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Buell’s Future Uncertain?

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Since Kieth Wandell took over from Jim Ziemer as the CEO of Harley-Davidson, analyst expectections have been that Wandell, an outsider bought in as CEO from Milwaukee-based automotive supplier Johnson Controls, would be a strong, take-charge leader who is well-suited to address the MoCo’s current challenges. One of those challenges may be Erik Buell, and Buell Motorcycles division.  A confidential source with high-level contacts inside Harley-Davidson informs me that a number of H-D executives will be pushing to have the company divest itself of Buell Motorcycles, and that a decision to sell or shut down Buell may come in the near future.

The word is that both Buell and Harley-Davidson have found the relationship unsatisfactory for a number of reasons, including the company’s refusal to allow Buell to outsource anything but Evolution V-Twins for several years, and Erik Buell’s strained personal relations with a number of MoCo executives. With a company outsider who has no particular vested interest taking over the helm as CEO, and devastatingly bad sales results due to the current recession, some Harley executives believe that this would be the perfect time to kill the Buell division.  If so, it would be a sad close to an overall sad chapter at Harley-Davidson.

In my view, Harley’s stewardship of Buell Motorcycles has been a classic case of a missed opportunity. The acquisition of Buell was a great opportunity for the MoCo to develop a line of race-bred sportbikes that could have made Harley a serious contender in that market.  But, Harley-Davidson blew it.

The company’s refusal to allow Buell to use any engine but the air-cooled, V-Twin, Sportster-derived Evolution engine effectively throttled Buell from the very beginning.  Whatever advantages may have accrued from implementing the Buell “trilogy of tech” in a sporting motorcycle were largely negated by the use of the underpowered Evolution powerplant.  Harley seems not to have understood that creating a technically sophisticated sportbike that would get its lunch eaten by any 600cc sportbike produced by the Big Four was nothing but a recipe for failure.

Ironically, elements of the Buell “trilogy of tech”, especially mass centralization and low unsprung weight have shown up in competing sportbikes.  For instance, the 2010 BMW S1000RR utilizes an under-body muffler arrangement very similar to Buell’s.  So, clearly, the problem isn’t Buell’s technology, but rather the use to which it was put, prior to the release of the 1125R in 2008.

Harley also alienated its dealers by forcing them to accept consignments of Buell motorcycles that they didn’t want to sell, and, in many cases, knew they couldn’t sell.  Not only were they being required to sell a sportbike that almost no one wanted–as Buell’s 2% market share of sportbike sales indicates–the MoCo never adequately invested in dealer training, in either the sales or service departments.

This is not to say that Erik Buell has been blameless either.  He is reputed to be abrasive and difficult to work with by many H-D executives.  This has resulted in bad feelings among executives that has made them less likely to give Mr. Buell’s opinions about the direction of Buell Motorcycles any serious consideration.

Moreover, Buell’s  marketing and public relations have been marked by avoidable mistakes.  For instance, the press reveal of the 2008 1125R–the only bike with Buell makes with a non-Sportster powerplant–was a disaster.  Buell used pre-production bikes with faulty fuel management and suspension issues for the demonstrations given to the international motorcycling press.  As a result, the general impression given by the media was of a mediocre bike with poor fueling, wallowy suspension, and quality control issues.   Rather than waiting until the company had ironed out those issues satisfactorily, Buell went ahead with the reveal, which resulted in doing more harm than good to the bike’s image.  Most recently, Buell’s callous dismissal of the Blast model for the 2010 model year, replete with disparaging comments about the bike, alienated many observers–not only in the press, but among Buell’s customer base as well.

If the anti-Buell Harley execs get their way, this long litany of failure will come to an end by pushing Buell out the door.

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12 Responses to Buell’s Future Uncertain?

  • A couple of chaps where wondering what planet you live on. Obviously, it could not be planet earth, where Buell just won the AMA National championships in the Daytona Sportbike Class, using an engine sourced from Rotax in Austria.
    When writing a piece for you blog, it is always a good idea to gather a few facts first. Your piece has practically none.
    Here is the Buell site. Perhaps you would enjoy taking a look at it before you write  you next item.
    And by the way, the Buell Motor Company is one of the few companies in the business that is profitable right now.
    http://www.buell.com/en_us/
     

  • *shrug*

    I live on the planet where Harley-Davidson bought MV Agusta for no clearly discernible reason.  Where Buell sells 4,000 motorcycles a year.  Where Harley-Davidson makes more than twice as much in logo merchandise than Buell makes selling motorcycles.  Where more than half of Harley-Davidson dealers don’t even sell Buells.

    Oh yeah, and where winning a sportbike championship has almost no effect whatsoever on the business case for retaining Buell.

    Which of these things are different on your planet?

  • Good news . . . .

    One of the first things Keith Wandell did was to end the career of a couple of those “top level execs”.  They were stale and stuck in the “that’s the way we’ve always done it” mindset.
    Buell is enjoying amazing, given the current economic conditions, success.  Times are not “good” for anyone but Buell has made huge adjustments and remains profitable. . . . one of very few such companies.
    Buell, as of Sunday, has just one a NATIONAL CHAMPIONSHIP in their first year of racing the 1125R.  The bike holds huge potential and Buell has sponsors aching to sign on for next year.

    Times are tough.  So tough that folks need to contrive imaginary quotes and sources without citing them.  I’ve known Erik Buell since I bought my first Buell over 20 years ago.  He’s not difficult to work with, he simply suffers fools poorly and some of the folks at HD have been terribly (look at thier results) short sighted.

    In short . . . I’m betting Buell thrives in the coming years.

    Court Canfield
    New York City

    • So tough that folks need to contrive imaginary quotes and sources without citing them.

      I can assure you that I don’t make up sources or quotes. Making such accusation, without any knowledge of me or my professional past, does make you sort of an asshole, though.

      I’ve known Erik Buell since I bought my first Buell over 20 years ago. He’s not difficult to work with, he simply suffers fools poorly and some of the folks at HD have been terribly (look at thier results) short sighted.

      Ah. So, I’ll just take that as confirmation of the strained relationships between Erik Buell and some of the Harley people, shall I?

      Buell, as of Sunday, has just one a NATIONAL CHAMPIONSHIP in their first year of racing the 1125R. The bike holds huge potential…

      How many sponsors are lining up for any of the XB models? Don’t bother answering. We all know it’s a rhetorical question, just as we know the answer is…none.

      Buell has a contender motorcycle in the 1125R. It the only contender they have. It’s a great motorcycle. Too bad they couldn’t build it 10 years ago under Harley’s short-sighted leadership.

      I’m glad that Danny Eslick won the championship. The thing is, no one seems to be able to explain how that changes the business case for the Harley-Buell relationship. Moreover, there is a substantial number of people who think–rightly or wrongly–that the 1125R winning the AMA Daytona Sportbike class is kind of like a normal kid winning the Special Olympics.

      Buell is enjoying amazing, given the current economic conditions, success. Times are not “good” for anyone but Buell has made huge adjustments and remains profitable.

      Well, if Harley decides to divest itself of Buell, then that makes them a more attractive target for a buyer, doesn’t it?

      One who hopefully won’t waste the opportunity like Harley-Davidson has.

  • http://dalefranks.com/cycles/?p=992&cpage=1#comment-426

    You were quick to blog about Buell winning this comparison. And it was an 1125 derived 1125cr that won. Sort of ironic that a Championship winning bike turned into a street bike can win comparos, but still get bashed by people who don’t even recognize who Court Canfield is? Who are you anyway?

    • I didn’t bash Buell. I bashed Harley for failing to capitalize on what Buell could have done for them. In any event, being insufficiently worshipful of Buell does not amount to “bashing”, nor does pointing out that 98% of sportbike riders don’t seem interested in buying one. facts are stubborn things, and your deep passion for Buell doesn’t affect them.

      And yes, I know who Court Canfield is. Where did I indicate that I didn’t? Did I miss performing some required gesture of obesiance because he dropped in with a comment?

      You Buell guys seem awfully sensitive.

  • I think you make some valid points and agree that some statements and inferences have been made by others that are irrelavent regarding the general topic of your original post.

    My experience with corporate america over the past 20 years (which is what we are talking about here) has been that what is unimaginable to many is quite likely to occur. It appears much of the commentary has lost sight of the original context.

    btw – I own a Uly.

  • sorry about that last post my kids hitting the key board. I Just wanted to say that i am a big fan of Buell and currently own a 2009 1125cr. I can honestly say that i haven’t always been a fan but was curious about there line up, the reasons being exactly what you stated, that damn Harley engine. It seems to me that things are changing for the better with that new engine and the Buell signs that i keep seeing pop up on alot of Harley Davidson dealerships. I would definately not want to see Buell go under but would love to see them split from Harley Davidson.

  • While I agree with a number of your statements, I do think Buell is here for the long term. Harley while managing the Harley line up very well (V-Rod excluded), I do feel there is a place in the coming years for Buell. I suspect, and this is my own gut feeling, that the practice of keeping Buell under the MoCo’s thumb my end…in a good way. The Evolution engine not with standing, I find it hard to believe that as technologically innovative as Buell is that they will not be a player in the future.
    To your point of the 1125’s poor suspension has been dispelled for good, it is now recognized as exactly the opposite. The Blast issue, sorry to say, I couldn’t agree more.
    Further, you may have more insight. While I’m sure there is and anti-Buell crowd within Harley, I’m equally sure there is a pro-Buell crowd.

  • Over the years Court has always been a huge supporter of Buell & has always toed the company line of denying any & all rumors no matter how much they may be based in fact.

    When I announced that Buell was indeed working on a water cooled bike, it was quickly denounced by Court as well as a good number of the Buell fan boyz. Even though I had personally seen the mule bike, it was decided that simply wasn’t good enough.

    When I also announced that the V-rod motor was initially developed for Buell, that too was denounced & it wasn’t unitl the past couple years where Buell actually acknowledged that in fact his company was the original target for the engine.

    You could hand the Buell faithful a signed letter from HD’s President as well as Erik stating that Buell was being either sold off or simply dropped & that too would be regarded as hearsay. Times are rough for all manufacturers right now including the mighty mothership Harley Davidson. Factories are being closed, hourly as well as salaried jobs are being eliminated, even talk of closing their manin facility in York, PA is being discussed.

    The bottom line is HD answers to it’s share holders & they demand profits. If more profits can be attained by eliminating or selling Buell than that’s what will happen.

  • I don’t know if Harley plans to get rid of Buell, but I hope they sell the brand to someone else… someone who better appreciates sportbikes.  I’ve been rooting for Buell for years, but I always thought they were being held back by HD.  I don’t know who’d want to buy Buell, but just about anyone who’d get them out of Harley dealerships would be an improvement.

  • I hope the Buell can survive. However, in my opinion, they have to get out of the HD dealerships and try to get in with European and/or Japanese dealers. The type of customer that is looking for a sportbike is NOT the type of customer that the HD dealers cater to. Someone who is interested in a Buell is not going to be someone looking to buy into a “lifestyle”. The other manufacturer dealers will be also more likely to “get it ” about Buells. Also, since Buell is still owned by HD, please go find a designer over at MV Agusta and do something about those godawful pods on the sides of the 1125’s.

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