Buell Motorcycles To Go Out of Business

10/15/2009 @ 2:24 pm, by Jensen Beeler22 COMMENTS

After releasing grim third-quarter financials today, Harley-Davidson has also announced that it is discontinuing Buell Motorcycles. In a somber video (posted after the jump), Erik Buell confirms the news, and praises the Buell team for taking on the industry giants with “this little American sportbike company.” Buell will continue to sell its motorcycle stock, and Harley-Davidson will continue to honor any warranties and part needs for Buell motorcycles.

With sales down 21.3% from last year, and net income down 84%, Harley-Davidson is feeling the full crunch of the economy now. Closing Buell may make sense in the short-term on the balance sheet, but also takes away any hope of the company moving beyond the dwindling baby-boomer cruiser market.

With this news, also comes the annoucnement that Harley-Davidson will be selling MV Agusta, making it clear which brand is the basket HD is putting all its eggs in. “The fact is we must focus both our effort and our investment on the Harley-Davidson brand, as we believe this provides an optimal path to sustained, meaningful, long-term growth,” as Keith Wandell, the Harley-Davidson’s new CEO puts it.

The decision will result in a reduction over time of about 80 hourly production positions and about 100 salaried positions at Buell. Employment will end for a majority of Buell employees Dec. 18, 2009.

Harley-Davidson expects that with the closing of Buell, a one-time charge of $215 million to $245 million will occur in 2009 and 2010, which is an increase of $55 million from the estimate provided back July 16, 2009. However, Harley-Davidson also estimates an annual ongoing savings of approximately $140 million to $150 million from this restructuring.

Harley-Davidson also expects to incur approximately $125 million in one-time costs related to the discontinuation of the Buell product line. $115 million of that amount will be incurred this year.


Official Statement from Buell Motorcycles:

EAST TROY, Wis. — (Thursday, October 15, 2009) Buell Motorcycle Company officials thanked the company’s customers, employees and dealers for an unforgettable ride, following today’s announcement by Harley-Davidson, Inc. that it will discontinue the Buell® product line as part of Harley-Davidson’s go-forward business strategy. The new long-term strategy aims to drive Company growth through a focus of efforts and resources on the Harley-Davidson® brand.

“I want to personally thank all our past and present Buell employees, dealers and suppliers for their efforts. I also want to thank Buell motorcycle owners for their support and passion for the brand,” said Buell Motorcycle Company President Jon Flickinger.

Flickinger said a limited number of new Buell motorcycles remain available for sale through authorized dealerships and production will wind down by October 30. He also stressed that Harley-Davidson will provide replacement parts and service through dealerships and that warranty coverage will continue as normal for Buell motorcycles.
“I will always be proud of what we have accomplished. It is a testimony to what a small group of passionate and inspired people can do, and with brilliant innovations, we’ve produced some of the best-handling bikes of all time,” said Buell Chairman and Chief Technical Officer Erik Buell. “I personally look forward to exploring how I can continue to work with Harley-Davidson to bring advanced product technology to riders.

“I have also had the great fortune to meet and get to know many Buell riders over the years, and they are an amazing and interesting group of free thinkers,” Buell said. “May you ride with pride into the future. And may your roads ahead be as adventuresome and rewarding as mine have been for the last 26 years.”

A wholly owned subsidiary of Harley-Davidson, Inc. since 1998, Buell Motorcycle Company was founded in 1983 by Erik Buell and produced more than 135,000 motorcycles. Over the past 26 years, Buell motorcycles won numerous design accolades and awards, and countless races and championships around the world, including the AMA Pro Daytona SportBike championship in 2009.