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New-look Buell fires on all cylinders as it ramps
19-1-2014 - Erik Buell is the founder of Erik Buell Racing, which has geared up to introduce a mass-production version of its sport bike that will sell for under $20,000.
By of the Journal Sentinel
East Troy — Erik Buell's motorcycle assembly line has been running about a month, and already Buell is worried about not having enough space as he ramps up production and kicks his engineering efforts into overdrive.
"These are wonderful problems to have," Buell says as he walks through the plant where the first Erik Buell Racing production motorcycles are being assembled for delivery in February.
The plant's layout was designed by a former automotive industry engineer who was fed up with big companies and, like Buell, wanted to challenge the status quo.
It's a plant where people aren't stuck in the same job day after day, and they're encouraged to try new things that improve the work flow.
"Once you learn all of the workstations, you could build a motorcycle from scratch. And that's more fun and more interesting for people than doing a typical assembly line job," Buell says.
Creating a product from scratch is something the longtime entrepreneur knows a lot about, having founded a company in a Mukwonago barn 30 years ago, and then starting over in 2009 as a manufacturer of racing motorcycles aimed at the highest level of the sport.
Erik Buell Racing is the sequel to Buell Motorcycle Co., which was owned by Harley-Davidson Inc. for more than a decade before Harley dropped the brand in 2009.
Initially, the new company produced hand-built $40,000 sport bikes for road-racing enthusiasts. Now, it's geared up to build a mass-production version that will sell for $18,995 but has a similar racing pedigree.
Buell has cultivated more than 60 dealerships, starting from scratch, including dealers that sell high-end sport bikes from European manufacturers Ducati and BMW.
The company is pursuing the top 100 U.S. motorcycle markets, and in Wisconsin has landed dealerships in Milwaukee and La Crosse.
Last week, Buell announced it opened a European office to support the company's race team and build brand identity overseas.
"We want to be a global company ... and not be seen as just some guy making a few bikes," said Gary Pietruszewski, vice president of global sales, who previously was a vice president with Piaggio Group, USA.
The company now has more than 120 employees, up from about 10 only two years ago, when it built bikes one at a time in a small part of the factory it leases on Buell Drive.
Outgrowing the factory
Starting out small, at the high end of the sport bike market where a company's racetrack reputation matters, was intentional.
"The idea was to make a statement that we were back as a new company that was very different, very high-tech. We wanted to race at the highest level right away," Buell said.
The company will add more jobs this year, Buell said, including positions in technical areas, sales and manufacturing. Already, he is worried about not having enough room for storing bikes and materials, and his engineering department which does consulting work in addition to designing Buell motorcycles.
The company has another bike coming out later this year and another model is getting close to production. In a few years, or sooner, Buell could be looking for another building.
"I don't know what we are going to do. I don't want to move far because most of the workforce is around here. But my job is to remove obstructions, whether it's sweeping the floor or finding a new building," he said.
The additional jobs are aimed at producing a less expensive version of the racing bike that's similar but has more costly components such as carbon-fiber body parts.
The new bike, the 1190RX, will compete with European manufacturers Ducati and BMW and Japanese manufacturers Honda, Yamaha, Kawasaki and Suzuki.
"Erik knows that it's going to be tough. On the other hand, he's a really smart guy, and I am confident he will figure it out," said John Ulrich, editor of RoadracingWorld.com and a motorcycle racer whose team has won five American Motorcycle Association Pro Road racing titles.
"There are relatively smaller importers, like Triumph and Ducati, that are having great sales success by their standards. I think there's a place for the bikes that Erik is building ... and I think there's an appeal to something that's put together in Wisconsin as opposed to some place over an ocean," Ulrich said.
Partners with Hero
Buell invested his own money into the new venture, but it wouldn't have accelerated at such a fast pace without assistance from Hero MotoCorp., the largest motorcycle manufacturer in India, which acquired a 49.2% stake in Erik Buell Racing for $25 million.
"It was hugely important. They believed in us pretty early on," Buell said.
He says Hero has pledged to let him keep control of his company, where he remains chairman and majority owner.
Erik Buell Racing has done a lot of technical consulting for Hero and is helping the company establish its brand and motorcycle sales in the United States.
"They are very humble and very willing to learn," Buell said about working with a company that builds more than 6 million motorcycles a year.
Hero, based in New Delhi, brought in designers and engineers from East Troy to assist its 300-member product development team.
Of 19 new bikes that Hero plans to display at a New Delhi motorcycle show in February, 13 have ties to Buell engineers. One of them is an electric-hybrid scooter that's very different from anything currently in the marketplace.
"I like living in the future, doing stuff that's really radical rather than preserving the past," Buell said.
After Harley dropped his company, he could have retired and not risked his savings on another business venture. But the engineer, who carries images of futuristic motorcycles on his cellphone, had too many ideas that begged to become reality.
He also felt an obligation to the former Buell Motorcycle Co. employees and others in the industry, including young engineers.
"It was a lot of people who, I thought, would get more enjoyment out of my retirement money than if I had bought a yacht and had to worry about scraping off the barnacles," Buell said.
The breakup with Harley-Davidson was painful and included a liquidation sale, where hundreds of Buell Motorcycle Co. items were sold, including factory tools, office equipment, framed photos and an American flag from the lunchroom.
It was especially painful to see people lose their jobs, Buell said, and it was tough to watch while the brand with his namesake headed into oblivion.
Harley-Davidson, though, dropped its noncompete clause in Buell's employment contract and allowed him to start Erik Buell Racing.
Buell says his bikes don't compete with Harley because he doesn't build cruiser and touring-style motorcycles, and his company is tiny compared with the world's largest manufacturer of heavyweight bikes.
On his own, he has more creative freedom than he had under Harley.
"I would never have been able to do the things I am doing now ... which is a little closer to what I like, maybe a lot closer," Buell said.
His new company has hired engineers from Yamaha, Boeing Corp. and General Motors. Its engineering staff is much larger compared with the old Buell Motorcycle Co., partly because of the consulting work done for Hero.
There's a lot of energy in the workplace, which includes product designers fresh out of college, brimming with new ideas.
"We have young people who work like maniacs," Buell said.
Buell Motorcycle Co. also used a nontraditional assembly line.
"The traditionalists said it would never work, that we couldn't build 3,000 bikes a year. But we got up to 15,000 bikes a year, with one work shift, and there was virtually no absenteeism because people had fun and got a lot of credit for what they were doing," Buell said.
"It's really not anything I have done except trust the Wisconsin workforce," he added.