OMC is there hope???

[Kaz]

After reading all the gloom and doom here on OMC, I am concerned because I have a new 2000 50hp on my pontoon. According to all the posts no warranty or parts are forthcomming. Last night a salesperson from Hallbergs advised, not to worry!! He said Omc is in chapter 11, not 7, and will re-organize. The new management will be named shortly. Any new information to support his statements?

[Ernie Hanby]

You can bet that the size & real potential growth of OMC someone with deep pockets will have all portions of OMC back up & running early in 2001.JMO from common sense. www.hambys.com

[Bo]

Kaz, Do not fear. OMC will be back and stronger than ever. New owners should be announced somewhere around Feb 8th. Everything will be fine. Tight lines and Happy pontooning.

[Bo]

Kaz, Do not fear. OMC will be back and stronger than ever. New owners should be announced somewhere around Feb 8th. Everything will be fine. Tight lines and Happy pontooning.

[Robertp]

I'm sorry to say that, in my opinion, the sad truth is that OMC as you knew it, is not likely to emerge from a chapter 11 bankruptcy. It merely provided protection from creditors allowing some opportunity to determine how to liquidate the Company. I say liquidation because the Company has already announced that it is selling it's assets. A sale of the assets is the only way a new owner will have protection from being encumbered by continuing liabilities, including warranty claims. As I understand it ALL assets are being sold, both boat and motor, so it is quite possible that no warranty claims will ever be honored. If your goal is simply to see Stratos, Javelin, etc. boats back in production then it is quite likely that will happen. Realistically, that is about the only outcome you will see.

[Scott]

"so it is quite possible that no warranty claims will ever be honored. "


With what do you base this claim? This is a court supervised sale. Part of the reason the sale is court supervised is that there will be stipulations for consumer protections. Besides, it would be suicide for a marketing department not to warrant a product with their name on it. Why would you want to piss off current customers? The idea is to retain them.

[Bo]

Scott, Good point. Besides there's an awfully good chance that OMC will be sold as a whole company and not just parts of it. Well anyway, we'll all know soon what the outcome will be. Tight lines to all.

[??]

if OMC is out of business why would it care about marketing and reputation??

[Bayside]

There is no chance what so ever that OMC will stay intact! The boat divisions will be sold, it is the ONLY hope the the motor division has to generate enough money to keep going. It is also outlined in the asset liqudation plan, if selling the boat divisions doesn't generate enough revenue, then the only hope is to sell the outboard motor division. There have been other outboard manufacter's that have visited the OMC plants in the past few weeks, and the impression I got is that they are in need of updating. Don't get me wrong I don't want OMC to go under (I love the 225 'Rude), but everyone should know what they are up against.

[Hans]

Just supposin' I had the money......

If it looked like their "brick and mortar" was viable, I'd bid on the "motors only" segment. When (if) I won the bid, I'd immediately split into two standalone companies, "Evinrude" and "Johnson".

Under the "Evinrude" banner I'd try to hire back the best of the OMC "R&D" folks and move aggressively forward with 4-stroke, Ficht, etc.

Under the "Johnson" sign I'd pursue a harvest strategy, manufacturing 2-stroke carburated engines as long as EPA and the marketplace would let me, and then continue to supply parts to the huge "installed base" legacy of OMC iron around the world.

In both companies, I'd honor all current warranties until expiration -- yes, I'd lose money for a year but the good-will would be valuable going forward.

Hans

--
They called me mad, and I called them mad, but #####
them, they outvoted me!

[Phil T.]

Trivia question. Is everything for sale except the German Ficht company? That's one part of OMC I have never seen mentioned as being for sale. It was my understanding OMC bought the company instead of a license to use the patents.
Are the corporate raider owners dumping everything but the "high-tech" division?

[hgf]

Sorry Scott, just because the sale is court supervised does not mean the court protects the consumer. Only means the judge has the final say. There is a creditor committee, composed of the 20 largest creditors who do not have any security, so it may be possible one member represents the consumer. They get to pitch in their opinion. Usually a deal is struck without the Judge being involved, then he or she blesses it. If there is opposition, the judge gets to say who wins.
In reply to a later comment, it is possible a high tech outfit is left behind. They could file a plan saying they will pay 1% of the unsecured debts, and then get to keep on operating. But usually, when this type of sale occurs, it is the end. When the sale is done, the company often converts to a Chapter 7. A trustee then tries to collect what is possible, and gives it a decent burial. But the sold assets can include the names of Johnson and Evinrude, and they may be off and running again, unencumbered by any debt. The only winners are usually the lawyers (grin) who now get to bill like crazy.

[Robertp]

I base my opinion on some knowledge, admittedly limited, as I am not an attorney, of Chapter 11 of the U.S. Bankruptcy Code. Chapter 11 permits the Co. (debtor) to stay in control of it's assets while undergoing a reorganization. Section 1123(a) of the Code lists the mandatory provisions of the plan, while sec. 1123(b) lists the discretionery provisions of the Plan. Sec. 1123(a)(1) provides that the plan designate "classes" of claims and treatment of those classes under the plan. Under Sec. 1126(c) of the code, an entire class is deemed accepted if accepted by at least 2/3 in amount and more than 1/2 in number of the allowed claims in that class. This would include the impaired claims as a class and, my opinion only, this is where the owners, having warranty claims would fall. I know of NO protection for warranty holders who have NO registered claims.
It should be noted that the reorganization plan can consist of a plan to sell it's assets and this is precisely the announced intention of OMC in press releases of Dec. 27, 2000 and registration form 8K with the SEC.

You should understand this is NOT a marketing issue, brand issue, etc. It is legal and financial issue. As much as all of us would probably like to see a happy ending, you should be realistic and understand it is quite likely that there will not be one and for people to be spreading rumors of these happe endings, such as the boat salesman mentioned above, is false and misleading. They (OMC) are selling, realizing what they can, and paying creditors.

[Someday]

Kind of like Mercury/Mariner

[hgf]

robertp you are absolutely correct as to what happens, or is supposed to happen, when a company reorganizes. But, thats the theory. Sounds like OMc is selling off various parts, or assets, to the highest bidder. That's a liquidation "plan", designed to shoehorn into the rules you list. Your also correct it is a legal and financial issue, the creditors want their money. My point was the unsecured guys, including the dealers and customers, are one class of those claimants, and they are unsecured. But there could be a happy ending yet - not from a legal perspective, but more from the laws of economic reality. A buyer of the name Evinrude gets very little if he only buys the name, but stiffs all the unhappy customers. The dealers will also not be happy then. So, the buyer should, if he has any brains, will try to make an offer that gets him the assets, but will also try to pick up some of the unknown warranty claims. He can say "I am paying X million bucks, which includes Y million for the hard assets, plus Z for the warranty claims. Now judge, my offer is better, because I plan to take care of the many customers out there, so pick me, even though someone else is bidding slightly more for the hard assets, but no warranty claims." Buyer can also say "I will keep the workers employed, will not fire them, so pick me" This argument gets him support from the officers too - maybe they get to keep their jobs and bonuses!

Sorry for the long response, hard to make it shorter.

[Observer]

Their plants and facilities are not very good. Not a lot of brick and mortar in the hard assets portion, unfortunately.

[Robertp]

FJH,
Good response and definitely has merit. Thanks for your reply.

[Robertp]

DUh, Address should have been to HGF. Sorry. Still a good response :)

[Airwave(OH)]

The Ficht motor project is what gottem in trouple to begin with. It has been a disaster. I know General Motors has been looking at a posible bid on OMC but not sure how serious. So has the Japanese. We should know something real soon.

[Kaz]

Thanks to everyone who answered!!!! Boy, ask a question and you sure get the good info on this message board...Kaz

[Waukeganguy]

Well guys, here's the inside scoop; over 100 offers were made for the assets of the Outboard Marine name and facility in Waukegan Illinois. The winner of the bidding is>>>Yamaha

just remember who told you.

[Airwave(OH)]

Don't know how you can say that for sure when OMC is taking bids till Jan. 26th. The auction will be held Jan.31st Then the winning bid will be announced. There has been over 100 bids for the company as of now..It won't surprise me if they do get it though.

[AquaMan]

$100 Million and you could own OMC, lock, stock and barrel.

As the other posts have pointed out the real deal at this point is liquidation of the "valuable" portions of the company. Blue sky is gone and most of the assets are now below face value.

-Drive MFR/Assembly (They sold the outdrive portion to Volvo)
-Boat building Companies (Chris-Craft,Stratos, Four Winns, PrinceCraft, Etc)
-Financial Services (Loans on sales of boat/motor packages - Paper)
-Inventory (Unsold product - Once its gone its gone)
-Parts/Service (Huge value)
-Intellectual Property (Ficht Tech, OMC Name/Logo, Other Patents & Trademarks) (The biggest value)
-Goodwill
-Dealer Distribution Network (Another big gold bone)
-Facilities (Disrepair and retooling required - OSHA)
-Land (Contaminations and EPA violations make this worthless)

The items of intest to the market are the Parts and Service, Intellectual Property and the Dealer Network. The rest are lemons that the competition or or potential buyers would like to avoid. With new OSHA laws in place for the MFR side and EPA issues on their land (Huge costs to meet regs. for both), these will be dismissed as anchors. The boat divs will be sold independantly as will the motors and these will be way below value. More then likely, a company like GenMar would buy that. Since they are already a huge OMC customer, it would make sense.

The Ficht tech will sold and licenced to every 2 cycle MFR out there. Snowmobiles, ATVs, etc in an effort to recoup profit and offset the sale and cost of maintenence of existing motors. Bombardier, Polaris or some overseas Co. seams likely. Penski was interested last time around and may be waiting for the firesale to jump. Volvo might be a good suitor for both the Fcht and the motors with the cash from the sale of their auto div. to Ford.

The boat groups may go to Brunswick who already bought Bayliner and SeaRay, but they will look to fill holes not filled by their existing MFRs. The aluminum boats, Lowe and PrinceCraft will likely go to a comapny like Smoker or GenMar or maybe a management buyout.

I doubt the company will remain intact since there are so many lemons to deal with. You will, however, see the new owner of the motor div., maintain the parts/service side since continued sale of new units depends on service of older units. The parts business is almost as profitable as new unit sales. Goodwill will force warranty support as well.

This is all happening while US spending is declining making the sale very hard. Consumer confidence is down nationwide and with OMC specifically. The timing of this is what will cause the breakup. 5 years ago, they could have pulled this off with the right guy at the wheel. Bleeding was never stopped by the Greenwood group. They tried, but poor investments and slumping sales broke the camels back. Ficht was the hole that never panned out. Too many development and quality issues, as most of you owners already know.

For the short term, buy what you think will provide the best service for your $. Discounts on Johnson/Evinrude will make these motors very attractive in the next few months and into the summer. Firesales on the remaining inventory will bring out the "truck load" sales. Warranty will continue once the new company has been settled.

I am saving my $ to buy Chris-Craft, PrinceCraft, Lowe and Johnson/Evinrude for $5 million. Ahhh, dreams never end. <grin>

AquaMan~~~~~~~~~~~~~

--- "It all begins and ends at the water's edge"

[tigger]

I have a deposit on a new lund that has a 150 hp Ficht on the back. I've been told that they have corrected the earlier problems on these motors. OMC problems aside, does anyone have any insight into this situation. rc

[IaCraig]

What part of OMC do you want to look past, and what do you want insight on??? I'll assume you want to look past the chapter 11 filing and waranty questions, and gather insight as to if the FICHTS are fixed or not.

My personal experience is that I have a 1999 150 HP ficht and never did have problems with it. But I still took it to the mechanic and he applied the infamous "UPGRADE KIT" to it. I lost almost 10% of my WOT MPH and RPM (this upgrade is supposed to make it the same performance as the new ones). Don't misunderstand I still like it, just that I used to like it better. I can still idle with it trolling for a few hours, then open it up 10 miles back to camp and it never misses a beat. It always starts and runs smooth & clean. But, my question is "is it still a 150 hp? Or is it closer to 135 hp?" I'd be curious how the actual HP at the prop compares to a Merc or Yamaha 150?

IaCraig

[Bo]

I have had 3 Fichts, 2-150's and now a 225 hp. No problems and absolutely great running engines. Remember, you really only hear about the ones that are bad or have had problems. You don't hear about all the good ones.

[walleyechaser]

I HAVE A PRINCECRAFT SUPERPRO 188 WITH A FICHT. I GET 57MPH. THE MOTOR RUNS GREAT. JUST ASK SCOTT G FROM WALLEYE CENTRAL HE USED MY BOAT AT TWO MWC TOURNEYS LAST YEAR, AND HE LOVED IT. I BELIEVE SCOTT RUNS A 225 FICHT ON HIS TRITON. I'LL ALWAYS RUN EVENRUDE. EVERYBODY WILL BE HAPPY ON FEB 15TH.

[Bo]

Hey Walleye Chaser, I do believe that you are correct with your boat package and your date. Remember it's almost spring.

[Rigger]

IaCraig
Most big dealers have DINOs. Go have it put on one and see what you have first hand.

Rigger

[Allen]

Lots of good thoughts from the above posts. Some things I have a different take on. While the dealer network is definately valuable, it is so only to the right type of company. It would be a godsend to Yammy and Suzuki. I know you guys find Yamaha's readily available, but I travel a lot to bass fish all over the country. I have a Yamaha, and parts are scarce in other regions. It's not like going down to the local OMC Merc shop, where in most regions, wherever there is a lake, there is an omc and merc dealer.

The network is valuable, but to Yamaha or Suzi, I think the boat companies are prospect for the largest impact on their companies. Look at all the transoms that become available with the purchase of just STratos/Javelin...through in HydraSports saltwater rigs and you have as many transoms sold per year as Ranger and Triton. Suddenly, the boys in Fond Du Lac have a big threat on their hands. Japanese motors on a lot of boats that previously made up most of Johnson/Evinrude sales. These companies with the motors would go from third and fourth rung on the ladder to a very strong second, and maybe first more quickly than you can imagine. Boat sales will be soft for a couple years. The japanese are very agressive. They have the resources to wade it out. I don't know if Penske and EB Triton have the mettle to make it through a transaction like that followed by soft sales. I think it is prime opportunity, boats and or motors for the Japanese companies. But, just like everyone else on here, that's an opinion. We'll all know in a couple of weeks.

[walleyechaser]

i agree with you 100%. you are right-on buddy

[Rigger]

OMC discounting motors 20 percent

United States
Waukegan, Illinois

Outboard Marine Corp. (OMC) is selling outboard motors to dealers on a cash-in-advance-only basis, but only if dealers have no "open or past due items" on their accounts, including items that were floor planned.

In a letter faxed to OMC dealers, the company stated that motors can be purchased at dealer net price, less 20 percent. All motors will be sold "as is" with no warranties or guarantees. The letter also stated that all sales are final and no returns or exchanges will be allowed.

Upon receipt of an order, according to OMC, accounts will be reviewed for any open or past due items.

OMC dealers have been receiving notices from the OMC credit department concerning items that are considered open by the company.

The OMC letter stated: "Please be advised that a major portion of the invoices billed in late November and December 2000 that were to be floor planned by Transamerica and funded to OMC were not processed for payment."

The letter continued, "Payment for these engines should be made directly to OMC."

OMC has also informed dealers that all open and pending orders for parts and motors have been canceled. Any orders must be resubmitted under the new terms and conditions.

Consumers warned

OMC is providing consumers with details of its Chapter 11 bankruptcy proceedings. In a notice on its Web site, OMC warns consumers that the company is prohibited from paying warranty expenses on its products.

Consumers are also informed of the scheduled bankruptcy process. The full text of the letter follows:

A Note to our Customers
The Chapter 11 Process and How it Affects You
01/24/2001

Outboard Marine Corporation filed for Chapter 11 bankruptcy on December 22 and now is working under Bankruptcy Court supervision to complete the sale of its boat and engine operations. OMC believes that the best way to protect the long-term value of its brands, as well as the investment boaters and dealers have in them, is to complete the sales process as quickly as possible.

Prior to the filing, OMC closed all manufacturing and distribution facilities and reduced staffing to minimum operational levels. OMC is making every effort to provide customer support. However, the Company is not operating under normal business conditions. We ask for your patience as OMC works to complete the sale of its operations.

If you are considering the purchase of an OMC boat or engine brand, you should be aware that:

While under Chapter 11, OMC is prohibited from paying warranty-related expenses. This applies to all warranties on product sold prior to and/or after the bankruptcy filing.

OMC is not sponsoring the Stratos/Javelin World Championship tournament series, and all previously announced tournament dates have been cancelled.

Parts and accessories are being sold to our dealers from existing inventories. Consumers may purchase parts and accessories only through authorized Johnson & Evinrude or OMC Boat Company dealers. OMC does not sell parts and accessories directly to consumers.

While under Chapter 11, OMC is prohibited from paying warranty-related expenses. This applies to all warranties on product sold prior to and/or after the bankruptcy filing.

OMC is not sponsoring the Stratos/Javelin World Championship tournament series, and all previously announced tournament dates have been cancelled.

OMC understands that the conditions under which it must operate while in Chapter 11 bankruptcy place difficulties and burdens on its dealer and end-user customers. OMC believes that the best way to protect the integrity of its brands is to sell them as expeditiously as possible to new, financially sound owners.

Bankruptcy Court Approves Process For the Sale of OMC's Operations

The following is a brief outline of the sales process as approved by the US Bankruptcy Court.

January 26 – Deadline for submission of all sealed bids

February 2 – Announcement of successful sealed bidders

February 5 – Open auction where additional bids may be submitted

February 8, 9 & 12 – Court hearing where bankruptcy court will determine the new owners of OMC's operations

OMC expects the closing process to follow shortly thereafter. The first sales of operations could be completed by the end of February.

OMC is a proud company with a heritage dating back to the invention of the gasoline outboard by Ole' Evinrude in 1909. While the name Outboard Marine Corporation may disappear with the conclusion of the Chapter 11 bankruptcy process, the names of OMC's world-renowned brands – Johnson, Evinrude, Ficht Ram Injection, Four Winns, Chris-Craft, Seaswirl, Hydra-Sports, Lowe, Princecraft, Stratos and Javelin – will live on.

OMC thanks you for your patience and understanding through this difficult process.

— BII Staff

[Popeye]

20 percent off dealer cost!!! You wont see anything like this again. You can get an aftermarket warranty through your dealer for a couple hundred dollars. Go for it!!! Popeye