[Rhodes22-list] Now comes General Boats

Wed Aug 5 10:55:05 EDT 2009

Stan,

Does this mean on a private sale you expect 5% from the seller and another 5% from the buyer for 10% of the selling price? If the seller doesn't do their part but the buyer did 10% would the GB support be offered?

I am new to the Rhodes want to be owners list and would like clarification. Your points are well taken.

Scott Badley
WYO Sailer

-----Original Message-----
From: rhodes22-list-bounces at rhodes22.org [mailto:rhodes22-list-bounces at rhodes22.org] On Behalf Of stan
Sent: Wednesday, August 05, 2009 8:17 AM
To: The Rhodes 22 mail list
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
__________________________________________________
To subscribe/unsubscribe go to http://www.rhodes22.org/mailman/listinfo/rhodes22-list

For the list Charter and help with using the mailing list and archives go to http://www.rhodes22.org/list
__________________________________________________