Erik Buell: EBR buyer gets a “turnkey” motorcycle manufacturer

Psst – Hey, buddy? Wanna buy a motorcycle manufacturer?

If you’ve saved your money for a big purchase, just like your parents told you, it might be about to pay off: Erik Buell Racing is for sale, after going into bankruptcy protection earlier this year. From what Erik Buell is saying, the sale will give you just what you’ve always wanted: A fully functional motorcycle marque, ready to go.

When EBR’s financial woes were first announced, there were some hopefuls who thought it might just be a brief hiccup, with the Wisconsin-based manufacturer back in business in a few weeks after securing some loans. No such luck! In an interview with Powersports Business, EBR founder Erik Buell told the mag his company was about $10 million short of what they needed for funding, so they shut down operations to meet payroll obligations.

Facing their shortfall, Buell told Powersports Business his company “shut down in mid-stream.” He said whoever buys EBR gets a “turnkey” business, with “Bikes and engines … lined up on the production line, sitting there with plastic covers over them.” He said they could “literally be shipping bikes out of the building the same day somebody turns the switch back on.”

Buell also said there’s an inventory of parts and even finished bikes in the facility.

That makes the upcoming sale of EBR much more interesting. As long as the buyer is able to bring back most of the employees who’ve left, we could see EBR bikes being shipped pretty soon after the sale (originally scheduled for July 21, but now postponed). EBR didn’t go out of business because they were selling outdated motorcycles that nobody wanted – they had a desirable product. If a buyer can figure out how to deliver those motorcycles more quickly, and at a lower price, we might see the day of the Great American Sportbike yet.

The big question is, who would buy the company? If the courts are handling the sale, then anyone who shows up with enough money is eligible. That thought probably scares some EBR fanboys, who’ve been circulating conspiracy theories that EBR’s former business partner Hero (motorcycle manufacturer based in India) is responsible for EBR’s problems. Considering EBR’s facilities are probably full of designs EBR was working on for Hero, it would certainly make sense for them to make the purchase, especially when you consider they were already interested enough to buy 49 per cent of the company in 2013.

Who else could be interested? Since EBR’s selling point has always been their made-in-the-USA origins, most EBR aficionados probably want a US-based buyer. Some fans would probably like to see Parts Unlimited make the deal; Parts Unlimited and their subsidiaries handled EBR’s parts distribution. However, we haven’t seen enough a faint hint of that deal happening.

For more details on EBR’s current situation, read Powersports Business here.

11 thoughts on “Erik Buell: EBR buyer gets a “turnkey” motorcycle manufacturer”

  1. “so they shut down operations to meet payroll obligations.”

    If that’s the straight goods, they are to be complimented. When’s the last time you saw a company in bankruptcy protection paying their workers?

    1. Translation: “We weren’t selling enough motorcycles to be profitable and meet our payroll OBLIGATIONS.”

      Erik Buell – Master of Spin

  2. While EBR wasn’t selling “outdated motorcycles”, they were selling motorcycles that not enough people wanted at a price they weren’t interested in paying. They really didn’t have a desirable product.
    Modern, advanced, well-managed manufacturers (like Hero) have the managerial know-how to calculate correctly how much a product should sell for in order to be viable over the long term. They know all their costs and include R & D and design costs allocating them along the anticipated lifespan of the product. They can accurately project sales figures and constantly track (and manage) progress towards targeted profitability. The plug was pulled for a reason and that reason is IT’S NOT GOING TO WORK.
    As TK4 said, put this mortally wounded dog out of its misery.

    1. Joel

      This is precisely what I have said repeatedly. Hero did the right thing, but sadly too late to recover their lost investment. EBR has so little value that it will be liquidated for peanuts. TO be clear, I am not gloating, only reinforcing the point.

      1. Michael

        I don’t think anybody cheers against a company like EBR making a go of it, but like you wrote elsewhere motorcycles create emotional attachments and that can make rational, intelligent people do stupid things. Unfortunately it is very common for an entrepreneur or small business owner to become so enamoured/attached to their idea or creation that they end up in the same situation as EBR/Buell.

  3. Okay, everyone who comments on what the industry needs, how it should all work, fork over the capital and get to it.

  4. Bullwinkle: Hey, Rocky! Watch me pull a rabbit out of my hat.
    Rocky: Again?
    Bullwinkle: (tears off a shirt sleeve) Nothing up my sleeve. Presto!
    (reaches hand into hat and pulls out the head of a lion)
    Bullwinkle: No doubt about it, I gotta get another hat.

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