In unexpected and disappointing news for bike fans, Erik Buell Racing (EBR) announced on April 16 that it has ceased operations.
Facing a debt of US$20 million the company has filed for protection from its creditors under Chapter 128. A court-appointed attorney will oversee the ensuing bidding process that should result in the sale of EBR’s assets. All of its 126 employees have lost their jobs, including recently hired engineers from companies such as Yamaha, Boeing and General Motors.
It is unclear what has happened between EBR and partner, Hero MotoCorp of India. With an investment of $25 million in 2013 Hero acquired a 49.2 percent stake in Buell’s company and planned to introduce its models in the US market through EBR’s dealer network, with Europe earmarked as the next step. Erik Buell’s engineering know-how played a pivotal role in the development of the new models Hero needs in order to attract customers in western markets. The new HX250R production model and the prototype Hastur are prime examples of this synergy. “Hero MotoCorp, with strong in-house R&D capabilities, remains confident that its future product line-up would not be affected despite EBR ceasing operations,” says the spartan statement from New Delhi, the only official word from the Indian side so far.
Initial reports blame the closure poor sales of EBR’s commercial models, the 1190 RX superbike and the 1190 SX streetfighter, yet it may not be game over for Erik Buell.
"To say this setback is a disappointment does not begin to express what I feel right now," said Buell. "I am personally grateful for the support of our outstanding workers, customers and vendors. While this is a sad ending, I personally hope for a new and better beginning."
In the mean time Hero will continue to honor its main sponsor role in Team Hero EBR in World Superbike Championship (WSBK). “For Team Hero EBR, nothing has really changed,” states Larry Pegram, team manager and rider. “We are going to be racing this weekend and we plan to continue for the season. All indications are that we are going to be able to do that. There is obviously some restructuring and financial stuff going on in the USA, but we are over here in Assen and getting ready for a good weekend.”
Hero has reportedly guaranteed the funding required to run the two-rider outfit of Pegram and Italian Niccolo Canepa for the whole season.
Erik Buell thanked supporters in the following Facebook post on April 18:
Thank you for the supportive posts, texts, and e-mails since the announcement that EBR has ceased operations. This is a difficult time, and your comments mean a great deal to me personally and also to the EBR team that has done such amazing work over the past few, intense years.
No doubt, it was an incredible ride, feeling like the longest qualifying lap ever. And, then, just when we knew we were about to set an all-time record, we tossed it in the last corner…
Keeping with racing analogies, now we need to get back on the track and look ahead remembering all the things we were doing right around so many turns.
Unfortunately, in the end, we tried to do too much with too little funding, but it doesn't diminish the accomplishments. We introduced the world class American super bikes of 1190RS, 1190RX and 1190SX, while at the same time doing revolutionary work for Hero on the HX250R, Leap, SimplEcity, iON, RnT and many others, plus concepts never publicly seen. It was great EBR innovation and design, and introduced new technology to Hero and its suppliers to provide a real kick start for them. But in the end all of this simply overwhelmed us, and for that we are sorry and saddened.
I want you to know that looking ahead my focus is 100% on helping the receiver best maximize the value from EBR to benefit all, and I will make every possible effort to get the new organization to where it can support the dealers and customers first, and then help find investment to get back to full throttle.
Thank you for your support, it means a great deal. Please stay tuned - I cannot predict the future, but always believe the best is yet to come.
Erik
