BRP Ending Production of Evinrude E-TEC

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Mambo Minnow
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BRP Ending Production of Evinrude E-TEC

Postby Mambo Minnow » Wed May 27, 2020 6:40 pm

Press release today from BRP:

Full Text of Press Release:

    BRP ADVANCES MARINE STRATEGY BY FOCUSING ON BOATS AND NEW TECHNOLOGIES
    May 27, 2020 at 5:00 PM EDT

    Company discontinues the manufacturing of outboard engines and agrees with market leader Mercury Marine to support boat packages.

    Valcourt, Quebec, May 27, 2020 – BRP (TSX: DOO; NASDAQ: DOOO) announced today it has re-oriented its marine business by focusing on the growth of its boat brands with new technology and innovative marine products. We will discontinue production of Evinrude E-TEC and E-TEC G2 outboard engines. Our Sturtevant, WI, facility, will be repurposed for new projects to pursue our plan to provide consumers with an unparalleled experience on the water.

    We remain committed to our Buy, Build, Transform Marine strategy which has been underway since 2018 with the acquisition of Alumacraft and Manitou boat companies in the U.S., followed by the acquisition of Australian boat manufacturer Telwater in 2019.

    “Our outboard engines business has been greatly impacted by COVID-19, obliging us to discontinue production of our outboard motors immediately. This business segment had already been facing some challenges and the impact from the current context has forced our hand,” said José Boisjoli, President and CEO of BRP. “We will concentrate our efforts on new and innovative technologies and on the development of our boat companies, where we continue to see a lot of potential to transform the on-water experience for consumers,” he added.

    Discontinuing outboard engine business and signing an agreement with Mercury Marine

    Following our decision to discontinue E-TEC and E-TEC G2 outboard engines, we have signed an agreement with market leader Mercury Marine to support boat packages and continue to supply outboard engines to our boat brands.

    We will continue to supply customers and our dealer network service parts and will honour our manufacturer limited warranties, plus offer select programs to manage inventory. These decisions will impact 650 employees globally.

    Pursuing new opportunities within Build and Transform phases of strategy

    With this announcement, BRP will be positioned to expand its presence in the pontoon and aluminum fishing markets through technologically advanced solutions. We will leverage our track record of ingenuity through our R&D resources to enhance the boating experience with unique new marine products, such as the next generation of engine technology with Project Ghost and the next generation of pontoons with Project M, code names for new products we expect to transform the industry.

    Maximizing operational and functional efficiencies

    Lastly, we will consolidate Alumacraft operations from two sites to one. All Alumacraft operations will be transferred to St Peter, MN and our site in Arkadelphia, AR will be permanently closed. In addition, we want to upgrade the boat production facilities to reorganize manufacturing sites and apply the modularity model used elsewhere. This move is designed to enhance productivity and efficiency and to allow us to respond with even more agility to demand.

    About BRP

    We are a global leader in the world of powersports vehicles, propulsion systems and boats, built on over 75 years of ingenuity and intensive consumer focus. Our portfolio of industry-leading and distinctive products includes Ski-Doo and Lynx snowmobiles, Sea-Doo watercraft, Can-Am on- and off-road vehicles, Alumacraft, Manitou, Quintrex, Stacer and Savage boats, Evinrude and Rotax marine propulsion systems as well as Rotax engines for karts, motorcycles and recreational aircraft. We complete our lines of products with a dedicated parts, accessories and apparel business to fully enhance the riding experience. With annual sales of CA$6.1 billion from over 120 countries, our global workforce is made up of approximately 12,600 driven, resourceful people.

    http://www.brp.com

Ironcladjamin
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Re: BRP Ending Production of Evinrude E-TEC

Postby Ironcladjamin » Wed May 27, 2020 7:02 pm

This is a bummer, I just put two E-TEC G2 150-HP engines on my boat.

Will this affect the warranty?

Don SSDD
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Re: BRP Ending Production of Evinrude E-TEC

Postby Don SSDD » Wed May 27, 2020 7:34 pm

Signing a deal with Mercury to supply outboards for their boat brands. Wow.
1986 Outrage 18 with 2001 Honda 130 HP
Former Owner 1991 Guardian 19 with 1994 Evinrude V4 140HP
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quickenberger
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Re: BRP Ending Production of Evinrude E-TEC

Postby quickenberger » Wed May 27, 2020 8:12 pm

I read that they will still honor warranties.

My dad bought a G2 150 H.O. last year.

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Re: BRP Ending Production of Evinrude E-TEC

Postby jimh » Wed May 27, 2020 8:41 pm

I knew that Evinrude was only a small segment of the overall BRP business, but just shutting it down seems unbelievable.

Don SSDD
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Re: BRP abandoning Evinrude E-TEC

Postby Don SSDD » Wed May 27, 2020 8:45 pm

jimh wrote:I knew that Evinrude was only a small segment of the overall BRP business, but just shutting it down seems unbelievable.

Especially when you consider the money just invested for the G2 expansion. Maybe Mercury will take over the E-TEC.
1986 Outrage 18 with 2001 Honda 130 HP
Former Owner 1991 Guardian 19 with 1994 Evinrude V4 140HP
Former owner 1987 Montauk with 1998 Mercury 90HP
Nova Scotia

roundle1979
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Re: BRP Ending Production of Evinrude E-TEC

Postby roundle1979 » Wed May 27, 2020 9:37 pm

Did not see this coming.

Perhaps Volvo--who recently purchased Seven Marine--will choose to go down market and purchase Evinrude

kwik_wurk
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Re: BRP Ending Production of Evinrude E-TEC

Postby kwik_wurk » Wed May 27, 2020 11:00 pm

WOW, Mercury.

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Phil T
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Re: BRP Ending Production of Evinrude E-TEC

Postby Phil T » Thu May 28, 2020 8:10 am

Post citing Bombardier Inc. as responsible for demise deleted.

BRP is a wholly separate corporate entity and not a part of Bombardier Inc.
Member since 2003
1992 Outrage 17, 1992 Evinrude 115

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Re: BRP Ending Production of Evinrude E-TEC

Postby biggiefl » Thu May 28, 2020 9:51 am

I wonder how good the deals will be. When OMC went bust you could rob their engines. I remember my Evinrude/Suzuki 70hp 4 stroke was $2700. I need a nice 200HO for my 18 Outrage.
On my 24th Whaler. Currently in the stable: 86 18' Outrage, 81 13' Sport(original owner), 87 11' Sport, 69 Squall(for sale cheap).

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Re: BRP Ending Production of Evinrude E-TEC

Postby Masbama » Thu May 28, 2020 10:29 am

This is quite sad. I have owned two Johnson and two Evinrude outboard engines. I have always been intrigued by the G2 technology, especially the new I-3 G2 models. Hopefully they will repurpose the facility soon so those folks will be able to keep on working.

Yamaha, Mercury, Suzuki and maybe Honda are now the major players.

Maybe Tohatsu will buy and produce the Evinrude name and technology.

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Re: BRP Ending Production of Evinrude E-TEC

Postby jimh » Thu May 28, 2020 2:06 pm

The Milwaukee newspapers have always been a good source of informed reporting on Evinrude and Mercury. Here is their story on the decision by BRP from Milwaukee Business News:

https://biztimes.com/cutting-hundreds-o ... ry-marine/

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Re: BRP Ending Production of Evinrude E-TEC

Postby biggiefl » Thu May 28, 2020 3:18 pm

How will re-sale on boats equipped with E-TEC engine be affected?

Look at the re-sale of Ficht-powered boats and early Optimax engines 10 to 15-years ago. I mean a restored Montauk with a two year old E-TEC would bring a pretty penny a few days ago.

Will [the ending of production of E-TEC engines] now cost the owner a thousands in resale if they sell soon?
On my 24th Whaler. Currently in the stable: 86 18' Outrage, 81 13' Sport(original owner), 87 11' Sport, 69 Squall(for sale cheap).

quickenberger
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Re: BRP Ending Production of Evinrude E-TEC

Postby quickenberger » Thu May 28, 2020 4:28 pm

Does BRP knows of something about their engines that we don't yet.

Did Mercury take advantage of a skittish market and made BRP an offer they couldn't refuse in order to control more market share?

Will third-party manufacturers will be able to come on-line in order to support the engines that are no longer under warranty?

Time will tell if replacement part prices will skyrocket or if you'll be able to pick-up engines super cheap because it'll be too expensive to justify fixing.

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Re: BRP Ending Production of Evinrude E-TEC

Postby dtmackey » Thu May 28, 2020 4:58 pm

As the happy owner of a 2006 Etec 250 that has been a rock solid performer, the decsion for Evinrude to stop production does not come as a surprise at all.

The stigma of a "2 stroke" has been around since the late 90s and early 2000's where Merc, Yamaha and OMC pumped out countless direct injected 2 strokes that quickly were viewed as troublesome and unreliable. The rush to meet EPA regs was done at the cost of the marketability of 2 stroke motors and Yamaha was quick to see where the future was headed. One by one, 2 stroke offerings were discontinued and replaced with 4 strokes.

What struck me is the sliver of market share the Evinrude had and knowing R&D costs and retooling for new motors is an enormous cost when the G2 was launched, I looked at it and wondered how they made the justification. I'd pour over the BRP quarterly financial releases wondering how they were staying afloat (Evinrude), but when you look at the entire BRP portfolio, the other divisions are very successful - CanAm, SkiDoo, SeaDoo and others. I'd image they carried Evinrude over time hoping that the pendulum would swing back in favor of the G2 enough to support future models, but the market was not having any part of it.

I would be shocked if another company picked up the remains of Evinrude and made any attempt as continuing production. I can see patents for power steering, lower units and midsections getting sold off to companies, but we've see the last of Etec production in the marine environment.

On the flip side, Etec technology is utilized in SkiDoo snowmobiles where BRP SkiDoo is the dominant market player controlling the lions share of the market and the Etec motors have been wildly successful. I fully expect the technogy to live on in the SkiDoo lineup.

D-

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Re: BRP Ending Production of Evinrude E-TEC

Postby biggiefl » Fri May 29, 2020 10:40 am

I agree on them retaining their technology for other brands as they will use them in snow mobiles and jet engines for SeaDoo.

The Fict engines were pretty reliable outside of the 150 & 175hp. Same went for the Optimax which were more reliable than the Fict. Yamaha HPDIs were dialed in on the 150-200hp range are basically considered bulletproof. However their 225-300's were mechanical failures and probably ruined their reputation that they dropped the whole line. The 200HP HPDI would be a perfect match for my 18' Outrage but I am still going with a 4 stroke unless a smoking deal comes my way.
On my 24th Whaler. Currently in the stable: 86 18' Outrage, 81 13' Sport(original owner), 87 11' Sport, 69 Squall(for sale cheap).

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Re: BRP Ending Production of Evinrude E-TEC

Postby hauptjm » Fri May 29, 2020 11:14 am

With this announcement, BRP will be positioned to expand its presence in the pontoon and aluminum fishing markets through technologically advanced solutions. We will leverage our track record of ingenuity through our R&D resources to enhance the boating experience with unique new marine products, such as the next generation of engine technology with Project Ghost and the next generation of pontoons with Project M, code names for new products we expect to transform the industry
.

If BRP thinks this Project Ghost is the future of boating, then I will not be surprised by their further demise as a going concern. Just my opinion, of course, but "SeeDoing" the next generation of boats will not transform the industry. It will simply be the the three-wheeled version of boating that the Stinger (Polaris) is to motorcycling.

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Re: BRP abandoning Evinrude E-TEC

Postby jimh » Sat May 30, 2020 9:42 am

A sidebar in which an erroneous notion that BRP was producing four-stroke-power-cycle engines under their JOHNSON brand name has been eliminated.

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Re: BRP abandoning Evinrude E-TEC

Postby jimh » Sat May 30, 2020 9:45 am

One days after the May 27, 2020 announcement, BRP held an investors conference call on May 28, 2020. The call transcript is available at

https://www.fool.com/earnings/call-tran ... cript.aspx

Here are some excerpts:

    [Speaking is] Jose Boisjoli -- President and Chief Executive Officer

    "Good morning, everyone, and thank you for joining us. About two months ago, when we presented our year-end results, we were of -- we were on a roll. We had incredible momentum with every product line worldwide, and we were anticipating another great year ahead.

    "Like the rest of the world, we were faced with the sudden impact of the COVID-19 crisis, which brought rapid changes that significantly disrupted our business and operation and forced us to quickly adapt our plan. It began when our dealer had to close their business as the situation worsened in China in January. Closure followed in Western Europe in February, where local government enforced severe containment measures.

    "As you can see on this slide, retail in North America had been strong until mid-March, was negative for one month and once dealers started to reopen, retail has been strong since mid-April. Our manufacturing has reopened or is in the process of reopening, and we are adapting to the present reality.

    "With retail tracking better than expected, we are now focused on getting production back to capacity globally. I am proud of the team's swift action taken to limit the potential impact of the crisis on our business and protect our financial flexibility. Amongst other, we deployed global protocol to ensure that our employees can work in a safe environment and reduce risk. We adjusted our production plan in line with government health regulation and expected market demand. We implemented cost mitigation measures, notably temporary layoffs, salary reduction and an exhaustive review of discretionary spending, resulting in overhead savings of up to CAD450 million for the rest of the year. We focused on liquidity preservation, notably focusing our capex investment on key projects, with high-impacted return, resulting in a total capex target of CAD220 million to CAD250 million for the year, representing a reduction of about CAD130 million to CAD160 million from last year level. And we were successful in extending our term loan B by $600 million and maintain our covenant-light condition. As a result of this effort with our cash on hand and CAD700 million of revolver availability, following the completion of the term loan transaction, we have about CAD1.3 billion of financial flexibility.

    "While we remain cautious about the future, we expect that these different initiatives will allow us to navigate through the uncertain times while allowing us to continue investing for the long-term growth of the company. However, these measures do not come without sacrifice and one of the toughest decisions we had to make, as we announced yesterday evening, is the discontinuation of outboard engine production.

    "As you have witnessed over the last few years, despite its innovative technology, our outboard engine line-up has been losing share in a market that was already difficult. Our strength was in the early power segment while the industry growth was driven by the package sector, which led to continued share erosion. Given this trend, our outboard engine had fallen behind in terms of profitability and cash generation potential.

    "As the current situation forces us to reduce our investment plan and reviews downward our growth expectations for the business, the path to profitability improvement for outboard engine was too long. It became apparent that we had to discontinue production. For Evinrude employees, let me say that I am very proud of the part they have played over the past years, and in particular their efforts over the past 18 months. Although we have made progress, the impact of the COVID-19 has left us no choice. I wish to thank them for their dedication and commitment in helping us create the Marine Group.

    "This decision will allow us to refocus our Marine investment on higher expected returns and sustainable projects, such as innovative technology and enhancing our boat offer. We remain committed to our Marine strategy with an evolution to our approach. Along with the announcement last night, we also announced a global supply agreement with Mercury, which is securing access to engines and is expected to support our dealer network development efforts.

    "Our strategy has always been about building a strong Marine business by offering customers a superior boating experience through product innovation. The discontinuation of outboard engine production does not change that objective. The development of Project Ghost and Project M are progressing as planned and we are confident that they will be game-changers in the industry.

    "....Finally, looking at our Marine business. Revenues were down 26% due to a lower volume of outboard engines and boats sold, partially offset by the impact of the acquisition of Telwater during last year. At the retail level, Alumacraft was down over 20% resulting from weak industry trends in key markets, while Manitou performed well with retail up low-teen percentage. With the confinement measures lifting and spring weather getting better, we see retail improving for both Manitou and Alumacraft."

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Re: BRP abandoning Evinrude E-TEC

Postby jimh » Sat May 30, 2020 10:01 am

More excerpts:

    Operator

    "Your next question comes from the line of Craig Kennison with Baird. Please go ahead."

    Craig Kennison -- Robert W. Baird & Co. -- Analyst

    "Hey, good morning. Thank you for taking my questions. Seb, I think you just mentioned some metrics regarding the engine business that you're exiting. Could you share with us the annualized revenue and margin profile of that business, so we can try to exclude it from future results?"

    Sebastien Martel -- Chief Financial Officer

    "Yes. Well actually on the OE business, there's actually two components; there's the unit business and there's the parts business. And the parts business is a business that we're going to be continuing. Obviously, we're going to be servicing our dealers for warranty but also for our consumers that are no longer under warranty but need service, so that business is going to keep going on.

    "As Jose mentioned, the unit business, so the actual engine, was a business that we were sub-scale. We've been losing market share over the last few years. And from a margin perspective, it's a business that was almost breakeven. And from a profitability, it was a business that was actually at a loss position, and that's why we took the decision to discontinue it.

    "When you look at OE in terms of the whole portfolio of our Marine segment, the engine business is about 45% of total revenues. So if you carve that part out, it should give you a good appreciation of what the remaining business is.

    Craig Kennison -- Robert W. Baird & Co. -- Analyst

    "What would you estimate your market share to have been in that?"

    Sebastien Martel -- Chief Financial Officer

    All [Phonetic] in the mid-single digits.

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Re: BRP Ending Production of Evinrude E-TEC

Postby jimh » Sat May 30, 2020 10:16 am

What was revealed in the conference call:

  • the margin on E-TEC engine sales was very slim
  • the E-TEC market share was declining and was only 4 to 6 percent (or more politely "mid-single digits") of the total outboard engine market
  • the overall outboard engine market was trending toward packaging of outboard engines with new boat sales
  • the Evinrude outboard engine manufacturing was operating at a loss

While we would all like to think that BRP has some obligation to dealers who have been selling their engines to boaters who have been buying their engines for the last 100 years, in the corporate world the real obligation of BRP is to the investors. Of course, the biggest investors are a capital investment company (BAIN CAPITAL MANAGEMENT) who is really quite agnostic about where the profits come from.

The manufacturing of modern engines requires a huge investment in research, design, production facilities, and so on, and because of intense global competition in outboard engines the margins on their sales to dealer by the manufacturer has always been low. Because of the very high fixed costs in manufacturing, profits only occur when those fixed costs are paid off. This means profits come only at the incremental sales that occur after break-even. If your market share is declining, your expectation of future profits is also declining.

When Evinrude introduced their E-TEC G2 engines, they lost an important advantage they once had: lower engine weight compared to competitor's four-stroke-power-cycle engines. Certainly BRP knew this would occur, but they apparently felt that E-TEC G2 engines would mostly sell as a package with new boats which were designed for higher engine weight. And some competitors' four-stroke-power-cycle engines were now the same weight or even perhaps lower weight. Those lighter engines from competitors would compete in the re-power market. Evinrude would be losing market share in the re-power market.

Regarding the re-power market, there are only so many old boats that need new engines. I look at my own history of engine purchase. I have owned five outboard engines, but I only bought one of them as a new engine from a dealer. That one new engine is on my 1990 boat. How many more new engines do I expect to buy for that 1990 boat? I don't plan to buy any more new engines, at least I hope I don't need to buy any more. A 1990 boat is now a 30-year-old boat. I think Evinrude was reasonably correct in deciding that lowest engine weight would not be a huge factor affecting choice of engine for most boaters.

The 45-percent of the marine division revenues that came from outboard engine manufacturing may seem like a big chunk of revenue, but if that segment of the business produced no profit and was actually losing money in outboard mafacturing, it may not be very hard to end that outboard manufacturing operation. In addition, when viewed as part of the overall business of BRP, the Marine Division was really not a big factor. Selling snow machines (SKIDOO and LYNX), jet-skis (SEADOO, off-road vehicles and motorcycles (CAN-AM), and Original Equipment (OE) small engines (ROTAX) were other profitable and collectively much larger business units of BRP.

Viewed in terms of a corporate cultural orientation, Bombardier Recreational Products' other business units all tended to be market leaders or very dominant in these other businesses. In outboard engines Evinrude was running in third or fourth place (or perhaps worse) with a single-digit market share. There really was not a reasonable basis to think that Evinrude could ever return to be the market leader and take away business from Mercury and Yamaha, who combined probably have 85-percent of the market (as each often claims they have the majority position in the market). That was never going to happen. Evinrude was going to be splitting a minority share of the market with Honda, Suzuki, and Tohatsu.

Finally, the recreational boating market seems to be in a totally new era. Boat builders are all making very large and very expensive outboard-powered boats. The days of everyman having a 15-foot aluminum skiff in the garage, with a 40-HP outboard engine, and towing it the lake to go fishing seem to have ended. Small-boat recreational boating now consists of jet-skis or personal watercraft (PWC), or pontoon boats, or very specialized species-specific fishing boats (bass and walleye boats), or purpose-designed boats for towing water skiers, wakeboarders, and tubes. All those boats are usually sold with already installed and configured outboard engines. To sell outboard engines in volume today, an engine manufacturer has to own boat companies or have long-term agreements with boat companies to exclusively use a certain engine brand.

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Re: BRP Ending Production of Evinrude E-TEC

Postby jimh » Sat May 30, 2020 10:38 am

Regarding obligations to fulfill warranties: I am sure there must be some legal obligations in the USA regarding this. I doubt anyone can predict with certainty what will occur. Questions about this are mostly rhetorical questions.

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Re: BRP Ending Production of Evinrude E-TEC

Postby jimh » Sat May 30, 2020 10:43 am

Regarding how the present value of an Evinrude E-TEC engine already in service on a boat will be affected by the end of production: I think it is safe to presume that the value won't be increased. Once a new engine is put on the transom of an old boat, it has already lost a great deal of value. You cannot buy a $15,000 outboard engine, put it on a 30-year-old boat, and expect that the value of the boat and motor has suddenly increased by $15,000. Buying new engines at retail to re-power old boats was already a money losing investment.

For a similar situation, ask all the Mercury VERADO FOURSTROKE in-line four-cylinder engine owners how they were affected when Mercury stopped making their engine.

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Re: BRP Ending Production of Evinrude E-TEC

Postby jimh » Sat May 30, 2020 12:38 pm

BRP also reported in their Fiscal Year 2021 First Quarter Report:

    Marine
    Revenues from the Marine segment decreased by $39.2 million, or 25.9%, to $112.1 million for the three-month period ended April 30, 2020, compared with $151.3 million for the corresponding period ended April 30, 2019. The decrease was mainly due to the COVID-19 pandemic, partially offset by the acquisition of Telwater Pty Ltd during Fiscal 2020.

    North American outboard engine retail sales decreased on a percentage basis in the mid-forties range compared with the three-month period ended April 30, 2019.

Certainly sales of outboard engines were affected by the closing of dealer stores beginning in mid-March, but a decline of more than 40-percent is a worrisome indicator that perhaps more than COVAD-19 was affecting sales.

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Re: BRP Ending Production of Evinrude E-TEC

Postby Maverick » Sat May 30, 2020 1:39 pm

About a month ago I purchased a new Suzuki 90 for my 17’ Whaler - I have many reasons, but it was a dollar bottom line - about $2500 cheaper for comparably sized Suzuki versus ETEC motor.

I hate to see a great American icon like Evinrude get sidelined - it is a sad commentary especially for the workers, and of a long-standing legacy that I have always appreciated and respected. While I take no delight in the demise of any company with such a distinguished history, I have to wonder where the company leadership was focused, and why.

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Re: BRP Ending Production of Evinrude E-TEC

Postby pcrussell50 » Sat May 30, 2020 2:13 pm

Four contributing factors to ending E-TEC production:
  1. COVID is an excuse, not a cause
  2. Prior to G2 the E-TEC two-stroke technology was superb, light, clean, fuel efficient
  3. BRP marketing failed to get that message across in the onslaught of four-stroke technology
  4. E-TEC engines were too expensive

The nail in the casket: the G2 was a trifecta of disaster. It was ugly beyond all get out but that can be overlooked if there is a redeeming factor, such as light weight, which was the one thing E-TEC engines offered over four stroke technology. But no. While four-stroke engines got lighter, BRP decided to pork up the G2. So they made the G2 ugly, heavy, and expensive. The three worst things they could have done. The outcome is no surprise.

I was born into boating as an Evinrude fan. This is sad for me. I was prepared to overlook the appearance, but I wrote them off as soon as the weight specs started coming out on the G2.

-Peter
Last edited by pcrussell50 on Sat May 30, 2020 3:01 pm, edited 1 time in total.

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Re: BRP Ending Production of Evinrude E-TEC

Postby jimh » Sat May 30, 2020 2:49 pm

PETER--if I have read the company financial reports, sales were going okay, but there was no profit.

Regarding engine weight, it is no longer a concern with new boats. New boats are all designed for heavy engines. Engine weight is only a concern for re-powering old boats, designed for engines made in the 1970's and 1980's. That was 40 to 50-years ago. But in an industry where all other manufacturers were trimming weight, to add weight to your product was not exactly a brainstorm idea.

Regarding appearance: the new G2 styling was a radical departure. Maybe the management thought it would appeal to millennials. They forgot that millennials don't buy expensive items, they lease them. If they don't buy themselves a car, why would they buy a $25,000 outboard engine on a $100,000 boat. They don't have waterfront homes, they rent them on the weekend. They can't be trailer-boaters because their car won't tow anything. Therefore I also think the radical styling was certainly a problem, and especially for the most likely customers of a two-stroke engine: nostalgic upscale men over 50-years-old who own 30-year-old boats that were too expensive for them when they were younger.

Regarding price, that has always been a problem for U.S. manufacturers in competition with Japanese imports.

If Evinrude had been more competitive perhaps BRP could have entered into an agreement with Brunswick where they made an engine in common, a commodity engine, and then they could have shared the high investment, low margin business of making engines. I heard Bob Lutz, a talkative retired auto executive, suggest that the global car business needs to go to commodity engines. One supplier would make a four-cylinder, direct-injection, turbocharged 2.5-liter 250-HP engine, and sell it to all the car makers. Each car maker would save a billion dollars in design, engineering, tooling, production, and testing. Who really buys a car for a particular engine--other than Oldsmobile owners, if you can make that allusion.

Regarding the G2 technology: let me mention a similar situation. In electronics, there were vacuum tubes before there were solid-state components. Someone once proposed that there should be consideration given to the exact opposite sequence of evolution. Suppose the solid-state devices were invented first. Then someone came up with vacuum-tubes.

We should look at the E-TEC G2 and its legacy preceding engine in that respect. What if the G2 were the first model developed, and then Evinrude came out with the G1. What would you say then?

You could say the G1 was lighter and you liked the retro styling. But you'd also have to acknowledge that the fuel economy was worse, the power output was worse, and the emission output was worse. The cost of the two is about the same.

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Re: BRP Ending Production of Evinrude E-TEC

Postby pcrussell50 » Sat May 30, 2020 4:20 pm

Very insightful and informative post, Jim. I disagree with none of it.

jimh wrote:Regarding engine weight, it is no longer a concern with new boats. New boats are all designed for heavy engines.


Because the new boats are also heavier. I have trouble understanding how more weight in the same sized package adds value. And it has nothing to do with the fact that I have now gone over 50.

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Re: BRP Ending Production of Evinrude E-TEC

Postby jimh » Sun May 31, 2020 7:39 am

Re weight of new boats: yes, the boat builders seem to have forgotten the concept of light weight. I don’t have a theory. Start a new topic and we can discuss it. With regard to BRP deciding to cease production of Evinrude outboard engines, that topic is very tangential.

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Re: BRP Ending Production of Evinrude E-TEC

Postby jimh » Sun May 31, 2020 10:25 am

There are many other forums discussing this topic, and I came across a very optimistic comment: in the future BRP would resume production of outboard engines under the JOHNSON brand, avoiding the stigma and tarnish of the EVINRUDE brand being associated with two-stroke-power-cycle engine manufacturing and the E-TEC and E-TEC G2 model designators, and these future JOHNSON engines would be four-stroke-power-cycle engines based on technology from BRP's ROTAX division.

This is optimistic thinking, but it seems to ignore the actual wording in the announcements. Here are some direct quotes:

"Company discontinues the manufacturing of outboard engines"

"Discontinuing outboard engine business and signing an agreement with Mercury Marine"

BRP does give a hint at the future:

"With this announcement, BRP will be positioned to expand its presence in the pontoon and aluminum fishing markets through technologically advanced solutions. We will leverage our track record of ingenuity through our R&D resources to enhance the boating experience with unique new marine products, such as the next generation of engine technology with Project Ghost and the next generation of pontoons with Project M, code names for new products we expect to transform the industry."

It seems clear to me that whatever Project Ghost and Project M turn out to be, they won't be outboard engines in a traditional sense. They appear to be a new type of propulsion engine that will be custom-fitted to particular boats, much like an inboard engine would be installed inside the boat. You can see BRP's presentation to investors of these future products at

http://ir.brp.com/static-files/4158acfd ... bd8420c6d8

Jump ahead to about page 80 to see the future Project Ghost and Project M concept drawings.

This document also give a clue to where the Marine Division ranked in terms of overall business for BRP. The don't get around to marine in the presentation until about page 70.

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Re: BRP Ending Production of Evinrude E-TEC

Postby pcrussell50 » Sun May 31, 2020 10:51 am

jimh wrote:There are many other forums discussing this topic, and I came across a very optimistic comment: in the future BRP would resume production of outboard engines under the JOHNSON brand, avoiding the stigma and tarnish of the EVINRUDE brand being associated with two-stroke-power-cycle engine manufacturing and the E-TEC and E-TEC G2 model designators, and these future JOHNSON engines would be four-stroke-power-cycle engines based on technology from BRP's ROTAX division.

This is optimistic thinking...


How did Evinrude get "stigma and tarnish" from the original E-TEC's? Light, clean, quiet, fuel efficient. Too expensive, yes. But otherwise everything you could want in an outboard. I can only imagine that the "stigma and tarnish" came from the G2, which was even more expensive, with greater weight and ugly (er, radical styling) to boot.

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Re: BRP Ending Production of Evinrude E-TEC

Postby jimh » Sun May 31, 2020 12:46 pm

According to enlightened thinkers, all two-stroke-power-cycle engines have been suspect and prone to catastrophic failure since the day a four-stroke-power-cycle engine was produced by the engine manufacturer that those thinkers think is the greatest of all time, and insert your favorite brand there.

Also, many think that departing the outboard engine business in the very abrupt manner that BRP has done will leave a permanent scar on their brands in the marine business. There may be some truth in that. One dealer already posted his disgust with BRP and their exit. When former dealers start talking trash about their former brand partner, it is not a pretty sight.

I really have empathy for dealers who have been selling only Evinrude for 100-years; they can't be too happy with BRP right now. On the other hand, a dealer who continues to provide top service for Evinrude may have more business, due to other dealers ending their relationship with BRP.

Were I an Evinrude dealer right now, I would get on the phone to Suzuki. I'd try to get a Suzuki dealership. Mercury and Yamaha already have very strong dealer networks, so getting a new dealership from them may be very hard. Even if you did get a Mercury or Yamaha dealership, you would be competing with the other existing dealers in your area. Suzuki needs a better dealer network--at least where I am located it does. Suzuki engines should be easy to sell to a lot of customers; they have three important features: first, they are not two-stroke-power-cycle, so there is no stigma to overcome; second, they are generally priced lower than all other brands; and third, you can actually get inventory. Apparently for some models of Mercury outboard engines there is a long waiting list at the moment.

As far as brand competition, there has always been a DOG-AND-CAT relationship between Mercury and Evinrude/Johnson. You usually never found them combined under one dealer's roof. The two brands did not like each other, going back to the days when they were the only two manufacturers of outboard engines. For any long-time Evinrude dealer to take on Mercury would be akin to heresy. Better to switch to Suzuki and only order white cowlings.

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Re: BRP Ending Production of Evinrude E-TEC

Postby pcrussell50 » Sun May 31, 2020 1:59 pm

jimh wrote:According to enlightened thinkers, all two-stroke-power-cycle engines have been suspect and prone to catastrophic failure since the day a four-stroke-power-cycle engine was produced by the engine manufacturer that those thinkers think is the greatest of all time, and insert your favorite brand there.


Tongue in cheek as you are obviously being, I suspect there is truth in what you are saying. Ignorance and bias make a powerful cocktail that almost always trumps fact and reason.

By the way, I don't have nor have I ever had, an E-TEC motor, so I have no reason to support them (the originals at least), other than on their face value.

-Peter

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Re: BRP Ending Production of Evinrude E-TEC

Postby sraab928 » Mon Jun 01, 2020 9:51 am

jimh wrote:For a similar situation, ask all the Mercury VERADO FOURSTROKE in-line four-cylinder engine owners how they were affected when Mercury stopped making their engine.


I am sorry but this analogy is absurd to me: comparing a discontinued model to a discontinued brand. I know you enjoy picking on Mercury (I own an Evinrude E-TEC not a Mercury Outboard) but seriously.
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Re: BRP Ending Production of Evinrude E-TEC

Postby Phil T » Mon Jun 01, 2020 10:37 am

Do not overlook or minimize the influence Bain Capital has. Larry shared some rather salient points regarding this.

Private equity are not in the investment game, they purchase assets and then leverage as much money as possible. Not bringing in cash, sell it or shut it down. Remember Gordon Gecko.
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Re: BRP Ending Production of Evinrude E-TEC

Postby jimh » Mon Jun 01, 2020 11:03 am

Phil T wrote:Do not overlook or minimize the influence Bain Capital has.


If you take on the devil as a business partner, there should not be an expectation of angelic behavior.

BRP is a publicly traded equity stock company. It has many investors. It raised a lot of new capital investment by going public. All publicly traded companies have to disclose their financial details. Any money or influence attributable to a particular investor or group should be transparently revealed if the regulations for publicly traded companies are followed. There are cadres of tort lawyers looking to start class action suits if there is a hint of scandal.

The price of BRP stock will tend to reflect if investors think the decision to exit the outboard engine manufacturing business and to throw research and product development into “the next generation of engine technology” was a smart move.

Any comments by Larry Goltz should be posted here by Larry Goltz. I am not going to discuss Larry Goltz comments without Larry Goltz being a participant in this discussion.

There are dozens of threads with hundreds of participants on many boating websites. This thread cannot discuss everything said in every thread on every website.

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Re: BRP Ending Production of Evinrude E-TEC

Postby pcrussell50 » Mon Jun 01, 2020 11:07 am

I love Larry :)

What is his user name here in the new forum? I'd love to use the search function on his user name and catch up on his posts.

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Re: BRP Ending Production of Evinrude E-TEC

Postby Oldslowandugly » Mon Jun 01, 2020 11:18 am

In my area I see E-TEC motors everywhere. Especially on boats that were originally equipped with Mercury motors. Re-powering with E-TEC motors is (was) a thriving business. I always planned on getting one when and if my 27 year old 48SPL quit for good. "We will continue to supply customers and our dealer network service parts "--this is what scares me the most. I read an article years ago where BRP admitted that "keeping old motors alive was not the goal- selling new motors was". I have kept many an old Johnny-Rude motor healthy with dealer parts. The old OMC used to pride itself on supporting motors going back to the 1920's. But lately BRP dealers have not kept up stock and I have turned to NOS parts from Ebay and other places. I doubt that BRP is going to support E-TEC motors for very long, if at all. If I believed that the support was really going to be there I would run right out and buy a new 50hp E-TEC from whatever dealer had one in stock. But if I can't get parts then there is no point to that.

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Re: BRP Ending Production of Evinrude E-TEC

Postby jimh » Mon Jun 01, 2020 11:27 am

pcrussell50 wrote:I love Larry


Me, too. But I do not believe he is writing any articles on the new forum under any user-id.

ASIDE: last summer Larry and I did some boating together, and we enjoyed two nice dinners together. We had not seen each other in quite a few years. By the way, all the outboard engines he has on his five boats are still older two-stroke-power-cycle engines. He has not re-powered with any VERADO or other FOURSTROKE Mercury engines, nor any OPTIMAX engines. I think his newest engines are c.1988. One of his recent boat purchases was a boat with an OMC engine. He immediately removed the engine, sold it, and replaced it with a vintage Mercury two-stroke-power-cycle engine.

Larry was forecasting the demise of Evinrude for about 17-years. I don't think he ever forecasted a global pandemic. If you get up every morning and say it feels like rain today, you are going to eventually be right.

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Re: BRP Ending Production of Evinrude E-TEC

Postby jimh » Mon Jun 01, 2020 11:35 am

Re maintaining the legacy or non-G2 E-TEC engines: many of the basic components were derived from older OMC engine block designs. The critical new components to maintain will be the engine management module, the voice coil fuel injectors, and the SLE Magnum gear case. But I expect aftermarket suppliers will fill in any important gaps. You can still get repair parts for outboard engines that have been out of production for 40 years.

The E-TEC G2 engines are quite different. I suspect that many OEM components will be needed to maintain them for long-term service.

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Re: BRP Ending Production of Evinrude E-TEC

Postby Don SSDD » Tue Jun 02, 2020 10:20 am

I think the costs of developing new engines, having them certified by EPA, is extremely expensive. As emission rules change or as manufacturers modify existing designs, a new emission approval is needed. If you look at world engine manufacturers like say Caterpillar or the auto manufacturers, they have many engines they build for emission specs in Europe, Asia, Africa, that never ever arrive in North America as they don’t bother to have them EPA or California emissions certified.

Caterpillar was a big manufacturer for decades of diesel engines for highway tractors like International, Freightliner, Peterbilt, etc. but gave up due to the cost of keeping up with North American emission standards. There were constant changes on diesel emission standards every 3 or 4 years and Cat just gave up. They still produce their diesels for their construction equipment but the truck market was abandoned.

I guess BRP decided to give up on their marine engine sideline too.
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Re: BRP Ending Production of Evinrude E-TEC

Postby pcrussell50 » Tue Jun 02, 2020 11:37 am

This. ^^^ And for some reason it’s mostly USA/North America with the “our way or the highway“ mindset that is intolerant of the slightest differences in regulatory standards. Even ones that are higher. EuroDOT headlights have much more stringent standards than USA DOT due to the higher speeds on European freeways. But they still allow USDOT cars on their highways. We do not allow theirs on our highways. It’s childish and petty. But we (citizens) allow it. Though I suspect the average American citizen doesn’t even know to be outraged.

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Re: BRP Ending Production of Evinrude E-TEC

Postby biggiefl » Tue Jun 02, 2020 11:47 am

I do my best not to be outraged about European headlight laws.
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Re: BRP Ending Production of Evinrude E-TEC

Postby pcrussell50 » Tue Jun 02, 2020 12:26 pm

biggiefl wrote:I do my best not to be outraged about European headlight laws.


It’s not just headlights, mate. Not. Even. Close.

It’s not even merely what the guy/Don above me posted. Although he is exactly right.

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Re: BRP Ending Production of Evinrude E-TEC

Postby jimh » Tue Jun 02, 2020 8:32 pm

I really have not investigated this significant influence of government regulation on the market for outboard engines, but some are claiming the EPA relented on exhaust emission regulations on four-stroke-power-cycle OUTBOARD engines. This rule CHANGE is claimed to be a big boost to four-stroke outboards because they don’t have to meet the more stringent regulations.

The relationship to BRP is that the E-TEC was able to meet these stringent regulations. When the EPA threw out those requirements for four-stroke outboard engines they handed those manufacturers a huge gift and stole a huge advantage away from Evinrude.

Is this true? I don’t know. I read it on a website. I need to research more about this. Maybe there is an informed reader who can comment.

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Re: BRP Ending Production of Evinrude E-TEC

Postby pcrussell50 » Tue Jun 02, 2020 9:19 pm

Ultimately the way to take outboard emissions to the next level will be through the addition of weight, cost, bulk, and complexity. Regulators couldn’t care a whiff about weight, cost, and bulk, but adding complexity has dire consequences in marine applications where continuation of propulsion and added fire risk may have life and death consequences. You don’t have catalytic converters on aircraft engines for this reason. Not that the regulators aren’t plenty tempted.

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Last edited by pcrussell50 on Wed Jun 03, 2020 9:57 am, edited 1 time in total.

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Re: BRP Ending Production of Evinrude E-TEC

Postby jimh » Wed Jun 03, 2020 9:31 am

PETER--thanks for your remarks of the future of emission regulations for outboard engines, but I really wanted to know if there had been a policy change.

I recall reading many predictions that outboard engines would need to add catalytic convertors in order to comply with EPA exhaust gas emission regulations. Now, if my inference is correct, apparently the EPA decided to change their orders and are exempting four-stroke-power-cycle outboard engines from this rule.

By the way, this may also have a huge influence on why there are suddenly 350-HP and 400-HP and even more powerful outboard engines being used as twins, triple, and quad engine power on boats that would otherwise typically have big inboard engines. Those big inboard engines would have needed to use catalytic convertors to meet their emission requirements, but a monster 400-HP outboard is exempt. For further discussion about this see

The Rise of Very Powerful Outboard Engines
viewtopic.php?f=4&t=5070&p=29168#p29168

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Re: BRP Ending Production of Evinrude E-TEC

Postby pcrussell50 » Wed Jun 03, 2020 9:57 am

As you said. It’s been talked about. And planned. There are no requirements yet for catalytic converters on outboards because no bureaucrats in charge have had the courage to sign a death warrant on human lives. Someday one will.

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Re: BRP Ending Production of Evinrude E-TEC

Postby jimh » Wed Jun 03, 2020 10:04 am

sraab928 wrote:
jimh wrote:For a similar situation, ask all the Mercury VERADO FOURSTROKE in-line four-cylinder engine owners how they were affected when Mercury stopped making their engine.


I am sorry but this analogy is absurd to me: comparing a discontinued model to a discontinued brand. I know you enjoy picking on Mercury (I own an Evinrude E-TEC not a Mercury Outboard) but seriously.


You forgot to read the first sentence of my reply. I said:

jimh wrote:Regarding how the present value of an Evinrude E-TEC engine already in service on a boat will be affected by the end of production...


The Evinrude brand is not discontinued. Actually, I expect that sales of parts and authorized service for the no-longer-in-production E-TEC engines will continue. Providing parts is generally a profitable part of the marine business, often more profitable than making outboard engines that will need those parts.

I don't think you can possibly view what I said as "picking on Mercury." I hope this won't stun you either, but BRUNSWICK owns all sorts of marine parts and accessory businesses, and those operations sell parts for engines that Mercury no longer produces. I am not aware of any special exemption that restricts commenting about Mercury dropping an entire line of engine production after a short production lifespan. The L4 VERADO came out after the L6, and production of the L4 has ended, while production of the L6 continues. I am sure owner's of the L4 were surprised to find their engines made obsolete so soon.

You seem to think that BRP has gone out of the marine engine business entirely. That is not the case. They just announced they would stop producing their Evinrude E-TEC engines. It seems likely that BRP will continue to have authorized service-only dealers that will service and support E-TEC engines, and that BRP will have parts for them. I expect that to happen, unless the people running BRP are incredibly short-sighted and want to forego the opportunity to generate profit from sales of parts on engines they don't make any longer. If that actually occurs, then I would not make the analogy I did. But I don't expect BRP to suspend a profitable marine operation. If they do, maybe there is something else going on.

By the way, my own E-TEC engine went out of production about five years ago when it was superseded by a newer model, a G2 version. That engine was already about six or seven years old, it had hundreds of hours of use, and its value had already diminished in terms of what price it might fetch if I wanted to sell it. But its value to me as a propulsion engine on my boat did not change, it still runs and moves the boat just like it did before the G2 model replaced it. This is quite similar to all the people who have four-cylinder VERADO FOURSTOKE engines that are now out of production.

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Re: BRP Ending Production of Evinrude E-TEC

Postby biggiefl » Wed Jun 03, 2020 10:22 am

Jim there is a big difference on resale on a model that is no longer produced and a company that is no longer in business. I can imagine that the resale of the 3rd generation corvette was less affected when replaced by the 4th gen. than the owners of MG's in the early 1980s.
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