BRP DISCONTINUES THE MANUFACTURING OF OUTBOARD ENGINES
May 28, 2020
BRP (TSX: DOO; NASDAQ: DOOO) announced May 27th, that it has re-oriented its marine business by focusing on the growth of its boat brands with new technology and innovative marine products. BRP will discontinue production of Evinrude E-TEC and E-TEC G2 outboard engines. The company announced that their Sturtevant, WI, facility, will be repurposed for new projects.
BRP has entered into an agreement with market leader Mercury Marine to support their boat packages with Mercury engines.
In their press release, BRP stated that, “We remain committed to our Buy, Build, Transform Marine strategy which has been underway since 2018 with the acquisition of Alumacraft and Manitou boat companies in the U.S., followed by the acquisition of Australian boat manufacturer Telwater in 2019.”
“Our outboard engines business has been greatly impacted by COVID-19, obliging us to discontinue production of our outboard motors immediately. This business segment had already been facing some challenges and the impact from the current context has forced our hand,” said José Boisjoli, President and CEO of BRP. “We will concentrate our efforts on new and innovative technologies and on the development of our boat companies, where we continue to see a lot of potential to transform the on-water experience for consumers,” he added.
Discontinuing their outboard engine business and signing an agreement with Mercury Marine
Following their decision to discontinue E-TEC and E-TEC G2 outboard engines, BRP has signed an agreement with market leader Mercury Marine to support boat packages and continue to supply outboard engines to their boat brands.
BRP will continue to supply customers and their dealer network service parts and will honour manufacturer limited warranties, plus offer select programs to manage inventory. These decisions will impact 650 employees globally.
Pursuing new opportunities within Build and Transform phases of strategy
With this announcement, BRP will be positioned to expand its presence in the pontoon and aluminum fishing markets through technologically advanced solutions. BRP will leverage their track record of ingenuity through their R&D resources to enhance the boating experience with unique new marine products, such as the next generation of engine technology with Project Ghost and the next generation of pontoons with Project M, code names for new products they expect to transform the industry.
Maximizing operational and functional efficiencies
Lastly, BRP will consolidate Alumacraft operations from two sites to one. All Alumacraft operations will be transferred to St Peter, MN and their site in Arkadelphia, AR will be permanently closed. In addition, they want to upgrade the boat production facilities to reorganize manufacturing sites and apply the modularity model used elsewhere. This move is designed to enhance productivity and efficiency and to allow BRP to respond with even more agility to demand.
