I would not get worried yet, things will get clearer in the next few weeks. I am concerned as well about the availability of parts, but just as with the Buell products HD has provided parts through 2018. If the company is liquidated Hero may be responsible for support and warranty work for 7 years, if the company is sold and production continues the new company will provide support, this would be the best scenario for all concerned. Going to do some research on the issue.
Originally Posted by Another Buell
Yeah, owners, suppliers, dealers and employees are understandably concerned and upset right now because if the worst happens and EBR just disappears, we're all in trouble.
I'm 99% sure that won't happen, but that 1% uncertainty combined with how bad it will suck if the worst does happen is upsetting. And the lack of communication is the problem at the moment. Try to keep in mind that the lack of communication is because lawyers are involved and confidential negotiations are underway. The lack of communication is actually a good thing because if this was just over and going to be auctioned off for parts, those involved could say so because nothing would be on the line. The silence means there's a high stakes poker game going on and nobody wants to show their cards.
I mentioned it before, but I think it's worth going over again so we can all maintain perspective.
In 2013, before EBR had produced a real street bike and before any real dealer network was established, Hero paid $25 million dollars for 49% of the company. That means by their careful assessment the company was worth about $50 million. Now that real motorcycles exist and a production line is up and running and a dealer network exists, the real value of the company has to be greater than than that. But for the sake of discussion and illustration, let's imagine that Hero overestimated things by quite a bit and the real current value is only $40 million as a motorcycle manufacturer (I'm personally sure it's more than that, but I'm just using an intentionally low number to illustrate).
Now if we assume nobody is interested in running it as a motorcycle company, what's it worth? You've got some inventory and tooling that are basically worthless (and will actually cost money to dispose of). Then you've got some equipment, computers, office furniture etc. that could be sold off for some value. I'd guess less than a million, but again for the sake of discussion, let's inflate it to $3 million.
So as a motorcycle company it's worth $40 million. As scrap it's worth $3 million. If this company is on the auction block going twice for $3 million, SOMEBODY is going to jump in. At that price Erik himself could probably jump in and buy it, and once he owns it free and clear he can use that approximately $40 million value as a motorcycle company to get the cash he needs to not only pay off the debt, but have plenty of cash to keep operating and get into the black.
I don't think that will happen because I think somebody else (most likely Hero) will jump in and outbid whatever Erik could do, but the key point is there's too much value there for the world to let it be auctioned off for $3 million, and somebody will almost certainly buy it to make motorcycles. And once they've bought it to make motorcycles, a good part of the value of the company will be the existing suppliers, dealers and owners, so that company will make efforts to keep us happy.
Another thing that (hopefully) EBR has to add to their value- ready-to-build designs for motorcycles we haven't seen yet. I'm guessing they have at least the AX designed, and maybe one or two smaller bikes. If Polaris wants to make Victory their performance bike brand, acquiring EBR would be an easy way to do it.
Yep. It seems almost a no brainer that Polaris would be at least interested in using EBR to plug the hole in their offerings.
BUT a complication with the smaller bikes is they probably use at least some Hero components. And that's also why Hero needs EBR, and, I suspect will be willing to outbid everyone else. EBR and EBR's future products and EBR's dealer network and EBR's engineers are integrated Hero's future plans.
That's why I suspect Hero was able to give Larry Pegram 'assurances'. There's no way they're letting anyone else get their hands on EBR and they'll pay what they need to to get it.
I'd be willing to bet Polaris (and maybe some other companies) would be very interested up to about $30 million. Above that, it becomes less attractive, and I think other bidders will drop off above that level with Hero ultimately getting it.
Thanks for the replies. I really appreciate them. They definitely help ease the worry. My heart goes out to all the families and people affected by the whole situation. For me it's just a worry about parts and service. I can't imagine how the families directly affected by the whole thing must feel. Or how disappointed Erik must feel. But hopefully in the end something good come out of it. It just doesn't make sense for whoever pulled the funding to do so now. It seems like things were really starting to take off. I know the dealership I bought my bike from had sold a couple units in the past year. And in sure more would have sold as time went on. I think the price was a bit hi, but these bikes are just absolutely amazing to ride. I mean, they have always been. I have owned an XB9 and an 08and 09 1125. For me, no other bike was better. And I know as time went on people would realize this. But at the same time, the prices needed to be lower. The insurance rates for these bikes are so high, I'm sure that was a deciding factor in people's final decision to buy. I'm 37 and still pay almost a thousand a year. So for the younger crowd, a bike payment of say 250 plus insurance if around the same is just to much. So how to fix that I don't know, but surely some other models in the line up would have helped. Hopefully we will get the chance to see something great come from all of this. It would be so sad to see a mans lifetime of work and all his teams work just go away in the blink of an eye over funding. I just can not imagine this situation would not have been discussed before production started. Surely they had to know the first year would have been hard and not much money would be made. All first year bikes have issues, let alone two first year bikes and a brand new company. This could not have been ignored. That's why I'm so shocked. But again hopefully something good happens for all involved.
reading all your responses eases my worries as well. I just got an 1190SX last month. I love this bike sooo much. My insurrance came out to almost 2,500 and i was a bit tight on money so my guy helped me out and lowered me to liability dropping it to 190 for the whole year (LOL). I was nervous to take out my bike then, now hearing they shut down makes me just want to put the bike away in the garage. i feel maybe i made a mistake buying this bike since i planned to use it as my daily form of transportation. I guess it's safe to assume there is no factory warrenty and getting my hands of parts (if needed) will be tough. Im just hopping the dealership will at least to give me warrenty
Audio interview with the editor of Cycle World about the closure:
http://www.cycleworld.com/2015/04/17...3at0o.facebook
I'm hoping we'll hear something by early May from the receiver or interested parties. I would hope and expect the receiver is pushing for things to happen relatively quickly (by legal standards) since it's in the interest of everyone involved to get some clarity sooner rather than later.
Yea, it seems like the longer this takes the worse it is for everyone. Employees are already finding other work, dealers are selling off inventory, hell, there are probably some owners trying to unload their bikes. Fingers crossed that something good comes out of this.
BTW- www.ebrracewear.com has all their stuff at half off. I threw a few bucks their way tonight. They have added quite a few new T-shirts recently and have some other nice-looking gear as well.
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