Pacific Northwest Closures....... (BMW, Ducati, KTM, Indian)

36654 said:

What product was Ford going to build for Japan that wasn't already available from their subsidiary Mazda? Relative to China, Buick did very well there selling mundane Regals.

In the US, the foreign car companies, for example BMW, Mercedes and, later, VW got whatever tax and development deal they wanted and promises that the local and state governments would fight any efforts to organize the work force. Forget the NAFTA blame game, GM, Ford and Fiat-Dodge are just abandoning everything but the highest profit vehicles (Pick-ups). It's just laziness.

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powwow said:

That is correct, although they will still be building the Mustang.

Ford has never made money on car production and with consumer demand having shifted substantially to more truck like vehicles, it was a pretty easy decision. You will likely see smaller, cheaper "SUV" type vehicles from Ford that replace a small car.

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powwow said:

Mazda is not and has never been a subsidiary of Ford. At one time, Ford had a 33% investment in the company, which did give it control. Ford sold most of that stake in 2008 and the remaining shares in 2015.

You are correct...state governments (primarily southern states) in an effort to build a job base, courted all of the foreign manufacturers to build assembly plants. It was pretty ironic when the U.S. legislature was debating whether to bail out GM and Chrysler (Ford did not take any bail out money), Sen Richard Shelby from Alabama was waxing poetic about screw the domestic companies, if they can't survive, just let them fail. Meanwhile, he's shoveling hundreds of millions of dollars in tax breaks to Mercedes, Hyundai and Honda (i.e.$250 million dollars in tax breaks to Mercedes alone) in an effort to entice them to build plants in Alabama (which they did). South Carolina did the same for BMW, Tennessee for Nissan, Georgia for Kia, Texas and Indiana for Toyota, Ohio and Indiana for Honda. I don't blame the states for trying to build an industrial base of jobs, but it certainly makes for an uneven financial playing field for the domestic manufacturers. Of course, the foreign companies were smart and wanted to build primarily in union unfriendly, southern states.

Not sure your point about laziness??? It's more like survival...and we haven't even talked about Asian currency manipulation to keep their vehicles cheap in the U.S.....

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36654 said:

Building an industrial base is simple if you offer low wages. In 1982 the UAW starting wage was ~$22. Today, it's $19 and change, but employee have to work several years as temp/seasonal workers at $16 (BMW SC wages) before they become full benefit employees. In many ways, the the southern states just moved the Mexican border to the Mason Dixon line. And, the jobs went to the lowest wage area. Today's $19 UAW starting wages is equivalent to 32.5% of the 1982 starting wages.............of course, that's before we talk about the reduction in retirement benefits and employees cost for health insurance.

But, returning to Ford. Severing the decades old relationship with Mazda cost them the ability to design cars (non-truck based vehicles), just like GM's liquidation of Opel. In both cases, the domestics outsourced the design of the lower profit vehicles (sedans) and both will soon eliminate any meaning production. What they offer, will be sourced from partner companies.

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akbeemer said:

Article on the recent PNW closures from Sound Rider!


10 takeaways from the demise of NobleRush

The recent closure of the NobleRush chain of stores torpedoed the Pacific Northwest motorcycling community with a magnitude unmatched by any previous motorsports event in the region. The fortunes of one Microsoft executive made a seven-year appearance in the community only to depart in one of the worst ways possible. Let's look at how we got here, what to be wary of in the future, and how we move forward.

Howard Crow operated the NobleRush collection of motorsports stores from August 2012 until its bankruptcy on September 19, 2019

First off we ask the question, how did one guy buy a dealership (Ducati Seattle), watch its sales drop off; buy the competitor (Ducati Redmond) only to see that shop dwindle as well, then latch onto a major European shop in Seattle (Ride West BMW), lose customer confidence there and still be able to yet again buy a major motorcycle retail store in Auburn (Hinshaw's Motorcycle Store, Indian of Auburn) and see its reputation also fade?

For starters, it probably wasn't right for Ducati to place all its Seattle metro eggs in one basket. In fact, some OEM's have a rule that no one can own two of its shops that are geographically side-by-side. Yet Ducati allowed it and was willing to allow that same owner to purchase the franchise in South Sound as well. Fortunately, the latter didn't happen, which is lucky for Ducati owners seeking a certified tech to work on their bike. Had South Sound Motorcycles gone down in the fall, Ducati owners only choice for OEM service would be Spokane or Portland. Have a nice ride…

The motorcycle industry is a very dynamic business and requires a little TLC from the top down to keep employees and their customers happy. Nearly every shop purchase we've seen in the PNW in the last two decades by a well-financed individual who was an absentee owner has either failed or been sold. Lesson learned - if you want to keep your full-time job at the tech company that provided all your wealth, then keep it, just don't try to build a motorsports empire on a bean-counting-style of management and not tend to it daily. Doesn't work.

Who is the banker that followed the unsuccessful pattern of missing sales goals and lack of profitability after three years and continued to loan money? That banker, or group of bankers/investors were wrong in letting this situation continue to snowball.

Our understanding is a bankruptcy was filed, although as of this writing it does not appear in the King County database of bankruptcy filings. In bankruptcy, there are two types of filings. Chapter 7 is where you throw your arms up, cry uncle and shut it all down. In a Chapter 13 filing, you're given a period of time to reorganize, setting a goal to rise up out of the ashes. This particular situation was clearly a Chapter 7 filing and no previous Chapter 13 is on record which means the owner simply got in too deep to believe he could fix the mess and come out the other side. That's just bad planning, but when you're busy at your software day job, who's got time to pay close attention?

This took a toll on a number of people. Here's a few of the ways it affected people across the community:

1) Lost Jobs - about 100 people lost their jobs. We're glad to see some of them already finding work at surrounding dealers, but for others it may be a while before they work again.
2) Locked Up Property - Some customers had paid cash for new bikes that had yet to be delivered. Some customers had bikes in these shops for service. Others had bikes in showrooms on consignment as used inventory. It took several days for employees to get access to the shops, at no pay, to begin calling customers to arrange pick-up of their property. A week out there were still a lot of loose ends. In the case of bikes in for service, parts were gathered up and provided back to the customer with the half-repaired unit. Call in a tow truck and then what?

3) Unused Gift Cards - Anyone holding a gift card for one of the five locations is basically S.O.L. You could take it as a loss on your taxes which will get you a small write-off not near the value of the card. One customer was holding a $500 gift card.

4) Extended Warranty - Dealers love to sell customers an extended warranty. Often times, if these are not direct from the manufacturer, then they are dealer specific and can't be used elsewhere. Again, these customers are S.O.L.

5) Where to now? - Thousands of customers/riders were affected by the closures. Many asking, "now where do I take my bike?" Each OEM has a listing of dealers on their website, and we took the time to update our dealer directory on Sound RIDER! as well.

6) The land owners - All the shops were on leased property. By the time the bank gets itself paid back, will there be any money left to cover unpaid rent?
7) Former owners - Several of the former owners had extended private loans on the purchase of their businesses. Will they ever see the money owed to them. That's unlikely.

Within the social media post we published, nearly every independent tech was posting their services. Customers need to be leery about using a non-certified tech by the OEM for several reasons. Many bikes sold over the last two decades, in particular European models, require special training and, just as importantly, special tools to do the job correctly. One thing a rider can do is purchase the shop manual and refer to it before service. That way they'd know the ins and out of the upcoming service to be done and what special tools may be required. Then, by all means, query the tech and see if they actually have those tools and diagnostic devices on hand. Valve adjustments ain't what they used to be.

Poor communication prevailed throughout the 7-year legacy of NobleRush, but it really showed itself when the stores were closed. Employees were simply told to go home. No mention about getting final paychecks and commissions owed to them. For customers looking for answers on the company's websites and social media pages, forget it, nothing was ever posted. We think that's simply an irresponsible way to drop a bomb showing no integrity. But if you didn't care about employees and customers, you could not have done a much better job.

Profit is important. Did you get the best deal ever on your last bike? Is that dealer still around today? Dealers do need to be profitable to stay in business. If they're giving the lowest price every day on the showroom floor thinking they'll make it up later in service, just look at what happened here. Didn't work out that way.

Consider paying full price for your next helmet, jacket, boots or bike. If you don't, how far will you have to ride for your next service?

Something that disappeared when Ride West BMW was purchased was its flair for inspiration. That shop, more than any other shop in the PNW, inspired riders to go further. It helped connect the dots for those seeking information to make their transcontinental dreams come true. Again, this is one of those dynamic aspects that sets a great dealership apart from the rest. And it translates into more miles ridden, more service needed, more tires bought, and ultimately the next bike purchase.

Sadly, Howard Crow seemed to be in search of specific metrics that pointed to a sale. It doesn't work that way, there's a lot more that makes a sale happen than a post on social media, an email showing used inventory over and over again, or simply standing at the door waiting for someone to pull out their wallet.

When all the bean counters do is count beans, it's over.

SR!/October 2019[/QUOTE

With state franchising laws, it can be difficult if not impossible for a manufacturer to deny the purchase of an existing franchise. Once the parties have a legal buy/sell in place, they are typically covered by the states laws and unless there is an obvious way to deny (i.e. a past felony conviction) the application, it can be legally difficult.

That's why it's very important for a franchisor to have a detailed process of franchise approval that they follow to the nth degree (i.e. experience level, financial, history of success, etc). If they've been at all inconsistent in how they've applied their approval process, denying a franchise candidate can be a huge uphill battle.

Click to expand...

powwow said:

10 takeaways from the demise of NobleRush[/SIZE][/B]

The recent closure of the NobleRush chain of stores torpedoed the Pacific Northwest motorcycling community with a magnitude unmatched by any previous motorsports event in the region. The fortunes of one Microsoft executive made a seven-year appearance in the community only to depart in one of the worst ways possible. Let's look at how we got here, what to be wary of in the future, and how we move forward.

Howard Crow operated the NobleRush collection of motorsports stores from August 2012 until its bankruptcy on September 19, 2019

First off we ask the question, how did one guy buy a dealership (Ducati Seattle), watch its sales drop off; buy the competitor (Ducati Redmond) only to see that shop dwindle as well, then latch onto a major European shop in Seattle (Ride West BMW), lose customer confidence there and still be able to yet again buy a major motorcycle retail store in Auburn (Hinshaw's Motorcycle Store, Indian of Auburn) and see its reputation also fade?

For starters, it probably wasn't right for Ducati to place all its Seattle metro eggs in one basket. In fact, some OEM's have a rule that no one can own two of its shops that are geographically side-by-side. Yet Ducati allowed it and was willing to allow that same owner to purchase the franchise in South Sound as well. Fortunately, the latter didn't happen, which is lucky for Ducati owners seeking a certified tech to work on their bike. Had South Sound Motorcycles gone down in the fall, Ducati owners only choice for OEM service would be Spokane or Portland. Have a nice ride…

The motorcycle industry is a very dynamic business and requires a little TLC from the top down to keep employees and their customers happy. Nearly every shop purchase we've seen in the PNW in the last two decades by a well-financed individual who was an absentee owner has either failed or been sold. Lesson learned - if you want to keep your full-time job at the tech company that provided all your wealth, then keep it, just don't try to build a motorsports empire on a bean-counting-style of management and not tend to it daily. Doesn't work.

Who is the banker that followed the unsuccessful pattern of missing sales goals and lack of profitability after three years and continued to loan money? That banker, or group of bankers/investors were wrong in letting this situation continue to snowball.

Our understanding is a bankruptcy was filed, although as of this writing it does not appear in the King County database of bankruptcy filings. In bankruptcy, there are two types of filings. Chapter 7 is where you throw your arms up, cry uncle and shut it all down. In a Chapter 13 filing, you're given a period of time to reorganize, setting a goal to rise up out of the ashes. This particular situation was clearly a Chapter 7 filing and no previous Chapter 13 is on record which means the owner simply got in too deep to believe he could fix the mess and come out the other side. That's just bad planning, but when you're busy at your software day job, who's got time to pay close attention?

This took a toll on a number of people. Here's a few of the ways it affected people across the community:

1) Lost Jobs - about 100 people lost their jobs. We're glad to see some of them already finding work at surrounding dealers, but for others it may be a while before they work again.
2) Locked Up Property - Some customers had paid cash for new bikes that had yet to be delivered. Some customers had bikes in these shops for service. Others had bikes in showrooms on consignment as used inventory. It took several days for employees to get access to the shops, at no pay, to begin calling customers to arrange pick-up of their property. A week out there were still a lot of loose ends. In the case of bikes in for service, parts were gathered up and provided back to the customer with the half-repaired unit. Call in a tow truck and then what?

3) Unused Gift Cards - Anyone holding a gift card for one of the five locations is basically S.O.L. You could take it as a loss on your taxes which will get you a small write-off not near the value of the card. One customer was holding a $500 gift card.

4) Extended Warranty - Dealers love to sell customers an extended warranty. Often times, if these are not direct from the manufacturer, then they are dealer specific and can't be used elsewhere. Again, these customers are S.O.L.

5) Where to now? - Thousands of customers/riders were affected by the closures. Many asking, "now where do I take my bike?" Each OEM has a listing of dealers on their website, and we took the time to update our dealer directory on Sound RIDER! as well.

6) The land owners - All the shops were on leased property. By the time the bank gets itself paid back, will there be any money left to cover unpaid rent?
7) Former owners - Several of the former owners had extended private loans on the purchase of their businesses. Will they ever see the money owed to them. That's unlikely.

Within the social media post we published, nearly every independent tech was posting their services. Customers need to be leery about using a non-certified tech by the OEM for several reasons. Many bikes sold over the last two decades, in particular European models, require special training and, just as importantly, special tools to do the job correctly. One thing a rider can do is purchase the shop manual and refer to it before service. That way they'd know the ins and out of the upcoming service to be done and what special tools may be required. Then, by all means, query the tech and see if they actually have those tools and diagnostic devices on hand. Valve adjustments ain't what they used to be.

Poor communication prevailed throughout the 7-year legacy of NobleRush, but it really showed itself when the stores were closed. Employees were simply told to go home. No mention about getting final paychecks and commissions owed to them. For customers looking for answers on the company's websites and social media pages, forget it, nothing was ever posted. We think that's simply an irresponsible way to drop a bomb showing no integrity. But if you didn't care about employees and customers, you could not have done a much better job.

Profit is important. Did you get the best deal ever on your last bike? Is that dealer still around today? Dealers do need to be profitable to stay in business. If they're giving the lowest price every day on the showroom floor thinking they'll make it up later in service, just look at what happened here. Didn't work out that way.

Consider paying full price for your next helmet, jacket, boots or bike. If you don't, how far will you have to ride for your next service?

Something that disappeared when Ride West BMW was purchased was its flair for inspiration. That shop, more than any other shop in the PNW, inspired riders to go further. It helped connect the dots for those seeking information to make their transcontinental dreams come true. Again, this is one of those dynamic aspects that sets a great dealership apart from the rest. And it translates into more miles ridden, more service needed, more tires bought, and ultimately the next bike purchase.

Sadly, Howard Crow seemed to be in search of specific metrics that pointed to a sale. It doesn't work that way, there's a lot more that makes a sale happen than a post on social media, an email showing used inventory over and over again, or simply standing at the door waiting for someone to pull out their wallet.

When all the bean counters do is count beans, it's over.

SR!/October 2019[/QUOTE

With state franchising laws, it can be difficult if not impossible for a manufacturer to deny the purchase of an existing franchise. Once the parties have a legal buy/sell in place, they are typically covered by the states laws and unless there is an obvious way to deny (i.e. a past felony conviction) the application, it can be legally difficult.

That's why it's very important for a franchisor to have a detailed process of franchise approval that they follow to the nth degree (i.e. experience level, financial, history of success, etc). If they've been at all inconsistent in how they've applied their approval process, denying a franchise candidate can be a huge uphill battle.

Click to expand...

rangemaster said:

Larry:

It was a sad day when I learned of the demise of NobleRush; I recently reached out to Roman Lemeshkov whom I had purchased several bikes from when he worked for Ride West and then NobleRush.

He’s out of the country right now, and has not secured his next job yet. Roman was always very knowledgeable and very helpful. I feel bad for all of the employees of those dealerships.

Ride safe!
Gregg


Sent from my iPhone using Tapatalk

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