posted 05-07-2002 10:21 AM ET (US)        

Is it a Merc, a Yamaha or both?
A new outboard engine product rumored to be coming to market later this year — a 4-stroke outboard that would be built in Japan by Yamaha and marketed in the U.S. under the Mercury Marine name — has become the industry’s hottest topic.

Rumors that the two big engine makers have struck a deal have become so prevalent that some have coined a nickname for the mystery engine: the Mercaha. On a more official level, another source says Mercury already has given it a name — the OF 225 Razorback.

Despite all the talk elsewhere, neither Mercury nor Yamaha is saying much about the reports, refusing either to confirm or deny them.

“I don’t have any announcement on that,” said Tom Mielke, director of corporate communications for Mercury, a subsidiary of Lake Forest, Ill.-based Brunswick Corp.

“I can’t comment on that,” said Phil Dyskow, president of Yamaha Marine Group Co. in Kennesaw, Ga., the U.S. affiliate of the Japanese builder.

The new engine, according to multiple industry sources, would be a Yamaha 225-hp 4-stroke covered with a black, Mercury-branded hood.

Speculation about the deal has been fueled by a growing industry belief that consumer demand and tougher emissions standards are going to dictate an increasing emphasis on 4-stroke engines over the new-technology 2-strokes. Both far surpass conventional outboards in efficiency and clean operation, but the 2-strokes have been hurt by well-publicized episodes of operational problems.

Most industry sources speak of the Mercury/Yamaha reports only on the condition of anonymity. One who is willing to go on the record is Phil Keeter, president of Marine Retailers Association of America, who says he has heard of the arrangement from several people within the industry.

“I find it interesting, if the rumors are true, that the largest company in our business — Brunswick — is having problems with their engines and they’re going to their competitor to solve them,” he said. “I think that’s unique.”

Keeter and numerous other industry sources say the reports they have heard also point to a deep division between Yamaha executives in Japan and those in the United States, who are said to have objected strongly to such an arrangement with Mercury. Brunswick executives, sources say, negotiated directly with Yamaha in Japan, bypassing the U.S. operation.

Yamaha outboards have been consistently growing in popularity in the United States, and there have been times in the recent past when the company has had difficulty building enough engines to supply its own dealers. But the anger of the U.S. Yamaha people centers more on concerns over dilution of the strong brand image the company has built, sources say.

The Mercaha rumors first surfaced at the Miami International Boat Show in February. One industry executive said Mercury was prepared to show the Yamaha 4-stroke at Miami and represent it as its own — part of a joint venture with Yamaha. The source said, however, that Yamaha’s U.S. executives refused to acknowledge it as simply a joint venture because the agreement actually calls for Mercury to buy as many as 4,000 full Yamaha engines.

Part of the Mercury exhibit at Miami was a large engine mock-up bearing no horsepower designation, and labeled simply, “Project X.”

Mercury and Yamaha have worked together on various projects in the past. Mercury spokesman Mielke says the two companies have had several joint venture agreements dating back to 1972 under which one would provide a specific component to the other. In some cases, Mielke explained, Mercury would get engine blocks only and then build up the powerheads; in other cases, Mercury would provide the powerheads or cylinder heads with Mercury-built parts and send them back to Yamaha.

In all of those previous arrangements, Mielke says, the gear case, midsection, cowl package, shift linkage and controls were developed independently by each manufacturer.

“There’ve been ongoing talks just as there have been since 1972,” was all he would say of the latest rumors.

But much of the industry is convinced the reports are true. “Everybody and his brother has heard about it,” said one dealer who asked to remain anonymous.