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by Steve McCadams

(Story from June 2001)

 Once billed at the leading manufacturer of outboard motors, Outboard Marine Corporation (OMC) sent shock waves throughout the industry back in December when it announced it was filing bankruptcy.

 Makers of Evinrude and Johnson outboards, along with such boat companies as Chris-Craft, Four Winns, Seaswirl, Pricecraft, Lowe and the Tennessee based Hydra Sports, Javelin and Stratos brands, the company had commanded a third of the US marine outboard market.

 Citing a disappointing operating performance of the OMC Corp., and unsuccessful efforts to secure additional financing, the company who had become a household word among the ranks of fishermen and recreational boaters, seemed to be sinking.

 OMC had laid off 7,000 of its worldwide staff of 7,700. Authorized OMC dealers were facing uncertain futures as parts and warranty service for repair was at a standstill. Research and development came to a halt.

 Customer bases began drying up too as anglers didn't want to purchase a motor from a company or dealer who might not be able to stand behind the product.

 Promotion and advertising were factors too. Suddenly, here it is in the heart of the boat, sport and travel show season where local dealers display boats and motors to thousands of potential customers. The recreational season is looming yet suddenly OMC was not there to give dealers co-op money to display and advertise.

 At every turn there was a high level of uncertainty. It had affected the entire industry including boat manufacturers and suppliers here in Tennessee. Javelin and Stratos boats are manufactured in Mufreesboro and Smyrna. Hydra-Sports got it start in Nashville before changing into the saltwater market and moving to North Carolina.


 Based in Waukegan, Ill., the company got its start back in 1909 when Ole Evinrude first invented the gasoline powered outboard motor on his farm in Christian, Norway. Two years after inventing it he launched a national advertising campaign and the concept of a internal combustion engine took off. It was the birth of the recreational marine industry.
 Ole's hand-built Evinrude outboard--a 1 1/2 horsepower, single cylinder unit---would make rowing a thing of the past. Four years later he had sold 9,400 units.
 He sold his company in 1914 but by 1921 had re-entered the outboard manufacturing business with his light weight, twin-cylinder motor. At two-thirds the weight of his original engine, the newer motors pioneered the use of aluminum for marine engines. By 1924, his newer company ELTO, was outselling the original Evinrude motors.

 In 1929, ELTO was merged with Evinrude and the Lockwood-Ash Motor Company forming Outboard Marine Manufacturing. It later merged with Johnson motors. In 1956, the company adopted the name of OMC.
 The company kept refining and many innovations were industry firsts, including the first V-4 in 1958, and the first V-8 in 1985. Just a few years ago it introduced Fict Ram Injection which offered 35 percent better fuel economy, lower hydrocarbon exhaust emissions and up to 50 percent reduction in oil consumption.

     In the late 1980's many outboard manufacturers, including such giants as OMC and Brunswick's Mercury Marine Division, began buying boat companies and established packaged deals where consumers purchased this or that boat already rigged out with a certain brand of outboard, trolling motor, electronics, etc....

 Some analyst say this was the beginning of a problem. Others saw it as a strategic move in the marketplace. The consumer did get a little price break and the dealers could cut costs of rigging.
 There were, however, problems in the road ahead as many consumers didn't like having to buy this or that brand outboard in order to get the boat they wanted. And, the maneuver alienated some dealers who had long been loyal to this or that brand of boat. Suddenly, they found themselves having to choose one over the other as the OMC Corp., started offering its boat brands to its Evinrude and Johnson authorized dealers only.
 OMC had enjoyed success with its two lines of outboards that had interchangeable parts but different cosmetic appearances. This way, they had provided dealer protection with two different brands yet the boating industry was somewhat different.


  Earlier this week a federal bankruptcy judge approved the sale of OMC's main assets to Canadian based Bombardier Inc. and Minneapolis-based Genmar Holdings Inc. A joint bid of $95 million cleared the way for the likely recall of some of its workforce.

 Bombardier, which makes business jets and other products, will get the Johnson and Evinrude marine engine brands. Genmar gets the boating divisions which included the two Tennessee based companies of Stratos and Javelin.

 The judge, before issuing the ruling, threw out Brunswick Corporation's objections to the sale of the previous day. Brunswick, which owns among other companies that of Mercury and Mariner outboards, had made an initial offer before withdrawing from the auction.
 OMC filed for Chapter 11 protection on December 22. Since then, many customers and dealers, not to mention creditors and suppliers, have been in limbo.


  Just how much damage has been done to OMC remains unclear. Many potential buyers have no doubt abandon ship over the last three months.

  Dealers have a lot of questions about the past, present and future. Some marine dealerships who were established with several different brands of boats and outboards have weathered the storm in pretty good shape.
 There have been a few dealerships that offered both Mercury and Evinrude products which gave them warranty and parts for the other brands of Johnson and Mariner. And, such outboard companies as Suzuki, Yamaha, Nissan and others have likely taken advantage of the situation at hand with increased incentives for its dealers and potential customers. OMC has no doubt lost a lot of its marker share over the last three months.

 On the other side of the coin are those marine businesses who were exclusive OMC. Suddenly they found themselves at boat show time with the peak season on the threshold yet representing boat manufacturers and outboard motor companies that were shut down.
 How could they sell a product and stand behind it with claims of warranty and service when they didn't know themselves as to the future situation? While in the minds of most such a good company as OMC had to be bought, sooner or later, by someone who had the capital to keep it afloat. However, no one knew who would buy it or when?

 Just what these two companies will do with the assets of OMC they've just purchased is anyone's guess. Some experts feel the boat companies will be sold here and there and may once again manufacture on the name and reputation of the boat brand itself.

 If that's the case, the industry may revert back to the days of boats being boats and motors being motors where the consumer chooses specifically the line of options he or she desires. The days of the package deals may be fading but that, like the overall OMC deal, is still going through uncharted waters.
 Looming in the midst has also been the employees of OMC. Engineers and designers, executives and sales representatives. The rank and file workers on the line are factors as well. All these people and more may have scattered over the last three months looking for and finding jobs elsewhere in the marketplace.

 Getting these people back or finding quality personnel is yet another ingredient in the recipe for reviving OMC and rebuilding the company's reputation.
 It will be interesting to see what moves take place in the months ahead. A sluggish economy may add more bumps to the road but the recent steps taken to sell off the company's assets is a step in the right direction. The "not knowing" has caused turmoil for OMC's legions of supporters.

 ( Part I of a two-part series on the transition of OMC. In next week's column I'll have comments from area OMC dealers regarding the changes at hand within the industry and how it has effected them locally. Also, comments from local boaters and manufacturers representatives.)

For Part Two Click Here

Steve McCadams
 is a professional hunting and fishing guide here in the Paris Landing area and host of The Outdoor Channel's television series  IN-PURSUIT.