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The Rise And Fall Of Evinrude

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  • The Rise And Fall Of Evinrude

    By Craig Ritchie IBI News

    The news this week that BRP Inc. has elected to exit the outboard engine business and discontinue building product under its Evinrude nameplate closed the book on a brand that helped drive boating into the modern era.

    Ole Evinrude, a Norwegian emigrant to the United States, is widely credited with the invention of the world’s first practical outboard engine in 1907 after a boat trip across a local lake to get ice cream for his fiancée took so long that the ice cream melted by the time he returned. Evinrude realized that a propeller turned by a gasoline engine would move the boat at a much higher speed, leading him to develop a design concept – centred around an engine turning a vertical crankshaft with power directed to the propeller through a set of beveled gears – which is still in worldwide use today.

    It took two full years of technical development before Ole Evinrude was able to bring his original single-cylinder, 1.5 horsepower engine to market and establish the Evinrude Motor Company in June, 1909.

    The engine was an instant success, but Evinrude was forced to sell the fledgling business shortly afterward in order to care for the fragile health of his former fiancée and now wife, Bess. Undaunted, he formed a second company in 1920 called ELTO – an acronym for Evinrude’s Light Twin Outboard – which also proved successful, selling 1,051engines in the company’s first year of operation and 3,549 engines in its second.

    By 1925, ELTO production had surpassed 7,500 units per year. The introduction of the Super ELTO Twin in 1926 – supported by a massive $125,000 advertising campaign – helped ELTO capture even greater market share. In what must have been a moment of intense gratification, Ole Evinrude was able to regain control of the original Evinrude Company when it and a third engine building concern, Lockwood-Ash, merged with ELTO to form Outboard Motor Corporation (OMC) in 1929.

    The stock market crash of October 1929 brought sales of all outboards to an abrupt halt as the world plummeted into the Great Depression. Ole Evinrude passed away in June 1934 only months after his wife, leaving the company to their son, Ralph. With the economy now rebounding, Ralph Evinrude soon orchestrated the acquisition of OMC’s key competitor – the Johnson Motor Company – in 1936. On the strength of its large dealer network, the Johnson branding was retained even though the engines were soon mechanically identical to their Evinrude siblings.
    The boom years
    Returning to full production following the end of the second world war, OMC made the most of boom times for the leisure marine industry, with the company expanding its manufacturing facilities and introducing new engineering innovations to make its engines quieter, lighter and more reliable.

    The company continued to expand steadily until the energy crisis of the early 1970s put a pause on growth. A nationwide energy policy in the US that restricted the use of gasoline for recreational purposes was bad enough. Compounding things for Evinrude and OMC was the simultaneous arrival of all-new competitors from Japan in its core markets.
    The company’s response was to try and starve the Japanese brands by embarking on a ferocious price war, slashing prices in North America and Europe by as much as 25%. The new competitors, including Yamaha, Suzuki and Honda, responded in kind, setting off a series of tit-for-tat price cuts that chopped OMC profits from $12m in 1977 to just $5m the following year, forcing a company-wide strategic reorganisation.

    That restructuring, followed by a torrent of new products like OMC’s revolutionary Sea Drive Power System – an innovative outboard motor on an enclosed bracket that was marketed as a replacement for inboards on larger boats – helped drive several seasons of double-digit revenue growth through the late 1970s and early 1980s. Buoyed by its newfound success, the company invested $100m in capital improvement projects to modernize and expand its manufacturing operations, including the latest in robotic automation technology to position OMC among the most technologically-advanced manufacturers in the industry.

    New products continued to pour onto the market, including the world’s first V8 outboard – one of no less than 94 models in the 1986 Evinrude/Johnson lineup. Ensuring the company had access to transoms to mount these engines on, OMC acquired five boat builders between November 1986 and February 1987, spending $120m in the process. Further acquisitions followed.

    OMC reported record earnings of £1.2 billion in 1987,
    with 14,000 employees worldwide in 34 plants and dozens
    of boat brands – many which still resonate today

    On the strength of this unforeseen level of vertical integration, OMC reported record earnings of $1.2 bn in 1987. By the end of the decade, the company had 14,000 employees worldwide working in 34 different manufacturing plants producing Evinrude and Johnson outboards, OMC Cobra sterndrives, and a variety of aluminium and fibreglass boats under the Chris-Craft, Donzi, Four Winns, Grumman, Hydra-Sports, Javelin, Lowe, Princecraft/Springbok, Roughneck, Sea Nymph, Seaswirl, Stratos, Sunbird and Suncruiser brands.
    Say hello to Ficht

    As one of the world’s leading engine brands, Evinrude had met and overcome its share of obstacles over the years, including a recent shift to the use of unleaded gasoline. New EPA clean air regulations introduced in the late 1990s saw parent company OMC partner with German engineering firm Ficht GmbH to produce a series of direct injection, high horsepower outboards which would be sold as flagship products under the Evinrude and Johnson brands. The new designs were nearly complete when further EPA amendments necessitated additional engineering changes – some of which were said to have been implemented without sufficient testing before the engines were released to the market.

    The results were disastrous, and engines with the new technology soon developed a reputation for serious powerhead failures. Warranty claims skyrocketed – to the point OMC was left with no alternative but to recall the entire first generation of Ficht product. The cost of dealing with thousands of warranty repairs and replacements – compounded by even greater reputational damage and ramped-up competition from competitors who smelled blood in the water – proved too great for a firm that was by that point already facing numerous other financial challenges. OMC filed for bankruptcy in 2000 and its outboard engine assets were acquired by Quebec, Canada-based Bombardier Recreational Products (BRP).

    BRP had acquired both the Evinrude and Johnson brands, initially electing to sell Evinrude as its premium product line with the direct-injection two-stroke technology, while offering Johnson as a four-stroke alternative. The original Ficht technology was reengineered, rebranded E-TEC, and became the key point of differentiation for the Evinrude brand moving forward – particularly after BRP subsequently discontinued the Johnson nameplate to focus its efforts on Evinrude alone.

    BRP earned a number of accolades for its engineering advancements related to E-TEC, including JD Power CSI awards in 2003 and 2009, an EPA Clean Air Excellence Award in 2005, a Top Product award from Boating Industry magazine in 2014, Red Dot and Good Design Australia awards along with NMMA and Boot Dusseldorf innovation awards for E-TEC G2 engines in 2015, two awards from the Moteur Boat Magazine Podium for the E-TEC G2 150 and 150 HO engines in 2017, another Red Dot award for E-TEC G2 in 2018, and another NMMA Innovation Award for the E-TEC G2 115 HO engine just last year. Yet for all of its technological innovation, Evinrude’s engine sales lagged behind those of four-stroke competitors.

    “Over the past few years, despite its innovative technology, our outboard engine lineup has been losing share in a market that was already difficult,” admitted BRP CEO and president, José Boisjoli in a call with industry analysts on Thursday after BRP had released its 2021 FY first quarter results. “Our strength was in the repower segment, while the industry growth was driven by the package sector, which lead to continued share erosion.”

    That, and further economic challenges presented by the worldwide Covid-19 pandemic, ultimately proved too much for the storied, 113 year-old brand. Out of options, BRP had little choice but to pull the plug, relegating one of the most recognizable names in boating to the history books.
    Editor’s Note: One can not help but note the irony of this news in light of the resurgence of outboard motors in recent years and the renewed energy they are bringing to the industry at a critical junction.
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