Jacobs claims new documents support attack on Mercury

MINNEAPOLIS – For the second time in less than a week, Genmar Holdings, Inc. Chairman and CEO Irwin L. Jacobs has distributed a letter to all Genmar dealers and U.S. boat manufacturers attacking Brunswick and Mercury Marine.

In a letter this morning, Jacobs wrote that “there were some amazing facts uncovered” since his Oct. 14 letter, which he said “fully support many of the statements I made in prior e-mails I sent to you last week.”

In his earlier letter, 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.”

Today’s letter quoted several documents that Jacobs said had been unsealed by a ruling Friday from a Wisconsin district court judge in the breach of contract lawsuit between Brunswick Corp. and Yamaha Motor Corp. Ltd.

“I think you will agree that after reading the enclosed statements from Brunswick and Mercury’s desperate Memorandum of Law to the Court in Green Bay dated September 27, 2004, one has to wonder why they sued Yamaha in the first place,” Jacobs wrote.

Jacobs included several paragraphs in his letter from documents that Mercury had submitted to the court, including these:

“It is impossible for Mercury to substitute for the Yamaha powerheads within the remaining time frame of the agreement. If Yamaha stops providing powerheads under the agreement, then it would be impossible for Mercury to continue selling 75-115 HP four-stroke engines.

“If Mercury were unable to sell 75-115 HP four-stroke engines, the impact to its business and the business of Brunswick would be incalculable, but certainly devastating. It would be impossible for Mercury to recover damages sufficient to compensate for the loss of these engines. Because these engines are a central part of the Mercury product offering, and because Mercury’s consumers demand a full line of engines, it is likely that a significant number of Mercury’s customers would shift their purchases to a different engine manufacturer who could offer a full line of engines. The loss of customers in this manner would cause incalculable harm to Mercury. It would be almost impossible to quantify these damages.”

Jacobs said that after reading the statements he had enclosed, “I don’t believe anyone can disagree with my statement in last week’s e-mail about their “arrogance and misleading” tactics.

The Genmar CEO contends that Mercury has contradicted itself by condemning Yamaha for ‘dumping’ outboard engines in the U.S. while at the same time filing suit to get Yamaha to sell it four-stroke engine heads at a price they complained to the Department of Commerce is too cheap.

“What continues to absolutely astound me and I assume any other interested party is that Brunswick and Mercury started this whole disastrous mess,” Jacobs wrote. “With all the obstacles and uncertainties we have in business and life today, our industry certainly didn’t need Brunswick and Mercury creating a situation that not only doesn’t create a single value-added dollar to their products or our industry, but in fact, they will have potentially caused enormous added costs and great confusion to the marine industry, regardless of the legal outcome between Yamaha and Mercury.

“I believe the damage, uncertainty and confusion that Brunswick and Mercury have caused over their anti-dumping case against the Japanese engine manufacturers will go down in the marine industry history books second only to the financial damages and hardships that the OMC bankruptcy caused back in 2000.”

Mercury responds

Mercury issued a short response this morning to Jacobs’ letter, stating, “Mr. Jacobs is entitled to express his opinion. But the fact remains that both federal regulatory agencies examining dumping and the U.S. federal district court considering Brunswick’s contractual rights with Yamaha have consistently found our assertions to be correct at every stage.”

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