| OMC Declares Bankruptcy | |
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Outboard Marine Corporation filed for Chapter 11 bankruptcy the week before Christmas. OMC is the company that produces Evinrude and Johnson gas and trolling motors, Stratos and Javeline bass boats, and many more fishing related products. They also make Chris Craft runabouts and other pleasure boats. The company has been around for many years and this was a shock to many in the fishing world.
Apparently they got into trouble by buying too many other companies too fast and overextended their credit. There were also problems with many of their gas motors and warranty work cost them a lot of money. And with the slow-down in the economy, they could not sustain their credit.
I have had Johnson and Evinrude gas motors on every boat I have owned, and have used their trolling motors exclusively since 1983. In my opinion they have produced quality products and have stood behind them if I had a problem. I am currently running a 1997 200 Johnson Venom and a Johnson 24 volt trolling motor on my Stratos 295 PE, so I am well invested in their products.
A warning of future problems came last spring when my standard two year warranty expired. During the first two years I could have bought an extended warranty for two more years for about $1800. I received a notice that the price was going up for that warranty. That told me OMC was having problems paying for the warranty work they were doing. Right now I am glad I did not buy it since no warranty work is being done.
OMC developed the FICHT motor, a quiet, gas efficient fuel injected outboard. Unfortunately, they did not hold up and lots of people had trouble with them. This also lead to a drop in sales at a time with other problems were lowering the income for OMC.
No one seems sure what will happen right now. All factories have been closed since about 4000 workers were laid off just before Christmas. Dealers have stock of boats and motors that they can not sell, even to people who have put a down payment on them, because of the uncertain future. No warranty work is being done. Dealers are not sure they will be able to get parts for these products. There are rumors that several companies want to buy out parts of OMC, but nothing is certain right now.
I understand no dealers are taking OMC products to boat shows this winter, and that is understandable, given the situation. Everyone is afraid of buying anything from OMC until the problems are settled and another company buys them out, or they are able to start production and stand behind their products. Right now, fishermen can only watch and wait.
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