View Full Version : Harley could have, should have sold Buell

DrogeN Omen
03-25-2010, 01:56 AM

Harley could have, should have sold Buell.

Buell_1125_Engine.jpgWriting in American Motorcycle Dealer, respected journalist Alan Cathcart reports on growing stockholder unrest following Harley management's decision to shutter rather than sell Buell. According to Cathcart, Bombardier made two separate offers to Harley after Buell's closure was announced, but both were declined seemingly for reasons of vanity. Now, HD stockholders have savvied to the fact that declining the offers cost the hemorrhaging doo-rag manufacturer $125 million in shutdown costs and potentially many times more due to negative publicity. Remember, Harley shut Buell without first calculating the costs.

Bombardier -- a Canadian company to which motorcycles are little but a side-line to massive aircraft and public transport operations -- owns both Can-Am and Rotax. Rotax makes the 72° v-twin that was used in both the Buell 1125CR and 1125R, Can-Am makes the utterly pointless, non-leaning Spyder trike that's also powered by a Rotax V-twin (the 60° one that was also used in the Aprilia RSV 1000 R). Seeking to protect a major outlet for Rotax engines, Bombardier initially offered to purchase the design and manufacturing rights and tooling to produce the two water-cooled Buell motorcycles. When that offer was refused, Bombardier then offered to acquire the entire Buell operation. While this would still have meant the end for the Harley-powered models, Cathcart says it could have seen Bombardier use Buell's existing East Troy, WI facility to produce not only the 1125s, but also that Can-Am Spyder; the bikes could have been re-badged under the Can-Am brand. The terms of both offers are unknown, but would have likely covered most, if not all of that $125 million, especially appealing when you consider Harley actually had to pay Bombardier a large sum of money to cancel its 10-year contract for the Rotax motors.

So why didn't Harley take the easy and less costly way out and make the sale to Bombardier? According to Cathcart, it was the risk of getting "considerable egg on their corporate faces" if the 1125s had found more market share simply by being marketed properly and placed in more appropriate dealerships. That's not going to sit well with stock holder calling for blood after larger than expected fourth quarter 2009 losses.

Harley has declined to comment on the potential sale of Buell many, many times, only saying, "We decided not to sell Buell because it is too inextricably tied to Harley-Davidson operations. Bottom line, we thoroughly explored it and decided it was not the option to pursue." We thank them for their good humor and patience in putting up with our constant hassling.

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03-25-2010, 01:58 AM
This has previously been posted already, and the discussion about killing Buell instead of selling it was also active when it occurred.

The previous posting of this very same text is only a few pages back on most recent threads.

DrogeN Omen
03-25-2010, 02:01 AM
i liked this comment that Harley Davidson is no longer a bike manufacturer and has turned into a boutique company selling aftermarket parts...
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HD does not have an "engineering department." If they do then they must be "engineering" the latest line of crotchless pants, do-rags, nose picker gloves and clocks because they sure have not done any "engineering" on HD's ancient line of motorcycles. The last thing they "engineered" was the V-Rod and all that was is a water cooled version of the old v twin. The V-Rod does not sound like a harley so the harley morons will not buy it. HD will never recover there "engineering" cost on the V-Rod. It has been stated before that if you walk into a Harley dealership over 75% of the floor space is for aftermarket products like HD t shirts, hats, nose picker gloves etc. I now believe what everybody has been telling me - that HD is a boutique company that sells an aging line of motorcycles to go with there clothing line. :D :D

DrogeN Omen
03-25-2010, 02:02 AM
true... sorry didnt know...

i did search through the threads to make sure it wasnt already posted but didnt find anything...

03-25-2010, 10:40 AM
There is a good write up in the May issue of Cycleworld though that sheds some light on the poor management of Buell by HD. Also a review of the new Baracuda 2 that never made it to market. Good read if you get a chance.