On December 22, 2000, OMC filed for bankruptcy protection and announced that it will sell off some or all of its boat and engine manufacturing divisions. At the same time it announced its intent to lay off about 4,000 employees in its North American operations.

It does expect to continue operations during this reorganization, with employees retaining compensation and benefit plans if the Bankruptcy Court allows.

While OMC has been known to have been having financial problems over the past few years, it was felt the aggressive re-structuring done this fall would allow it to continue in spite of the announced $59.5 million loss on sales of $565.7 million during the first half of this year.

Besides Johnson and Evinrude outboards, OMC's boat building divisions include Chris-Craft, Four Winns, Seaswirl, Stratos, Javelin, Hydra-Sports, Princecraft, and Lowe.

The immediate affect on dealers is unknown at this time. There has been talk that a non-domestic engine company is interested in the outboard engine divisions, who currently are estimated to have one-third share of the North American market. It is also reported that a number of boat building companies would be interested in some or all of the OMC boat divisions.

Some dealers feel this may be a good change, allowing the individual boat companies to generate more profits without OMC's overhead charges. Almost all hoped that the outboard divisions would be sold to another engine company shortly.

Genmar Holdings Inc. has announced an exclusive service protection plan for new OMC outboards in dealer stock, regardless of the boat brand the engine is mounted on. Obviously many dealers are concerned whether OMC's warranties will be honored and the dealer paid for any repair work.

The Genmar plan, made available through First Protection Corp. (FPC), will provide service coverage on new engines in dealers' stock with a term equal in length to the original manufacturer's warranty. It is expected to cost dealers about 7-8 percent of dealers' cost of the product. Coverage is also available for engines sold and delivered since 1 October, 2000.

It is felt most dealers had plenty of engine inventory on hand for their spring season.

Genmar dealers will receive detailed information from their OEM manufacturer; all other dealers can get information through FPC by calling 800-328-8690.