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Ship Shape Sterns
By Jenna Bates
If you’re like most engine rebuilders, you’ve probably thought once or twice about expanding or specializing in various niche markets. In fact, you may already be performing some specialty work for friends or for your "best" customers. And, chances are if your shop is near the water, you’ve seriously considered diving into rebuilding marine engines. If that’s the case, then be sure to test the waters before you do, because, according to some marine rebuilders we’ve talked to, it can be an all or nothing prospect.
To save you the leg work, we paid a visit to Jim and Dawn Dubbert, owners of Dubbert’s Outdrive in Port Clinton, OH, to see what it takes to make a splash in their own specialty — rebuilding marine stern drives.
Dubbert’s specializes in stern drive repair and maintenance, high performance upgrades and tuning, and engine repair and maintenance. They also service Johnson and Evinrude outboards and can arrange storage, both indoor and outdoor during the off season. As far as rebuilding goes, though, the Dubberts mainly concentrate on the stern drive — a drive mechanism for a boat that has the motor located inboard.
The stern drive includes a gearbox located outboard of the transom with an input shaft extending toward the inboard motor and an output shaft extending aft toward a propeller shaft. A universal joint coupling is provided to drive the propeller shaft while a gimbal ring is employed to universally mount a propeller shaft housing such that the propeller may be used for steerage as well as forward thrust. The gearbox includes a first gear pair capable of being changed to provide different output ratios. A second drive link in the gearbox gives a selection of directions of rotation of the propeller shaft.
In short, a stern drive is more complicated than it looks, and it requires a little more care and attention because of the two 90-degree angles it contains. If the owner of a stern drive is diligent about changing the oil every year — especially in the fall — a stern drive can go for five to seven years before encountering a problem, the most common of which has to do with seals. A stern drive can have up to 30 seals, and if they are allowed to freeze, they crack. If they crack, water gets in, and anyone can tell you that’s bad news for a boat.
Unfortunately or fortunately, depending on whether you’re the rebuilder or the customer, many boat owners don’t keep up on their maintenance — especially those who are new to boat ownership.
"I’m seeing more and more 30-year-olds stick a half million dollars in their boats and think nothing of it," explains Jim Dubbert. "They’re stockbrokers or own Internet companies, and they buy boats without considering the maintenance."
In addition, Dawn Dubbert explains that high performance types of boats are more readily accessible to the normal consumer these days.
"Now you can order higher horsepower right from the maker," she says. "You can get a 1,000 hp Mercruiser now, and they dominate the high performance end."
The Dubberts have seen their high performance business increase dramatically over the last three years. These days, high performance work makes up approximately 50 percent of their business. The other 50 percent is what they call the "normal, run of the mill" maintenance such as tune-ups.
Like many rebuilders, Jim Dubbert started doing something else before he became involved in marine engines. That "something else" was drag racing. It was in those drag racing years that Jim learned about engines and how to rebuild them. Around that time, a local boat service was looking for someone to do tune-ups, and they found Jim. Jim took the job and enjoyed it because he didn’t get as greasy and oily working on boat engines as he did working on cars.
Jim worked his way up through the ranks and was even able to show some old guys a thing or two that he had learned from automobile engines — especially when it came to rebuilding outdrive motors. He stayed with the company for 26 years and was promoted to general manager.
Jim didn’t enjoy management, however. He found that customers wanted him to do their work for them personally, and he missed being in the thick of things. So, eight years ago, Jim and his wife Dawn decided to go it alone and opened their own business. They have five employees and have just moved into a new building to accommodate their growing customer base.
"The customers have really forced us to grow," Jim says.
The Dubberts now have six bays to accommodate boats. They offer indoor and outdoor storage as well as road service for whatever a customer may need. Sometimes this requires doing a tune-up right at dockside; sometimes this means hauling the boat out of the water. Whatever it is, the Dubberts can do it.
"The problem is most boat owners put their entire budget toward buying the boat and don’t take maintenance into account," Jim explains.
If it sounds like a business that can make a rebuilder a lot of money, it is. But, don’t jump ship just yet, because Jim says that the competition with marinas is often stiff, and a rebuilder would need approximately $100,000 worth of tooling just to get started. This tooling can include a starter package from the manufacturer as well as small parts accessory packages. Specialty equipment such as heavy-duty floor jacks may be required, and the more lines a rebuilder takes on, the more money he’ll have to invest.
Then there’s the training.
Jim and his employees attend training seminars approximately six weeks every year; in order to maintain their dealer status, the employees must be master or certified mechanics and earn 15 training credits every two years.
Most of the training is done in the winter during Dubbert’s slow season. And, that’s something else you’ll have to keep in mind if you’re thinking about a career in the marine engine business — winter. If you aren’t lucky enough to live in a warm climate where boats run year round, you’ll have to take into consideration that every winter will be a challenge. To overcome this challenge, the Dubberts offer incentives for their customers to bring in work during the offseason. They offer a number of discounts, as well as winter storage at a fraction of what some marinas charge.
"We only charge about a quarter of what others charge for storage because it fuels the service business," Jim says.
They make up for the slow times in the summer though, working 14- or 16-hour days.
"In the summer, we have more work than we know what to do with," Jim says. On average, Dubbert’s services 600 to 700 lower engine units a year — and that’s in Northern Ohio, where boats are only used about six months of the year.
In warmer climates, especially those with salt water, which is a lot harder on an outdrive than fresh water, a rebuilder could see double that volume.
Like many in the marine engine rebuilding business, the Dubberts are seeing more competition from a number of sources. There are the marinas, of course, which offer both storage and maintenance; however, marinas can charge up to $85 an hour for labor, and their employees may not have the same sort of training mechanics in a shop like Dubbert’s have.
Another source of competition are the production engine remanufacturers (PERs), many of whom are branching out into marine outdrives. Jim explains that the lure of the PERs is primarily the time factor; they may be able to ship an outdrive to a customer the same day it is ordered whereas rebuilding an outdrive in a custom shop takes much longer. However, Jim cautions that some PERs use parts which may have had significant impact damage, parts which he will not reuse.
"If I get an old stern drive in that’s had a lot of impact damage, I junk it out and give it to the equivalent of a core supplier that in turn may sell it to a PER," Jim explains.
PERs may also be picking up a fair amount of business simply because of the sheer volume they can inventory. The Dubberts have plenty of rebuilt outdrives inventoried, but it’s likely they can run out of them early in the boating season. The PERs then pick up that business because smaller businesses can’t stock the quantity of units that a PER could.
As far as inventory goes, the Dubberts are sure to stock a large selection of vertical assemblies — at least one of every different kind of unit. However, most of these are new, and they only stock certain selections of rebuilds.
Another possible obstacle may be the manufacturers themselves because they can make it difficult for a rebuilder to get started. As Jim explains, rebuilders that only take a few outboards on will find it tough to get the proper parts because some manufacturers, like Mercruiser, are stingy with their franchises. On the other hand, some boat dealers may be interested in giving service work to someone else because they want to concentrate on selling boats.
"There’s not a lot of money in selling outboards," says Jim. "But, there’s lots of money in fixing them!"
Many manufacturers also take territory into consideration and will only allow a certain number of franchises in one area.
These are all factors that rebuilders will want to take into consideration before jumping in head first.
One advantage to working with marine engines is the customer’s attitude. Too often, customers come to an automotive engine rebuilder simply because they have to. Something has gone wrong with their car, and they’re usually not happy about it.
On the other hand, boats are not a necessity for most people; they buy them because they can. People are more willing to spend money on recreation, and the Dubberts often have customers who tell them, "Do whatever it needs" without regard to cost. Despite this, Jim is careful to call his customers before performing such work and explains to them exactly what maintenance the engine requires. He knows that keeping the customer happy is the most important part of his job.
With this in mind, the Dubberts offer a one-year minimum warranty on all rebuilds.
To get the word out, the Dubberts market their business through word of mouth, billboards, a Web site and advertisements in marina and regional magazines.
Dubbert’s extensive Web site (www.dubbertsout-drive.com), offers both information and parts sales. Jim and Dawn answer approximately 50 e-mailed questions a week from those boaters trying to do it themselves. They sell new and used parts online, but the most valuable feature the site offers is the access to information about old technology.
"They don’t teach the old technology anymore," Jim explains. "So, people who have old boats can e-mail us their questions or locate hard-to-find parts."
The Dubberts junk out about 10 to 12 boats a year, and they have learned the value of holding on to some of those old parts, which are becoming more and more scarce.
"It’s the customer who drives you, and that’s why this kind of business is usually all or nothing," Jim says. "It’s hard to do one thing and not do everything."
The Dubberts even go so far as to subcontract fiberglass repairs, making them a one-stop shop for their customers.
"If you enjoy working on automotive, you’ll enjoy this," says Jim. "The only negative side is the tooling expense."
Making waves by rebuilding marine stern drives requires a lot of cash and a lot of dedication; it’s typically an all-or-nothing prospect if you want to make a big splash. There’s a lot to take into consideration before diving in, and it’s important to get all the information you can.
But, if you’re finding that you want to take on a new challenge or are just concerned because your automotive engine rebuilding business is starting to stall, then you might consider becoming a big fish in marine stern drive rebuilding instead of letting this specialty be the one that got away.
You may e-mail Jenna at: firstname.lastname@example.org.