JB and others, thought you might enjoy this.<br /><br />From the National Post today. (Canadian)<br /><br />April 13, 2002<br /><br />Bombardier seen saving Evinrude from a watery grave<br />Moved fast at failed firm<br /><br />Franois Shalom<br />The Gazette<br />It was a year ago that Bombardier Inc. pounced on bankrupt Illinois-based Outboard Marine Corp., maker of Evinrude and Johnson outboard motors.<br /><br />OMC, controlled by financier George Soros, had been plummeting through years of technical and managerial meltdowns, and the coup de grace was administered by a widespread fuel-leak problem, which the U.S. Coast Guard said caused fires and explosions.<br /><br />OMC filed for bankruptcy in November, 2000, giving Bombardier an opening to do what it excels at: buying internationally known but distressed brand names for a pittance -- in OMC's case, US$54-million for its engine division.<br /><br />Now, 13 months after the takeover, people in the industry believe that Bombardier might just have rescued Johnson and Evinrude, which invented the outboard engine in 1909, from a watery grave.<br /><br />The first order of business, said Diane Byrne, who follows the boating industry for the magazine Power & MotorYacht, was to decide quickly to honour some warranties, which they weren't obligated to do.<br /><br />"They covered 2001 and 2000 model-year engines made by the previous owners," said Byrne.<br /><br />"Trying to please owners as well as [former OMC] dealers created a lot of good will."<br /><br />Michel Baril, president of Bombardier's Recreational Products division, conceded that the program took its toll on profit margins.<br /><br />"We had to ramp up fast and we still have to re-establish our dealer network, but we're now going to attack the cost issue," said Mr. Baril. "It will take another two or three years."<br /><br />The company had to respond because "technical problems were not addressed with diligence, and that tarnished the product ... and created a lot of uncertainty in the market."<br /><br />OMC's principal technology -- the FICHT direct-injection engine -- had design flaws that had to be fixed. Now, adapting that technology to other motorized vehicles Bombardier makes, especially Ski-Doos, will be the linchpin of Mr. Baril's strategy going foward.<br /><br />The doubts about the survival of Evinrude and Johnson were compounded by the usual industrious bad-mouthing from its two main competitors, Brunswick Corp.'s Mercury division and Japan's Yamaha engines.<br /><br />"Brunswick and Yamaha went around to dealers when we bought OMC and said: It probably will never start up again, these guys are plane-and-train people, not engine guys,"' said Mr. Baril. "And they indulged in a bit of blackmail -- telling dealers they had to sign up for two or three years."<br /><br />Still, Ms. Byrne said that Bombardier has played its hand well.<br /><br />Last May, two months after buying OMC, it acquired a new 470,000 square-foot plant in Sturtevant, Wisc., from a printer gone bankrupt. By September, only six months after the takeover, redesigned engines were coming off the line at the plant, which now employs 800 people and produces 200 motors a day.<br /><br />And the marketing offensive is on full-bore.<br /><br />"Since December," said Mr. Baril, "we've taken small group of dealers through the Sturtevant plant every two days or so, telling them all about the engineering, and they gave us all sorts of feedback on [their priorities]."<br /><br />But that's not to say Bombardier has steered completely clear of treacherous shoals.<br /><br />Chicago's National Marine Manufacturers Association closely guards the market share for their members. But the consensus is that Brunswick's Mercury holds about 40% to 45% of the outboard engine market, while Yamaha has roughly 25%. Which means that Bombardier will have to duke it out with Honda, Volvo, Suzuki and others to climb out of distant third place.<br /><br />Mr. Baril has grand plans nonetheless.<br /><br />"Eventually, I don't see why we couldn't get one-third of the market," he said, or about 250,000 engines "within maybe five or six years. ... Or maybe 10 years."
