| Author | Message | ||
     Sporran |
http://www.facebook.com/buell Dunno if this link will work but apparently Harley knocked back Can Ams offer to buy Buell. WTF!!! The article is in the Australian AMCN | ||
| Chameleon |
Referenced content:  | ||
| Jdugger |
A friend sent me a word document that I can't attribute (and therefore don't know of its validity) but it goes into the details of the Canadian offers and speculates the reason HD rejected the offers was to avoid the possibility of egg on their faces should the 1125r become successful. Sad, and possibly true. | ||
| Ogobracing |
From day one I thought BRP would have been perfect to pick up Buell and pondered why Harley did not want to sell it. Now I know that BRP was interested. I now more ticked than ever at HD, and not just because of Buell, but because of every single job lost that might have been saved. | ||
| Kirb |
I can assure you BRP was interested 3 years ago... It wouldn't have been difficult to do a 1125 only gig, but also easy to outsource parts through HD for the air cooled bikes. It's not like it hasn't been done before. HD wanted t tank buell, claim the loss, and move on. There was even speculation that BRP and HD would merge if the economy doesn't turn around, but those are just rumors... | ||
| Andros |
so so so sad! | ||
| Jaimec |
I have a dream that BRP will buy Harley, tear it apart, and sell off the pieces. Would serve them right. | ||
| Syonyk |
Hrm... Harley wants to focus on younger riders. Most of which I see riding something in the "sport, sport-touring, or adventure" category. I think I know a company that used to make such things! | ||
| Rockstarblast1 |
How could the 1125 become sucessful now? There almost all sold, not like sales can pick up. It won't a championship in ama. And they don't make aftermarket parts to profit from. There jus toying with the idea and don't really kno what to do, but if they really had no intent to do anything it would be sold allready | ||
| Kirb |
The point was that the offer was presented to HD BEFORE they closed Buell, not after. The 1125 motor was in the works way before 2008 (I heard in 2005 that it would be rotax and liquid and assumed it would be an Aprillia clone). Either way, BRP saw that their market better aligned with Buell. BRP tried to grab a company that was already up and running an soon to be using their product. | ||
| Jules |
That doesn't fundamentally alter anything that we already knew - HD made a bad decision. All it now shows it that it was a REALLY bad decision and that there were plenty of other opportunities. I think if I were a HD shareholder I'd be a bit pissed right now and want to know why they spent my money on a stupid idea when they could have actually sold Buell and made me even more! Whatever they are dong over there at HD it isn't smart! | ||
| Hogzilla |
My thought, from a branding standpoint, is keeping Buell around, and with HD so closely linked to Buell, they opted to kill it for brand control. Not defending the idea, just trying to get into the heads of what they could have been thinking. IF Buell was bought and the line stared to look more like BRP's product line, it could confuse purchasers that this was a Harley direction. HD and Buell have been linked at the hip since the beginning. I can't see HD wanting to risk losing control of their brand in any way as a long term risk. They are one of the most brand conscious companies out there. For better or worse. | ||
| Kirb |
HD and Buell linked at the hip? I couldn't think of a more disconnected brand relationship. Other than Buell came up through HD, started on it's own, and then was folded back in later. I hardly think that HD folk would care that Buell was gone just as much as Buell people wouldn't care that they could go to another dealer that actually cared about the product they were selling. In 'carguement' speak, it would be easier to spin off Saturn than it would be to spin off Pontiac. Closing down Buell rather than selling it off (or part of it) doesn't make ANY sense regardless of your feelings on the brand. | ||
| Skratch |
In talking to people supposedly in the know... One of the main reasons it was done this way is to keep all control of all things Buell with Erik. Selling off to another company would also sell of any creative control/patents/copyrights. My understanding was this was a way for Erik to keep all things Buell with him so in the future he could bring it back in whatever form he wanted. So if thats true, at least I'll give HD credit for respecting what Erik has done and allowed him to do with Buell as he wished. | ||
| Hogzilla |
Kirb, this was only a theory based on HDs tight control of their brand. I am not selling this as fact. Ultimately HD or any company will do what's easiest, in the best interest of the long term growth of the company and most profitable. Skratch, this makes sense since he's able to take with him the 1125r as basis for his racing enterprise. I get the feeling Buell may be back, but in a very different way. This, in the long term, could be very good. | ||
| Homer007 |
total bs. technology improves and evolves over time and in the motorcycle industry, that pace is accelerated. why swallow a 150 million dollar write-off to keep patents/copywrites/etc that becomes more obsolete with each passing day? | ||
| Skratch |
Its not about technology. Its about keeping something near and dear to Erik Buell with Erik Buell. I don't know if its right or not, but its what someone at my HD store (who seems to have a huge inventory of Buell) told me. It may not be what Erik wanted as far as HD dropping him. But I'm sure in his heart and soul he'd want to keep Buell with himself and not have some other company take it over. In that aspect then it makes sense. | ||
| Jdugger |
This is the text excerpt from a friend. It's unattributed, and I make absolutely no claims of it's truthfulness or accuracy, but it's an interesting read. So, take it all with a grain of salt... Hurt by savage restructuring costs and the sluggish U.S. economy, on January 22 Harley-Davidson reported a larger-than-expected loss for the fourth quarter of 2009, its first quarterly shortfall in 16 years since the same period in 1993. Harley also warned of “challenging conditions” in 2010, as U.S. consumers remain wary about making luxury discretionary purchases. Harley said shipments of its bikes to dealers fell 27 percent to 223,023 last year, down from 303,500 in 2008, as turnover tumbled 40 percent to $764.5 million. This led the company to report a 2009 fourth-quarter loss of $218.7 million, compared to a profit of $77.8 million a year earlier, although included in the loss was a hefty $167 million in restructuring charges. Harley expects shipments to fall another 5-10 percent in 2010, leading it to deliver between 201,000 and 212,000 bikes this year, with first-quarter production down as much as 30 percent from a year ago – a decline that President/CEO Keith Wandell attributed to the fact that customers had become “more practical and cautious.” To redress that, Harley-Davidson is seeking to attract younger buyers, and to expand its global reach as it attempts to increase its presence outside the USA, an endeavor symbolized by the fact the company has now begun selling a 12-strong range of H-D models in India, and is looking for other growth opportunities abroad, while divesting itself of what it terms “unwanted brands” – namely Buell, and MV Agusta. “We are behind in that area,” said Wandell in an interview with the Wall Street Journal, in referring to Harley’s expansion in export markets. Indeed, the company’s results were worse than Wall Street was expecting, leading its shares to fall by 7.7 percent on publication of the results. In light of that, Harley management’s surprise decision, announced on October 14 last year, to spend the $125 million shutdown costs entailed in “discontinuing” their youth-targeted Buell sportbike subsidiary in order to focus on the Harley-Davidson brand’s core product range, is increasingly being questioned. The move hasn’t just generated heaps of negative publicity largely detrimental to the Motor Company’s overall image, it’s also caused dismay among Buellisti, both in the USA and abroad, where in countries like France, Germany, Italy and Japan the Buell marque has a well-established and faithful clientele. The decision is also now being questioned by Harley stockholders, who have zero commitment to maintaining the Buell brand, but are very much interested in getting value for their investment dollar. For it’s now reliably understood that H-D management rejected two attempts by Canadian snowmobiles-to-aerospace conglomerate Bombardier to become Buell’s white knight, under the aegis of its BRP/Bombardier Recreational Products division. As the owner since 1970 of Rotax, which produced the liquid-cooled eight-valve DOHC Helicon engine powering the Buell 1125R sportbike and 1125CR café racer, Bombardier was anxious to preserve the existence of an important customer for its European subsidiary. According to sources in Austria, it’s understood that the Canadians initially made an offer to acquire the design, manufacturing rights and production tooling of the two Buell-Rotax models in order to continue manufacturing them for sale under the Can-Am name alongside BRP’s current Can-Am Spyder – the three-wheeler powered by the Rotax 60-degree V-twin engine, which was the engine formerly sold to Aprilia for use in the RSV Mille sportbike range. Bombardier originally founded Can-Am in 1973 as an offroad motorcycle brand using rotary-valve Rotax engines – to such good effect that they swept the first three places in the 1974 AMA 250cc MX series, and were in the process of developing a range of road bikes, when Bombardier management shifted attention from manufacturing recreational products to the railway and aircraft sectors comprising the heart of the Fortune 500 company’s business today. In light of that, Can-Am motorcycle production ceased, before the name was revived in 2006 for a new range of sporting ATVs, followed a year later by the debut of the Spyder. When Bombardier’s attempt to acquire the rights to the 1125R/CR models was turned down, it’s understood that the Canadians returned with an offer to purchase the entire Buell operation for an undisclosed figure, which the Harley-Davidson board once again rejected. It’s believed that Bombardier would likely have maintained the existing Buell manufacturing operation in East Troy, Wisconsin, but in downsized form to reflect the fact that its line of Harley-engined Firebolt/Ulysees/ Lightning air-cooled models would have been discontinued. Indeed, it’s even possible that assembly of the Can-Am Spyder might have been shifted to East Troy from BRP’s Valcourt, Quebec, factory where it’s currently produced, to take advantage of the excess space that would have become available with the deletion of the air-cooled Buell models. While still not concerned by either party, the news of the Bombardier approach has caused consternation not only in East Troy, but also at Rotax’s Upper Austrian base at Gunskirchen, where a valuable customer has been lost; and also among Harley stockholders, who question why the board opted to spend the $125 million Buell shutdown costs at a time when the Motor Company is struggling to regain profitability, when all or part of this might have been offset by making a deal with Bombardier. Harley-Davidson acquired Buell in 2003 with the hope of breaking into new sportbike markets, but a lack of acceptance by the company’s own dealer network – many of whom bitterly resented being made to stock a type of motorcycle they had no interest in – and inadequate investment in building the brand, combined to brake Buell’s growth. Harley-Davidson CFO John Olin has revealed that the Buell brand was not accounted for separately on the Harley-Davidson books, which might be one reason management chose to “discontinue” it, rather than sell it to Bombardier, even if it would continue to exist only under the Can-Am label. But another factor may well have been that Harley bosses would have had considerable egg on their corporate faces if the 1125R had succeeded in building market share under Bombardier ownership. Was the price of saving that kind of embarrassment the $125 million it’s taking to shut Buell down? Meanwhile, it’s going to be interesting to see what Erik Buell does next, as soon as his 15-month noncompete agreement with Harley expires – a period he’s conveniently occupied by creating his new racing-focused company ( erikbuellracing.com  ) to provide existing Buell customers with competition support. But with the 1125R platform for that operation no longer being manufactured, this will have only a limited shelf life. Then what? Well, maybe Bombardier may have an answer to that, too...} | ||
| Kickstand76 |
Harley did not sell Buell probably because HD may exploit EBR or the Buell brand in the future. why else would a company that's losing profits, turning down multi-million dollar offers hold on to a company they recently shut down? (Message edited by kickstand76 on February 08, 2010) | ||
| Fresnobuell |
why else would a company that's losing profits, turning down multi-million dollar offers hold on to a company they recently shut down? One word-egos. Extremely sad but true. | ||
| Kickstand76 |
I also read an article recently that HD donated both HD's and Buell to the Haitian gov't.  | ||
| Sburns2421 |
I honestly do not understand why anyone would buy a bike from Harley in the future, all things considered with regard to Buell. Perhaps BRP's offer was an extreme low-ball, but even if they just took the company over it would have been cheaper than closing it down. This is a serious miscalculation on management's part. It appears H-D is taking out of both sides of their mouth. They say they want younger customers, then they alienate what younger customers they had by closing Buell. If Buell was now BRP-owned, Buell loyalists would probably not hold ill will toward Harley. As it is I know people that will never set foot in a H-D dealership because of this fiasco. | ||
| Court |
True. Harley is currently buying mangoes to get tariff relief and sending motorcycles to Haiti. Nothing quite like a good old fashioned American company. | ||
| Syonyk |
I'm thinking a Ulysses would be a good option down there. | ||
| Thefleshrocket |
Interesting stuff, Jdugger. Considering that parts of your document are word-for-word the same as the article posted in AMCN, I think it's reasonable to suspect that your document is the original article before it was downsized. I also didn't realize that Bombardier owned Rotax. I remember reading somewhere that each Rotax 1125 motor cost Buell something like $5000. If the 1125R began being produced by CanAm, there would be no need for the markup of selling the 1125 motor to Buell since the engine would be staying in-company. Perhaps removing that markup could have resulted in the 1125R's MSRP going down. A lot of the reason that I didn't buy an 1125R after test riding one back in '08 was that I just didn't think it felt like a $12K motorcycle. Now if MSRP was more like $10,500 and if I could find a dealer willing to part with one for close to $9k, I would have been a lot more likely to consider buying one. (I have a tendency to shop around for the best deals on bikes--back in '03, I bought a new '03 GSX-R1000 for $8500, which was $2000 off of MSRP. In '06, I bought a new-old-stock '03 Kawasaki Z1000 for $5900, which was $2600 off of MSRP. Both bikes were 500+ miles away, so I made long trips to save that money. My point being that there might have been hope of finding a new 1125R for around $9K if MSRP was $10,500 or so.) I don't know if the "high" pricetag was a big part of the reason that 1125Rs didn't sell quite as well as they could have, but given how many people (myself included) snapped them up after the fire sale began, I think it's safe to say that lower prices probably would have helped sales. Perhaps significantly. | ||
| Skratch |
Buell is and always has been a niche market. By HD dumping the Buell line isn't going to do jack or squat to their overall sales. Simply because people who are looking for a HD style bike aren't going to look at Buell. It may be HD is talking our of both sides of their mouth in regards to marketing to a younger crowd. But make no mistake. They want people on Harleys. Buell will likely never be what Harley is. Simply because of too many other options in the sport-bike field. People who by HD are buying the brand and the image. Its either that or Gold Wings. So I still don't believe one has much to do with the other. That...and Erik Buell still has complete control over the Buell brand. I think thats a good thing vs. selling it off to XYZ company and having them take creative control over the brand and the trademark. | ||
| 46champ |
One thing you can take to the bank. THE STOCK HOLDERS MEETING WILL BE INTERESTING! | ||
| Highscore |
It is more than the Buell market, which brake away for Rotax BRP in Upper Austria:  The pic shows a Cagiva bike. This company is a subsidiary of MV Agusta, purchased by HD for 80 Million € in 2008. The Helicon engine was designated to power this new motorcyle in 2010 in a new, torque-optimized trim with 120 HP output. Looks like as this motorcycle will never come. Rotax-Bombardier has invested millions into this new engine. The 8000-9000 units Buell 1125, produced until now, are not sufficient for a turn back of this investment. For this reason the decision of HD to cancel its sport bike sector as a whole has a huge effect to the Rotax facility compromising directly workplaces here in Austria. The Helicon engine is state of the art, competing with Ducati, its is the engine Eric Buell has been waiting for to make his bike and concept perfect. There should be a good chance to find a reasonable market for this bike and Bombardier has recognized this. | ||
| Jdugger |
That Cagiva bike is way out of scale. If that's the Helicon, then that bike has a 42" seat and a 30gal gas tank! | ||
| Mountainstorm |
It would be extremely satisfying to see HD taken over and sold off like they sold off Buell. I wonder if that is even possible. |
