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August 2009

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Genmar Files Chapter 11 Bankruptcy

Carver Boat Corporation's parent, Genmar, filed for Chapter 11 Bankruptcy on June 2, 2009.  There are two secured debtors and 100 to 190 unsecured debtors.  Others may also have claims against Genmar, such as warranty claims and dealer contracts.  The bankruptcy court will determine who will be paid and the schedule of payments.  Any statement as to what the reorganization will provide is speculation.  The bankruptcy court approves the reorganization plan that determines what the actual outcome will be.  Genmar went from around 1000 employees to about 90. 

Mr. Jacobs, CEO of Genmar,  recently criticized Brunswick Corporation, makers of Bayliner, SeaRay, and Mercury engines, as being too negative about the industry.  Mr. Jacobs also stated that had he been asked a month before the bankruptcy filing that such a filing would be necessary, his response would have been absolutely not.  He went on to say that he was stunned by the need to file bankruptcy.  These statements are surprising given that the boating industry is in the deepest slump since the 1988 luxury tax debacle.  Genmar's sales were down about 50% from 2008 to 2009.  The industry as a whole was down about 35% according to industry sources.  One would think that a businessman experiencing a 50% decline in sales might realize that there was something wrong

According to the International Boating Industry newsletter, Genmar dealers declined to join the Marine Retailers Association of America (MRAA) as a creditor's group in the bankruptcy action.  The MRAA cited insufficient interest in the Genmar dealer group.  Mr. Jacobs has promised the dealers that Genmar will honor all dealer obligations in the bankruptcy plan due out on October 18, 2009.  Mr. Jacobs is "happy our dealers have faith in us, and they don't need a lawyer representing them."

Genmar was the second largest boat builder in the US prior to the bankruptcy.  Mr. Jacobs stated that four factories resumed operations for build to order only. 

We continue to get notes from members who are having problems with their gasoline engines running ethanol.  It's not clear if the increase in ethanol percentages from 10 to 15% has had a corresponding negative effect on the engines.  There are two problems with ethanol - it's more volatile than gasoline, so it evaporates quicker and ethanol is hydroscopic or hydrophilic - it attracts water.  The volatility causes the octane levels to be too low for satisfactory operation.  The hydrophilic property can put water into the fuel lines - not a good situation.  While water separating filters are pretty standard on diesel engines, you may want to seriously consider adding a set of Racor filters on your gasoline engines, too.

One of the marinas in Stuart Florida advertises that its fuels do not contain ethanol.  I've spoken to the service manager and he tells me that they are not having any of the problems with pre-ignition or knock that he's hearing about from other sources. 

It just seems that we should be able to get marine fuel that does not contain ethanol.  It doesn't make sense not to.  There is a House bill requiring a study of ethanol fuels used in marine applications.  Let me know if you are interested in contacting your congress person asking for approval of this bill.
 

ICW Cruise, November 1, 2009, Hampton City Docks, Hampton, VA 23605.  Bruce Muller is planning to lead an intrepid group of cruisers (up to four boats) south from Hampton to southern Florida.  Contact Bruce directly by using clicking here.  The deadline for signing up is October 15, but it is most helpful if you contact Bruce sooner.

Florida East Coast Rendezvous, February 26, 2010, Harborage Yacht Club and Marina, Stuart, Florida 34994.  Several years ago, we had a successful Rendezvous on the West Coast of Florida.  We're going to try to re-create the same excitement on the east coast early next year. The Harborage Yacht Club and Marina has as many slips as we can use and there are two restaurants on site - one a more formal, table cloth restaurant and the other a more casual, larger restaurant.  The marina itself has excellent facilities, including a workout room, swimming pool, and hot tub.  We'll have a potluck dinner on Friday night and vendor presentations on Saturday morning.  We are still working on the budget for this event.

The Ninth Annual Chesapeake Bay Rendezvous was pretty successful.  The one thing that we'll do differently next year is to scrap the game - it was probably not a good idea to use harbor water to spray one another with the week after a major fish kill in the harbor.  I still have the taste in my mouth from that.  Friday's rain finally stopped and we had a great time at Saturday night's dinner.  Sunday morning, cooked to order breakfast, a new tradition.