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Brunswicks buys key marine equipment suppliers

Discussion in 'General Yachting Discussion' started by PacBlue, Jun 29, 2018.

  1. PacBlue, Jun 29, 2018
    #1
    PacBlue

    PacBlue Senior Member

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  2. olderboater, Jun 29, 2018
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    olderboater

    olderboater Senior Member

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    It will be interesting. I don't know that the anti-Brunswick feelings in other companies is as strong as it once was, simply because Brunswick isn't the factor they were. I remember all the manufacturers like Cobalt, Chaparral, Regal, and others looking to push Volvo Stern Drives because they felt Brunswick with Sea Ray and Bayliner was predatory. The feeling was that Sea Ray and Bayliner could sell for less because Brunswick was more concerned about motors and engines than boat profits. Today, Sea Ray and Bayliner don't dominate the industry like they did. Their competitors are far healthier than they once were.

    Gradually, this might open the door for other brands but builders aren't going to change unless they have a good business reason to do so and changing just because Brunswick owns these equipment brands isn't a good business reason. I don't expect to see a lot of change in how the companies acquired are run.

    An interesting sidelight that just crossed my mind. Will Mastervolt continue to supply and sponsor the Volvo Ocean Race?
  3. PacBlue, Jun 29, 2018
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    PacBlue

    PacBlue Senior Member

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    I know of quite a few boat builders who treat it just like a Coke-Pepsi rivalry, plenty of bad blood to go around for some. See continuing litigation on patent infringement between Cobalt and SR. There will be builders who will be making equipment changes asap, as their is a certain emotional charge that a move like this elicits. It will be a door opener for some, time for suppliers to get on the phone and show there abilities!

    I recall being contacted by a colleague during a recent recession looking for employment and he came from years of competing against Brunswick brands and could not pull the trigger when a Brunswick opportunity came up even though I told him it would be a good fit. Too much Hatfield - McCoy feelings to overcome.
  4. olderboater, Jun 29, 2018
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    olderboater

    olderboater Senior Member

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    You mention Cobalt and they definitely aren't fans of Brunswick, but the litigation is at this point primarily a legal matter. Meanwhile, Cobalt sells a lot of Mercruisers, probably more than Sea Ray does today, so they're not going to just summarily make a change. Also, note that Cobalt is no longer a private company and now owned by Malibu.
  5. PacBlue, Jun 29, 2018
    #5
    PacBlue

    PacBlue Senior Member

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    The use of Mercruiser/Mercury and to a much lesser extent Zeus, has a lot of angles being played for non-Brunswick brands, too large a topic to address here.

    Go to your corporate board meeting and realize that before you were pumping in X dollars to a competitor's coffers and now it is going to be XX dollars. Not hard to imagine what happens next. Where there is a viable option, I bet it is going to be looked at real hard right now.

    For the Cobalt and other outside brands I would flip it another way - hey Brunswick, since I am now buying even more product from you, (the new XX number), what's my new discount?
  6. Capt J, Jun 29, 2018
    #6
    Capt J

    Capt J Senior Member

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    Most of the boat builders today are either owned by hedge funds or public traded corporations. Either of those two are simply going to pick equipment for the boats they're building strictly based on the bottom line.
  7. PacBlue, Jul 2, 2018
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    PacBlue

    PacBlue Senior Member

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    I think you are referring to Private Equity groups, like one of the key players in this deal.

    It is one thing for non-Brunswick brand boat builders to sell Mercury/Mercruiser equipped boats, as they would not walk away from a deal if a customer had a preference for those engine packages.

    But even though they are good products, no one is going to walkaway from a deal because it doesn't have a ProMariner Battery Charger or Lenco Trim Tabs, etc. Companies like Carver, Tiara, Pursuit, Cruisers, Four Winns, Chaparral, Cobalt, Mastercraft, Malibu, Correctcraft, Regal, Monterey, Formula, etc. will take a hard look at how much they want to feed parts/equipment business to the Brunswick empire.

    As far as how corporate buying works, here is the real scenario - Corporations will task their buyers to reduce parts cost by 5% annually. This is a typical goal tied into bonus structures and why you see parts and equipment changes. Now they have grown to a $1.5 billion share of that business, who do you think they are going to look to make up the difference as they reduce their own costs by 5% with the same parts they are now selling to non-Brunswick brands?