Buell is done, finished, gone - Page 7

Gas Man · 10-16-2009, 01:08 PM

http://hellforleathermagazine.com/20...n-to-erik.html

We just got off the phone with Harley spokesperson Paul James. According to him, Erik Buell is in ongoing discussions with Harley about taking on an advisory roll at The Motor Company, in which capacity he'll contribute to future product design. The rest of Buell's 180 employees won't be so lucky, they'll be out on the street as of December 18, the day the Buell plant shuts down. This news will come as a shock to them, like the rest of us, they only found out about Harley killing Buell this morning.

Paul didn't have Buell sales figures to hand and we don't believe they're published by Harley, but he suggested that this year's sales were down compared to last's about the same percentage as Harley's better-than-industry-average 21.3 percent figure. Indeed, Harley isn't killing Buell because it's unprofitable, it's killing Buell because it wants to invest every last penny back into Harley to save that brand from possible failure. It's not actually sales that are Harley's biggest problem -- although they can't help -- it's the troubled finance wing. Harley's practice of giving sub-prime motorcycle loans to unsuitable candidates has bit the company in its proverbial ass, forcing Harley to borrow $1 billion in operating capitol at 15%. That's only enough money to see it through to the end of the year. So far this year, revenue at Harley is only down 17 percent, yet net income has fallen 71.4 percent.

The decision was made to shutter rather than sell Buell because it's product range and distribution network are so heavily dependent on its parent company, that there's relatively little value in the company that could be transferred to a new owner.

Asked how Harley intends to replace the customers that will now be lost to Buell's competitors and how Harley intends to expand its appeal to post Boomer generations, Paul is insistent that Harley's current range already has the ability to appeal to that audience, saying, "Keep in mind, in the U.S., H-D holds the number two share position overall (all size bikes) among young adults 35 and younger and we are the share leader in heavyweight motorcycles among this group, so we know our motorcycles appeal to young adults.

"We will continue to develop products under the Harley-Davidson brand that appeal to riders under 35 years old. That said - and while I can't discuss the specifics of future product plans - you can expect us to focus on high-impact product introductions that attract new riders and help define the future of motorcycling. We are not ruling anything in or out...we simply will pursue it through the Harley-Davidson brand."

Wes Siler. October 15, 2009 — Permalink

Particle Man · 10-16-2009, 01:10 PM

Quote:

Originally Posted by karl_1052

I doubt the dealers knew. I don't think Erik knew until they brought him into HR one morning.

Good point. I think the local guy mentioned that it just got too damn expensive to carry the franchise.

Sean · 10-16-2009, 01:32 PM

Well that's interesting

Sales (MRQ) vs Qtr. 1 Yr. Ago -18.02
Sales (TTM) vs TTM 1 Yr. Ago -13.25
Sales - 5 Yr. Growth Rate 4.02
EPS (MRQ) vs Qtr. 1 Yr. Ago -84.13
EPS (TTM) vs TTM 1 Yr. Ago -67.85
EPS - 5 Yr. Growth Rate 2.24

So they're down slightly and losing their shirt. Their gross margins are still higher than the industry average. Considering that so much of their sales is high-margin accessories (t-shirts and chrome junk), I would guess that the drop in earnings is not in line with the drop in sales revenue.

I think if Buell were earning money for them, they would keep the brand and just suspend R&D and marketing (inc racing). That tells me it's a money losing operation.

pdog · 10-16-2009, 03:46 PM

Ah, a 40 year old muscle car. Nice.

Phenix_Rider · 10-16-2009, 08:13 PM

Quote:

Originally Posted by Gas Man

"We will continue to develop products under the Harley-Davidson brand that appeal to riders under 35 years old. That said - and while I can't discuss the specifics of future product plans - you can expect us to focus on high-impact product introductions that attract new riders and help define the future of motorcycling. We are not ruling anything in or out...we simply will pursue it through the Harley-Davidson brand."

I can't wait to see what this brings. The only Harleys that have been remotely attractive to me haven't had many HD parts. How many gixxer riders do they honestly think they can capture with low horsepower heavyweight twins?

Dave · 10-16-2009, 09:00 PM

Quote:

Originally Posted by Phenix_Rider

I can't wait to see what this brings. The only Harleys that have been remotely attractive to me haven't had many HD parts. How many gixxer riders do they honestly think they can capture with low horsepower heavyweight twins?

who says they are gnna go after zuk sales? Maybe take a crack at bmw with an adventure sportster

derf · 10-16-2009, 09:46 PM

How about a vrod based sport bike?

pdog · 10-16-2009, 10:35 PM

Google "Roehr". Conventional wisdom is that the engine's too heavy.

http://www.motorcycle-usa.com/16/438...irst-Ride.aspx

Quote:

Originally Posted by derf

How about a vrod based sport bike?

Gas Man · 10-16-2009, 11:43 PM

Keep spewing and reproducing ignorance people....

Dave · 10-17-2009, 12:29 AM

Quote:

Originally Posted by Gas Man

Keep spewing and reproducing ignorance people....

whats ignorant here? i rode it. it revs slooooooow. whole bike feels maybe 600 fast at best

10-16-2009, 01:08 PM	#1
Gas Man Trip's Assistant Join Date: Feb 2008 Location: Imported from Detroit Moto: 2009 HD Street Classic Posts: 12,149	http://hellforleathermagazine.com/20...n-to-erik.html We just got off the phone with Harley spokesperson Paul James. According to him, Erik Buell is in ongoing discussions with Harley about taking on an advisory roll at The Motor Company, in which capacity he'll contribute to future product design. The rest of Buell's 180 employees won't be so lucky, they'll be out on the street as of December 18, the day the Buell plant shuts down. This news will come as a shock to them, like the rest of us, they only found out about Harley killing Buell this morning. Paul didn't have Buell sales figures to hand and we don't believe they're published by Harley, but he suggested that this year's sales were down compared to last's about the same percentage as Harley's better-than-industry-average 21.3 percent figure. Indeed, Harley isn't killing Buell because it's unprofitable, it's killing Buell because it wants to invest every last penny back into Harley to save that brand from possible failure. It's not actually sales that are Harley's biggest problem -- although they can't help -- it's the troubled finance wing. Harley's practice of giving sub-prime motorcycle loans to unsuitable candidates has bit the company in its proverbial ass, forcing Harley to borrow $1 billion in operating capitol at 15%. That's only enough money to see it through to the end of the year. So far this year, revenue at Harley is only down 17 percent, yet net income has fallen 71.4 percent. The decision was made to shutter rather than sell Buell because it's product range and distribution network are so heavily dependent on its parent company, that there's relatively little value in the company that could be transferred to a new owner. Asked how Harley intends to replace the customers that will now be lost to Buell's competitors and how Harley intends to expand its appeal to post Boomer generations, Paul is insistent that Harley's current range already has the ability to appeal to that audience, saying, "Keep in mind, in the U.S., H-D holds the number two share position overall (all size bikes) among young adults 35 and younger and we are the share leader in heavyweight motorcycles among this group, so we know our motorcycles appeal to young adults. "We will continue to develop products under the Harley-Davidson brand that appeal to riders under 35 years old. That said - and while I can't discuss the specifics of future product plans - you can expect us to focus on high-impact product introductions that attract new riders and help define the future of motorcycling. We are not ruling anything in or out...we simply will pursue it through the Harley-Davidson brand." Wes Siler. October 15, 2009 — Permalink __________________ -Chris "Why pay somebody else to fuck up your bike?" Run Amsoil Product

10-16-2009, 09:46 PM	#7
derf token jewboy Join Date: Nov 2008 Moto: CBR 900, KLR ugly ass duckling, Gas Man Posts: 10,799	How about a vrod based sport bike? __________________

10-16-2009, 11:43 PM	#9
Gas Man Trip's Assistant Join Date: Feb 2008 Location: Imported from Detroit Moto: 2009 HD Street Classic Posts: 12,149	Keep spewing and reproducing ignorance people.... __________________ -Chris "Why pay somebody else to fuck up your bike?" Run Amsoil Product

10-16-2009, 01:32 PM	#3
Sean giggity Join Date: Nov 2008 Location: socal Moto: street, sumo & dirty Posts: 1,071	Well that's interesting Sales (MRQ) vs Qtr. 1 Yr. Ago -18.02 Sales (TTM) vs TTM 1 Yr. Ago -13.25 Sales - 5 Yr. Growth Rate 4.02 EPS (MRQ) vs Qtr. 1 Yr. Ago -84.13 EPS (TTM) vs TTM 1 Yr. Ago -67.85 EPS - 5 Yr. Growth Rate 2.24 So they're down slightly and losing their shirt. Their gross margins are still higher than the industry average. Considering that so much of their sales is high-margin accessories (t-shirts and chrome junk), I would guess that the drop in earnings is not in line with the drop in sales revenue. I think if Buell were earning money for them, they would keep the brand and just suspend R&D and marketing (inc racing). That tells me it's a money losing operation.

10-16-2009, 03:46 PM	#4
pdog Refugee Join Date: Nov 2008 Location: San Francisco, CA Moto: Pimped 2005 SV650 Posts: 332	Ah, a 40 year old muscle car. Nice.