Archived OMC Bankruptcy News
Current News |
 |
Archived OMC Bankruptcy News
Current News |
|
The following warranty message is posted on the Lowe web site:
Mar 16: Today's Bombardier dealer blast fax told dealers they were anxious to process parts orders, but since open accounts have not yet been established, its going to be cash up front in the form of faxed checks via their CHAX system.
Mar 16: Boating Industry International article, Bombardier may build engines soon, reports Bombardier's president announced they could be building Evinrude and Johnson outboard engines as early as this summer, but failed to say where those engines would be manufactured. His also revealed their exact payment for OMC's engine division, $53.8 million.
Mar 15: Boating Industry International article, Chris Craft startup in 90 days, reports employees may be recalled in about 60 days. The new owners say they have no plans to move the plant overseas (they are in the UK), but in 3 to 5 years they may add another facility for producing larger craft at another site (possibly in FL). They are currently studying warranty issues surrounding existing Chris Craft boats.
Mar 13: Boating Industry International article, Brunswick under FTC investigation, reports the FTC informed the Securities and Exchange Commission in February they were investigating the possibility Brunswick's bids in the OMC auction violated antitrust laws.
Mar 12: Bombardier press release, Bombardier finalizes acquisition of OMC's engine assets, says the deal is now closed and states, "we are now actively developing a detailed business plan and we will soon be in a position to announce our action plan for this business".
Mar 9: Boating Industry International article, Brunswick slips quietly into Princecraft, reports the lawyer handling the sale did not know Brunswick was behind the scenes till the deal was closed.
Mar 9: AP story,
British Company buys Chris Craft,
reports a British investment firm, Stellican Ltd, bought Chris Craft after 3 days of negations with Genmar Holdings.
Jacobs said Chris Craft did not fit into their marketing and distribution strategy or portfolio. The future of Chris
Craft is unknown, Stellican specializes in "turn around investment."
Mr Wizard comment, Is Brunswick on the horizon again?
Mar 9: Montreal Gazette article, Dubois floats a boat deal, reports Marcel Dubois who was running Altra marine products since 1984 beat out Jacobs and bought out the company for $18 million yesterday.
He then, immediately sold it to Brunswick, preserved his job as president and saved 250 jobs. The $18 million dollar
deal broke down as $11 mil for the assets and $7 mil for the trademarks. The article went on to estimate about 10
percent of the employees had already found other employment and list their annual revenues as about $60 million
on the sale of 4,000 boats/yr.
Jacobs lost a court effort to prove he had picked up the Princecraft name in the earlier auction. Mr. Wizard
predicts more battles over the trademarks are yet to come.
Mar 8: Boating Industry International article, OMC boat building plants reopening, reports Seaswirl and Four Winns are up and running, but may soon run out of engines. Lowe, Stratos and Javelin are recalling/hiring workers. The Syracuse Indiana Lowe plant is being closed and moved to Lebanon.
Mar 7: Boating Industry International article, Bombardier announces warranties, says even though the sale of OMC is not final, they plan to honor all original two year warranties of Evinrude and one year warranties of Johnson 2000 and 2001 engines.
Mar 7: Boating Industry International article, OMC sale to Genmar complete, reports the Genmar deal is now complete. Lowe, Seaswirl, Four Winns and Hydra-Sports boats sold in 2000 and remaining in dealer inventory will be warrantied. Stratos and Javelin were left out in the cold due to recent product changes creating an uncertain warranty liability per Jacobs. Genmar will be providing dealers up to $1000 rebates on Stratos and Javelin sales which could be used for covering warranty issues.
Mar 1: Milwaukee Jounal Sentinel article, Retirees denied benfits in bankruptcy court, reports OMC retirees lost their health insurance coverage Thursday after representatives failed to convince the judge to extend the coverage another month. Representatives of the United Steelworkers of America told the judge OMC failed to give retirees the 10 day's notice required by law. The judge agreed, but said their was no way to penalize the bankrupt company. The bill to keep about 2,850 retirees insurance in place is about $700,000 a month. The paper goes on to list similarities with the Pabst Brewing cancelling retiree insurance there several years ago.
Feb 28: Bankruptcy Court docket document 662 filed today indicates Genmar and OMC arguing over selling some trademarks free and clear of encumbrances. Lists a Quebec attorney. May be the Princecraft tradename issue.
Feb 28: Boating Industry International article, OMC product exchange set up, says the Marine Retailers Association of America (MRAA) is setting up a swap shop on their web site (http://www.mraa.com) allowing dealers to exchange inventory and surplus OMC parts. The site will be hosted by boats.com and funded by Transamerica Commercial Finance Corp (major dealer floorplan financed).
Feb 28: Bankruptcy Court docket document #661 filed today says the reason the sale to Genmar has not consummated is they are arguing over the Murfreesboro property. Sounds like OMC
is saying it was not included in the sale, or is at least not included free and clear of all encumbrances. You can view it from
our Bankruptcy Proceedings page.
Later we heard it MAY be due to the city issuing bonds to raise the money for the land, buildings etc with the
understanding that OMC would retire the bonds by 2007 (?). Money guarantee came from a County Industrial Board and actual
money came from a bank in Canada. OMC may not actually own the property at this time. This is all speculation based on
a few tips.
Feb 27: PBG (Pension Benefits Guaranty Corportation) the federal corporation providing guaranteed pension benefits for many private-sector pension plans issued a press release announcing they are taking over the underfunded OMC plan covering more than 10,000 people. The OMC pension benefit plan was PBG insured, most of the retirement benefits are protected and monthly checks to those who already retired will continue without interruption. Within a few months PBG will notify affected retirees if it has to reduce payment of certain supplements and benefit improvements because the additional amounts may not be fully guaranteed.
The OMC plan had about $454 million in assets with estimated benefit liabilities of $527 million ($73 million underfunded).
Feb 27: Montreal Gazette article, The Liquidator vs. Dubois covers the continuing battle in Canada for Princecraft. It reports the current bids are Mr. Dubois at $11 million and Mr. Jacobs at $9.6 million, but seems as if no timetable is in place for drawing the bidding to a conclusion.
Feb 26: Boating Industry International article, OMC sale delayed, says Genmar reports the sale is not yet final and has not determined when that will occur. Earlier, they had hoped the sale would be final by today.
Feb 24: Bombardier put up a page providing a the contact for business development and one for the press pertaining to the OMC assets.
Feb 23: Boating Industry International article, OMC sale imminent, reports Genmar says they anticipate the sale (final transfer of ownership) of some of OMC's assets to Genmar Holdings Inc. will occur by Monday Feb 26. On Tues Feb 27 they (Genmar) will issue a statement further outlining their specific plans and further information on warranties of OMC products sold prior to the bankruptcy in December.
Feb 21: Boating Industry International article,
OMC boat plant sale may be soon,
covers the continuing saga of the Princecraft plant in Canada. An attourney representing the plant
and OMC says they are trying to wrap up the issues as soon as possible, but there are still more things to
be resolved.
The article said the Princecraft brand name would be part of the Canadian sale, we heard
earlier reports that Genmar already owned the name as a result of the original auction. I just checked
Document 460 in the Bankruptcy Court docket
(it includes all the trademarks and patents transferred in the U.S. auction in section B21). The list includes
a couple Princecraft trademarks in the U.S., one in Canada and several in other countries. Seems like there
is a little confusion here.
Feb 20: Boating Industry International article, Princecraft fate undecided, tells of the continuing liquidation process in Canada. The article quotes the Feb 17 article in the Montreal Gazette and goes on to report Mr. Dubois and Jacobs have both confirmed they are potential buyers. It mentions the Canadian Competition Bureau, similar to the U.S. Federal Trade Commission, has refused to comment concerning any interests it may have in the situation.
Feb 19: Boating Industry International article,
Retailers may give OMC warranties reports the MRAA
(Marine Retailers Assoc. of America) has suggested its members offer an express writen warranty with the OMC products.
RBBI comment: Are they suggesting each retailer create and provide/sell a warranty with OMC products?
Feb 17: Montreal Gazette article, Bait set for Princeville boat maker Corporate raider Jacobs looks to hook Altra Marine Products tells the interesting localized story of "Irv the Liquidator" trying to takeover the Princecraft facility.
Feb 16: Boating Industry International article, Bombardier to honor warranties, says Bombardier announced at the Miami International Boat Show they "hoped" they would be able to provide warranty protection for about 80 percent of existing OMC engine products. They will announce their warranty decisions in 30 days.
Feb 15: Genmar posted a press release on their site, Genmar announces acquisition of OMC boat assets, saying they hope to complete the acquisition in two weeks and they are currently working with the sites to prepare to begin manufacturing as soon as possible and re-establish contracts with the dealers.
Feb 15: Boating Industry International article, Genmar likely to pay some OMC warranties, Says Irwin Jacobs is optimistic Genmar will be able to provide some warranty protection for some existing OMC products. He pointed out they would not be covering all OMC products with their prior warranties. He made the statement at the Miami International Boat Show. Mr. Jacobs was not optimistic that dealers would receive rebates based on earlier contracts with OMC and said Genmar has acquired the Princecraft brand name, but the facility in Canada has yet to be sold.
Feb 15: Bombardier sends first blast fax to dealers. The fax says they are excited about the "potential" acquisition and will be holding a Press Conference at the Miami International Boat Show to celebrate the "anticipated" purchase. They want to ensure their customers they will continue to enjoy the high quality outboard engines the dealers have been providing them thus far.
They will be working on the Business Action Plan in the upcoming weeks to transition these three historic brands into the Bombardier family and they will keep the dealers abreast of the direction in which they will be heading.
Feb 14: Montreal Gazette article, Quebecer battles Irv the Liquidator, reports Altra/Princecraft is still up for grabs. A telephone auction to sell the firm to the highest bidder failed Monday night. The auction is being held by a Canadian legal firm under Jan 18th directive from Quebec Superior Court at the request of OMC. The article says Quebec entrepreneur, Marcel Dubois who sold the firm to OMC 11 years ago and stayed on as president is squaring off with Irwin Jacobs as the sole remaining bidders.
Feb 14: Boating Industry International article, US company says it has a pact with Bombardier to purchase Ficht engine technology, reports Polaris has reached an agreement with Bombardier to supply the Ficht components they were previously purchasing from OMC. Environmental problems of the Waukegan site are discusssed and Bombardier is not saying if they will reopen the site.
Feb 13: Boating Industry International article, US City, home to OMC, has had no word from Bombardier, reports the city is excited OMC has been sold, but they have not heard any intentions concerning the plant from Bombardier. Bombardier has only said they plan to continue the Evinrude and Johnson lines, but details will be available at a later date.
Feb 12: Boat Building International article, Genmar CEO says OMC boatbuilding plant will open soon, workers will be hired back, says Genmar is moving very fast to get the plants back open and they plan to rehire the employees. A major press conference is being planned for the Miami International Boat Show this Thursday. One of the OMC sites will require environmental cleanup costs that could run into the $millions. The enviromental concerns are being rasied by the City of Waukegan concerning 5 OMC buildings there. This issue is still being considered by the court.
Feb 11: Bombardier gains full control of Ficht technology. Part of the conditions of sale were for OMC to purchase the remaining 49 percent of Ficht from the family in Germany (terms $5.8 million from proceeds of sale of OMC) and then when Bombardier purchased OMC, they would own it all. Details of the court approving the purchase are in Court Docket document 431 on our Bankruptcy Proceedings page.
Feb 9: We received a great on-site report from the Bankruptcy Court hearing Feb 8th by an independent sports writer. It details the process used to consider and reject Brunswick's bid.
Feb 9: Dow Jones Newswires article, "Court Approves Outboard Marine Sale to Bombardier, Genmar", says Bombardier will be taking over the Johnson and Evinrude brands which together control 30 percent of the U.S. market. Bombardier's bid was estimated at about 10 cents on the dollar of engine assets by one rival. Genmar will overtake Brunswick and become the country's leading boat maker with 19 brands and an estimated 20 percent market share. Genmar picked up the boat lines for an estimated 70 cents on the dollar.
Feb 9: Lebanon Daily Record article, Lowe Reopening New owners to start calling employees back, says Lowe will spend the next week taking inventory, and bringing in parts and materials to begin production. Genmar will retain Mr. Crawford as president of Lowe. Mr. Crawford said they expect to rehire as many of the 320 employees laid off as possible. Employees will be called in over a two week period (weeks of Feb 26 and Mar 5).
Feb 9: Boating Industry International article, Sale of OMC to Bombardier and Genmar approved by US Bankruptcy court, reports the sale itself has been approved, but some straggling matters remain to be resolved on Monday.
Feb 9: Crains Chicago Business News article, Brunswick's Bid for OMC Rejected says that at the start of the hearing, Brunswick and six other firms presented a bid of $96.5 million. Brunswick said it did not present a bid earlier because OMC wanted a $25 million deposit to protect it from antitrust action. OMC said it had receive two calls from the Federal Trade Commission saying they would aggressively oppose the sale of engine assets to Brunswick. Brunswick's bid was rejected by the court.
Feb 9: Boating Industry International article, US Bankruptcy court rejects late Brunswick bid for OMC says the hearing is to resume today to consider the Genmar/Bombardier bid, now that the Brunswick bid has been rejected. Mr. Buckley of Brunswick declined to comment on all aspects of the case, including possible future objections.
Feb 9: Waukegan Sun article, Brunswick OMC offer rejected, says Brunswick submitted a new bid of 53.2 million for the engine business at the hearing yesterday. The judge said, "The court finds no basis to overturn the sale based on objections raised by Brunswick." The article also said the FTC had told the court they were opening an investigation into Brunswick's attempt to acquire OMC assets. If Brunswick bought the engine operation, they would control about 80% of the market. Locally, they expect the acquisition to revive operation of the die-cast facility in Waukegan.
Feb 8: Waukegan Sun article, OMC may call some back to work, is a little less promising than its title. They just say Gary Beckett (OMC) said the effect on employees remained unclear following the joint bid by Bombardier and Genmar. "It's too early to say whether any of them would be called back, but there's certainly a possibility."
Feb 8: Boating Industry International article, Dealers optimistic, cautious as proposed OMC sale goes to court, pulls together some earlier news items on Mr. Buckley's recent comments, recent comments from OMC, and the Daily Herald, all of which point out its not over yet. What happens in court today is extremely important. Bombardier is still silent and a group of independent builders is nervous (possible increased consolidation of the industry).
Feb 7: Soundings Trade Only online article,
Jacobs: No plans to sell any OMC companies, Jacobs said he does not plan to sell off any of the boat companies he just bought.
He left open the discussion of warranty reimbursement, floorplan interest and rebates owed dealers by the OLD OMC
and said those issues would be resolved quickly.
Mr Wizard Comment "Is this the same Mr. Jacobs who told us he had no interest in purchasing any part of OMC
a few days ago, now telling us he has no intention of selling off any of the boat companies he just bought?
Feb 7: Boating Industry International article, Sale of assets not a done deal, reports Gary Beckett of OMC is pointing out the sale is not final til approved by the court on Thursday. Bombardier was also cautious in making any comments about the future. George Buckley at Brunswick said "other issues could be raised by other parties" in reference to the court hearing. He did not elaborate on those issues. (Several anticipate Brunswick may fire another attempt at taking over the firm themselves in the Bankruptcy hearing.)
Feb 7: Daily Herald news article,
The details
behind $95 million OMC deal, points out both buyers are out of state firms (tax considerations, possibilities for further
local investment) and that Brunswick may challenge the sale in the Bankruptcy Court hearing Thursday. The article reports
the auction of the 14 individual segments of OMC went way into the night, then Genmar and Bombardier proposed a deal
for the entire firm. The price is referred to as a "steal".
RBBI Comment: It will be very interesting to see the bids for the individual segments if they are ever made public.
Feb 6: Bombardier press release announces their sucessful bid for OMC.
Feb 6: Boating Industry International article, OMC accepts joint bid from Genmar, Bombardier, confirms the rumors we have been hearing today. Sources at OMC confirm the approval of a joint bid from Genmar and Bombardier. Other sources place the bid at $95 mil. Bombardier gets the engines. Genmar gets the drives. Many point out several objections from other bidders, including Brunswick. It may not be over yet.
Feb 6: Soundings Trade Only online article, Genmar-Bombardier alliance wins
OMC auction, says the alliance has Bombardier giving $50 mil for the engine business and Genmar kicking in $45 mil for
the boat business. The article hints Brunswick may offer a higher figure in the Court hearing, launching a bidding war.
Mr. Wizard Comment: Sounds like the Florida recount all over again to me.
Feb 5: This morning the Bankruptcy Court posted Feb 2nd Docket document #377, Notice of Highest and Best Qualified Bids for the Debtors Assets. It contained the Godfrey Conveyor Company bids. $32.8 mil in two pieces ($22.5 mil for Four Winns and Lowe, $10.3 mil for Chris Craft, SeaSwirl, and Hydra-Sports.)
S&S Acquisitions LLC $1.5 mil for Hydra-Sports, Tracker Marine $2.5 mil for Stratos Javelin, and stated, "discussions are continuing with potential bidders of the engine business and an announcement is anticipated at the Auction identified below (Feb 5th)".
Feb 3: Cadillac News article, OMC sale nears reports some first round boat company bids. Godfrey Conveyor $32.8 mil for Four Winns, Lowe, Chris Craft, Sea Swirl and Hydra-Sports. The bid broke down to $22.5 mil for Four Winns and Lowe and $10.3 mil for the rest.
Feb 2nd: We received this tip about 2pm central Feb 2nd may be total rumor, believe at your own risk). Also is unclear if for the whole thing, or just the engine division: Just out of Waukegan - of the two bidders left for the Corporation - Mercury Outboard bid $48 million, and Bombardier bid $52 million for starters. If this is true, would expect it to be sold in pieces. A lowball bid of this nature might allow the purchaser to assume the warranty of exisiting engines and assume the EPA superfund site liabilities.
Feb 2: Soundings Trade Only Feb 2001 issue cover article, OMC Bankruptcy problems "snowballing" for dealers, Tells how OMC no longer paying warranty expenses, floorplan interest, advertising/ boat show co-op dollars and rebates owed them from previous sales is starting to take a toll on the dealers.
Many dealers complained of the lack of communication from OMC during early stages of the bankruptcy. OMC conceeds "it was preocuppied with bankruptcy details in the period immediately following the filing." But they are now communicating with the dealers via blast faxes.
The article includes responses from other industry firms. Mr. Buckley's (Brunswick) English heritage showed through in his statement, "I think it's very sad that OMC handled some things the way they did. It's not cricket."
Feb 1: Boating Industry International article, OMC will be billed for January floorplan financing, covers the continuing saga of who to make floorplan payments to. The article says Transamerica is going to try to stick OMC for the January interest payments (estimated in low seven figures), but it is unlikely they will be able to collect.
Feb 1: The Daily Herald filed a story, Gloom, hope on economic front, on the ex-OMC employee job fair in Waukegan yesterday (Jan 31). Local economic news was even bleaker with the announcement of the closing of a major mall the day of the job fair.
Jan 30: Boating Industry International article,
OMC letter on floorplan financing incorrect reports
Transamerica Distribution Finance (OMC floorplan finance provider) say the recent letter from OMC telling dealers
to make floorplan payments direct to OMC is in ERROR. These payments are to be sent to Transamerica and
any failure of dealers to make those payments is in direct violation of their contract.
Mr. Wizard is sorry he did not come up with this idea earlier - telling everybody to send all their payments to his house.
Jan 29: Another round of interesting filings have appeared in the court docket.
Looks like everybody is getting into the fray. Volvo Penta entered as a creditor, The United States and the State of Illinois both came in to represent their respective Environmental Protection Agencies, The National Highway Safety Transportation Administration objects to any sale of OMC that does not require completion of the safety recall campaigns, and even 7-UP and Doctor Pepper jumped on the band wagon. Seems as if they had a promotional agreement with OMC to provide prizes for several contests. They are stuck with the contract, 14 winners of boats and motors with no prizes and their reputation damaged.
OMC filed to block the creation of a committe to represent past and present employees and retirees at the Bankruptcy hearing.
Then they filed some really nasty language against the City of Waukegan and North Shore Gas for attempting to block sale of the Waukegan facility on environmental and other issues.
More info on the each of these docket items is provided on Bankruptcy Proceedings Page
Jan 26: OMC Press Release informs consumers units being sold with no warranties. Parts are being sold to dealers from existing inventories. Consumers can only obtain parts from dealers.
Jan 26: For those used to living without warranties, the OMC situation offers new opportunities. Mr. Wizard received an email today from a group in Russia wishing to buy dealer inventories. It also indicates the worldwide impact of this situation.
We are looking for OMC dealer (former or active), who may be interested
in his stock clearance - we need to purchase Johnson outboards and spare parts.
May be you will find possibility to help us with small portion of your wizardry.
Jan 26: Boating Industry International article, OMC discounting motors 20 percent, reports they are now selling motors with no warranty for 20 percent off for cash in advance basis, but only to dealers with no balance owed to OMC (including floorplans).
Jan 26, Boating Industry International article, CIty of Waukegan to sit in on OMC case follows a long with our earlier reports of the City trying to block the sale based on environmental issues and possible lake front development opportunities.
Jan 25 BII article says Brunswick closing 4 boat plants in effort to decrease inventories.
Mr. Wizard said this might be move to shake the confidence of those preparing to place bids in the OMC auction..
Jan 25: Boat Building International article,
OMC engine operations have
no "credible bidders" reflects comments from a conference call with George Buckley, Brunswick
CEO, with investors. He thinks some, but not all of the boat companies will survive, but sees no
bidders for the engines. He says the tradenames (Evinrude and Johnson) may be sold to a Japanese
builder.
RBBI Comment: Sounds like he agrees with Mr. Wizards
post earlier this morning.
Jan 23: Several interesting items appeared recently in the court docket.
Jan 24: Boating Industry International article, OMC employees fight for pensions talks about the petition above and interviews a representative of the IMMA (Independent Marine Machinist Association) on their involvement.
Jan 23, Boating Industry International article, OMC Europe official moves to VW reports their former sales manager for Germany and GM of Ficht Gmbh & Co. KG, moved to VW. OMC's European president says the individual is still an OMC employee. The same article reports OMC's booth space at Dusseldorf was converted to the Dusseldorf Internet Cafe.
Jan 22 George Soros appeared on National Public Radio, Talk of the Nation show. You can find it in the NPR archives Under Jan 22nd, 2001. The topic was Campaign Finance Reform. He appeared in the second hour of the call in show. One of our readers reports Soros fielded an e-mail question on the OMC bankruptcy near the end of his hour and responded, "There were problems with the engines which could not be fixed." Ouch !
Jan 20: In a move bound to raise an emotional response, OMC has petitioned the bankruptcy court to allow it to spit over $3 million in bonuses among 157 of its remaining employees. The court allowed approximately $2.5 million for this purpose. A section near the end of the document filed by OMC requesting the funds said, "Accordingly, the Debtors believe that granting the relief requested in this Motion is in the best interest of the Debtor's estates, their creditors and other interested parties." Mr. Wizard suspects some ex-employees may not agree. The amounts requested before the total requested (before being reduced about being reduced about 15 percent) showed $400,000 to Romano and $200,000 to Martinez.
Jan 20: Boating Industry International article, OMC to pay "key employees" $2.5 million in bonuses discusses the bonuses recently allow by the bankruptcy court.
Jan 19 Boating Industry International article, OMC bankrupted by legislation claim includes comments of small European engine manufacturers expounding on George Buckleys comments a few days ago attributing part of the demise of OMC to the US governments rush to created tough emmission standards. The small Euopean firms are saying the strong noise and emmission regulations in place or being discussed in parts of Europe could have the same effect on them and are asking for relief from the EC (European Community).
Jan 18 Boating Industry International article, U.S. bank says marine industry will survive OMC problems reports comments by Deutsche Financial Services (DFS) a dealer floor plan financing company feels the OMC problem is a "short term market disruption" and they will continue their marine financing efforts.
Jan 17th: Boat Building Industry International article, Brunswick's Buckley speaks out on OMC bankruptcy tells of Buckley sending a letter worldwide to Brunswick dealers to shore up dealer and supplier confidence in the industry with the demise of OMC He points out it is business as usual (which is still pretty good) at Brunswick and they will be courting OMC dealers as long as it does not interfere with Brunswick responsibilities to its existing dealers.
He identified 5 external forces contributing to the demise of OMC
Jan 16: Boat Building Industry International article, U.S. Volvo ends ties with OMC, reports Volvo pulled their remaining tooling equipment from an OMC plant last week used by OMC to manufacture some gas stern drive and inboard parts for Volvo.
Jan 12: Major article in todays Wall Street Journal, "Capsizing of Outboard Marine Shows How Soros Took Bath in Private Equity." Exerpts and brief rewordings are below. We suggest you read the full length article.
When Greenway Partners did not have enough money to take over OMC in 1997 they turned to Soros. Irwin Jacobs said, "Don't do it," Now, Mr. Soros's firm is scrambling to salvage something from the $320 million investment. Another $130 million was put in last year. People close to the situation say Mr. Soros's group had gains of about 4% last year from private equity, even while writing off almost all of the Outboard Marine investment.
Mr. Soros's organization jumped in, initially committing about $200 million to the deal, while Greenway Partners chipped in about $77 million. (The rest of the buyout price came from bridge loans and bank financing.)
... the low-margin boat business got more difficult, while increased competition from Japanese engine makers also hurt sales.
Parts shortages in peak selling season last year greatly reduced the volume of high margin engines they were able to produce.
Kirk Brewer, OMC spokesman, said "The company is focused on trying to sell its brands so that the brands do not lose additional market share."
Soros group assumed full control of the company at the end of 1999, and invested $65 million in early 2000.
Now, the Soros and Greenway groups are working hard to sell parts of Outboard Marine, to salvage something from their investment. But people close to the matter say the economy's weakness means they may not get more than 20 cents on the dollar,
One person not interested in acquiring Outboard Marine's assets: Mr. Jacobs of Genmar Holdings, one of the country's largest boat makers. Says Mr. Jacobs: "I have never seen a situation handled so badly in my entire business career."
Jan 10th: AP reports Ford and Yamaha teaming up to produce boat motors in US. This may have significant impact on OMC situation.
Jan 10: Waukegan Sun article, Kirk to OMC: Get information to laid off workers Representative Kirk scolds OMC for leaving employees in the dark about their pensions and health insurance. In a meeting with Fix and Romano (an OMC attorney) he urged them to "put all things necessary to sign up for COBRA on their web site and hot line."
The company has not decided if pension funds will continue to be managed by Northern Trust Bank or turned over to the feds (the Pension Benefits Guarantee Program), Kirk said.
The article went on to list Brunswick, Yamaha, Bombardier, Suzuki, Nissan and Toyota as potential bidders.
Jan 10th: AP article, Several bidders express interest in Four Winns says OMC will be accepting bids for its assetts up to Jan 26th. The bids will be opened Jan 31 in the Bankruptcy Court and a hearing by the court will be held Feb 8 to review the sale or sales.
Jan 8th: Crains article, Taking Charge of Wards and OMC bankruptcies focuses on David S. Kurtz, the lead bankruptcy attounery for both firms. Over the next year, ee will be overseeing the liquidations and negotiating with creditors over distribution of the proceeds.
Jan 5th: Boating Industry International article, Fix says OMC division may be running again in February, is notes of an interview with Fix. He predicts closing of sale on some or all divisions shortly after the 8 Feb Bankruptcy Court review.
Over 100 companies had been identified as potential bidders for the divisions, some of them from outside the marine industry. Some have already placed bids.
He said a toll free phone number has been setup to communicate with the dealers providing recorded messages to frequently asked questions and allowing the caller to record a message and OMC will respond directly to them. Other communications will be in a fax to dealers next week explaining how to order parts. Fix said messages from OMC would be more frequent in the future (responding to the current lack of communications).
Jan 4th Waukegan News Sun article, Finn urges city to intervene at OMC reports an independent candidate for Mayor has his eyes on the lakefront property and Waukegan and does not want it auctioned off to the highest bidder. Possible uses of the property as a 4-year college or other residential or commercial use. The current mayor says, "Its going to be years before they do anything down there, We'll wait and see - let it take its course."
RBBI Comment: Suggest those considering developing this property read our Plant Site EPA Ground Pollution Problems section discussing the two EPA Superfund sites on the property.
Jan 4th Waukegan News Sun article, OMC late with list of workers reports OMC has yet to supply a list of laid off employees to the state of Illinois Rapid Response unit or to the Workforce Development Unit after stating a list would be available at OMC's Waukegan offices in the WARN filing. This is making it very difficult for govenment agencies trying to spring into action and help the employees with job search assistance, help with unemployment benefits, job skill and resume workshops and individualized career counseling. Efforts of these agencies are being stymied by OMC's failure to provide a list of displaced employees. OMC reported Wednesday they were working on a list.
Wisconsin and Michigan officials are reporting similar problems in their states (OMC failed to produce a list of employees).
RBBI Comment: This is a strong indicator of Mr. Wizards's premise, OMC may be trying to delay relocation of ex-employees in an effort to increase revenue from the sale of the various divisions developed in his Why Doesn't OMC provide job placement assistance? article.
Jan 4th: Waukegan News Sun article, Kirk in Charge in 10th reports a newly elected U.S.
Representative in the Wuakegan area:
"expressed concern about the apparent shutdown of the Outboard Marine Corp. Waukegan plant and the layoff of
1,200 workers. He said he had been trying to reach OMC officials."
RBBI Comment: OMC's failure to visit with a U.S. Representative is another indicator of Mr. Wizard's premise, OMC is trying to delay all attempts to assist their ex-employees in an effort to maximize the value of the divisions when they are sold.
Jan 4th Boating Industry International article, OMC: payments due dealers will wait says fax OMC sent to US and European boat and motor dealers, said payments for warranty repair work and rebates to dealers for earlier purchases and coop advertising will either be decided by the bankruptcy court or by the new owners of its various divisions. The fax also included a FAQ (list of questions and answers).
Jan 4th Boating Industry International article, OMC branding removed from London show reports the Evinrude and Johnson engines stand at the London International Boat Show at Earls Court has no visible OMC branding. The labels were removed on orders from OMC.
The article also reports sealed bids for Four Winns are to be received by 28 January and will be opened on 1 February. They say the business will not necessarily go to the highest bidder.
Jan 4 The U.S. Bankruptcy Court approved on an interim basis OMCs request for $10 million in DIP (debtor-in-possession) from a group led by Bank of America N.A. A January 22nd hearing is scheduled to consider granting final approval.
Jan 2 Chicago Tribune article, "Outboard Navigating Rough Seas" reports:
"One of OMC's biggest engine customers already has made up its mind. Closely held boatmaker Genmar Holdings, after considering Outboard Marine's "enormous problems," is "already moving out of OMC," Chief Executive Irwin Jacobs said in an interview. In the future, he said, his Minneapolis company would rely instead on OMC engine rivals such as Brunswick Corp.'s Mercury engine group and Yamaha of Japan.
The outspoken former corporate raider, asked about widespread speculation that Genmar will be a bidder for Outboard Marine's assets, said flatly that "we have no interest in the engines" and voiced little interest in the boat operation, either."
The same article quotes a note from a dealer posting feedback on Mr. Wizard's page!
"At a Web site where OMC employees and dealers have been venting their frustration, the mood was dour. "My guess is I'm not the only dealer contemplating what to do next," fretted one anonymous dealer in a posting. "We are sitting on product that for all practical purposes has no company backing."
Jan 2 Boating Industry International reports OMC dealers "scared to death"
Dec 31 Boating Industry International reports, Genmar head "livid" over OMC actions.
Dec 30: Crains Dealers Head for Lifeboats Discusses situation from dealer viewpoint and approaching boat show schedules.
Dec 26: Dow Jones News Service Reported:
Bill Brandt of Development Specialists Inc. in Chicago said they have already seen considerable interest in the divisions, even before the bankruptcy, but nobody wanted the whole company.
Development Specialists and investment bankers Houlihan Lokey Howard & Zukin are helping stabilize operations and sell OMC.
"Most of Outboard Marine's assets will probably be spoken for by the end of February," Brandt said. "The DIP financing we put together envisions a very rapid response to the significant amount of market interest we have seen for the various constituent parts of the business."
Brandt said he expects there'll be very competitive bidding at the court-supervised auctions. They need to start rapidly to be ready for the New York Boat Show in two weeks.
Outboard Marine wants to maintain its dealer network through the asset sale prices, but once sold, its up to the buyers.
They are finding the engine division harder to sell than the builders.
They make two strokes in Waukegan, and assembly plants in Calhoun, Ga., Chicago, Hong Kong and Mexico. They also provide Kawasaki and Polaris Industries Inc. with PWC engines, making them likely bidders.
OMC is trying to get a $35 million debtor-in-possession loan approved by the court to allow continued operation during the restructuring. They are also asking to be able to continue paying their remaining approximately 1,000 employees in order to maintain customer sales, support and service activities and suppliers in order to keep their doors open during the restructuring.
Dec 28 Boatbiz reports confusion over OMC in Europe. OMC's European operation says they are not automatically included in U.S. Chapter 11 proceedings. A major dealer in the U.K says they are a completely different company and will not be effected by this liquidation. Others point out they will be running out of stock as their inventory is depleted.
Dec 25 Detroit Free Press OMC Files Bankruptcy article specifically discusses plan to sell Four Winns.
Dec 25 Waukegan Sun Times, OMC Workers Left Out in the Cold
Dec 25 Waukegan Sun Times, OMC all but shutdown
Dec 23 Chicago Tribune article says OMC owes creditors more than $768 MILLION !!!
Dec 23 Lebanon Daily Record www.lebanondailyrecord.com covers Lowe Boat shutdown
December 22 PARIS (AP) -- A Parisian investigating magistrate has ordered U.S. financier George Soros
and three others to stand trial for their alleged roles in a 1988 insider trading scheme.
Le Monde newspaper reported in its Saturday-dated edition that American billionaire and philanthropist Soros was one of
those suspected of benefiting from privileged information during an operation to try to buy part up of the capital of French bank
Societe Generale, which was privatized in 1987.
Dec 22 OMC files bankruptcy in Chicago
Dec 22: You can follow the actual case dockets, etc for OMC Aluminum Boat Group, OMC Fishing Boat Group, OMC Latin American Carribbean Inc, OMC Nevada Inc, OMC Recreation Boat Group, Inc. on the U.S. Ilinois Nothern Bankruptcy Court web site. Note: the first case in the list is an old one.
Dec 22 Chicago Tribune reports OMC bankruptcy filing to be handled by David S. Kurtz of Skadden, Arps, Slate Meagher & Flom (Chicago Office of NY based law firm) as early as today (Friday).
Dec 22 The Herald Tribune has a story up on the situation at Chris Craft today.
Dec 20th the Waukegan News Sun reports 700 hourly OMC workers in Waukegan, earlier laid off till mid January are now being told the company has yet to determine if they will be called back at all.
Dec. 21st we heard the Waukegan staff had been permanently sent home.
Dec. 21st Newspaper (Rome News-Tribune in Rome,Ga) wants to talk to OMC employees, especially those in Calhoun, Ga., area. Call 706 290-5259 or email MColombo@rn-t.com
Dec 21st Newspaper (Daily Tribune News in Cartersville, Ga.): If there are any employees of the Calhoun, Ga. plant that wish to discuss the situation, especially if they're from Cartersville/Bartow County, please call Matt DiFebo at 770-382-4545. I can also be e-mailed at mdifebo@daily-tribune.com.
Dec 21st Dow Jones Newswires confirms closing of OMC and possible Chapter 11 bankruptcy filing Friday.
Dec 22 The entire Dow Jones Newswire above was published in today's Crain's Chicago Business News. We were interviewed by Crain's a few days ago for a possible upcoming feature article.
Copy of closing notice issued to employees.
General Coverage of OMC news over the last several years is available on our OMC News page.
 |
Return to Recreational Boat Building Industry Home Page
Polson Enterprises Research Services |