Gunboat Sues Chinese Boat Yard

I'm trying to figure out what they'll gain if they do win in a Rhode Island Court. Michael Jordan isn't doing well with his suit of a Chinese company either.

Not exactly that. More like, a work and business culture somewhat like XVIII century West: already too much people around so you may easily not overly bother offering every passer-by quality some XV's century craftsman had to offer his 50k population city just to stay on the job after everyone know him, still not enough conscience and group experience to culturally internalize how doing a bad job hurts everyone in the long run.
In practical terms, under intense supervision (which does eat a good bit into the supposed cheapness) you can get the quality you want, as any iphone shows. But a blind expectation should go further towards "bad faith" then we're used to.
Then again, not like self-delaminating-hulls-and-"screw you"-manufacturer-follow-up is a thing unheard of in the developed world

Going to court in China/India/Russia/e t.c. is a "special" experience indeed, but that's why people use US/UK courts for it. Then again, some "freedom of contract" things considered given in common law sphere are lawfully void elsewhere, and non-competes are a common casualty.

From the article: “He’s trying to sell boats here, and he’s got his 25 other companies in primary markets all over the United States,” Johnstone told Told Trade Only."


I would suggest this is what they are, at best, trying to threaten.

Losing all that money, reputation and being made to look incompetent: that is also a reason.


Reading the article, you have to ask where Gunboat was during the manufacturing process. It is not as though a carbon fibre hull is made in a hurry!

Doing business in China for a start is wake up to be VERY aware and watch the process and your assets. Especially the copyright. So how did the management in the US allow this to happen?

Makes Gunboat owners appear to be quite naïve at best.

That's too long shot for at best.
Where at manufacturing process my arse. They weren't there between build completion and client delivery!

Bet there's a lot of unemployed boat builders in N.C. laughing their butts off at Gunboat's expense about now. Every business that outsources to save pennies should read that article over many times. Sounds like they got exactly what they paid for and deserved for taking jobs away from the U.S. "The cheap becomes expensive."

They simply failed to manage their business. I think they could have made a mess of things wherever they manufactured. They obviously made a poor selection of their business partner. There are builders manufacturing successfully in that region.

They talk about what it cost them over the last five years. Why did they not change anything in five years? I'm sure they have blamed it all on the Chinese builder when talking to customers. Well, the blame goes to Gunboat. The buck stops there. If you don't deliver a quality product to your customers when you're supposed to then you are the one at fault. It's called management. They failed to manage.

If other reports are to be believed its not for the first time that this happened to Gunboat. Looks like their previous build contracts in SA also blew up in a quite similar manner.

Absolutely.

It is not as though the Chinese/Taiwanese connections are hiding or disguising that they are producing and marketing 55 and 66 catamarans. The court case may explain why this is so.

Translation. They didn't know what they were doing. They still didn't know what they were doing. They don't now know what they're doing.

The huge internal inconsistency (and dare I say, unfairness) of these kinds of deals is the pattern like:
a) "Okay guys, you've got no technology, no marketing, no brand name. You are just a cheap labor. So get me my stuff, cheap!"
b) "Ouch! How dare you, absent my technological and brand supervision, pump out exactly the cheap-labor-crap? Didn't I pay you for the quality stuff?" (No, you didn't. Your clients paid your for the quality stuff, like 2x-4x of what you passed on.)
c) "Ouch ouch! You're trying to find/steal/burrow technology, marketing and brand name for yourself? You weren't supposed to be able to google how much I am pocketing for it!"

This is inherently problematic. Not only and not even primarily because "them Chinese are hard to deal with", but because when the deal is not fair, sooner or later the stress of that unfairness will pop out.
And of course at the bare minimum you do need supervisors, to at least push it towards "later".

P.S. before you rush to educate me about RnD and marketing expenses, understand that I am explaining this a kind of from a Chinese PoV. The cycle of "subcontractors feel ripped off, try to go up the chain, feel what these costs really are and probably go back" is classic, but you can't realistically expect every businessman to have it internalized before trying. Not to mention the fact this cycle might as well end up with subcontractor actually supplanting "brand holder", look no further then Lenovo which went from low-cost OEM for high brands to both establishing own and actually buying a couple of those.

I have trouble parring the word "Luxury" with trying to produce things the cheapest way possible. Seems you're on the wrong track as soon as you start looking around the world for cheap labor. It's not a big jump from there to trying to save even more money by using cheap materials and not putting in your own team to supervise production. For the price of that, plus delivery costs it seems that it might be cheaper to hire seasoned labor near where you intend to sell your product. Cheap labor produces cheap products. Gunboat's situation shouldn't surprise anyone, much less themselves.

Subcontractors feeling ripped off, in what way? If they agreed to produce a product at X and the Owner on sells for whatever he can, so be it! That is the nature of a free market and it is not this that can be called being "ripped off". If there is an inequality in the shareholding or profit sharing, save it for the next round of contract negotiations. If the sub-contractor produces the goods to satisfaction, and the Principals make a huge profit, it is very doubtful a (good) business enterprise would swap out the sub-contractor and start the whole process again with another.


However if your point is that the sub-contractor is then not being paid for delivering a product (unsupervised) by the Owners, then I agree with you entirely. So perhaps that is your point. It comes back to Gunboat having an unrealistic view on business, expecting high value product for low value payment.

It remains a case of bad business, greedy, unrealistic, perhaps lazy by the principals.

The Taiwanese connections are not being altruistic on this deal. The sub-contractor in this scenario is surely not passing the extra profit onto the workers that he will make by cheating the owner out of their equity in the property, so let’s not go socialistic on the point in case.

Kafue, that (the freedom and sanctity of contract) your point of view. Not necessarily shared by everyone, and generally you get better results understanding other points then you get just pushing own. Double so if you want to do good faith business, since you can't qualify good faith in said contract.
I was providing some experience as to what other points might be.

Then again, a remark about not going socialistic with Chinese is kind of a perfect illustration in itself.

Subcontractor does not cheat owner of their equity, they cheated Gunboat (who paid them, not the client, client paid Gunboat) out of expected quality. And we "surely" have no idea how the "extra profits" were distributed. We don't even know if the subcontractor price Gunboat paid was even enough to produce quality stuff at all, even with labor cost difference.