jeeps, right up until Chrysler purchased them, were OK. And my point was not about poor manufacturing or design or anything in that vein. Rather, it was only that those things that were made by companies that are gone just depreciate more quickly.
Yes, there are lots of NOS OMC parts out there, but if you were selling a boat with used OMC outboard on the transom, there would be some number of people out there who would not touch it because they would knew the company was out of business. This affects value of the ourboard.
Example: I was at the Mid-America Boat Show in Cleveland this evening. Every single Johnson/Evinrude dealer was liquidating their OMC boats and motors at huge discounts (well below dealer cost), and every one of them has picked up Mercury or Yamaha as an outboard line. As time goes on, and the OMC dealers will get more desperate as the motors slowly get sold, and as their floor planning costs continue to grow. They will discount more and more to get rid of them. This HAS to affect the used market.
My saying they are worthless is harsh, and probably not completely true, but no question they are now worth a lot less than the equivalent Mercury or Yamaha motor today, and that was not the case in early December while OMC was still in business.
One former exclusive OMC dealer at the show this evening had two prices on boats with outboards. A lowball price with an OMC motor and another, higher price with a Mercury outboard, typically about 15-20% more for the package. (This was at Parma Marine in Parma, Ohio, oldest OMC dealer in the Cleveland area.) All their "loose" OMC motors were marked "Liquidation Sale" and were priced like a Nissan/Tohatsu motor via the Internet, except with no warranty.
The same thing would apply if any other manufacturer of outboards suddenly went out of business. It is even worse than when Mercury Marine dropped the Force line at the end of 1999. At least you can still get parts from Mercury Marine.
My guess is that some company will buy up all the existing parts from the OMC Parts and Accessories and sell them to dealers. They will also likely become more expensive over time as the supply winds down.
Boating is supposed to be fun. Why would someone put up the the aggravation if there are good alternatives. TIme in life is too crunched as it is.
But who knows; I could be wrong. Let's hope some viable company buys the engine operations as a business, and not just for scrap value. But, I think it is a longshot.
posted 01-27-2001 01:06 AM ET (US)
The big beneficiary may be Sierra Engine
Parts. They already have a pretty complete
line of basic parts (tune up parts, seals,
ignition bits, trim tilt motors, etc) for
OMC (and Merc) motors. They are probably
working overtime to figure out what they
need to add to the line.
posted 01-27-2001 01:13 AM ET (US)
BTW, all the 2001 13' Sports and a number of the larger Whalers had "SOLD" tags on them from the three Whaler dealers at the Cleveland show. All, of course, had Mercury outboards on the transoms. Portage Entry Marine, just outside Port Clinton, Ohio, had the best prices.
posted 02-04-2001 09:22 PM ET (US)
What motor options are left for me if I have been a OMC motor person since I bought my first motor in 1976? I have not run anything except OMC motors.
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