Jacobs attacks Mercury again

MINNEAPOLIS – Genmar Holdings, Inc. chairman and CEO Irwin L. Jacobs, has again weighed into the engine-pricing dispute between Mercury Marine and Yamaha Motor Corp. Ltd., attacking Mercury’s position on several fronts in a letter yesterday addressed to Genmar dealers and U.S. boat manufacturers.

Jacobs accused Mercury of dishonesty and said the outboard engine manufacturer would do, “Whatever it takes to increase their own profits, even if it means hurting or possibly destroying an industry that has been declining for years.”

Jacobs said Mercury was attempting to “dupe the International Trade Commission into substantially raising engine prices,” after Mercury helped initiate the anti-dumping investigation of Japanese outboard engine manufacturers undertaken by the U.S. Department of Commerce earlier this year.

Yamaha subsequently informed Brunswick Corp. – Mercury Marine’s parent company – that it would cease delivery of the 80 – 115 HP powerheads it sold to Brunswick, unless the company agreed to a 91.6-percent price increase.

Brunswick responded by filing an anticipatory breach of contract lawsuit in the U.S. District Court, Eastern Court of Wisconsin, against Yamaha Motor Co. Ltd., attempting to stop the increase and force Yamaha to continue selling the powerheads at current prices.

The court recently ordered the parties to settle the dispute through a process of arbitration – which is ongoing. But Jacobs believes Mercury’s actions with regard to Yamaha constitute a double standard.

“Mercury is attempting to publicly and legally condemn Yamaha for ‘dumping’ outboard engines in the U.S., while at the same time in their neighborhood court in Green Bay, they are attempting to mislead their friendly local court by asking the court to order Yamaha to sell them four-stroke engine heads at a price they complained to the Department of Commerce is too cheap, and to the court in Green Bay for the same products, they say is too expensive,” Jacobs wrote. “It is simply an illogical and untenable position to take.”

Jacobs also claimed Mercury misled the government by asking the Department of Commerce to help save the jobs of Mercury’s employees in the United States with its investigation, while at the same time “building a new engine factory in China that will most likely replace workers in the future at Mercury’s factory in Fond du Lac, Wis.”

He then went on to allege, as proof of Brunswick’s plans to control the boat building and engine industry in the U.S., that within the past 60 days Brunswick had “approached Genmar to ask if we would be interested in selling our saltwater boat group to them. Suffice it to say we have no interest now or anytime in the future to sell our saltwater boat companies to Brunswick,” Jacobs wrote.

Contacted this morning by telephone, Mercury said it would issue a response on the matter in the near future.

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