Buell is dead.
Oct 15, 2009 | 06:19 PM
#1
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Joined: Apr 2008
Posts: 2,592
From: Mulholland Drive
Buell is dead.
Harley drops two lines as income plummets - JSOnline
Harley drops two lines as income plummets
By Rick Barrett of the Journal Sentinel
Updated: Oct. 15, 2009 8:06 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, Tim Conder, an analyst at Wells Fargo Securities, wrote in a note to investors.
Conder changed the share rating to "outperform" from "market perform." "Investors are yet to fully appreciate" the potential shipment increase, benefits from cost cutting, profit from Harley's financial-services division and a possible resumption of share repurchases, Conder wrote.
The decision to drop Buell comes only a month after a Buell 1125R bike beat Honda, Yamaha and Suzuki motorcycles to win the coveted American Motorcycle Association's sport bike championship Sept. 8 in New Jersey.
It was the first pro championship for an American motorcycle manufacturer since 1986 and the first for Buell.
The victory was especially sweet for company founder Erik Buell, given that his foreign competitors are much larger manufacturers with hundreds of people on their race teams. With a little luck, Buell said in a Sept. 20 Journal Sentinel interview, the victory could fuel the company's sales, which are tiny compared with Harley- Davidson and its Japanese competitors.
The company, founded in a barn in Mukwonago 26 years ago, has struggled in the recession.
This summer, Harley executives dropped plans for a $10 million Buell facility in the East Troy Business Park, saying they had taken a fresh look at the plans and decided the timing was wrong.
In July 2008, Harley acquired MV Agusta for about $109 million. The Italian company produces a line of premium sport motorcycles under its brand and a line of lightweight bikes under the Cagiva brand.
One of the MV Agusta bikes, the F4CC model, is a limited-production machine that has a top speed of 195 mph and sells for $120,000.
Each F4CC comes with a special boxed certificate of origin and an expensive Italian wristwatch. MV Agusta describes the bike this way: "Its elegant black dress underlines the elegance and sophistication of a beautiful woman in a 'little black number.' …It doesn't matter if the ignition keys are never turned in the lock, if the bike rests on a stand in someone's home, or if it only does the occasional mile or two to 'give it a run.' What does matter for a true enthusiast is to possess just one of the 100 models made and to treat it as if it were a priceless painting worth millions."
Much less expensive, the remainder of the MV Agusta lineup falls in a price range of about $15,000 to $30,000 - more expensive than some Harleys but comparable with other European sport bikes. The Italian firm produced about 5,800 bikes last year, compared with 330,619 that Harley shipped to its dealers. But more than 80% of MV Agusta's sales are in Europe, an important and largely untapped market for Harley as it becomes more of a global company and less dependent on U.S. motorcycle sales.
Harley drops two lines as income plummets
By Rick Barrett of the Journal Sentinel
Updated: Oct. 15, 2009 8:06 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, Tim Conder, an analyst at Wells Fargo Securities, wrote in a note to investors.
Conder changed the share rating to "outperform" from "market perform." "Investors are yet to fully appreciate" the potential shipment increase, benefits from cost cutting, profit from Harley's financial-services division and a possible resumption of share repurchases, Conder wrote.
The decision to drop Buell comes only a month after a Buell 1125R bike beat Honda, Yamaha and Suzuki motorcycles to win the coveted American Motorcycle Association's sport bike championship Sept. 8 in New Jersey.
It was the first pro championship for an American motorcycle manufacturer since 1986 and the first for Buell.
The victory was especially sweet for company founder Erik Buell, given that his foreign competitors are much larger manufacturers with hundreds of people on their race teams. With a little luck, Buell said in a Sept. 20 Journal Sentinel interview, the victory could fuel the company's sales, which are tiny compared with Harley- Davidson and its Japanese competitors.
The company, founded in a barn in Mukwonago 26 years ago, has struggled in the recession.
This summer, Harley executives dropped plans for a $10 million Buell facility in the East Troy Business Park, saying they had taken a fresh look at the plans and decided the timing was wrong.
In July 2008, Harley acquired MV Agusta for about $109 million. The Italian company produces a line of premium sport motorcycles under its brand and a line of lightweight bikes under the Cagiva brand.
One of the MV Agusta bikes, the F4CC model, is a limited-production machine that has a top speed of 195 mph and sells for $120,000.
Each F4CC comes with a special boxed certificate of origin and an expensive Italian wristwatch. MV Agusta describes the bike this way: "Its elegant black dress underlines the elegance and sophistication of a beautiful woman in a 'little black number.' …It doesn't matter if the ignition keys are never turned in the lock, if the bike rests on a stand in someone's home, or if it only does the occasional mile or two to 'give it a run.' What does matter for a true enthusiast is to possess just one of the 100 models made and to treat it as if it were a priceless painting worth millions."
Much less expensive, the remainder of the MV Agusta lineup falls in a price range of about $15,000 to $30,000 - more expensive than some Harleys but comparable with other European sport bikes. The Italian firm produced about 5,800 bikes last year, compared with 330,619 that Harley shipped to its dealers. But more than 80% of MV Agusta's sales are in Europe, an important and largely untapped market for Harley as it becomes more of a global company and less dependent on U.S. motorcycle sales.
Oct 15, 2009 | 07:39 PM
#4
Teamspeed's Howitzer
Joined: Oct 2009
Posts: 12,273
Times are really changing. I see a real 'uptick' in my business but I'm not sure this is really a sign that the recession is coming to an end.
I remember riding my RC51 (first one was a 2000) and seeing Buells, thinking they were neat -but not for me. Still saddens me to see the end of an era in motorcycles.
RIP Buell!
I remember riding my RC51 (first one was a 2000) and seeing Buells, thinking they were neat -but not for me. Still saddens me to see the end of an era in motorcycles.
RIP Buell!
Oct 15, 2009 | 09:27 PM
#6
Teamspeed Senior Member
Joined: Mar 2008
Posts: 515
From: Atlanta
I'm a fan of Buell Motorcycles and will be picking up a Firebolt next week actually.
Here's a video of Erik Buell giving the bad news
http://www.roadracingworld.com/news/...&article=38447
Here's a video of Erik Buell giving the bad news
http://www.roadracingworld.com/news/...&article=38447
Oct 15, 2009 | 09:43 PM
#7
Thread Starter
| Teamspeed Pro
Joined: Apr 2008
Posts: 2,592
From: Mulholland Drive
Oct 16, 2009 | 01:02 AM
#9
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Joined: Sep 2007
Posts: 1,787
Buell will not be missed.
The reality is that you need the racing history and/or a huge R&D program to be competitive in the motorcycle industry today.
The AMA title was a joke. I would hope the 1125cc Buell would win when put up against 600cc in-line 4's. That series is laughable now that nascar runs it.
The reality is that you need the racing history and/or a huge R&D program to be competitive in the motorcycle industry today.
The AMA title was a joke. I would hope the 1125cc Buell would win when put up against 600cc in-line 4's. That series is laughable now that nascar runs it.
