OMC Sputtering Along
by Steve McCadams
(Story from June 2001)
Part 2 of a 2 part series: for
Part 1 click here
Johnson and Evinrude outboard motors have been two of the leading
brands for recreational boaters and anglers for many years. Back in
December, something happened and it pulled the plug on a giant
corporation who had also acquired a series of boat companies under its
Since December 22, Outboard Marine Corporation (OMC) has been in
Chapter 11 bankruptcy. All the while the assembly lines at the outboard
and stern drive engine plants have been silent. No research and
development. No manufacturing of new units. Parts distribution almost at
standstill as have been processing of warranty claims to dealers.
At the Tennessee based boat companies of Stratos and Javelin, two
companies in the series of boat manufactures owned by OMC, the lots are
filled with boats. Some were slated for distribution to dealers while
others are there for repair or mold problems when they came off the
Workers are unemployed and some have scattered finding work
elsewhere in the market. Others are in limbo with an uncertain future.
Massive machinery sets idle in the plants. From paint to resin
used in the building of boats, some of the material has a short shelf
life. One has to wonder how much has been lost just in the materials end
of the business.
Even though the company has gained approval for sale through a
federal bankruptcy court two weeks ago, many questions remain as to the
overall status of the company. From local dealers to the fishermen at a
boat show just looking at a new rig. Everyone has a few questions yet no
one seems to have many answers.
OMC's assets were purchased for $95 million by the two companies
of Genmar, known as JTC Acquisition LLC, and Bombardier Corporation.
When the company got the Okay to sell last week, court proceedings
got underway and now the lawyers and sorting out the details. Meanwhile
the two companies, one of which bought the boating lines while the other
purchased the engine side of the business, are still getting their ducks
in a row.
Genmar and Bombardier, in separate press conferences at the Miami
Boat Show held last week, said they'll do their best to support OMC boat
dealers and Johnson and Evinrude outboard dealers with product
Neither wants to announce details, though, until their deals are
finalized and their evaluations completed. Meanwhile sales of
Johnson and Evinrude outboards have almost stopped. Retailers have been
encouraged to offer their own warranty.
Apparently, there are still a lot of details forthcoming. Dealers
and owners of OMC products are still somewhat in the dark as to warranty
status and what's instore in terms of parts and buyer incentives.
"I've been an Evinrude dealer since 1980 but I haven't heard
anything new on the situation this last week," said Shelly Jones,
owner of Blue and Gray Marine at Paris Landing. "I think things
will get straightened out soon but right now, dealers haven't heard
Meanwhile, the boating season is already underway in southern
states while it's peak time for many major boat, sport and travel shows
across the country. This is the time of year when many boat buyers shop
and make their plans on purchases.
Spring fever stimulates outdoor activity and a lot of boaters like
to trade in the spring and have a later model rig as the fishing and
recreational boating season kicks in for their geographic area. Yet OMC
products have been somewhat scarce at shows lately with local dealers
having to carry the load for display and advertising, a burden that
hasn't set well.
Potential buyers of OMC products have migrated to other brands in
a big way, say many dealers. They're scared of OMC's situation and the
"not knowing" is a real dilemma for both buyers, workers and
In a stock-boosting pitch to securities analysts Feb. 12, reports
The Boating News, Brunswick (Mercury Marine) CEO George Buckley
predicted that Bombardier won't build outboard motors for at least
a year and that it would take an act of God for the Canadian company to
succeed in the competitive outboard motor market.
Other outboard motor companies are taking advantage of the void in
the market left by OMC's departure. Such brands as Suzuki, Yamaha, and
Nissan are reporting increases in sales. Other boat manufacturers
separate from OMC brands will no doubt follow suit.
Still, once things settle down and the OMC transition is
finalized, this company could bounce back and regain some of its lost
market share assuming the new owners put the capital in it to retool and
restart the assembly lines. Promotion and advertising could recreate the
strong support this company once had.
Yet few doubt the road ahead is long and winding for OMC. The news
has had a devastating throughout the industry and some of the pain is
just now being felt.
The overall fishing industry has been hurting for a few years and
most experts agree that OMC returning and getting back on its feet would
help everyone involved sooner or later.
Until the company addresses the questions that linger on
everyone's minds, the degree of uncertainty remains high and the support
and purchases of the products will remain low.
Small dealers cannot afford to offer their own warranty on big
engines or parts and labor for very long. Those who already own OMC
products really don't know if the new company will honor the warranty
they thought they had.
Professional anglers who are under contract to OMC are considered
assets of the company and cannot change over to other brands until
things are finalized, leaving them somewhat unsponsored on the
tournament circuits and frustrated.
Time will tell. Few ever thought it would come to this. Most hope
to see a silver lining in a dark cloud but for now, too many questions
remain and if the new companies expect to make a go of it they better
act quickly. Time, tide and the fishing season waits on no one!
is a professional hunting and fishing guide
here in the
Paris Landing area and host of The Outdoor Channel's television series IN-PURSUIT.