Posted on November 1, 2023
Mercury Marine president John Buelow grew up boating on the lakes of northern Wisconsin, the company’s home state, fishing and water skiing with his family. Next May, he’ll mark 20 years with Mercury. “Being from Wisconsin, it’s a dream come true to be part of Mercury, and now, to have the opportunity to lead it, it’s a real honor to lead such an iconic company surrounded by great people,” he says.
After starting in the finance division, Buelow was named CFO for Europe, Northeast Africa and the Asia Pacific region. He and his family — his wife of 27 years Kristine, twin 20-year-old sons Cooper and Finn, and daughter Greta, 13 — moved overseas for the position. The family lived outside of Brussels, Belgium. Buelow calls the experience rewarding, personally and professionally.
“Working with all the different markets and cultures, it’s really a bunch of micro-markets,” Buelow says. “North is so much different than the south, so it was interesting and challenging and complex.”
When the Buelows moved back to the United States, John entered a strategy and business development role. For five years prior to being named president, he was head of global operations.
Soundings Trade Only sat down with Buelow aboard a Sea Ray 370 Sundancer at New York’s Chelsea Piers to see how things have been going in the first year of his presidency. This interview has been lightly edited for length and clarity.
You’re almost eight months into your term as president. What has been the biggest challenge?
In a role like this, there are always challenges, so the key is you must be nimble and react and navigate through it.
Have there been any surprises?
I wouldn’t say surprises. The market is fluid, which is probably the main thing everyone is keeping an eye on. It’s good to see that retail has been reasonably good over the summer. We’re staying agile and want to make sure we’re taking care of our customers.
Was it tough to come in as president during the pandemic, because of the spike in popularity that boating experienced?
In my prior role, I was leading operations. I was focused on navigating the supply-chain challenges and adding significant capacity across our operations to meet demands that were driven by the market, but also by the preference for our product. We were seeing strong demand for the product. The good thing is with the capacity being online, we now can satisfy our customers’ needs and continue to expand and grow.
Is there still demand for big engines?
Premium is more resilient compared to other parts of the market, and with the strong response to our product, we still have strong demand.
How much of an impact did last summer’s cyberattack have on Mercury’s business?
We were impacted. I don’t have much more to say than what was released. We did lose some production, and we got back up and running in a relatively short time.
Can you tell us about your manufacturing facilities?
The manufacturing hub is in Fond du Lac, Wis. All Mercury engines and accessories are designed there by our engineering team, and we produce 75 hp and up through 600 hp there, along with the MerCruiser sterndrives and inboards. Our headquarters covers 3 million square feet. We do everything from casting, coating, machining and assembling of our engines in Fond du Lac.
How many employees?
We have 4,000 total, including engineers, sales, administration and salaried manufacturing, and about 2,500 hourly team members on the floor producing engines.
How many outboards are you producing annually?
I can’t tell you that, but the number continues to grow, and we’ve brought on a lot of capacity in the past couple of years. We increased our capacity on high horsepower by almost 60%.
Is Mercury using robotics and automation?
Capacity is an understatement of what we’re doing. We’re making investments to increase our overall capability. We like to show it off. It’s state of the art with advanced automation that drives gains in productivity, quality and safety. We have a significant increase in our automation in our casting and machining operations through our assembly operations. We’re using other technologies like IoT 4.0. More than 500 pieces of large equipment on the campus are connected, and we are collecting process data in real time, which lets us analyze and continuously improve the product and the process. We have strong capability and data analytics, and we can communicate this visually out on the floor.
How about 3D printing?
We use 3D printing in much of our die-casting of large, complex parts. We can 3D-print cores to enable cooling with precision-cast complex parts to improve quality. We use 3D printing in other areas of the operation for fixturing, tooling and rapid prototyping. In addition to the automation that drives performance gains, we’re also designing our operations and incorporating advanced manufacturing that is flexible. For example, in our assembly operation, we use automated, guided vehicles that transport the engine from station to station. Rather than being a permanent fixture in the operation, the AGVs are following a wire taped to the floor, so you have a lot of flexibility to reconfigure it and add stations. If we have to increase capacity, it gives us the ability to increase throughput on the line.
How is the propeller business doing?
The propeller business is going well. When we design our product, we design from prop to helm solutions. We’re really designing a system for the ultimate performance and experience for the consumer.
What are Mercury’s thoughts on diesel outboards?
Mercury Racing has a diesel DFI application, but it’s not a technology we see as relevant for the future.
What are your thoughts on alternative sustainable fuels such as isobutanol, ammonia and methanol?
We have low-voltage electric outboard propulsion systems, and right now, with the limitations and high density and cost for batteries, the application opportunities are limited. We see alternative fuels as an opportunity. Collectively, that could be an opportunity to reduce our carbon footprint. That could work for new propulsion systems, and there’s already a large base of existing engines that could benefit.
How does Mercury identify a potentially successful market segment and then develop a product like the V-12 600 or V-10 outboards?
A strength of ours is understanding the market and connecting with the consumers. That guides our product development. Through our insights, we identified the opportunity, and once we identified the timeline, five years is a reasonable estimate of the timeline. We do a lot of work up-front to understand what’s important and the trade-offs and what to incorporate into that engine to meet the needs of the consumer. We do define the functional requirements and then go through the process of designing. Our standards are high, so it’s a long process, but when we bring it to market, we believe we have the product exactly right.
How many people are involved in developing something like the V-10s and V-12?
It includes our whole organization. We have our marketing and category management group that connects with the customers. We have about 450 engineers dedicated to product development.
How does Mercury find and develop new engineers?
We need to make sure we maintain and stay on the leading edge, and it’s a combination of developing our existing talent and bringing in new people. We continuously provide development opportunities for our team members, and we also recruit broadly. We have relationships with different universities where we have co-op programs and bring in people after graduation, and we have programs where we recruit people who are further along in their career with specific technical skills that we need to expand our capabilities. It is competitive, but we’re successful in getting people to come to us because of the exciting work they get to do and the impact they can have.
Is Mercury Marine attractive to prospective employees?
Our strategy is to be an employer of choice. We know we’re competing for labor, but we don’t have a problem. People come in knowing they can have a good career with us.
For a couple of years, we heard from dealers frustrated with long backlogs. Are you caught up?
With the capacity we’ve been bringing up, we now can better-serve our customers and grow.
How many shifts is Mercury currently running for outboard production?
We’re running three shifts five days a week, and run certain operations on the weekend.
It wasn’t long ago that you were looking up at your competition in outboard market share. How did you claim the top spot?
I mentioned earlier the consumer connection and understanding of the market, and the application and then our product leadership. It’s one of our core strategic pillars. We’ve invested heavily in product development and capacity the past several years. If you think most recently, our V-6, V-8, V-10 and V-12 platforms give us industry-leading capability from 175 hp up to 600, with features and benefits that are desired in the marketplace.
Why was the choice made not to go with twin props on the V-10?
It’s driven by the amount of work up-front. We spend years to understand and define the functional development of that engine and then designing from prop to helm. We’re making decisions around the design to optimize the whole experience. Understanding the vessels it’s going on, and how it’s going to be used, both define that optimal balance and trade-off.
Mercury was known for being the leader in sterndrives. What prompted the move to big outboards?
We have a solution for everybody, but the market has driven our direction from the standpoint of what the preferences for the consumer are. Our intention is to lead. It’s educated on what the consumer wants and what we can deliver. We knew through advancements, solutions and technologies with the outboards that would better serve the wants and needs of the consumer.
When you were named president, the press release said you were integral in development of the 600-hp V-12 Verado and V-10 outboards. Can you provide details?
Before being in operations, I was responsible for category management from 2016 through 2018. The product plan would have started at that time, and I was continuously involved through our governance process and through my role in operations.
What are the plans for MerCruiser sterndrives? Is there still demand for them?
Sterndrive remains important to us, but we’ll be directing our resources and product development to the wants and needs of the market.
What has been the response to the Avator outboards? What is the next step in electrical development at Mercury?
This year, we’ve launched three products, and reception has been strong. We’re starting to ship the 20e and 35e this month, and we have two more products in the Avator lineup that we intend to release and unveil in the next few months.
Your outboard lineup seems solid. Where is the next phase of development?
I can assure you, we have a comprehensive and complete product portfolio plan right now, and our innovations are not slowing down.