Yamaha wins dumping case

Taken from Trade Only online newspaper:

The United States International Trade Commission today voted to reject Brunswick Corp.’s dumping claims against outboard engine manufacturers from Japan, finding no basis for its claims of injury.

The 11 a.m. vote was 4 to 2. It represents a victory for Yamaha Motor Corp., which had led the defense against a price dumping complaint filed a year ago by Brunswick Corp, the parent company of Mercury Marine.

“Yamaha has consistently stated that from the day that Brunswick filed
its complaint that there wasn’t any dumping,” said Phil Dyskow, president of the Marine Group of Yamaha Motor Corp. USA, in a statement. “We appreciate the fact the ITC investigated the facts, listened to our arguments, and voted in favor of our position.”

Mercury president Patrick C. Mackey indicated he found the ruling hard to fathom.

“Given the substantial evidence of harm to the industry presented by Mercury, we are disappointed with the ITC’s decision,” Mackey said in a statement. “Dumping was proved and we demonstrated that our outboard unit has suffered since 2000, so we don’t understand how this conclusion was reached.”

Dyskow said the decision shows the commission did its job thoroughly. “We are appreciative that the commissioners took the time to listen to the facts and to our arguments, because that’s all we needed,” he said in a telephone interview.

“Most important from an industry standpoint,” Dyskow said, “we can now get back to the business of boating. The legal fees Brunswick spent and what they forced us to spend could have funded Grow Boating for a long time.”

Mackey also said it will be back to business as usual for his company. "We want to assure our dealers and independent boatbuilder customers that the decision will in no way lessen our commitment to providing the quality products and services they have come to expect from Mercury," he said.

Analysts from Banc of America Securities, which recently initiated coverage of Brunswick stock, called the ITC vote “a major blow to Brunswick’s efforts to improve the margins on its outboard engine sales.” However, the research firm did not lower its current rating of “neutral” for Brunswick stock, maintaining its existing 12-month target project of $50 per share. Brunswick shares were trading this morning for $46.56 per share.

Brunswick and its Mercury Marine subsidiary filed the petition last Jan. 8 with the ITC and the Department of Commerce. The Lake Forest, Ill.-based company alleged that outboard motors and powerheads from outboard motors from Japan were being dumped into the United States.

The Commerce Department issued a preliminary determination last August that there was a pricing margin of 22.52 percent, and ordered all Japanese outboard manufacturers to post bonds in that amount of any engine imported into the United States. A final determination in late December reduced that amount to 18.98 percent.

It was up to the ITC, however, to determine whether or not the American companies were injured by the dumping. The commission held a hearing Dec. 14 and considered arguments from both sides. It also heard testimony from a substantial number of boatbuilders who came to testify for either Mercury or the Japanese manufacturers.

Dyskow said today’s finding effectively ends the case. “Injury is a necessary component of dumping,” he said.

“We are grateful to everyone in the marine industry who helped convince the ITC that Yamaha did not violate any dumping laws,” Dyskow continued. “Their support made all the difference.”

Dyskow extended “special thanks” to Irwin Jacobs of Genmar, Bob Deputy of Godfrey, Kris Carroll of Grady-White, Joan Maxwell of Regulator and Scott Deal of Maverick, who traveled to Washington, D.C., to testify on Yamaha’s behalf at the commission’s Dec. 16 hearing. He also thanked dealers and others who wrote letters to the ITC on Yamaha’s behalf.

Mackey, too, thanked those who had backed Mercury. “To the many who lent their support during this investigation, we offer our heartfelt gratitude,” he said. “Our thanks particularly go out to Wisconsin Gov. Jim Doyle and Congressman Tom Petri, IAM Local 1947 president Gene Herman, and the many dealers and boatbuilders who supported our position. For us, this was not a personal issue, even if some tried to make it so; it was simply one of principle for our employees, customers and shareholders.

“Finally, our thanks also go to the DOC and ITC staffs, who worked diligently to produce a determination,” Mackey said.

Since no injury was found, the bonds that were collected will be released and refunded to the affected companies.