Outboard Marine - AbsoluteAstronomy.com

Outboard Marine Corporation (OMC) was a maker of Evinrude

Evinrude Outboard Motors

Evinrude Outboard Motors is a company that builds a major brand of outboard motors for boats. Founded by Ole Evinrude in Milwaukee, Wisconsin in 1907, it was formerly owned by the publicly traded Outboard Marine Corporation , and is now owned by privately held Bombardier Recreational Products.-...

and Johnson

Johnson Outboards

Johnson Outboards was a US based manufacturer of outboard motors. The original company to make Johnson inboard motors and outboard motors was the Johnson Bros. Motor Company of Terre Haute, Indiana, United States...

boat motors and many different brands of boats. Evinrude initially began in Milwaukee, Wisconsin

Milwaukee, Wisconsin

Milwaukee is the largest city in the U.S. state of Wisconsin, the 28th most populous city in the United States and 39th most populous region in the United States. It is the county seat of Milwaukee County and is located on the southwestern shore of Lake Michigan. According to 2010 census data, the...

in 1907. OMC was based in Waukegan, Illinois

Illinois

Illinois is the fifth-most populous state of the United States of America, and is often noted for being a microcosm of the entire country. With Chicago in the northeast, small industrial cities and great agricultural productivity in central and northern Illinois, and natural resources like coal,...

. They also owned several lines of boats such as Chris Craft, Lowe Boats, Princecraft, Four Winns, SeaSwirl, Stratos, and Javelin. OMC was also a parent company to Ryan, which made lawn mowers. OMC sold 100,000 motors in 2000 and had one third of the outboard market. OMC filed for bankruptcy 22 December 2000 and laid off 7,000 employees. They announced they would no longer warranty their product. This left many owners in limbo wondering if the future owner would warranty their products as the future owner is not legally liable but could as a sign of goodwill. The names Johnson and Evinrude were won by bid in February 2001 by Bombardier Recreational Products

Bombardier Recreational Products

Bombardier Recreational Products or BRP is a Canadian company that traces its roots back to the year 1942 when Joseph-Armand Bombardier founded L'Auto-Neige Bombardier Limitée in Valcourt in the Eastern Townships, Quebec.In 2003, Bombardier Inc...

and the boat division by Genmar Corporation of Minnesota. At the 2001 Miami Boat Show they both said they would do their best to support dealers and warranties. The former OMC plant #2 in Waukegan, Illinois is now a United States Environmental Protection Agency

United States Environmental Protection Agency

The U.S. Environmental Protection Agency is an agency of the federal government of the United States charged with protecting human health and the environment, by writing and enforcing regulations based on laws passed by Congress...

superfund

Superfund

Superfund is the common name for the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 , a United States federal law designed to clean up sites contaminated with hazardous substances...

cleanup site funded by taxpayers.

Brief history

Outboard Marine Corporation sometimes referred to as Outboard Motor Company was formed in 1929 when ELTO

ELTO

The Elto Outdoor Motor Company was the second major outboard motor business founded by Ole Evinrude. Elto outboard engines were produced in the U.S...

was merged with Lockwood-Ash Motor Company. They began using the name OMC in 1956. The company faced net revenue losses of 7.3 million in the 2nd quarter of 1997 ending March 31 and would have been worse if 2 million in dividends were not suspended. The previous quarter loss was 14.3 million even after selling assets such as the corporate jet. In April 1997 OMC hired Salomon Brothers

Salomon Brothers

Salomon Brothers was a bulge bracket, Wall Street investment bank. Founded in 1910 by three brothers along with a clerk named Ben Levy, it remained a partnership until the early 1980s, when it was acquired by the commodity trading firm Phibro Corporation and then became Salomon Inc. Eventually...

to explore future option such as a buyout or merger. In 1997 Detroit Diesel

Detroit Diesel

As a corporation, Daimler Trucks North America has decided to rename the company "DETROIT".Detroit Diesel Corporation is an American-based diesel engine producer headquartered in Detroit, Michigan, USA...

made a $16 dollar a share bid for OMC. They were outbid at $18 a share by Alfred Kingsley who previously owned 2 million shares purchased at $17 a share and had no experience in the outboard industry. The deal was backed by George Soros. Carl Icahn

Carl Icahn

Carl Celian Icahn is an American business magnate and investor.-Biography:Icahn was raised in Far Rockaway, Queens, New York City, where he attended Far Rockaway High School. His father was a cantor, his mother was a schoolteacher...

, a corporate raider who bought TWA

Twa

The Twa are any of several hunting peoples of Africa who live interdependently with agricultural Bantu populations, and generally hold a socially subordinate position: They provide the farming population with game in exchange for agricultural products....

in 1988, is said to blame Kingsley his lieutenant during the 1980s for the ensuing TWA bankruptcy a few years later. David Jones former Mercury Marine

Mercury Marine

Mercury Marine, founded in 1939, is a division of Brunswick of Lake Forest, Illinois, in the United States. Mercury provides engines for private, commercial and government sales. Mercury also has its own line of very successful racing engines tailored for power and speed. The company's primary...

Division president until August 1997 was hired by Kingsley in September 1997 to become the President and CEO of OMC and resigned in August 2000 due to financial turmoil at OMC. In March 1998 OMC laid off 200 employees after earlier laying off 348. In September 1998 OMC announced the closure of their Milwaukee, Wisconsin

Wisconsin

Wisconsin is a U.S. state located in the north-central United States and is part of the Midwest. It is bordered by Minnesota to the west, Iowa to the southwest, Illinois to the south, Lake Michigan to the east, Michigan to the northeast, and Lake Superior to the north. Wisconsin's capital is...

and Waukegan, IL plants over the next two years. OMC released the 1997 FICHT fuel injected motor in 1996 to meet stiffer EPA guidelines. This motor used Gasoline Direct Injection

Gasoline direct injection

In internal combustion engines, gasoline direct injection , also known as petrol direct injection or direct petrol injection, is a variant of fuel injection employed in modern two-stroke and four-stroke gasoline engines...

developed by Ficht GmbH Germany. This motor had problems due to the transition phase of operation being exactly at the same trolling speed of many fishermen and had problems early on. Some outboard motor industry insiders have speculated the rush to meet EPA standards helped with the undoing of OMC.
Their previous engines were known to be reliable in most applications, and have been popular with fisherman and boaters for many years. They dominated the race scene in the 1970s and even held many records. Mercury

Mercury Marine

and OMC competed fiercely. Since then, Mercury has stood alone in the race scene. OMC was innovative and even raced an experimental rotary engine

Wankel engine

The Wankel engine is a type of internal combustion engine using an eccentric rotary design to convert pressure into a rotating motion instead of using reciprocating pistons. Its four-stroke cycle takes place in a space between the inside of an oval-like epitrochoid-shaped housing and a rotor that...

built in a joint effort with Wankel. Business and quality issues took its toll on the company and they were forced to file for bankruptcy. The Outboard Motor Company domain www.outboardmotorcompany.com was just purchased February 2010 by a small privately owned company named Matthews Mobile Marine, located in Ebony VA.

Complete history

Outboard Marine Corporation was the world's largest manufacturer and supplier of outboard motors and second largest producer of powerboats. Based in Waukegan, Illinois

Waukegan, Illinois

Waukegan is a city and county seat of Lake County, Illinois. As of the 2000 census, the city had a total population of 87,901. The 2010 population was 89,078. It is the ninth-largest city in Illinois by population...

the company had become famous for its brand-name Johnson and Evinrude outboard motors, as well as its Chris-Craft and Grumman powerboats. Other products under the brand names of Four Winns, Seaswirl, Trade Winds, Sunbird, Stratos, and Hydra-Sports include fiberglass runabouts, cruisers, performance boats, and craft for offshore fishing. Outboard Marine also marketed clothing for boating, and resort wear. Unfortunately, during the late 1980s and early 1990s, Outboard Marine had a difficult time keeping up with the competition, notably archrival Brunswick Corporation

Brunswick Corporation

The Brunswick Corporation , formerly known as the Brunswick-Balke-Collender Company, is a United States-based corporation that has been involved in manufacturing a wide variety of products since 1845. Brunswick's global headquarters is in the northern Chicago suburb of Lake Forest, Illinois...

, currently the world's largest manufacturer of powerboats.

Early years

Motorized transport was just becoming an everyday part of life in 1907, when Ole Evinrude

Ole Evinrude

Ole Evinrude, born Ole Evenrudstuen was a Norwegian-American inventor, known for the invention of the first outboard motor with practical commercial application.-Biography:...

first mass produced a practical outboard engine for boats. Evinrude placed an advertisement in a motor magazine to introduce his motor, drawing so many inquiries from U.S. and overseas readers that he decided to try large-scale production. Needing financial help with this undertaking, he found a backer and established the Evinrude Motor Company

Evinrude Outboard Motors

in 1910.

The business was an instant success—its market included not only recreational boaters but also the Scandinavian fishing fleets operating in the North Sea. Friction between the partners forced Evinrude to sell his share to his backer in 1914 and depart, after signing a guarantee restricting him from the outboard motor industry for five years. The company continued without him, becoming a subsidiary of the gasoline-engine manufacturer Briggs & Stratton

Briggs & Stratton

Briggs & Stratton is the world's largest manufacturer of air-cooled gasoline engines primarily for outdoor power equipment. Current production averages 11 million engines per year.-History:...

Corporation in 1926.

By 1921, Evinrude was back in business, in a venture he called the ELTO Outboard Motor Company. His new offering was the Evinrude Light Twin Outboard, a motor partly made of aluminum, reducing its weight by a third. Popular with the fishing fleets, this revolutionary engine outstripped sales of Evinrude's original outboard motor within three years. It also attracted the attention of a competitor, Johnson Motor Company, which brought out its rival lightweight engine in 1922. Johnson gained market share, snatching the lead four years later with an updated model weighing a trim 100 pounds, costing a thrifty $190, and able to drive a boat at a zippy 16 miles per hour. Neither the Evinrude Company nor ELTO could match this. Now far ahead, Johnson produced a net profit of $433,000 in 1927, far outpacing Evinrude's $25,000 and ELTO's $30,000.

A new engine in 1928 restored the ELTO Company, whose annual net profit rose to $300,000. Ole Evinrude merged ELTO with Stephen Briggs the following year when he and Harold Stratton disagreed over diversifying Briggs & Stratton into the outboard engine market. Mr. Briggs became chairman of the brand-new Outboard Motors Corporation with Mr. Evinrude as the President.

The Great Depression and World War II

Outboard scarcely had time to find its feet before the stock market crash of 1929 tested its staying power. Already responsible for $500,000 in bank loans as a result of the merger, the company had to increase its debt to $600,000 between 1930 and 1932, when operating deficits totaled $550,000. To keep the business afloat, the entire inventory was sold at bargain prices, and Evinrude sacrificed his salary until his death in 1934.

Johnson's fate was worse. A too-costly advertising campaign, as well as an ill-timed offering of matched motors and hulls, drained all cash reserves by 1930, when control of the company passed to its bankers. Next came an attempt to lessen its reliance on seasonal sales by entry into the refrigerator-compressor market. This last-ditch effort did not revive the business, and shortly thereafter Johnson was for sale.

In 1935, the Outboard Motors Corporation bought the Johnson Motor Company. Its $800,000 price tag brought Outboard a well-known line of outboards and plant and equipment worth $1.5 million. It also brought Outboard established overseas markets in China, Burma, Iran, and Albania, to broaden Evinrude's array of dealers in Europe, Australia, and New Zealand. Another plus was Johnson's niche in the refrigeration market; Outboard established the Gale Products Division at Galesburg, Illinois

Galesburg, Illinois

Galesburg is a city in Knox County, Illinois, in the United States. As of the 2010 census, the city population was 32,195. It is the county seat of Knox County....

, to manufacture this new line.

Expansion brought changes. No longer devoted to purely marine interests, the company changed its name in 1936, to the Outboard Marine & Manufacturing Company. Stephen F. Briggs resigned his Outboard chairmanship temporarily—he had held this position since 1929 to take the Johnson helm. He instituted a rigorous cost-cutting regime, and by 1937 the Johnson division's gross sales were $4.3 million, as compared with Evinrude-ELTO's $2.5 million.

By now, Outboard Motors accounted for about 60 percent of U.S. outboard motor production. There were three engine lines, suiting most needs: the ELTO line for the buyer seeking thrift; Evinrude, the prestige line; and Johnson, offering special features. Though there was cooperation, operations were largely independent. This left each division to award contracts to outside bidders as well as those sharing a place under the Outboard umbrella. Even export sales operations were handled differently; although they were all routed through the Waukegan headquarters, Johnson tended to sell directly to its dealers, while most Evinrude sales were passed through distributors and then to the dealers.

In addition to the engines, selling mostly in seasonal markets, there were other items broadening the product lines. The Lawn-Boy

Lawn-Boy

In 1934, the original Lawn-Boy lawn mower was manufactured by the Evinrude Company, becoming the first one-handed reel power mower introduced to the American public...

lawnmower had been an Evinrude staple since 1932, along with pumps for drainage, firefighting, and lawn spraying. Offerings from Johnson included small generators, a gasoline engine for washing machines, and refrigerators. In combination with the motors, all these produced net sales of $6.8 million by 1937, generating profits of $945,000.

In the early 1940s, Outboard's facilities were all converted to the production of war materials. Bomb fuses, aircraft engines, and firefighting apparatus flowed from the Outboard factories, along with landing-boat motors for the Navy. Evinrude four-cylinder engines carried troops across the Rhine. Net sales for 1945 reached $1.8 million, topping $2.5 million the following year.

The personnel who steered the company through the hectic war years were Outboard oldtimers. In addition to Briggs, there was Joseph G. Rayniak, director of manufacturing research, whose career dated back to the Johnson brothers' 2 horsepower Light Twin, unveiled in 1922. There was Finn T. Irgens, holder of 92 patents, who had risen to be director of engineering from a start with Ole Evinrude, in 1929. There was Ralph Evinrude, who had succeeded to the company presidency after his father's death in 1934.

Expansion and growth in the Postwar Years

These longtime staff members were all on hand with the return of peacetime, when the company converted its facilities back to the production of Johnson and Evinrude outboard motors. Spending $8 million on plant expansion and improvement by 1952, Outboard then offered models ranging from one-cylinder, 3 horsepower engines to two-cylinder, 25 horsepower models.

Several acquisitions broadened the Outboard product line during the 1950s. The first, in 1952, was RPM Manufacturing Company of Missouri, whose specialty was a rotary power mower that Outboard planned to sell under its familiar Lawn-Boy tradename. Featuring a detachable engine useful as an outboard, the mower was already a best-selling unbranded item in both the Sears and the Spiegel catalogs. Outboard coped with the huge volume of existing orders by completing entire units in one factory, rather than using the more time-consuming method of piecemeal assembly in several locations.

In 1956, the company changed its name to Outboard Marine Corporation (OMC). The same year, OMC purchased Industrial Engineering, Canada's largest chain-saw manufacturer, for C$2.55 million plus 40,000 shares. OMC moved this new subsidiary to Peterborough, Ontario, and changed the name Industrial Engineering to Pioneer Saws Ltd.

Cushman Motor Works

Cushman

Cushman is a manufacturer of industrial vehicles, personal vehicles, and other custom vehicles, including parking patrol auto rickshaws.- Models :* Haulster, small industrial multi-purpose truck.* Truckster* Bellhop Series, golf carts....

of Nebraska joined the company subsidiary list in 1957. Well-known in the utility vehicle field, Cushman had manufactured the Airborne, a motor scooter dropped by parachute for ground transport of paratroopers. Later the company's lightweight vehicles became popular for agricultural, industrial, and recreational use. Costing 114,000 shares at 30¢ par, the new acquisition added three-wheel mail carriers, golf carts, and motor scooters to the OMC product line. Besides the Johnson and Evinrude motors then being sold by about 7,000 retail dealers, the swelling list of OMC offerings included Gale Buccaneer motors sold through hardware jobbers, as well as a number of unbranded models sold for retailers.

The company's most innovative engine appeared in 1958. The first mass-produced die-cast aluminum engine, it was a four-cylinder, 50 horsepower outboard, completely manufactured by OMC, its V-blocks came from Johnson, its steel parts from Evinrude, while the Gale division contributed its carburetors and ignition systems.

Export sales of all items surged ahead during the 1950s. Seeing a 215 percent gain in exports between 1949 and 1956, OMC expanded its export department in 1956, gaining a new subsidiary called Outboard Marine International S.A. By 1960, taking the next logical step of overseas production, the company was manufacturing and assembling motors in Brugge, Belgium. All these developments showed in the annual net sales, which soared from $27 million in 1950 to $171.5 million by 1959.

During the 1950s, OMC's main objective had been acquisitions to broaden basic product lines. In the 1960s, the company's aim was to improve all these products and find growing markets for them. Ensuring its industry leadership by constant innovation and improvement to existing products, OMC allocated more than $7 million annually to research and development.

As the 1960s began, the United States was in the trough of a recession. First-time buyers as well as those seeking bigger and better leisure-time equipment put their purchases on hold. Because its principal markets were tied to leisure-time activities mostly practiced on a seasonal basis, OMC sales sank to a 1961 low of $132.3 million.

The economic turndown did not, however, prevent the company from starting a five-year philanthropic program in 1961. In response to a request to benefit the United Nations Food and Agriculture Organization's freedom-from-hunger campaign, OMC contributed several hundred outboard engines each year to be used in fishing, part of a program to increase food production in underdeveloped countries. Also in 1961, the company established the OMC Boats Division to produce and market 16- to 19-foot boats featuring both outboard and the newer stern-drive engines. Production began the following year, helping to raise sales to $151.9 million by 1962.

The stern-drive, or inboard-outboard motors, were available both as separate units for boat-builders, or as components of boats produced by OMC. Built to give the fuel economy and dependability of inboard engines, they were nevertheless as versatile as outboards. By 1965 the company was selling only about 20,000 stern drives a year, however, and sales of the outboards were still outpacing them tenfold. The problem stemmed from the engine's state-of-the-art technology; many dealers did not know how to repair these motors, and owners were often ignorant of maintenance needs. OMC met this challenge by developing computerized week-long repair and maintenance classes for dealer training. Four schools, two permanently stationed in San Francisco, California, and Waukegan, Illinois, and two mobile units familiarized customers with the new engines.

During the 1960s, public interest in novel sports offered new market potential. Alert to novel trends, OMC entered the snowmobile industry with enthusiasm, introducing the Evinrude Skeeter and the Johnson Skee-Horse in 1964, each sure to thrill riders with speeds of more than 30 miles per hour. Another innovation was the Evinrude Aquanaut for skin diving, also sold under the Johnson tradename Air-Buoy. Consisting of a floating gasoline-powered compressor, the unit supplied air to two masked divers at the same time. Another breakthrough was the loop-charged outboard, devised after the company went back to powerboat racing for the first time since World War II.

By October 1967, OMC's fiscal year-end sales had reached $233.4 million. Of this amount, 10 percent came from power mowers, with golf carts and utility vehicles sharing second place at 7 percent, and with snowmobiles, the fastest-growing segment of the business, also at 7 percent. Chain saw sales accounted for 4 percent of the final figure, while a full 70 percent came from marine products. The only failure of the decade was the boat-building enterprise; initially small operating losses grew each year, until the line was sold to Chris-Craft in 1970. Otherwise, the 1960s had been lucrative, as the 1969 net sales figure of $327.1 million showed.

Retrenchment and Reorganization in the 1970s

The 1970s began with a dip to $304.5 million in net sales. This was partly due to the unprofitable boat line, and partly to a line of tent campers that had never fulfilled expectations after the 1967 acquisition of their manufacturer, Trade Winds Campers. The company discontinued the line in 1971, and immediately saw the improvement in their net sales figures, which soared to $394 million by 1972.

There were other disappointments. Golf cart sales sank to 2 percent of overall revenue by 1974, and were discontinued in 1975. Chain saw sales totaled $19.1 million in 1976, resulting in losses for the company and reflecting a flattening of future market potential. OMC discontinued them the following year. Snowmobiles, constituting about 4 percent of sales volume in 1972, were offered in 1973 with an optional Wankel engine costing about $235 more than the conventional motor. Though this was the United States's first introduction to the revolutionary rotary engine, OMC's hopes of success were dashed by heavy competition from other snowmobile brands, as well as by two winters of sparse snow. Snowmobile production came to an end in 1976, after a fiscal 1974 operating loss of $13.9 million.

Fuel shortages were another downside. Coming to an OPEC-inspired zenith in 1973, they brought fears of a buying slowdown in the peak spring quarter. An OMC environmental executive warned of possible gasoline rationing by the petroleum industry, and outlined steps for fuel conservation among boaters.

In the same year, OMC purchased a five-acre site in Hong Kong. Intended as a first step towards larger outboard motor markets in Asia, the move was also encouraged by a Hong Kong government program designed to attract specific, technologically advanced industries. Assembly operations began in the plant in 1975, with the manufacture of electronic outboard motor components following two years later.

In 1974, Charles D. Strang succeeded W. C. Scott as president. Strang's interest in powerboats, beginning in boyhood, had lasted through college and a post as a research associate at Massachusetts Institute of Technology. During a later period of employment with the makers of Mercury outboard motors, interest had deepened into vocation. In 1966 his experience in the powerboat industry had brought him to OMC. Eight years later he rose to the presidency.

An environmental question was one of his first challenges. It began in 1976, when OMC was cited by both the U.S. and Illinois environmental protection agencies for polluting a drainage ditch and Waukegan harbor with polychlorinated biphenyls (PCBs). The company filed suit against both agencies after lengthy negotiations, charging that the federal government had dragged its feet in spending funds authorized for pollution-control use. Company attorneys also stated that the PCB-contaminated pipes had been replaced in 1976, but the agencies likewise filed suit, asking that the company be ordered to remove the contaminants from the harbor, and to pay a maximum penalty of about $20 million, reflecting a $10,000 fine for each day the PCB sources had been in place. This suit was to dog OMC's footsteps throughout the 1980s.

Reorganizing his domestic operations was another Strang priority, with bringing together the Evinrude and Johnson divisions at the top of the list. Complete separation of the two since the company's beginnings had fostered an intense rivalry between them, along with disregard for competition by manufacturers outside the company. To unite the company against outside competitors, in 1978 Strang centralized all domestic manufacturing operations at the corporate headquarters in Waukegan, Illinois, charging vice president James C. Chapman with responsibility for their coordination, as well as for manufacturing policy.

Next came long-range plans for dealing with the competitors themselves. Chief among these were the Japanese firm Yamaha, eating into OMC's European market, and Brunswick Corporation, makers of premium-priced Mercury outboards. A joint venture between Yamaha and Brunswick had produced a low-cost engine called Mariner; thus Brunswick then had an engine at both high and low ends of the market, leaving OMC sandwiched in the middle. With his newly united company behind him, Strang cleared this hurdle by slashing prices by 25 percent and also by making sure that all products offered by competitors were available in the OMC lineup. In another move, he bought out independent distributors overseas, thus gaining greater control over foreign marketing operations.

Threatening OMC's competitiveness was a 1980 Department of Energy proposal that boating be banned on weekends. As a result of this suggestion, public concern about gasoline shortages caused OMC's net sales to plummet to $687.4 million in 1980, from $741.2 million just one year earlier. It was not easy to maintain the company's competitive edge against the Japanese at this time, but Strang slashed budgets, reducing his work force by one-third, to save an annual pretax amount of $47 million. The reward for this effort showed at the end of fiscal 1982, when net sales reached $778 million.

Transition in the 1980s and 1990s

OMC was now in a position to spend $100 million on the construction and tooling of nine new plants. Contrary to previous practice, each plant was designed to specialize in one manufacturing function. In addition, overseas plants were refined to reduce operations costs and provide more efficient handling and storage.

Streamlining made product innovation easier. Power steering, variable-ratio oiling—delivering exact mixtures of gasoline and oil to the engine—and saltwater protection were new features appreciated by powerboat buyers. Starting in 1983, OMC began to prepare the way for a new stern-drive engine, to supersede previous models. After reviewing the stern-drive market, the company sent interviewers to dealers and service department personnel, gathering information for the ideal stern-drive engine. The result was the OMC Cobra, introduced in 1985. Designed for both boat builders and consumers, its 7.5 liter engine delivered 340 horsepower.

In 1984, James Chapman stepped into the presidency of the company, succeeding Robert F. Wallace, whose short tenure had lasted from January 1982. Like his predecessors, Chapman grappled with the Waukegan Harbor question. This issue was finally laid to rest in April 1989, when the U.S. Department of Justice ordered OMC to fund a trust to remove the pollutants from Lake Michigan.

This was just the beginning of OMC's problems, however. In 1988, the boat market peaked and then went into a tailspin. Although Chapman decided to purchase 15 boatmakers to assure OMC of captive customers for their outboard engines, the company did not develop a comprehensive or well-designed strategy to manage its growing operations efficiently. In the middle of the worst downturn in the industry's history, Chapman sold Lawnboy and Cushman for $235 million in 1989 to raise much-needed cash. In addition, he reduced staff, closed factories, and eliminated whole product lines, such as Chris-Craft engines and boat models—all to no avail. Between 1990 and 1993, OMC suffered losses totaling $440 million.

In 1989, OMC purchased some of the holdings of Murray Industries, Inc., makers of Chris-Craft boats. That same year, OMC sold off Lawn-Boy and Cushman. The sales netted a combined $248 million in cash for OMC. One portion of the money was used for capital improvements for its boatbuilding facilities while another portion was invested in building a new Suncruiser aluminum pontoon boat. Despite the large expenditures, OMC’s decision to focus on boatbuilding proved to be a good one. OMC was able to pair boats with appropriately powered outboards and sales of boat packages doubled within a one year timeframe.

Smaller and quieter V-6s were introduced in 1991 in the form of the Evinrude Spitfire and the Johnson Silver-Star series. These outboards featured a new flushing device that could be used to flush the engine with fresh water while it was running. The Spitfire and Silver-Star models also used an infra-red sensor system called Optical Ignition System (OIS 2000). This system automatically advanced the engine timing to eliminate unwanted timing changes. Other advancements in 1991 included smaller, more fuel efficient diesel stern drive models. The OMC Cobra Diesel was a 970 pound, 3.2 liter, six-cylinder monoblock inline powerhouse that produced 205-hp at 4300 rpm.

Electronic Fuel Injection (EFI) was introduced on select OMC drive systems in 1993, representing the first time that EFI was available to recreational stern drive customers. With the previous carbureted systems, boaters had to endure a nine-step starting sequence. With the EFI, boaters had only to turn the key and shift into gear.

By 1993, OMC had more than 20 brands in the marketplace, ranging from canoes to cruisers. Operations were divided into three groups – the Fishing Boat Group, the Recreational Boat Group, and the Aluminum Boat Group. Each group was responsible for all manufacturing and marketing efforts associated with its line of products. The Fishing Boat Group included Stratos, Hydra-Sports, Javelin and Quest by Four Winns. The Recreational Boat Group produced 80 models under the brand names Chris-Craft, Donzi, Four Winns, Seaswirl and Sunbird. The Aluminum Boat Group included Princecraft/Springbok, Suncruiser, Low, Sea Nymph, Grumman, and Roughneck. Many of these same brands are still in production today

End of an era

As OMC continued to lose money, Harry Bowman, the former CEO of Whirlpool Corporation, was hired to replace Chapman. When the boat industry finally rebounded from its economic downturn in 1994, OMC did not have enough of the right kind of product for its customers since much of it had been sold by Chapman. Bowman immediately formed a joint venture with Volvo

Volvo

AB Volvo is a Swedish builder of commercial vehicles, including trucks, buses and construction equipment. Volvo also supplies marine and industrial drive systems, aerospace components and financial services...

to consolidate two engines into one brand name, finalized a contract with a German firm to bring in new technology for high-pressure fuel injectors so that OMC engines could be more fuel-efficient, initiated a thoroughgoing advertising campaign to strengthen its brand name Evinrude and Johnson outboard engines, and began to develop a new generation of outboard motors that were environmentally acceptable, fuel-efficient, and easily repaired. Bowman's strategy worked. By the middle of 1995, OMC's revenues were $1.1 billion.

As of 22 December 2000, OMC owed its creditors more than $768 million dollars and was forced to file Chapter 11 bankruptcy. OMC shut down all manufacturing productions on 15 December 2000 and began preparation for the bankruptcy process that was soon to follow.

Statistics

Incorporated: 1936 as Outboard Marine & Manufacturing Company
Employees: 8,283 (1996)
Sales: $1.1 billion (1996)
Stock Exchanges: New York, Boston, Midwest, Pacific, Philadelphia
SICs: 3732 Boat Building and Repair, 3519 Internal Combustion Engines (3 horse power to 300 horse power V8)

North American factories

Waukegan, Illinois
Waukegan, Illinois
Waukegan is a city and county seat of Lake County, Illinois. As of the 2000 census, the city had a total population of 87,901. The 2010 population was 89,078. It is the ninth-largest city in Illinois by population...

- Corporate Headquarters, outboard engine component manufacturing, research & development
Calhoun, Georgia
Calhoun, Georgia
Calhoun is a city in Gordon County, Georgia, United States. As of the 2010 census, the city had a population of 15,650. The city is the county seat of Gordon County.-Geography:Calhoun is located at , along the Oostanaula River....

(Marine Power Products Group) - Johnson & Evinrude outboards, manufacturing and complete assembly
Spruce Pine, North Carolina
Spruce Pine, North Carolina
Spruce Pine is a town in Mitchell County, North Carolina, United States. The population was 2,175 at the 2010 census.-History:Spruce Pine was founded in 1907 when the Clinchfield Railroad made its way up the North Toe River from Erwin, Tennessee...

- Power Head (engine block) lost foam casting, Johnson & Evinrude outboard engines
Andrews, North Carolina
Andrews, North Carolina
Andrews is a town in Cherokee County, North Carolina, United States. The population was 1,602 at the 2000 census.-Geography:Andrews is located at .According to the United States Census Bureau, the town has a total area of , all of it land.-History:...

- Gear Case casting, machining and subassembly, Johnson & Evinrude outboards
Burnsville, North Carolina
Burnsville, North Carolina
Burnsville is a town in Yancey County, North Carolina, United States. The population was 1,623 at the 2000 census. It is the county seat of Yancey County.-Geography:Burnsville is located at ....

- Lower Unit casting, machining and subassembly, Johnson & Evinrude outboards
Sturtevant, Wisconsin
Sturtevant, Wisconsin
Sturtevant is a village in Racine County, Wisconsin, United States. The population was 6599 at the 2009 census.Sturtevant celebrated its 100th anniversary in 2007.-Geography:Sturtevant is located at ....
Milwaukee, Wisconsin - Crankshafts, drive shafts, propellers, miscellaneous steel products, fuel system components, Johnson & Evinrude outboards
Delavan, Wisconsin
Delavan, Wisconsin
Delavan is a city in Walworth County, Wisconsin, United States. The population was 8,463 at the 2010 census. The city is located partially within the Town of Delavan.-Economy:Delavan is home to the Wisconsin School for the Deaf, and Andes Candies.-History:...

- Fuel system components, Johnson & Evinrude outboards
Murfreesboro, Tennessee
Murfreesboro, Tennessee
Murfreesboro is a city in and the county seat of Rutherford County, Tennessee, United States. The population was 108,755 according to the United States Census Bureau's 2010 U.S. Census, up from 68,816 residents certified during the 2000 census. The center of population of Tennessee is located in...

- Stratos & Javelin fishing Boats, manufacturing and complete assembly
Peterborough, Ontario
Peterborough, Ontario
Peterborough is a city on the Otonabee River in southern Ontario, Canada, 125 kilometres northeast of Toronto. The population of the City of Peterborough was 74,898 as of the 2006 census, while the census metropolitan area has a population of 121,428 as of a 2009 estimate. It presently ranks...

Principal subsidiaries

Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...

, Outboard Marine Asia, Ltd.
Belgium
Belgium
Belgium , officially the Kingdom of Belgium, is a federal state in Western Europe. It is a founding member of the European Union and hosts the EU's headquarters, and those of several other major international organisations such as NATO.Belgium is also a member of, or affiliated to, many...

, OMC Europe
Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...

, Outboard Marine Australia Pty. Ltd.
Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...

, Outboard Marine Corporation of Canada, Ltd.
Mexico
Mexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...

, Outboard Marine de Mexico, S.A. de C.V.
Sweden
Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....

, Ryds Batindustri AB

Brand names

Johnson Outboards
Johnson Outboards
Johnson Outboards was a US based manufacturer of outboard motors. The original company to make Johnson inboard motors and outboard motors was the Johnson Bros. Motor Company of Terre Haute, Indiana, United States...
Evinrude Outboard Motors
Evinrude Outboard Motors
Evinrude Outboard Motors is a company that builds a major brand of outboard motors for boats. Founded by Ole Evinrude in Milwaukee, Wisconsin in 1907, it was formerly owned by the publicly traded Outboard Marine Corporation , and is now owned by privately held Bombardier Recreational Products.-...
Chris Craft
Chris-Craft Boats
Chris-Craft Boats, formerly Smith and Sons Boat Company, is a defunct manufacturer of wooden boats. It was sold in 1960 to NAFI which would take the Chris-Craft name.-History:...

, boats
Carl A. Lowe Industries, Inc.
Princecraft, boats
Four Winns, sport boats and cruisers
Seaswirl, saltwater and freshwater fishing boats
Grumman Powerboats
Trade Winds, luxury boats and yachts
Stratos, fishing boats
Javelin, fishing boats
Donzi Marine Corporation
Sea Nymph, Incorporated
Sunbird Boat Company, Incorporated
Adventurent, Inc.
Hydra-Sports, Inc.
Lawnboy
Tecumseh

Bankruptcy notification

OMC press release
22 Dec 2000

WAUKEGAN, Ill., Outboard Marine Corporation (OMC)

Outboard Marine Corporation and several of its subsidiaries today filed for voluntary reorganization under Chapter 11 of the US Bankruptcy Code in US Bankruptcy Court in Chicago. OMC has sought protection under Chapter 11 so that the company can implement its plans to sell some or all of its engine and boat operations. OMC also announced a significant reduction in its North American workforce affecting salaried and hourly employees at all of its operations.

OMC stressed that the company expects to continue operations during the reorganization process.

OMC has requested that the Bankruptcy Court allow the company to continue compensation and benefit plans for its remaining employees, maintain customer sales, support and service activities, and make post-petition payments due to suppliers in the ordinary course of business.

OMC said it has received a commitment from its bank group to provide debtor-in-possession financing

Debtor-in-possession financing

Debtor-in-possession financing or DIP financing is a special form of financing provided for companies in financial distress or under Chapter 11 bankruptcy process. Usually, this security is more senior than debt, equity, and any other securities issued by a company...

totaling $35 million, which is expected to be sufficient to permit the company to operate while it implements its restructuring plan.

The company has the support for this course of action from its major investors.

The company said the filing has been made in order to enable OMC to complete the sale of its boat and engine operations under Court supervision. OMC said it intends to do everything it can to expedite this process and to consummate a beneficial transaction as quickly as possible.

OMC said that the reduction in force affects approximately 4,000 employees at its boat and engine operations in North America.

Outboard Marine Corporation is a leading manufacturer and marketer of internationally-known boat brands, including Chris-Craft(R), Four Winns(R), Seaswirl(R), Javelin(R), Stratos(R), Lowe(R), Hydra-Sports(R) and Princecraft; marine accessories and marine engines, under the brand names of Johnson(R) and Evinrude(R); and Ficht Ram Injection(R) — the world's premier low-emission
two-stroke outboard engine technology.

SOURCE Outboard Marine Corporation (OMC)
Web Site: omc-online.com