Yeah it soure sounds like they've gone elsewhere
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Yeah it soure sounds like they've gone elsewhere
I still don't think so. This fits with what I had speculated previously. What I still believe is that Indian gave him the initial $25 million but that was it. The only way he would get cash out of them would be to sell more of the company. They would buy services from the company, sponsor the race team etc., but cash was Erik's problem.
If he wanted cash, he would have to go elsewhere or sell. He probably thought he had a loan lined up, but after the lender examined the books, that money didn't come and left him high and dry.
The thing that strikes me about that article is it reminds us how bad things were after Harley and what Erik did. He had nothing, but he bought up the old racing parts, rented a building and started a company to start designing bikes from scratch and continue supporting Buell racers and owners in any small way he could.
He scratched and scraped and put a small company together and started selling the 1190RS with his eye toward larger volume bikes - the 1190RX, SX and beyond. Hero gave him the cash he needed to get those bikes going, but he overextended himself. When the bikes he produced weren't selling fast enough, he got into debt and we ended here.
Now think about that and imagine the worst case scenario. No big companies are interested. As I've said, I don't think that will happen, but if, hypothetically, it does, here's what I think will happen:
Erik will buy the company for approximately $1 million dollars. He'll hire back his very small core of key, trusted people that helped him get restarted 5 years ago and he'll start again. He'll be $20 million in debt, but he'll have far more assets than he had before (A good portion of the $25 million he got from Hero probably went toward paying off debts he had racked up prior to their involvement to get the company up and off the ground).
He'll probably need to drop some of the underperforming dealers, but he'll keep the best. He'll get production back up and running (but at a much slower pace) and he'll make sure parts are available for existing owners. He'll probably create a new bike that falls between the 1190RS and RX with enough exotic parts to justify the $25,000 price he'll have to charge for the lower volume production model, but the lower volume production combined with only enthusiastic dealers will help ensure supply doesn't get ahead of demand and keep plant costs down. Like the original days of Buell (prior to Harley) he'll be selling an expensive but very unique bike to a small number of enthusiasts who want a unique, American sportbike. He won't have as many employees and he won't be buying components as quickly, but all the tooling will be in place, so he won't have to go back and design and build all that from scratch. Most suppliers will probably work with him. Some might demand cash up-front and others may refuse his business, but enough of them will want to get some value out of the equipment and tooling they've already paid for to work with him and help him get back on his feet.
I don't think any of that will happen because I think Hero will buy everything, but that's the absolute worst-case scenario I imagine.
It'll definitely be interesting to see what that Aussie M/C magazine has to say about EBR's receivership and Hero next week.
Someone posted this other bit of recent news about Hero on ADVrider: http://www.rediff.com/money/report/g...s/20141009.htm
Interesting, a couple of EBR owners on Badweb posted that they received letters in the mail yesterday, "Notice of Receivership, Bar Date for Filing Claims, and Injunction" from the State of Wisconsin.
I'm guessing this is part of the receivership process, since these guys bought EBR motorcycles with a 2 year warranty and therefore they have an interest in the outcome of the receivership.
Yeah, I'm sure it's part of the process. And while the receiver probably has a very good idea of where this is going, they probably can't say a damn thing other than to ensure us the process is underway.
The linked Hero article may not tell us much specifically about what's going on here, but it certainly seems to confirm they're willing to take whatever they can get out of any business relationship.
And yeah, the Australian article will be interesting not only for what it says, but for what it may force Hero to address. Because of the legal proceedings, all parties are being very tight-lipped, but depending on the questions the article raises, Hero may be forced to respond in some way.
Got my letter in the mail today. I can't imagine filing a claim against an idol of mine.
Well, if you'd ordered parts, like a race ECM for instance, from their on-line store and haven't received them, that would be a legitimate claim. Hopefully the receiver would allow those parts to be shipped if they're in stock.
The purpose of sending the letters around is so the receiver can determine exactly how much EBR owes, so that if/when the company is sold those debts can be paid off.
The frustrating thing is it's going to take several months minimum to collect all the information, file all the papers and even get to the point the bidding process can start.
While there's a lot that's uncertain about this whole thing, here's something I can tell you with absolute certainty: If I win a big lottery in the near future, there's going to be at least one bidder who has every intention of keeping the company going.
The letter gives recipients 90 days to make a claim, so yea, it seems like it's gonna be at least 3 or 4 months before anything happens, or at least before anything is finalized.
I watched "the Ragged Edge" again this morning. At several points, Erik comments on camera about how hugely difficult it is to get investors to invest in small American manufacturers. There's gobs of money out there, it's just that everyone's looking for a quick payoff. You can really feel his conviction that this philosophy HAS to change if this country is going to continue to be a great place.
Nothing really new here, but a nice summary with some optimism for the future: http://www.cheatsheet.com/automobile...tml/?a=viewall