BLOG: Can one boat company be too powerful?

IN today's fast, challenging business environment, dear reader, mergers, acquisitions and absorptions are about as commonplace as coups in despotic developing nations or the strikes which finally did for British Leyland. We've seen Tata buying Jaguar and Land Rover; Volkswagen swooping on Bentley and, closer to home, BRP gamely attempting CPR on the terminally ill Outboard Marine Corporation. The old institutions and conventions are fast breaking down, and no product or brand is sacrosanct or inviolable any longer.

The Skipper - rampant, hedonistic, thrusting capitalist that he is – is for the most part a huge advocate of doing whatever is legally justifiable and necessary to secure, reinforce and consolidate one’s trading position – anything, in fact, that will deliver a stinging, smarting blow to the opposition and show them who is the benchmark and who is destined to play catch-up.

Nothing – simply nothing – comes close to the heady feeling of knowing that your company is the one everybody’s chasing; that your product, your go-getting aggressive proactivity, your dealer network and your policies and procedures are what are filling the fraught agendas of meeting after meeting at rival firms. You are omnipotent! You are the industry benchmark; the standard by which all others are judged; the one who dictates the pace. Still with me, are you? Am I rambling, expostulating and waffling even more than normal? Please bear with me, dear reader, because I promise you I’m getting there…

The above scenario may quite possibly capture the feeling of euphoria surrounding Telwater at present, after last week’s masterly, bloodless but nonetheless devastatingly effective coup against their only major volume competitor, Ally Craft. We now have a leviathan - a monolithic, multi-brand boat company with theoretical capacity that would shame a niche vehicle or truck manufacturer; a company that is to rolls of aluminium what Rupert Murdoch is to rolls of newsprint. But why buy a boat company – a boat company which produced a reasonable product, a name brand, and sold it through a respected dealer network – only to close it down? Sure, we might pontificate about doing whatever it takes to guarantee market dominance (and don’t forget that Brunswick was concocting a similar fate for OMC until US regulators stepped in and stopped them dead), or spending whatever is required to literally “own” the market. However, to buy a viable, profitable company that produced thousands of boats (and generated millions of dollars) just to have the satisfaction of removing it from the action... well, that takes nerve, brinkmanship and unbridled chutzpah of the highest calibre. Unless, of course, they have plans for it (or its machinery and equipment) that will, in time, play out in this or some other market.

And what about the Ally Craft dealers who sold that brand purely on the basis that it was a viable alternative to a Telwater product? They woke up one morning last week to be told – by Telwater, previously the opposition – that their suitability was being assessed to sell one of the three Telwater brands. It’s like going to bed a Ford dealer and waking up to a phone call from Holden asking where they can put their signage. And what happens if any of those dealers (and The Skipper has spoken to at least one) don’t want to sell Telwater boats? The above notwithstanding, there are company CEOs in every sphere who would unquestioningly sacrifice their virgin daughters to achieve what Telwater has done. Name one industry where a single company has stamped its imprimatur so firmly and decisively on a key volume segment. Bet you can’t. Even in something like the rarefied, arcane mining segment, companies like Caterpillar, Komatsu and Hitachi would positively salivate at the mere thought of this level of domination.

Despite The Skipper’s wholehearted embrace of aggressive, “gonzo” business ethics, it’s debatable whether outright hegemony of this type is good for the industry as a whole, where one manufacturer basically dictates the trends, styles, designs and maybe even price points for trailerable aluminium boats. There are probably many aluminium artisans and craftsmen out there producing boats in relatively small numbers who will no longer be able to compete with Telwater in the purchasing stakes and who may now see their businesses relegated to the status of “also-ran”. Sad in a way but possibly a portent of how things will eventually be – maybe no room for the “plodding”, bespoke purists any more. All the above notwithstanding, the fact is that Telwater is now the juggernaut of the Australasian marine industry and its hurtling, meteoric ascent to this position would make as good a “How-to-attain-and-retain-no.1-spot” thesis as has ever been written.