So says Alan Cathcart, writing in world renowned trade journal AMD this month.

The first bid, for the manufacturing rights and tooling for the 1125cc Helicon-engined models, which they would have produced under the Can-Am name alongside the 3-wheeled Spyder - and which can easily be seen as an opportunity to protect jobs at their Austrian subsidiary, Rotax - was turned down, and was followed up by a second to buy Buell, retaining the branding and even the East Troy production facility.

The purchase of Buell itself would again have focussed on the 1125 models, and it's suggested that the plant would either have been downsized with closure of the XB lines, but the spare capacity possibly used to move Spyder production to within the US national borders to give it a "Made in the USA" tag that wouldn't hurt its American sales.

Either move would have saved Harley-Davidson millions of dollars in the closure of the marque, and it's said that some Harley-Davidson stockholders are said to be questioning that decision, adding their voices to the world's Buelligans whose dismay at the loss of a bike they were passionate about has not done Harley-Davidson's reputation any favours with new markets and the younger riders who they are currently trying to court.

Cathcart adds that Harley's CFO, John Olin, has revealed that Buell wasn't separately accounted for on Harley-Davidson's books, which is cited as a possible reason why Harley chose to close rather than to sell Buell, but I can't imagine Harley not knowing exactly what Buell's profitability was at any point since they bought the company from Erik Buell, and while it might have taken a while to have surgically separated a deeply entrenched Buell from H-D's accounts, I don't think it would have cost anything like the quoted £125m that Harley set aside to close Buell.

My money is still on Harley resurrecting the marque - or at least keeping its options open to do so when the economy stabilises: they've spent way too much money not to have bigger plans.

The suggestion that they wouldn't sell to Bombardier to protect the reputations of senior management, in the event that BRP achieved what Harley failed to do, might have more credence if it was a couple of million dollars at stake and the entire board was implicated - as would the decision to buy exclusive rights to the engine of a bike that they had no intention of building again, as a leaving present for Erik - but we're talking about $125 million at a time of financial crisis, and that is at the conservative end of the figures bandied around. How much is the reputation of a board member worth? I'd argue that it's much less than the value of a brand, prioviding that brand has a future.

If Harley-Davidson are planning to resurrect Buell - and you might notice that no Buell branding has been dropped in any corporate context - they're playing a dangerous game and really need to calm the market down before the decision in October, which is seen as anything from a pragmatic calculated business decision to an act of corporate vandalism, threatens to de-rail Harley's own recovery.

Some of the above is educated speculation, but one thing isn't open to interpretation: Harley does need new blood like every other motorcycle manufacturer in the world, and they either need something like Buell as it existed or an entry level range of motorcycles that will introduce the next generation of riders to motorcycles generally, and the Harley-Davidson brand specifically, which could be another use of the Buell brand ... although I still reckon an enlarged XR brand and single-cylinder model based on XL/XB technology would be the better route to getting to a younger audience.

But hey! It's not my money.

7 comments:

Greg said...

While many people seem to think Harley will revive the brand . . . as would be logical, I think that's a very false hope. The fact that they did spend so much money to shut Buell down illustrates they are cutting ties with the brand. They don't want anyone else to have it, but they don't want it either.

If they really had interest in the brand, they could have cut staff in half and chugged along at a break-even pace until the economy picked up and spent far less than 125 million (maybe they could have even made a small profit). I feel fairly confident that they'll never continue the brand.

. . . but they SHOULD help Erik Buell get up and running at any cost. Every day Erik Buell doesn't make motorcycles is a day that fans of American motorcycles are seeing HD as an un-American force.

HD should sell Erik the rights . . . at any price. If they say $1 million and he says he can't afford it, they should cut the price until he can. It's in their best interest to be able to promote new products without having Buell fans jump into on-line forums and say: "What about Buell?"

Bill said...

If by "resurrect the brand" you mean "crush all that is great about it, and reintroduce it the Harley way", then yes, you are probably right.

Lets look more closely at that though.

Buell bikes were designed and built by Buell, and were (from the XB line on) world class bikes by any measure.

Buell apparel, marketing, and dealer experiences were world class also, but world class jokes. And those were squarely under the control of Harley Davidson.

The original XB9 was meant to come out with a turbo charger... the real reason for the snorkel tube through the right side of the frame. That would have made it a more than 100 RWHP bike with world class handling.

It had passed all the durability tests when Harley decided that instead of using the Garrett turbo (you know, the one used by Saab, Porsche, Audi, Volvo, Subaru, Mercedes, etc) that Harley could design their own that was better and cheaper. You can imagine how that went.

Sigh. Harley can't resurect Buell without the brain trust they squashed. Harley will instead create some sort of twisted abomination of what they thought the brand "should have" been. It will be a tragic comedy.

Andy@AmV said...

Hey Bill, where did you get the turbo info from? That missed my radar completely. Do you know of any pics?

Somehow, I can't see Harley reinventing the Buell without Erik's involvement, or without the Rotax motor seeing as a lot of the shutdown costs, we're told, were in respect of retaining exclusive rights to that motor from BRP/Rotax, preventing them from reselling it as their motor.

I see supporting the warranties of the 1125 motors and Buell's racing enterprise as R&D without the pressure of market expectation, because I reckon one of Erik's and Harley's biggest mistakes was underestimating the hostility of the press to the idea of an American Sportsbike ... unless, perhaps, they'd bought-in a Gixer motor and put it in a better chassis. Even then I wouldn't hold out much hope that they'd accept that either, because it flies in the face of everything they believe.

These are the people who demanded that Harley fit the VR motor to an XB for pity's sake, and when they got a ground-up build that was streets ahead of the technology of the VR - and built by the people who made the Aprilia Mille motor - they still couldn't see past the received wisdom that has coloured their judgement to date.

I had the pleasure of sitting with some of these gentleman on the XR1200 launch and heard them being very positive about the XR among themselves while slagging-off the 1125, before going home to slag off the XR too, and flogging the freebie Screamin' Eagle bag on ebay.

Maybe if Harley had given them the latest iPod they might have got better press for the XR, but nothing short of racing success is going to make these blinkered word-manglers take Buell seriously.

My sincere hope is that Harley resurrect Buell as a standalone operation - as they were doing with MV, who seemed to be moving forward - with a hands-off policy and embedded world class management ... once Erik has proved the motor in the heat of competition, of course.

That is the only way that the Buell brand can be relaunched with any credibility, and I don't think anyone at Harley-Davidson would be so stupid as to contemplate putting another dollar into the company without learning the expensive lessons from the past.

Bill said...

The turbo information leaked out over time from various sources, even before Harley dropped the bomb in East Troy. Harley still has a lot of Buell employees by the short hairs, so you won't see the authoritative story until those strings get cut. I could be wrong, but I'm not.

Look at this post (home brew kit) which has a dyno plot from an XB showing 150 HP and 130 foot pounds of torque.

Andy@AmV said...
This comment has been removed by the author.
Andy@AmV said...

I'm aware of the low pressure turbo that the German Hillbillies fitted to an XB9, and briefly considered sticking my Aerocharger onto my M2 until I seriously thought about it.

Even with the variable pitch impeller in the Aerocharger to reduce turbo lag to ceramic blade levels, I'm not absolutely sure I'd want that sort of power delivery on something as light and lively as an XB9. Was wonderful on my Evo FLHT, but you sure learn how to countersteer quickly, hurtling into corners with the throttle closed but still under boost >8-0

I hope it was rigged up with a dump valve?

Bill said...

I'm guessing that in factory trim (especially passing all of its durability testing) it was dialed back to be fairly conservative, maybe 115 to 125 at the crank, for an honest 100 to 110 HP at the rear wheel.

That would have set it up to go toe to toe with the 600's at the top end, with harder pulling down low, and keep high revving nature of the 9 (rather then the slower reving 12).

Ahhh.... what could have been...