| Author | Message | ||
     Classax |
Let's get a few things straight: The RX/SX is an improved version of a machine that would have hit the market in 2011 and would have been a total game changer. No one disputes that the RX crushes the 2014 versions of the big 4 bikes(in showroom trim). The Panigale and SuperDuke are what you get when you take the Buell design philosophy to the extremes with 3 years of additional development and a ton of electronics, and head to head it was a virtual wash between them on performance. EBR leading with the RS/RX/SX made sense because it was the product furthest along in development. They couldn't continue the XB's (GREAT BIKES BY THE WAY)expressly because of HD, so that left only one fully developed machine ready for market. They came to market with what they had. The HERO deal seemed to have expanded things much bigger and faster than Eirk's original plans only to have the proverbial rug snatched from under it. Think about it, IF HERO does indeed owe $20 million plus for services rendered and the total EBR debt were say $25M ( I've heard figures as low as $18M) do you honestly think they shutter the company over $5million in debt? Come on! POLARIS would be nice since its American, but I remind you that Erik mentioned he was going to do work for BRP to bring his concepts to snowmobiles. So street bikes would round out their product offerings just as well. Not to mention the Helicon/1190ET-VT gets to come home to its Rotax cousins. What I do not wont't is for HERO to get out of this with any product or and if they do, I hope they have to pay nearly triple what it would have cost originally. Since everything in the notification stated that the goal is to sell things as a going concern (each lot designed to continue operation) If at least lots 1,3,4, and 8 wind up with the same buyer I would take that as a VERY good sign. Of greatest concern to me is who gets lot 6 which is all of our spare and repair parts pool at the moment. (Message edited by Classax on July 01, 2015) | ||
| Discochris |
It's been discussed here, but I thought that because of the type of receivership involved, Hero is not eligible to purchase the company as they have an ownership stake in the company (the same would be true for Erik himself). It would appear from the outside looking in, that that was part of the reason for filing the way they did - so that if Hero was trying to choke off the company to get them on the cheap, this would block them from being able to do so. | ||
| Reepicheep |
That's a stupid statement. | ||
| Tpoppa |
That's a stupid statement. Why? | ||
| Hughlysses |
^ The statement presumes that "ideal" management would have resulted in a successful business. That's not necessarily true. | ||
| Classax |
I haven't been able to find anything that states that previous principals are unable to bid as long as they meet the requirements as a qualified bidder (can pay cash immediately, and have assets enough to meet/project a good faith going concern) and are approved by the Receiver. I expressly reserve the right to be completely wrong on this though. I reiterate even if they had 25 million in debt, an accounts receivable with of 20 million plus means they weren't in that bad a shape. Receivership was a nuclear option with an eye towards the future as opposed to a Chptr 7,11 or 13. The bikes were not marketed well enough, quality was coming along but not as perfect as needed and many felt they were priced too high. I say try getting a 190 miles to a tank on your Panigale on the way to the track. Ain't going to happen. The reality is the venture didn't work as well as expected or projected for a number of reasons; timing, people, market conditions and product all played their roles. The question is where does it go from here? | ||
| Reindog |
It is a stupid statement. I have worked for a well managed company that closed its doors. | ||
| Greatlaker |
Bombardier was interested in Buell and MV Agusta back when Harley got rid of both operations. BRP envisioned Rotax engines in Buell's and MV's, two, three and four cylinders bikes and to reintroduce Can-Am off road bikes. Of course the caveat to all of that is, BRP has all of its wheeled product line built in Mexico. Buell and MV would have suffered the same ignominious fate. BRP loves Mexican production, its the only reason they aren't terminally in the red. Buell would have been designed and engineered in the USA but Pedro would have been bolting the bike together in Juarez. All that being said, unfortunately BRP isn't in the cash rich position it was in 2009. The SeaDoo division has been losing money, the SkiDoo division has been losing market share and the off road and on road products are just breaking even. Bombardier isn't in any financial position presently to do anything with EBR assets. Even if they did purchase EBR the end result isn't going to be what most of you guys want anyways. Be happy BRP didn't buy Buell. | ||
| D_adams |
So according to this, the receiver *could* have continued to operate the business up until the sale. Bummer that it didn't happen that way. Would have kept everyone (possibly) employed at least through July, although making payroll would have been required I'd imagine. | ||
| Steeleagle |
If that were possible, businesses could acquire debt, go into receivership, zero out their debt, buy themselves back and start over. Quite the scheme! One would hope it's not an option, at least from the Hero side. And based on comments heard at Homecoming, it didn't sound like it. | ||
| Rick_fears |
Going off that note, did Erik officially own the company or was it owned by an llc? Wondering if Erik could qualify as an employee... | ||
| Teeps |
>>>Stevel Posted on Wednesday, July 01, 2015 - The EBR effort was mismanaged end of story. Court Replied on Wednesday, July 01, 2015 - I disagree. But then, unlike the Facebook crowd, I had the opportunity to see and know the plan, the budgets and the key players. Nothing was mismanaged. Court, I know you have "the inside line" for all things Buell. You say (above) with authority that EBR was not mismanaged. That being the case; are you at liberty to say what really happened? Not looking for a fight, just some truth, if you can speak it. If not, I understand that too. | ||
| Stevel |
Court, How can you say there was no mismanagement? They failed! Decisions were made that were clearly wrong. Those poor decisions created vulnerabilities. Without those, HERO's actions would either not have occurred at all or would have been survivable in the worst case. Like I said, there is only one name on the failure list. I will be the first to admit that I was wrong, if evidence proves that, but there is no evidence to date provided by you or anyone else to prove otherwise. | ||
| Macbuell |
It is impossible to end up in Receivership without bad decisions or mistakes being made along the way. Choosing your business partners is a HUGE decision and in this instance, EBR made a very poor choice. Maybe they were the only option but if that is the case, that says something about your business model in that no one else wanted to invest in it. | ||
| Reepicheep |
Nobody said no mistakes were made, that is an absurd standard that no business would pass. Many business fail, and businesses fails for many reasons, some related to the making of bad decisions, some from the result of taking necessary risks and just loosing the bet, some due to completely external and unavoidable circumstances. To say that because EBR failed is because it was mismanaged is simply stupid. It fails on its face on at least two levels. 1) It isn't clear that EBR has failed yet. It is in receivership. That's not good, but its not dead yet. 2) To say that a company failed is always and necessarily because they were mismanaged is an obvious logical fallacy. Some companies are in harder markets then others. Some companies are in markets that have to take really big risks to have any chance of succeeding. Sometimes unforeseeable or unavoidable external influences are simply so overwhelming that survival is not possible. Some companies fail because they are mismanaged. The only thing stupider than saying going into receivership proves that the company was mismanaged, is to declare it's true because you read it in a comment on Facebook. I don't know enough to be able to prove if EBR was mismanaged or not. The people that are in a position to know are hinting that the move to receivership was a strategic one designed for protection from a suddenly malicious and hostile majority partner. Having a major partner start to maliciously manipulate you, and having a major shareholder maliciously manipulate you, would cause most companies (well managed or not) to fail, regardless of how "well managed" they are. You can try and shout from the bleachers that it was poor management to put yourself in a position where you are dependent on single major partner. But that fails on a couple levels also. First, that was only a bad management decision if there were other better options available. If not, it was simply a necessary business risk. How much money do you think was sitting around looking for startup US motorcycle companies in 2008? Secondly, it assumes that going into receivership was a "management failure". What if it was actually "management brilliance" in the face of incredibly difficult challenges? We don't know enough to know. We all have our opinions, which is fine. But to state as a fact that EBR failed because it was mismanaged is simply a stupid statement. | ||
| Reepicheep |
So Macbuell, are you saying that "good management" would have been to never start a company unless people were rushing to fund it? So you are saying that good management would have been to shut down Apple on Dec 1, 1997, because nobody would invest? On that month, the stock price of apple was .44 cents (adusted for consistency). Today that same share is $144. | ||
| Ourdee |
. | ||
| Gregtonn |
The EBR effort was mismanaged end of story. Stevel seems you have had a burr in your shorts since Buell wouldn't hand over the prints to the 1125 engine so you could re-engineer it according to your grand plan. Lots of companies have gone under, not all of them due to mismanagement. G | ||
| Tpoppa |
2) To say that a company failed is always and necessarily because they were mismanaged is an obvious logical fallacy. Some companies are in harder markets then others. Some companies are in markets that have to take really big risks to have any chance of succeeding. And the decisions to enter those markets are made by....wait for it...the management team. This is one of the biggest questions on the table. Is entering the market with ONLY a superbike a wise business decision? Is that a survivable strategy, even with engineering revenue? | ||
| Classax |
I specifically did not use the word mismanaged and named the areas where I felt the company did poorly. Namely: Marketing Quality Control Internal Customer Service /Dealer Infrastructure Development Going into receivership with only 51% control of the company, couldn't have gone over well with the board. Hero obviously felt they would not be as deeply impacted as they were or it is as a company, a habitual liar. The mere fact that their(HMC) whole enterprise with EBR is now on the auction block to INCLUDE IP, finished and unfinished work, the accounts receivable for consulting work AND FUTUR CAUSES OF ACTION(I read that as RIGHT TO and PROCEEDS FROM FUTURE LAW SUITS) is an indicator that something in the relationship went WAY wrong; as 49 percent of the board would NEVER vote to have to buy back stuff it already thought it would own in the process. Receivership in this case is basically Sherman' March to the Sea. This has hurt EBR but HERO's long term plans and infrastructure for the US market and new products have been effectively scuttled. I can only hope the stalking horse bid for lot 2 is three or four times what it would have cost them to pay EBR for services rendered. Companies fail every business day. Not all of them are managed into the ground, sometimes the times, market, economy and force majure all conspire to 'force' their hands. No one is perfect, but just because its imperfect doesn't mean it was completely all screwed up. | ||
| Hootowl |
"Is entering the market with ONLY a superbike a wise business decision?" They didn't. The engineering team was paying the bills, not cycle sales. That was the plan. Might have worked too, had they been paid for the work they did. | ||
| Classax |
And the decisions to enter those markets are made by....wait for it...the management team. This is one of the biggest questions on the table. Is entering the market with ONLY a superbike a wise business decision? Is that a survivable strategy, even with engineering revenue? It is if that's only thing you have developed enough to got to market with. I guess you could just be MOTUS and not actually sell anything... Again if what we understand is true, if HERO pays its $20M bill, the discussion would not be about whether doors stayed open but how to sell the 1K plus bikes they made to play in WSBk (again at HERO's request.) They may not have been killing the market but EBR stayed afloat for 4 years selling parts and $40K superbikes before Hero came along. | ||
| Gregtonn |
I'll bet EBR going into receivership was an "Oh crap!" moment for whoever dreamed up this scheme at Hero. G | ||
| Crusty |
It really is amazing how many sharp business tycoons enjoy hanging out on Badweb! I would think that since they know what Erik and company did wrong, they would get in on the auction and buy EBR and do it right. Then they could make a fortune. | ||
| Davegess |
49 percent of the ownership may have been against but Erik controlled 3 of the 5 board seats so he wins 3-2. It will be interesting to see who shows up at the auction; or sends I bids,. The way I read it is they don't have to sell the lots I orde but could start with lot 9 | ||
| Steeleagle |
Thank you, Crusty! You read my alleged mind! (Message edited by steeleagle on July 01, 2015) | ||
| Classax |
It's pertty tick slrick to purchase and ride a dead horse my friend, pertty tick slrick indeed. | ||
| Mr_grumpy |
I have been known to go to the auction & buy dead cars. Fix em, drive em, sell em. I know mechanics, not business. As for dead horses, I've hauled the sides in a reefer from the abattoir in England to the packing plant in France. There's a bob to made off dead horses too. | ||
| Classax |
 | ||
| Macbuell |
I never said "Bad Management" anywhere. I said bad decisions and mistakes. That happens with any business. Some can survive them. Others cannot. And no matter how you look at it, going into Business with HERO was a Bad Decision, a mistake, and the primary reason they are where they are. The leadership at EBR is responsible for making those decisions and it is silly to absolve them of that responsibility. Could they have foreseen these issues with HERO? I don't know. According to some, yes. But my only point is that you cannot absolve them of the responsibility of deciding to partner with HERO. |
