Buell to be Discontinued

saab93driver said:

It's sad to see the company go but as for Eric Buell I find it hard to feel much sympathy. After all he got to realize his dream to a degree that most of us will not even come close to and I would be willing to bet he isn't walking away empty handed.

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Empty-handed no. Broken hearted yes.

HD dealers treated the Buell brand like something shoved down their throats. Very few stocked them or even wanted to talk about them. I was always getting promos to test ride a Buell, but just try and find a "participating dealer".

Too bad. I have a lot of respect for Eric Buell and really feel for the guy. He put his body and soul into making it work. His bikes were way out of the box.

I doubt the dealers will miss the brand, hell, most of them are probably happy to be rid of any thing that's not an HD.

I would think 180 workers is not a lot to build motorcycles. And I see a couple of them in my cowtown. Did HD ever split out the Buell operational loss?

I think HD - like many other business - got to greedy, ahem agressive in their expansion strategy. Could you imagine, the HD dealer in my cowtown also is the only BMW dealer here now. While Harleys are parked inside the BMWs are parked on the parking lot for display during the day. Tztztz...

/Guenther
(...who had been looking at the Ulysses just a few months ago)

You guys crack me up.

So many of you are slamming H-D for doing/not doing things while slamming BMW for not doing/doing the same things.

In the US H-D claims +380 dealers and of those 306 are listed as Buell dealers. At the corporate marketing level they have done a ton of things to promote and develop the brand over the years they have owned it.

H-DÔÇÖs annual reports do not break out a separate P&L for Buell but do give a variety of figures that paint a picture of where it was in the company.

In 2008 Buell represented 2.2% of the income for H-D just ahead of other.
World wide revenue by product (Dollars in millions)
76.5 % HARLEY-DAVIDSON MOTORCYCLES $4,278.2
15.3 % PARTS & ACCESSORIES 858.
7 5.6 % GENERAL MERCHANDISE 313.8
2.2 % BUELL MOTORCYCLES 123.1 0.4 %
OTHER 20.5 TOTAL NET REVENUE $5,594.3

Buell shipped 13,119 units in 2008 which was up from the 11,513 shipped in 2007 and ahead of what I believe was the previous annual high of 12,460 in 2006. The Buell sales are predominately US with H-D taking the main line as an export. In 2008 the company shipped 303,479 H-Ds down from 330,619 in 2007.

For a bit of perspective BMW claims to have shipped 11,617 units to the US which was down 3.9% from the previous years. With a smaller and more narrowly focused product line Buell outsold BMW in the US for each of the years ÔÇÖ06-8.

When all the dust settles BuellÔÇÖs survival will probably be seen as an engine supply problem. Both the Sportster engine based models and the Rotax 1125 models present business problems Buell probably could not overcome.

The Buell line is dominated by the Sportster engine. With the closing of an engine plant pending along with other consolidations the supply of engines for Buell may not have been there in an ongoing basis. Within the H-D sales numbers the often maligned Sprotster represented 20% or 60,678 units for 2008. The supply may well not be there for both the Sportster and Buell.

The 1125cc Rotax engine has been generally well received. The problem here is not so much the bike or the engine but the cost of the engine. When the deal with Rotax was made the dollar was strong and the margins were good. The dollar is weak the expense is greater while market conditions have put big pressure on keeping prices to the consumer down to keep sales up. The business model may not be there.

Engine supply issues threatened to put an independent Buell and Eric Buell out of business in the past. It may be finally the real culpererate for an H-D owned BuellÔÇÖs death is engine supply.

Financial Services was mentioned in another post. This is a segment of H-DÔÇÖs business that took a big hit in 2008 and holds on going exposure. Income in this area for 2007 was 212,169 while in 2008 it was only 82,765 (dollars in thousands). H-D holds a great deal of customer finance paper. They have taken hits in the last two years for this. The worst of the customer paper may be over. They also hold a lot of financing of dealerships. This is where their real exposure may be. Where it will end up in 2009ÔÇÖs report will undoubtedly be continue a downward trend.

Financial issues in another sense have bitten H-D this year. It has been responsible for changes in leadership in the corporation. It will be responsible for more nasty headlines about H-D in the future.

Mika said:

You guys crack me up.

For a bit of perspective BMW claims to have shipped 11,617 units to the US which was down 3.9% from the previous years. With a smaller and more narrowly focused product line Buell outsold BMW in the US for each of the years ÔÇÖ06-8.

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Maybe the lackluster BMW sales is Xplor's problem beneath their stoic fasode, or how BMW dealerships who sell other brands will have one Open House for their BMW models and two or three Open Houses for their Triumph, Ducati or Japanese brands. I suspect that the grumpies will cling to their beemers or HDs so it should not affect our generation. But I was glad when Bultaco folded its easier to get parts for them now than it was back in the day.

Thanks Mika, your explanations are always so complete and sensible, a welcome voice of reason I must say.
I was wondering what will happen to the Harley used market when HD Financial begins to sell off their repos? And pity the Buell owners with new bikes that are now worth less than the out the door price at the dealer.
At least the economy is getting better.............(tic, tongue in cheek).

I am sure that Eric Buell will rise again, his passion, engineering skills and ingenuity will keep him in the forefront of the motorcycle world.

I think that with the onset of the recession, there was bound to be some fallout in the motorcycle industry.

I am sorry to see Buell go; I thought they were neat bikes.

A few years ago, I rode an XB9S on that twisty ridge road east of Idaho City, and it was a total blast (sorry, couldn't resist ).

Amazing how things change. In 2004 my son was "awarded" a place in line to be able to purchase a HD Fat Boy at only $1000 over retail! He had it less than two weeks and someone paid him another $2000 over what he paid for it.

I was invested in HD and watched it closely. The local "Want Ad" magazine would have four or five used Harleys in it.

I remember how quickly the Want Advertiser expanded to seven or eight pages of used bikes in 2007. And at greatly discounted prices.

Just do a search on Craigs List for HD. Look at the quantity and prices.

Someone asked about V Rod. This product never developed. Especially in USA. It had a bit of a sales trend going in Europe, but that has died from what I've read.

HD built a new factory in Alabama just for this V Rod product line. I'm told it is either closed or it is closing. But as far back as a year or two ago the workforce was just a small percentage of its start up force.

These are very difficult times we are living in. In 58 years I've never seen anything like it. And I was a business owner during the horrific Carter years. That was a walk in the park compared to what is going on now.

RoyB said:

Amazing how things change. In 2004 my son was "awarded" a place in line to be able to purchase a HD Fat Boy at only $1000 over retail! He had it less than two weeks and someone paid him another $2000 over what he paid for it.

I was invested in HD and watched it closely. The local "Want Ad" magazine would have four or five used Harleys in it.

I remember how quickly the Want Advertiser expanded to seven or eight pages of used bikes in 2007. And at greatly discounted prices.

Just do a search on Craigs List for HD. Look at the quantity and prices.

Someone asked about V Rod. This product never developed. Especially in USA. It had a bit of a sales trend going in Europe, but that has died from what I've read.

HD built a new factory in Alabama just for this V Rod product line. I'm told it is either closed or it is closing. But as far back as a year or two ago the workforce was just a small percentage of its start up force.

These are very difficult times we are living in. In 58 years I've never seen anything like it. And I was a business owner during the horrific Carter years. That was a walk in the park compared to what is going on now.

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There's a big difference from the late 70's. Today, we have no rust belt industry to loose, just stock brokers and bankers which we keep at all costs. We don't build, we just charge each other interest and fees on something imported from abroad or built in-country by illegal alien labor to keep prices low and profits high. Prior to the reformation, this was called usury and it was considered a sin.

How one makes their living is important. I'm much more impressed by those who create or build, than those who merely profit.

OK, I'm stepping down from the soap box, now. Just had to let that out.

36654 said:

There's a big difference from the late 70's. Today, we have no rust belt industry to loose, just stock brokers and bankers which we keep at all costs. We don't build, we just charge each other interest and fees on something imported from abroad or built in-country by illegal alien labor to keep prices low and profits high. Prior to the reformation, this was called usury and it was considered a sin.

How one makes their living is important. I'm much more impressed by those who create or build, than those who merely profit.

OK, I'm stepping down from the soap box, now. Just had to let that out.

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Amen!

The keyword here is "Tangible" or the lack there of.

amiles said:

Are they all sitting home playing video games and looking at porno?

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Not all of us play video games.

Lots of good stuff here...

...and I will not re-hash.

Motorcycle brands notwithstanding, I admire the Erik Buell as the person who tried to fulfill his dream beyond all odds. It is the old "David and Goliath" story.

What really bothers me about this is that he may go the way of many other old Wisconsin companies.

I have many friends who own H-D's (afterall, I am in the heart of H-D land), and they all said that Beull Bikes were always treated as "unwanted relatives" by the dealers.

Personally, I would like to see a private equity group pick up Buell, but that is wishful thinking at best.

Nathan...

You crack me up!

We all know that you are in denial about having that X-Box motorcycle racing program

But seriously folks....

This was not meant to be a hijack!

V Rods made in Kansas City

All the V Rods ever produced have been made in Kansas City. That plant also makes the Dynas and Sportster. There may be some compnents plant in Alabama but it's not the V Rod plant.

36654 said:

There's a big difference from the late 70's. Today, we have no rust belt industry to loose, just stock brokers and bankers which we keep at all costs. We don't build, we just charge each other interest and fees on something imported from abroad or built in-country by illegal alien labor to keep prices low and profits high. Prior to the reformation, this was called usury and it was considered a sin.

How one makes their living is important. I'm much more impressed by those who create or build, than those who merely profit.

OK, I'm stepping down from the soap box, now. Just had to let that out.

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Well said.

I have wondered when we have shipped our manufacturing overseas, will the Burger King worker go to McDonalds to buy his burger and vice versa?

Ralph Sims

...will the Burger King worker go to McDonalds to buy his burger and vice versa?

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They already do...

I watched the video with Eric Buell. Wow - did I feel his pain. You could sense that this was his baby. I really am sorry that it all went down this way.

gazettextra.com: Walworth County officials hope to retain motorcycle company

Buell is not HD

Please remember that Buell is/was a stand alone company. It is/was not part of HD. It was its own company.
The analogy is do you know anyone that owns or have you ever seen a Lincoln Town car, or a Lincoln Continental, or a Lincoln Navigator?
Do those people own a Lincoln? Or do they own a Ford? Lincoln is owned by Ford. Much the same way as Buell is owned by HD. It is a separate company.
That's all. Thank you
Max