Here is an excellent article on the Harley Davidson / Buell buyout:
motorcycle.com
LOS ANGELES, February 20, 1998
-- Harley-Davidson, Inc. announced today that it has acquired most of the stock of Buell Motorcycle Company (BMC) of East Troy, Wisconsin. Harley-Davidson had previously owned 49% of BMC with the remaining shares owned by company founder Erik Buell. Buell has retained a minority interest in BMC and remains Chairman and Chief Technical Officer. He has now entered into a long-term employment agreement with Harley-Davidson.
"I'm not exactly sure when this all started," Erik said in a midnight interview with Motorcycle Online last night, "but it was initiated by Harley, although the idea of it has been in the back of my mind for quite some time. From my perspective, this is a very positive step that is a significant leap towards getting Buell the capital and resources we need to make this happen."
The multi-million dollar question is, of course, what did Erik get for his eponymously named company?
"It was a stock swap deal," Erik told Motorcycle Online, though he declined to name specific numbers. "I got Harley-Davidson stock in return for (most of my) Buell stock. I wanted to maintain some portion of Buell, so I kept 2% of (outstanding) stock."
"We are firmly committed to Buell as a separate and distinct product and brand," said Jerry Wilke, president of BMC. "The ownership change allows Buell Motorcycle Company to move forward with exciting plans for growth and take full advantage of our partnership with Harley-Davidson."
"Buell is an integral part of our strategy for expanding into new markets and attracting new customers into the sport of motorcycling," said Jeff Bleustein, president and CEO of Harley-Davidson, Inc.
"I couldn't be happier," Buell said. "This is recognition of the accomplishments that our team has made in establishing Buell as a player in the highly-competitive sportbike market. And we will continue to develop the most exciting motorcycles in the industry."
Erik Buell remains Chairman and CTO of Buell Motorcycle Company -- which is now a division of H-D Inc. -- so Erik now has two jobs: First, overseeing Buell, second, as a high-level Harley employee who reports directly to Jeff Bleustein. Erik is on the Harley product planning committee, and has help ensuring that Buell remains a priority since Buell President and Chief Operating Officer Jerry Wilke and Buell's Director of Worldwide Sales, Scott Miller, are also on the committee.
Two significant points of Erik's
contract stand out. First, if Harley
sells Buell, Erik goes with Buell.
Second, Erik doesn't remember
seeing a "no racing" clause in his
current deal. Previous contracts
prevented Erik from both
participating in racing himself and
funding a team through Buell, so
rumor has it that -- if there is no such
clause -- Erik will force a factory
team into existence next year. Erik
loves racing almost as much as building bikes.
More from the Rumor Mill
Speculation has it that Erik was offered large sums of money to cash out and sit back, look good, and attend PR functions. When questioned about this, he was a bit coy: "I went into this because I love what I'm doing, not looking for a big buyout. My worst nightmare is sitting around, doing nothing. I want to manufacture motorcycles for a long time -- I really enjoy my work -- and we're just getting ready to start on the areas that, over the next 20 years, are really going to make an impact. Buell was about me wanting to build bikes, not get rich. I'm having way too much fun doing what I'm doing to retire now."
So what does this mean in terms of Erik's control of the company? Erik sees this as a step up. Sure, he had complete control of Buell Motorcycle Company before, but BMC only had one client to whom they sold all their bikes -- Buell Distribution Corp., a wholly-owned subsidiary of Harley-Davidson. Not only did BDC set the prices at which Erik purchased motors, they set the price on how much they'd buy back completed bikes. If BDC didn't want to buy a new model, then Erik couldn't force them, the end result being that if Erik wanted to bring a bike to market and H-D didn't want it, he'd have to fight to make things happen. Now, with Buell a high priority at Harley, Erik still dreams up, designs and implements new models, and all he has to do -- with the help of Messrs. Wilke and Miller -- is convince Harley to sell it.
"I feel much less stress now," admits Buell, and his relaxed, confident tone left us with the impression that Erik feels more in control of his company now than ever. That must be satisfying for the intensely driven Buell, because things are looking rosy at BMC.
"Sales are currently up 49% year-to-year," continues Erik, "but that's the surface of what's happening. A big change was delivering bikes on time and on schedule and meeting ISO (International Standards Organization, which, in part, documents exactly how a product is manufactured) standards, so even though things are happening fast, auditors can now see that we're following plans."
Erik will continue to spend all his time at Buell, attending only high-level meetings at Harley-Davidson. He has no Harley title, simply Chairman of Buell Motorcycle Company. Buell will be soon expanding to nearly twice their size. A deal is closing to acquire a large portion of a new building next door to their East Troy headquarters.
The New World Order at Buell shakes out like this:
1) Erik Buell, Chairman and Chief Technical Officer
2) Jerry Wilke, President and Chief Operations Officer.
Beyond that, the company is very horizontal. Some of the key players are:
At Harley-Davidson's Juneau offices;
Scott Miller, Director, Worldwide Sales
Joe Hice, Director of Public Relations.
At Buell's East Troy Headquarters;
David Ulicki, Information Management, ISO Certification
Bret Schaller, Leader of Analysis and Testing
Gene Giuzzetti, Product Manager (he manages the line).
motorcycle.com |
