The X Factor
Mercury Marine is about to give birth to the long-awaited “Project X” line of four strokes. And no one is as proud as the engine family’s father — George W. Buckley.
It isn’t just because the company is set to begin making money on its largest investment ever in one product family. Nor is it because of his belief that Project X will redefine Mercury’s place in the market.
It’s because it already has redefined Mercury — on nearly every level.
With the first Project X models scheduled to begin production in April, Mercury employees now believe “there isn’t anything you can throw at us that we cannot do,” says Buckley, the originator of the Project X dream.
Since the time when Buckley, then the president of Mercury Marine, first introduced the estimated $85-million, four-stroke project, there has been a 180-degree change in the culture and the level at which the company operates. Having made monumental changes to the company’s operations, Mercury says it is now poised to stand up to higher, automotive-level standards.
Not only has the company adopted such stringent standards and test procedures in-house, but it also has partnered and consulted with automotive suppliers experts and engineers. In fact, 19 months ago, Mercury attracted former Porsche engineer Claus Bruestle to join its team as vice president of research and development. Buckley says Bruestle, who logged 16 years at Porsche, has commented that Mercury, through Project X, “is at the leading edge of engine design anywhere in the world.” He wasn’t brought on board just for Project X, however. His automotive experience will inform the development of projects across Mercury’s product lines.
Some may say this product launch couldn’t have come at a better time. With Mercury receiving criticism from Japanese engine builders — and those loyal to them — for its outboard engine dumping allegations, now might be the best time to show the industry that it can compete with the performance and quality of products built by foreign engine manufacturers.
Conceiving Project X
Buckley, now the chairman and CEO of Mercury Marine parent company Brunswick Corp., conceived of Project X in 1997, when he first joined the company as Mercury president.
He says Mercury was founded based on two-stroke technology, and given its history, two-stroke was where its engineers had been looking for solutions to emissions pressure. But when he came on board, “It was relatively clear to me that the government would continue to push emissions regulations.”
To Buckley, who had worked in the auto industry, that meant considering a new direction. He believed “the technological battleground would be had elsewhere,” not in the two-stroke marketplace. For that reason, he pushed the company to go beyond its roots to embrace four-stroke technology.
It wouldn’t have been enough to just match the Japanese engine manufacturers, though, he says. We had “to invent an engine a generation beyond what the Japanese are doing,” and create a range of four-stroke engines that perform better than two-strokes.
Whether, indeed, the company has accomplished its goal will ultimately be determined by consumers’ reaction to the engine line. However, there’s little doubt that the process of bringing Project X to market has transformed the company.
The impact of the project, which current Mercury president Pat Mackey says “rejuvenated our company,” stretches from one end of the engine builder to the other, from R&D and manufacturing to procurement and employee safety.
The project isn’t just stirring things up inside Mercury Marine, though — it also has the potential to impact the company’s relationship with boat builders, dealers and perhaps most of all, its customers.
Putting its money where its mouth is
The development of what is being called the “Verado” line of engines is easily the most expensive project in the company’s history, which suggests the importance Mercury is placing on it.
The project was launched in 1997 when Buckley went to the Brunswick Board of Directors and proposed it, estimating that it would cost at least $85 million. Five years and more than $100 million later, Buckley admits that one of his favorite phrases is “You cannot save your way into prosperity.”
You can’t spend your way into prosperity either, he adds, and Mercury is now “working the cost side of the equation.”
Though Mercury won’t break down the monetary allocation of the project, it reports spending $11 million simply on the development of its high-pressure lost foam casting facility, used to cast its block, head and crankcase. On top of that, there are the costs associated with more than a handful of automotive consultants and suppliers, as well as the complete overhaul of Mercury’s outboard manufacturing facility and the creation of 194 development engines.
At the time, the board decided that it was necessary to invest the money if it wanted to remain in the outboard market and continue to be a market share leader, according to Mercury. Ultimately, the company says the board members trusted that the Mercury team had the vision, resolve and capability to turn the project into profit for its shareholders.
An emphasis on process
The Mercury team has changed during this project, however. Three years ago, Mackey, a chemical industry executive with a long career at Dupont, took over the helm of Mercury. He brought with him a philosophy based around process. This, ultimately, has resulted in the company receiving ISO 9001:2001 certification and the adoption of Lean Six Sigma, both of which Mercury says helped the company raise its standards.
Mackey also has a “keen instinct for the human element,” according to Tom Mielke, Mercury’s outboard marketing director. He “understands how to motivate people” and get them to think differently, something which has helped transform Mercury over the past few years.
For his part, Bruestle has brought what he calls “Germanic discipline” to the company’s product development process. Though Bruestle, originally from Germany, has unhappily made the transition to American coffee and speed limits, he says the people at Mercury ultimately won him over and he plans to stay on board until retirement.
In fact, with the most-intensive piece of the Verado project behind him, he says Mercury has placed 23 other projects on his plate from across its product lines, projects that he says will ultimately result in many “surprises.”
Going four-stroke
Mackey says the launch of the first four Project X engines at the Miami International Boat Show in February makes him proud to deliver part of Buckley’s dream and vision to the market. The launch of the 200-, 225-, 250- and 275-hp Verado engines will mark Mercury’s entrance into the four-stroke outboard market. Mercury says it will begin volume production of all four models in April to assure that its partners receive adequate supplies for 2005 model-year commencement. The remainder of the Verado family, which will range from 135 to 275 hp and above, will be available within the 2005 model year. Previously, the high horsepower four-strokes sold under the Mercury brand were manufactured by its competitor, Yamaha Marine.
That doesn’t mean Mercury is severing its relationship with Yamaha, however. Mercury says it has contracts with Yamaha across different horsepower ranges, and it doesn’t have any immediate plans to cancel them.
The Verado line of engines is intended to offer the best characteristics associated with both two-stroke and four-stroke engines, according to the company. This isn’t a new goal in the industry, however. Over the past several years, Suzuki has been replacing its two-stroke outboards with four-strokes that it says offer the same level of performance as the engines they’ve replaced. Bombardier also says it is providing the best of both worlds with its E-Tec line of two-stroke, direct-injection outboards.
Mercury says it chose four-stroke technology for Project X because of legislation it is anticipating down the road. While the company admits that “you can do a lot with two-stroke DI engines,” it also points out that two-strokes burn oil, creating particulates, and when legislators begin demanding the same level of environmental cleanliness from marine manufacturers that they currently demand from the automotive industry, two-stroke direct injection technology will no longer be viable.
There isn’t a consensus on this, however. Bombardier Recreational Products says that its new E-Tec line is actually better suited to meet forthcoming emissions regulations than other technologies.
“Simply refer to EPA data to see how low E-Tec is in particulate matter,” says Bombardier spokesman Dave Thompson. “And for CO, there is currently no technology designed to bring four-stroke CO emissions below NIOSH recommended levels. E-Tec is already there, and its ability to adapt to future emission regulations is very strong.”
Thompson also pointed out that Bombardier already owns four-stroke technology — including supercharged engines — in Sea-Doo watercraft, in addition to manufacturing the four-stroke engines for BMW motorcycles and Aprilia Italian sportbikes.
As a result of Mercury’s belief in the future of four-stroke technology, instead of taking its OptiMax direct injection motors to the next level, it has been exploring “how you can make a four-stroke run like a two-stroke.” Admittedly, according to Mielke, in the past, many four-stroke consumers have been disappointed with their performance, compared to the two-strokes they left behind.
To create an engine that would change consumers’ perceptions, Mercury made an uncharacteristic move – instead of creating a solution in-house, it worked in conjunction with automotive consultants with experience building high-performance engines. In fact, Bruestle says 85 percent of the value of the Verado engines have been bought by Mercury from “the outside.” The end result is an engine designed specifically for a marine environment that borrows its concept from such engines as a Ferrari V8, Porsche Cayenne or Volvo 5/6 inline engine.
“This industry needs to more forward very rapidly [to match the] comfort and performance of automobiles,” says Mackey.
This engine is intended to offer the features typically associated with four-strokes – quiet, low emissions, fuel efficiency, smoke-free operation – in addition to those often associated with two-strokes – lightweight, high-performance operation with a fast hole-shot and strong mid-range power.
Paying the price
The price of offering such a high technology engine appears as though it will be shared by both consumers and manufacturers.
“The whole move to low emissions engines has put pressure on margins [across the industry],” Mackey says. “We as companies need to deal in the real world.”
This means looking at factories’ efficiencies, cost structure, effectiveness of sourcing, and taking advantage of new technology and automation to “curtail the escalation of cost in this industry.”
It also may mean manufacturing in low-cost economies, Mackey says. For example, Mercury has broken ground on a facility in China that will come on line in 2005 to build small- to medium-sized four-stroke outboards.
While Mackey admits that boating is getting “very expensive,” he says he doesn’t see pricing becoming “dramatically different in the next five years.” Despite the higher cost to manufacture four-stroke engines, he says four-stroke prices are “not dramatically different” than those of two-strokes. As the last American outboard manufacturing company, “we’ve got to absorb the additional costs for environmental legislation and be at the forefront of the transition to new technology,” he explains.
Mercury isn’t completely absorbing the cost, however. The company says the Verado line is priced about $1,000 more than the retail price of competitors’ four-strokes, though it’s tough to make direct comparisons. Unlike its competitors’ product, the Verado engine system includes a digital throttle and shift, as well as electrohydraulic steering.
Mielke makes the point that the engines are targeted at “sophisticated buyers,” with whom value is more important than price in most cases – not entry-level boaters.
Impact on dealers, builders
The addition of the electrohydraulic steering and digital throttle and shift will change the way dealers and builders work with Mercury, as well as the reliability of the product, according to the company.
Both dealers and boat builders will have to receive training to be able to install the engines. As of late January, about 28 boat builders, including Donzi, Boston Whaler, Godfrey, Fountain and Wellcraft, and about four dealers had been certified. Mercury’s main push to train its dealer base will occur between February and May, during which it plans to certify hundreds of dealers around the country, according to the company.
While it requires training, the installation is actually easier than with traditional engines, the company says, because there are no adjustments to make. Technicians just have to learn to trust the computer, Mielke says.
While the cost of the training is included in Mercury dealers’ annual training fee, the expensive part of becoming certified to service the Verado engines is the software, which costs a few thousand dollars and the optional but strongly suggested laptop tool, which costs about $6,000.
The addition of the electrohydraulic steering and digital throttle and shift allows Mercury to provide consumers with a predictable experience from engine to engine, the company reports. It also begs the question, Mielke says, of why in the past so much was left to chance. Some boat builders, for example, may have used the selection of throttle, shift and steering system to hold the cost of their end product down, which could have produced a different and potentially less satisfactory experience than a more expensive system.
Manufacturing process evolving
Another new feature of the engines is that many of their parts have been designed to be interchangeable from one horsepower size to another, making it easier for Mercury and its dealers to keep parts in stock. This also allows Mercury to save money on the parts by manufacturing a higher volume.
Mercury also designed its new assembly line to be versatile. It eventually will allow the company to build all Verado engines on the same line with the same people, switching from building one horsepower engine to another in 20 minutes or less.
The manufacturing facility for the Verado line is brand new, and the engine building process was designed from the bottom up, according to Mackey. This has produced a change in employees’ experiences at Mercury through a focus on repeatable processes, which goes hand in hand with improving health and safety for workers, according to Fred Brightbill, president of Mercury’s integrated operations division.
One such example is the use of ergonomic work stations that allow the assembly line to be adapted to a comfortable and efficient height depending on the workers’ needs. This greatly reduces the possibility of repetitive-motion injuries common in the industry to this type of assembly work. As a result of this and other changes, the company has seen a 35-percent improvement in employee safety in the past year and a 70-percent improvement over the past two years, Brightbill says.
In addition, the focus on process has allowed Mercury to take the motions of a seasoned trained machinist and institutionalize it so that it can repeated again and again even by a beginner.
“These kinds of changes started with Verado, but will expand into all we do in Fond du Lac,” says Brightbill.
For the boat builder, dealer and consumer, Mercury says this means a higher quality, more reliable product. In addition, its new engines were built to offer the performance, quietness and ease of use that Mercury says consumers are asking for.
Ultimately, Mercury also hopes the end result of its investment will inspire new consumers to take up boating and former boaters to think about giving boating a try once again. If indeed it meets this goal, the American manufacturer may have taken a step toward maintaining its place as the No. 1 outboard engine builder in the industry during a time when competition in the outboard sector is especially fierce.
Outboard engines continue to Evolve
Since the introduction of U.S. Environmental Protection Agency and California Air Resources Board (CARB) emissions regulations for outboard motors, the marine industry has been divided on how best to meet these standards.
Outboard Marine Corp. (subsequently Bombardier Recreational Products) and Mercury Marine initially decided that the direct injected two-stroke was the way to go. The Japanese manufacturers, with the exception of Tohatsu, placed their development dollars primarily in four-stroke technology.
Four stroke the technology of the future? With the introduction of Mercury’s Project X engine, now called Verado, it appears that the long-term future may lie in the four-stroke camp.
Only Bombardier is expending a great deal of energy in the further development of two-strokes. And with its recent introduction of five new E-Tec models, ranging from 40 to 90 hp and all with the CARB three-star rating, Bombardier seems to be able to do better than just hold its own in the low-emissions arena.
Remember, it was less than 10 years ago that it was believed that meeting CARB’s three-star regulations couldn’t be done with a two-stroke platform. Today, both Mercury and Evinrude have achieved this rating with two strokes.
Mercury has indicated that it will continue to refine OptiMax, its two-stroke direct inject engine line, with the expectation to phase it out in the U.S. market by the year 2010 as emission standards become more stringent. The product’s life expectancy in the world market is unknown, however.
On the four-stroke side, Mercury has a long-term contract with Yamaha for four-stroke engines and engine components in the 115 hp range and below and still has a short term contract for V6 four-strokes. Verado engines will be Mercury’s top horsepower offerings, eclipsing the 250 hp Optimax two-stroke.
Bombardier has hedged its two-stroke offerings with four-stroke engines from Suzuki including the 225 hp V-6.
Advantages of two-stroke technology
Evinrude’s E-Tec represents a substantial improvement over the preceding Ficht engines with higher injection pressures and faster injection times. The E-Tec injected two-stroke still has some advantages over other two-stroke injection systems and four-stroke engines.
The major advantages are weight and simplicity. The E-Tec injection system is lighter and simpler than the Orbital-based OptiMax and TLDI used by Tohatsu and Nissan, and considerably lighter than comparable four-strokes.
The Yamaha HPDI is no lightweight system either, but at 300 hp is currently the highest rated DI two-stroke. The two-stroke is also a less complex engine and easier to both build and maintain.
A different direction
In the high horsepower four-stroke field, Mercury seems to be going in a different direction than the Japanese manufacturers who have universally embraced a high displacement V-6 configuration. Mercury has gone with a small displacement 2.6-liter inline 6 that is supercharged.
The Japanese V-6’s are in the 3.3-liter range or larger. I have been able to drive several boats powered by the 6-cylinder four-strokes. I can unequivocally state that the 6-cylinder Verado is the strongest accelerating four-stroke outboard so far. The engine is smooth, quiet and because of the supercharger, develops superior low-end torque.
The current competition for the Verado is Suzuki’s 250 hp V-6. This is a 3.5-liter engine that weighs 580 pounds. If you think that a 2.6-liter engine should weigh less, think again. The Verado tips the scales at over 625 pounds with a 20-inch shaft length and about 15 pounds more with a 25-inch shaft.
At 250 hp, the Suzuki weighs 2.32 pounds per horsepower. At 250 hp, the Verado weighs 2.56 pounds. per horsepower. If it is too heavy, increase the power. At 275 hp, the Verado also weighs 2.32 pounds. per horsepower, the same as Suzuki, which offers the best horsepower per pound advantage of the current crop of V-6 four-strokes. Even though displacement is smaller, the inline 6 is not the lightest weight or most compact block configuration.
The issue of price
It is not the size of an engine that determines cost. The difference in price of a piston for a three-inch bore is very little less than the price of a piston for a four-inch bore. The accessories, such as the supercharger and after cooler, add to weight and cost.
The engine also has such features as a fly by wire shift and throttle and a built-in hydraulic steering system. This is going to add to the cost of the engine and only time will tell if the public is willing to pay for these advancements.
The past 10 years have produced some monumental changes in the outboard motor and many of the initial product plans and concepts have fallen by the wayside. We were once told that four strokes would be the power of choice under 100 horsepower while those engines over 100 hp would be direct injected two-stroke.
With 250 hp four-strokes here now and more powerful four-strokes on the horizon, it appears that the future of the outboard will be four-stroke power. But everything is a moving target, so don’t count the two-strokes out just yet.
– Jim Barron
