Irwin Jacobs on Brunswick

What do you all think about this?
Agree? Disagree? The numbers are pretty strong in favor of his assessment.

Jacobs says Brunwick’s strategy is flawed

I am outlining some of my thoughts and candid views regarding the recreational wholesale and retail boating market in conjunction with what I believe is going to create both several opportunities as well as some very difficult times for certain boat manufacturers and dealers in the recreational boating market in 2007 and beyond.

Although the recreational boating industry has not been exactly robust over the past two years, there surely has proven to be several independent boat manufacturers and dealers who have been able to more than hold their own and in several cases certain manufacturers and their dealers have even grown their businesses in spite of the fact that the market overall has been flat to down.

I believe that Brunswick’s acquisition binge of several boat companies over the past three to four years has up till now proven to be nothing short of a disaster for Brunswick. Based on the public information available both from Brunswick itself and from Statistical Surveys, I don’t believe there is a single boat company that Brunswick has purchased over those three to four years that are better off today than they were at the time that Brunswick purchased them. In fact, most of them, if not all of them, have continued to substantially lose market share and business far in excess of the overall difficult market conditions.

I further believe that Brunswick’s poor timing of being extremely aggressive in purchasing the boat companies they acquired over the past three to four years is going to offer several of the well-run independent boat builders and their dealers a golden opportunity to grow their businesses in 2007 and beyond at the expense of Brunswick, even if the retail recreational boat market continues to show little or no growth in 2007 and beyond.

The fact that the independent boat builders and their dealers have the flexibility to offer the retail customer their choice of engines, I believe that it in itself is enough to take market share from Brunswick’s boat companies. Whereas Brunswick offers, for the most part, only their Mercury engine products and the fact is by their own admission, Mercury has outright lost market share for their engines over the past several years in the U.S.

A further fact, I believe, is that Brunswick’s overall strategy to become a vertically integrated marine company is flawed for the simple reason that in order for Brunswick Boat Companies and their Mercury Engine Company to grow they cannot do it without the support of the independent boat builders (their competition) and their dealers.

Therefore, my conclusion is simple “why would any competitor of Brunswick’s want to help them grow there businesses at the same time that Brunswick is competing against them every day in the recreational boating business?”

I believe the answer is quite simple and I predict that Brunswick is going to continue to lose market share and businesses both in the boat and engine business to the well-run independent boat manufacturers and their dealers who compete with Brunswick Boat and Engine Company. In other words, even with a continued difficult boating market I believe there is going to be a lot of business out there for the taking.

Irwin L. Jacobs

Chairman and CEO, Genmar Holdings

Irwin L. Jacobs January 16th, 2007
COMMENTS

In the short term, “independant” companies like alumacraft are loving the fiasco that is brunswick. I’ve got a number of other predictions about the industry but I’ll keep them to myself, for now.

I do know this, companies like Lund have been overtaken by companies like G3 in total sales this past year and I’m willing to predict another competitor will pass them here shortly.

It will be very interesting to see how the marine industry shakes out over the next couple seasons.

Hey Chris!
I take it G3 isn’t a Brunswick company? I know if I could get a new boat right now it would be a G3. I’ve liked there line-up from the get go. Unfortunately they were just starting up when I purchased my Mr. Pike. I like my Lund; but I really like that 18′ G3 that is in the Night Fishing Trophy Walleyes video. Sweet!

dd

I saw a chart today at the Boat Show that showed Crestliner’s net loss was 35.8%, Lund 17%.
Only 1 US aluminum boat manufacturer showed a gain in 3rd Quarter/2006. That company represented a 5% overall market share. Crestliner and Lund dropped well below that number.
Makes you wonder if Irwin is right. We have all whispered our thoughts about this in one way or another for some time.
What do you all think? This should make for a good debate, as long as it does not turn into boat bashing. That is not my intent. But this is “Our” industry being the fun loving, fishing minded people we are. There are statistics out there to bolster observations by many. Grab what you can find, and hold them up for us to see. This is boat buying season. Many people are going to be buying boats of all makes and models. Glass and aluminum. What do you see happening with the current state of affairs?

I guess I haven’t really paid much attention in the last 7 years since I bought my Lund. I know seeing a River-Pro isn’t a rare occurrence anymore. And that is definetly a small niche company. There definetly seems to be a market for smaller boat companies if people like what they build.

dd

I agree with him whole heartedly. I love my crestliner but if I had to buy again and they told me I had to take a Mercury motor or they charge my more to re-rig I would tell them to take a leap.

Crestliners were selling like hot cakes a few years back. Mainly it was the price and quality of the product. Brunswick comes in and limits the options and raises the prices to try to get back the money they invested and puts a bunch of dealers out of business. Wow that was really smart thinking. NOT!!

Now we are left with a few supporting dealerships and most of them jacked up there prices knowing there are fewer dealers to go to.

All said and done Jacobs hit the nail right on the head and Brunswick has put a really bad taste in alot of peoples mouths.

Just my .o2 cents

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Crestliners were selling like hot cakes a few years back. manly was the price and quality of the product. Brunswick comes in and limits the options and raises the prices to try to get back the money they invested and puts a bunch of dealers out of business. Wow that was really smart thinking. NOT!!

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That pretty much sums it up.

I’m most interested to see what happens to the upper-end walleye market over the next few years. The $55K+ rigs that guys are buying on 14 year loans…

Yes very intersting. I doubt it is going to look pretty.

Damn I used to think a 30-35k boat like that fully loaded was abit over the top. But WoW add another 20k and you had better love that boat or live in it.

G3 really sells more boats than Lund now?

Congrats!

Even though I bought a Merc, that is why a bought a Tuffy over a Lund.

I did not like the way they shafted the local dealers, and to get “I” wanted I had to pay thru .

Go TUFFY

By the way the G3 is a nice ride and so is Alumacraft

I’ve owned a different motor on each of my last 3 boats (Yamaha, Mercury and Evinrude). I’ve had good luck with all three so I don’t have a preference. However, much like cars, most guys have a strong loyalty to one manufacturer. That alone has to drive buyers away from exclusive boat packages. I agree with Erwin.

I have a strong dislike for Mercury based on owning 4 of them in the past and not liking any of them. I was always told the new motor is much better then those in the past, and belived the sales hype only to be disapointed.

Now after fishing in many different boats, I have to say I want my next boat to have a Yamaha motor on it. IMHO they are the best.

So that immediately throws out Crestliner or Lund, two of the favorites in the aluminum boat world. I am leaning towards an Alumacraft or a G3 now.

The only thing I do know, is if I have to pay more for a Crestliner or a Lund to get the motor I want on it, I will go for something else. Corporate suicide.

While I agree with everything Mr. Jacobs said we must remember one thing.

From the time he became a corporate raider in the 80’s Mr. Jacobs has shown that his only interest is in himself.

The fact that he purchased Genmar and created FLW is a good thing for the fisherman. Don’t think for one second that he wouldn’t sell us out to the highest bidder if the price was right.

The letter is a direct marketing ploy aimed directly at his main competition.

THE BOY IS NO DUMMY!

I’ve owned 5 Lunds, 1 Starcraft, 1 Crestliner, 1 PolarKraft and 1 Ranger (with my second one on order) powered by Johnson (OMC), Yamaha and a new ETech on it’s way. All boats had their pluses and minuses but will say that most everyone got the job done.

I’ve followed this entire debate and have to somewhat agree with the tone that Brunswick has brought this on themselves. Call it corporate greed and short-sightedness or whatever you’d like but only mother time will truly show how this plays out.

The best part is that living in this country allows us the freedoms to choose as we see fit. My choices have been shaped by good and bad experiences around the water and most importantly I’ve LEARNED that a boat or motor is only as good as the dealer you bought it from. Again a boat and motor is only as good as the dealer you bought it from. The manufacture is a LONG, LONG ways away after the sale, it’s the personnel at the dealership that can convert the most unfortunate boat or motor occurence into a smooth sailing repair that further develops trust and loyalty with that customer.

Great debate you’ve started here Chris. I look forward to comments as there’s always a new way to look at things….
Kurt

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I’m most interested to see what happens to the upper-end walleye market over the next few years. The $55K+ rigs that guys are buying on 14 year loans…

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That’s the same area the upper end bass boats are in. It seems many (most?) of the upper end expensive boats are boat by guys on prostaff type deals. I think soon a price point will be met where the market just can’t bear the prices anymore and some serious trouble could come.

I don’t like the one motor only brands either. The other bad thing in the bass boat industry is the companies sponsoring the indivdual tours (Ranger-FLW vs. Triton-BASS).

I have always been a Lund person, 5 of them, and for the most part a Mercury man. I ‘m looking at buying a new boat again. This time I want a Yamaha on the back, so you know what choices I have, Alumacraft or a G3. I didn’t think I would ever have any boat but a Lund,but that is now over. Unless this all changes, I feel Lund is headed the wrong direction.

I will be in the market for a new boat this fall. I’ve got several manufactures in mind, however none are Lund & Cresliner simply because I refuse to pay more for a boat with a Yammy or Etech on it. My personal preference for motors, Yammy, Etech, Merc. In that order. So, I’m living proof, Brunswicks marketing scheme has failed miserably on me.

I purchased my Explorer a few weeks before the buyout. The way that Brunswick has handled this entire thing has caused me to decide that I would never purchase another Lund, as long as Brunswick owns them.

When I was deciding which boat to purchase, I looked at Alumacraft and G3 as well. The only Alumacraft dealer close to me is really small and the owner pretty old. That made me nervous. The only G3 dealer in my area had a few on the floor that did not trip my trigger at all. The fit and finish of those boats turned me off at the time. Since then, that dealer has gone under, and I’ve seen some pretty impressive G3’s elsewhere.

The dealer that sold me my Lund is not at all happy with how this acquisition has been handled. Before the acquisition, he only sold Lund. Today, he sells Lund, Alumacraft and Skeeter.

People will keep buying 55K glass boats as long as they have to pay 35-45K for an aluminum boat. The glass boat companies have figured out now that they can make a similar boat in style to the aluminum boats and make a profit now that aluminum boats are so expensive.

There’s no doubt that there will always be people out there with gobs of money to spend on the upper end boats.

Give it 5 years, at that time Brunswick will have failed miserably and Lund and Crestliner will be bought by a private owners group.

Kenny at Smittys Marine in Lake City saw this coming a couple years ago and brought in Alumacraft to sell along with his Lund boats. In the 90s Alumacraft bought [hired] a big Lund designer from Lund. The result is that Alumacraft boats have become top notch boats like the Lund is. Also now brought in has been the Ultracraft boat line [a Misty Harbor boat] and also coming is YarCraft for a glass boat line. I would assume other dealers will be doing the same. By the way if anyone is looking at buying a Lund boat with an Etec instead of a Mercury motor they have quite a few Lunds in stock. They bought ahead of time to be able to satisfy their customers who might still want a Lund boat but not a Mercury motor. Some dealers are getting smart and are looking out for the customers and realize that they aren’t going to be told what they can only carry if they want a to carry a certain brand boat. Alot of people are very loyal to their motors as its the motor that gets them from point A to point B and just don’t want to give their brand of motor up and they shouldn’t have to.

Thanks, Bill

I personally don’t much care for Alumacraft boats or Merc motors. Nothin against you guys who do, we all have our own preferences.

Give those preferences, the current envirnonment pretty much takes Alumacraft, Lund, and Crestliner out of my consideration for a top end walleye boat. And I’m not looking at G3 because I don’t much care for 4stroke outboards either (really intrigued by the E-Tech!!)

SO

I’m looking at two options:

a fiberglass boat (Warrior has my attention)

OR

if I decide that I just gotta stay with aluminum, LAKE ASSAULT sure builds a heckuva boat

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Give it 5 years, at that time Brunswick will have failed miserably and Lund and Crestliner will be bought by a private owners group.

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My prediction as well. One nice thing, at least the guys looking to sell or trade up a rig with anything other than a black motor should have a little more value/leverage going for them. At least I hope I do!
Chris

I personally think Warrior is going to take a big step forward in the baot industry within the next year or so, It is not because they have a Bass Boat now on the market which does help but they have gone thru and fixed a few things here and there with there boats which is going to be noticed they are likeable changes as well… Warrior

Hey, I’m just pissed I can’t get an inboard Yamaha on a RIVER-PRO….what’s up with that?

Seriously, I have considered buying boats I never would have otherwise, even if they cost thousands more, simply to get the motor I want on the back.

James,

a few questions that perhaps you or someone on this board can answer.

Isn’t Jacob’s company, Genmar Holdings, much like Brunswick inasmuch as they purchased several independent boat manufacturers. My understanding is they also went with the package deals, but perhaps I am wrong.

I do know that in 2006 I purchased a new Crestliner, and either E-Tec or Crestliner re-configured the controls, electical system, etc. to accomodate the switch from Merc to E-Tec at no charge.

I am not an Irwin Jacobs fan, but his comments are right on regarding Brunswick, albeit, as mentioned above, I thought Genmar Holdings did the same thing.

Finally, as an aside does anyone have an idea how old Irwin Jacobs is. I met him in Mpls. in the 1970’s and thought he was old at the time. Of course I was only in my thirties then.

Irwin Jacobs, needs to shut up and go away! He is the one that started the whole mess in the early 90’s, with boat package deals. He did more to put the smaller marine dealers out of bussiness than anything.

Good Post grump!

Most people’s love of the FLW has clouded their memories to the fact that much of what is happeneing is a direct result of Irwin’s desire to own and control as much of the boating world as is possible. He’s still mad that Brunswick managed to chase him away when he tried unsuccessfully to buy Mercury years ago. He more/less took that as a drawing of the “line in the sand”, and has done everything he can to turn the world against both Mercury, and Brunswick ever since.

Funny isn’t it that in his little speech he points fingers at the very boat companies HE SOLD to Brunswick as indicators of what might be in store for Brunswick in the future. Poison pills maybe??