MINNEAPOLIS, FOND DU LAC, Wis. – The ongoing war of words between Genmar chairman Irwin Jacobs and Mercury Marine saw yet another skirmish late this week with Jacobs accusing Mercury of attempting to eliminate Volvo Penta as a competitor in the sterndrive engine business.
In an open letter addressed to “all Independent Boat Manufacturers and Their Dealers,” Jacobs wrote that he had received reports Mercury Marine has offered “huge cash rebates” to several retail boat dealers representing independent boat companies’ products.
Jacobs alleged that the dealers Mercury was offering the discounts to are currently ordering boats with Volvo Penta sterndrives. He accused Mercury of offering discounts to those dealers that agree to switch to MerCruiser sterndrives.
Jacobs wrote “the independent boat builders and dealers need to take a very serious look at what I think is a dangerous strategy on the part of Mercury Marine and Brunswick to eliminate Volvo Penta competition in the sterndrive engine business and ultimately to cripple or eliminate the independent boat builders as competitors to their stern drive engine and Brunswick boat businesses.”
He further accused some Brunswick boat companies of pricing their entry-level boats at below market prices to take market share away from independent boat builders and some dealers.
In response to Jacobs’ allegations, Pat Mackey, Mercury Marine’s president, said in a statement that Jacobs’ charges were little more than “hearsay and opinion,” and that he lacked “any critical support” for his charges.
“As industry participants do, Mercury MerCruiser adjusted its dealer programs at the start of the 2006 model year,” Mackey wrote. “These adjustments eliminated certain disparities between dealer programs offered by Volvo-Penta and those offered by MerCruiser. History in the marine industry has shown that, when approximate parity exists, dealers will migrate to the brand with the greatest equity. In this case, that company is MerCruiser.”
Mackey said that Genmar has become one of Mercury’s “fastest-growing customers” and therefore “Genmar certainly recognizes the history and legacy of Mercury MerCruiser which, in combination with attractive programs, provides a competitive marketplace.”
Mackey concluded by saying that Genmar remains a valued customer.
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