[Rhodes22-list] Now comes General Boats
bdunn1 at aol.com
bdunn1 at aol.com
Wed Aug 5 13:55:59 EDT 2009
Stan: Thanks for the complete explanation; I couldn't quite understand
what was going on when I happened to join into the stream a couple
weeks ago. I believe you are due monies for any assistance you give
some one selling/buying a used boat. No one else would give the
support on such a transaction for cars, houses, or ironing boards. I
don't know how many boats are involved or the sales price but I would
think 10-15% of the transaction cost should be tacked on. If that runs
the price up too much let them buy a new boat and get the "service" for
free.
regards,
Bill Dunn
-----Original Message-----
From: stan <stan at rhodes22.com>
To: The Rhodes 22 mail list <rhodes22-list at rhodes22.org>
Sent: Wed, Aug 5, 2009 10:16 am
Subject: Re: [Rhodes22-list] Now comes General Boats
This paper on Loyalty/Royalty is apart from the ongoing GB vs. Art
C.
battle, having only been joined to that complaint because Art, while
purporting
to support GB, has, in the matter of Loyalty/Royalty, rejected the GB
proposal
in his own multiple Rhodes buying and selling. It is hoped that
airing the
Loyalty/Royalty tender might end the myopic rational that it is crazy
for GB
expecting anything from the sales and purchases of Rhodes that GB had
nothing to
do with. The factual truth is there are no Rhodes sales that GB has
nothing to
do with: Rick's 7/26 5:28PM e-mail supports that position at one end
of the
debate (how the private seller volunteered GB's time to clinch this
private
Rhodes purchase decision); to David Culp's 7/26 4:49 PM e-mail at the
other end
of the debate (re the high value of Rhodes re-sales). For Ben's,
Joe's, John's
and all others' academic Loyalty/Royalty questions, here is the logic
to
consider.
When sane folks, who haven't thought it through, laugh at GB's
crazed
Loyalty/Royalty notion, I think of the Marx Brothers' movie where
Groucho is
reviewing a contract where Chico is applying for a loan and Groucho
says, "You
have to sign the sanity clause" and Chico laughs and says, "Everyone
knows there
is no Sanity Claus". There is no authority to the Loyalty/Royalty
clause that
we ask you to incorporate when buying or selling a Rhodes 22 Sailboat -
it is
purely voluntary. But, the win, win, win logic of the value added for
all three
parties, is overwhelming, as this brief will argue.
1. Boat Show goers fall in love with the Rhodes - but one of the
biggest
drags on a "yes" from wannabes has been, "Am I buying from a company
that will
still be around next year?" Many current Rhodies let us know that they
share
that concern of who is going to back up their boat's welfare if GB's
welfare is
being allowed to deteriorate. This decision-contributor is one of
several you
have to join in any conclusion re GB's Loyalty/Royalty proposal.
2, General Boats builds a single boat. In this business the money
is in the
big boats. Accordingly the business plan of almost all other builders
is to
offer an entry level boat at the lowest selling price possible (even a
loss) to
get new sailors' brand loyalty and then walk them up the size line.
The Rhodes
business plan, for better or worse, is just the opposite. We do not
continually
walk around our boat seeing how we can save a nickel - we walk around
the Rhodes
and see how spending an extra dollar will make an even better boat. It
is this
not-continually-coming-out-with-a-cheaper-boat, but continually
offering a
better boat, that keeps getting Rhodes, which does not advertise,
featured in so
may publications that thrive off advertising. August "Sailing" is just
one more
recognition of "what we do". Invariably publications deal with us
before an
article decision and invariably we point out to them that we do not
advertise so
they should not risk the wrat!
h of competitive boat builder who do. And invariably their response
is that
their readers have a right to know. If you buy or sell a Rhodes
privately,
insisting to yourself that GB had nothing to do with it, so warrants
nothing,
you are diluting the facts and deluding yourself.
3. The Rhodes 22 is the beginning and the end of the GB line. We
have no
more profitable size to move you up to. Nor is your buying a Rhodes
like
buying a car that you periodically do many times in a lifetime and so
provide
the seller many sales to amortize the costs of winning you over as a
customer -
only a handful of Rhodies have opted for their second Rhodes in one
lifetime.
The effort/time/mail/phone/e-mails/visits/demos/etc. wooing our
buyers, are
not spread over multiple or moving up sales. In a fiscal period all
these
expenses must be born by the few new boat sales and the many used boat
sales
these expenses make possible. So, at least in GB's business scope,
Rick's
comfort-accounting reasoning for panning GB's position on the
responsibility of
private sales, does not hold water.
4. Why, at the start of GB's second 50 years, the Loyalty/Royalty
program?
We will spare you our political explanation, which is irrefutable, and
simplify
the reason with two words: Oil, and a nameless second word to avoid
diversion.
Boats are built of oil. When we started gas was 26 cents a gallon and
we sold
boats for $2,500 to firemen and policemen, teachers and auto workers:
providing
a large middle class base. My daughter (the writer) had no time to go
to the
bathroom, she was so busy taking deposits at the Mt. Clemens (Detroit)
boat
show.
When inflation raised the cost a bit, our base shrank a bit, to
business men
and bookies. When inflation continued, and at an increasing rate, we
sold to
doctors and lawyers; a shrinking base. And, when inflation really took
over,
sales were restricted to a handful of Arabian Sheiks. We had to do
something -
and we did: Selling used Rhodes.
Recycled Rhodes saved the day for GB while we watched the Gulf
Stars and
Bristols, Allied Yachts, Marshals (who was an overnight guest at our
home, and
then killed himself), O'Days, Sovereigns, Irwins, Nimbles, Starwinds,
Balboas,
Windstars, Tanzers (whose plant we now occupy), Grampians and an
amazing number
of small and big builders in the US and Canada and around the World,
who started
the same time we did, go out of business. And we watched the value of
these
builders' used boats plummet in the surviving market. In contrast, the
private
sales of Rhodes became, and remain, easy. And used Rhodes values keep
rising.
But Art, and his co-thinking Rhodes-buying-and-selling crowd, cling to
their
self-serving myth that, in their particular instances, GB has nothing
to do with
their buying and selling successes.
The issue may be better framed by the answer to the question: "Why
does a
surviving company like Macgregor, who builds a single model, not need
customer
support? You may be interested in the answer but, you do not want GB
to do
what Macgregor does. When used boats begin to impinge on Macgregor's
new boat
sales and dealer channels clog up, Roger simply stops production of
that boat
and comes out with a different boat. If you owned a Venture 17 or 21
or 22 or
23 or his cat or one of the many versions of the Macgregor 25 and 26
(Roger even
changes the name of his boats), you have seen the price of your
discontinued
model drop, sometimes even before your classified hits the streets.
(And what
are the chances of the next owner of one of these discontinued brands,
getting a
replacement for that lost cast iron swing keel.)
5. The nature of business (and life) is "change". The battle over
government Health Care today is no different than the battles over
government
Social Security, government Medicare and government Unemployment
Insurance, were
yesterday. Today they are all accepted as American way-to-go programs.
"What
is good for General Motors is good for America" was the slogan in my
early
business days. If GM ever entertained the idea that used car sales
might be
indebted to the parent company, they did so too late. Changing times
morph
current traditions into new traditions, when times call for it .
Today's
economy evolution rubs it under our nose that boat builders need to
join already
sanctioned residual supported industries - if we want to hold onto the
wonderful variety of selections having many small builders offers.
The news
today tells of newspapers and wire services turning to digital coding
technology
to fight off dinosaurian extinction by asking royalties from other !
media who freely lift news companies' expensively gathered
information. No
one is expecting you to feel for poor old GB - you should be thinking
what is
good for you. And what is good for you is what is good for General
Boats. Take
it from the old man - flexible thinking keeps you enduringly relevant.
A hollow
sounding idea today can make solid sense tomorrow.
Consider the Chicago Boat Show as an example of changing times.
This year,
for the first time since the Boat Show's start at the Chicago Stock
Yards where,
"we were there", we did not go. It is not that there were no Rhodes
sales made
at the last few Chicago Shows - there were. But they were made by
private
buyers and sellers - sales where not one cent went to GB to pay costs
for
bringing show boats all the way to Chicago, paying for the 5 days
rental of Navy
Pier space, for parking, manpower and the tabs for eating and sleeping
in
Chicago and the pleasure of doing it all in freezing winter winds.
"You can
see the boat at the show, the salesman is great, he will take as much
time as
you need to show you all the features and answer all your questions and
give you
a great booklet to take with you - and then you can buy my Rhodes."
Loyalty/Royalty would have gone a long way to keeping this show on GB's
itinerary. A few Chicago buyers and sellers did get our messag!
e and earned our loyalty for denting our costs. But there are limits
to the
shortfalls our Social Security checks can cover.
We appreciate suggestions such as yearly dues but feel this one
would prove
a burden for owners. We have given much thought to Saving Private
Sales and
Saving General Boats and note that when we buy something, the sales
person then
wants to sell us a back-up policy. My reaction is to decline on the
grounds
that if the item is new and guaranteed, why would I need any additional
support.
But re-sale items are another animal. Very little of GB's time seems
to be
taken by new boat buyers. But private re-sales buyers are turning GB
into a
full time not-for-profit organization. When we negotiate with a new
contractor
and feel the product or service has been under priced, we offer to pay
more
because we do not want to lose a source in the middle of a season. I
guess this
is the real thesis of this paper.
Unless anyone has a better idea we think the solution is a charge
each time
a title is transferred. A sort of sales tax, if you want to view it in
that
light, or as though it were a restrictive clause that survives a house
sale or a
broker's commission that repeats every time the agent re-sells that
particular
house, or a residual when new viewers see a re-run. No matter the
rational,
the bottom line is that it becomes a powerful tool for the SELLER of
his or her
boat: " When you buy my boat the builder is going to continue to give
you, the
new owner, ongoing support to your questions and parts that you may one
day need
and even help you when you want to sell your boat." We think this a
tremendous selling pull - to which we can add a push on the buying
side: "Ask
the person selling you this particular Rhodes if they are on board with
GB's
voluntary re-sale terms. If your seller tells you they are, then make
sure the
seller gives you their numbered Loyalty/Ro!
yalty certificate. If your seller tells you that they are not going
along with
GB's voluntary private re-sale program and you buy their boat anyway,
then you
have to understand that it is only fair and reasonable that GB will not
be
giving you its time and attention at the expense of all those sellers
and buyers
who are providing ongoing support to keeping General Boats a capable,
vital,
operating company.
We have field tested this idea and the results have been
encouraging. A
few sellers have told us we must be nuts. But many appreciated the
mutual
advantages. One seller, who told us to our face where to go with this
radical
idea, later sent us a letter, with a check in it, saying that he had
thought it
over and came to understand that the reasoning was exactly correct.
IN
CONCLUSION
We understand that those of you who have not been in business
for
yourself, may not be cognizant of the endless vacuum crevices in every
business,
sucking out the dollars generated by trying to stay on the business
cash flow
treadmill. Just a small example: Can you imagine that GB pays a
"personal
property tax" on its cars and also pays a "personal Business property
tax" on
the same cars: (The tax title alone is idiotic.) Added to the
standard
business cash sucking faults, GB has the burden of the ever growing
private
sales market: "I am thinking of buying Joe Blow's boat. Can you tell
me the
hull number? Can you look up and get me the prior owner? Can you
check your
records to see it there were any problems with this boat? He is asking
$X
dollars, do you think that is a fair price?" And sellers: "I'm
thinking of
selling my boat. It's an 88. Here is a list of the items it has.
What do you
think would be a good price. Oh, yea, I need one of those thi!
ngs for the boom. Can you get it out to me next day - I have some
lookers
coming from SC."
For those who still believe GB no way contributes to every
privately
sold Rhodes; For those who believe. "sure, GB dollars and time make
private
sales possible but it should be a free-be that goes with the
territory"' ; For
those who believe GB can survive such free-bes by simply making it an
accounting
entry - we invite you to sit in this chair for just one day. After
all, we are
all in the same boat ! (I just couldn't resist.)
ss
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