Larry Tague, owner of Lake Viking Marine, is among Missouri’s watercraft dealers actively seeking legislation to prohibit marine manufacturers from terminating dealership contracts without good cause.
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Larry Tague, owner of Lake Viking Marine, is among Missouri’s watercraft dealers actively seeking legislation to prohibit marine manufacturers from terminating dealership contracts without good cause. A legislative bill, sponsored by State Rep. Jim Guest (R-King City) and co-sponsored by State Rep. Jim Whorton (D-Trenton), could serve as a model for the rest of the nation.
The issue has attracted much interest throughout the boating industry. Dealers accuse manufacturers of exercising vicious, dictatorial judgment in arbitrarily terminating dealerships without justification. Mr. Tague has made several trips to Jefferson City to testify at hearings regarding the proposed law, HB 1286. A similar bill, proposed last year by Rep. Whorton, was unsuccessful.
Rep. Whorton said that HB 1286 was voted with “Do Pass” designation out of committee and is now awaiting placement on the calendar for House debate. In a telephone interview yesterday, Rep. Whorton says he is not overly optimistic that the measure will reach the floor since the state budget will take priority upon the legislators’ return after next week’s spring break.
“We did overcome some opposition from marine manufacturers and worked through several details with lobbyists,” Rep. Whorton said. “This protection for marine dealers is something that just slipped through the cracks before, and is nothing more than that granted to all sorts of other merchandise dealers. I’d guess there’s a 50-50 chance of the House passing this measure, if it makes the calendar for floor debate and vote. Then, of course, it would go over to the Senate where it may or may not gain approval.”
Mr. Tague’s circumstances were featured in the May, 2003, boating business newspaper Soundings Trade Only. Since little has changed since its publication, the following excerpts are reprinted from that article written by staff writer Lindsey Savin.
“The old adage is correct: Nice guys do finish last.
“That’s what Missouri dealer Larry Tague, owner of Lake Viking Marine in Gallatin, MO, concluded after Four Winns canceled his contract and left him without one of his principal boat lines.
“Now Tague, with the support of several local marine dealer associations, is hitting back — taking his case to the Missouri legislature to prevent the same thing from ever happening to another dealer.
“Missouri dealers aren’t the only ones turning to their state governments for help. Louisiana has six pieces of marine legislation (proposed)… in Florida dealers are taking a different route, working with the National Marine Manufacturers Association to craft a mutually agreeable model dealer/manufacturer contract.”
According to the article, Mr. Tague received a certified letter from Four Winns informing him that the dealership’s contract would not be renewed for 2003 and that he had 90 days to stop selling the brand. When he telephoned the Michigan-based Genmar subsidiary to find out what he had done wrong, he was told, simply, “Nothing.”
“They said I was one of the good guys, but I was just canceled — period,” Larry says.
Genmar at the time said the decision was part of a Four Winns national branding strategy that called for consolidating Missouri sales into one dealership — Lake Port Marina in Osage Beach, MO. There were four other dealers in Missouri canceled out like Lake Viking Marine. All five dealers’ CSI ratings were above average. What’s more, all five dealers had stuck with Four Winns when its previous parent, Outboard Marine Corp., struggled through bankruptcy proceedings in early 2001.
Tague joined the other canceled Missouri dealers in researching the issue. They found an existing Missouri law — called the Missouri Agricultural Fair Dealers Statute — designed to protect dealers from arbitrary cancellation by a manufacturer. Although this statute pertains mostly to the farm equipment industry, Tague and the others first tried to convince legislators to extend the law’s protection to marine dealers. That effort, resulting in HB 549 proposed last year, was unsuccessful.
The effort was renewed this year with the first reading of HB 1286 accomplished in the 92nd General Assembly this past January. The act proposes to amend Chapter 407, RSMo, by adding six new sections relating to marine franchise dealers.