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ContinuousWave: The Whaler GAM or General Area
|Author||Topic: News Update|
posted 01-31-2001 03:08 PM ET (US)
Raytheon Recreational Division sold to European venture capital firm today for $108 million.
OMC was in bed with Volkswagen for engine development. Seems Ficht GmbH & Co. KG licenses out its technology to both companies. Makes you wonder if this was/is the 4 stroke technology everyone thought OMC wasn't working on!! I found it real hard to believe a company that had 30% of the outboard market wasn't working on something that was being mandated by big brother in just a few years. No matter how poorly Soros and the rest ran the company, something was rotten with the speculation that there wasn't some kind of development.
posted 01-31-2001 07:42 PM ET (US)
What happened to the Bankrupcy bids? I thought they were due last Friday. Any news on this?
posted 01-31-2001 08:11 PM ET (US)
click on this link for dates
posted 01-31-2001 08:12 PM ET (US)
Bids were due, but they are not opened and revealed by the Bankruptcy Court unitl Feb. 2. Final bids are due Feb. 5, with results approved or rejected by the Court on Feb. 8.
All kinds of rumors on the Internet. One thing is true; last week George Soros, the major OMC owner, was interveiwed by NPR on "Talk of the Nation". Responding to a listener's email about OMC, he said "the engines had problems that could not be fixed"; hence the bankruptcy filing. Lots of other reasons too, like end of a fiscal year (convenient), the local Waukegan Union rejected renegotiating the contract, and the existing contract was up Dec. 31, big slowdown in the economy, the fact that no engines were built between March and July, 2000, which is peak season, due to supply chain problems, lots of recalls on the Ficht Evinrudes, etc. Plus it turns out the Waukegan plant is an EPA Superfund site. Looks like he got tired of pumping money in.
We'll have to wait to see what happens.
posted 01-31-2001 11:16 PM ET (US)
I have been following the OMC sitution quite closely, and from what I can tell it's a true business/management nightmare. How they kept the operation alive as long as they did is an amazing tale by itself. The parent company should have been put out of it's misery 3 or 4 years ago! It's engine division has been in SERIOUS trouble for that long.
By their own admission, the name Outboard Marine Corporation will cease to exist. But some of the brand names like Four Winns, Chris Craft, Evinrude and Johnson should survive, depending on the auction results 02/08. It is highly unlikely that the main engine plant in Waukegan IL will ever again produce the outboards. The place is a pollution disaster from years of bad management, and most want it torn down and the land and harbor cleaned up. To buy it, deal with the EPA in getting it cleaned up, and get it working again is more than any buyer would want to face financially. If the engines are ever again to be made, it's going to be somewhere else.
My guess is the the E & J names could appear on someone else's engines, with maybe a few of the successful E & J models brought back to life and put in the mix. Rumors of a severe fire risk with Fichts abound, and people can't get the kits to repair them. Many won't even use their boats because of this risk. Other than that, they're supposed to be great engines. This should have the potential of being corrected, however. I heard that EVERY SINGLE 97-98 Ficht initially introduced had to be replaced with a 2nd generation RAM engine, costing the company millions.
Warranties on the pre-bankruptcy produced engines are probably gone forever. But in reality, since not many engines have been sold in the last 2 years, there aren't that many out there (relatively) to get hurt in this category anyway. It's the dealers that are going to take a hit here, trying to preserve their customer base for another day's sale of another brand.
For those with existing older engines, I'll bet someone will pick up the parts opportunities. For anyone contemplating a new engine at FIRE SALE pricing, wait until Feb 8th and see what happens. Then you'll know in advance what you're getting into. If they collapse with no buyer or warranty and parts availability, the left over engine inventory should sell for less than half of original list.
So we'll know in a week. Then it will take months before any new production is seen from the wreckage.
posted 02-01-2001 12:21 AM ET (US)
Companies like Sierra don't need the court's
blessing to fill the parts void. There's
absolutely zero chance that the void will
not be filled, at least for the common
maintenance parts. Sierra and (I suspect
others) already make those.
The court's blessing is only need to to
posted 02-01-2001 01:07 AM ET (US)
Further to Chuck's message, I would agree, and understand there already is a computer program out for Dealers and other repair outfits where they can find the correct aftermarket parts and who makes them. According to a Dealer I trust, he says that not all parts will be available in the aftermarket without having access to the original engineering designs. Some of the more complicated components are simply not profitable on an "only aftermarket" basis. Since many parts were subbed out, I would expect those MFG's would try to get the rights to continue making them. If there's a market, someone will find it and fill it.
Then there is also the used part market for the tougher items, like crankshafts, etc needed for rebuilds.
posted 02-01-2001 09:31 AM ET (US)
You know, I have been calling around my area and I haven't found anyone who is selling off thier OMC stock at fire sale prices. In fact some dealers have explained that the prices are sometimes more than before bankruptcy due to OMC revoking thier rebate incentives. I'm tired of all this speculation and hearsay rumors. The fact is if the company is chapter 11 you would think that dealers would want to offer some reduction in thier eledged 200% profit. This doesn't seem to be the case at all. I think that because repowering with another brand will mean my replacing all my controls and that the others' supplies are limited, I will just run that 150 evinrude until it explodes! Mybe by then it will be time to get a new boat anyway!
posted 02-01-2001 10:09 AM ET (US)
The last OMC dealer in Cleveland (now a Mercury dealer) was selling their OMC engine stock at the Mid-America Boat Show last week with all the motors marked "Liquidation Sale". Not total "fire sale" prices, but about the same price across the board as the equivalent HP mail order Tohatsu motor.
posted 02-01-2001 09:26 PM ET (US)
Interesting that the OMC dealer switched to Mercury. If anyone seems poised to pick up some market share it must be Mecury.
When I was looking for a Yamaha service dealer, one that I called told me he just dropped them and changed to Mercury because they made him a terrific offer he couldn't refuse.
I think I read recently that the entire Yamaha inventory has been sold already to boat makers who want engines for their transoms.
I can't see how Yamaha will increase their dealer network if:
--they don't have any more production to sell
It will be truly interesting to see how this all evolves.
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