Harley drops Buell around 180 positions in East Troy to be let go.

[CBRXXBLACKBIRD]

Harley drops Buell line, income plummets

By Rick Barrett of the Journal Sentinel
Posted: Oct. 15, 2009 7:24 a.m.
Harley-Davidson Inc. said Thursday it will discontinue its Buell motorcycle brand and divest its recently acquired MV Agusta lineup as part of the company's long term business strategy.
The news that Harley was dropping two lineups came as the struggling manufacturer also said that its third-quarter income fell 84% to $26.5 million, or 11 cents a share, from $166.5 million, or 71 cents a share a year ago.
The company had $1.12 billion in sales in the quarter, down 21% from $1.42 billion in the third quarter of 2008. Worldwide motorcycle sales at Harley dealers fell 21% during the third quarter compared with the same period in 2008. The company said it shipped 27% fewer motorcycles in the quarter.
In a news release, Harley said it would discontinue its Buell brand, based in East Troy, and divest the Italian MV Agusta brand. The Buell decision will result in the loss of about 80 manufacturing jobs in East Troy and about 100 salaried positions.
"The fact is we must focus both our effort and our investment on the Harley-Davidson brand, as we believe this provides an optimal path to sustained, meaningful long-term growth," CEO Keith Wandell said in the release.
Harley, the world's largest manufacturer of heavyweight motorcycles, has been restructuring as it has sought to cope with weaker sales. The company has cut more than 1,000 jobs, implemented temporary production shutdowns, and is considering closing its assembly plant in York, Pa.
Even many die-hard Harley loyalists, caught by the severity of the economic downturn, haven't bought new bikes.
In July, the company trimmed its shipment forecast for this year to 212,000 to 228,000 bikes, as much as 30% fewer than in 2008. On Wednesday, Harley shares climbed to one of their highest levels in a year after Wells Fargo & Co. upgraded the stock, citing a possible increase in motorcycle shipments to dealers. A drop in motorcycle inventory this year should mean a "low single-digits" rise in shipments in 2010 and 2011.
 

[Scratch33]

Damn.  

Pleas, Piaggio - carpe diem!

[Billbo]

Wonder what this means to Buell owners in terms of parts and service? Don't they have to carry parts for a certain number of years (like car dealers)?

[MilleArp]

Do you have the actual linky for this article?  

[Scratch33]

http://www.jsonline.com/business/64352232.html

[County Tar]

Here is the message from Eric Buell.

http://www.buell.com/en_us/

[bomber]

Do you have the actual linky for this article?  

Google will give you many links.

Parts and service were pretty dismal in the first place . . . . . . . . I believe all the have to carry (by law) is emmisions related parts (read, most of the engine and fuell system parts), but that's a very fuzzy memory on my part.

[Fourstring]

They're going to still honor warranties and parts, according to the Buell site.  

MV Agusta is gone too.

[falconati]

Wow, listening to him talk was so depressing.  Just imagine what it feels like to have your life's work shut down....ugh

[Quickv4]

VERY sad news!

I was almost crying with Eric (as he was on the verge of)

Really sad to see such a spirited ingenious individual's dream crushed, I know how that feels.


 If I had a couple million just laying around, id see if I could help him kae his own company, rather than be tied to HD.

[jadziadax8]

In a news release, Harley said it would discontinue its Buell brand, based in East Troy, and divest the Italian MV Agusta brand. The Buell decision will result in the loss of about 80 manufacturing jobs in East Troy and about 100 salaried positions.

So, let me get this right.  They've got 80 people building Buells in East Troy and 100 people managing.  I think I'm seeing part of the problem here.

[Fourstring]

Not to mention Buell was still turning a profit.  So they shut down a portion of their business that was in the black in spite of management top-heaviness.

[Quickv4]

well, it sounds like they were down in profit, but much less than HD!

[FZ1 Matt]

So, let me get this right.  They've got 80 people building Buells in East Troy and 100 people managing.  I think I'm seeing part of the problem here.

100 salaried employees doesn't mean they're all managers.

[FZ1 Matt]

Not to mention Buell was still turning a profit.  So they shut down a portion of their business that was in the black in spite of management top-heaviness.

I've always heard from friends that work at HD that, overall, Buell lost money every year. HD just kept them going.



p.s. Do I own a vintage bike now?

[UFO]

Wow, what a slap in the face to American motorcycle enthusiasts and Buell owners.  I've never really been in to Buells, but that really sucks.

[bomber]

80 folks on the line -- 100 in support, R&D, purchasing, et al . . . . . a fairly impressive ratio, actually, when compared to other manufacturing companies (of course, HD has a lot of responsibility for Buell's distribution channel)

I have some friends in East Troy -- sad day for them, indeed.

I have some friends in the Iron Tower, as well, and can't help but think they will also be in for some hard times . . . . .

Oh, and Buell's been in the black for 4 or 5 years now --

[Thunder7]

What matters most is that mismanagement has yet again led to peoples lives being ruined.

[Tpoppa]

Besides being a talented engineer, Erik is one of the most passiosate m/c enthusiats in the world.  Also a very good guy, that made himself available to Buell riders.  Somehow, I doubt we've seen the last of him.

I hope Penske, who is fresh off the Saturn deal falling apart, takes a long hard look at Buell and MV Agusta.

[Oddball]

It is such ashame that this has happened.  I've always been interested in Buell's and they have been on my short list for my next ride for some time.

I wish everyone at Buell the best of luck.

[FlowBee]

HOG stock is up 5% already today!  Some suit is going to get his bonus this quarter!!

CNBC has the CEO of Polaris on right now.  They beat estimates this quarter by 9% and see this as the bottom.  He says "this is the perfect time to innovate and get ahead as we come out of this."  Polaris stock is up 10% today!

[Fourstring]

Although I'm not a fan, if I was going to buy an American cruiser it would be a Victory.  The guys at Polaris have shown some serious grapes in the last few years.

[Brad1445]

BUell was not killed it was a suicide of a million stupid moves, mostly on the 1125

[Rogue]

Brad, you should be happy and proud of yourself now.

You wanted this to happen more than anyone in here.  So enjoy your day in the sun.  

[Haar]

Does this move really surprise anyone?  Buell got a boost with H-D's $ then what else could happen.  Some day the U.S. industry will pay attention to who's who (Jap Big 4).  Remember what Indian did to it's followers and workers?  H-D taking on MV Agusta reminds me of the Aerimacchi days of the 70's.  Gee, I'd like to buy an American cruiser too if I didn't have to pay $5000 extra for a performing motor. CVO my ass.  Oh, I still have my AMF harley and it is what it is but ride the ones from across the pond.  can'tkeeprantinglikethis...goin'nuts.  --proud co-owner (taxpayer) of the big three and livin' the dream  

[saab93driver]

HOG stock is up 5% already today!  Some suit is going to get his bonus this quarter!!

I'd be willing to bet Buell himself has stock as part of his deal with H-D too so from a finanacial perspective he should be better off today than yesterday.  On the one hand I am sorry to see a company like this fold, on the other hand the teary eyed speech doesn't really move me - I don't feel bad for Buell himself.  He's actually fortunate that he got to live his dream more than most people ever do and I'd be surprised if he himself is walking away empty handed.  

[Thunder7]

I'd be willing to bet Buell himself has stock as part of his deal with H-D too so from a finanacial perspective he should be better off today than yesterday.  On the one hand I am sorry to see a company like this fold, on the other hand the teary eyed speech doesn't really move me - I don't feel bad for Buell himself.  He's actually fortunate that he got to live his dream more than most people ever do and I'd be surprised if he himself is walking away empty handed.  

I cant disagree with you but there may be another side to it- As we all know, motorcycling is a passion that easily consumes many of us. Buell was/is no exception and he has now had that rug ripped out form under him. Also, its very possible that part of what is upsetting him is that "his" people are going to be losing their jobs and if he is that rare person with that kind of conscience- It could also explain a lot.

[JamesG]

Erik never cared about the money, his dream was building motorcycles. His way.  Who was the last head of a bike company that was like that?  Soichiro Honda?

I only hope that Buell and the other engineers and R&D guys did not have no compete clauses in their contracts with HD and that Polaris scoops them up to work for Victory.  It would be awesome to see a real Victory sportbike that wasn't hamstrung by traditionalist dictates from a mothership board of directors.

Buell really was one of the jewels in HD's crown of its claim to being "THE American Motorcycle Company".  And they went and pawned it to make their bottom line look better like a junkie needing a quick fix.

It occurs to me to wonder how much the aquisition of MV Augusta cost in lawyer and legal fees? And now they are turning around and saying, "Oh, never mind. Anyone want to buy an Italian motorcycle company?"  There is nothing like indecisive dalying executive management to piss away a company's cash...


I was thinking of selling my '06 Uly. But now I think I'll keep it. It now represents Buell at its zenith.  

 

[OU812]

I cant disagree with you but there may be another side to it- As we all know, motorcycling is a passion that easily consumes many of us. Buell was/is no exception and he has now had that rug ripped out form under him. Also, its very possible that part of what is upsetting him is that "his" people are going to be losing their jobs and if he is that rare person with that kind of conscience- It could also explain a lot.

he was a hero to many. Myself included.

[woodman]

Erick needs to hook up with Bombardier (can-am). They own the major portion of Rotax so that would be his source for engines.

[ninegear]

Erik never cared about the money, his dream was building motorcycles. His way.  Who was the last head of a bike company that was like that?  Soichiro Honda?


It occurs to me to wonder how much the aquisition of MV Augusta cost in lawyer and legal fees? And now they are turning around and saying, "Oh, never mind. Anyone want to buy an Italian motorcycle company?"  There is nothing like indecisive dalying executive management to piss away a company's cash...
 

thats what made erik such a great guy. he was happy building bikes. even though his bikes where ugly as hell they made up for it with many other things.
if i had the cash i wouldnt mind buying mv augusta. i would drop the prices down a bit though.