R.I.P. Buell Motorcycles
It's no surprise that I never much cared for the look of most Buell motorcycles, and one was even at the head of the list of the Ugliest Motorcycles in history. However, what just happened to Buell motorcycles is nothing short of a crying shame, and it marks a day when all American motorcyclists have to be, at least in part, in mourning.
The news has just hit that the Harley Davidson motorcycle company will be closing its Buell subsidiary. Not selling it off, or letting the current management attempt a leveraged buyout, but closing it outright. Buell will let its last employee go just before Christmas. Happy holidays to you too!
Check the video message that the company is gone right from an emotionally-shaken founder Erik Buell:
The reasons for the closure are obvious. Not enough blind motorcyclists in the world who could overlook the incredibly ugly styling which was the Buell trademark. Buell barely ever sold more than 5,000 units per year and in the motorcycle business that's junior ankle biter status at best. I've been harping on and on in my Hubs about Buell's retch-inducing styling, and it just goes to prove that I was right all along.
The reasons for not even attempting to sell Buell in any way to any one are quite obvious as well. We live at a time when it is next to impossible to get a credit card or a home mortgage, let alone refinance a money losing motorcycle manufacturer. Leveraged buyouts may very well be a thing of the past, when investment banking was not a dirty word, and Lehman Brothers still occupied hundreds of thousands of pricy Manhattan commercial square feet.
Basically who is going to loan Erik Buell the money to keep his company going? No one. So it will be closed, the parts sold off for pocket money, and the company that started in a garage nearly a quarter century ago, now will no longer even have the garage. The typical rags to riches to rags story which is all too frequent in the midst of the Obamacession.
Yeah, you know... the Obamacession... the one that the White House has been trying to convince Wall Street no longer exists. Happy days are here again! For everyone except the American taxpayer, businessperson and consumer, of course...
Quite surprisingly Harley Davidson announced at the same time that they would also be seeking a buyer for their Italian business, MV Agusta and Cagiva. The ink on the purchase contract is still wet: Harley paid almost $110 million for the firm barely 15 months ago. This is clearly a case of buy high sell low, as if the folks over in Milwaukee think that their Varese asset is going to be turned into a cheque for $110 million they've been having more than just a beer or two at last night's H.O.G. function.
MV Agusta sells one particular model of motorcycle for upwards of $120,000. Exactly what a motorcycle does that makes it worth that much is a complete mystery to me, and apparently also to the vast throngs of international buyers which have shunned the brand. Thus Harley bled more red ink at the time that it least needed it, and now it's trying to get out of the profoundly bad deal they made just last year. Although commercial banking in Europe didn't quite take the shin kicking that it did on this side of the pond, the bottom line still is that it would be an immensely convoluted set of procedures to be able to work a leveraged buyout of MV Agusta and I, for one, would be profoundly surprised if any private investor is willing to take on a business that sells motorcycles that no one in their right mind could possibly ever afford.
The most serious repercussion of all this divestiture is the effect on the Grand Old Harley Davidson Company itself. For the first time since the very bad old AMF days, an unbiased observer has to legitimately wonder if there will be a Harley Davidson in a couple of years. A company like that cannot bleed so much money for so long without having to take extremely drastic, even Draconian measures. However, Harley Davidson is an American icon, and it seems inevitable that the marque will survive in one way or another.
After all, we live in Obamarxist times. How long will we have to wait until we see Harley get a huge bailout cheque from the American taxpayer? After all, the money sucked away by the IRS has been funneled into all sorts of down on their luck enterprises, so can Harley be far behind?
We now have Government Motors and soon we may have Harley Federalson. The insanity of communist bottomless checkbook corporate economics continues.
May the good Lord have mercy on the American taxpayers, at the time of their greatest need.