Yamaha and Mercury battle over powerheads

FOND DU LAC, Wis. and KENNESAW, Ga. – Yamaha Motor Corp., U.S.A. has called on Brunswick Corp. to withdraw all remaining Yamaha powerheads from its dumpling complaint against Japanese outboard engine manufacturers, the company said in a press release today.

Phil Dyskow, president of Yamaha Motor Corp., U.S.A., said Brunswick’s decision last week to ask the U.S. Department of Commerce and the U.S. International Trade Commission to exclude 75-, 90- and 115-hp four-stroke powerheads from their ongoing dumping investigations “is a major admission that it was wrong in including Yamaha’s powerheads in its dumping complaint.”

Dyskow said Brunswick’s request reflected “its recognition of the correctness of Yamaha’s position.”

“We anticipate that if the powerheads at issue are not subject to potential antidumping duties that Yamaha will withdraw its request for a 91.6-percent price increase on those powerheads,” Dyskow said. “Had Brunswick either not included these powerheads in the dumping complaint or removed these powerheads from the dumping complaint several months ago when Yamaha repeatedly asked that Brunswick do so, the present litigation and arbitration could have entirely been avoided.”

However, Dyskow went on to say that regardless of the eventual results of the ongoing disputes, Yamaha would not produce 75-, 90- and 115-hp powerheads for Brunswick after March 2006.

Mercury responds

In response to Yamaha’s press release, Mercury issued one of its own this morning, saying the withdrawal of the 75-, 90- and 115-hp four-stroke powerheads is “beneficial to all involved parties and would help produce a quicker resolution to outstanding issues between Yamaha and Mercury.”

“The Department of Commerce has ruled the Japanese outboard industry has engaged in dumping practices, and the International Trade Commission is currently determining the extent of damage to the U.S. outboard industry,” Mercury said. “When Yamaha retaliated to Mercury’s anti-dumping petition by attempting to nearly double the cost of powerheads it sells to Mercury, the courts instructed Yamaha to live up to the terms of the existing contract, which runs through March 2006.

“Yamaha seemingly had no problems with the contract prior to the filing of the dumping complaint. Mercury is absolutely confident it will satisfy all customer orders before and after the conclusion of that contract. Mercury sought a court injunction to ensure that Yamaha continues to supply powerheads, per the existing contract, through its conclusion.”

In a separate statement Friday, the company said it realized the importance of continuity of supply, and was extremely confident that would not be an issue at Mercury Marine.

Mercury also responded to allegations made by Genmar Chairman Irwin Jacobs in a letter last week sent to dealers and U.S. boat manufacturers. Jacobs again attacked Mercury for filing its dumping complaint in the first place and questioned whether the U.S. government should be helping Brunswick and Mercury “level the playing field,” given the company’s global manufacturing and sourcing strategy, which he suggested may result in future layoffs of U.S. workers in favor of moving jobs overseas.

“Despite Mr. Jacobs’ continued rhetoric, we believe most people in the industry understand and support our efforts to stop Japanese outboard companies from ‘dumping’ in the United States,” Mercury said. “The fact that they have been dumping is not a question, it is a statement of fact. The only question left to answer is the degree of harm suffered by the U.S. outboard industry. We have won every decision in every step of the process, and we’re confident we will win the final decision as well.

“It is public knowledge that Mercury is building a new plant in China to manufacture small engines, but it’s also public knowledge that all involved individuals here, including union officials, are aligned on this decision and understand the long-term strategy in keeping Mercury the world’s premier manufacturer of marine engines. We have made significant investments in the Fond du Lac campus with our Verado line, just one of many indications of our commitment to this city and this country.”

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