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Marine Engine Building
By Larry Carley
Inboard, outboard, jump aboard? The marine market is a profitable niche for some engine builders, but it’s not for everyone. Building marine engines takes the right location, the right customer base and the right know-how.
Tom Fileman of Flagship Engine in Punta Gorda, FL, estimates the marine market in the U.S is only about 110,000 to 120,000 gasoline engines a year. It’s not a big market, and there are not a lot of marine specialists around.
Fileman, who has been doing inboard and outboard engines since 1963, says he now sells only new inboard engines but still remanufactures outboard powerheads. "We’re original equipment with GM, and build new inboard and stern drive engines. We also remanufacture outboard powerheads for Evenrude/Johnson, Mercury and Yamaha."
Fileman sells engines in 24 states, but does not do any retail business. He only works through dealers and distributors. "There are a lot of marine engine builders in Florida, and a lot of automotive rebuilders who are trying to do marine engines. But many of these people have little or no experience in the marine market and try to sell a passenger car engine as a marine engine for as little as $600. Those kinds of engines won’t hold up because they don’t use marine quality parts.
"Marine applications are very demanding, and there’s no way to build a marine engine inexpensively. You have to use top quality parts. One hundred hours in a boat is roughly the equivalent of 25,000 miles in a car because you’re often at full throttle under constant load." Fileman said he sells a Chevy V8 marine engine for $1,200 to $2,000 with a one-year warranty on engines rated up to 375 hp. For engines rated up to 800 hp, the warranties range from six months to 90 days.
"Our remanufactured outboard engines sell for about 50 percent of the cost of a new engine. We sell a reman two-cylinder outboard in the 40 to 60 horsepower range for $1,500 to $1,600. A reman V4 outboard sells for $2,500 to $2,600. A V6 is $2,700 to $2,800. A loop charged V6 sells for $4,500 to $4,600."
Fileman says the soft economy and war concerns have not had an impact on the high priced 700 to 800 hp marine engine market, but it has hurt the mid-range repairing, rebuilding and repowering market. Business was way down last year, but Fileman says things have really picked up the past two months.
Fileman says he recently invested in a second dyno test cell to comply with new emission regulations. "We’ve always dyno tested every inboard engine we build, but with the new emission regulations we’re going to have to do a lot more testing."
Starting in 1998, all new marine engines have had to meet certain emission requirements. Fuel injection has replaced carburetion, and computerized engine controls are now used to control fuel delivery and ignition timing. Fileman says some of these new "emissions-compliant" outboard engines can cost upwards of $12,000. "Anyone overhauling one of these newer engines had better know what they’re doing," he said.
The latest change is that starting in 2004 California will require new boats to be equipped with catalytic converters to reduce emissions even more. There will be a gradual phase-in period with converters becoming mandatory on all new boats by 2007.
"Adding converters to a boat is a lot different than handling converters under a car. Putting the converters inside a boat hull creates a potential safety hazard because of the heat they generate. The Coast Guard will be testing converter-equipped boats for two years to ensure they don’t have the potential to blow up. This is going to add a lot of cost to new boats, probably $800 to $1,000 to a boat with a V8 engine. California also wants the manufacturers to warranty the converters for three years. And just like a car, there will be a warning light on the instrument panel to tell you if there is an emissions problem.
"I question the impact all of this is going to have on the environment. There can’t be more than 10,000 to 15,000 powerboats in the entire state of California, and most of the time they just sit there unused," says Fileman.
Fileman also says salt water corrosion is going to be a problem with converters and oxygen sensors. Salt spray gets everywhere, which isn’t a problem if the engine is running. But when it’s shut off and sitting for a long period of time corrosion can really take off.
Fileman adds that the new emission regulations would also change the way engines are cooled. With salt water cooling, engines can only run about 148° to 149° F. If they get much hotter than that, salt starts to crystallize and cause problems. To meet the new emission regulations, boat manufacturers will have to go to fresh water cooling with a heat exchanger between the water in the engine and the outside water. This will allow higher engine temperatures up to 170° to 180° F.
Fileman says the change from two-stroke outboard engines to four-stroke engines with overhead valves requires smaller tooling to handle the smaller heads and valves. "We can use the same basic shop equipment as before, but we’re having to buy new tooling for the newer engines."
Marty Signorelli of Diamond Marine in Ft. Lauderdale FL, says his company specializes in outboard engines only. "We’ve been in business 25 years and are Mercury specialists. We sell motors all over the country and do a lot of custom engine building and racing stuff."
Signorelli says a typical rebuild goes for about $2,500 to $2,600. "We use all Mercury parts because there are no aftermarket parts available for these engines. You can’t go to somebody who makes pistons for four-stroke passenger car engines and ask them to make you some special two-stroke pistons. The marine market is completely different so we have to rely on parts from Mercury."
The Reman Alternative
Vincent Mancini of Recon Automotive in Philadelphia, PA, a supplier of reman engines and components, says his company launched a line of inboard marine engines nine years ago in response to customer requests. "To promote the line, we started attending local boat shows. We also developed a marine catalog and a point-of-purchase counter mat and brochure. We’ve had a great response and are selling to marinas that do engine installations as well as other engine rebuilders."
Mancini said the reman marine market is expanding thanks to the high cost of new marine engines. People want a more affordable replacement option.
"What we do is take a high quality passenger car engine core and convert it to a marine engine. We don’t use any block that has been sleeved or repaired. The crank can be no more than .010˝ over, and .040˝ over for the block. We then install a special marine cam, gaskets, new valves and springs, brass freeze plugs, hard seats if needed, and hypereutectic pistons with moly faced rings. We have a separate assembly line for these engines and a special area set up within the plant. The engines are sold outright with no exchange needed and include a one-year warranty."
Mancini said that old marine cores are usually too corroded to rebuild anyway. So if you’re doing a custom rebuild, pay close attention to the condition of the coolant passages. And if you’re doing a block only, the coolant passages in the heads should also be inspected.
On applications where twin inboard engines are used, one engine typically rotates in the opposite direction to offset the prop torque generated by the second engine. Rebuilding a reverse rotation inboard engine requires a number of changes, including polishing the crank in the opposite direction as usual, using special oil seals with reversed flutes to prevent oil leaks, reversing pistons and rods left to right, and installing a cam with a special reverse rotation profile.
To keep the distributor and oil pump turning in the same direction as before (no reverse rotation distributors or oil pumps are available for these applications), a gear drive must be used for the cam so it will turn in the same direction as before, or a cam with a special reverse distributor drive must be used along with a reverse rotation gear on the distributor shaft.
Another Point Of View
Mark Berman of Bam Marine in Pompano Beach, FL, says he used to rebuild inboard engines but now just sells new Mercury engines. "We still do outboard drives and transmissions, but that’s all."
"The inboard market today is almost 100 percent GM engines. "You can buy a brand new GM small block V8 today for about $1,700, so I don’t see a big demand for reman inboard engines."
Berman says the outboard market is strong – and profitable, too. "A new Mercury inline four cylinder outboard motor goes for about $4,000, with some high performance engines selling for as much as $60,000!"
Berman says the soft economy has hurt his business. Last year was phenomenal for us, with sales up about 200 percent. But this year, sales have been down about 30 to 40 percent. Our small parts sales are doing well, and we’re hoping sales will pick up as the boating season starts to take off."
We Do It All
Duane Dugas of Dugas Engine Services in New Iberia, LA, says his company does a lot of inboard marine engines as well as automotive and light diesel engines. "We do anything that we can fit in the door."
Dugas says his business is on the Gulf coast so he gets a lot of work from local boat dealers as well as walk-in customers. "Air boats are popular here, and we do a lot of big block Chevy V8s for them. We also do a lot of small block Chevy V8s and diesels for boats, too."
One thing Dugas won’t do is patch jobs on marine engines. "For marine engines, we only do complete overhauls. If you don’t do the whole engine, nine out of 10 times it will come back and bite you because of oil consumption or something else. Salt water is really corrosive on these engines so it’s important to go through everything, test the block and manifolds, replace corroded fasteners and install new gaskets. You have to be especially careful on the older marine engines because they may have been rebuilt before."
"A lot of shops don’t want to do marine engines because of the way the engines are used and because they’re exposed to salt water. I’ve seen head gaskets fail in as little as five hours from internal corrosion. That’s why you have to be so careful."
Dugas says he gets about $2,200 for the average marine engine overhaul, which is about $500 higher than what he gets for a comparable automotive gasoline engine. He provides a 90-day warranty on his marine engines.
Marine engine building is not that different from building engines for passenger cars and light trucks. But it does require experience, know-how and the right market base. It helps to be located in a "water" location and have a broad customer base to draw upon. Those who are successful marine engine builders have all of these things working in their favor.
The marine market is not a huge market, but it is one that can be a profitable specialty for engine builders who like boats and understand boaters.