Heart Attacks Mergers and Mutiny

During this period of growth and development, Carl Kiekhaefer suffered from heart trouble. After a frightening false alarm, he decided to begin the search for the perfect corporate merger. After thoughtful research and soul-searching, the decision was made to merge with the Brunswick Corporation, very successful in the leisure products industry and loaded with capital ensuring future development and leadership.

In 1951, just 2 weeks after being hired by Kiekhaefer, the young engineer Strang presented an idea he had developed in college in 1948 about a way to improve the old stern drive technology from the 30’s, which had been tried and abandoned due to intrinsic flaws. Because of his preoccupation with this search and his overly secure vision of the industry, he dismissed the idea with an imperious laugh and a wave of his hand. In a rare moment of shortsightedness, Carl Kiekhaefer dismissed the idea and instructed his new employee to focus on the Lightning and Thunderbolt engines, letting a pivotal piece of technology slip through his fingers and the modern stern drive sat on the shelf.

The basic challenge of the stern drive concept was to marry the benefits of inboard and outboard motors. The inboard could produce far greater HP. For example, when the Mercury 60HP was the largest outboard motor available, anything from 65HP to many thousands of HP could be generated by an inboard motor. Unfortunately, inboards were clumsy to operate, inefficient and slow turning due to drag. They also required a large hole in the bottom of the boat, which demanded vigilant maintenance.

By comparison, the outboard motor was streamlined and agile with most of its weight in the very rear of the boat, and its efficient transfer of energy from the motor to the propeller allowed for steady control.
As a young engineering student at MIT, Strang had tinkered with the idea coming up with an aluminum fire pump engine attached to the lower portion of a traditional outboard propeller and shaft. The truly innovative part of Strang’s design was to incorporate a double-universal joint between the inboard motor and the outboard propeller, allowing for fluid steering control and maximum power transfer. He named his invention after a sultry comic book siren named Apacinata Von Climax, and the AVC drive became the first functional version of the modern stern drive. Strang tried to enter this prototype in hopes of having his “hybrid” be accepted as an outboard motor in speed racing competitions, but it was not allowed in the race and he put the idea aside.

7 years after Strang’s prototype was rejected by race judges and 4 years after Carl Kiekhaefer dismissed the concept, Strang and a Kiekhaefer employee named Jim Wynne discussed the AVC during a business flight in 1955. In his excitement over the idea, Wynne immediately included Alexander into the conversations. Strang confided that Kiekhaefer had rejected the idea, so the three men decided to pursue it themselves. Not really acknowledging the mutinous nature of the act, Strang and Alexander loyally continued their jobs as Executive VP and VP of Engineering, while Wynne continued as Chief Engineer in charge of product testing.

By 1958, Wynne quit his job with Kiekhaefer Mercury to spearhead the three men’s secret vision by securing a patent in his own name on the AVC and starting up a small company called Hydro Mechanical Development. The three men tried in vain to sell the idea to other manufacturers, but no one had the vision to invest. Through Wynne’s ongoing experimentation, he purchased a partial engine from his local Volvo sales rep. When the rep showed an interest, Wynne showed him the concept. Quickly, the sales rep sent photos and drawings of the remarkable prototype to the home office in Sweden.
During this time, Wynne agreed to crew with a Danish boat-builder on a trans-Atlantic crossing intended to set a record. While in Denmark to prepare for this event, he took a side-trip to Sweden to meet with Volvo. The meeting went very well and Volvo wanted to proceed with the collaboration, so Wynne contacted Strang, encouraging him to leave Kiekhaefer Mercury and begin the new relationship with Volvo. Surprisingly, Strang declined and gave Wynne permission to do what he wants with the idea.

Volvo agreed to buy the patent, and Wynne, Strang and Alexander cemented a bond of secrecy about their mutinous actions, developing the idea while on Kiekhaefer Mercury payroll and with Kiekhaefer Mercury materials and equipment, and then selling it to a competitor in secrecy. Because Wynne was not as visionary an engineer as Strang, he could not answer questions from Volvo regarding details of the design, so Strang himself had secret meetings with Volvo engineers to refine the product for manufacturing while still a trusted employee at Kiekhaefer Mercury.

Wynne was given credit for the invention and the three shared the secret for 30 years.
Kiekhaefer never discovered how intimately Strang was involved in the design and development of the industry-changing innovation. He never recalled his conversation with the younger Strang in 1948, and he never suspected that he himself had funded the development of Volvo’s revolutionary product. As the new technology inundated the industry, Carl Kiekhaefer publicly resisted the allure. He criticized the Volvo product while secretly developing his own version, seeming to reserve the option to gloat if (and when) the new technology failed.

Kiekhaefer Marine was able to spin Volvo’s success into its own by watching how the stern drive was manufactured and marketed. OMC, a longtime rival of Kiekhaefer Mercury launched its version of the stern drive in 1961, and to Carl Kiekhaefer’s delight, it had less HP than his existing Mercury 80HP for the same price. As Kiekhaefer observed the competition, he realized that both Volvo and OMC had attached their drive to a standard engine with low HP. Kiekhaefer Marine, with Strang in charge of development, had engineered the MerCruiser Stern Drive Power Package, which could be attached to 110-140HP engines for significantly more power. They followed that with the even more powerful MerCruiser II, which could handle 225 – 310HP engines.

The MerCruiser Stern Drive introduced in 1961 is the first collection to be painted black. The black color was suggested to make the large engine look smaller, but quickly became a brand trademark. The MerCruiser was a huge global success, and quickly captured 80% of the world market. Shortly after that, Kiekhaefer introduced the first 100HP and 125HP outboard engines, and with the launch of the Merc 1000 Phantom, an icon was born.

During this height of success in the recreational boating industry, the bowling industry shrank. The Brunswick Corporation suffered great financial losses, and the Kiekhaefer Mercury Division emerged as the stronger branch of the company. This dynamic combined with Carl Kiekhaefer’s caustic personality and health issues set the stage for a changing of the guard. Carl Kiekhaefer was forced to resign as President in 1969 and the company name changed to Mercury Marine, although out of respect, it was not until 1973 that the Kiekhaefer name was dropped from the Mercury product line. Kiekhaefer went on to start a new company, Kiekhaefer Aeromarine Motors with his son Fred. The company thrived until Fred left, accepting an offer for a consulting job from Price Waterhouse. Fred’s father Carl was
disappointed in his son’s choice and lost interest in continuing to manage the business.