Mercury Outboard Motors was founded in 1939 by Carl Kiekhaefer who at the time was a chief engineer working at a successful company not related to boating. Wanting to own his own business he bought a failed outboard motor company in his hometown of Cedarburg Wisconsin that produced Thor brand outboard motors, with the plan to produce magnetic separators for the dairy industry. Thor motors became very unpopular because they did not run very well and had poor performing boat propellers. When their contract with Montomery Ward was terminated that was the end for them.
When Kiekhaefer took ownership of the factory he found a few hundred of the old Thor motors that were re-labeled Sea King for Montgomery Ward still there collecting dust.
He was about to call a junk dealer to get rid of the motors when he decided to tinker around with one of them to see if he could get it to run better. After improving some parts on the engine the thing ran great. Instead of calling the junk man, Carl called Montgomery Wards and then was soon contracted to deliver the rest of the Sea Kings to them. People who bought the motors liked them and requests for more engines came in. With the machinery that was used to make the engines still in the factory, Kiekhaefer started making more engines and was now in the outboard motor manufacturing business.
Carl changed his mind about the the diary industry and quickly started designing a new streamline looking outboard motor with the model name of Mercury that would come out in 1940.
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