Captain Bill Jennings
How An Industrial Giant Went Down
It was a complete shock to boaters when one of the marine industry's largest and best known companies suddenly declared bankruptcy. In addition to their Johnson and Evinrude brand of motors that represented 33% of world outboard sales, the parent company, Outboard Marine Corporation (OMC), owned 13 boat building companies. They had factories in 12 American cities and subsidiaries in 6 different countries. How could all this go sideways?
Marine writers are sometimes privy to witnessing pivotal points in the history of an industry, and back in the year 2000 just such an event showed up for me. I was one of 21 media personnel to witness this critical happening first hand. OMC had extended an invite to key marine writers to experience the launch of their new "FICHT" outboards that employed a direct fuel injection system. The OMC plan was to spend a night on Hilton Head Island, and the next morning board a fleet of runabouts with Evinrude power for the test run. Most of us attending the launch already knew each other, because it seemed that the same handful of journalists showed up at all key marine events. Seven boats, each with three writers onboard would wind their way north to the city of Charleston, South Carolina, where everyone would then celebrate the wonders of the new OMC Evinrude outboards.
What actually happened is a tale that has never been told.
This demonstration was far more important to OMC than many of us realized at the time. They were having a run of serious financial problems and were eager for an announcement in outboard technology to reverse their fortunes.
The EPA had been dogging outboard makers for several years over their two-stroke technology that spewed gasoline across the top of cylinders with little concern about the quantity that went unburned and into the water. There was an urgency for companies to build and sell four-stroke engines because they burned much cleaner than two-strokes. Penalties were punishing, like in 1989 when the U.S. Department of Justice ordered OMC to fund a trust to remove pollutants from Lake Michigan.
Struggling to fill their outboard supply lines while meeting EPA legislation, some manufacturers crossbred with other outboard brands to reduce emissions for their own motors. As an example, for several years Yamaha supplied Mercury with their four-stroke powerheads for 40 to 225 HP outboards. And this was not the only such example. In order to build a captive outboard motor market for their Evinrude and Johnson motors, OMC purchased 13 established boat manufacturers that included names like Chris-Craft, Princecraft, Four Winns and Donzi.
Despite this added support, OMC experienced multi-million dollar losses in the 1990's. They first laid off hundreds of employees, then in 1998 OMC announced the closure of their Milwaukee, Wisconsin and Waukegan, Illinois plants. Rather than tooling up for a complete shift to four-stroke production, OMC decided to upgrade their existing two-stroke motors. A fuel injected technology from Germany named "FICHT" was adopted. It was going to be a company life saver. It would provide the cleanliness of a four-stroke with the performance of a two-stroke. During development and testing, the failure rate on prototype models was high, primarily due to the high pressure (PSI numbers) in the cylinders. But by 2000, OMC engineers declared the motor ready for release.
Oh yes -- back to our media procession departing Hilton Head in a seven boat convoy. The weather was warm and seas calm as we cruised northbound following inland routes as much as possible. The two media in the boat, and myself, were enjoying a quiet ride when a surprise call on our VHF advised us that one of the other boats was having a problem. The specifics were unclear but we were told the boat could not continue. Then another call advised that a second boat was stopped and the report said it was due to engine trouble. The remaining five boats continued until just south of Charleston when a third boat dropped out with engine problems. The question was, what was going on and what would happen next for this critical media event??
Part Two: The Final Blow
The day long demonstration of the Outboard Marine Corporation's all new two-stroke outboard was over. Only four of the boats that departed Hilton Head that morning had survived. As we pulled into the beach club at Charleston Harbor Resort & Marina, silence prevailed. What would we write? If we did not report the truth, it would be irresponsible journalism. If we reported what actually occurred, it would spell doom for the new Evinrude motor launch.
A gala dinner was planned, but the events of the day ruled that out. OMC had counted on a successful demonstration of a new type of outboard, and if 21 national marine resources had been able to extol the virtues of this new Evinrude an OMC sales increase could have been guaranteed. But we couldn't. After cleaning up, all 21 media folk who had participated in the test ride gathered in the hotel bar. I mean, when such a well laid plan fails, where else could we go? Considerable discussions followed, but we finally all agreed on a plan. So when OMC president David Jones joined us in the bar we were ready for him. Our media spokesman told him that as far as we were concerned the day did not happen. It was our belief that some small component on their new outboard needed adjusting, or maybe a single part needed an upgrade. In any event we figured Evinrude could fix it. We thanked Mr. Jones for his hospitality, and asked that he call us as soon as the new FICHT two-stroke was ready for a press test. He gratefully agreed.
Reliable sources at the OMC head office in Waukegan, Illinois, related some of what happened next. The big concern was that the OMC factory had already shipped to their dealers their Evinrude motor allotment for the upcoming year. These were the same motor models that were used on our test. So David Jones summoned his engineers to the Waukegan office and asked them one question: "How many of the Evinrude motors that have already been shipped to dealers, would succumb to the same fate as the motors that grenaded on the media tour?"
He gave them three days to come up with an answer, based upon the testing and information that they had on file. At the end of three days the engineers answered: "All of them."
David Jones resigned and OMC laid off 7,000 employees.
As it turns out, I was present at what I believe to have been the final nail in the OMC coffin. It was the pivotal point when it became clear that despite all its efforts, Evinrude would not survive. OMC filed for bankruptcy in December 2000. They had been a multibillion dollar Fortune 500 corporation, in business since 1907.
Most of the OMC boat divisions were purchased by Genmar Holdings and they are still in business today under their original names. The Johnson and Evinrude brands were purchased by Bombardier Recreational Products of Quebec In 2003. Bombardier relaunched a heavily modified Evinrude two-stroke under the name Evinrude E-TEC. I asked Bombardier at that time when they planned to let the Johnson nameplate out of the closet, and apparently it was being reserved for a possible future Bombardier four-stroke model. We'll never know.
As a result of unanticipated high production costs for the new motor and a low market share, due to Evinrude's previous problems, Bombardier closed down its Evinrude outboard production in 2020. Nonetheless, Bombardier has announced that it will continue to honor warranties, extended service contracts, and parts for Evinrude's E-TEC and its later model the G2. They will also maintain the Evinrude trademark. Mercury viewed these events as an opportunity to expand and entered a partnership with BRP to supply outboards for the BRP boatlines, Alumacraft, Manitou, Quintrex, and Stacer. Verifying their intention to fight for prominence in the marine business, Bombardier introduced this year an all-new line of small pontoon boats, with a flexible floor plan and two new jet engines.
But that special one day excursion with OMC's Evinrude FICHT outboards will always remain a vivid memory.
Don't miss our feature series- Gone But Not Forgotten- The Story of OMC