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OMC vs. Mercury
|Author||Topic: OMC vs. Mercury|
posted 09-11-2000 10:57 AM ET (US)
My intention is not to create a controversy, but rather to understand the current engine "enviroment". Granted, I have been an OMC guy forever. My perception and experience always pointed to OMC as being the workhorse, dependable motor. I also was always under the impression that Mercury was the "Ferrari", fast, but not reliable. Obviously, with markets determining the surviors, Mercury has to have improved over the last decade to remove the "black anchor" image. They wouldn't be selling the engines they sell if not. However, I'm confused as hell as to the situation I'm hearing regarding OMC. To my innocent eye, OMC is selling engines as fast as they are made. Down here in South Louisiana and the Gulf Coast there are more boats utilizing outboards then probably anywhere else in the world. Boating (recreational and commercial) is year-round. Without fail, OMC is absolutely dominate. Go to Florida, and the locals who expose their boats to salt water 100% of the time, and run 30 - 100 miles offshore to fish, are virtually all using OMC Oceanrunners and OceanPros. Here in Louisiana and in south Texas, again virtually all of the Oilfield is using OMC, not to mention the fact that all U.S.Coast Guard and most other military branches use them for their outboard needs. In fact there is a dealer here in the New Orleans area that has been listed as "the King of Outboards" selling more outboard engines than any other dealer in existence. Exclusively OMC engines. I know one dealer does not a market make, but I just can't imagine it's engine sales that is hurting this corporation. Of course, I am not an expert but rather just a consumer. I also hope that a company that has produced such a good product for so long is not at the brink of collapse, as it sounds from the comments I'm hearing on this forum.
posted 09-11-2000 12:44 PM ET (US)
Well the article lhg mentioned is dated August 28 2000 and you can read it here ---
from what I gather nothing to do with which engine is better so to speak but the mess OMC has gotten themselves in --- read the article it will help explain the predicament
posted 09-11-2000 02:20 PM ET (US)
Jim: I agree with you, and I would hate to see a brand like OMC dissappear. But I believe the information you are hearing is correct. My information comes from "Soundings TRADE" monthly newspaper, and they did indicate that OMC's engines sales are decreasing. At the same time, over the last 5 years, Yamaha is claiming their sales have doubled, mostly at the expense of OMC. As everybody knows, Yamaha makes a good product and is tough competition!
If I understand it correctly, OMC has suffered from failure to improve technology fast enough (like ignition, narrower degree V blocks, power trim, & fuel injection systems), plus a bunch of other problems,
I think engine brands do show some "territoriality", probably because of Dealer efforts & successes. On the Southeast coast of Florida, for instance, Palm Beach to the Keys, Mercurys are by far the most common engine seen, particularly in the twin engine V-6 area. The bass boat and "go fast" markets are also controlled by Mercs, representing huge sales. But just because they are fast does not mean they are not reliable and are not corrosion resistant!
posted 09-11-2000 03:30 PM ET (US)
Oops Larry thought you got it from the article I listed --- paints a gloomy picture I must say --- though Chris Craft is having a banner year and introducing some classic designs again --- my bet is they will get a financial infusion some way ---
Another item just picked up -- Merc now has the Japanese governments ok to by pass their extremely tough and costly pre-testing before an engine can be sold in Japan gives them a nice advantage I would think over other imports ---
posted 09-11-2000 03:48 PM ET (US)
O.K. I think I've gotten a little up to speed on the OMC situation. Unfortunately, after a little investigation into the marine engine industry, it doesn't look like any of these companies are competent with business at hand. The Chicago Business article paints a horrible picture. Personally, I can't believe Soros is going to leave $373 million on the table. Not on a company that has a 34% market share. Now OMC (Greenmarine Holdings) fires CEO David Jones on August 29th. He was put there by Soros. I have to assume Soros has full intent to make good on his investment. That's a good thing for the industry/consumer. Speaking of which, Brunswick recently announced it's divesting itself of the camping, fishing and bicycle divisions. And taking a $190 million AFTER-TAX charge off. OUCH! This is by a company whose stock is down almost 50% in the last year. If they are not careful, the American marine engine industry is going to ALL be working for Yamaha. This is not a healthy industry ( sans Yamaha). Because of the nature of my profession, I'll try to keep an ear to the ground on any other developments. Of course, I know you guys will do the same. One of the great things about this site are the varied talents of its participants. You guys really know whats shaking in the boating world.
posted 09-11-2000 05:38 PM ET (US)
Jim: Don't write off Brunswick/Mercury too fast. They're very solid, with stock only down to 19 1/2 from year high of 26. The previous CEO, Peter Larson, evidently did make the mistake of getting away from their core business of engines & boats with this bicycle & fishing equipment, but that was only a samll glitch. And he got pushed aside! Their combined marine engine sales are huge. Nobody else even comes close! Mercury controls at least 85% of the marine engine business in gasoline inboards & Stern drives, and close to 50% in outboard engines, and growing. This is why all the independent boat builders have been sueing them for non-competitive behavior. But recently most of this has been overturned in the appellate courts.
One of their biggest secrets, however, is how they're doing with Boston Whaler! Can't find anything on this in the trade or financial publications. They just don't release this kind of info! But since the production force at the factory has doubled from the Reebock/Meridian days, I assume they're doing allright with Whaler also.
posted 09-11-2000 06:04 PM ET (US)
Wow, Tom, thanks for the Chicagobusiness link. Had not seen that story. Everybody should check it out. This is stuff that is not published in the boating mags! Even the trade journal I saw toned it down a bit, probably not wanting to scare OMC's Dealers, suppliers and customers. Incidentally, when BW first became available from Meridian, I understand OMC really wanted the company, but couldn't swing it. Lucky for Whaler!
posted 09-11-2000 09:41 PM ET (US)
A couple of observations that make me continue to believe that OMC is in serious trouble and has a terrible image problem to overcome: Our town police boat is a 25' Whaler Vigilant (c. 1995) and originally came with twin 200 Johnsons. In 1998, they blew one of the two powerheads and replaced both motors with 1999 Evinrude Ram Ficht 200s. I pass by this Whaler everytime I go out of the boat basin hand noticed this weekend that one of the white painted 200s was a little blackened here and there and when I looked closer, the cowling was clearly melted in parts. I haven't yet heard what actually happened, but with all the bad press surrounding the Ficht system, I'm only guessing that there was some sort of a malfunction with the fuel delivery system. I'll report further when I find out what actually happened. Nevertheless, having heard enough bad stories about the big OMC engines from dealers and consumers in the last several years coupled with my own observations, when it came time to repower a Revenge 22, I went with Yamaha and I've been an OMC guy for a real long time. I would say that here in the East, Yamaha is probably now the dominant outboard brand rigged on the higher quality boats not owned by an engine manufacturer such as Edgewater, Pursuit and Grady.
posted 09-12-2000 07:48 AM ET (US)
Peter --- according to our OMC dealer/marina fellows the Ficht engines have had there problems particularly the initial production runs --- OMC has paid out a lot for warranty repairs and upgrades --- they noted OMC has been even paying "more" than normal labor to their dealer shops to repair and/or replace questionable parts for over the past year on the Ficht engines. In general they said OMC is bending over backwards to get everything corrected and keep "happy" customers of the Ficht engines --- also they report no problems of any significance with the standard OMC motors
Speaking of the "law" when we travel out the Maurice River to Delaware Bay the NJ State Police have a docking/office complex usually 6 to 8 Guardians lined up various sizes, and a couple of cc hard bottom inflatable boats all powered with Johnson Ocean Runners didn't see a Ficht in the bunch all looked relatively new --- wondered if they just re-powered their fleet --- don't re-call early this year them having all the same brand and they certainly didn't look "new" - an aside note --- our boys in blue beat the living %%%&^* out of them has been my observation --- our tax dollars at work ---- chuckle
Another the "man" story happened on our way up this Spring from FL one morning on the ICW ran (not literally) in to local sheriff's patrol boat --- they had just come out for the mid week waste of time cruise --- had brand new Optimax 135's on the launch -- forget but think it was a modified Grady White no brand markings --- anyway they hailed did a quick courtesy safety check --- said it was strange to see our size boat with NJ registration numbers down in southern NC --- anyway --- we chit chatted for a while asked what did they thought of the Optimax --- the one fellow pointed to our 1987 200 Yamaha's and said they had just replaced that boat's 150 hp Yam's with the Mercs --- he then related they wished they had the Yamaha's back --- now I didn't get into the why and where for's since we had wasted enough time --- wished us a good safe trip and we departed our ways --- draw your own conclusions ---
As Larry pointed out --- could be in any given area a very aggressive dealer can sort of direct the market --- particularly the government procurement market with pricing and service ---- this may explain why one US brand is dominate over the other in a certain geographic area more so than the old question which is better choice --- Yamaha though is a totally different marketing story I think ---
posted 09-12-2000 01:18 PM ET (US)
Well I really hope that OMC rights itself and certainly bending over backwards will help some, but for how long and for how far can OMC keep bending is what I wonder about. BTW, I'm fairly certain that those 200's were the upgraded RAM Ficht. I think your right about the boys in blue -- here though the way they beat the %*&%^*% out of them is by letting the engines idle for an extended period of time. With my old OMC's, I would never let them idle for very long. Even when putting into harbors, I'd change speeds fairly frequently.
When I was considering the repower, I really wanted to go the OMC route and knew that OMC would probably fix any problems under warranty, but with the shorter boating season we have here I ultimately decided that I didn't want the higher likelihood of being inconvenienced (i.e., missing a weekend or two because the engine was in the shop being rebuilt for free). Well that's just the recent thinking of one consumer.
posted 09-12-2000 02:17 PM ET (US)
For what its worth the problems with the FICHT engines were resolved before the 200's and 225's came out in 1999. Yes there were some upgrades for the 1999's, but most including mine have not needed them. I was worried about these engines and did a lot of research before I bought mine. I've been in contact with a number of other owners of the 200/225's and everyone seems to love them. I contact OMC tech service about every 2-3 months checking to see if any upgrades are needed on mine. So far all I had done since
Nov of 1998 when I got mine is to have the injector bolts upgraded to a stronger bolt. When doing a tune up I index my plugs toward the injectors. I have also switched to the OMC Ram oil which is 50% synthetic. Some owners had a problem with plugs burning out real fast and did get an upgrade to the 99's that made them "like" the 2000 FICHT RAM's.
I have not had that problem. Also, it should be noted that SeaTow is repowering their outboard boats with FICHT's and according to Les Hall (SaeTow VP) the captains report great fuel savings, low oil usage, quick starts, no smoke, and very dependable operation (not an ad, but direct info from Les). If you follow some of the other boating forums I think you'll see reports of failures about equal through the major lines now. You will see people "reporting" FICHT problems based on the original powerhead issue, but actual owners of the new engine quickly point out the error.
IMHO -- OMC will survive......
posted 09-12-2000 06:03 PM ET (US)
I too am a long-time OMC fan. In fact still own a 1981 Evinrude 115 that has survived 19 seasons of salt water use. Even so, she now looks pretty shabby and drinks pre-mix like crazy. I am considering another OMC engine to re-power with, but think I'll wait and see how things shake out. My local OMC dealer (OMC since 1955) has recently dropped the line. He says that the number of problems was horrendous. He sells a lot of rigs for off-shore fishing, and even though most of the problems were covered by warranty, the inconvenience of being stranded off-shore and ruining an expensive trip was creating a credibility problem for him. He also sells Yamaha, Honda, and Mercury, and reports nothing unusual in reliablity with these engines. To sum up, I believe OMC must be where Harley-Davidson was in the early 80's and probably needs a similar shake-up to get quality up to the level of their competitors. I wish them well!
posted 10-04-2000 01:11 AM ET (US)
Further to the OMC situation, I just received my October issue of "Soundings Trade Only" (they bill it as the "Boating Business Newspaper"), and the headline says "What's next for struggling OMC?, Company's survival in post-Jones era is contingent on Soros' Deep Pockets".
In a front page article by Melanie Winters, Staff Writer, she says: (I'm going to quote passages that may of interest to Forum visitors)
"The survival of Outboard Marine Corp appears to hinge on one man - billionaire investor George Soros - and his willingness to pour more more money into a company that continues to suffer one setback after another.
"Any additional cash would come on top of the half-billion Soros and his investment group have already put into the nation's second largest boat and engine builder. ...... and have pumped in another 120 million over the past year just to keep it afloat.
"the extent to which he is willing to put more money into it will determine whether this company is going to survive. They need cash. If they don't get a cash infusion it seems they're going to have to sell some assets.
"Many believe Soros will come to the rescue at least one more time.
"After two weeks in the top job, not much was clear about where Fix (the new CEO) will take the company. But his mission seemed clear: turn it around quickly or preside over its breakup.
"Whatever the outcome of the immediate crisis, analyist Kissel says OMC is going to have trouble winning back market share.
"They've been in trouble for years, citing early difficulty with the new FICHT engines in 1998 and 1999, and more recent problems related to third party suppliers.
"OMC has already lost 4% market share in the engine business because outsourcing problems - the inablility of third party suppliers to deliver engine components on time - prevented the company from getting its product out.
"OMC's latest setback is all tied to those third party supplier problems in its North American Engine Operations (Johnson and Evinrude outboards), OMC's boatbuilding companies .......are doing quite well.
"But the (outsourced) components took longer than anticipated, and engine production was constrained. The Company was forced to shut down (engine) production from February to May.
"But each time it appeared the Company was going to turn a corner, there was an unexpected setback. The two that exacted the most damage were the FICHT problems in 1998 and 1999, and the current difficulties with third party suppliers." (End of quotations)
posted 10-04-2000 05:44 AM ET (US)
Larry why does this article a month later sound a lot like what was written last month (Aug) in Chicago Business !!!! That one said the same basic thing --- hummm
posted 10-04-2000 09:17 AM ET (US)
I have a 2001 Evinrude 115 Fitch. Starts quickly and runs very quit with plenty of power. I am still in the break in period; I only have about 10-15 hours on her. I noticed a small amount of red injection oil dripping down off of the lower unit. I popped the cover as the boat is out of the water and noticed a very small pool of oil on the inside of the casing under the breathing element I think? The engine was planned up and gravity... I think the element may be saturated with oil and is dripping out. I Understand the Computer injects more oil for the break in period. Any thoughts from any one....
posted 10-04-2000 09:52 AM ET (US)
Check with your dealer or if your not comfortable with them try Kenny Tuttle at Spring Garden marina OMC dealer down 55 just a short distance on 47 first turn on the right after the Port of Call restaurant --- great folks and will give you straight advice --- Tom
posted 10-04-2000 10:53 AM ET (US)
Thanks. I was told it was normal as the injection system is over injecting during the break in period and it would not happen down the road.
posted 10-04-2000 12:06 PM ET (US)
Curious as to what the thoughts are as to who a purchaser would be for various parts if there were to be a breakup. I'm thinking that a logical piece would be the OMC division. If that were the case, I wonder if there are some synergies that could be exploited by a current competitor. Say, a Yamaha, Honda or maybe even Toyota. Apparently, Toyota is making an attempt to enter the recreational marine industry for the last few years. As far as I know, no one with that kind of money has ever entered this industry. Honda is the closest, but not a flea on bugs a--, as far as the money Toyota represents. A little day-dreaming maybe, but imagine OMC with the backing of the second largest automobile manufacturer in the world. What a combination. The other alternative (and my preferred choice) would be for OMC to survive as "compounder" said a la Harley Davidson. At this point, I guess this is just miscellaneous ramblings.
posted 10-04-2000 03:58 PM ET (US)
Tom: Can't answer your question about that Chicago article, but I assumed this was more recent info in that things are not yet improving for the company. Could be that other sources of anticipated capital have gone away, and only Soros himself is left.
Jim: I would tend to agree with your "ramblings". Since the boat divisions seem to be doing OK, I would imagine that OMC/Soros would hold on to those companies, and sell off the outboard engine division.
It seems that Yamaha and Mercury are way too solid with their own brands to need OMC. Probably the same for Honda. I would agree that American companies in trouble are often picked up by foreign companies with similar operations, and since the Japanese are continually trying to gain american marine marketshare, Nissan (not in great shape themselves), Tohatsu or Suzuki could be interested, particularly the latter, since they are already making OMC's 4 strokes, and don't have any "clean" 2 strokes of their own. So it seems like a good fit.
posted 10-04-2000 04:15 PM ET (US)
Jim: Further to the above, I didn't mention Toyota. In this same "Trade" journal I have previously read that Toyota, indeed, is poised to enter the marine engine business, with both 4 stroke OB and I/O entries. Their most likely target is Mercury's dominance of the marine propulsion market, and Mercury is very concerned. Knowing Toyota, and with their financial clout, I wouldn't think they'd want to begin by dealing with someone else's (OMC's) dirty laundry. My guess is they'll do what Yamaha did in 1985 - make a fresh start. The drag from OMC's tarnished image would be too much for them. This doesn't mean they'll make it, however. Look what happened to the Chrysler engines. Although I must say the Japanese tradition/culture of refusing to let a company/market entry fail (as in Subaru) could make a difference here.
They consider national pride to be at stake.
(Wonder what they're going to do with the Bridgestone tire disaster?)
posted 10-05-2000 07:33 AM ET (US)
Larry as you posted earlier after you read the Chicago article, that writer also pointed out in August it all boils down to Soros' Deep Pockets" on what might happen.
Now for my humble opinion (right Tom humble!)I think after speaking with two local OMC dealers one of which I am very friendly with and he will discuss business openly and the other a tad tight lipped --- both however said in essence the same --- no problem -- on the information they have received it will be business as usual and were assured that the financial situation is on it's way to being rectified. Both had very good seasons with there OMC outboard sales though one said it was more for re-powering than selling them with new boats ---
So I feel this situation as the news media has a knack to do that they're making a mountain out of a mole hill! No doubt OMC has had problems which were costly to correct but unlike Larry don't feel it drastically tarnished their image or soured their dealer organization to the extreme these articles paint the picture --- Hope I'm right on this --- time will tell --- and an aside, I have other rants on the marketing practices of the entire outboard industry which I think should be looked into by the FTC --- another story --- Tom
posted 10-10-2000 06:36 PM ET (US)
In the 2-Stroke section, OMC motors are clearly the best, Followed by Yamaha. If you play no buying a 4-stroke motor, I wouldnt think of buying anything but a Honda. I have had too many bad experences with Mercury.
posted 10-10-2000 07:41 PM ET (US)
Mercury, I believe, makes the lower half (driveshaft/gear cases/props) of most of Honda's 4-stroke outboards. At a marine trade show two years ago, when the Honda 75 & 90's were introduced, I went up to a salesman and observed that the lower portion of the engine looked like the Mercurys. He said he wasn't supposed to admit it, but I was correct!
posted 10-19-2000 04:30 PM ET (US)
JimH just referred me to an article dated October 11th that indicates OMC has received another 45 million loan from it's principal investors to sustain ongoing operations. So it seems things may be looking up for them.
posted 10-21-2000 06:41 AM ET (US)
Larry that's great news!
Sure the OMC press release on the financing arrangement was sweet music to their dealers ears ---
posted 12-06-2000 11:04 PM ET (US)
Further to the OMC situation, the Evening News here tonight is running a story that OMC is immediately laying off 1000 people, at all levels. It goes on to say that if things do not improve, more will be laid off. They didn't say whether this involved the boat or engine divisions, or both. I think things seem to be slowing down in the industry in general, as Mercury has also announced a rebate program on new engine sales.
posted 12-07-2000 10:40 AM ET (US)
More on the layoff at OMC at this URL:
posted 12-11-2000 03:49 PM ET (US)
I've been taking a marine motor maintenance class from the local tech school. When asked what motor he thought was the best, the instructor(a Mercury/Yamaha tech) put it this way:
" If you like working on ignition problems, get a Merc; if you like working on carburetors, get a Yamaha; if you like both get an OMC."
posted 12-20-2000 01:16 AM ET (US)
Some more on OMC from Boating-Industry.com. Looks like the recreational boating industry is slowing down along with the rest of the economy:
OMC shuts down boat and engine manufacturing
Outboard Marine Corp. has temporarily shut down manufacturing at all of its boat and engine operations starting 15 December as an extension of its normal Christmas week closing, according to Gary Beckett, director Corporate Communications.
Beckett added that this is a temporary shut down and the company plans to recall employees in about four to five weeks. In addition, the company has suspended all shipments to dealers.
This shut down is in response to weakness in the market, according to Outboard Marine, and a build-up of inventory at the dealer level.
Outboard Marine Corp. recently announced it will reduce its workforce worldwide. The reduction in force will affect about 1,000 of OMC's 7,200 employees at all levels and will be completed by the end of the year.
posted 12-20-2000 09:34 PM ET (US)
I have been in the marine business for 45 years. Have had dealerships for Chrysler, Evinrude and Mercury and have owned them all. I happen to be a Mercury fan, but they all have done what they were designed for.
I am now in the marine wholesale business and call on dealers of all brands, it has been depressing talking to OMC dealer this past year listening to their problems getting parts from OMC and some being shut down because OMC wanted a SUPER dealer in the area. What are the super dealers going to do now? One thing with J & E you could find a dealer anywhere you looked so you could choose who you felt comfortable with.
They allways built a quality outboard (wont't talk about the I/Os). I hope they make it. Sure they had some problems with the new technolegy, but so did every one else.
Like I said I am a Mercury fan but "GO OMC".
ps: My first outboard motor was a Johnson purchased in 1954.
posted 12-22-2000 08:55 PM ET (US)
I am a Marine Mechanic. Outboard motors have been a good part of my bread and butter for most of my life. Allthough I was weaned on Mercury I`ve always believed Johnson Evinrude put out a good product. The truth of the matter is some models were good and some not so good. Some had quirks and some did`nt. This is true of both franchises. I am upset that O.M.C. is folding. The "Imports" (although I think alot of the conventional North American parts etc are made abroad) are expensive and alot of them have thier quirks, poor designs, and flaws too. I think that there are greater powers at work here and I am not reffering to God. "I hope I can get parts" is what everyone in my crib is asking. The aftermarket boys will have a field day if the patents go. Time for some new technology??????????????? Stevo in El Cerrito.
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