THE DEMISE OF BUELL
Harley-Davidson abruptly pulls the plug on Buell Motorcycle Company, and also looks to sell off MV Agusta, which it bought in '08 On October 15, Harley-Davidson officially announced that it was shutting down Buell Motorcycle Company, which it had purchased the majority ownership rights to back in 1998 from founder Erik Buell, due to the parent company's dismal third-quarter financial results. Harley-Davidson suffered a precipitous 84 percent decline in net income and a 21.3 percent drop in retail motorcycle sales compared to the same financial quarter in '08, with its retail and wholesale loan department-Harley Davidson Financial Services-plummeting from an '08 third quarter profit of $35.6 million, to an operating loss of $31.5 million; revenue from its Parts & Accessories and General Merchandise sections also suffered double-digit declines. As part of the drastic cost-cutting measures, H-D also surprisingly announced that it was looking to sell MV Agusta, which it had only just recently purchased majority ownership rights for $110 million in 2008.
Buell's production lines had already been dormant for a couple of months in '09 due to declining demand in the tough economy, and rumors had been making the rounds that they would never come back to life. Nonetheless, it was definitely a bitter pill to swallow for company founder Erik Buell, who had passionately steered his company since 1983; Buell quickly posted an announcement video on its website, and the firm's CEO and chief technical officer looked positively shell-shocked as he spelled out the bad news. To make matters worse, H-D spokespersons have stated that H-D will not sell the brand to an outside entity because the Buell product line is too closely integrated with Harley-Davidson's operations and dealership network. There was no announcement or confirmed status at press time regarding whether Harley-Davidson was going to keep Erik Buell on in some sort of product development capacity.
"I will always be proud of what we have accomplished," said Buell in his video statement. "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. 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. 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."
Harley-Davidson stated that the Buell motorcycles, accessories, and apparel already completed and/or on sale on dealership floors would still be for sale while supplies last, and that the company intends to continue supporting the existing bikes' warranty and current owner parts/service needs.
The discontinuation of the Buell brand comes on the heels of Richie Morris /Rossmeyer Racing's Danny Eslick winning the inaugural AMA Pro Racing Daytona SportBike series championship on his Buell 1125R (Eslick had also just signed a contract for 2010 to continue racing with the team), as well as Buell being anointed the "Official Pace/Safety Bike of AMA Pro Racing". Race contingencies for 2010 have also been canceled. Much of the current upheaval in AMA Pro roadracing (Honda announced they are pulling out of AMA roadracing, with Kawasaki likely to follow suit; Suzuki will be cutting back drastically on its roadracing efforts) is a result of the controversy surrounding the accusations of the organization's favoritism toward Buell, with the homologation approval of the company's 1125RR superbike (in obvious violation of the AMA rulebook) being a pointed example.