Re: Merc 4 strokes made by Yamaha?
Capt said:
I nearly laughed myself silly when I found out last year that Mercury was suing Yamaha for importing too many engines into the US and [affecting] the sales of American engines. All the while Mercury was the biggest importer of Yamaha powerheads and using them on their engines. This means that Mercury dealers had to buy Yamaha tools and diagnostics equipment to work on Mercury engines.
Just a clarification to this comment--Mercury did not file a lawsuit against Yamaha regarding importing too many engines. Mercury asked the United States International Trade Commission (USITC) to investigate to see if outboard motors imported from Japan were being sold at less than fair value (LTFV). After a lengthy investigation, the USITC did conclude that outboard motors were being imported from Japan and sold at LTFV, however they also concluded that this was not causing any harm to domestic producers. Therefore the USITC did not find it necessary to impose a remedy. Mercury had asked that the USITC impose a remedy which would have been in the form of an import duty of 22-percent of the value of the motors.
The decision was controversial and came with a 3-to-2 vote, so it was not exactly a clear win or lose. Mercury made its point--the Japanese were selling at LTFV--but they failed to prove they had been harmed by it. Thus they got no remedy.
As a result of the bitter nature of the USITC testimony and investigation, Yamaha tried to unilaterally break off their contract with Mercury to supply them with motors. This then forced Mercury to bring a lawsuit against Yamaha asking a court in Wisconsin to compel Yamaha to continue to import more motors from Japan and sell Mercury the four-stroke motors it wanted to buy from Yamaha. In this dispute Mercury prevailed, and Yamaha was forced to continue to sell Mercury the four-stroke motors it needed. So the actual lawsuit filed by Mercury against Yamaha was not to reduce or limit their imports, but to force them to continue to import and sell motors to Mercury, which is just the opposite of what was mentioned above.
Overall all I feel that the USITC investigation ended up making enemies for Mercury. Also, in the process of the testimony there were many embarrassing moments for Mercury. In any case, Mercury spent a lot of money and effort with the USITC and got nothing for it, no remedy. And all of the Japanese makers had to spend a lot of money defending themselves in the investigation. Perhaps Mercury felt it was a victory because the USITC did decide there was selling by the Japanese at LTFV, but that may have only been a bitter satisfaction. I am sure Mercury would have much rather had a tariff imposed. If that had happened it would have really shaken up the outboard motor marketplace in the United States. Adding 22-percent import duty to every Yamaha, Honda, Suzuki, and other Japanese brands would have been a stiff economic penalty for the sellers to absorb. They would have had to raise their prices.
If the Japanese had been forced to raise the prices of their outboard motors, it was generally believed that this would have been followed in suit by Mercury, who would have raised their prices. In fact, this was one of the arguments made by the Japanese outboard makers and their supporters, that the real purpose of the action by Mercury was to drive the price (and thus the profit) of outboard motors to a higher level.
The testimony, arguments, and findings of the USITC make for fascinating reading. Most of the documents are still available on-line from the government website that published them. Unfortunately, much of the pricing and sales volume information has been redacted in the public versions. If it had not, they would have been very, very interesting reading.
Ultimately, Mercury did not prevail in this matter and for that I think we can be thankful, otherwise these expensive outboard motors would cost even more.
