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October 15, 2009 , 2:01 pm <H2 class=entry-title>Harley-Davidson to Discontinue Buell Sport Bikes</H2>By Jerry Garrett
The Buell 1125R.
Continuing hard times at Harley-Davidson came to something of a head Thursday with the announcement that the company was killing its Buell line of sport bikes almost immediately and actively looking for a buyer for its MV Agusta brand.
Harley, which is based in Milwaukee, also disclosed continuing losses at its finance unit and a decline in sales of its heavyweight Harley-Davidson motorcycles. Overall, Harley’s net income for the third quarter plunged by 84 percent from last year, which was also a down year for the company.
The Buell brand, based in East Troy, Wis., will shut down later this month, although Harley will continue to supply replacement parts and honor warranty claims. About 180 workers will lose their jobs. (Buell has provided an online page for customers here.)
Just last month, Buell won the American Motorcyclist Association’s coveted SportBike championship – the first for an American motorcycle maker since 1986. But Harley had struggled to make a sales success of the innovative sport bikes; earlier this summer Harley announced that it would drop plans to build a $10 million Buell factory.
Larry W. Smith for The New York Times An MV Agusta F4 on display at a Harley-Davidson dealership in Topeka, Kan.
The Buell decision is expected to saddle Harley with about $125 million in costs associated with the shutdown. The bottom line in the MV Agusta divestiture will not be known until the brand is sold, but Harley said it had already taken a “goodwill impairment charge” of $18.9 million related to the brand in the third quarter.
Harley raised eyebrows in the industry with its $109 million acquisition just 16 months ago of MV Agusta, a boutique line of very expensive sport bikes manufactured in Italy.
Throughout its operations during the recent economic downturn, Harley had already cut more than 1,000 jobs and trimmed production forecasts by at least 30 percent. The company said it was also considering what to do with its under-utilized assembly plant in York, Pa., and would make announcements about its fate later in the year.
In announcing these changes, Harley said it would refocus its business model solely on its core Harley-Davidson brand.
As bleak as the announcement was for Buell and MV Agusta, Harley said sales of its cruiser motorcycles dropped 21.3 percent worldwide in the third quarter, better than the industry average decline of 35.9 percent.
Continuing hard times at Harley-Davidson came to something of a head Thursday with the announcement that the company was killing its Buell line of sport bikes almost immediately and actively looking for a buyer for its MV Agusta brand.
Harley, which is based in Milwaukee, also disclosed continuing losses at its finance unit and a decline in sales of its heavyweight Harley-Davidson motorcycles. Overall, Harley’s net income for the third quarter plunged by 84 percent from last year, which was also a down year for the company.
The Buell brand, based in East Troy, Wis., will shut down later this month, although Harley will continue to supply replacement parts and honor warranty claims. About 180 workers will lose their jobs. (Buell has provided an online page for customers here.)
Just last month, Buell won the American Motorcyclist Association’s coveted SportBike championship – the first for an American motorcycle maker since 1986. But Harley had struggled to make a sales success of the innovative sport bikes; earlier this summer Harley announced that it would drop plans to build a $10 million Buell factory.
The Buell decision is expected to saddle Harley with about $125 million in costs associated with the shutdown. The bottom line in the MV Agusta divestiture will not be known until the brand is sold, but Harley said it had already taken a “goodwill impairment charge” of $18.9 million related to the brand in the third quarter.
Harley raised eyebrows in the industry with its $109 million acquisition just 16 months ago of MV Agusta, a boutique line of very expensive sport bikes manufactured in Italy.
Throughout its operations during the recent economic downturn, Harley had already cut more than 1,000 jobs and trimmed production forecasts by at least 30 percent. The company said it was also considering what to do with its under-utilized assembly plant in York, Pa., and would make announcements about its fate later in the year.
In announcing these changes, Harley said it would refocus its business model solely on its core Harley-Davidson brand.
As bleak as the announcement was for Buell and MV Agusta, Harley said sales of its cruiser motorcycles dropped 21.3 percent worldwide in the third quarter, better than the industry average decline of 35.9 percent.
