Erik Buell Racing Closes Down

April 13, 2015—Erik Buell Racing has closed the doors on its East Troy, Wisconsin, factory after a noon-hour all-company meeting was held to inform the approximately 120 employees the company was entering receivership.

The reborn American sportbike manufacturer had clawed back after Harley-Davidson’s 2009 closure of Buell Motorcycles in the same facility EBR occupies today. Some initial funding was found domestically, alongside Erik Buell’s own investment, for the operation of EBR, but the biggest boost came when India’s Hero MotoCorp bought 49.2 percent of the company for $25 million in July 2013.

In our late-2013 interview, Buell said Hero had been impressed with EBR's work and grew to believe that "we'd be able to pull off this American sportbike, where most people were just rolling their eyes and saying this can't be done." Added Buell: "I shopped this thing from coast to coast in the US for years and, man, I got nowhere. One manufacturing guy invested in the business along the way and he was key. He was a guy who got it and understood what we were doing."

With Hero's funding, EBR made exceptional progress on the 1190RX superbike with limited time, resources, and personnel, speeding the bike into production for the 2014 model year. It was followed in 2014 by the 1190SX naked bike.

The relationship with Hero began with engineering contracts in 2011 and produced several smaller-displacement models. In the same late-2013 interview, Buell said engineering contracts and consulting had become good business for the company and that he envisioned expansion in that area.

In October 2013, it was announced that EBR would be the distributor for Hero motorcycles in the US and Canada starting in summer of 2014. As of this time, however, there appears to be no distribution of Hero motorcycles in North America.

Though sales numbers are not known, the 1190RX superbike was subject to factory incentives of at least $2,000, indicating sales fell short of expectations. An insider said the SX was “doing much better.” Nonetheless, the initial investment in manufacturing and parts was unable to be recouped by sales, and hopes for more funding from Hero did not come to fruition.

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The Milwaukee Journal Sentinel reported that EBR was seeking Chapter 128 protection, a Wisconsin form of bankruptcy protection similar to federal bankruptcy protection. It is described by the Wisconsin Bar Association as "an old, but still little-known alternative to bankruptcy…for clients who have more debt than they can handle, wish to repay, and need the help of a structured plan to get back on their feet." Indicating, as ever, Erik Buell the man hopes to continue his efforts to build an American sportbike. The Journal Sentinel reported that Buell said he hoped for a "new and better beginning."

“The turn we recently took, after we thought we were moving forward, was unexpected,” Buell said in a statement. “We thought we had secured funding, but in the end, we were not able to get the funding in place. Therefore we need to do the best we can under the circumstances for all parties in interest.”

As of earlier today, www.erikbuellracing.com website contained no data. Employees were sent home after the announcement. "It was the second time I'd witnessed and all-company meeting end in tears," said an insider.