Freakin hell
Wow. I think there's more to this than meets the eye:
http://www.chapter128trustee.com/what.php
Hero has made no secret that they'd buy the remaining 51% if given the chance, so why didn't that just happen? From the above link, it looks like the debts will be repaid, so I don't think this is an end or just an attempt to skip out on payments.
I suspect someone's waiting in the wings. Perhaps Erik forced this because he knew that his and Hero's interest would be auctioned off and he would then be able to work with a third party who he expects to buy it? Just wild speculation on my part, but something is going on more than them just giving up.
I have to imagine there would be a lot of interested parties who would pay for a turn-key American Superbike manufacturer. Polaris? BRP? Ford?
Sad, but also intriguing.
Here's what Hero's head said in an interview with Cycle News 2 weeks ago when asked if he would buy EBR:
Source: http://cyclenews.uberflip.com/i/4878...ue-13-march-31
As long as they still keep building bikes in the US, I'm good with that.
AF1, any additional info?
Well this most certainly sucks!!! I hope something happens to keep things going, just have to wait and see. I was going to buy an SX at the end of the year and put the RX on the track. I can't bare the thought of buying a Ducati!
We know just as much as you guys. The EBR sales rep called to tell me at the same time the article was posted. He and all the others are out of a job as of today, and nobody knows anything.
I want to know...
What happens to the bikes we still have on the floor? We have two RX, SX, and a RS...ouch.
Bikes waiting on warranty work? Will we ever get paid?
Parts? Will the orders ever get filled?
I've been running this through my head and I can't make any sense of it. We know that Hero paid $20 million a few years ago for 49% of a company that wasn't selling anything. Now they've got bikes that have been fully realized, been approved by all government agencies and they have a dealer network etc. all the hard work happened between the time Hero bought their share and now. The company now has to be worth more than the $40 million it was worth a few years ago. Okay, so they've also got some debt that's going to knock the value down, but I can't imagine that debt is huge. Let's say they made 1000 bikes at a cost of $12,000 each that went completely unsold. That amounts to about $12 million, so knock that off the $50 or $60 million the company would otherwise be worth and there's still a lot of value there (and those bikes still have value even if they weren't sold).
I have to imagine at the absolute very least a deal in the ballpark of the following was on the table: Hero writes Erik a check for $10 million and takes full ownership of the company (a bargain for them). They keep Erik under contract for at least 5 years as technical adviser at $500,000 a year, continue making motorcycles and keep the legacy going.
While Hero would be getting a bargain and Erik probably wouldn't like the idea of losing his ownership, something like that would have to be preferable to the company ceasing to exist and never making motorcycles again.
With that in mind, I have to imagine that whatever the future holds Erik must consider it a better option than the above. And anything better than the above has to mean motorcycles will continue to be made.
There is probably a lot of financial and political wrangling, but I can't envision a logical scenario in which EBR simply disappears. Something's happening that we just don't understand yet and hopefully there will be limited disruption to the people at EBR, dealers, suppliers etc. when all is said and done.
Last edited by Scott; 04-15-2015 at 07:32 PM.
Its a sad day. American Superbikes owned by India just does't have the same ring. IF HERO were buying Erik out there would no need to suspend operations and fire the staff, you simply do the transaction and pencil in Inc or Subsidiary on all the signage. Not over think it since we don't have many facts but:
They suspended operations, and closed firing the staff.
Instead of going chapter 11 they go WI Chapter 128 which is more like a protective order against being sued and shelter from additional interest from creditors until you can pay them off. Under 128 they could have kept the staff and continued supporting dealers and customers but didn't which makes me think its way more grave a situation than just a restructure.
The sudden lack of funding large enough to overthrow an operation like this is either GE or Hero.
If its was GE that means they don't have enough to pay the suppliers which is why we seem to always see parts out of stock. In which case some may be able to rescue them and operation MIGHT resume ( they didn't have to close for this scenario though).
If its HERO, that's a major problem as the principle investor pulling out would leave Erik having to fund operations and pay off debts himself (as before.) Seeking chapter 128 buys him 36 interest free months to pay off creditors by selling off company and personal assets. In that scenario its turn off the lights and shut off the ac and only eat Roman noodles while we figure a way out of this without loosing the house...
As a customer who paid FULL price in support of an American company recognizing that in order for a company to viable it would require investment, I am very disappointed. EBR never really seemed to my mind to taking the right steps to sell motorcycles. FACEBOOK is not the best way to advertise. Despite the difficulties I had I still think the RX is perhaps the best motorcycle I have ever ridden for MY style of riding. The support to customer and dealers has always been my complaint and without sales you can't pay suppliers and when they eventually all demand their money ... well you know the rest.