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Ordering 2022 malibu’s mid-year 8% surcharge


PaintedRocksSurfer

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1 hour ago, TenTwentyOne said:

That is a term that has definitely been thrown around a lot in my industry (and obviously a lot of others) as means to not honor a contract. It doesn't stand up in most cases, and is being used as a blanket excuse in instances in which it doesn't apply. Force Majeure is not applicable in instances in which costs go up, or a legal excuse to not honor a contract because of cost increases. Although that seems to be a popular excuse to just ignore a contract and raise prices.

Legally, Force Majeure is only applicable to unforeseen circumstances causing the fulfillment of the contract to be impossible. It has nothing to do with price increases being passed down.

I had a supplier pull force majeure on me, in order for them to capitalize on selling the product elsewhere at a higher market value.......... I contracted with them. The market price went up. They didn't honor my contract, and sold my product to the highest bidder. Maybe they thought I wouldn't chase it, but they were wrong. Their greed cost me a net loss of more than $1.4M. The case is ongoing......

Sorry about the loss.. but good luck.. AOG clause? Hopefully you have a way of proving your specific inventory was sold to the others?

While I haven't read the fine print at Malibu but I'm sure there's a reason they did what they did legally.. AKA we know you want it but do you really want it more than the other guy willing to pay more surcharge... 

I'm sure about everybody on planet Earth is rewriting their contracts now if they haven't already

Edited by The Hulk
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39 minutes ago, The Hulk said:

Sorry about the loss.. but good luck.. AOG clause? Hopefully you have a way of proving your specific inventory was sold to the others?

 

There wasnt an AoG clause, and it wouldn't apply here. (At least in the typical type instance that there would be an AoG clause on a grain contract). This wasn't an instance of buying grains before harvest, or while in farm storage. This was imported soybean meal that was stateside and warehoused already. 

I have emails from other companies that were offered the product at the same time as this company was telling me they had nothing for me. They were even so stupid as to specify the tonnage available (1800 tons). I guess this broker must not have realized that, while the feed milling industry up here is very competitive, it is also very close knit. The company owners/executives shoot the poop with each other all the time....... So this BS was figured out pretty quick.

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11 hours ago, RCorsa said:

It’s kind of gross imo if it’s true that Malibu volumes and profits have increased so much that they then send a letter out (or via that Facebook post) that given their hard times they need to increase prices mid year.  I’d personally just prefer them to say. “We want to take advantage of record sales and profits while we can, and we feel we can make even more money by jacking up prices.  As CEO I’m hoping for an even bigger bonus in 2022 as I’m hoping to buy a new jet so I don’t have to travel with normal folk”.   That would be awesome and at least honest. 

They are a publicly traded company so they have to protect their value, but they are cutting dealer allocations (ie fewer boats) so they have to recoup materials costs.  I'm sure it won't make them 100% but we will will have to wait for earnings reports.  Price increases also slow sales (normally) which they need since they will be unable to produce their normal volume.  I don't think this is a cash grab ... its a balancing act.

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FWIW, last night I received an email from one of our biggest manufacturers of products we use every day.  All silicone and epoxy resin based product surcharges were increased from 10% to 30$ effective 11/1/2021.  All other products from that manufacturer have seen surcharges increase from 10% to 15%.  This is for all material shipped after 11/1/2021 regardless of when the order was placed. 

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ahopkins22LSV
3 hours ago, TenTwentyOne said:

That is a term that has definitely been thrown around a lot in my industry (and obviously a lot of others) as means to not honor a contract. It doesn't stand up in most cases, and is being used as a blanket excuse in instances in which it doesn't apply. Force Majeure is not applicable in instances in which costs go up, or a legal excuse to not honor a contract because of cost increases. Although that seems to be a popular excuse to just ignore a contract and raise prices.

Legally, Force Majeure is only applicable to unforeseen circumstances causing the fulfillment of the contract to be impossible. It has nothing to do with price increases being passed down.

I had a supplier pull force majeure on me, in order for them to capitalize on selling the product elsewhere at a higher market value.......... I contracted with them. The market price went up. They didn't honor my contract, and sold my product to the highest bidder. Maybe they thought I wouldn't chase it, but they were wrong. Their greed cost me a net loss of more than $1.4M. The case is ongoing......

Exactly. Like when a company is shut down for a cyber attack via ransomware and has to disable 100% or their systems forcing all production to halt for a week or so and not keeping up with customer demand.  Cost going up is to be negotiated between supplier and customer. 

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6 hours ago, Slayer said:

FWIW, last night I received an email from one of our biggest manufacturers of products we use every day.  All silicone and epoxy resin based product surcharges were increased from 10% to 30$ effective 11/1/2021.  All other products from that manufacturer have seen surcharges increase from 10% to 15%.  This is for all material shipped after 11/1/2021 regardless of when the order was placed. 

This is what I'm talking about.. it's the tip of the iceberg.. many folks think the high inflation hit and is over. It's just beginning

3M is rationing most customers at 70% of last year for resins and such, fiberglass will be interesting this year for sure.. 

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25 minutes ago, hunter77ah said:

Costco increased the price of tortilla strips from $3.99 to $4.89.  Inflation is real!

But those damn rotisserie chickens won't change in price! :lol:

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8 hours ago, pauley71 said:

They are a publicly traded company so they have to protect their value, but they are cutting dealer allocations (ie fewer boats) so they have to recoup materials costs.  I'm sure it won't make them 100% but we will will have to wait for earnings reports.  Price increases also slow sales (normally) which they need since they will be unable to produce their normal volume.  I don't think this is a cash grab ... its a balancing act.

Any guesses to what production units will drop to? 10-25% less boats in 2022? 

 

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15 hours ago, The Hulk said:

This is what I'm talking about.. it's the tip of the iceberg.. many folks think the high inflation hit and is over. It's just beginning

3M is rationing most customers at 70% of last year for resins and such, fiberglass will be interesting this year for sure.. 

Our silicone prices are all up 30% as well.  It's only just begun.  

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On 10/26/2021 at 11:00 PM, RCorsa said:

Wow that’s crazy. 18-24 months for a Whaler.  

We will be two years when we take delivery of Viking 44 open. Its crazy..  I think the new 64 is estimated for 2023 if you toss them a few mill as a deposit. 

 

I pushed out the our build slot on our 2022 25lsv.  Would have been here by Christmas, thinking I should have just taken it.  

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2 hours ago, Slayer said:

Our silicone prices are all up 30% as well.  It's only just begun.  

Odd how that all works.. 

M2 supply+ 30% real inflation...+30%

Silcia shortages and 70% allocation... + 30% prices

Malibu already at roughly about 90% allocation and.+8% immediate surcharge and another increase on the way ...

Ias mentioned a +10% food increase in the next few months from the roughly 90% allocations.. farm equipment, and fertilizer.. off the chats. A 10% food increase is going to be the minimum over next 60-70 days

Stagflation.. we're full fledge into it for the next 2yrs.. better lock in anything you can now..

Remember.. shortages make perfect financial Sense!

 

Edited by The Hulk
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20 hours ago, 18vlxguy said:

Looks like there is a year end sales event now. Wonder how this is going to work out with people having existing orders in!:dontknow:

I also belly laughed when I saw that on social media

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1 hour ago, rennis said:

I also belly laughed when I saw that on social media

My only guess is someone was being really "smart" and scheduled the year end savings emails to automatically send out every year. Either that or like most companies the marketing department lives in their own bubble. 

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15 hours ago, vanamp said:

My only guess is someone was being really "smart" and scheduled the year end savings emails to automatically send out every year. Either that or like most companies the marketing department lives in their own bubble. 

or they are doing a fire-sale because production will likely come to a standstill on Jan 4th now...  if this holds entire country will be shut down. 

frankly i think think Malibu knew this was going to happen at some point soon, thus why they already started reducing and allocating dealers to less units. 

I feel for you guys who have orders in... if this stands your likely not getting your boats this year. good luck

 

 

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10 minutes ago, The Hulk said:

or they are doing a fire-sale because production will likely come to a standstill on Jan 4th now...  if this holds entire country will be shut down. 

frankly i think think Malibu knew this was going to happen at some point soon, thus why they already started reducing and allocating dealers to less units. 

I feel for you guys who have orders in... if this stands your likely not getting your boats this year. good luck

 

 

Are you referring to a Jan 4th shutdown because of the gov vaccine mandate? Or nothing to build the boats with? Or a mix of both?

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16 minutes ago, BlindSquirrel said:

Are you referring to a Jan 4th shutdown because of the gov vaccine mandate? Or nothing to build the boats with? Or a mix of both?

yes, they essentially are or will soon be tied together...

OSHA.... look out...

 

Edited by The Hulk
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I was sure the "Jan. 4 shutdown" was going to be caused because of shifting all production of everything to build just the 100% confirmed 27 LSVs.  Then the story arc took a disappointing twist.  

Edited by jjackkrash
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And watch out for terms like "glut" and "bag holder" when they figure out how to dump the contents of all those containers on dry land and all the over-ordering catches up with the market.   It is going to be an interesting year or two for sure.  

Edited by jjackkrash
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47 minutes ago, jjackkrash said:

I was sure the "Jan. 4 shutdown" was going to caused because of shifting all production of everything to build just the 100% confirmed 27 LSVs.  Then the story arc took a disappointing twist.  

that will be taking place at the new "secrete plant 3" with a sub-contracted team of only 99 people so they won't be affected.

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