Mercury fires back at Genmar/Yamaha

FOND DU LAC, Wis. – In a 1,400-word letter addressed to its dealers and U.S. boat builders, Mercury Marine President Patrick C. Mackey responded this morning to recent attacks by Genmar CEO Irwin Jacobs who has made allegations that Mercury is trying to drive up the price of outboard engines in the United States.

Mackey offered a detailed outline of Mercury’s actions since it filed an anti-dumping petition against the Japanese outboard engine industry in January, and accused Genmar and Yamaha of “mischaracterizing” several facts of the dispute.

“Despite our longstanding policy of not responding to unsubstantiated criticism and speculation, we at Mercury Marine find it difficult to ignore the recent accusations from Mr. Irwin Jacobs of Genmar Inc.,” Mackey wrote. “We feel it is important to set the record straight on the preliminary anti-dumping duties imposed on the Japanese outboard engine manufacturers, the contract dispute between Mercury Marine and Yamaha, and the recent price increases by Mercury Marine.”

Mackey said Mercury filed its anti-dumping petition to ensure that Japanese engine manufacturers were following the law and competing fairly.

“The U.S. government has preliminarily imposed anti-dumping duties on Japanese outboard engine manufacturers,” Mackey wrote. “Contrary to Mr. Jacobs’ implications, the U.S. government conducted its own independent investigation – it did not rely on information from Mercury Marine. Indeed, the majority of the data used by the government to measure whether Yamaha was ‘dumping’ came from the Japanese company itself.”

Mercury says its not trying to inflate prices
Mackey went on to say that contrary to Jacobs’ assertions that by filing its complaint, Mercury was trying to drive up the price of outboard engines in the U.S. market, foreign companies have in the past tried to do that themselves, using dumping as the strategy to reach that goal.

Dumping occurs when a foreign company sells a product in the domestic market at less than the price that company charges in its home market to injure or drive domestic competition out of business.

“Mercury Marine’s price increase has been mischaracterized,” Mackey wrote. “Mercury Marine has no intention of increasing prices in proportion to the duties levied by the U.S. government. Recently announced price increases on outboard engines were driven by higher raw material costs.”

In a letter released yesterday, Jacobs had alleged Mercury was supporting an approximately 22-percent increase in duty on all outboard engines imported from Japan so that it could raise the prices of the outboard engines it sells by a like amount.

“Frankly, with the high prices of outboard engines today, I can’t imagine how much damage an additional price increase of 22-percent will do to our industry,” Jacobs wrote.

Mercury explains lawsuit against Yamaha
Mackey accused Yamaha of retaliating against Mercury for the anti-dumping investigation by taking several actions, including refusing to sell engines to Brunswick and by “improperly” attempting to terminate a contract to supply powerheads to Mercury.

“Yamaha’s unilateral termination of the contract required Mercury Marine to take emergency action,” Mackey wrote. “Mercury Marine sued Yamaha to protect its customers and enforce the contract that Yamaha signed.”

Mackey noted that after several weeks of hearings, a federal judge granted the relief requested by Mercury Marine and ordered Yamaha to comply with the terms of the contract by supplying the powerheads both in the agreed upon quantities and price.

The Mercury Marine president said he expects all of the to be resolved over the next several months.

“Please understand that our sole intent has been to seek enforcement of U.S. laws that ensure fair competition that benefits consumers in the long run,” Mackey wrote. “Mercury Marine is confident that it will prevail. But regardless of the outcome, our customers should remain confident that we will continue to work hard to meet their expectations, and we will continue to deliver the full line of engines you have come to expect from Mercury Marine.

“We ask that you determine for yourself the best path for the U.S. boating industry.”

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