Jump to content

WOW!!! EBR closes shop and files for bankruptcy


Bubba

Recommended Posts

i thought the Hero partnership was going to bring great things for them, but I've never seen one on the street.

 

You have to sell bikes to make money.  Damn shame though.  Seems like they didn't see it coming either, because a lot of riders and employees were active last weekend...

Link to comment
Share on other sites

That blows. I always thought of them like the Shelby of motorcycles. Not sure how much of the business or how much of the design either Erik or Carroll did.

Hope no small suppliers fall in the domino pile as big banks seem to wrangle legal preferred creditor status.

It's sad how much marketing plays over product quality these days.

Link to comment
Share on other sites

I hated to be right, but I called this one as soon as they started releasing pricing.

 

I hope Erik finds a way to find a success in this business, but exotic pricing in performance bikes is an uphill battle, and he doesn't carry the panache or world-wide name recognition of Ducati.

Link to comment
Share on other sites

It takes courage to start an automotive company from scratch. And by all accounts they turned out a good product. The guy has my respect.

Nothing about the story makes any business sense to me though. I read today EBR had over 120 employees, which would be about a $10M per year burn rate. And they lead with a product in a shrinking and highly competitive segment. Did I mention the EBR bike is inferior to its competetion, priced higher, ugly, and has no dealer network?

For Hero their initial investment had to be a pure play on the intellectual property. But you'd think they could have achieved that for less than $25 million.

Link to comment
Share on other sites

Nothing about the story makes any business sense to me though. I read today EBR had over 120 employees, which would be about a $10M per year burn rate. And they lead with a product in a shrinking and highly competitive segment. Did I mention the EBR bike is inferior to its competetion, priced higher, ugly, and has no dealer network?

 

 

I agree that their motorcycles made zero business sense.  They appealed to a tiny niche market that is already full of some stiff competition.

 

I've loosely followed EB since I bought my first of 3 Buells in 2004.  He is a prolific engineer, but not what I would call a shrewd business man.

 

EBR has no business racing in WSBK.  While they seem to be fine street bikes, they're just not competitive at that level of racing.  The motors are way down on power and if they actually finish a race it's in or near last place.  The number of grenaded motors (over stressed by race teams), DNFs, and DNSs (due to parts not being available to race teams) was absurd.  It was a comedy of errors.  The race efforts have damaged their reputation in Europe.  While the Pegram team seems to be better managed, are they only a few crashes away from being out of parts?

 

EBR racked up debt they could not pay themselves.  They were relying on additional funding to keep the doors open, presumably from Hero.  Apparently that funding was not contractually guaranteed, which is a reckless way to run a business.  Business acumen should dictate that you do everything in your power to prevent yourself from getting into a situation from which the "rug can be pulled" with disastrous results. A lesson I thought was made painfully clear by Harley Davidson in 2009. 

 

EB is certainly no quitter.  I expect some form of business to rise out of EBRs ashes.  But his engineering determination needs to be tempered by some sound business decisions.

Link to comment
Share on other sites

I agree that their business model (or their apparent business model) doesn't seem to make sense, but we're not privy to their actual inner workings.

 

The Hero partnership made sense, and then I didn't see anything come from it in the US market...

Link to comment
Share on other sites

EBR was involved in engineering and design for several Hero models:  HX250R, Leap, SimplEcity, iON, RnT, Hastur, etc.  It's likely that engineering contract with Hero was completed and was not renewed, which led to the closure.  I believe Hero was targeting 2014 to enter the US market, which obviously didn't happen.  I recently read that was pushed back to 2016. 

 

If EBR was operating that close to financial ruin, dedicating engineering and financial resources to the WSBK effort makes even less sense.

 

A EBR few dealers posted on Badweb saying they found out about the closure on the internet.  As of a couple days ago they still hadn't received any communication from EBR.  No direction on what to do with existing inventory, or if the business would continue.  Some even had motorcycles, but never received any titles or documentation for them.  Piss poor communication  :mad:

 

The fire sale has already started.  One dealer was already selling new ones for $9,999 and demos for $8,999.  I expect the prices to drop further unless a new owner is announced.

Link to comment
Share on other sites

I think it's a "sit tight" situation.  A receiver could still purchase the business and re-open.  It's more likely that they'll liquidate assets, but stranger things have happened.

 

PIRC was in receivership from 2008 through 2013(?), and now look at the place - they've added more garages, more bathrooms, and cleared the way for the South track to be paved this spring.

Link to comment
Share on other sites

  • 3 months later...

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
×
  • Create New...