Genmar files for Chapter 11 bankruptcy

[AZSenza]

Re: Genmar files for Chapter 11 bankruptcy

I'm lucky enough to have a mid 90's deep V Larson
I agree with the "Too many boat brands" But just like Pontiac, Olds etc, people have favorite brands, hence the term "Brand" It would be pretty boring to go to the lake and everyone is in the same boat...How many colors of gel coat are there anyway!

 

[danond]

Re: Genmar files for Chapter 11 bankruptcy

I for one am glad to see the brands consolidate and some/most go away. There is no difference in boat design anymore and there's too many brands. Glastron used to look like Glastron - now I can't tell the difference between it, SeaRay, Bayliner, etc and I don't care, either. It's obvious since about the mid 90's the boat manufacturers couldn't give a rats ***** as far as design is concerned.

Those of you pining to keep the other brands around should think twice - the people who cared about those companies, the designs, and what the brand meant to the customer have long since sold their shares and moved on.

Shut down the mega-corps and bring on the boat companies with passion again.

Bubba - you should read up on Chap11. It's bad for the company. It's not a free ride. You have to restructure. In laymans terms, you sell your soul to the bank, fire all/most of your management, streamline every inch of the company, write off as much debt as possible, sell chunks of the company to other investors, etc. It's not a good thing to go through, but it does let you keep some of your employees working and paid, and allows you to retain ownership of your brands.

 

[ondarvr]

Re: Genmar files for Chapter 11 bankruptcy

I know some are going to argue with me but boats really are way over priced compared to the cost of manufacturing, and the manufactures have suffered from being "fat" until the market fell from under the manufactures and they couldn't / wouldn't react fast enough.

Actually there are no ( maybe a couple) boat companies getting fat even in the good times, they tend to survive a little better, but there just isn't that much money in building boats. You would amazed at the amount of money needed to build boats in a heavily emission regulated environment.

Many boat companies are started by boat lovers that think they can make a better product and while a profit is nice, they see little. The companies tend to fail after the entrepreneur sells out to investors and they bring in the bean counters. When the B/C's take over, quality goes down and innovation stops, profit is the goal, not a better boat. Profits go up for a short time, but as demand for a dull mediocre bowrider slows, the company starts to lose money and may get bought out, or go away.

 

[5150abf]

Re: Genmar files for Chapter 11 bankruptcy

I have been in the buisness since 1987 and have seen alot of ups and downs and alot of lay offs but they rarely lasted more than a couple months, this one is way different.

Few saw it coming and none thought it would last this long, some were more prepared than others but it has really devastated the industry, not only boat companies are going down, alot of suppliers were heavy into the RV buisness to and that has absolutely callapsed, so even those companies that are still going are having to find new suppliers for stereos ect.

When this started 1-1/2 years ago there were 53 pontoon companies so ya, the market was pretty bloated and this has really thinned the heard, I would say at least half are gone now, the ones that can weather the storm will be in a very good position as this breaks and people start to buy boats again, hopefully that is very soon but I really don't think so.

What hurt alot of companies is they built boats then sold them so as the economy crashed they are sitting on a couple hundred boats that noone wants so the build to order companies are in much better shape.

 

[jay_merrill]

Re: Genmar files for Chapter 11 bankruptcy

Personally, I hate this Chaper 11 "get out of debt free" system.

I think you misunderstand what Chapter 11 does. It is not a "get out of debt free" system.

Under Chapter 11, a company must submit a reorganization plan and statements of financial affairs to the U.S. Bankruptcy Court. The point of all of this is to develop and execute a plan to insure payment to creditors, as well as maximise the chances of a successful recovery of the business. While it is true that certain legal agreements can be voided, most of which relate to leases of real estate, equipment, etc., the intent of Chapter 11 is to protect creditors, while rebuilding the business. The process is not always successful, but it is very much preferable to an immediate Chapter 7 proceeding.

The alternative is liquidation, a process which results is in partial payment of debts to creditors, at best. In the event of a liquidation of a boat building business in this economic environment, the chances of getting much for a bunch of boat molds, manufacturing equipment, fiberglass/resin inventory, boat parts, etc., is slim to none. The end result of this would be creditors getting pennies on the dollar from the debtor.

 

[Home Cookin']

Re: Genmar files for Chapter 11 bankruptcy

Bubba, it's the union contracts and inflated wages that send them over the edge in the first place. If we want to keep manufacturing in America, the unions need to release their grip. Then products can be sold at a fair and competitive price, people will buy, and life goes on. Le tthe consumer pay for the work that goes into the boat, not the pensions, parachutes and idle time wages.

 

[jay_merrill]

Re: Genmar files for Chapter 11 bankruptcy

No doubt that lots of people get hurt in bankruptcies. The GM problems will hurt many too - whether GM recovers or not. That is just a fact of life.

I'll offer you another view, however. I once was hired to run the day to day operations of a company that had filed Chapter 11. Frankly, I had never been in that environment before, so I had to do alot of learning very quickly. During the three years that I was in the job, we repaid a bank about two million dollars that they would have never seen otherwise. We also paid about a million and a half dollars to various other creditors - also folks who would have never recovered much, if anything, otherwise.

Not everyone was made completely whole or protected from hardship. I had to reject a few very expensive and unnecessary lease agreements, get rid of some equipment leases and fire/let go a few people. The folks who were fired were responsible for the financial failure, through either bad decision making or outright fraud. Those let go, were people who really hadn't done anything wrong, but just weren't affordable, given the reorganization of the company that had to take place.

I put in many 70 hours weeks, trying to prevent damage to as many vendors as possible. I also ate a heck of alot of "Tums" and didn't sleep much for a long time. In the end, however, I feel like we did a pretty good job of acting responsibly and reducing damage to our creditors, for the most part.

We could have filed Chapter 7, but we didn't and I think we made the right decision.


PS: If you had an attorney involved in the 20 thousand dollar issue, and he didn't get you to a point where you were allowed to keep the first 10 grand, plus be put into the creditors monthly payment schedule on the remainder, he did a bad job for you.

 

[haulnazz15]

Re: Genmar files for Chapter 11 bankruptcy

The UAW was one of the primary ones who killed the auto makers. The rest of the working world has to pay out of pocket for medical coverages and other benefits at least some partial amount. The average adjusted wage of a UAW worker is $40/hour!! Some guy is pulling in the equivalent of a 80K/yr salary while installing seats in a minivan!

My point is that they should have been brought in line with the rest of the blue collar workers a long time ago. Unions are biggest load of crap today, they had their place in early industry but now serve no purpose other than to make money for themselves.

My .02

 

[jay_merrill]

Re: Genmar files for Chapter 11 bankruptcy

I hear you and that sort of thing certainly does happen in bankruptcy court. My experience with it is that the judges tend to be very opinionated and they don't always do what you think they will, or what they really should do. In fact, one of the reasons why we picked the bankruptcy attorney that we did, is because we knew that the senior partner in the firm, who was our primary attorney, was a lifelong friend and drinking buddy of the judge.

Obviously, stuff like this isn't supposed to play into the whole thing, but it does. That's not to say that the judge did anything illegal, nor was there any "back room funny stuff" going on, but I have no doubt that the relationship gave us a slight edge, if we were pretty much in a defenseable position about something.

Really, all you did is what any other vendor would have done, which is to make sure you got paid when things started looking ugly. No one can blame you for that and its just too bad that the judge didn't let it slide. The funny thing is that the debtor probably wished you had been able to keep the money, simply because its money gone and you would have been just one less creditor to have to deal with. That said, you can bet that there was a creditor's committee and all of those guys were screaming about even distribution of the money and payments.

Hopefully, a few of these companies will get pared down to a point at which they have a chance to survive. Even more hopefully, they will keep the brands that most of us want!