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MRAA responds to Genmar dealers’ concerns

It’s the “right stuff” in a bad situation! That’s the bottom line of MRAA president Phil Keeter’s announcement that the association will serve as a catalyst to bring together Genmar dealers.

Genmar’s recent filing for protection under Chapter 11 bankruptcy puts every Genmar dealer at risk of being left out of what is likely to be a tedious reorganization process. MRAA, responding to its members’ concerns, has presented a plan that may give the dealers a voice in the reorganization process.

It’s not surprising that Genmar dealers have serious concerns. After all, the nightly TV news reports covering the GM and Chrysler reorganizations, and the interviews of dumped auto retailers across the nation, are still vivid in our minds. In the Chapter 11 process, reorganization means just that: reorganization. Accordingly, if Genmar emerges from Chapter 11 as I believe it will (FYI, statistically, most companies don’t), it won’t be the Genmar we’ve known.

During the GM and Chrysler reorganization, we learned that the company executives, the union, the bond holders and the Obama administration had the major seats at the table. It seemed the group that was least recognized in the process was the retail dealers. Moreover, these dealers even had strong franchise agreements, not the impotent dealer agreements we use in the marine industry.

Any way you look at it, Genmar dealers have a basis for sleepless nights, particularly if they are unsecured creditors owed warranty reimbursements, rebates, or promotional or other funds.

So MRAA’s recommendation that dealers unite as the “Committee of Genmar Dealers” and become represented by a high-profile law firm in the field of dealer issues, Bellavia Gentile & Associates, is exactly what MRAA should be doing for its members. To be clear, this does not mean MRAA will be representing the dealers in the bankruptcy process. It does mean Genmar dealers should join this committee so they have their own strong representation and influence in the difficult reorganization process ahead.

I’m reminded of a case in Ohio a few years ago when a shrink-wrap manufacturer sued and/or demanded payment from 36 dealers for alleged use of a proprietary process. Individually, many dealers couldn’t afford the legal costs to defend themselves, so they all formed a committee, each contributing a small fee into the pot. They hired a good law firm that went into federal court and won a favorable summary judgment.

The point is that while that case and the Genmar reorganization are completely different, it illustrates how when dealers join together they can accomplish things that individually they simply couldn’t.

One more observation: I suspect Genmar’s Chapter 11 filing won’t be the last we’ll see in the months ahead. As Genmar’s Irwin Jacobs so accurately wrote to all Genmar dealers: “I have never throughout any time in my 50-plus years in business experienced anything that even remotely resembles the unpredictable business environment that we have experienced over the past several years and which still continues.”

Sadly, it’s the “still continues” part that makes the MRAA recommendation in this case a likely model for other dealers in the future.

Comments

4 comments on “MRAA responds to Genmar dealers’ concerns

  1. Don Thurston

    At the risk of sounding foolish to some, this Genmar class action movement is an example of an ambulance chasing lawyer looking to pay his country club dues with our money.
    The reality of the situation is that this is a business built on a certain blind trust. Read your dealer agrement and see where any of the bad scenarios pointed out by the attorneys could happen without a bankruptcy ! The typically loosely worded, one sided dealer agreements that we sign each year, guarantee us nothing but a few extra days to kiss our butts goodby if we don’t measure up to some imaginary market measuring stick from OZ. If there truly is anyone out there who feels that hiring a lawyer to further hobble an already difficult situation and raid the treasury or a company that is trying to do the right thing and survive (while trying to preserve the jobs of Genmar workers, suppliers and dealers) then go ahead and join the feast! But be prepared for finger food. Be assured, the lawyers will eat in the private dining room while all you toadys eat in the back of the kitchen.
    I have no love for most boat companies or many of the demands that have been made by some over the years. I will only point out that Genmar has been one of the only companies to have cut some serious checks to or in behalf of their dealers in support of outrageously priced boat shows and necessary rebates and sales programs where the money really did go to the dealer without having to be notarized by Tinkerbell at midnight on Halloween while standing on your head whistling the Battle Hymn of the Republic !!
    Good luck, but don’t spend the money yet !

  2. Linda

    It is interesting to note that this law firm will be acquiring a pretty nice retainer fee if all (or most) of the 1100 Genmar dealers send in the $1000.00 fee as the MRAA suggests…. What is even more interesting is, that the agreement (they are asking dealers to sign when they send in their money) specifically states that the individual dealers’ interests will NOT be represented, but only those of the committee…….hmmmm. That part would make me a little hesitant to sign a check over to them.

  3. Show me

    YOur empathy for these dealers in joining the suit? Make a contribution to cover the expense a few dealers within a small radius of your domicile?? Surely a few grand would help support 3, 4 or 5 delerships…should they be so inclined to join.

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