MIAMI — Jeff Malehorn, president and CEO of GE Capital, Commercial Distribution Finance, told industry members before the Miami Boat Show that his company is completely committed to the marine industry and inventory finance, and he looks forward to better times now that the recession has ended.
In a presentation where he declared the year of the crisis officially dead and said operating routines are normalizing, Malehorn told an audience, “I get the question, ‘Are you committed?’ and I have to laugh. I’m like, ‘Are you kidding me? We made it together through Armageddon, am I committed?’”
Malehorn said he is optimistic about the outlook for the near future. He cited GDP growth, low product overhang, increasing orders, more efficient businesses, stronger players, and regulation as reasons for his optimism.
At the same time, he listed several negatives that are still affecting the industry, which include low (but improving) consumer confidence, fewer dealer outlets, steady unemployment, and the perception of affordability.
Generally, however, his assessment was upbeat. From a manufacturer perspective, he said aged inventories are mostly back in line with normal levels, and there is increased confidence about production from the majority of people GE talks to. Not all manufacturers are doing equally well (ski boats, pontoons, and aluminum boats are doing particularly well, while product over 30 feet is still challenged), but the current trends are positive.
From a dealer perspective, he said individual cases are all over the board, but while dealers had pretty fragile balance sheets and tattered cash flow statements, things are looking better, with turns up to about 1.8 from 1.5.
Rob Podorefsky, managing director of the interest rate management group at GE Capital, backs up much of what Malehorn said with numbers.
“We’re in the seventh quarter of economic growth, whether it feels that way to you or not,” he said.
Podorefsky said 2011 consensus real GDP estimates are for 3.5 percent growth, December’s tax bill provides more clarity for near-term, and the Fed is committed to increased monetary stimulus.
“This should be a pretty good year,” he said.
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