Q&A with Paul Ray

President, Ilmor Engineering
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Paul Ray, President, Ilmor Engineering

Paul Ray, President, Ilmor Engineering

In 2002, Ilmor Engineering technicians were running 8.3-liter engines side by side on dynamometers at its headquarters in Plymouth, Mich. One was an offshore racing engine that the company had built. The other was a Chrysler V-10 for the Dodge Viper sports car.

“It didn’t take a rocket scientist to figure out that a Viper engine could make a really nice boat engine,” says Paul Ray, president of Ilmor Engineering. “We approached Chrysler and asked if it was possible to buy engines from them to turn into marine engines.”

Along with Big Thunder Marine in Lake of the Ozarks, Mo., and Douglas Marine, which builds Skaters in Douglas, Mich., Ilmor put a pair of marinized V-10s in a 32-foot Skater catamaran with Mercury Racing Number Six sterndrives. The initial pair of engines made 550 hp.

As Ilmor continued to develop its MV10s — the company wasn’t allowed to use the Viper name — power output evolved to 625 and 710 hp. When the fourth generation was introduced for model year 2007, power went up to 725 hp, and Ilmor introduced a high-performance drive, the Indy.

A year later, just as Ilmor was making great strides, the Great Recession tanked the economy, taking the majority of the high-performance marine industry with it. “It wasn’t a sustainable business model anymore,” Ray says.

But Ilmor survived, most notably by partnering with MasterCraft Boats as an exclusive supplier. Ilmor also builds engines for auto racing, including the IndyCar Series, where the company has snagged 330 checkered flags and 21 victories at the Indianapolis 500.

Today, the company remains headquartered in Plymouth, with another facility in Mooresville, N.C. There are about 140 employees in the United States, with another 100 in the United Kingdom. Ilmor ships about 3,600 marine engines a year, and about 60 percent of total revenues come from marine and 40 percent from racing. (Profit is the opposite ratio.)

Ray, whose father who was a car racer in the United Kingdom, runs the company. He is also active at the American Boating Congress in Washington, D.C. In his spare time, he likes to build hot-rod cars; he uses a 3-D printer to make parts. He also enjoys cruising on his family’s pontoon boat, and having owned Eliminators and Donzis, he’s on the hunt for a bigger boat to use for overnights on the Great Lakes.

Ilmor’ s One Drive sterndrive is the result of a collaboration with Yanmar.

Ilmor’ s One Drive sterndrive is the result of a collaboration with Yanmar.

How long have you been with Ilmor?

Nearly 30 years. I arrived in the beginning of 1990. I was working at Cosworth Engineering. I started as a development engineer and worked many other jobs in Formula 1 and IndyCar racing as I grew with the company. Working with IndyCar brought me to the U.S., and then I was hired by Ilmor to set up a permanent company here.

What drew you to Michigan?

Our corporate offices were at Detroit Diesel, which Roger Penske owned at the time. As we grew and brokered a deal with Mercedes-Benz in 1995, we realized we were going to outgrow our facility. It became a matter of bringing all of the things in-house that we were outsourcing. We built the facility in Plymouth in 1997.

Did people know Ilmor’s history in auto racing and engineering when you first got into the marine industry?

I’ll never forget my first opportunity to speak at the Miami boat show, in 2003. In front of a large collection of journalists, I gave a speech that I titled, “Who the Hell is Ilmor?” Just about every journalist that was there came to see me at the booth to ask more questions because we were the new kids on the block.

Did the company have any history on the marine side in the United Kingdom?

I did, and so did Ian Hawkins, who eventually joined Ilmor. We were quite involved with Formula 2 powerboat racing, building outboard V-6 race engines for tunnel hulls. We were working together for a while, and Ian moved to America before I did, and I continued on after Ian left.

How are things going at Ilmor today?

Exceptionally well. We’ve never had a year where we haven’t grown, and in recent years, we’ve been growing double digits every single year.

What is your relationship with MasterCraft?

We consider it a partnership because we are exclusive to them for the tow-sports segment worldwide. We work closely together because it’s in our mutual best interest to improve the boat-engine interfaces to MasterCraft’s needs.

Do you just build inboards for wake-sports boats?

About 2½ years ago, we built a new sterndrive. It’s called the One Drive, and it’s unique because it’s a hydraulic shifting mechanism instead of a cone clutch, which gives us a lot more control over the feel of the shift.

Why is the feel of the shift so important?

If you’re going into forward or reverse, it’s not as important, but when you’re in joystick control, the smoothness of the shift is critical to a pleasant experience. Every half a second, we can make a shift. It allows us to shift the drives constantly throughout any maneuver. That can be when you’re moving sideways into a dock or rotating the boat in one direction, or if you’re in station-keeping mode trying to hold a position in a harbor with a high current or wind. Our system will shift and move the drives continuously to maintain position.

Did you partner with someone on the joystick or develop your own?

The joystick itself is an industry-available model, but we did all of the control systems that manage the steering, the throttles and the transmission shifting. We do all the software and the electronics hardware as well, so it’s unique to Ilmor.

Who is using the One Drive?

Formula and Stancraft are our two biggest customers. Aviara has taken it on as well, and we’ve talked to a lot of people in the industry who’ve tested the drive and shown some interest.

When designing an engine, do you ask MasterCraft what they need and work from there?

We absolutely ask them what they need. We talk to them continuously to get a sense of direction. We meet with them a few times a year to discuss the latest trends.

Ilmor’s U.S. headquarters 
in Plymouth, Mich.

Ilmor’s U.S. headquarters in Plymouth, Mich.

Is it always about performance, or are there other considerations?

It’s also about fuel economy, noise and transmission smoothness. We have a long list of items that we address to create a powertrain package. It’s not only the performance envelope; sometimes it’s the size. In one case, we had the water pump mounted on the side of the engine, and we felt for service and simplicity that putting the water pump on the nose of the crank made sense. We spend enormous amounts of time making sure all the fill areas and dipsticks are accessible at the front of the engine.

Are you limited to marinizing automotive engine blocks, or do you also design your own powerplants?

The 7.4-liter we sell is an Ilmor- specified set of components, and we hand-assemble the engine in Detroit in our race shop. Others are General Motors-based engines, but we can swap out camshafts and other components.

Has moving into the wake-sports segment changed Ilmor’s design approach?

It’s much more cost-conscious, so you need to be more careful to ensure you’re not putting unnecessary items on the engines. For example, in the high-performance world, we had all sorts of things that were polished and shined up to reflect the boat they’re going into.

What might surprise people about the process of designing an engine?

How much effort goes into qualifying the engine once you have designed it. From concept to production takes two full years of effort. The engine as a prototype would be up and running in six months, but beyond that you have to spend a great deal of money on components to marinize it.

How about the required certifications?

We have to do countless hours of testing. We need to certify the engine by running a 480-hour test on the catalyst, and then we have to put it in a boat and run it for hundreds of hours to make sure they’ll handle the conditions they’ll encounter. It’s incredibly labor-intensive, and a large amount of hardware is used up in the process.

What is the corporate structure at Ilmor?

There are two halves of Ilmor: the U.S. companies and the U.K. side. In 1984, when the company started, the shareholding was Roger Penske owning 25 percent, Paul Morgan and Mario Illien each having 25 percent — they are the founding members — and General Motors owning 25 percent. That changed over the years. In 2000, Paul Morgan was killed in a plane crash, and the company changed dramatically.

How so?

In 1994, Mercedes-Benz and Ilmor had started working together when we built engines for them for IndyCar racing. Mercedes purchased the whole company in the U.K. after Paul’s death. As part of the deal, we bought back special projects, which was the division that was managing the IndyCar program. The initial transaction started in 2001 and was finalized in 2005. The shareholding in the U.K. was Penske and Illien, and over here it was Penske, Illien and Liz Morgan, Paul’s widow. I also purchased a small piece of the company.

And then the economy crashed. During the recession, how did you transition from high-performance boats to the tow-sports segment?

In 2007, one of Roger Penske’s investment funds had purchased MasterCraft Boats, and we had already started designing engines to fit into the company’s boat range. His investment team divested itself of MasterCraft during the economic meltdown, and we were left with half a factory and half an engine set, and being a bit unsure what the future looked like. In 2008, we mothballed the North Carolina factory. In 2010, the new owners at MasterCraft approached us and asked if there was an opportunity for us to continue our relationship, so we started delivering engines to them. When it became clear that the economy was going to rebound, we started everything back up in North Carolina.

Ilmor builds inboard and sterndrive engines at its North Carolina facility.

Ilmor builds inboard and sterndrive engines at its North Carolina facility.

What is some of the latest technology used at the factory?

One of the biggest things is a robotic paint booth, which cost well over $1 million in 2007. We knew that having people in Tyvek suits and breathing gear wasn’t a pleasant way to exist, so we decided the best thing to do was to make a robotic paint booth. We can load engines, transmissions and components onto a hanging conveyor system, and they disappear into the paint booth. Inside, there’s two robots: One applies a primer coat, and the other applies a top coat, and an infrared drying oven dries them before they come out of the booth.

What is the biggest challenge you’ve encountered in the marine industry?

Changing people’s minds, specifically in the sterndrive world. There is very little appetite for change and trying new things. It takes a brave person to do that. Scott Porter and the team at Formula, and Robb Bloem and his team at Stancraft, were brave enough to do it.

It seems that a big part of the growth of outboards is that manufacturers tout their superiority in salt water. Is that accurate?

There’s a misconception that sterndrives don’t perform well in salt water. Some don’t, but we’ve spent a lot of time addressing those issues. We offer a seven-year warranty on our sterndrive exhaust manifolds in salt water just to prove to people that you don’t need to replace your manifolds every two years.

Are catalysts a difficult hurdle to overcome for sterndrives in salt water?

To put on these large, catalyzed exhaust systems is a tremendous expense. The catalysts that go inside the exhaust system are oversized, and there’s a lot of complexity, not the least of which is all the approvals you need to get.

With outboards getting bigger, should they be subject to the same emissions rules as sterndrives?

Outboards were 250 hp, meaning that the biggest outboard was smaller than the smallest sterndrive engines. Now we’re seeing large-capacity outboards that are quite dirty relative to their sterndrive or inboard counterparts. You can get a 350-hp outboard, and the emissions regulations are far, far below what they are for a 350-hp inboard or sterndrive. You don’t need a catalyst on an outboard. The inboard and sterndrive sector is being unfairly punished by needing to have emissions certifications at the level we do. We can’t compete, because the cost of our catalyzed systems is a very heavy penalty.

From an operating perspective, we’re seeing that boaters want more of an “automotive experience” on the water. What is Ilmor doing to achieve this?

The beauty of being an engineering company is that we have a lot of talent focused on vessel control, so we’re constantly trying to improve it. It’s exactly why we’ve done all the things we have with our joystick system, to be able to give the boat owner the best experience possible. There are some things that don’t fit well in the boating environment, such as crash-avoidance systems and autonomous driving and that sort of thing.

Are we making boating too easy?

I don’t think you can make it too easy, but the problem is that all of that stuff comes with immense complexity. That’s where things get difficult, because boats aren’t maintained as well as cars are. They are exposed to harsher environments, and as a consequence you need to be very careful. It’s easy to replace a chart plotter, but it’s very difficult to change a control system that won’t allow a boat to function properly.

Formula was an early supporter 
of Ilmor, and the companies 
continue to work together. 

Formula was an early supporter of Ilmor, and the companies continue to work together. 

Newer boaters don’t seem to be engine brand-specific. They seem to just want to start it and make sure it works.

The people who step on our boats at various boat shows aren’t interested in the engines. They’re interested in the experience. We try very hard to let people experience our product. Generational changes occur where people are used to things just working.

The industry is facing some pretty big issues, including a workforce shortage. What is Ilmor doing to attract and retain employees?

We need to talk about the two halves of the business. We have the engineering side, which is product development and testing and support. We pay good wages, provide a robust workplace that is clean and modern, use modern management techniques, and do everything we can to provide the staff with everything it needs, including flexible scheduling. On the production side, it’s a little more rigid. You can struggle with retention because of wage levels. However, providing a good work environment with great management and benefits, you create an environment where people want to stay.

How important are the issues of ethanol and alternative fuels?

It’s a disaster for marine. For racing in IndyCar, we race with E85 fuel, so it’s marvelous. For boats, it’s the wrong fuel. If we could move toward isobutanol, it could be a better fuel, but in a marine environment, 100 percent gasoline is the way to go.

Are you working on sustainability initiatives?

For every engine we sell, we try to determine how many trees it would take to offset the engine’s carbon footprint through its life. For every engine we sell, we plant three trees, and to date we’ve planted more than 70,000 trees, mostly in northern Michigan. We’d like to see everybody doing it. It’s good to have a positive environmental impact, even though we’re building things that aren’t necessarily environmentally friendly.

What can we expect from Ilmor heading into the future?

Continued growth. We’re going to continue to try to find new customers to sell existing product to, and we’re going to continue to innovate and find ways to make our products better. We have a lot of good, fresh ideas about the future and how we can continue to make our products better and improve the customer experience. 

This article originally appeared in the December 2019 issue.

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