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Erik Buell Interview - Looking Forward, Not Back
A talk with Erik Buell a year after Harley-Davidson pulled the rug out from under Buell Motorcycle Company.
December 16, 2010
By Alan Cathcart
Photography: Tom Riles
On October 14, 2009, Harley-Davidson management suddenly announced that Erik Buell's eponymous motorcycle company had reached the end of the road. The decision to shut Buell down - and to put its recently-acquired MV Agusta brand up for sale as well - came in the wake of a collapse in Harley-Davidson's own sales and profitability during '09. Harley management's surprise decision to spend the $125 million shutdown costs in order to focus on the Harley-Davidson brand's core product range seemed questionable to many. To make matters worse, despite rumored offers from other manufacturers to buy the brand and keep it alive, Harley management turned them down and retained all property and rights. The former Buell factory's assets were ignominiously auctioned off, and the building now sits with a "For Lease" sign out front.
The chance to sit down with Erik Buell nearly a year after the shutdown of his company in the canteen-cum-meeting-room of Erik Buell Racing, which occupies a small section of the now-anonymous deserted former Buell factory in East Troy, gave a fascinating - and sometimes depressing - insight into the ways of the modern business world. But make no mistake: a man with enough drive to pursue his dream of building a true American sportbike for more than 26 years isn't going to let even a tremendous blow like Harley's sudden shutdown of his former company stop him now.
Alan Cathcart: At what stage were you made aware of the Harley-Davidson board's decision to shut Buell down, and did president Keith Wandell advise you personally? Were you told Harley-Davidson management's rationale for doing this?
No, Keith did not speak to me himself to tell me of the decision. I found out about it the week before on the Friday, and then it was announced publicly the following Thursday that they were closing Buell.
I guess they had their reasons, but I was not privy to any of these specifically, so I have no idea. I was just told they were pulling the plug on us, period. I got hearsay from people who'd been in meetings where Keith had talked about the whole future of Harley-Davidson being about "focus, focus" on their core customer, and I think people internally were starting to say, "hey, Buell is disrupting us." I do know they did a survey of the entire Harley-Davidson dealer network, where they asked them if they thought they should keep Buell. Well, only about 35-40 percent of the dealers even sold Buells in the first place, so it was pretty much a foregone conclusion that the majority were going to say, "no, let's just work on Harleys." So who knows? I'm not really in a position to say anything about all the rumors that were going round about their reasons for closing Buell, even if to me it doesn't make any sense. They made the decision, even if I don't agree with it. There were moments a number of years ago where I thought they were going to make the transition to become something bigger and broader than what they were, but it never happened.
I don't want to make all this sound like Harley is a bad company at all, because I really appreciate the fact that they tried to invest in what I believed in. It's just that somewhere along the line, they kind of changed direction. Vaughn Beals, Rich Teerlink and Jeff Bluestein were the leadership group when Harley originally bought Buell, and it was exciting the way they were talking to me about being very innovative, and Buell becoming Harley's sportbike company. And that's why I was enamored with the initial start-up, because they were talking about the things that I wanted to do then, so rational design like fuel in frame, rim brakes, getting into ABS immediately, airbags, just all kinds of innovative stuff. But the business needs at Harley have gone in a different direction since then, and the leadership vision has become different. Who's to say what's right or what's wrong?
AC: What was Buell's performance as a company in 2008-09, in the year before the shutdown?
We were making in the region of 8000-10,000 bikes a year - I think the most we ever did in one year was 12,000. But, by 2009 we'd hit a number of things that didn't make it look good for us. I'm not allowed to talk about the financials, but the sportbike industry had got into a bad situation, and us with it. I don't know the exact percentages, but they dropped significantly.
AC: What were the terms of your separation from Harley-Davidson? Here we are in the old Buell factory, from which you're able to base Erik Buell Racing for at least the time being, so it must have been relatively amicable. What conditions were imposed on you?
EB: I think it was indeed reasonably amicable, especially as I did have a contract that said that I couldn't get back into the motorcycle industry for a period of time after severance. It would've been until February 2011, but that's actually kind of fallen by the wayside, so I'm free to do my own thing. It was a clause dating back to my original agreement with Harley that was still in place. They basically said that the original agreement was in case I went off to Honda while they were still running Buell, so if it's all finished and Buell is gone, why should we keep him out of the industry? So they released me from it, and I could go and work for Honda now, but I'm not going to. I'd have worked for Mr. Honda-san in a heartbeat, though! He was a true visionary who understood motorcycles.
Beyond that it's quite typical, stuff like any intellectual property remains with Harley, which is the same for anybody leaving a company. I have no access to the Buell name after the end of this year. One thing that I did get from them, which I think was a great move, was the ability to license and use the Buell name and sell derivative race bikes as Buells until December 21, 2010. Their idea being that I was going to invest significantly in this, I'm going to buy parts for these off them, and it was a good marketing thing for them, because it kept their Buell brand alive and saved it from collapsing while they had a lot of inventory in the dealer network that they needed to sell off. Harley isn't going to build any more Buells, but it still has the legacy of the brand to take care of, to dispose of inventory, and keep the value up in the short term. So allowing Erik Buell Racing to do something with racing that helped their dealers and kept some good PR coming about Buell, was a very inexpensive way to do that for them, especially as we'd just come off the back of winning an AMA National championship with Danny Eslick in 2009.
AC: So now that you're free to choose, what do you want to do next?
This small fleet of 1125Rs...
This small fleet of 1125Rs awaits conversion to track-day or AMA competition racebikes.
I really want to continue building bikes, and I want to get back into the streetbike business, manufacturing innovative sportbikes. I know I'm going to have to start out small, just like before, but I think we produced a tremendous number of innovations over the years at Buell, and I want to be able to do that again. I don't want to be restricted in what I deliver to the customer, so if I do have investors or have a partnership with another company, which I guess is inevitable if I'm going to make this happen, then it'll have to be somebody who very much understands the sportbike market and the customers we want to address, in terms of what we want to do. I'll have to be very careful to make sure the package will work for everybody. I still have to make the bike I want to make, my ultimate Buell dream bike that sits on the wall over my desk as a concept drawing! There's so many different ideas to put into metal, and so many different motorcycles still to make that I hope and believe there are customers out there for. The huge number of concepts and projects that we started out developing at Buell that were all cancelled when Harley shut us down, these were all about innovation.
All along the way with Harley management it had been, "We don't want to do a hyperbike, we don't want to do the full fairing, we don't want to go head-to-head with the Japanese, we don't want to make a left turn and go hard-on sportbike. We want to do a gentleman's superbike, so in best Buell tradition it'll show the engine off, we'll sit the rider high and upright, and the bodywork should sort of protect him, all those kinds of things. Oh, and it needs to have a heritage legacy to the old Buells, so we need to keep some of the styling looking the same." The whole situation at H-D got pretty frustrating. I mean, I'd throw out concepts and try things, but the bottom line was always that they made the decisions as to what got built and what didn't; and I guess I was part of that, since I was part of the company. But I'm really convinced we'd have been much more successful had we come out with a genuine ground-breaking superbike with striking looks like the B2 (a fully faired twin-cylinder prototype much different than the 1125R that was on the verge of being launched when H-D killed the Buell brand), not something that basically tried to not offend too many people. That would have been the first real product with an 1125R-type motor, and we would've raced it, just as Geoff May is racing our 1190RR in AMA Superbike this year, and doing pretty good. Once again people at Harley would say, "racing is just Erik's hobby" - but I really am much more of a businessman than they think I am. You race because it's very important for the credibility of your designs and your products to have them prove their worth in competition with their rivals, probably more so when you're doing different things that other people aren't doing.
AC: The Buell 1125R has a perfectly valid engine that's not being used to power anything right now. Have you had discussions with Bombardier as Erik Buell Racing about making a future streetbike using that engine?
EB: We've had discussions with them about whether we could get parts, or if we'd be able to get engines from them in the future if we moved ahead. It's a great company by the way, both Bombardier and its Rotax division. Bombardier has some really fine people. I love working with them. They're a very innovative company.
AC: Have you discussed having them as the investor producing a Can-Am motorcycle to your design?
Buell with just one of his...
Buell with just one of his many innovations: an 1125R frame that also doubles as the fuel tank.
I can't talk about that.
AC: What exactly does Erik Buell Racing do at present, and what are you selling?
EB: Harley was going to throw away the racing stuff. I wanted to continue to help the dealers, start a race business to keep the enthusiasm up, keep the remaining dealers and the owners excited, keep the spirit alive. I also wanted to keep as many people employed as possible. Right now, we're at ten full-time and two part-time employees, almost all from the old Buell group. We build track-day bikes, where we leave the belt drive on them; some of them are built up from demonstrators that came back, and they start as low as $7500. The Daytona SportBike is a replica of the bike Danny Eslick won the AMA championship on last year, but it's not too exotic and it costs $15,900. The motor's stock, but it has a race exhaust, a tuned ECU, a chain-drive conversion, racing brakes, a suspension kit, the fairing's lighter, and it's set up for a different radiator mount. Then we make two versions of the RR, where we blueprint the motors, and there's a lot of hours in doing that. The ASB is the 1125R in American Superbike spec, and that costs $41,900, and the 1190RR is $44,900. We can also build any existing customer bike up to any of those specs.
After 2010, we won't be able to sell any complete Buell motorcycles, but I can supply parts, because I got all the tooling needed to make the race parts, so someone can bring me an 1125R and I can build an RR from it. I know a lot of guys bought 1125R streetbikes when they were sold off at such low prices after the shutdown was announced, and now they tell me, "I want to keep riding this thing!" They've fallen in love with them, because the bikes really work.
AC: You mentioned electric bikes. Is this something that you're interested in exploring?
The Erik Buell Racing shop...
The Erik Buell Racing shop handles converting former 1125Rs into track-day and full AMA American Superbike-spec machines until December 21, 2010, when Buell's agreement with Harley-Davidson to build bikes and use the Buell brand name expires.
Absolutely, yes. It's not right around the corner, but I've been thinking about it for years, although it was not something we were doing at all at Harley-Davidson, and it wasn't something that I was allowed to have Buell working on. But it's something that's been huge in my mind for 15 years, because for that long the writing has been on the wall that it's going to come, and when it's ready, it's going to work. The things about it I like are that I hate noise - well, on the racetrack I love noise, that's one thing I go there for - but riding on the street or out in the woods, I hate noise. I don't want to bother anybody; I can't stand riding a noisy bike, and I hate riding behind one. I just want to go fast, and the more I bother people, the less likely it is for me to be able to do that.
I'm a huge believer in personal transportation. On the other hand, fuels are getting expensive and unavailable, and I want to make sure that there's a valid way to have transportation, whether it's sporty or not. Light and nimble is a wonderful thing. I wish we did more of it, and what they should be doing now here in the USA is legislating away big heavy vehicles, and making it easier and more rational for companies to make small, lean, fuel-efficient vehicles. They don't jam up the motorways, they don't jam up the parking garages - all the things that people know in Europe just seem to be unconsidered over here. You know, "motorcycles must be very big and loud and chromed, and must bark and smoke, and you only ride them on Sundays" - dear God, that's not what a motorcycle is! A motorcycle is a wonderful way to go somewhere, to enjoy doing so, without wasting a whole lot of energy.
AC: It's one year since Buell got shut down, so how do you feel now? Any better than this time a year ago?
I'm not bitter at all at Harley-Davidson, I'm not devastated that my name can no longer be placed on bikes that I build; that's the way it goes. Look forward, not back. But I am very concerned about the customers we had at Buell, the people who bought our bikes and now go, "oh man, did I make a mistake, how am I going to be able to keep riding this thing?" I want them to be supported. A lot of that stuff is still up in the air, but hopefully we can sort that out. But the part that's very hard to get over is the loss of jobs, which was a loss of hope for a lot of people. Many of our people have got re-employed doing different things, thank heavens, but they've lost a job that they really loved, that they were really excited about doing. I have people who have gotten new jobs calling me up and saying, "If you ever get going again, I'd really love to come back."
I know what motorcycles I want to build, I know they'll offer something nobody else has, and I know I have people out there who want to buy them. The challenge is making all this happen - and that's what I'm working on all the time. Tell your readers they haven't heard the last of me. I've got more to do than just play guitar!