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Pressing for a share of help

The marine industry is putting on a full-court-press to get assistance from Washington that will unlock floorplan and consumer credit, even while President Obama announced yesterday the freeing up of billions for small business.

The President finally acknowledged small businesses are the key to economic recovery since better than 70 percent of all jobs created over the past 10 years came in small businesses. I say “finally,” because I long ago became fed up with Washington’s “too big to let fail” blinders that blocked their view that small businesses, like marine dealers, have been going down the tubes due to dried up credit lines. 

 The key to this latest Obama plan is that the government will spend up to $15 billion to buy the small-business loans that are now supposedly choking community banks and lenders. Theoretically, that could allow those banks to start lending money again to small firms to pay bills and stay afloat. Sadly, $15 billion isn’t nearly enough. AIG, for example, has already received more than $170 billion!

So, it leads me to believe there may be as much politics behind this program as heart. After all, the President is surely aware of the growing displeasure on Main Street with the hundreds of billions propping up so-called financial giants who made brainless decisions while small businesses have done nothing wrong and still get screwed over.
Politics and insufficient funds aside, however, our industry continues its push for a piece of the pie.

NMMA and MRAA are aggressively pursuing support in the halls of Congress and at the Federal Reserve to include funds for floorplanning and consumer purchases of boats. (See last Tuesday’s “Dealer Outlook” for more details.) This would come from the $200 billion TALF program. We must keep up this pressure or get left behind. Moreover, in spite of GE’s recent move that clobbers dealers with rate increases, we need to see GE able to tap into these funds, too.

Bottom line: (1) Help now by taking the action recommended in last Tuesday’s “Dealer Outlook.” (2) Watch for every detail coming out within the month on this latest small business program announced yesterday. (3) Once well informed, go aggressively to seek available local loans and credit. In this case, the early birds may be the only ones to get a worm.

Comments

14 comments on “Pressing for a share of help

  1. Captain Andrew

    In my humble opinion, consumer credit has really got us into this mess in the first place–at least in-part. the answer is to produce more affordable (albeit smaller) vessels that people can afford that does not require them to borrow money from their house. If one can’t afford a boat payment based on their income and/or investments–then he/she should not be a boat owner.

    Fractional ownership or chartering is the future. The industry needs to wake up! Purchasing a quarter share in a $250,000 boat and being responsible for one quarter of the operating costs is a LOT more affordable than purchasing the vessel out-right as sole ownership. Freeing up consumer credit is not the answer…Making boating more affordable is the answer.

  2. Fred Santogrossi

    Hey Norm!!! Hope all is well
    When NMMA asked for dealers to try to help with a targeted (their local reresentatives) letters to the House Financial Services Committee & Senate Banking Committee I went ahead & clicked & sent. But in addition to that I also sent a fax, by printing off the entire lists, to ALL the members of both committee’s. Hopefully other dealers have the time (which we have) to do as much as possible! I did receive a reply from the 2 Illinois Senators, who were both Dems, What happened to the Republicans that I would rather hear from?? Send me back your email address & I will send you a pic of the McCain/Palin sign I put out front of our dealership prior to Nov 08.

  3. boatman11

    Dave Boso is right. Be careful what you wish for. You want to bring Government into your business? You could get stuck having to abide by THEIR regulations. There will be strings attached. It could be a very high price to pay for something that will only provide limited and short term relief at best. All the billions in bailout money hasn’t shown to do much good for the credit markets so far. Bad Precedent.

  4. CarlM

    2 words CLAW BACK
    What she gives she takes away more.
    Ask Chucky Shummer about his 100% tax proposal on seperation pay.

    Bosso is correct once you start dancing with this partner you will soon loose all control
    It will take you down hard & leave you in a heartbeat penny less & enslaved wishing you never had met her.

  5. Schwarzel

    Well you people who think Government can solve problems get real. Let me ask this question, Name one thing that Government has done RIGHT……. still waiting for the answer. NOTHING, that is what they do right. Yes they run the Armed forces but that is about all they can do. Heck they can’t even find billions of dollars that they have spent. If you want to solve this problem, THROW THE BUMS OUT…..ALL OF THEM. Most to all of the congress has NEVER RUN A SMALL BUSINESS so how do they know how to fix it? Most could not make it in the REAL world so they ran for office….forever. If we want this problem solved, roll up your sleeves and lets get to work, ’cause if we are waiting on this bunch from Washington, hell will freeze over first. Now Norm you can have your soap box back.

  6. Gordy McKelvey

    I’d read the fine print before I’d accept any aid tied to the bailout plan. I know dealers are hurting and I know that relaxed credit criteria and extra money would be of some short term benefit, but what’s the cost going to be down the road. I’ve read several articles outlining how the states must use government money. One particular requirement is that road projects must pay union wages. This particular requirement would actually reduce availible jobs instead of increaseing jobs, especially in right to work states. Instead of having five guys looking in a hole while one digs, you’d only have two looking in the hole while one digs. The other three would still be unemployed. When you dance to the tune, you gotta pay the fiddler.

  7. arch

    It’s SHOCKING to me that people in this industry want government to get involved. You are NAIVE if you think gov’t help is a good thing. Why do you think these banks and even some of the states are giving back or not even accepting gov’t $ even though they need money?

  8. Ed Riester

    Norm, is the problem with the lack of marine sales really about the lack of credit availability? I have a different take on our problem but maybe it is flawed because my products are used on mainly larger boats. It seems a little unfair for me to blame our problems on President Obama but hear me out. My domestic sales started to decline in late 2007 when Obama was looking like a viable candidate. My domestic and worldwide sales fell off a cliff when it became quite obvious that he was going to be our next president. Just coincidental? I believe it is fair to say that all of my end-users are rich (or were) and it is my opinion that they were the first to curb their spending due to the fear of Obamanomics (higher taxes). This curb in spending quickly trickled down (pun intended) to the entire world. Recessions are always about a lack of confidence and our president has scared the heck out of my customers. No matter who won the election our economic problems would have been a challenge but I fear that declaring war on rich people has made it much worse. Until confidence for the customer as well as the lender is restored, sales will be slow and restoring confidence to my customers is not a priority of the current administration. I too have been in the boat business 39 years and this recession makes the luxury tax years look easy. The only thing in the budget for my company will actually cost us in the form of the new 65% of Cobra payments for the unfortunate people we had to lay off. So much for small business help! Washington caused this problem – why would we look for them to solve it? We will need to solve our own problems.

  9. Captain Andrew

    Arch–I couldn’t agree with you more. We need two things:

    1) An economy where people can get good paying jobs
    2) Products and services which are affordable to middle-income customers as well as rich customers.

    Keep the Govt out!

  10. arch

    ED RIESTER is absolutely correct. The #1 problem is not lack of credit, or credit tightening, it’s lack of consumer confidence. Of course, the credit tightening has definitely contributed to the problem.

  11. AnonymousBob

    First comment to Ed Riester: quite the slippery slope conspiracy theory you got going on there. Congrats on rationalizing that nonsense to yourself. The markets began their decline in 2006 with the slowdown in the housing industry. However, the product that first began slowing down in sales was the product bought by the “Joe Six Pack” customer, the buyer that was typically a blue-collar, budget oriented buyer. The big boats continued to sell because your customers were still not feeling the effects of the slowdown. As things began to turn sour on Wall Street (in 2007) is when your customers began pulling back on their spending. I’m not a fan of trickle up or trickle down economics, so I won’t speculate as to which buyer affects the other.

    I also don’t agree that Washington caused the problem. They did enable it due to lack of oversight and accountability, but the problem really started on Wall Street with the securitization and bundling of mortgages as investment vehicles. Wall Street went crazy at the money trough and, as Bush said, they got drunk on money. The hangover, though, is being felt by every single one of us.

    The intervention by government is unwelcome due to the red tape everyone mentioned. We need to operate as a true free market to bring about the end of the crisis much quicker. Government intervention is only prolonging the issue, in my opinion. Is any firm too big to fail? I don’t think so and always thought that was a main principle of the free market economy – survival of the fittest. If AIG, for example, made stupid business decisions, then they need to feel the consequences. If it means failure, it means failure. Imagine how many boats could be bought with $170Billion!!

  12. arch

    BOB, I agree. You did a great job explaining WHY consumer confidence is so shaken right now and who is at fault. I agree with ED that Obama fueled it, but he certainly isn’t mostly to blame for it happening. I do however feel like he has done a TERRIBLE job of addressing it.

    Another point to consider is this? Why did our gov’t allow a company like AIG to get so big? I’m totally against gov’t involvement and over-regulation, but we shouldn’t have any one company that is so big, that if it were to fail, it would sink the economy. This company insures so much and has it’s hand in too many cookie jars.

  13. Captain Andrew

    AnonymousBob

    YOU ARTICULATED THE POINT BETTER THAN I COULD EVER HAVE DONE! You, my friend, are 100% right in my opinion!

    Let the bad businesses fail. The govt can’t stop this tsunami of a crisis; It can however, set reasonable rules by which people can play the game.

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