Bombardier Drops Evinrude Outboards

Yes, I would think so. Perhaps something of the nature, "No, we don't have any interest in buying it, but perhaps we can help you out. Let's see. If you were to shut it down and enter an agreement to source our outboards, we could make that an extremely favorable agreement, almost like our own boat brands."

Quid pro quo.

Or do you believe it's just a coincidence that on the same day they announce shutting the outboard down, they sign an agreement with Mercury Marine?

They sort of slide by the shut down of the Arkansas plant.

And how would you feel if you were one of their outboard dealers or a boat manufacturer using them? Perhaps like they just pulled the rug out from under you with no warning?

Then how would you feel if you're a builder using their Rotax engines? They lost $226 million for the quarter ending April 30, but the majority of that was the impairment charge they took. Their marine business was and remains a small part of their overall business, about 10% of sales. Put another way, it wasn't and still isn't important to them. It's a side business to them and you really have to be careful depending on someone in such a situation.

Their debt is huge, $2.4 billion Canadian. Their current liabilities exceed current assets and in total their liabilities exceed assets by $793 million Canadian. Not a pretty picture. They've projected the next three months revenues to be down 40% and then the following 6 months beyond that down 10-20%. Very likely this is not the end of their issues as is the case with so many highly leveraged companies. First of many in the industry to fall.

I think that's a harbinger of things to come. Outboards are mostly bought by working-class people. Those are the people who aren't working today.

By comparison, for the first three months of the calendar year, Brunswick's Propulsion revenues were down 1%, Parts and Accessories down 4%, and boats down 22%. They believe the retail sales in the marine industry will be down 15-25% vs. last year. They believe with the cost reductions they've made they can even be profitable during the second quarter. Sure sounds like optimistic thinking to me. I can't grasp why they'd release such a statement. Most public companies right now are saying very plainly, "we have no idea."

Here is what is more common to see published as Marine Max did:

In March 2020, the outbreak of COVID-19 caused by a novel strain of the coronavirus was recognized as a pandemic by the World Health Organization, and the outbreak has become increasingly widespread in the United States, and other countries in which we operate. As a result, beginning in March 2020, we have temporarily closed certain departments or locations based on guidance from local government or health officials. We are following guidelines to ensure we are safely operating as recommended. We are taking proactive steps to enhance financial flexibility including reducing orders from manufacturers, implementing operating cost savings plans, delaying or reducing capital expenditures, and furloughing team members associated with temporary closures. As the COVID-19 pandemic is complex and evolving rapidly with many unknowns, the Company will continue to monitor ongoing developments and respond accordingly. Management expects its business, across all of its geographies, will be impacted to some degree, but the significance of the impact of the COVID-19 pandemic on the Company’s business and the duration for which it may have an impact cannot be determined at this time.​

The figures that OB put forward are likely the culprits, but cultural differences may have played a role too. Bombardier has a proven track record of engineering various recreational products. Evinrude, not so much. I did some development work for Bombardier 35 years ago. A few years later I met with the engineering team at Evinrude for a similar program. Rude, was the best descriptor for the engineers that followed Ralph. Typical Florida boys.

Well, as BRP is not part of Bombardier and totally unaffected by their Aero business, I can't put much stock in your speculation.

The Company survives off the taxpayers of Canada, should be sold or closed.

The one horse dealers are the ones going to be most affected.
Have one down the road that's been a Rude dealer for 35 years. That's what they eat sleep and breathe.
They're not the only dealer in that position. It's not like they can just grab another product tomorrow.
If they have strong service departments they'll survive for the short term .

I am a little surprised given the amount of center consoles with multiple outboards, as well as midsize boats like MJM selling so many outboard boats. Now that I think of it, they are mostly delivered with Mercury or Yamaha.

YEAH, they failed to update or fix a FLAWED design. Everyone else moved away from Direct Injection 2 strokes and over to 4 strokes, years ago, bombadier never stepped up to the plate. Besides that fact that the FICHT design was a highly flawed design. It relied on injectors at 850-900 PSI, so none of the injectors could have balanced flow, so instead the computer has to make up for the different flow rates of each injector by changing the pulse timing. That being said, they have no engine mounted oil resevoir, SOOOOO if the remote oil tank hose kinks or breaks at cruise speed, or the oil pump goes bad, by the time you hear the alarm and back the throttle down the motor is completely fried. I watch exactly this happen on a new one with 16 hours on it a few years back.

I believe it's a regional thing.
As an example, here in SWFL it's split between Yamaha and etec . Mercury is the step child in these parts. Go up to the Great Lakes and Mercury is the favored son.

A lot has to do with dealer support in a given area. Where my boat is there are tons of Yamaha OB's and some Honda and Suzuki. We only have two dealer/supports in the area and this is what they sell and service. I virtually never see a Merc. On a neighboring Island about 75 miles away they have a Merc dealer. That's all you see there.

Evinrude had less than 4% market share and was the only manufacturer using what is generally considered an inferior technology. That’s not a sustainable business plan.

Bombardier was clearly wrong to stick with a flawed 2-stroke technology, but it is a little sad that Evinrude/Johnson are gone. My first boat -- a 12' Penn Yan cartopper -- was powered by a 3 hp Johnson, and I've owned a number of boats since then powered by Evinrudes and Johnsons. I admit a couple of old 225's and 235's were truly smoky beasts. Evinrude/Johnson commanded 75% of the market for years, with Mercury a distant 3rd.

And their true demise wasn't under Bombardier, but they can credit Jacobs for it with his Genmar fiasco and demonstration of how to take the top brands in the industry and destroy them. He destroyed so many companies during his career.

Now, his death was certainly a sad event just over a year ago. I hate anyone having to go through that.