May 28

May 28 The Fall of Evinrude Outboards: Innovation, Strategy and Failure

This is a difficult article to write for many reasons. For one, Wave to Wave intentionally doesn’t do “news” articles for many reasons but sometimes the news is too big to ignore. And, the news that BRP is discontinuing production of Evinrude outboards came as a surprise to many. It’s important to understand that BRP, which owns Evinrude, is fine, they are continuing with their recreational products and other segments of their marine business. The news coincides with BRP’s quarterly earnings report on May 28, 2020. A representative from BRP told me they will honor the limited warranties, extended service contracts and supply customer service / parts for Evinrude outboards. They have inventory and will deliver ordered engines as well. Mercury Marine will take over powering BRP brand boats. This won’t be a news article though, I want to look at the brief history of Evinrude but I mostly want to look at what went wrong and why.

BRP is a successful company, making a host of recreational products that spun off from Bombardier Inc. in 2003. Bombardier had acquired Evinrude out of the OMC bankruptcy in 2001. At the time it seemed like the perfect match. BRP has experienced growth year over year for over the last 5 years and in 2019 reported annual revenue of over $5.2 billion.

Evinrude had a lot of trouble with product overlap with the legacy Etec engines when the new G2 was launched. Focusing on the G2 and moving away from the Etec line might have been a better strategy.

Before Covid 19, there was every reason to believe Evinrude was executing on its long term plan. BRP had acquired Alumacraft and Manitou Pontoon boats that had them create a new division, BRP Marine Group a couple years ago. They recently launched their new 115 - 150 G2 line. Ambition was high and set on growing boat brands along with innovative marine products. Tracy Crocker, president of Evinrude would head up the new BRP Marine Group. You can’t blame Covid 19 entirely and some companies that are now going bankrupt were in poor shape before Covid but you have to remember, this isn’t a bankruptcy, this is a business decision based on many factors. Evinrude wasn’t run particularity well, but if Covid never happened, I have no doubt other avenues would’ve been explored before the plug was pulled.

What was wrong at Evinrude? They had unique and very competitive engines, in fact when it comes to some features, they were leaders. Evinrude G2 engines had the most innovative steering system on the market, a completely integrated unit. Their two stroke technology was extremely efficient and in some ways out performed many four strokes. Evinrude had a unique cowl that was interchangeable and customizable. I really liked what they were doing, I love competition and companies that think outside the box. BRP has considerable engine manufacturing capabilities but was the Evinrude strategy all wrong?

The steering completely integrated into the swivel bracket was truly a marvel of engineering.

Evinrude wasn’t in the 300 HP + space and that hurt them. They didn’t have the same dealer network that Mercury or Yamaha did and didn’t own as many transoms, making it tough out of the gate. On the surface, the mistakes I think they made are that they had too many engines overlapping. When you have the volume Mercury and Yamaha have, it’s possible to overlap but when you are lean and mean you have to operate that way. Evinrude had legacy Etec engines alongside the new G2 engines for too long. They also had HP overlap with two versions of the 150 G2, an etec version, now a 3 cylinder version. They had 2 different 200 versions, 2.7L and 3.4L, and all through the lineup they had models that didn’t add value. That’s one problem.

In 2020 Evinrude made upgrades to the 3.4L engines with upgraded cooling passages and an improved cowling material, smooth instead of textured plastic for the frame. And a brand new 3 cylinder 115 to 150 platform was introduced. All signs were pointing to a long term strategy that appeared to be working. The interchangeable colored side panels were a cool innovation on the G2.

Another issue is trying to compete on volume when you are a niche player. What I mean by that is, focus on what you do best, and run that, don’t try to out do Yamaha or Mercury at their game. Evinrude probably could’ve survived profitibly at a smaller scale, being the premier product in each segment and dropping the legacy Etec line much sooner. That might mean not making engines under 115 HP, streamlining the the lineup and creating value behind their innovation.

For evinrude, execution was pretty good, except for the 2.7L 150 to 200 range, which was probably a make for break for them. The 2.7L was too heavy and gave up the competitive advantages that Evinrude should've had in that segment. Mercury and Yamaha had lighter engines with gear ratios more suitable to that class and so it was difficult to market those engines. This hurt Evinrude sales in a huge segment.

The SLX gearcase is a formidable one and used on the 2.7L 150 to 300 HP G2 engines. The idea is to reduce cost and simplify manufacturing, only the gear ration is different. But the heavy unit was part of the reason the 2.7 G2 was so heavy.

Although many people think that performance engines are niche and aren't worth making, those people simply fail to understand marketing and margin. By not having legit performance outboards and instead relying on “HO” branded engines that are merely decals, you give up marketing opportunities and premier product opportunities. Mercury has done this exceptionally well for a long time. Halo products can create halo brands, and become market leaders by being aspirational and create new markets. But let’s not turn this into a marketing article.

Tracy Crocker failed to lead the right strategy and the Covid 19 shutdown forced the hand of the higher ups at BRP when the Evinrude brand had been fighting to be profitable for a while. Without the shutdown, more time would have allowed for an alternative strategy for the brand. Could Evinrude have been sold? Probably. Could it have been stripped down and streamlined into a premier niche product? Yes. Is this the end of Evinrude forever? I actually don’t think so. There is so much value in that brand, I could see someone acquiring the Evinrude brand and G2 technology for pennies on the dollar. The right operator could make it work.

2019 was a much better year for almost everyone.

Although I am a Mercury guy through and through, I don’t generally have outward bias, and it truly bothers me for the industry to lose such a storied brand. There is a reason I chose the G2 250 HO for the Activator project, it was the best 250 on the market. My Dad was a Mercury dealer in the seventies, but the first boat I drove as a little kid had a 4.5 Evinrude. When my Dad was young he raced in community races in the fifties and sixties. He told me a story about switching the engine on his boat, a 14’ Unicraft, to run a 40 HP Evinrude he borrowed from his uncle. Since he had trouble lifting the engine, he took the boats to a beach and used the beach to help move the motor over, he clamped it on, set it up and made his way over to the race. Unfortunately, at the beach, he had accidentally plugged up the water inlet with mud and seized the engine on the way. It’s a funny story now.

Ole Evinrude was the first to market with an outboard engine in 1909. Evinrude over the years has had many game changing innovations and some catastrophic failures. Pulling the plug on Evinrude means thousands of jobs are lost which is heartbreaking in itself and it means shutting the door one of the most storied brands in the marine industry. It didn't’ have to be that way. Sometimes these strategies and decisions are made by people with MBA degrees who spend more time on spreadsheets than on the water and don’t have their finger on the pulse. I’m a little surprised BRP missed that part because if there was one thing missing from Evinrude, it was a little passion. May 27, 2020 wasn’t a good day for the industry but whatever happens from here it was a hell of a ride.

"Many of life's failures are people who did not realize how close they were to success when they gave up."

Thomas Edison