Dumping investigation to exclude powerheads?

FOND DU LAC, Wis. – Mercury Marine has asked the U.S. Department of Commerce and the U.S. International Trade Commission to exclude specific powerheads from their ongoing investigations of “dumping” allegations against Japanese outboard engine manufacturers, the company said in a press release today.

It remains to be seen, however, whether these government bodies will even consider Mercury’s request.

Yamaha, meanwhile, is still evaluating whether it would benefit from Mercury’s request, were it granted, said Phil Dyskow, Yamaha Marine Group president, in an interview today.

Mercury said it made the request in an effort to place tighter focus on the fundamental issue of its dumping complaint against the Japanese companies. It’s likely, though, that those who oppose Mercury’s decision to file dumping allegations will see this new development in a different light. Certainly, Mercury appears to be most likely to benefit from the request, should it be granted. The company currently buys 75, 90 and 115 hp four-stroke powerheads from Yamaha.

“Mercury has asked that these powerheads be excluded from the scope of the investigation after concluding that the importation of these powerheads does not pose a threat to competition in the outboard engine industry or to American jobs,” said Patrick C. Mackey, president of Mercury Marine. “We have always asserted that Japanese dumping of outboard motors, not powerheads, is the offense that is injuring the domestic industry.”

Mercury said powerheads as a general category were originally included only to avoid the potential of importing engine components for assembly in the U.S. to circumvent any anticipated duties.

“Eliminating these powerheads won't meaningfully increase the risk of circumvention, but it could reduce some of the ‘noise’ surrounding this situation – namely the Yamaha litigation involving these powerheads, Mackey said. “If the powerheads are removed from the equation, the base issue of Japanese dumping and its harm to the U.S. industry would remain.”

Request by Yamaha denied

Mercury’s actions today follow a press release from the company yesterday, which said a request by Yamaha Motor Corp. in its pending litigation with Mercury Marine was denied Tuesday by the Seventh Circuit U.S. Court of Appeals in Chicago.

Yamaha’s request was for an expedited review of an appeal of a decision made last month by a federal court judge who ordered Yamaha to comply with the terms of its existing supply agreement with Mercury Marine.

“I don’t think anyone should be misled,” said Dyskow. “Our appeal in Wisconsin will go forward. It just won’t be fast-tracked. No victories have been won at this point.”

The companies are in litigation over the pricing of the 75, 90 and 115 hp four-stroke powerheads Yamaha supplies to Mercury.

Mercury and Yamaha currently are scheduled to enter court-ordered arbitration to resolve the dispute regarding pricing and delivery of product.

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