Who will carry on the outboard motor legacy of Johnson and Evinrude?

Posted: Wednesday, January 24, 2001

MINNEAPOLIS (AP) -- Ole and Bess Evinrude knew they were on to something big when they began peddling ''detachable rowboat motors'' in Milwaukee in 1909.

''Hundreds of people will want that motor as soon as they know about it,'' Bess Evinrude told Ole. He invented one of the first outboards, a 1 1/2-horsepower contraption that resembled a coffee grinder.

And the four red-haired Johnson brothers of Indiana, who built the first Johnson marine motor at about the same time Evinrude was perfecting his, clearly saw the potential in 1908 when they began making 3-horsepower engines in their Johnson Brothers Motor Co. factory.

But it's likely neither the Johnsons nor the Evinrudes knew they were helping launch what would become a $25 billion-a-year marine industry or creating legendary machines that would endure into the next millennium.

For many Minnesotans, the ubiquitous Johnson and Evinrude outboards have been a cherished and integral part of fishing and boating lore in the Land of 10,000 Lakes.

Now that legend -- and the future of the venerable Johnson and Evinrude names -- is in jeopardy because of the bankruptcy last month of the engine-maker's parent company, Outboard Marine Corp. of Waukegan, Ill. The company, which also makes Chris-Craft, Javelin, Stratos and Four Winns boats, sent shock waves through the industry when it closed down operations, laid off 4,000 workers and filed for Chapter 11 bankruptcy.

The news was all the more stunning considering that Johnson and Evinrude account for 32 percent of the outboard market, which totaled $2.9 billion last year. OMC, however, has been heavily leveraged since it was bought by George Soros and an investor group in 1997. It reportedly has struggled with a variety of financial problems, lost market share, faced stiff competition from Japanese engine makers and most recently dealt with a slowing U.S. economy.

However, company officials, industry observers and local dealers say the Johnson and Evinrude portions of the company almost certainly will be sold, possibly next month, and likely will live on. OMC is accepting bids on its boat-and engine-making operations, and a court hearing to review those bids is scheduled for Feb. 8.

OMC officials have said the new owners could be operating as soon as mid-February and well before the boating season begins in spring.

That will be a relief for Johnson and Evinrude owners and dealers. The dealers are heading into the winter boat show season -- traditionally a key time for many to sell boats and motors -- with the OMC bankruptcy issue hanging overhead like a cloud of exhaust from one of Ole Evinrude's old motors.

''Customers are calling us up and asking about it,'' said Luke Kujawa, manager of Crystal Marine in Crystal. ''We just explain we can still buy parts from OMC, and we have warranties in place. Johnson and Evinrude still have some of the most dependable engines on the market. There's no doubt they'll be bought and will be up and running again. People will buy them.''

John St. Martin, owner of Robbinsdale Marine in Robbinsdale, said there is much brand loyalty in the outboard market, and he, too, expects Johnson and Evinrude to survive and prosper under new ownership.

''People are loyal to those brands. Their dads and grandpas have had them. And they just keep running,'' he said.

Unlike many other dealers, St. Martin carries only Johnson and Evinrude, meaning he can't fall back. But, he said, ''I'm not losing any sleep yet.''

Dave Perkins produces the Minneapolis Boat Show, which opened this week, as well as similar shows in Kansas City, Mo., and Des Moines. The timing of the OMC bankruptcy -- right before the boat show season began -- wasn't good, but Perkins said there has been little fallout.

No dealers have pulled out of his shows because of OMC's troubles, he said. And sales at the recently concluded Kansas City show were the second-best ever.

''It's been business as usual. People are buying boats,'' Perkins said. ''They are selling OMC products.''

Greg Proteau, spokesman for the National Marine Manufacturers Association in Chicago, which puts on 21 boat shows nationwide, said attendance has been good nearly everywhere, and OMC sales don't appear to have been affected by the bankruptcy. Marine sales remain strong, he said, particularly among high-end products.

Meanwhile, it's not the first time Johnson and Evinrude have hit rough waters. There were early growing pains, and the Great Depression brought both companies to their knees.

But Ole Evinrude's firm survived, bought Johnson and eventually grew into one of the largest marine companies in the world.

Now the question appears to be: Who will carry on the Johnson and Evinrude legacy?


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